When banks request permission to merge, they may receive questions from their regulators or from community members who will be impacted by the merger.
In the case of CIT Group purchasing OneWest Bank, there’s been a lot of information that the banks have tried to keep secret. Here’s two recent examples:
1) Total number of foreclosures: OneWest Bank refuses to disclose the total number of people who have lost their homes due to IndyMac mortgages that OneWest foreclosed on. We do know that it’s a high enough number that the FDIC estimates it will pay out a total of $2.4 billion to cover foreclosure-related costs under a controversial “shared loss agreement” the billionaire owners of the bank were able to obtain when they bought the failed IndyMac bank.
2) Letters from Fannie Mae and Freddie Mac: Oddly enough, the Sullivan and Cromwell attorneys recently submitted a letter to the Federal Reserve about letters they had received from Fannie Mae and Freddie Mac. According to the attorneys, both Fannie and Freddie are “okay” with the merger. If that’s the case, then why are the attorneys trying to keep these letters confidential? Does it have anything to do with the former general counsel of OneWest Bank (a man who brags he helped kill bankruptcy reforms that many thought would have helped homeowners in foreclosure) now working at Fannie Mae? Will the Federal Reserve allow these letters to stay secret?