When the Office of the Comptroller of the Currency gave conditional approval to the merger of CIT Group (NYSE: CIT) and OneWest Bank, the bank was required to meet two conditions.
One of the conditions was an updated CRA plan. However, we believe the CRA plan being submitted to the OCC is essentially the same weak plan the banks offered nearly 7 months ago, the day before the Federal Reserve and OCC held a public hearing on this contested merger.
This follows on the heels of a Los Angeles Times editorial, calling on the OCC to set a high bar for OneWest’s community reinvestment plan.
In comparison, City National Bank, a bank about the same size as OneWest, created a Community Reinvestment Plan as part of its merger with Royal Bank of Canada that calls for about twice the investment in Los Angeles communities. Banc of California, a smaller bank than OneWest, has also committed to a far more rigorous and substantial community reinvestment plan as compared to OneWest’s.
CRC was also disturbed to receive an email from a person who discovered their name had been fraudulently added to a petition started by the CEO of the OneWest, urging Federal Reserve Chair Janet Yellen to not hold hearings on this hotly contested merger. In a brief review of about 600 signatures, CRC identified a number of other red flags that suggest a breach of trust in the public comment process. CRC has requested the Federal Reserve and OCC investigate.