Urge Governor to Return $331 Million to Homeowners

Return $331 Million in Misappropriated Funds to Help 800,000 California Homeowners in Distress

>>SIGN PETITION>>

 

In 2012, California Attorney General Kamala Harris negotiated a settlement with many of the banks to help homeowners struggling as a result of the financial crisis. $350 million was supposed to go to assistance programs for California homeowners.

In 2013, Facing a huge deficit, Governor Brown took the money to balance the budget. Now that the state is projected to see major surpluses, we want the money to be used for its original intended purpose.

On June 12th 2015, the California Superior Court ordered the Governor to return $331 million he illegally took from a homeowner and renter fund. The fund could help millions of homeowners, future homeowners and present renters. However, the state legislators still need to work with the Governor to pass legislation to re-appropriate the money.

Help us by showing the state legislators you want this done. Many legislators are already supporting the return of the money.

More about the issue:

NY Times
http://www.nytimes.com/2015/06/16/business/california-has-to-repay-331-million-to-homeowners-fund-court-rules.html

SF Chronicle
http://www.sfgate.com/news/article/Judge-Brown-and-Legislature-illegally-raided-6329098.php

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Letter to the Federal Reserve and OCC Strongly Advocating CIT Group’s Proposed Acquisition of OneWest Banc

Click HERE to download a PDF of this letter.

November 7, 2014

 

Janet Yellen
Chair, Federal Reserve
20th Street and Constitution Avenue N.W.
Washington, D.C. 20551 
Thomas Curry
Comptroller of the Currency
400 7th Street, SW
Washington, D.C. 20219

Why Many Black, Latino and Asian American Church, Minority Business and Minority Nonprofits Support the Acquisition of OneWest by CIT

Dear Chairwoman Yellen and Comptroller Curry,

As this letter indicates, a broad coalition of minority community groups support, for a number of reasons set forth below, this merger based upon the number of accomplishments and an even greater number of commitments by OneWest Bank pursuant to CRA including the commitment to secure “Outstanding” CRA ratings and to take a number of actions to support Chairwoman Yellen’s commitments to end income inequality.

The National Asian American Coalition is part of a major coalition of Black, Latino and Asian American organizations, from faith-based to small business to non-profits, that has played a major role, beginning with the Great Recession of 2008, in attempting to ensure that the financial industry avoids a repetition of the extraordinary crisis that may have begun as early as 2001 when some of us met with then Chairman Alan Greenspan to discuss our concerns relating to lax bank regulatory oversight.

We and our colleagues within the coalition have frequently met with all the federal banking regulators in DC, as well as with the leadership of FHFA, HUD and key congressional leaders from Republican Darrell Issa to Democrat Maxine Waters. We have also met with the leadership from more than thirty financial institutions, including leadership from the four “Too Big to Fail Banks” Citigroup, Bank of America, Wells Fargo and Chase, as well as a number of so-called “Systemically Important” banks such as Union Bank, US Bancorp, Capitol One, Regions Bank and Bank of the West.

We have also met with a number of banks that may soon be so-called “Systemically Important” including First Republic Bank and City National Bank. In addition, we have met with the leadership from mid-sized banks such as Cathay Bank, East West Bank and Pacific Western Bank, as well as a large number of community banks.

The “we” in our coalition, includes the leadership of the National Hispanic Christian Leadership Conference of 40,000 Latino Churches, the leadership of the 5,000 African Methodist Episcopal Churches, the leadership of the largest Latino Chamber of Commerce and one of the largest pan-Asian American advocacy groups in the nation. Virtually all will be affected by CIT’s acquisition of OneWest Bank.

We and the members of the minority coalition, some of whom will be submitting separate letters of support, all support the merger. However, before describing why we support the merger, we wish to offer some observations on “Systemically Important” banks and the present inadequacies of CRA particularly in its implementation by banks and regulators.

