Business & Economy

Groups accuse OneWest, CIT Bank of violating Fair Housing Act

File: People walk by the headquarters of CIT Group on Nov. 2, 2009 in New York City.
File: People walk by the headquarters of CIT Group on Nov. 2, 2009 in New York City.
Spencer Platt/Getty Images

Two nonprofit housing advocacy groups are accusing Pasadena's OneWest Bank of discriminatory lending practices. 

The California Reinvestment Coalition and Fair Housing Advocates of Northern California filed a complaint Wednesday with the federal Department of Housing and Urban Development against OneWest's parent company, CIT Bank. They allege that the bank may have violated the Fair Housing Act through practices that kept minorities — in particular Asian, black and Latino applicants —  from having equal access to home loans.

"The bank's lending to people of color in neighborhoods of color is low in absolute terms, it's low compared to what other banks are doing, and it's low compared to the proportion of people of color in the neighborhoods that the bank is meant to serve," California Reinvestment Coalition Deputy Director Kevin Stein told KPCC.

A table created by housing advocates purports to show the percentage of loans made to different minority groups by OneWest Bank compared to the percentage of the local population those groups make up.
A table created by housing advocates purports to show the percentage of loans made to different minority groups by OneWest Bank compared to the percentage of the local population those groups make up.
National Community Reinvestment Coalition

The Fair Housing Act "prohibits discrimination in the sale, rental, and financing of dwellings ... based on race, color, national origin, religion, sex, familial status ... and disability," according to HUD.

The complaint alleges OneWest avoided putting branches in minority communities and extended few mortgage loans to minorities.

"Having branches that kind of ring neighborhoods of color in its assessment area [...] is not making branch loan products, other branch loan products and financial services available to those communities," Stein said.

A map created by housing advocates purports to show OneWest Bank locations in relation to minority communities in the greater Los Angeles area.
A map created by housing advocates purports to show OneWest Bank locations in relation to minority communities in the greater Los Angeles area.
National Community Reinvestment Coalition

The number of home loans made by OneWest in minority communities over the last few years is dwarfed by the number of foreclosures in those areas, Stein said. An estimated 68 percent of the bank's foreclosures occurred in minority communities, the groups allege.

"To have an institution that's main way of interacting with working-class communities and communities of color to be through foreclosure is deeply disturbing," Stein said. "We're hoping that the bank will change its course and recommit itself to doing what is right, and making credit available to all qualified borrowers and consumers in its assessment area."

The groups also say OneWest maintained and marketed foreclosed homes in predominantly white neighborhoods better than those in minority neighborhoods.

U.S. Bank reached a settlement over a similar complaint about its foreclosed properties in September.

The complaint now goes on to be reviewed by HUD, who will make a determination of whether it falls within their jurisdiction, and if so, whether to pursue an investigation.

KPCC reached out to OneWest Bank for comment, but had not heard back at press time.

Document: OneWest Bank