In a letter to Justice Department (DOJ) leadership, Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, both commended the department for the enforcement actions against City National Bank and urged it to ensure the bank is fully satisfying its obligations.
“I encourage the DOJ and the Office of the Comptroller of the Currency (OCC) to consider taking steps to ensure the bank, like any other bank that settles allegations or is found to have engaged in such misconduct, satisfies their obligations under your respective consent orders in a robust and transparent manner for the benefit of all consumers that they allegedly harmed,” Waters wrote. “This kind of follow-through with respect to redlining or other discriminatory practices is critical to ensuring that our nation’s anti-discrimination and community reinvestment laws are being implemented the way Congress intended.”
The missive came after reports that City National’s new branch is to open in an area with few Black residents, seemingly in violation of the settlement reached between it and the DOJ in January 2023. As part of the agreement, City National was required to open at least one new branch in a majority-Black and Hispanic neighborhood and evaluate future opportunities for expansion within the county. The order also required the bank to establish a loan subsidy fund to provide at least $29.5 million in home mortgage credit within the next five years to majority-Black and Hispanic neighborhoods in the Los Angeles area.
“I understand the bank has established their Ladder Up Home Loan Program and has been providing borrowers with up to $20,000 that can go to interest rate reductions, closing cost reductions, or down payment assistance, but there is not a lot of transparency about how much of these subsidies have been provided to date, how many mortgage loans have been supported, or where these homes being supported are located,” Waters noted. “While the bank is required to report certain information to relevant authorities, more specifics about this loan subsidy fund and other obligations should be periodically disclosed so that the public, especially the Black and Latinx communities that were harmed by the bank, can better understand what progress is being made in addressing these concerns.”
In addition to the settlement with the DOJ, the OCC downgraded City National’s CRA [Community Reinvestment Act] rating, as well as imposed its own enforcement action and $65 million penalty to ensure the bank “clean[s] up [its] fair lending operations, among other reforms.”
However, Waters pointed out, the OCC did not make it clear how the public will be made aware of the progress being made in addressing the enforcement action. She stated that while there are reasons certain information with respect to banks should be kept confidential, “I would encourage your agencies to maximize transparency when implementing these type of consent orders for the benefit of the public.
“To the extent that you encounter any laws that needlessly limit disclosure that unduly undermines accountability and transparency in these cases, please let me know,” she added.