Foul Play Related To OneWest/CIT Merger?

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CRC to Share Findings of Fake Public Comments During ‘Too Big to Fail’ Merger under OCC Comptroller Joseph Otting’s Tenure as Bank’s CEO

CRC and Public Citizen Call for Investigation and Full Accounting of AstroTurf Campaign During Otting’s Tenure Prior to CRA RuleMaking Process Public Comment 

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Q4 2019 hedge fund letters, conferences and more

Washington D.C. – On Thursday, February 6th, 2020, The House Financial Services will hold a hearing “Fake It Till They Make It: How Bad Actors Use Astroturfing to Manipulate Regulators, Disenfranchise Consumers and Subvert the Rulemaking Process” at 2:00 p.m. EST in Room 2128 of the Rayburn House Office Building.

California Reinvestment Coalition’s (CRC) Executive Director Paulina Gonzalez-Brito will appear as an expert witness alongside Bart Naylor, financial policy reform advocate at Public Citizen’s Congress Watch, among other leading government accountability and financial services reform experts.

Ms. Gonzalez-Brito will appear before the committee to discuss CRC’s findings of fabricated emails discovered while Comptroller of the Currency Joseph Otting was the head of OneWest bank.

Fake public comments and bank regulators

CRC and Public Citizen are strong advocates for government accountability and a fair and open public comment regulatory process. Public Citizen stands in solidarity with CRC in the demand for a formal investigation into the fabricated comments leading to the OneWest CIT merger. Unless manipulators are held to account, there is no meaningful deterrent to corruption of public comment.

Submission of fake comments marred OneWest/CIT’s merger application before federal regulators. Otting’s previous handling of the public comments process is of consequence today because he is overseeing the public comment process for his effort to restructure regulations around the Community Reinvestment Act (CRA), the anti-redlining civil rights law. CRC and leading experts fear that Otting is driven to hurt the law given his past history with it. Proposed changes will undoubtedly curtail reinvestment into low and moderate income and communities of color throughout the nation.

OneWest/CIT merger

CRC and over 100 organizations opposed the OneWest/CIT merger. CRC and the Greenlining Institute also called for an investigation into whether OneWest Bank played any role in orchestrating the submission of fake comments for stakeholders to weigh in on the merger application. The organization suspects foul play. As part of the merger, Mr. Otting solicited letters of “support” from his financial services contacts via a form letter on the bank’s website. CRC analysis of these letters observed a number of anomalies and ultimately found evidence of “fabricated comment letters” in support of the merger.

Until we know who is responsible for the fake public comments supporting the OneWest/CIT merger, the OCC should not proceed with finalizing a regulation that will curtail the impacts of the CRA.

The Community Reinvestment Act (CRA) stands as one of the most important banking laws that Congress has enacted to combat discriminatory practices by banks, such as redlining. The law requires banks to help meet the credit needs of all parts of the communities they serve, consistent with safe and sound operations. For more than 40 years, the CRA has helped to expand access to affordable credit to all communities, including low-and moderate-income communities and communities of color.

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About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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