[Congressional Record Volume 163, Number 25 (Monday, February 13, 2017)]
[Senate]
[Pages S1112-S1121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Nomination of David Shulkin
Madam President, I want to take a moment to address the nomination of
Dr. David Shulkin to be confirmed soon as the next Secretary of the
Department of Veterans Affairs. We all know the Veterans Affairs
Department faced a number of challenges in recent years: long waiting
times, disability claims backlogs, issues related to accountability,
whistleblowers, and the quality of care. The list is too long. As the
second largest Federal agency, employing more than 350,000 people
across America and serving as our largest integrated health care
system, some challenges are unavoidable.
As the VA provides for the brave men and women who fought and
sacrificed for this country, as well as their families, it is critical
that it be held to a high standard. We in Congress must work to ensure
that, in addition to holding the Department to a high standard, we also
ensure that it is well funded and that it has the tools and flexibility
to do the job.
It is critical that we strengthen the VA system and not weaken it
through privatization, which would only lower the quality of health
care for our veterans. That is why I am pleased with the nomination of
Dr. Shulkin by President Trump to be the next Secretary of Veterans
Affairs.
Despite years of people playing politics with the VA--efforts which
have only been counterproductive and have made it difficult for the VA
to fill critical vacancies--and despite months of President Trump's
talking about privatization without offering real solutions, today we
have a nominee who appears to understand that, while there is a role
for expanded care options, weakening or dismantling the VA is not the
answer. I was heartened by Dr. Shulkin's commitment during his hearing
in the Senate Veterans' Affairs Committee on February 1, where he said:
``The Department of Veterans Affairs will not be privatized under my
watch.''
Dr. Shulkin may not be a veteran himself, but I am encouraged by the
fact that he comes from a military family and has decades of medical
experience, including serving for 2 years under former VA Secretary
Robert McDonald as head of the Veterans Health Administration after
being nominated by President Obama. May I add that he left a lucrative
private sector job and took a huge pay cut to join the VA.
It is no surprise that a number of veterans service organizations
actively support his nomination. Although progress has been made in
recent years, there are still challenges at the VA that we need to
continue to address. I worry about the veterans' health care,
education, homelessness, accountability, and a host of other issues. I
look forward to working with Dr. Shulkin on these matters.
But we must not forget that, overall, in terms of health care, the VA
is consistently found to provide care in key areas that is better than
or on par with care in the private sector. It is significantly more
cost effective, as well. And most veterans across the country prefer
their veteran-centric health care that they receive in the VA. Despite
what some may claim, most of them do not support privatization. I want
to be clear that this includes a myriad of efforts under the guise of
expanding access or choice.
So I hope my colleagues will join me in supporting Dr. Shulkin to be
the next VA Secretary. I shared then-President Obama's sentiment that
he was the right person to head up the Veterans Health Administration
back in 2015, and I believe he is the right person to head the VA
today.
Just 3 days ago, I was in Marion, IL, and visited our veterans
hospital there. I met with the administrator. Ms. Ginsberg told me she
knew of Dr. Shulkin and had high regard for him. That came as high
praise from someone who is on the front line of serving thousands of
deserving veterans in southern Illinois every single day. So her
endorsement helped me to come forward today and to commit that I will
be voting to make sure that Dr. Shulkin gets this opportunity to head
the Veterans Affairs agency.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. MERKLEY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MERKLEY. Madam President, even now, more than 2 months after then
President-Elect Trump nominated Steven Mnuchin to be Treasury
Secretary, I still find it hard to believe. Month after month out on
the campaign trail, President Trump attacked Wall Street. He said, time
after time, that he was going to take on Wall Street. He attacked his
opponents in the primaries and in the general election by saying that
they were too close to Wall Street and, specifically, too close to
Goldman Sachs.
He said, regarding Secretary Clinton: She will never reform Wall
Street. I know the guys at Goldman Sachs; they have total control. But
he countered this by saying that he would do it differently. He
promised to take on Wall Street. He promised to fight for middle-class
Americans. He promised to drain the swamp and reduce and eliminate the
powerful entrenched special interests here in Washington, DC.
But what a change can happen within a few weeks. Less than a month
after winning the Presidency--I should point out, winning the electoral
college but losing by a massive margin the popular vote, the citizen
vote--who does Mr. Trump pick to be Treasury Secretary? A 17-year
Goldman Sachs veteran, a foreclosure king--Steve Mnuchin.
So here tonight, not even a decade after the second worst financial
crisis
[[Page S1113]]
in U.S. history, we will be holding a vote on whether Steve Mnuchin is
a fit character to be Secretary of the Treasury.
What is particularly puzzling is not only the Goldman Sachs
background, in contrast with the President's campaign promises, but
also that this individual was a contributor to many of the predatory
practices that nearly destroyed our economy in 2008, and he is someone
who made a fortune throwing struggling American families out of their
homes and onto the streets.
I am somewhat shocked we are here tonight and that some of my
colleagues are considering voting to put a man in charge of our
Nation's financial system who played such a role in bringing it to its
knees just a couple of years ago.
Let's remember the massive impact on American families. They lost
jobs by the millions. The unemployment rate soared. They lost their
retirement savings and often they lost their homes--not just because
they lost their jobs and couldn't pay their mortgage but because of the
predatory design of the mortgages.
So I am shocked that I am here tonight and we are holding this vote
and that we are particularly considering an individual who worked to
tear down the protections and throw American families to the Wall
Street wolves.
Maybe we should have a Treasury Secretary who succeeded in the past
to build up the economy, not one who participated in tearing it down.
Maybe we should have a Treasury Secretary who worked hard to put tens
of thousands of people into homes, rather than someone who personally
profited by throwing tens of thousands of American families out of
their homes. I would be feeling much better about the vote we are
holding tonight if that was the case because the American people have
endured too much pain and suffering at the machinations of Wall Street.
I thought we had perhaps learned our lesson. We worked hard to pass
the Dodd-Frank reforms that would end those predatory mortgages, that
would end those liar loans, that would end those teaser rate-exploding
interest rate loans that brought families to their knees, that would
end the securities designed in such a fashion that you couldn't
evaluate whether they were AAA or AA, that would end this process and
this formulation that turned the dream of American homeownership into
the nightmare of American homeownership--this nightmare in which,
instead of building wealth for American families, homeownership became
a predatory instrument for draining wealth from American families.
What was Steve Mnuchin doing when the Banking Committee was working
to save the economy he had helped to tear down? Well, he was
foreclosing on more than 36,000 struggling homeowners, conducting more
than one-third of all the reverse mortgage foreclosures, running a bank
with a record of discriminating against minority home buyers, running a
bank with a record of discriminating against minority neighborhoods.
So for all these reasons, this is the wrong man; the wrong man
because he does not fit the promise the President made to take on Wall
Street; the wrong man because he participated in destroying our
economy, which harmed millions of American families; and the wrong man
because he wants to dismantle Dodd-Frank, which had been put together
specifically to end the predatory practices, including the illegal
robo-signing he participated in.
This individual has no business overseeing the financial future of
the American people so I will be voting no on his confirmation, and I
passionately urge my colleagues to do the same.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. CASEY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Moran). Without objection, it is so
ordered.
Mr. CASEY. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CASEY. Mr. President, I rise this afternoon to speak about the
nomination of Steve Mnuchin to be Secretary of the Treasury and the
concerns I have about his nomination.
I want to start with a Pennsylvania story. It is a story we wish we
didn't have to highlight, but it is relevant to the discussion and
debate on this nomination.
I am looking at a document that is a written summary of a television
investigative news report from January of this year. It is from the
Pittsburgh television station WTAE, and it is dated January 16, 2017.
