HUD Approves Settlement Between California Reinvestment Coalition and CIT Bank dba OneWest Bank Resolving Allegations of Discriminatory Redlining

The U.S. Department of Housing and Urban Development (HUD) announced July 29, 2019, that it has approved a Conciliation Agreement between the California Reinvestment Coalition and CIT Group, Inc., and CIT Bank, N.A., dba OneWest Bank, resolving allegations that the bank engaged in lending discrimination by “redlining” in the Los Angeles region. Read the agreement.

The Fair Housing Act prohibits financial institutions from discriminating on the basis of race or national origin in their mortgage lending services. This includes redlining, which is the practice of denying credit to residents of predominantly minority neighborhoods.

“Homeownership is the foundation of the American dream,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Today’s settlement is an important step toward ensuring access to that dream for all borrowers, regardless of their race or national origin.”

OneWest Bank is a retail bank with 60 branches in Southern California. The complaint, filed by the California Reinvestment Coalition (CRC), alleged that from 2014 to at least 2017 OneWest Bank discriminated in the marketing and origination of home mortgages, as evidenced by the low number of mortgages it made to African-American and Latino borrowers relative to the demographics of the area and to the industry as a whole. The complaint also alleged that the bank located and maintained branches in areas that do not serve minority neighborhoods and borrowers. OneWest Bank denies discriminating in violation of the Act, but has entered into the Conciliation Agreement to provide “important and valuable assistance to minority communities in its service areas.”

As part of the settlement, OneWest Bank will invest $5 million in a loan subsidy fund to increase credit opportunities for residents of majority-minority neighborhoods; devote $1.3 million toward advertising and community outreach; and provide $1 million in grants for homebuyer education, credit counseling, community revitalization, and homeless programs. OneWest Bank is also committing to originate $100,000,000 in home purchase, home improvement and home refinance loans to borrowers in majority-minority areas, and to open a full-service branch serving the banking and credit needs of residents in a majority-minority and low- and moderate-income neighborhood. Click here for the press release.