Senator Elizabeth Warren had some choice words regarding Steven Mnuchin, President-elect Donald Trump’s pick for U.S. Treasury Secretary. In a statement, the Massachusetts senator called out the Goldman Sachs alum for his role as one of the architects of the 2008 financial collapse. Mnuchin’s appointment, Warren argued, “should send shivers down the spine of every American who got hit hard by the financial crisis.”
“Steve Mnuchin is the Forrest Gump of the financial crisis — he managed to participate in all the worst practices on Wall Street,” Warren wrote. “He spent two decades at Goldman Sachs helping the bank peddle the same kind of mortgage products that blew up the economy and sucked down billions in taxpayer bailout money before he moved on to run a bank that was infamous for aggressively foreclosing on families.”
Warren also pointed out that Mnuchin’s appointment is a flagrant contradiction to the whole “drain the swamp” talking point upon which Trump based his anti-Washington campaign. After all, Trump accused Hillary Clinton of being in the pocket of Wall Street and then he goes ahead and chooses a former partner at Goldman Sachs for a cabinet position. When Mnuchin moved on from the investment firm, he further capitalized off the predatory lending practices that led to the 2008 collapse by becoming a foreclosure profiteer.
During the depths of the financial crisis, Mnuchin was looking to make profits from the ruins of the housing bust. In 2009, he put together a group of billionaire investors and bought a failed California-based bank, IndyMac. It had been taken over by the Federal Deposit Insurance Corp. after its sketchy mortgage loans went bad.
Mnuchin and his partners bought IndyMac on the condition that the FDIC agree to pay future losses above a certain threshold. They renamed the bank OneWest Bank and, after running it for six years, they sold it last year for a profit, estimated at close to $1.5 billion.
Kevin Stein of the California Reinvestment Coalition, a housing advocacy group, says that profit was made on the backs of suffering California homeowners. “In essence what they did is they bought a foreclosure machine,” he says.