The headline on the document is ``Trump Pick for Treasury Secretary
Foreclosed on Hundreds of Homeowners in Western Pennsylvania.'' The
article says in pertinent part about this one Pennsylvanian:
Nellie Mlinek lost her husband to cancer. She lost her son
to an overdose. And then she lost her home to OneWest Bank.
It goes on to describe the interaction between this individual and
the bank, and of course this is the bank of which Steve Mnuchin was a
part owner.
I also want to read what she said about the circumstance she was in.
She was hoping that because of the circumstances with regard to her
home, that she would be able to work with the bank instead of having
foreclosure. That was not to be.
The article goes on to talk about others in the region who had
foreclosures as well. A house in White Oak, PA, was foreclosed in 2014;
a house in North Versailles was foreclosed in 2013; a house in Penn
Hills in 2012; a Pittsburgh house was foreclosed in 2011. These are all
communities in Allegheny County, Southwestern Pennsylvania, and Nellie
was from Westmoreland County, which is just to the east of Allegheny
County. So that is what the article summarizes--foreclosures throughout
a corner of Southwestern Pennsylvania, as the headline says, hundreds
of foreclosures.
The article starts with this line: ``Critics say President-elect
Donald Trump's pick for treasury secretary, Steven Mnuchin, ran a
foreclosure machine at a major bank,'' and it goes on from there. That
is one in Pennsylvania, and then references to foreclosures that I read
from are summaries of what happened to some others.
Then we go to the other end of the State. This is in Southeastern
Pennsylvania, the region within which Philadelphia sits. In this case,
the individual is Ruth Guerriero. Ruth is from South Philadelphia, and
she remembers the day she got the letter that ``scared me to death.''
The letter threatened a foreclosure because of a reverse mortgage that
she didn't know existed. The headline of this article is ``Reverse-
mortgage nightmare can start after borrower dies.''
In this case, Ruth lost her husband. The article says that this
particular piece of mail in October 2013 was from OneWest Bank,
informing Ruth that it was foreclosing on the house in the 2800 block
of South Hutchinson Street that she and her late husband had bought in
2006 for $200,000. Without her knowledge, Ruth Guerriero said, her
husband, 23 years her senior, had taken out a reverse mortgage in
September 2007. It goes on from there.
So anyone who has had that experience of losing a home or becoming
the victim of a reverse mortgage when you didn't have prior knowledge
can relate to what has happened to these individuals. This is part of
the debate. These are not the only considerations we weigh, but when
you have, in this case, a nominee for Treasury Secretary who comes into
the nomination process not having held public office or not having held
appointed government office, this is part of the record you are to
review. It is really the only record--the record in this case as a
banker or a businessperson, and in his case, his work on Wall Street.
I had the opportunity, of course, as a member of the Finance
Committee, to meet Mr. Mnuchin in my office and to question him more
than once in the question period for the Finance Committee. In our
meeting, I asked him, for example--and these are other relevant
questions in terms of presenting accurate information, presenting
information that will fully answer questions--I asked him how many
times his financial institution chose to modify mortgages as opposed to
foreclosing, and he told me that there were about 100,000 mortgage
modifications. Yet we
[[Page S1114]]
know the documented evidence tells a different story; it is about one-
third that number, closer to 35,000 modifications.
I realize that someone could not remember the exact number, but I was
surprised at how far off he was in something so substantial in
someone's life, whether it was a person like Nellie or other
individuals. A mortgage foreclosure, as opposed to a modification,
which is a better result for an individual or family--that is a
substantial difference in their lives. And I would hope that when you
are in any way involved in a foreclosure, as a banker or as a part of
an entity that is foreclosing, that you would carefully weigh the
consequences before you choose to pursue foreclosure or pursue a
different path, the path of modification, which, of course, everyone
would prefer in that circumstance.
I asked Steve Mnuchin how many Americans his bank had foreclosed on
during the financial crisis, and he has yet to provide an answer to
that question. I know others may have asked a similar question, and I
wonder if they got an answer. We will see what the public record shows.
Mr. Mnuchin was also asked to provide a copy of a letter he said he
sent to the Department of Housing and Urban Development raising
concerns about the impact of the company's reverse mortgage guidance.
It was almost a month ago that we asked for that information to be
produced, that letter, and we still haven't seen it. So I wonder about
the statement he made with regard to information from HUD.
I also asked Mr. Mnuchin whether his financial institution engaged in
the predatory practice of so-called robo-signing, and this is a
question which was asked by a couple of Senators. I asked him for that
information, and he said that wasn't the case. But now we know from the
documented evidence in an answer that he later changed that there was
robo-signing taking place at the time we alleged that it did.
So when you ask a question in a hearing and you get an answer that
was wrong or incomplete or misleading or otherwise, that is one thing.
You could sometimes have a circumstance where someone didn't
intentionally want to mislead or tell a lie, or they may have answered
a question imprecisely or without a lot of information. But I think it
is a little different when you ask a question in writing, where the
individual had the time to analyze a question and provide an answer in
writing with some time to reflect, some time to consult some other
sources of information before they draft their answer and then submit
it to you as part of the nomination process. In this case, Mr. Mnuchin
had a different answer than the facts showed, and I will go through
that a little bit later.
At some level, there is a question of accuracy, maybe even rising to
the level of trust, and that is something we have to consider when we
are making a determination about a nominee, because almost any Cabinet
agency has to transmit information, very specific, detailed
information. People have to be able to rely upon the information, the
accuracy of it and the completeness of it. And if he has had problems
in his nomination process, that causes us to raise some real questions.
I wanted to start with OneWest Bank--another entity called Financial
Freedom. I don't know how far we will get into this in the limited time
we have. In 2009, Mr. Mnuchin and his business partners bought OneWest
Bank at the height of the financial crisis for $1.6 billion, paying
about 5 cents on the dollar for the bank's assets. Mr. Mnuchin was able
to buy the bank at such a significant discount in part because he was
entrusted to modify as many home mortgages as possible so homeowners
could stay in their homes. He foreclosed on more than--I should say
OneWest Bank foreclosed on more than 40,000 Americans, so we are told.
We don't know how many foreclosures they engaged in in Pennsylvania,
but, as I read a couple moments ago from an investigative report from
WTAE, it is at least hundreds in one region of the State. We have 67
counties. Depending on where you draw the line, Southwestern
Pennsylvania is 10 counties, 12 counties, somewhere in that range,
maybe as high as 15 if you went as far north as Erie. Let's say it is
15 counties. Hundreds of foreclosures in that region is substantial.
Later, after all of those thousands of foreclosures across the
country, Mr. Mnuchin sold OneWest Bank for $3.4 billion in 2015. The
sale itself yielded the group of individuals, including Mr. Mnuchin,
billions of dollars--that would be Mr. Mnuchin and also investors.
I mentioned the foreclosures before and the individuals involved. I
wanted to go a little deeper into the particular circumstances.
I mentioned and highlighted Nellie's story. Here is what took place
in that circumstance--or what she had hoped would take place. Nellie
was hoping that she would be able to work something out with the bank,
so she asked OneWest to help her keep the house by adjusting her
payment. That often happens when a bank initiates a foreclosure. It
begins a process but works something out with a homeowner, and that
would be called a modification. In this case, Nellie asked OneWest to
help her keep her house by adjusting her payment, but she said the bank
refused and then foreclosed on her. She said: ``They should have worked
with me to meet a payment that I could make.'' She filed for
bankruptcy, but even that did not save her house. She said it cost her
``a lot of depression.'' That is what Nellie said about her own
circumstances, and I mentioned the other communities in Western
Pennsylvania.
That is the reality foreclosure brings to bear on the life of one
individual who is struggling, who, in Nellie's case, has had a series
of setbacks, deeply personal, tragic circumstances compounded by the
foreclosure. The same is true of Ruth in South Philadelphia, in terms
of the impact of that decision. We have a lot of ways to summarize
information like this, and I will just highlight maybe one or two.
