Trump shelves probes into BofA, other banks

Since President Donald Trump took office, Trump administration's Office of the Comptroller of the Currency has quietly shelved at least six investigations of discrimination and redlining, according to internal agency documents and eight people familiar with the cases.

Flagstar Bank, a leading lender in Michigan, wrongly charged Black homeowners more through a network of mortgage lending affiliates, OCC officials concluded in 2017. That same year, agency examiners found that Colorado Federal Bank, an online lender, was doing the same to female borrowers.

Another inquiry by OCC officials concluded that Chicago-based MB Financial, a lender acquired by Fifth Third Bank last year, charged Latinos too much on mortgage loans. Cadence Bank, a lender in several Southern states, was turning away minority borrowers in Houston, according to an OCC investigation. Fulton Bank, a lender based in Pennsylvania, had been discriminating against minorities in parts of Richmond, Virginia, and its home state, regulators concluded.

In each case, despite staff recommendations that fines or other penalties be imposed, the OCC took no public action and closed the investigations quietly. In the past, banks have had to pay substantial sums after similar investigations. In 2012, in the wake of the housing crisis, Wells Fargo paid $175 million to resolve allegations that it charged Blacks and Hispanics more to buy a home after an investigation that began with the OCC years earlier.

Each of the banks declined to comment on the specifics of the investigations and said they are committed to providing equal access to credit. The OCC has historically prioritized the well-being of banks over bank customers, said current and former examiners, but the balance has shifted even further under the Trump administration.

"We have not always been the biggest defender of consumers," said one veteran OCC attorney who has handled enforcement matters but asked not to be named for fear of losing his job. "Lately, though, we are outright hostile." Career staff and ordinary agency employees who have raised alarms about discrimination and other consumer abuses have seen their concerns brushed aside by the agency's leadership, according to two current and two former OCC officials who have left in the last three years. The OCC was run from November 2017 until May of this year by Joseph Otting, a former bank executive with ties to Treasury Secretary Steven Mnuchin.

The administration has not only held back from redlining enforcement but tinkered with rules for applying the Community Reinvestment Act, a law that has helped combat discrimination for five decades. Homeownership remains a key path to building family wealth in America, but the homeownership rate among blacks is 44 percent compared to whites at 74 percent, according to the most recent census data.

One major obstacle to narrowing that gap is discrimination in mortgage lending.