PUBLISHED MARCH 22, 2017 21:33
“The California Reinvestment Coalition is deeply concerned about reports that Joseph Otting is being considered for what is one of the most important roles in the banking world. If Mr. Otting were to be nominated, it would be another example of this administration’s preference for filling key regulatory posts with bankers and Wall Street executives with problematic track records, including Mr. Otting’s former boss, Steve Mnuchin.
While CEO at OneWest Bank, Mr. Otting worked against the interests of Main Street homeowners, small business owners, and seniors. His leadership at the bank resulted in a redlining complaint that our nonprofit filed against the bank; investigations by HUD’s Office of Inspector General and the New York Attorney General into reverse mortgage problems at the bank’s reverse mortgage subsidiary; subsequent disclosures about material weaknesses with internal controls at that same subsidiary; and one of the most problematic foreclosure records of all the banks in California.
The Los Angeles Times labeled OneWest Bank a “laggard” after analyzing its small businesses lending record, citing its preference for private equity deals, and also noted the bank’s higher than average amount of insider loans.
On the consumer side, the bank was roughly nine times as likely to foreclose on a homeowner living in a community of color as compared to originating a mortgage to a homeowner in a community of color. While serving as CEO of OneWest, Mr. Otting also served as chair of the California Chamber of Commerce, which labeled a state bill to protect widows and widowers from needless foreclosure as a “jobs killer” in 2015.
In trying to secure approval for OneWest’s merger with CIT Group, Mr. Otting infamously created an online petition urging Federal Reserve Chair Yellen to not hold a hearing on the proposed merger. Mr. Otting then asked his friends on Wall Street to sign it. In Mr. Otting’s judgment, his friends on Wall Street, thousands of miles away, were somehow better situated to provide input on a California bank merger than the community members who were actually going to be impacted by the merger.
The Comptroller of the Currency is one of the most important jobs in the nation for ensuring that large banks (including Mr. Otting’s former employer) are well-capitalized, well-regulated, and don’t engage in illegal or harmful practices against their customers. If this nomination were to become a reality, we imagine the Senate Banking Committee will have a great deal of questions about the many problems Mr. Otting had running one bank in Southern California, and whether he’s truly qualified to serve as a regulator for over 1,400 banks.”