For example, according to the National Consumer Law Center, in March
of 2012, a Philadelphia senior citizen with a reverse mortgage from a
wing of Mr. Mnuchin's bank--in this case, the name of the entity was
Financial Freedom--sought assistance because he had been served with a
preforeclosure notice. The reverse mortgage company owned by Mr.
Mnuchin gave this individual 30 days to pay almost $5,000.
What was the bill for? Well, without his knowing it, Financial
Freedom charged him over $2,000 for forced-placed insurance coverage
from 2010 to 2012. Financial Freedom threatened to go forward with the
foreclosure unless this senior citizen made immediate monthly payments
equal to almost 35 percent of his monthly income. With legal
assistance, those payments were reduced.
I would hope you would not need to hire a lawyer to get those
payments reduced, but sometimes when you are up against a powerful
financial institution, that is the only way to proceed.
Instead of immediately informing this senior citizen of his lapsed
coverage, Financial Freedom charged excessive amounts for forced-placed
coverage. Financial Freedom then waited 2 years to begin collection,
but it expected this senior, who was living on a fixed income, to pay
within 30 days. Financial Freedom also did not tell this senior citizen
he could apply for a longer repayment plan due to his low income.
According to the National Consumer Law Center, in 2015, Financial
Freedom notified a Pennsylvania reverse mortgage holder's heirs that
the only way to avoid foreclosure on the family home was by repaying
the loan balance or selling the property for at least 95 percent of its
appraised value. They said the appraised value for the Pennsylvania
home was $170,000, even though their own appraisal of the property just
one month earlier was $67,000. There is a big difference between
$170,000 and $67,000. It seems that $170,000 was the appraised value at
loan origination, way back in 2007. Now, of course, it is years later,
and that was, of course, before the market collapsed. So for the
purposes of preforeclosure notice, Financial Freedom used an appraisal
over $100,000 more than the actual value of the home. They were trying
to force the heirs to pay more than $100,000 above the home's value to
prevent foreclosure of the family home.
So these are a couple of Pennsylvania stories--Ruth and Nellie and
then some others, whose names aren't in the text of my remarks, but
give similar stories about some of the foreclosure practices
[[Page S1115]]
that Mr. Mnuchin was part of when he had these individual banks.
Here is the question on robo-signing that I mentioned earlier. I
submitted a question for the record in writing and gave it to him, and
here is what his response was to the question. The question was this:
One of the most significant scandals during the financial
crisis was the practice of ``robo-signing'' whereby bank
employees rapidly approved foreclosure documents without
thorough review. Many were wrongfully foreclosed upon on
account of these practices. Did OneWest Bank ``robo sign''
documents relating to foreclosures and evictions?
His response was pretty shocking:
OneWest Bank did not robo-sign documents, and as the only
bank to successfully complete the independent foreclosure
review required by Federal banking regulators to investigate
allegations of robo-signing, I am proud of our institution's
extremely low error rate.
The reason I say that it was a shocking answer is because he had
signed his name to a 2011 document that found that OneWest Bank did, in
fact, robo-sign. The findings from the Office of Thrift Supervision
does not explicitly state robo-signing--that is not a legal term of
art--but it does set forth a fact pattern for robo-signing, which
involves an employee signing foreclosure documents without reviewing
them. Instead of reviewing the details of each, robo-signers assume the
paperwork is correct and sign it automatically. Almost anyone who lived
through the financial crisis of 2008 knows what robo-signing is, and
many were victims of this practice.
So that is a problem, obviously, when you answer a question in a
manner that is totally inconsistent with the facts.
I know I am low on time, and I want to wrap up. What I will do for
the record--or if we have time to come back later--is to get into some
other issues. But one of the real concerns I have about his nomination
is not just his record as a banker, as a person working on Wall Street
and working in that world. It is one thing to say you did something in
your prior life, but once you put on the mantle of public service and
the heavy responsibilities of Treasury Secretary, you set aside that
other work you did or that other position you had, maybe, on some
issues. But, apparently, some of his work--or at least some of his
points of view--will continue in the Treasury Department, because I
think it is pretty clear, based upon some reporting back at the end of
November, that Mr. Mnuchin believes that one of his prime
responsibilities is to begin to dismantle, or substantially alter, what
we know as the Dodd-Frank legislation.
We know what happened prior to that. We know what happened to the
economy. We know that the United States lost about $19 trillion in
household wealth. That is $19 trillion, with a ``t.'' More than 8
million jobs--by one estimate, 8.7 million jobs--were lost. So I would
hope that as Treasury Secretary, were he to be confirmed, he would make
sure that we never go down that path again--that before you dismantle
Dodd-Frank, you better think about the consequences to real people's
lives.
So I will wrap up because I know we have to go, but I will put more
information in the Record.
Let me conclude with one thought before we move on. One of the
concerns I have about his nomination, also, is not something you can
point to in a document. It is just a gut instinct or a judgment that I
have made, and it is a judgment that can be summarized this way: I have
a real concern about his commitment to public service. Why do I say
that? It seemed that, in this whole process of disclosing financial
information--turning over documents, answering questions, answering
follow-up questions--Mr. Mnuchin was kind of resistant to scrutiny or
seemed to be burdened by this, and that somehow he was disclosing too
much. His demeanor, when you would ask him some questions, appeared to
me to be a demeanor that was not consistent with what public service
must be about. When you are in public service, whether you are elected
or appointed, you are, in fact, a servant. You don't work for a bank,
you don't work for a financial institution, and you don't work for a
company. You don't even work for a President. You work for the people.
I was taught a long time ago that the closer you can get to this
ideal--which is inscribed on a building in our State capitol in
Harrisburg: ``All public service is a trust, given in faith and
accepted in honor''--the way you accept your public duties is not only
to disclose what you should disclose, to answer questions which you
must answer, but to do it in a manner where you are doing it with a
belief that you are a public servant and with the spirit of public
service. If you are labored and if you are chafing under that or
resisting, you should probably do something else with your life.
I hope I am wrong about that. I hope once he is in office--and it
appears that he may be confirmed--and if he is confirmed, we see a
different approach to the duties of public service and the burdens of
public service. I hope I am wrong about him, but my instincts tell me
otherwise.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I rise today to speak in opposition to
President Trump's nominee to serve as Secretary of the Treasury, Steve
Mnuchin.
From his days at Goldman Sachs, on the frontlines of developing the
very products that brought our economy to its knees, to his reign as
chairman of OneWest Bank, quantified by tens of thousands of
foreclosures and qualified by years of despair, to his plan to get rich
off cash-strapped seniors, to his investments in Sears that stripped
pension benefits from low-wage-earners, Mr. Mnuchin made a career out
of exploiting the financial turmoil of hard-working American families,
never once stopping to consider the impacts of his profiteering on the
people of this country.
At every step of the way, Mr. Mnuchin's mantra has been to privatize
profits and socialize losses.
While our President spent much of his campaign railing against
Goldman Sachs and Wall Street's stranglehold on Washington, it should
be lost on no one that Wall Street has the majority vote in this
administration. With friends like Mr. Mnuchin and Gary Cohn in high
places, the country's largest and most complex financial institutions
can rest easy, knowing this administration is firmly committed to their
bottom lines. As Treasury Secretary, Mr. Mnuchin will be a chief
architect of the GOP's ``Wall Street First'' policy.
Despite his self-described humble beginnings at Goldman Sachs in the
1980s, Mr. Mnuchin was on the frontlines of developing the now-infamous
collateralized debt obligations known as CDOs and credit default swaps.
I urge my colleagues not to be fooled by Mr. Mnuchin. He was part of
the cadre of corporate raiders that brought our economy to its knees.
