Mnuchin's former bank agrees to $100M redlining settlement
The Department of Housing and Urban Development approved a $100 million settlement in favor of the California Reinvestment Coalition against CIT Group's OneWest Bank.
The agreement resolves allegations that the bank discriminated in its lending services by redlining throughout Los Angeles. The CRC filed a fair housing complaint with HUD against OneWest in 2016. Both Treasury Secretary Steven Mnuchin and Comptroller of the Currency Joseph Otting previously were chairman of OneWest.
"This agreement has the potential to bring about positive change for communities most impacted by discrimination and redlining," Kevin Stein, deputy director of the California Reinvestment Coalition, said in a press release. "It will create a meaningful chance for groups most often targeted for abuse to own a home and build wealth over time. The bank's commitment to provide $5 million in subsidies to eligible borrowers and $100 million in home lending, including marketing FHA loans, will enable more Californians to remain and thrive in their neighborhoods."
The major commitments of the settlement include $100 million in home loans for Southern California neighborhoods of color. OneWest must open a full-service branch in a low- or moderate-income minority area. The bank must also provide owner-occupied homes with nonjumbo loans a $5 million subsidy fund for closing costs, down payment assistance, interest rate or insurance premium reduction, as well as offer and market Federal Housing Administration loans.
"Homeownership is the foundation of the American dream," Anna María Farías, HUD's assistant secretary for fair housing and equal opportunity, said in the release. "Today's settlement is an important step toward ensuring access to that dream for all borrowers, regardless of their race or national origin."