OneWest Bank, founded by Steven Mnuchin, accused of redlining in SoCal
From the Los Angeles site: Two housing advocacy groups have accused OneWest Bank, which is headquartered in Pasadena, of discriminating against black and Hispanic borrowers in California.
Steven Mnuchin, a contender for the position of Treasury secretary in Donald Trump’s administration, founded the bank in the wake of the 2008 mortgage crisis. The groups allege the bank made few mortgages to minority homeowners and had very few branches in minority neighborhoods.
Their complaint requests the Department of Housing and Urban Development investigate whether OneWest violated federal discrimination laws, including redlining, Bloomberg reported.
Historically, redlining referred to the Federal Housing administration flagging neighborhoods, usually black neighborhoods, as high-risk, making it difficult for homeowners to get loans, and putting them at the mercy of lenders who could easily exploit them.
OneWest has 52 branches in Los Angeles alone, but lent to only two black borrowers across six Southern California counties throughout the years of 2014 and 2015, according to an analysis by the two housing groups, California Reinvestment Coalition and Fair Housing advocates of Northern California.
Out of its 74 branches in Southern California, zero are in predominantly black neighborhoods, according to the analysis. There were 11 branches in majority-Latino neighborhoods and one in a majority-Asian neighborhood.
Mnuchin, who sold the bank to CIT Group last year, is not named directly in the suit, but was active at the bank during the period of alleged redlining.
CIT, which paid $3.4 billion for the bank, said it was “committed to fair-lending.” Mnuchin owned a 1.2 percent stake in CIT as recently as March. [Bloomberg] — Chava Gourarie
Source: The Real Deal