In its 2011 report on the great recession that wiped out nearly $13
trillion in household wealth and cost nearly 9 million Americans their
jobs, the Senate Permanent Subcommittee on Investigations described
Goldman Sachs' role in the crisis as follows:
Goldman engaged in securitization practices that magnified
risk in the market by selling high risk, poor quality
mortgage products.
It said:
Conflicts of interest related to proprietary investments
led Goldman to conceal its adverse financial interests from
potential investors, sell investors poor quality investments,
and place its final interests before those of its clients. .
. .''
Despite the damage they caused, Mr. Mnuchin never learned his lesson,
and, as recently as 2012, he praised these instruments, calling them
``an extremely positive development in terms of being able to finance
different parts of the economy and different businesses efficiently.''
Now, after he left Goldman Sachs, Mr. Mnuchin started a hedge fund,
Dune Capital, which started investing in an exotic financial instrument
called life settlements, which are made up of life insurance policies
purchased from cash-strapped seniors. The investor, Mr. Mnuchin's hedge
fund, had a plan to pay the premiums on the policies until the seniors
died, at which point they would cash in on the insurance claims.
So let's be clear. Under Mr. Mnuchin's plan, the sooner seniors died,
the more money his hedge fund would make. While the markets for
[[Page S1116]]
this product collapsed before Mr. Mnuchin could cash in, we have to ask
ourselves if this is the type of leader whom we want at the helm of our
economy? Do we really want a Treasury Secretary who had a plan to get
rich off of dying seniors?
That brings us to the end of 2008 and early 2009. Wall Street had
brought our economy to the brink of collapse, and 13.2 million
Americans were facing unemployment. Home values were plummeting, having
fallen 12.5 percent in just one quarter. And where was Mr. Mnuchin? He
was negotiating the deal of a lifetime. In the darkest days of the
financial crisis, when Rome was burning, Mr. Mnuchin and his friends
were looking for stores to raid.
Boy, did they find a gem in IndyMac. He purchased IndyMac's $23.5
billion of assets for a mere $1.55 billion in March of 2009. With the
FDIC, Federal Deposit Insurance entity backing, its too many loans went
south. So he had a governmental guarantee for $23.5 billion of assets
for about $1.5 billion, and he had the government's guarantee. All that
Mr. Mnuchin had to do was to agree to help homeowners struggling with
their mortgages, but Mr. Mnuchin didn't hold up his end of the bargain.
He wanted more. Apparently, the profit margins of foreclosure were just
too sweet to ignore.
After buying IndyMac and renaming it OneWest Bank, Mr. Mnuchin was
installed as chairman. But instead of working to achieve sustainable
loan modifications and workouts for struggling borrowers, as Mr.
Mnuchin had committed to doing, OneWest's business model centered on
kicking borrowers out of their homes at the first sign of default.
In April of 2011, the former Office of Thrift Supervision hit OneWest
Bank with a consent order because the bank was actually putting
homeowners on a fast track to foreclosure, robo-signing foreclosure
documents.
In a sworn deposition in 2009, a OneWest vice president admitted to
robo-signing 750 foreclosure documents a week without ever reading or
reviewing them. In 2014, an independent government review of OneWest's
foreclosure activities in 2009 and 2010 alone identified more than
10,000 homeowners, including dozens of active-duty servicemembers, who
were owed $8.5 million in damages due to the bank's foreclosure
practices.
OneWest's practices were especially egregious when it came to seniors
with reverse mortgage loans. During Mr. Mnuchin's tenure at the bank,
OneWest's reverse mortgage subsidiary, Financial Freedom, had
approximately 17 percent of the reverse mortgage shares but was
responsible for nearly 40 percent of reverse mortgage foreclosures. In
other words, Mr. Mnuchin cornered the market on focusing and
foreclosing on seniors in America. Whether it was foreclosing on a 90-
year-old woman over a 27-cent--27-cent--missed payment or threatening
to kick an 84-year-old widow out of her home of 54 years, Mr. Mnuchin
was ruthless.
What did Mr. Mnuchin have to say about all of this when we asked him
during his confirmation hearing in the Senate Finance Committee? He
dodged responsibility at every step. First he blamed IndyMac for the
quality of mortgage loans; then he blamed government regulations, which
he falsely claimed forced his bank to kick people out of their homes.
If that wasn't enough, Mr. Mnuchin had the audacity to tell us that his
bank did not robo-sign documents despite clear evidence to the
contrary.
To make matters worse, Mr. Mnuchin had the gall to call OneWest a
loan modification machine. He repeatedly misled the committee that
OneWest provided more than 100,000 loan modifications when, in fact,
they modified less than one-quarter of that amount.
On top of misleading the committee, Mr. Mnuchin has been unwilling to
provide information on the number of borrowers who lost their homes
during the time that he ran the bank. We believe that number is at
least 60,000 families and seniors, but those numbers could even be
higher.
At the end of the day, this is about much more than numbers. It is
about the seniors who are barely hanging on to their homes--their only
source of wealth. It is about communities that were hit with a one-two
punch of subprime loans in the years leading up to the crisis, only to
face banks like OneWest with unrelenting foreclosure practices that
stopped at nothing until they had kicked people out of their homes.
It is about people like Sylvia Oliver of Scotch Plains, NJ. After her
employer cut her hours in 2009, like so many other hardworking
Americans at the time, she ran into difficulty paying her mortgage.
Despite the fact that Ms. Oliver found a full-time job and applied
eight--eight--times for loan modifications, Mr. Mnuchin's bank denied
each and every one of her applications. Ms. Oliver has been fighting to
save her home for 7 years. She is hanging on by a thread. Her own words
speak volumes about Mr. Mnuchin. She said:
It's been very painful and stressful not knowing if my kids
and my family are going to have a home to live in, or if it's
going to be foreclosed on. I would ask you to remember my
experience when you consider whether Mr. Mnuchin is qualified
to lead the Department of the Treasury. As the CEO and Chair
of OneWest Bank, Mr. Mnuchin had the opportunity to help
families like mine with responsible loan modifications, and
he didn't. I don't think this is a track record that anybody
should be proud of.
Ms. Oliver is right. Mr. Mnuchin's record is not only undeserving of
pride, it is shameful. While Mr. Mnuchin's business formula proved
toxic for tens of thousands of hard-working American families and
seniors, it was incredibly lucrative for Mr. Mnuchin and OneWest's
investors. He sold OneWest for $3.4 billion, a profit of $1.85 billion
over just 6 years, making around $200 million for himself. That is a
pretty nice return on investment.
While I am gravely concerned about Mr. Mnuchin's history of
exploiting hard-working Americans to line his own pockets, I am equally
concerned about his plan to unchain Wall Street. Mr. Mnuchin has made
it his No. 1 priority to roll back Wall Street reform.
As my friend Senator Brown has often said, our colleagues seem to
have contracted a case of collective amnesia about the great recession.
Just 8.5 years after the worst financial collapse in 80 years, which
put taxpayers on the line for billions in bailouts, the President,
Republicans in Congress, and Mr. Mnuchin are champing at the bit to
take down the very protections that were put in place to prevent
another catastrophe. I ask them, Have we learned nothing?
We know what this administration wants. It wants what the industry
wants. On the day the President signed his ``Wall Street First''
Executive order, Goldman Sachs' shares soared 4.6 percent, a $4 billion
gain. At the end of the day, Mr. Mnuchin is nominated to serve in a
position to ensure the financial stability of the American economy, but
his only experience is betting on the financial instability of American
families.
Not only did he profit off the backs of struggling homeowners, he
also stands to profit off of pensions he mismanaged while on the board
of the Sears company. From the time Mr. Mnuchin joined the board of
Sears, the company lost billions of dollars, including more than $8
billion since 2011 alone. Rather than invest in growth and its workers,
he decided to strip the company of its most valuable assets and keep
them for themselves and their friends.
