Trump Treasury candidate's bank accused of discrimination

November 17, 2016 4:57 PM EST

Steven Mnuchin, national finance chairman for Republican president-elect Donald Trump, arrives at Trump Tower in New York, U.S. November 15, 2016. REUTERS/Carlo Allegri - RTX2TV5T


News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.

By David Lawder

WASHINGTON (Reuters) - Two California housing advocacy groups have alleged that a bank formerly controlled by Steven Mnuchin, a top candidate to be President-elect Donald Trump's Treasury secretary, engaged in discriminatory practices against black and Latino communities.

In a complaint filed with the U.S. Department of Housing and Urban Development, the groups are seeking an investigation of claims that OneWest Bank violated the Fair Housing Act through "redlining" practices such as failing to locate bank branches in black and Latino communities and extending very few or no mortgage loans to borrowers of color.

Mnuchin, a former Goldman Sachs executive and Hollywood film financier who is under consideration for the Treasury post, was not mentioned in the complaint, submitted on Wednesday by the California Reinvestment Coalition and Fair Housing Advocates of Northern California.

But their allegations against a bank that was Southern California's largest during Mnuchin's ownership could fuel attacks from Senate Democrats if he is nominated to lead the Treasury, which is charged with safeguarding and regulating the U.S. financial system.

Mnuchin could not immediately be reached for comment through his office at Dune Capital Management, the New York-based hedge fund that he leads. Earlier on Thursday, he was seen entering Trump Tower in New York, where Trump's transition team is meeting.

The submission is the latest in the two housing groups' long-running campaign against OneWest, which also included complaining about its foreclosure practices and opposing its sale by a Mnuchin-led investor group to CIT Group Inc for $3.4 billion last year.

The complaint to HUD alleges that OneWest originated just two mortgages to African American customers in the bank's assessment area. It also maintained and marketed bank-owned homes in predominantly white neighborhoods better than in neighborhoods of color.

CIT said in a statement: "CIT is committed to fair lending and works hard to meet the credit needs of all communities and neighborhoods we serve."

Kevin Stein, deputy director of the California Reinvestment Coalition, insisted that the housing groups had long planned to file the complaint this week and the timing was not influenced by Mnuchin's emergence as a candidate for Treasury.

Mnuchin in 2009 led a group that acquired assets of failed mortgage lender IndyMac Bank for $1.55 billion from the Federal Deposit Insurance Corp, a deal that included a loss-sharing agreement on failed mortgages.

Rebranded as OneWest, it subsequently grew to have 73 branches and $23 billion in assets at the time the CIT deal was announced in 2014.

(Reporting by David Lawder; Editing by Andrew Hay)



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In






Related Categories

Reuters

Related Entities

Goldman Sachs, Donald J. Trump, Hedge Funds, Dune Capital

Add Your Comment