Representatives Maxine Waters (D-Calif), Ranking Member of the House Committee on Financial Services, and Al Green(D-Texas), Ranking Member of the Subcommittee on Oversight and Investigations, are urging House Financial Services Committee Chair Jeb Hensarling (R-Texas) to launch a probe into "the high potential for conflicts of interest" of the Trump Administration’s settlement with OneWest Bank while under Treasury Secretary Steven Mnuchin’s leadership. The legislators also have requested that the committee look into any pending investigations concerning OneWest and its subsidiary, Financial Freedom.
Letter to committee chair. In a letter to Hensarling, Waters and Green noted that Mnuchin served as co-owner, chairman, and CEO of OneWest Bank from 2009 to 2015. According to the letter, the Department of Housing and Urban Development, HUD’s Inspector General, and the Department of Justice have separately launched investigations into "the questionable practices of OneWest Bank under Mr. Mnuchin’s leadership."
Questions remain. "While the DOJ recently announced a settlement with Financial Freedom, a myriad of questions remain regarding the impartiality and adequacy of this settlement, as well as that of the other ongoing investigations," Waters and Green stated in their letter. On May 16, 2017, the DOJ announced that it had reached a settlement with Financial Freedom of approximately $89 million to resolve allegations that it violated the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. The lawmakers wrote, "In a troubling departure from DOJ practice under the previous Administration, the DOJ press release announcing this settlement failed to include the actual text of the settlement agreement and omitted important details such as the basis for the settlement amount." According to Waters and Green, there is no possible way to determine whether the settlement was fair because of the "scant details" included in the release.
Advocate action. The letter also outlined an action by the California Reinvestment Coalition and Fair Housing Advocates of Northern California alleging that OneWest, under Mnuchin’s leadership, violated the Fair Housing Act through redlining practices. Further, the legislators noted, CIT Group, which acquired OneWest Bank in 2015, disclosed to investors that it has been under investigation by HUD since 2015 regarding Financial Freedom’s servicing of reverse mortgage loans.
Legislators’ conclusion. Waters and Green concluded their letter by stating that "there is room for considerable doubt as to the impartiality and the adequacy of this Administration’s investigations into OneWest and Financial Freedom, and this Committee must act swiftly to take a close look at these issues."
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