Steve Mnuchin, Joseph Otting To Make Screwing Over Homeowners Safe For Bankers Again

It’s high time to take the “community” out of the Community Reinvestment Act.

You might think that, in the story of OneWest Bank, the villain is OneWest Bank, what with all of the illegal throwing people out of their homes with backdated documents and gamed foreclosure auctions and robo-signing and locking people out of their homes in Minnesota blizzards and foreclosing on people who owed it 27 cents to basically obstructing justice. You might also reasonably think that the men running OneWest are also villains. But those men are now two of the most powerfulbank regulators in the land, and they have a different villain in their retelling of the story.


“I went through a very difficult period with some community groups that didn’t support our community, who came in at the bottom of the ninth inning, that tried to change the direction of our merger,” he said at a banking conference in April. “And so I have very strong viewpoints.”

So Joseph Otting, now the Comptroller of the Currency, is unilaterally changing the rules under the Community Reinvestment Act, while his boss, Treasury Secretary Steve Mnuchin, goes about rewriting it.

Mr. Mnuchin said his time running a bank motivated him to revise CRA rules. He said the effort wasn’t “about weakening CRA in any way,” but about “making it more effective for communities.”

And just how would it do that, Mr. Secretary?

A later Treasury report on CRA ordered up by Mr. Mnuchin suggested changes that, among other things, could strip community groups of their leverage around deals.

Sounds about right.

Bankers vs. Activists: Battle Lines Form Over Low-Income Lending Rules [WSJ]