OneWest allegedly avoided lending to communities of color.
OneWest failed to locate bank branches in minority neighborhoods, loaned money to “very few or no” people of color, and did a better job maintaining and marketing foreclosed homes in mostly white neighborhoods, according to a complaint filed by two housing advocacy groups Wednesday with the U.S. Department of Housing and Urban Development.
The discrimination, called “redlining,” keeps communities of color in poverty by making it harder to buy homes. It was banned in 1968 under the Fair Housing Act.
The complaint was filed against CIT Group, the commercial lending giant that owns OneWest. Mnuchin, who led the investor group that bought OneWest in 2009 and served as its chairman, joined the board of CIT after the acquisition was completed in August 2015.
“Our analysis of OneWest suggests the bank has no significant branch presence in communities of color,” Kevin Stein, deputy director of California Reinvestment Coalition, one of the two nonprofits that filed the complaint, said in a statement. “[N]ot surprisingly, its home loans to borrowers and communities of color are low in absolute terms, low compared to its peer banks, and low when compared to what one would expect, given the size of the Asian American, African American, and Latino populations in California.”
Dune Capital, the hedge fund where Mnuchin works, did not respond to a request for comment on Wednesday.
“CIT is committed to fair-lending and works hard to meet the credit needs of all communities and neighborhoods we serve,” a spokesman for CIT said in a statement emailed to The Huffington Post on Thursday evening.
In the Los Angeles area in which OneWest operates, black borrowers last year received just 1.7 percent of its mortgages ― 2.1 percentage points below the industry average. Asian Americans made up 8.4 percent of the bank’s borrowers ― 3 percentage points below the industry average. Latinos comprised an additional 8.4 percent of borrowers ― 14 percentage points below the industry average. Meanwhile, the bank awarded 82.4 percent of its loans to white people ― 14.6 percentage points above the industry average.