Communities evaluating strategic plan and weighing options to weigh in with regulators on implementation of
plan as bank seeks approvals
Los Angeles- March 23, 2016— After a year-long merger process marked by staunch opposition from over 100
community groups, CIT Group announced a new strategic plan today focusing more of its efforts on middle
market banking. Community leaders who listened to the call were surprised the bank did not provide any more
detailed information about the bank’s pending Community Benefit and Reinvestment plan- a plan that in its last
iteration sorely lacked in lending to low in moderate income communities, as required in regulator conditions of
its acquisition of OneWest Bank.
In July 2015, CIT Group received a conditional approval by the Office of the Comptroller of the Currency
(OCC) to acquire OneWest Bank. The OCC imposed two conditions on its approval of the merger. First, the
bank was required to submit a comprehensive business plan to its regulators. Second, the bank was required to
update its Community Reinvestment plan, including through soliciting input on the plan from community
It appears that the bank has detailed a strategic business plan to sell off or spin off commercial air and improve
shareholder returns, all subject to regulatory approval, but the bank still has failed to provide a detailed
community reinvestment plan that meets community credit needs.
Upon hearing today’s news, community advocates had the following reactions:
“While we were hopeful that new leadership at CIT Group meant a fresh start with the bank’s approach to the
community and its reinvestment responsibilities, thus far, we’ve been sorely disappointed,” explained Paulina
Gonzalez, executive director of the California Reinvestment Coalition, which helped organized 100 nonprofits
against the merger and over 21,000 individuals to oppose the merger. “Today’s news adds to the many concerns
we shared with the OCC and Federal Reserve during this merger process about creating another Too Big To Fail
Bank that would increase the risk to our financial system. We will be weighing our options as we analyze the
plan and will be engaging with regulators as the bank seeks approvals on the plans it announced today.
California is still waiting for a CRA Plan that meets the credit needs of California communities instead of
shortchanging them like the one proposed under John Thain and Joseph Otting’s leadership. The OCC ordered
the bank to improve the bank’s old CRA plan and we’re still waiting to see if the bank will comply.”
“Our message to the banks and regulators was clear: Absent a comprehensive reinvestment plan that will deliver
tangible public benefit to low and moderate income communities this merger should not be approved. We have
waited patiently to see if the OCC really meant “conditional” in its merger approval, or if low income and
communities of color will be left behind yet again?” questions Michael Banner, president and CEO of the Los
Angeles Local Development Corporation.
Kevin Stein, associate director of the California Reinvestment Coalition adds: “The message from this New
Jersey bank to California is clear: We have millions of dollars for departing executives, but, nearly a year and a
half later, we still don’t have a plan for how we intend to invest in the California communities where we do
HUD Subpoenas: In CIT Group’s 10K, filed March 7, 2016, the company disclosed it had received subpoenas
from the Office of Inspector General at the Department of Housing and Urban Development, related to its
reverse mortgage servicing operations. The California Reinvestment Coalition had raised a number of concerns
with HUD and other regulators over OneWest’s reverse mortgage servicing and foreclosure practices.
Pay Cut: Various media outlets, citing CIT Group’s latest Proxy, pointed out that the board of CIT Group
docked John Thain’s pay to reflect their disappointment in his work with the OneWest merger integration
Retirement Policy Changed to Help John Thain: Reuters reported in December 2015 that John Thain
engineered a change to CIT Group’s retirement policies to benefit….John Thain! The change, which was
approved by the CIT board, could be worth as much as $13 million to Thain.