Support for Bank Regulatory Reforms with Some Qualifications

Our coalition strongly supported the Dodd-Frank Act and worked frequently with Congressman Barney Frank and Maxine Waters on various provisions. We also were initially strong supporters of the Volker Rule (until it became too complex and convoluted to be effectively enforced) and are deeply concerned about the lack of competition and the financial risks relating to “Too Big to Fail” banks. That is, we support much stronger competition than that provided by just Bank of America, Wells Fargo, Chase and Citigroup. For example, we believe that Governor Tarullo’s recent meeting with the leadership from all of the so-called “Systemically Important” banks with up to $150 billion in assets is a positive sign for possible change in the size required to be considered “Systemically Important”.

Specifically, we do not agree that a bank is automatically “Systemically Important” at the $50 billion asset level. Instead, we believe that in order to create more effective competition in addressing “Too Big to Fail” banks, banks with under $500 billion in assets should be treated as “Important” banks but not necessarily “Systemically Important” banks. For example, no bank should automatically be considered “Systemically Important” until it reaches a minimum of $100 billion in assets. Further, the stress test should be proportional to the size of the institution from $100 billion to under $500 billion.  For example, banks between $250 and $500 billion, such as US Bancorp and Capitol One, should be in a separate category, distinguished from banks such as Union Bank with $105 billion in assets. Such graduated treatment could also maximize competition. It could, for example create at least ten and in some regions up to twenty competitive banks.

We have analyzed the impact of the CIT/OneWest merger in the above context from the perspective of our nation’s 130 million minorities and the 70% of our population that lives from paycheck to paycheck.  Our conclusion is that this merger does not automatically create a “Systemically Important” bank.

 

Income Inequality

All of our organizations fully support Federal Reserve Chair, Janet Yellen’s October 17th speech to the Federal Reserve Bank of Boston on income inequality. As referenced in the speech, banks play a crucial role in eliminating income inequality and wealth inequality. One of the four pillars of Chairwoman Yellen’s speech is the education of our children and its impact on future income and wealth inequality. Another key feature is the building of wealth through homeownership. A third key pillar in transmitting wealth and reducing income inequality is through small business development and technical assistance.

We urge that all banks seeking to merge should be judged, in part, by their role in helping reduce income and wealth inequality.

Two Percent of Pretax Profits Directed at Underserved Communities

One of the keys to reducing income and wealth inequality is the amount of corporate philanthropy relative to assets, and/or relative to deposits, and/or relative to revenue and particularly relative to pretax profits allocated for the above referenced reductions in income and wealth inequality. For many years we and one of the most respected opponents of income inequality, Greenlining Institute, have urged that at a minimum, every financial institution commit a minimum of two percent of pre-tax profits to underserved communities rather than the prevalent less than one percent of net profits that is often distributed primarily to elite causes such as art museums and universities. We therefore urge that this merger and future mergers be examined in this context and the degree to which a bank meets the two percent of pre-tax profit standard. (This is just one-fifth of the ten percent tithing among many church members.

Outstanding and Outstanding Plus CRA Ratings

As we have pointed out in comments filed with the Federal regulators on September 8th relating to CRA reforms, the present CRA rating system is an inadequate evaluator of what a financial institution does to benefit the community. We believe it will be improved once Maxine Waters’ Section 342 diversity provisions are implemented under the Dodd-Frank Act (CFPB will hopefully announce its requirements for greater transparency by the end of this year.)

Similarly, too many banks that are nonresponsive to community needs receive so-called “Outstanding” CRA ratings and rarely is a mediocre bank subject to a “Negative Needs to Improve” CRA rating. (None of the so-called “Systemically Important” banks, to our knowledge have received an overall “Needs to Improve” rating even though many are lacking in service, investments and lending to underserved communities)

This is why, in our September 8th CRA comments to the regulators, we urged a new category, which we believe requires no legislation. The new rating is “Outstanding Plus,” a rating we believe no large bank has yet earned. OneWest Bank has committed to receiving an outstanding CRA rating in the future in the three categories of lending, service and investments in the community. They also have informed us that should the regulators create the new and higher rating of “Outstanding Plus,” as we have proposed, they will consider quickly seeking to achieve such a rating.[1]

Specifics of Why We Support the Acquisition

From our initial discussions, it appears that 60 to 100 minority church, small business and nonprofits will be working with us to support the merger because of the specific commitments with OneWest Bank and its CEO to assist underserved communities and because of its pledge to be at a minimum an “Outstanding” bank in terms of CRA.

