Nominee to Lead OCC Joseph Otting Criticized by Consumer Advocates

In The New York Times:

Mr. Otting worked closely with Treasury Secretary Steven Mnuchin when the two men ran OneWest. Formerly known as IndyMac, the lender had to be taken over by the federal government in the financial crisis of 2008 and was sold to a group of investors that included Mr. Mnuchin the next year. Mr. Otting was chief executive of the bank from 2010 to 2015, when it was acquired by the CIT Group for $3.4 billion. * * *

Critics have repeatedly raised concerns about OneWest’s foreclosures and use of illegal tactics like “robo-signing” in the wake of the financial crisis. The bank has also faced attacks over the practices of its reverse mortgage subsidiary Financial Freedom, which announced an $89 million settlement with the Justice Department last month.

Senate Democrats pressed Mr. Mnuchin to account for the bank’s behavior under his tenure at a heated confirmation hearing in January, and Mr. Otting is likely to face similar scrutiny.

“The president’s choice for watchdog of America’s largest banks is someone who signed a consent order — over shady foreclosure practices — with the very agency he’s been selected to run,” said Senator Sherrod Brown, Democrat of Ohio, referring to a 2011 consent decree between OneWest and the Office of Thrift Supervision, which was later folded into the comptroller’s office.

“If Mr. Otting didn’t deal fairly with the customers at his own bank, it’s difficult to see why he’s the best choice to look out for the interests of customers at more than 1,400 banks and thrifts across the country,” said the senator * * *

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