While Sears seemed to lose in this transaction, there were some that
certainly appeared to profit. Not surprisingly, Mr. Mnuchin and his
hedge fund friends were those profiteers. As a shareholder lawsuit
contended, they gobbled up the most valuable and profitable assets, and
they saved golden parachutes for themselves to escape if the company
crashed. This might sound complicated, but it is a move that would make
Gordon Gecko from the movie ``Wall Street'' proud. Just replace
Bluestar Airlines with Sears, and fiction becomes reality. In the world
of both men, greed is good.
But this isn't a movie. It is the real world with real-life
consequences for 200,000 people who work at Sears. Stripping Sears of
$12 billion worth of its most valuable assets contributed to the
devaluation of the company, which further jeopardized the pensions of
more than 200,000 Americans. According to the most recent filing, this
pension fund is now underfunded by an alarming $2 billion after they
stripped $12 billion of its most valuable assets. These retirees, who
rely on pensions to live, who worked hard all of their lives and played
by the rules, have already
[[Page S1117]]
had their benefits cut by Mr. Mnuchin and the Sears finance board. In
fact, the pension situation has become so dire that the government,
through the Pension Benefit Guaranty Corporation, or the PBGC, felt
compelled to step in to protect the pension benefits for these 200
people.
As if his past mismanagement of pensions isn't bad enough, as
Treasury Secretary, Mr. Mnuchin would oversee the decision whether to
bail out the pension. Mr. Mnuchin would have to decide whether to
protect his personal hedge fund investments in Sears, which he refuses
to divest, or to protect the Federal Government and those 200,000
retirees.
To be fair, when I asked Mr. Mnuchin about his inherent conflict of
interest during his confirmation hearing, he pledged to recuse himself
from any decision by the PBGC regarding Sears. But we have heard that
song before. Mr. Mnuchin can't avoid a conflict of interest by recusing
himself any more than President Trump can avoid a conflict by
supposedly letting his children run his businesses. The only true
firewall against a potential conflict of interest is through a full
divestiture, which Mr. Mnuchin refuses to do. As a private citizen and
executive at Sears, Mr. Mnuchin showed a total disregard for the earned
pension benefits of hundreds of thousands of hard-working Americans. I
have no reason to think he will have a change of heart as Treasury
Secretary.
Not only does Mr. Mnuchin want to let banks write their own rules and
let executives profit when they cut pensions, but he also wants to cut
taxes on the rich so he and his friends can keep more of their ill-
gotten gains. After helping raise millions of dollars from Wall Street
and big corporations for President Trump's campaign, they are now
expecting a big return on their investment--and, boy, do they win big
league under the Mnuchin-Trump tax plan. This ill-conceived proposal
would give large corporations, which are already earning record
profits, an additional $2.5 trillion. That is $2.5 trillion taken away
from transportation, from schools, from the middle class, and given
directly to multinational corporations. It would eliminate the estate
tax and gift taxes, giving a nearly $200 billion windfall to the
wealthiest 5,000 family dynasties in the country--$200 billion to the
wealthiest 5,000 family dynasties in the country--and 99.99 percent of
all Americans will not see a penny from this giveaway. But we know who
would benefit: Mr. Mnuchin and President Trump.
It doesn't stop there. On top of all of this, the Mnuchin-Trump
proposal would also give the top one-tenth of 1 percent--the wealthiest
of the wealthy, the corporate CEOs and hedge fund managers who make
around $4 million per year or more--$1 million back each and every
year. This group of elite earners already take home a whopping 184
times the average pay and has the same combined net worth as nearly 90
percent of all American workers. These 160,000 of the richest families
in the country have as much wealth as 144 million families in America.
I have nothing against wealthy people. I have nothing against
millionaires and billionaires. Many worked hard for their money, and
they played by the rules. I applaud their success. But I don't think
the wealthy, who are doing just fine right now, need an extra million
dollars or more than the middle class. I don't think we should be
borrowing trillions more from China just to give the top one-tenth of 1
percent another million dollars. This is fundamentally backward.
They say we can't afford to invest in infrastructure, we can't afford
to help our graduates with mounting college debt, we can't afford to
give a whole host of resources to things we think are critical to
compel our Nation to be the continuing global economic leader, but we
can afford to give $1 million away to all the millionaires and
billionaires in the country. This warped order of priorities is a
perfect metaphor for Mr. Mnuchin's school of economics: Give the rich
more and more because they know best.
Unfortunately, this theory of trickle-down economics hasn't worked in
the past and will not work now. The American people are sick and tired
of getting fleeced. They are tired of working hard every day and
playing by the rules only to fall further behind. They are tired of
losing in a rigged system.
But a Treasury Department led by Mr. Mnuchin will only deliver more
of the same: more tax breaks for the wealthiest in the country, more
borrowing from China, more income inequality. These are not the
principles Americans want or need.
In conclusion, you can tell a lot about a person based on how they
handle a crisis. When Wall Street crashed and the country plunged into
recession, where was Mr. Mnuchin? Was he warning regulators that they
were asleep at the wheel and hard-working Americans were being
exploited? Was he working to reform the broken system? No. He was
looking for stores to raid with one goal in mind: profits.
Some would like to either ignore or whitewash this past, but if we
don't learn from history, we are doomed to repeat it. The American
people cannot afford a repeat of that past. We cannot afford a return
to the Wild West of Wall Street--when the middle class was held hostage
to the earnings reports of the biggest banks, when the cure for income
inequality was simply more tax cuts for the wealthy.
We need a Treasury Secretary who will stand up to Wall Street, not
take orders from them. We need a Treasury Secretary who understands
that the strength of our country has come and will always come from the
middle class, not from the CEOs and the hedge funds. Unfortunately,
Mnuchin is not that person.
I urge may colleagues to oppose his nomination.
I yield the floor.
The PRESIDING OFFICER (Mr. Lankford). The Senator from Nevada.
Ms. CORTEZ MASTO. Mr. President, I rise today, along with many of my
colleagues, to speak out against the White House nominating Steven
Mnuchin to be the next Secretary of the U.S. Treasury. President Trump
has nominated the former CEO of OneWest Bank--who before that for 17
years was a Goldman Sachs executive--to run the Federal agency tasked
with crafting and implementing U.S. economic policy. So much for
draining the swamp.
I want to start, however, by sharing the story of a good friend, Lola
Orvik, whom I met when I was attorney general of Nevada.
In 2013, Lola's mortgage on her townhouse in Henderson was
underwater. Like thousands of other Nevadans, she needed to refinance,
but five different loan modification applications had all been rejected
by her bank. Lola was desperate for a solution and on the verge of
losing her home. She received a telephone call offering help that was
too good to be true, and it was. After calling my office, she
thankfully discovered that it was a scam. I am so glad she called my
office. Our staff referred her to a new program we had created, the
Home Again Homeowner Relief Program. It is a one-stop shop to help
struggling homeowners. It helped Lola finally get a loan modification,
reduce her principal by $37,000, slash her interest rate from 5.7
percent to 2 percent, and keep the house she had lived in for nearly 20
years.
The Home Again Program helped thousands of Nevada homeowners
understand all the State and Federal housing resources available to
them. It has helped folks like Lola restructure their loans to ensure
more affordable monthly payments. That simple hotline number has gone a
long way.
Because we were there to help her, Lola got her life back. However,
not everyone was as fortunate as Lola. In fact, some families are still
trying to overcome the continuing destructive impact of the foreclosure
crisis in Nevada and across this country.
In the depths of the great recession, Lola's predicament was not
unique. Nevada was ground zero for the housing crisis. Property values
plummeted. ``For sale'' signs lined the streets. Foreclosure notices
hung on doors throughout the State. Thousands of families lived in
constant fear of losing their homes.
