The testimony of Isela Gracian, Vice President of Operations for East LA Community Corporation (ELACC) about the proposed OneWest and CIT Group merger is featured in its entirety below. If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page helpful as well. Pictures are available here.
TESTIMONY OF ISELA GRACIAN, VP OF OPERATIONS AT EAST LA COMMUNITY CORPORATION
Good morning and thank you for hosting this hearing. My name is Isela Gracian and I am the Vice President of Operations for East LA Community Corporation (ELACC). ELACC is an economic and social justice organization serving the Eastside of Los Angeles for 20 years. We serve over 5,000 working class Latino families annually through our different programs and services. ELACC provides quality affordable housing to over 2,000 individuals in our affordable housing developments. Through our work we have leveraged over $124 million in investment for affordable housing and community assets to the Eastside of Los Angeles.
For decades the neighborhoods and residents we serve have lacked the needed investment to keep up with housing needs. In February of last year, the California Housing Partnership Corporation released a study highlighting how the housing market is failing to meet the need of low-income families in California.
In the Los Angeles County alone we have a deficit of nearly 400,000 homes for extremely low income renters; these are the most vulnerable residents in our neighborhoods. The families able to secure an affordable housing rental unit go from being rent burden with spending an average of 70% of their monthly income for rent to paying 30% of their income for rent. Affordable housing provides stability to families while enhancing the assets of neighborhoods.
While we believe that the large banks have failed to do their fair share of investment for affordable housing development, at least some have made efforts to improve access to capital and be partners is closing the affordable housing gap for low-income families. In these efforts one player has been absent, that player is OneWest. In their portfolio of products, OneWest does not have a multifamily loan product and CIT already has plans to phase out their Low Income Housing Tax Credit (LIHTC).
OneWest and CIT were saved by US taxpayer subsidies and they have failed to return the investment to the communities they are required to serve.
With so many families on the brink of homelessness because they are severely rent burdened we need every large bank reinvesting in the community.
Therefore, I urge the Federal Reserve to require that CIT and OneWest develop a comprehensive and public CRA plan with commitments proportionate to the size of the new bank and that it is informed by broad community input.