OneWest Bank is finally able to put two-year-old allegations of housing discrimination to rest as the Department of Housing and Urban Development approved a settlement Monday that will see the bank hand over a chunk of change to end the ordeal.
The settlement resolves the dispute between the California Reinvestment Coalition and CIT Group, which includes its subsidiary, OneWest Bank.
OneWest was founded by a group of private equity investors led by Treasury Secretary Steven Mnuchin.
Mnuchin and his partners formed OneWest from the remains of IndyMac Federal Bank in 2009. At the time of the alleged discrimination, Mnuchin was as OneWest’s chairman, while the current Comptroller of the Currency Joseph Otting was CEO.
The agreement approved Monday settles a 2017 complaint filed with HUD by the California Reinvestment Coalition accusing OneWest of failing to locate bank branches in communities of color and, from 2014 to at least 2017, extending very few or no mortgages to borrowers of color – a process commonly referred to as redlining.
As part of the settlement, OneWest did not admit to any wrongdoing, but agreed to invest $7.3 million in several programs designed to support minority homeownership. The deal includes $5 million earmarked to subsidize home loans for minorities in Southern California and the opening of a full-service branch in a minority and low- to moderate-income neighborhood.
“Homeownership is the foundation of the American dream,” Anna Maria 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.”