In a letter sent to the Federal Reserve Board on Friday, the Greenlining Institute urges the Fed to reject the proposed acquisition of Pasadena, Calif., based OneWest Bank by CIT Group. OneWest has branches throughout southern California.
“For the past five years, OneWest has been positioning itself as a bank for the wealthy,” said Greenlining Institute executive director Orson Aguilar. “The last thing California needs is a too-big-to-fail bank for the one percent.”
Greenlining’s letter cites multiple issues with the deal, including a lack of public benefit from the merger, OneWest’s clear intention to serve the wealthy and its poor track record with communities of color, lack of transparency, excessive executive compensation and a problematic loss-share agreement with the FDIC that could leave taxpayers on the hook. The letter also notes that OneWest’s Community Reinvestment Act plan, which theoretically outlines lending to underserved communities, appears to commit the bank to no new lending whatsoever and makes only a trivial gesture toward advertising with minority-owned media outlets.
If the officials choose not to immediately reject the proposed merger outright, Greenlining urges that at minimum the Fed extend the public comment period, hold public hearings in southern California and provide greater transparency, including details about the implications of the loss-share agreement.