OneWest Bank is a former US regional bank that operated from March 2019 to July 2022, when it became a division of First Citizens BancShares. With over 60 retail branches in Southern California. OneWest Bank specialized in consumer deposit and lending. OneWest also offered small business services, loans, and treasury management products.
 | |
| Company type | Subsidiary |
|---|---|
| Industry | Banking |
| Founded | March 19, 2009 |
| Founders | Steven Mnuchin (via IMB Holdco) |
| Defunct | July 15, 2022 |
| Headquarters | |
Area served | Southern California |
| Parent | First Citizens BancShares |
| Website | www |
History
editFrom 2008 to 2012, 465 banks failed in the United States following the financial crisis of 2007–2008. When the Federal Deposit Insurance Corporation (FDIC) closed the banks, their assets were sold.[1] On March 19, 2009, a seven-member investor group, IMB Holdco, led by Steven Mnuchin—which included billionaires Christopher Flowers, John Paulson, Michael Dell, and George Soros—purchased Independent National Mortgage Corporation (IndyMac Bank) of Pasadena, California for $13.65 billion from the FDIC and created OneWest, which then had 33 branches and $32 billion in assets.[2] IndyMac Bank's failure was the fourth largest in US history.[3]
Through OneWest Bank the investment group purchased two other failed banks from the FDIC, the First Federal Bank of California on December 18, 2009, which then had $6 billion in assets and $5 billion in deposits, and La Jolla Bank, FSB in February 2010, which then represented $3.6 billion in assets. In November 2010, OneWest purchased a $1.4 billion multifamily and commercial real estate loan portfolio from Citibank, which included approximately 600 loans, as part of their commercial real estate lending business.[4] Under a Freedom of Information Act (FOIA) request, nonprofit California Reinvestment Coalition determined that as of December 2014, the FDIC had already paid over $1 billion to OneWest Bank under the shared loss agreements it secured from the FDIC when it purchased IndyMac and La Jolla Banks, and that the FDIC expected it would pay another $1.4 billion.[5]
The New York Daily News[6] and the Wall Street Journal reported that OneWest Bank had started foreclosure proceedings on 137,000 homeowners.[7]
On November 25, 2009, Judge Jeffrey Spinner in Long Island, New York, penalized OneWest for their “harsh, repugnant, shocking and repulsive” actions in trying to work out a distressed mortgage, by canceling the debt in favor of the borrower.[8] A year later, an appellate court overruled that the decision.[9]
On December 8, 2009, OneWest worked with the Hennepin County, Minnesota Sheriff's department to change the locks on a distressed home despite stating in a Nov. 25 e-mail that they were rescinding both the foreclosure and the sheriff's sale. Changing the locks was done without a court action, bypassing mandated due process on home foreclosures in Minnesota.[10]
OneWest Bank stopped originating reverse mortgages before CIT acquired the bank. However, it continued servicing its portfolio of reverse mortgages, and was criticized for abusive foreclosure practices.[11] In May 2017, CIT agreed to pay $89 million in settlement claims related to OneWest's reverse mortgage program.[12] According to the United States Department of Justice, "The United States alleged that Financial Freedom sought to obtain insurance payments for interest from FHA despite failing to disclose on the insurance claim properly forms it filed with the agency that the mortgagee was not eligible for such interest payments because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to HUD, and pursuit of foreclosure proceedings. As a result, from March 31, 2011 to August 31, 2016, the mortgagees on the relevant reverse mortgage loans serviced by Financial Freedom allegedly obtained additional interest they were not entitled to receive."[13]
In July 2014, OneWest Bank and CIT Group announced a merger. CIT Group had accepted $2.3 billion in Troubled Asset Relief Program funding that it never repaid, because it declared bankruptcy.[14] Nonprofits raised concerns about the merger, citing the damage caused by OneWest's approximately 36,000 foreclosures in California, the bank's weak record in small business lending, weak Community Reinvestment Act record, and concerns about possible redlining. On February 2, 2015, Daily Kos and the California Reinvestment Coalition delivered more than 15,000 signatures on petitions opposing the merger.[15]
On August 3, 2015, CIT Group acquired OneWest Bank, N.A.[16] In January 2022, CIT was acquired by First Citizens BancShares.[17][18]
References
edit- ^ "Failed Bank List". Federal Deposit Insurance Corporation. Archived from the original on November 15, 2013. Retrieved November 15, 2013.
- ^ Wigand, Jim; Bovenzi, John (January 19, 2017). "Steven Mnuchin Bought IndyMac Fair and Square". Wall Street Journal. Retrieved December 23, 2018.
Trump's pick for Treasury made the best offer. The second-highest bid meant $1 billion more in losses.
- ^ Shalal-Esa, Andrea (September 25, 2008). "Factbox: Top ten U.S. bank failures". Reuters. Thomson Reuters. Retrieved December 23, 2018.
- ^ "OneWest buys $1.4 billion CMBS portfolio from Citibank". Retrieved 2018-11-20.
- ^ "OneWest Expected to Receive Over $2.4 Billion From FDIC | Los Angeles Business Journal". labusinessjournal.com. 16 December 2014. Retrieved 2019-05-31.
- ^ "Trump voter disappointed after Steve Mnuchin, whose bank foreclosed on her home, named Treasury Secretary". New York Daily News via The Associated Press. December 2, 2016. Retrieved December 23, 2018.
- ^ "Here's Why Treasury Nominee Steve Mnuchin Has Been Called the 'Foreclosure King'". Money. Retrieved 2019-05-31.
- ^ Crowley, Kieran; Wilner, Rich; Mangan, Dan (2009-11-25). "Judge blasts bad bank, erases 525G debt". New York Post.
- ^ Crowley, Kieran; Olshan, Jeremy (November 23, 2010). "Couple's foreclose break KO'd". New York Post.
- ^ "Leslie Parks Illegally Locked Out of Her Home by IndyMac/One West Bank | Twin Cities Indymedia | Movement Media for Minneapolis-St. Paul". Archived from the original on 2009-12-13. Retrieved 2009-12-09.
- ^ Woellert, Lorraine (December 2016). "Trump Treasury pick made millions after his bank foreclosed on homeowners". Politico.
- ^ "Steve Mnuchin's Former Bank To Pay $89 Million Settlement to U.S." NBC News. May 2017.
- ^ "Financial Freedom Settles Alleged Liability for Servicing of Federally Insured Reverse Mortgage Loans for $89 Million" (Press release). United States Department of Justice. May 16, 2017.
- ^ Reckard, E. Scott (16 December 2014). "Advocacy group protests CIT Group deal for OneWest Bank". Los Angeles Times.
- ^ "Daily Kos and partners deliver 15,000+ petitions to Federal Reserve: Stop these bank mergers". Daily Kos. February 3, 2015.
- ^ Peltz, James F. (August 3, 2015). "CIT Group closes $3.4-billion purchase of OneWest Bank in Pasadena". Los Angeles Times.
- ^ "First Citizens Completes Merger With CIT Group" (Press release). PR Newswire. January 4, 2022.
- ^ McCaffrey, Orla (16 October 2020). "First Citizens to Buy CIT Group". The Wall Street Journal. Retrieved 15 July 2024.
