Mnuchin's former bank settles lending discrimination claims
Posted July 29, 2019 6:27 p.m. EDT
CNN — OneWest Bank has agreed to a more than $7 million settlement over allegations of discriminatory lending that cover the period when Treasury Secretary Steven Mnuchin was chairman.
The Department of Housing and Urban Development said Monday that it would approve the settlement between OneWest and the California Reinvestment Coalition, which had accused the bank of "redlining," or denying credit to residents of predominantly minority neighborhoods, between 2014 and parts of 2017.
Fair lending laws prohibit financial institutions from discriminating on the basis of race or national origin when it comes to their mortgage lending services.
"Homeownership is the foundation of the American dream," Anna María Farías, HUD's assistant secretary for fair housing and equal opportunity, said in a statement. "Today's settlement is an important step toward ensuring access to that dream for all borrowers, regardless of their race or national origin."
Mnuchin was among the group of investors who organized OneWest from the remains of failed residential lender IndyMac. OneWest was sold in 2015 to CIT Group, where Mnuchin remained on the board of directors until late 2016, when he was tapped as treasury secretary by President Donald Trump.
The Treasury Department did not immediately respond to a request for comment.
The California Reinvestment Coalition alleged in 2017 that OneWest discriminated in the marketing and origination of home mortgages, pointing to the low number of mortgages it made to African American and Latino borrowers. The complaint also alleged that the bank and its office branches were in areas that didn't serve minority neighborhoods and borrowers.
OneWest Bank denies discriminating in violation of the law but agreed to the settlement to provide "important and valuable assistance to minority communities in its service areas."
The bank has agreed to invest $5 million in a loan subsidy fund to increase credit opportunity for residents in minority neighborhoods, spend $1.3 million in advertising to expand its outreach and provide $1 million in grants for homebuyer education, credit counseling and other services.