LOS ANGELES — One community activist threatened to go on a hunger strike if the merger is approved. A distressed homeowner literally screamed at regulators, claiming bankers tried to steal her home.

But perhaps the biggest shock was how many people showed up to support CIT's proposed acquisition of the parent of OneWest Bank at Thursday's packed Federal Reserve Board hearing.

Some attendees wore red-white-and-blue stickers declaring: "Churches support OneWest merger." Many of the 150 attendees clapped after Joseph Otting, OneWest's chief executive, spoke. And amid the heartbreaking tales told by distressed homeowners and reverse mortgage holders, many community group representatives praised Otting for spending time speaking to them and hearing their communities' concerns.

Otting has spent months reaching out to organizations like the National Asian American Coalition, the National Diversity Coalition and the Los Angeles Latino Chamber of Commerce, to win their endorsements and accolades.

"There is consensus around one thing: Joseph Otting is a great guy," Orson Aguilar, executive director of the Greenlining Institute, told five regulators sitting at a table in a packed hearing room at the local Fed branch.

Public hearings on mergers are usually more about blowing off steam or extracting a pound of flesh than they are about influencing the outcome or sifting out truths. The Fed is expected to approve the $3.4 billion deal between CIT and OneWest, which have made a $5 billion community-reinvestment pledge to get as many allies as possible to back the merger.

Visibly shaken borrowers, some of them on the verge of tears, described trying to get a response from OneWest Bank about home loan modifications and reverse mortgages.

"One bank is not above the law," Helen Kelly, a former Minnesota prosecutor who lives in Pleasanton, Calif., yelled at regulators. She alleged that OneWest refused to offer her a loan modification, and tried to foreclose on her home until she contacted the Office of the Comptroller of the Currency and ultimately got relief in 2011. "They are criminals, they should be in jail. Shame on all of you for selling us so short."

Yet the dozens of speakers also included supporters of CIT, a New York-based commercial finance lender, and OneWest Bank, which is based in Pasadena and has 73 branches.

"This partnership will give birth to a new reality in communities of color," said Mark Whitlock, senior minister at Christ Our Redeemer Church in Los Angeles.

Many speakers heaped praise on Otting, calling him an outstanding leader who built a business on the ashes of the failed subprime lender IndyMac Bank. Otting has pledged to give $5 million a year to local community nonprofits.

"We support OneWest Bank because it is committed to making loans to small businesses," said Gilbert Vasquez of the Los Angeles Latino Chamber of Commerce. "The chances of getting loans to minorities will improve" as a result of the merger, he said.

Even Robert Gnaizda, a longtime bank critic, defended the deal. "No bank that is large has done a good job in the last six years," said Gnaizda, who founded the Greenlining Institute and is now a general counsel with the National Diversity Coalition.

Several speakers called for the merged bank to add a minority board member and to double its pledge of investments under the Community Redevelopment Act.

Paulina Gonzalez, executive director of the California Reinvestment Coalition, said the two banks provided little community support before the merger was announced last year.

"Ramped-up CRA activity, grant-making and promises at the time of merger does not add up to the regulatory requirement that there should be a public benefit," Gonzalez said. "This merger doesn't meet the public-benefits test and therefore should not be approved."

Jesse Van Tol, chief of membership and policy at the National Community Reinvestment Coalition, quoted recent comments made by Fed Gov. Daniel Tarullo about where to draw the line on systemically risky institutions with more than $50 billion in assets.

"Your duty is to clarify that a significant public benefit has been created," he said.

Early in the hearing, John Thain, CIT's chief executive, defended the bank against arguments that the proposed deal would create a systemic risk. He argued that a combined bank would be "better able to withstand economic stress."

"Some have suggested that the transaction will create an institution that is too big to fail," Thain said. "It is clear that this transaction will not result in greater risk to the U.S. financial system."

Thain said he supports efforts in Washington to raise the threshold for systemically important financial institutions from the current $50 billion to $100 billion. The combined CIT-OneWest Bank would have assets of $70 billion.

Otting said he is committed to building "a hometown bank," with the objective of receiving an "outstanding" CRA rating from the OCC.

He said that OneWest has not originated a reverse mortgage since 2011, and that the vast majority of the loans were inherited from IndyMac's Financial Freedom and are serviced by third parties.

"In our view, the vast majority of criticisms of our servicing practices are really criticisms of the regulations of servicing. We share the frustration," he said, referring specifically to regulations from the Department of Housing and Urban Development regarding foreclosures on nonborrowing spouses.

He also said it was important to provide some context around foreclosures. IndyMac sold its third-party servicing operations to Ocwen two years ago, and in many cases does not own the underlying loans but is bound by servicing agreements with investors.

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