In 2008, Nevada had the highest foreclosure rate in the Nation, with
more than 77,000 homes getting a notice at the door saying they were at
risk for eviction. We led the Nation in the terms of foreclosure rate
for 62 straight months during the recession.
Things got so bad that by 2010, nearly 70 percent of Nevada
homeowners were underwater on their homes, meaning
[[Page S1118]]
that they owed more on their mortgages than the current value of their
property.
As Nevada's attorney general, I fought the big banks, Wall Street
institutions, and default servicing companies to secure more than $1.9
billion to help hard-working families get back on their feet. That
money helped to fund the Home Again Program.
More than just getting that money back, this was about changing the
conduct and predatory practices of the big banks when working with
homeowners. For instance, we made dual tracking an illegal practice so
that banks could no longer foreclosure on a home while simultaneously
considering their request for a loan modification and then charging
them fees every step of the way. We demanded that a homeowner have a
single point of contact within the financial institution so the
homeowner would no longer get shuffled around from person to person and
told to resubmit their loan modification application over and over
again. We demanded that the banks demonstrate that they had personal
knowledge of the foreclosure documents they filed to prevent robo-
signing and unlawful foreclosures of a home.
Unfortunately, not every bank was willing to do everything possible
to help the millions of Nevadans and Americans who were suffering. Mr.
Mnuchin's OneWest Bank--formally known as IndyMac--was one such bank.
Instead of trying to help homeowners, OneWest enforced predatory and
unforgiving practices that only served to line the pockets of Mr.
Mnuchin and his co-owners.
Steven Mnuchin purchased IndyMac from the Federal Government after it
collapsed and took control of the thousands of mortgages the bank
managed. Mnuchin rebranded the bank as OneWest and went to work using
questionable foreclosure practices, like dual tracking, so he could
make more money. That is not right.
Instead of working to help these homeowners stay in their homes,
OneWest Bank, under Mnuchin's leadership, became a foreclosure machine.
The bank had one of the highest denial rates for applications to the
Home Affordable Modification Program. A judge in Wisconsin cited
OneWest's ``harsh, repugnant, shocking, and repulsive'' practices when
deciding a suit against them. Recent documents show that the company
used robo-signing to deny modification claims, proving that it did not
fairly consider loan modification applications for tens of thousands of
homeowners.
When confronted with these facts at his Senate confirmation hearing,
Mr. Mnuchin lied. He denied that OneWest used robo-signing, offered
empty excuses, and shifted blame for his company's heinous practices.
And during his confirmation hearing, Mr. Mnuchin repeatedly refused to
say how many homes OneWest foreclosed on in Nevada.
However, according to new data, during the foreclosure crisis and its
immediate aftermath, OneWest made $3 billion in profit while evicting
3,654 Nevada families from their homes. This includes 181 foreclosures
on seniors who had taken out reverse mortgages. When he eventually left
the bank, Mr. Mnuchin received a $10.9 million payout. This is on top
of the annual compensation of $4.5 million he has received since 2015,
when OneWest was bought by other investors. Let me repeat that. Some
3,654 Nevada families lost their homes because Mr. Mnuchin's OneWest
put profits over people. That is a snapshot and a statistic which does
not do justice to how much pain that caused for those families.
I want to spend some time on these accusations of robo-signing, both
because Mr. Mnuchin clearly lied and also because this was an issue I
took on when I was attorney general during and after the crash.
First, let's be clear what this is. Robo-signing is a procedure used
by mortgage companies to sign foreclosure documents without reviewing
them. This is a reckless practice used by banks to cut corners and
forge documents, to rush things along, and it caused thousands of
families to be wrongfully evicted from their homes.
Like OneWest, the banks were involved in a massive robo-signing
scheme in my home State of Nevada, and I went after them aggressively
as the State's attorney general. Nevada led the Nation in foreclosures
every month for more than 4 years.
Mr. Mnuchin's company did not care that middle-class families were
losing their homes during the crisis. In fact, during his confirmation
hearing before the Senate, he admitted:
I never wanted to be in the mortgage servicing business. I
didn't want to be in the reverse mortgage business, I wanted
to build a regional bank.
In other words, Mr. Mnuchin had to convince his investors that they
would make money--a point that Mr. Mnuchin admitted at the hearing,
saying: ``Yes, my investors made a lot of money on OneWest.''
Not only did his investors make a lot of money, Mr. Mnuchin did so as
well. Since leaving the bank, he has pocketed nearly $20 million. Mr.
Mnuchin was making millions, while thousands of Nevadans were losing
their homes and their dignity, Nevadans like Heather McCreary of
Sparks, who came to Capitol Hill last month to share her heart-
wrenching story of how she applied to OneWest for a loan modification
in 2010 after she and her husband lost their jobs as a result of the
financial crisis. Despite three applications and following all
instructions, the bank kept Heather's family dangling and then suddenly
foreclosed on their home. I want to read some of Heather's testimony.
It is moving and heartbreaking and deserves to be heard by every Member
of this body.
Here is what she told us at the hearing:
In 2008, when the economy started to get worse, I was laid
off. The following year, in 2009, my husband Jack was laid
off too. Though Jack was able to find another job pretty
fast, he had to take a big pay cut--from about $25 an hour to
$8.50 an hour. Between the cut in Jack's pay and the loss in
income I experienced when going on unemployment insurance
benefits after I got laid off, we were pinched and we were
drowning financially.
However, we were determined to keep our dream home, so Jack
and I were tenacious about doing whatever we could to get
help. We sought help from the Hope Now Alliance, which is an
alliance of HUD-approved counselors who provide free
foreclosure help, and from the Washoe County Senior Law
Project.
We worked side-by-side with both organizations to do
everything required of us by our mortgage servicer IndyMac,
which later became OneWest. When we first asked for help,
OneWest gave us a short forbearance and allowed us to make a
smaller payment for several months with the goal of a
reduction in our monthly mortgage payments through the Home
Affordable Modification Program (or HAMP).
By applying for the HAMP program, we thought we were back
on the road to keeping our home. We complied 100 percent with
OneWest requirements for HAMP--we were incredibly nervous
about being able to keep our house, so we were extremely
careful to make sure we did everything we could to keep the
process going forward. Our application for HAMP was processed
and we were approved for our modification. I sent in the
signed paperwork and the first payment under the modified
payment amount along with it.
But then the process started to fall apart. After a whole
30 days, OneWest returned our personal check and told us that
only certified checks would be accepted, so they were now
voiding the modification offer. We had followed the
instructions to the letter on OneWest paperwork, crossing our
``T''s and dotting our ``I''s. But in the end, this didn't
matter--and OneWest's rejection of our HAMP application put
us on the road to foreclosure.
We applied two more times for loan modifications over the
next six months because we were given assurances by people at
OneWest that they would approve our application. We again
complied with every request OneWest made of us, taking care
to send in extra documents whenever OneWest requested them.
But as far as I can tell, OneWest never attempted to
process the loan modification. The foreclosure went through
and we lost our home on September 10, 2010. The foreclosure
left us without a home; and finding a new rental was
extremely difficult because of our credit. Juggling the
demands of raising our twins was so hard--the foreclosure
even meant that our kids had to miss school. Eventually we
did find a new place, but we had to pay an outrageous rent,
even though it was not a good home for us at all.
It's hard to explain the shame, embarrassment, and grief
that Jack and I felt. I've cried a river of tears over this.
I really didn't think we were asking too much: We wanted to
hang on to our home for the sake of our kids, and we did
everything we could to stay in our home. And while I will
probably never know exactly what OneWest did, the outcome of
my story proves that Steve Mnuchin's company had no interest
in helping us. They wanted to foreclose because they were
focused on their profits.
