June 6, 2017 / 12:57 AM / 3 months ago

UPDATE 1-Trump to nominate Joseph Otting to head bank regulating office

(Adds White House statement, background on Otting)

WASHINGTON, June 5 (Reuters) - U.S. President Donald Trump plans to nominate Joseph Otting, a former banking executive and associate of Treasury Secretary Steve Mnuchin, to regulate national banks as comptroller of the currency, the White House said in a statement on Monday.

The Office of the Comptroller of the Currency writes money-laundering rules and bank charters and is one of several regulators that monitor the health of Wall Street.

Otting likely will be asked about his views on the housing market and foreclosures when he faces a confirmation hearing in the U.S. Senate.

Otting has spent much of his career managing business loans or in commercial banking, rather than consumer credit and mortgages.

He has spent more than 30 years as a banker with stints at U.S. Bank and Union Bank, and was most recently chief executive of OneWest, the California lender conceived by Mnuchin after the 2008 housing crisis.

OneWest began as IndyMac, a leader in extending easy-to-get loans that fueled the housing meltdown. When IndyMac failed, Mnuchin resurrected it as OneWest and won a government guarantee to stand behind a large share of losses.

OneWest thrived but it also foreclosed on 36,000 California families. Over the years, California residents have protested at OneWest offices and executives' residences about losing their homes.

Mnuchin hired Otting in 2010. Four years later, the bank was sold to CIT Group for $3.4 billion. Before that deal was finalized, Otting tried to drum up public support for the merger.

CIT committed to deliver $5 billion in minority contracts, neighborhood grants and minority lending. Orson Aguilar, an advocate for fair lending, was persuaded by that appeal and Otting's outreach.

"There is consensus around one thing: Joseph Otting is a great guy," Aguilar, the head of the Greenlining Institute, told bank regulators at a 2015 hearing about the merger. (Reporting by Patrick Rucker and Ayesha Rascoe; Editing by Bill Trott)

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