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Sunday, Oct 1, 2023

OneWest Expected to Receive Over $2.4 Billion From FDIC

Livingston, N.J., finance firm CIT Group Inc. is expected to collect $1.4 billion from federal regulators to cover future losses should its purchase of Pasadena’s OneWest Bank be approved, according to a report from a group trying to hold up the deal.

That’s on top of the more than $1 billion the Federal Deposit Insurance Corp. has already paid out to OneWest as part of a loss-sharing agreement reached when OneWest’s owners took over the assets of failed Pasadena savings and loan IndyMac Bank in 2009.

The previously unreported figures emerged as the result of a Freedom of Information Act disclosure obtained by the California Reinvestment Coalition, a San Francisco organization that advocates for banks to do more for low-income communities. They were released today at a rally organized by the coalition, in front of OneWest’s headquarters.

The coalition wants the Federal Reserve to delay CIT’s planned $3.4 billion acquisition of OneWest, which was announced in July, and to schedule public hearings on the transaction.

“This is an embarrassing amount of subsidy for the FDIC to give to the billionaire owners of this bank, especially when the bank leadership refuses to create a strong community reinvestment plan,” said Kevin Stein, the coalition’s associate director, in a statement.

Representatives for CIT and OneWest did not immediately return calls for comment.

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