Heather's story is just one of thousands that highlight just how
wrong
[[Page S1119]]
Mr. Mnuchin is to be our next Secretary of the U.S. Treasury. The
Treasury Department has the vital mission of promoting the conditions
that enable economic growth, stability, job opportunities, and the
ability to buy a car or own a home. Their actions directly affect the
lives of every American.
Our next Treasury Secretary should have a proven record of fighting
to expand economic opportunities for everyone. That is what Americans
deserve. Yet, from where I stand, Mr. Mnuchin falls far short of that
test.
President Trump's choice of Mr. Mnuchin to lead the U.S. Treasury is
a slap in the face for Nevada families like Heather's. Her story makes
it crystal clear: This is not someone who will be looking out for
working people when he implements our Nation's economic policy.
In many ways, President Trump's unfortunate choice of someone like
Mr. Mnuchin should not surprise us because in 2006 the President said
he ``sort of hoped'' the real estate market would tank, and in 2007 he
said he was ``excited'' for the housing market crash. The motive was
the same: profits.
We cannot afford to return to the misguided policies that brought us
to the worst financial crisis since the Great Depression. Families
cannot afford to lose their homes again. But that is exactly what we
can expect if Stephen Mnuchin is confirmed as President Trump's
Treasury Secretary.
When I ran for the Senate, I promised Nevadans that I would fight for
them, that I would stand up for them and be their voice here in
Washington. Today, I am that voice, and that is why I rise with my
colleagues in opposition to the ``Foreclosure King,'' Mr. Mnuchin.
Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. BOOKER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOOKER. Mr. President, I rise today to join a chorus of my
colleagues in speaking out against the nomination of Steven Mnuchin to
serve as Secretary of the Department of the Treasury.
What I believe is, if you look at Mr. Mnuchin's record, he has spent
a lot of time benefiting from--in fact, even exploiting--families who
are struggling homeowners in my State.
I would like to read into the Record a report by NPR from November of
last year which makes his pattern stunningly clear.
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 called IndyMac. It had
been taken over by the Federal Deposit Insurance Corporation
after its sketchy mortgage loans went seriously 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 6 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 Californian homeowners.
This is not in the text here, but homeowners who were suffering from
a massive mortgage collapse that was created in many ways or stimulated
by the greed and avarice of bad actors. I witnessed this myself in
Newark, NJ, watching people feed upon a subprime mortgage environment
where they were pushing bad loans on unsuspecting borrowers.
Back to the text:
In essence what they did is they bought a foreclosure
machine.
According to the coalition, OneWest foreclosed on more than
36,000 homeowners under Mnuchin. During that time, the FDIC
made payments to OneWest totaling more than $1 billion. Those
payments went to the billionaire investors of OneWest Bank,
says Stein, to cover the cost of foreclosing on working-class
everyday American folks, many of whom lived in California.
So this was what we saw at the height of the financial crisis. Mr.
Mnuchin, already very wealthy, already very successful, did not see
Americans struggling, did not join efforts to try to empower, support,
or deal with this crisis. What he saw was an opportunity to take over a
financial institution and continue, if not accelerate, the foreclosures
that were going on.
It has become painfully clear that in what Mr. Mnuchin oversaw in the
operations of this bank that, as its business model, he set out to
explicitly mislead and manipulate homeowners into foreclosure.
This one article that I read has been repeated by organizations and
by news outlets all over the spectrum, talking about how Mr. Mnuchin,
in this environment, worked very hard to accelerate foreclosures and
take advantage of this and make a profit. From elderly widows, the
stories continue, to families, to small business owners, to Active-Duty
servicemembers, there were many, many victims of Mr. Mnuchin's bank's
predatory tactics, taking advantage of folks in a crisis, as opposed to
trying to figure out a way to support folks through it.
I would like to read one more from the Minneapolis StarTribune, an
article that documented one instance of the disturbingly prevalent
practices of Mr. Mnuchin's company.
The headline reads: ``Negotiating on foreclosure, then locked out in
a blizzard.''
A Minneapolis woman who was negotiating with a lender to
find a way to stay in her foreclosed house--
Stepping back from the text, this is someone who is working hard to
do the right thing in negotiations.
Back to the text:
They arrived home from work during Tuesday night's blizzard
to find that the locks had been changed. After spending the
night at her mother's, Leslie Parks went Wednesday to
Hennepin County Housing Court, where a referee ordered that
she be allowed back into her mother's former duplex at 3749
Park Avenue while negotiations continued. Locksmiths on
Wednesday reconfigured the locks that had been changed
Tuesday by a contractor for OneWest Bank.
These are the kind of tactics that were being used, the kind of
hardball tactics that were being used by Mr. Mnuchin's company that
really undermined a lot of hard-working Americans from a variety of
backgrounds in many, many different States.
His record is clear. Mr. Mnuchin not only advocated in support of
this company and its tactics, but even now he talks about trying to
roll back the kind of protections that have been put in place to try to
protect average Americans. Many of them are in the Dodd-Frank
legislation that helped to protect against the creation of an
environment in which such predatory practices can take place.
This position that Mr. Mnuchin has been nominated for, which is the
Secretary of Treasury, has a critical role within our economy. But one
of those roles has to be the idea that average Americans will be
protected from the kind of financial victimization that was going on
during the recession--actually, which lead into the recession.
We see that we can prevent Wall Street from burdening Main Street
with the costs while they reap the rewards. This is the broken system
that we saw in the past that needs fixing and needs healing. We don't
need one of the architects of the system that caused so much pain to be
in one of the most important positions in our land.
The head of this vital agency must be someone who understands their
responsibility to look out for the struggling American trying to make
it by playing by the rules and someone who is qualified and willing to
direct the Department to fiercely protect the economic security of our
Nation, the economic well-being of the American people, and the
integrity of our financial system.
I don't believe Mr. Mnuchin is that person. He has made it clear in
his decades-long career that he is willing for a profit to work hard to
exploit hard-working families and shortchange homeowners for that
personal gain. This is unacceptable. Mr. Mnuchin has built a career and
has reaped literally millions of dollars of success by pushing people,
by exploiting people, and by hurting people.
The American people cannot afford to suffer through another financial
crisis. We can't afford to have a master Wall Street manipulator put in
the position that we should be relying on to protect us from that kind
of financial manipulation.
This is a difficult economy where people in our country are still
struggling under challenging financial
[[Page S1120]]
times. I believe that we can make a nation where people can do good and
do well at the same time, where we should not elevate or celebrate
people who really fed off of the misery and the challenges of others,
but, instead, that we can have a nation where we put people, regardless
of their political background, in positions like the Department of
Treasury to celebrate the best of who we are, the best of our values--
people who are public servants, people who have shown a commitment to
not only serve but even sacrifice for one another.
What we saw amidst this crisis--amidst a crisis that, in many ways,
was aggravated and caused by greed and avarice in the mortgage industry
and the banking industry, among rating agencies--was that many people
showed who they were in a time of American struggle and American
crisis. We saw with clarity where people's priorities were. Was it
exploiting people? Was it manipulating systems for their own avarice
and their own benefit, or was it for being there for our country,
trying to make thing things better, trying to give people bridges that
could carry them from financial struggle and strain to stability, or
people that were trying to crumble those bridges and have people free
fall in financial distress.
This is, unfortunately, what we see here today. We have President
Trump trying to elevate someone who has not shown a record of someone
who wanted to help but instead has shown a record of someone who wants
to hurt. That to me is unacceptable, especially at this time where so
many American families are still struggling to get back on their feet
to find financial security and find the pathway to their American
dream.
It is for this reason and more that I cannot support this nomination.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. WYDEN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WYDEN. Mr. President, there are communities across this country
that are still waiting for the recovery from the great recession to
show up. In many of those towns and cities, the storefronts are boarded
up, the factories are shuttered, and, in what could be the most lasting
scar of the crisis, homes--many homes--have been foreclosed. A lot of
people in those communities cast their votes in November based on a
Trump message that real change was coming.