We are specifically working on a number of pilot programs by OneWest and its CEO that could double or triple the effectiveness of youth financial education programs and substantially reduce income inequality throughout California. This is especially likely, if some other so-called “Systemically Important” banks join with OneWest Bank.

In addition,

A.) We are working with OneWest Bank on a number of job creation and small business development and technical assistance programs that, if adopted or embraced by “Systemically Important” financial institutions, could within two years reduce California’s unemployment rate to well below the national average. It could also create tens of thousands of new jobs, particularly among unemployed and underemployed minorities. Further it could help develop long-term sustainable small businesses, some of whom could eventually be employers of hundreds if not thousands of inner-city unemployed or underemployed residents.

B.) We are working on a number of home lending programs including alternatives that, if adopted by the major mortgage originators doing business in California, could substantially alter the present lack of home originations to the vast majority of eligible Black, Latino and Southeast Asian potential homeowners in California.

C.) We are in the early stages of discussing a new bank model for large banks that is similar to the once prevalent practice of community bank CEOs of being personally involved in the community.

D.) We also note a number of commendable programs consistent with reducing income inequality and promoting youth financial education adopted by OneWest Bank prior to the proposed acquisition by CIT. These programs include Junior Achievement, Boys and Girls Clubs, Partnership for LA Schools, City Year Los Angeles and Mind Institute among others.

E.) We are working with the CEO of OneWest on developing an innovative Community Advisory Council that will have substantial input on future bank policies intended, for example, to reduce income inequality including creating of jobs, homeownership and youth financial education.

Throughout this letter, we have focused on minority communities, but believe all underserved communities should be served, without regard to race and ethnicity. We are, however, stressing minority since A) 60% of Californians are minorities, B) 75% of our K-12 public school students are minorities and C) 80-85% of underserved communities in California are minority communities.

Monthly Coalition Evaluations of OneWest

This preliminary report on why we support the merger will, on a month by month basis be updated and contain specific actions and results by OneWest Bank that relate to achieving an outstanding, CRA rating and specific efforts to help reduce income and wealth inequality[2].

In the Banc of California merger, 58 of our coalition members requested expedited approval of the Banc of California acquisition of Banco Popular. Because of the larger size of this merger, and the regulators present view of “Systemically Important” banks, we merely support timely approval. However, should the regulators reexamine and redefine “Systemically Important” banks[3], we may, based on subsequent achievements by OneWest Bank, urge the same type of expedited approval that we urged in the Banc of California/Banco Popular case.

D.C. Meetings with Regulators Including Federal Reserve and OCC

During the period November 12 to 14, 2014, we and many of our coalition members will be in Washington DC for meetings with key bank regulators, including Federal Reserve Chair Janet Yellen, Mel Watt, the head of FHFA, OCC, the FDIC, HUD and the CFPB to further discuss, based on the commitments of OneWest and its CEO, the potential positive benefits of this merger. We are also open at any time to a community dialogue with the key Federal Reserve and OCC staff on this matter and we believe that the CEO of both CIT and OneWest are prepared to join us if you wish[4].

 

