Problematic Practices At Steven Mnuchin's OneWest?

The GOP’s website introduces Donald Trump’s nominee for Treasury secretary, Steven Mnuchin, as a financial expert with experience backing films such as heroic films “X-Men.”

Nowhere does it mention that he’s also the former CEO of OneWest, a bank that critics allege acted more like a movie villain by locking out one homeowner during a blizzard and foreclosing on a 90-year-old woman who sent a check that was short by 27 cents.

But OneWest may become better known to Americans as Mnuchin nears his confirmation hearing to run the Treasury, which has duties including oversight of the country’s national banks and enforcing federal finance laws. Critics of Mr. Trump’s Treasury appointee were handed additional ammunition on Tuesday with a leaked memo from the California attorney general’s office, which found evidence of “widespread misconduct” at Mnuchin’s bank.

The memo cites a number of problematic practices at OneWest, including backdating documents, which presumably helped to speed up the foreclosure process. The leaked document, which was published by The Intercept, also says the bank obstructed the attorney general’s investigation by ordering third parties to fail to comply with subpoenas.

“The more that people hear about Steven Mnuchin and how he profited by foreclosing on millions of American families, the angrier they are and the more likely they are to contact their senators,” said Allied Progress Executive Director Karl Frisch in an interview. “There were systemic problems at his bank under his leadership.”

OneWest bought subprime lender IndyMac from the Federal Deposit Insurance Corp. during the housing crash for $1.5 billion, and it engaged in foreclosure practices that prompted one judge to scold the bank for its “harsh, repugnant, shocking and repulsive” behavior. Multiple lawsuits have been filed against OneWest, claiming that it unlawfully hiked homeowners’ mortgage payments after they filed for bankruptcy.

OneWest also was the sole bank that refused to settle with banking regulators over errors in dealing with homeowners during the housing crisis. OneWest is now part of CIT, which bought it in 2015.

Since the purchase, “CIT has and continues to remain committed to meeting the credit and banking needs of borrowers in our communities,” a CIT spokesman said in a statement. “CIT complies with all applicable laws and regulations, including California’s foreclosure process and all applicable servicing guidelines, and has implemented enhancements that strengthen the overall operations and controls at OneWest Bank.”

Mnuchin’s leadership of OneWest should be a focus of the Senate confirmation hearings, Frisch said, although he added that some fear the hearings will be pushed through quickly, without giving enough scrutiny to Mr. Trump’s nominees.

“He was a primary actor in the foreclosure crisis, and where other people saw calamity, he saw the opportunity to make a quick buck,” Frisch said.

Mnuchin, who sold OneWest to CIT for $3.5 billion, is believed to have personally made more than $200 million from the sale, according to Bloomberg News.

“Whereas before the bank claimed to have followed the law in their foreclosure practices, this memo paints a very different picture of a bank and a CEO that flaunted the law,” said Paulina Gonzalez, executive director of the California Reinvestment Coalition, in an email.

“There is clear evidence that the bank aggressively foreclosed on families,” she wrote, “and engaged in conduct which shortened the time period in which families could have worked to modify home loans and do all they could to save their homes.”

© 2017 CBS Interactive Inc. All Rights Reserved.