Asked if discrimination exists, top banking regulator says he has 'personally never observed it'

 
 
Posted7/5/2018 11:00 AM
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Joseph Otting, one of the country's most powerful banking regulators, repeatedly stumbled over questions from lawmakers this week on whether discrimination remains a problem in the United States, saying he had "personally never observed it."

Otting, the U.S. comptroller of the currency, is a leading proponent of revamping the 1977 Community Reinvestment Act, which compels banks to lend to borrowers in low- and moderate-income neighborhoods. Democrats warn that rolling back the law could open the way for more discriminatory lending, and lawmakers peppered Otting with questions about the issue during two congressional hearings.

During a recent House Financial Services Committee hearing , Rep. Michael E. Capuano, D-Mass., asked Otting whether he believed "discrimination exists in America today."

"I have personally never observed it, but many of my friends from the inner city across America will tell me that it is evident today," Otting said.

Capuano pressed Otting, asking, "Do you believe that it exists?"

"People have told me it exists, and so I trust those people when they tell me that," the comptroller responded.

Capuano returned to the question several times, asking Otting whether he had ever read about discrimination and whether he believed those reports. Otting's response: "My experience with writers are they're right half the time."

Capuano eventually surrendered, as he ran out of time. "I'm going to give it up," he said. "Mr. Otting, you got me. Never having seen discrimination, you're a very lucky man."

Later in the hearing, another Democratic lawmaker, Rep. Emanuel Cleaver II of Missouri, called Otting's responses to those previous questions "stupefying, even jaw-dropping." Cleaver asked Otting whether he was familiar with the white supremacist rally that rocked Charlottesville last August, leading to the death of a counterprotester.

"To be honest with you, I don't watch TV," Otting said. "I saw what was across the headlines, but I didn't spend specific time to study or analyze what took place."

Had he read any newspaper articles about the violence in Charlottesville, Cleaver asked?

"I don't read a newspaper," Otting said.

Cleaver then broached a topic that has roiled the banking industry for years: whether tech companies that want to offer some banking services should be required to comply with the same anti-discrimination laws as traditional banks.

"I am a big believer of minority inclusion," said Otting, who began his career at Bank of America. Noting his more than 30 years of experience in the banking industry, he said: "There are many people who would say that Joseph Otting spent more time in the inner cities of America than most banking executives across the world. "

Cleaver again asked Otting whether he had an opinion about discrimination in banking.

"I have not personally observed that," Otting said.

Cleaver, too, gave up. "I can't go any further," he said.

Otting offered a more nuanced explanation of his position before the Senate Banking Committee, telling lawmakers that he wanted to "correct the record."

"There's lots of evidence of inequity in the world," he said. "I would tell you just because I haven't personally experienced it, that I'm not saying" it doesn't exist.

Otting noted that as comptroller he had prioritized issues that will help low- to moderate-income communities and minorities. Revamping the Community Reinvestment Act and encouraging big banks to get back into the business of offering small, short-term loans will help "people in America that need the most help," he said.

Still, some senators appeared skeptical. Sen. Sherrod Brown, D-Ohio, ranking member of the committee, asked Otting whether an "old boys' network" has hurt the progress of women or minorities in banking or government.

"I wouldn't support those kind of activities," Otting said, adding that "I'm not aware of any old boys' network that I associated with the banking industry."

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