How Merger is Setting New Records

We believe the proposed merger of OneWest Bank and CIT Group is setting some new records- please let us know if you think we’re missing anything or if there are other banks who might be contenders for these superlatives:

1) Most opposed bank merger in the history of the US.  It takes a pretty god-awful bank merger to get 21,000 people to sign petitions against your merger.  Beyond the individuals opposing it, 100+ prominent national and California groups are also opposing the merger.

2) Most subsidized bank merger by the FDIC and taxpayers.  We realize there may be some competition for this one, but it’s hard to argue with $2.3 billion in unpaid TARP money and another $2.4 billion in “shared loss” payments from the FDIC.  Did we mention that the banks plan to lower their tax bill if the merger is approved?  The banks will use their 2009 bankruptcy to lower their tax bill.  Yes, you read that correctly.

3) Most secretive bank merger.  Given their troubled histories, we can see why the bank leaders have tried to hide their records, but luckily for communities, there are laws like the Freedom of Information Act.

Here’s a sampling of information the banks have tried to hide from California communities.

Number of foreclosures since George Soros and other billionaires bought IndyMac. While we estimate OneWest has foreclosed on 35,000 Californians, thus far, the bank has refused to say how many people it’s foreclosed on since 2009.  We know that it’s a high enough amount to have already claimed over $1 billion in shared loss payments from the FDIC.

Letters from Fannie Mae and Freddie Mac.  In the most recent letter from the bank attorneys (dated 5/22/15), the attorneys ask the Federal Reserve to keep letters from Fannie Mae and Freddie Mac confidential.  It leads a person to wonder- what are they hiding?

Secret Community Reinvestment Plan: The banks originally tried to keep OneWest’s Community Reinvestment Act plan confidential- it was only brought to light later.  In reviewing it, now we know why.  The bank hasn’t achieved the goals it set for itself in this plan, so it didn’t want communities to know that.  Also, the bank’s first CRA plan called for stronger reinvestment commitments than the plan the banks published the day before a public Federal Reserve hearing about the merger, which was held in February 2015.

Number of homeowner complaints: After the February public hearing on the proposed merger, the Federal Reserve asked OneWest a number of questions.  One of them was about the number of complaints they had received from homeowners.  BRAZENLY, the bank only reported on complaints that happened AFTER it sold a majority of its loan servicing to Ocwen.  Will the Federal Reserve wink wink at this sleight of hand in data reporting, or will it require the banks to actually report on the data it asked for?

 

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