Magazine article American Banker

Suits Reveal Racial Bias and Bullying at the OCC

Magazine article American Banker

Suits Reveal Racial Bias and Bullying at the OCC

Article excerpt

Two lawsuits recently filed by Sinclair National Bank have exposed an alarming pattern of racial discrimination and insensitivity to low-income borrowers at the Office of the Comptroller of the Currency.

Sinclair is a small institution operating in Arkansas and Missouri that focuses its lending efforts on lower-income and minority borrowers in the so-called nonprime market.

An article on the lawsuits in the Nov. 21 American Banker ("Arkansas Banker Sues OCC for Breach of Contract, page 4) describes serious allegations that OCC employees made racially hostile remarks about its borrowers and then aggressively sought to shut down the bank's nonprime lending program. The OCC did this despite Sinclair's success and the successful performance of its portfolio.

The article also describes the OCC's reaction when faced with these allegations -- a denial that anything was wrong and an attempt to bury the bank in an avalanche of punitive and arguably unlawful regulatory actions.

As a six-term former congressman from Missouri and as someone consulted early on by Sinclair as this shameful drama was unfolding, let me tell you what I told directly to the highest levels of leadership at the Comptroller's Office: The behavior of OCC representatives in the field in this matter was disgraceful and disheartening.

What's more, the agency adopted a see-no-evil approach to its examiners' conduct -- an unfortunate and all too familiar response to unlawful discrimination.

Given the number of years I spent in Washington working with federal agencies, I am extremely disappointed in the OCC's failure to properly respond to these types of allegations.

An examination at Sinclair has been going on in one form or another for months, a highly unusual event for an institution of this size. At times, the OCC sent more examiners into this tiny $27 million-asset bank than there were employees and customers combined. …

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