Respectfully Submitted,

/s/ Faith Bautista
President & CEO, National Asian American Coalition
/s/ Sam Rodriguez
President, National Hispanic Christian Leadership Conference of 40,000 Latino Churches
/s/ Mark Whitlock                                                        
Senior Minister, COR AME Church, Irvine, CA
Director of Corporate Partnerships, 5,000 African Methodist Episcopal Churches
Executive Director, Ecumenical Center for Black Church Studies
Chair, Orange County Interdenominational Alliance
/s/ Jesse Miranda
Founder, Jesse Miranda Center for Hispanic Leadership
Former CEO, National Hispanic Christian Leadership Conference
/s/ Sergio De La Mora
Senior Pastor, Cornerstone Church of San Diego (6,500 Member Congregation)
Co-Founder, Turning the Hearts Center/s/ Theresa Martinez
Chief Executive Officer, Los Angeles Latino Chamber of Commerce/s/ Charles Dorsey         ________
Associate Pastor – Youth and Young Adults, Christ Our Redeemer AME Church, Irvine, CA
/s/ Gilbert Vasquez
Chair, Los Angeles Latino Chamber of Commerce Serving 250,000 Latino Businesses
/s/ Arnulfo Manriquez
President & CEO, MAAC/s/ Jin Sung
Executive Director, OASIS Center International
/s/ Lee de Leon___________________________________
Pastor Lee de Leon, President and Founder Templo Calvario CDC
/s/ Dan de Leon__________________________________
Pastor, Templo Calvario CDC
/s/ Cora Oriel
President, Asian Journal Publications/s/ Alex Anderson                                          ________
Co-Chair, African Americans for Economic Justice/s/ Vivian Araullo
Executive Director, West Bay Pilipino Multi-Service Center
/s/ Eric Le
Director, Vietnamese & Laotian Community Alliance for San Diego and Orange County/s/ George McDaniel     ________                ________                ________
Co-Chair, African Americans for Economic Justice/s/ Cathy Zhang
Executive Director, Chinese-American Institute for Empowerment & Sound of Hope

 

CC        Federal Reserve and OCC Senior Executives

CEO of CIT

CEO of OneWest

CRA Director for OneWest

 


[1] This incentive is necessary since the stick approach has not worked. That is, large and medium sized banks are never prevented from seeking a merger since no bank pf significant size has, in recent memory, received an overall “Needs to Improve” CRA rating.

[2] Should the regulators embrace our September 8th comments on CRA and develop an “Outstanding Plus” CRA rating, we will also report on OneWest Bank’s efforts in supporting and achieving such.

[3] See for example Federal Reserve Governor Tarullo’s recent meeting with so-called “Systemically Important” banks with assets of $50 billion to $150 billion

[4] Approximately twelve of the undersigned will be at these DC meetings November 12 to 14 and may also meet with executive staff of the Federal Reserve and the OCC.

 

Community Support

Asian Journal to Federal Reserve and OCC

Templo Calvario CDC and Members to Federal Regulators

Petition by Vietnamese and Laotian Communities
in Support of CIT Acquisition of OneWest Bank

King Chavez High School Support of One West

COR CDC Letter of Support to One West

 

ADD Your Letter of Suport:
Contact Jeronathon Angeles jangeles@naac.org

 

 

Minority and Underserved Community Groups Urge Prepaid Cards Be the Predominant Financial Instrument for Children and Young Adults

FOR IMMEDIATE RELEASEJune 27, 2012

CONTACTS

 
Faith Bautista
(619) 252 1898
fbautista@naacoalition.org

Mia Martinez
(202) 559 7483
mmartinez@naacoalition.org

 
On June 26th, the Black Economic Council, the Latino Business Chamber of Greater Los Angeles and the National Asian American Coalition released their public comments before the Consumer Financial Protection Bureau (CFPB) on prepaid cards. In summary, they stated that prepaid cards, if lightly but effectively regulated, could become the overwhelming financial instrument used by the vast majority of children, young adults and possibly among all underserved Americans.

The three minority business groups recommend, for example, light but simple, understandable regulations that would maximize the number of competing financial and non-financial institutions. They estimate that this could result in a $500 billion or more business within five years.

The groups also recommend the avoidance of problems inherent in credit cards and checking accounts by having just one simple but understating basic fee. This would also eliminate the need for comprehensive and expensive regulatory enforcement that often discourages competition.

Mia Martinez, chief deputy for the DC bank regulatory operations said, “The movement to prepaid cards could be as revolutionary as moving from landlines to smartphones. To ensure that it is the financial instrument of choice for the unbanked, underbanked and other underserved communities, we urge, to the degree possible, just one simple basic fee.

