Donald Trump's pick to lead the Treasury Department, Stephen Mnuchin, built his reputation and his fortune as a savvy Wall Street investor. But those investments have put him in the crosshairs of Democrats, including U.S. Senator Sherrod Brown of Ohio.
In Thursday’s confirmation hearing, Brown repeatedly pressed Mnuchin, who served as Trump's finance chairman during the campaign. Mnuchin defended his role in the purchase of the failed bank IndyMac, whose collapse in 2008 was the second biggest bank failure of the financial crisis. Mnuchin, who assembled a group to buy the bank from the government, renamed it OneWest and turned it around, selling it for a handsome profit to CIT Group Inc. in 2014.
"Is it true…that OneWest foreclosed on 60,000 families nationwide and denied three-fourths of mortgage modification applications?" Brown asked Mnuchin.
Mnuchin said he was not aware of that.
In a quick follow-up, Brown asked the nominee if OneWest violated federal law by “initiating foreclosures on 54 active-duty military families?”
Mnuchin said OneWest did “unfortunately” foreclose on some military members, but he said “We responded to those people and made them whole.
Critics have cited the bank's foreclosure policies under Mnuchin as a prime example of the kind of Wall Street greed that Trump, the candidate, campaigned against.
Mnuchin has called the criticism unjustified, saying in a CNBC interview right after Trump nominated him in November that buying IndyMac was "one of the most proud aspects of my career" because his successful efforts to turn the bank around saved jobs. He said the foreclosures reflected the fact that the bank before he took over had accumulated the one of the worst portfolios of bad mortgage loans "in the history of time."
On Wednesday, a group of 10 Democratic senators led by Sen. Elizabeth Warren participated in a forum to hear testimony from some of the people who lost their homes after Mnuchin's bank foreclosed.
"OneWest was notorious for its belligerence and for its cruelty," Warren said, contending that OneWest gained a reputation as a "foreclosure machine."
But Mnuchin's supporters include Finance Committee Chairman Orrin Hatch, R-Utah. He called Mnuchin a "leader and a manager through his career, demonstrating an ability to make tough decisions and to be accountable."
This story includes reporting by The Associated Press.
