Top bank regulator Joseph Otting ran into trouble during Capitol Hill visits this week by downplaying the existence of discrimination in financial markets, which is likely to further strain the relationship between the Trump appointee and congressional Democrats.
While testifying Thursday before the House and Senate in his role as comptroller of the currency, Otting maintained that he hasn’t witnessed discrimination in finance. Democrats rejected the claim.
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“I’m not aware of any old boys network that I associate with the banking industry,” Otting said Thursday when asked by Sen. Sherrod Brown, D-Ohio, whether white men give each other advantages in hiring.
Brown, the top Democrat on the Senate Banking Committee that held the hearing, suggested that answer meant Otting couldn’t be trusted to rework the Community Reinvestment Act, the law requiring banks to serve low-income and disadvantaged areas.
The previous day in the House, Otting said he had “not personally observed” discrimination in banking. Rep. Emanuel Cleaver, D-Mo., called the statement “stupefying.”
Rep. Bob Menendez, D-N.J., said Thursday that he “could not believe the answers you gave” to the House panel. He then pressed Otting on the question of whether he believes there is discrimination in mortgage lending.
“I believe there is,” Otting responded, adding that some banking practices have disparate impact on different groups.
Otting and Democrats have been at odds from the beginning. Previously, he was the CEO of OneWest Bank, the same bank that Treasury Secretary Steven Mnuchin had helped purchase and run and that Democrats had criticized as a foreclosure machine. Otting only gained the votes of two Democrats in confirmation.
On Thursday, he maintained that he is pursuing two reforms to aid low-income groups: Allowing banks to compete more with payday lenders by offering short-term, small-dollar loans to people with questionable credit, and revamping the Community Reinvestment Act to promote more lending to poor communities.