“We predicted if this is accomplished, prepaid cards could within less than five years be a highly profitable $500 billion a year business for both regulated and unregulated financial institutions. Most significantly, it could become an almost universal financial instrument for children, college students and underserved communities.

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Link to Filing with Bureau of Consumer Financial Protection

Hearings by PCAOB on Big Four CPA Firms on Consumer Fraud and the Financial Crisis

Black Economic Council

National Asian American Coalition

Latino Business Chamber of Greater Los Angeles

FOR IMMEDIATE RELEASE

June 26, 2012

 CONTACT 

Mia Martinez
mmartinez@naacoalition.org

Yolanda Lewis
: yolandalewis@blackeconomiccouncil.org

(202) 559 7483

 

On Thursday, June 28th, the federal regulator known as the Public Company Accounting Oversight Board (PCAOB) will hold hearings in California on the failure of the Big Four CPA firms to protect investors and consumers from Fortune 500 corporate fraud and a future financial crisis.

The PCAOB has suggested testimony from the Black Economic Council, Latino Business Chamber of Greater Los Angeles and National Asian American Coalition. The three groups will be providing testimony on the failure of Big Four firms to provide independent audits and/or failure to follow generally accepted accounting principles and it adversely affects our nation’s consumers and homeowners. Both the Black Economic Council and Latino Business Chamber of Greater Los Angeles will be testifying at the hearing and the National Asian American Coalition was the only consumer group to provide testimony critical of the Big Four at the PCAOB’s first hearings in Washington, DC on March 21st to 22nd.

To opening commentator will be the former SEC chairman, Harold Williams. (Mr. Williams’ remarks will begin at 8:30 am.) He will be taking a very pro-consumer position relating to the adverse impact of the Big Four on protecting the integrity of our nation’s financial system. At the March PCAOB hearings, distinguished panelists, such as former Federal Reserve chairman Paul Volcker, also echoed the consumer concerns being raised by the PCAOB.

Yolanda Lewis, chief deputy for the Black Economic Council said, “California’s three largest utilities, PG&E, Edison and Sempra, have requested $17 billion in rate increases during a deep recession. It significant measure, they are relying on the accuracy of the Big Four CPA firm audits [Deloitte & Touche is the auditor for PG&E and Sempra, and PricewaterhouseCoopers is the auditor for Edison]. If the California Public Utilities Commission heeds our request for an investigation, it is likely that new CPA auditors will be installed and most of the proposed rate increases deemed unnecessary.”

Faith Bautista, president and CEO of the National Asian American Coalition said, “The foreclosure crisis that has caused 20 million homeowners to be in jeopardy of foreclosure or to be deeply underwater. In significant measure, this was the result of inadequate audits of derivatives, mortgage securities and high-risk “bets” by Big Four CPA firms.

“The Big Four audit 97 percent of all assets under the control of the Fortune 500 corporations. We have requested that the Department of Justice’s antitrust division initiate antitrust proceedings against the Big Four. We also urged that the Federal Reserve and the OCC urge new independent auditors for the 25 largest banks that are so-called ‘too big to fail’ banks.

“In the absence of new and truly independent auditors, the U.S. could become the new Greece or Ireland.”

Jorge Corralejo, chairman of the Latino Business Chamber of Greater Los Angeles said, “The Latino Business Chamber of Greater Los Angeles will be testifying through its vice chairman, Gilbert Vasquez, founder and partner at a prominent CPA firm that has always encouraged corporate America to use truly independent CPA firms. Mr. Vasquez is the former president of the California Board of Accountancy and a founder and former president of ALPFA, the Association of Filipino Professionals in Finance and Accounting. Mr. Vasquez is a strong proponent of the PCAOB’s ordering mandatory rotation of audit firms to preserve the independence of auditors.”

The hearing will begin at 8:15 am and ends at 6:30 pm. It will be held at the Hilton San Francisco Financial District, 750 Kearny Street, San Francisco, CA 94108.

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