If Donald Trump nominates campaign finance chairman Steven Mnuchin to head the Treasury Department, he’s sure to get a fight from advocacy groups that think the banker exacerbated the foreclosure crisis in California.
“It’s very troubling to think of basically a foreclosure kingpin running our Treasury Department,” said Joseph Ridout, manager of consumer services for the San Francisco-based advocacy group Consumer Action.
Mnuchin is a former Goldman Sachs banker and hedge-fund mogul. He led a group of powerful investors in 2009 that purchased the assets of failed lender IndyMac Bank, which had specialized in loans to weaker borrowers and was taken over by the government during the financial crisis. As part of the deal, the government agreed to absorb some of the potential losses.
From the ashes of IndyMac came OneWest Bank, based in Pasadena, California. It was owned by a holding company led by Mnuchin and composed of hedge fund giants. They included billionaire George Soros and John Paulson, who famously made billions betting on the collapse of housing finance. They were part of the plot of the book and movie “The Big Short.”