90 Community Organizations Urge Regulators to Reject OneWest Bank’s Community Reinvestment Plan and Stop Conditional Approval
BANK’S MISERLY PLAN FAILS LOS ANGELES COMMUNITIES
Los Angeles, CA, 10/20/15—Today, the California Reinvestment Coalition joins with 89 community-based organizations, urging the Office of the Comptroller of the Currency (OCC) to reject a weak community reinvestment plan submitted by OneWest Bank as part of its merger with CIT Group (NYSE: CIT). This letter comes on the heels of a Los Angeles Times editorial, calling on bank regulators to set a high bar with OneWest’s reinvestment plan.
In July, the OCC gave conditional approval for OneWest to merge with CIT Group. One of the OCC conditions was the bank submitting an updated Community Reinvestment Act plan. The Federal Reserve Board Approval Order also noted: “the Board expects the CIT Group to engage in activities that help to meet the credit needs of the communities CIT Group serves at a level commensurate with the expanded size and scope of the combined organization.” Community organizations called on regulators to reject the bank’s plan because it fails on all counts.
Advocates suggest the bank ignored the OCC’s instructions to meet with local organizations and failed to explain how it would help meet affordable housing and small-business development needs in Los Angeles.
Groups also note the bank’s use of a flawed “community assessment” survey completed by fewer than 30 orgs,but submitting the plan to the OCC with hopes of getting a “pass.”
Paulina Gonzalez, executive director of the California Reinvestment Coalition, one of 100+ organization that opposed the merger, comments: “When the OCC gave a conditional approval to the merger, that was an opportunity for the bank to hit the “reset” button on the most contested bank merger in recent history and start working with the community to develop a comprehensive plan to invest in underserved communities in Lo sAngeles. Unfortunately, 90 days later, the bank’s response is to continue ignoring community input, to offer essentially the same reinvestment plan we saw seven months ago that’s short on details and short on investment in low income communities, and hope the OCC, Federal Reserve, and LA communities would let them squeak by. We’re not going away, and we hope the OCC won’t turn its back either.”
Gonzalez adds:“Even more disturbing, our organization was recently contacted by a person who found their name fraudulently added to a petition supporting this bank merger, and whose name was used to create a fake email account. In a review of about 600 alleged signers for the bank petition, we identified a number of red flags. We shared this information with the OCC and the Federal Reserve and urge them to investigate this breach of trust in their public comment processes.”
Additional Background: The letter to the OCC, the redacted fraudulent email, and the Community Reinvestment plan created by OneWest’s peer, City National, which calls for double the investment as compared to OneWest,are available at http://badbankmerger.com