Heads are going to be spinning tonight with the news from the Senate.
In just a few minutes, this body will vote to confirm as Treasury
Secretary Steven Mnuchin, known by many as the ``foreclosure king.''
That is whom the President chose as his Treasury Secretary. Mr. Mnuchin
turned the bank he bought into a cash cow, and they set a land speed
record for foreclosures.
I have supported nominees for this position from both parties. I
voted for Paul O'Neill. I voted for John Snow, and Hank Paulson, who
served under President George W. Bush. I don't expect to see eye to eye
on each issue with every Treasury Secretary. I do expect to have
confidence that the Treasury Secretary is going to work on behalf of
all Americans--all Americans--and not just the well healed, not just
the fortunate, not just the powerful.
After considering Mr. Mnuchin's qualifications and background, I just
don't believe he would be that kind of Treasury Secretary. In Mr.
Mnuchin's response to questions from members of the Finance Committee,
he denied that his bank, OneWest, engaged in a practice known as robo-
signing. The public record says that is just dead wrong. In fact, a
OneWest vice president who worked under Mr. Mnuchin, Erica Johnson-
Seck, admitted under oath that she ran an office that churned out
roughly 6,000 sets of foreclosure documents a week.
She said she personally signed more than 750 disclosure documents a
week without even reading them, and there was no notary present during
the process. That is a violation of the law. When asked how much time
she spent executing each foreclosure document, Ms. Johnson-Seck
replied:
I changed my signature considerably. It's just an E now. So
not more than 30 seconds.
Now, on the eve of the Finance Committee mark-up for Mr. Mnuchin, the
Columbus Dispatch in Ohio reported documented examples of robo-signing
in Ohio. Now, on the eve of Mr. Mnuchin's confirmation vote in the
Senate, another such story has broken. This time it is in the State of
Washington, more evidence of robo-signing that directly contradicts
what Mr. Mnuchin told the Finance Committee and the public.
Mr. Mnuchin also withheld foreclosure data requested by two
Democratic members of the Finance Committee, Senators Brown and Casey.
He did, apparently, give similar information to Senator Heller, one of
the committee's Republican members. That is on top of $100 million
worth of property and more than a dozen positions with various business
entities missing from his disclosures to the Finance Committee.
My own view is, if not for the committee's minority investigations
team, I don't believe any of that information, none of it--$100
million, the other disclosures--would have ever come to light.
I am going to turn from missing disclosures and misleading testimony
to a broken promise. The day after news of Mr. Mnuchin's nomination was
leaked, he appeared on television and, in effect, debuted a new tax
policy. I have come to call it the Mnuchin rule, and I will quote Mr.
Mnuchin directly with respect to what he said.
Mr. Mnuchin said: ``Any reductions we have in upper income taxes
would be offset by less deductions, so there would be no absolute tax
cut for the upper class.''
I will repeat the last part of the Mnuchin rule: ``no absolute tax
cut for the upper class.''
When I first called this the Mnuchin rule during the Finance
Committee's hearing on his nomination, Mr. Mnuchin said he took it as a
great compliment, comparing it to the Volcker rule and the Buffett
rule. Well, you would think a fellow who proudly embraced having a rule
named after himself would actually stick to it.
The Mnuchin rule didn't last for very long before it was abandoned.
The very first act of the 115th Congress in a unified Republican
government, repealing the Affordable Care Act, would shatter the
Mnuchin rule. Then it is set to take another hit later this year. That
is with the majority working on plans to fast-track a second, even
bigger tax break for those who are the most fortunate. The Trump plan,
in fact, would hit millions of middle-income families with tax
increases by wiping out key personal exemptions and eliminating head of
household filing status.
So I want to be really clear what this means to people in Oklahoma
and Oregon and all across the country, working families: Working
families would get hurt by the Trump plan. They would lose key personal
exemptions. They would eliminate the head of household filing status
while those who were more fortunate would be in a position to get tax
breaks, additional tax breaks beyond what they already have in the Tax
Code.
The fact is, the Tax Code today is a tale of two systems. For the
firefighter in Coos Bay, OR, or the retail worker in Roseburg, your
taxes come straight out of each and every paycheck. That is the way it
works in Oklahoma, the way it works all across the country. The Tax
Code for working people is compulsory. Once or twice a month, your
taxes come directly out of your paycheck--no special dodges, no special
loopholes. Nobody is able to hide their pay in a Cayman Islands account
if they are a firefighter or a retail worker.
But there is a very different Tax Code in America for the well-
connected and the powerful. They have a whole array of lawyers and
accountants who specialize in helping them shrink their tax bills. And
with the right advice, the fact is, those people can, to a great
extent, decide what they are going to pay, when they are going to pay
it, and sometimes be in a position to not pay much, if anything at all.
The fact is, the tax system today punishes working Americans because
it treats them very differently than it treats the most fortunate. And
the administration and the majority in Congress don't seem to be doing
much in terms of fixing this disparity.
[[Page S1121]]
The Mnuchin rule just hasn't held up. It is beyond being on the
ropes. It is not going anywhere at all. In fact, the early proposals
only make this extraordinary unfairness, the unfairness at the heart of
America's Tax Code, even worse.
So what we have is another Trump nominee who, in my view, doesn't
meet the test of standing up for working families in those communities
all across the country who are waiting for economic recovery to show up
in their neighborhood. They are the ones who have seen the factory
close and seen the foreclosures and seen their neighbors laid off. And
they would like to see people in these positions advocate for them,
advocate for them because they need somebody who is going to stand up
for them, and they were told in the campaign that is what they were
going to get.
The fact is, Mr. Mnuchin is yet another Trump nominee who, instead of
standing up for those working families, has a different set of
priorities and, in addition to that, has the ethics alarm bells
sounding.
He appears to be withholding information requested by Members of this
body. My view is, he misled the Finance Committee and the public about
his bank's foreclosure tactics. The Mnuchin rule--the first promise he
made, the very first promise he made on policy, which he was proud to
have described as a rule named after him, already has been broken.
So I am not going to be supporting Mr. Mnuchin to lead the Treasury
Department. I urge my colleagues as well to reject this appointment.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, all postcloture time
has expired.
The question is, Will the Senate advise and consent to the Mnuchin
nomination?
Mr. HATCH. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
The result was announced--yeas 53, nays 47, as follows:
[Rollcall Vote No. 63 Ex.]
YEAS--53
Alexander
Barrasso
Blunt
Boozman
Burr
Capito
Cassidy
Cochran
Collins
Corker
Cornyn
Cotton
Crapo
Cruz
Daines
Enzi
Ernst
Fischer
Flake
Gardner
Graham
Grassley
Hatch
Heller
Hoeven
Inhofe
Isakson
Johnson
Kennedy
Lankford
Lee
Manchin
McCain
McConnell
Moran
Murkowski
Paul
Perdue
Portman
Risch
Roberts
Rounds
Rubio
Sasse
Scott
Shelby
Strange
Sullivan
Thune
Tillis
Toomey
Wicker
Young
NAYS--47
Baldwin
Bennet
Blumenthal
Booker
Brown
Cantwell
Cardin
Carper
Casey
Coons
Cortez Masto
Donnelly
Duckworth
Durbin
Feinstein
Franken
Gillibrand
Harris
Hassan
Heinrich
Heitkamp
Hirono
Kaine
King
Klobuchar
Leahy
Markey
McCaskill
Menendez
Merkley
Murphy
Murray
Nelson
Peters
Reed
Sanders
Schatz
Schumer
Shaheen
Stabenow
Tester
Udall
Van Hollen
Warner
Warren
Whitehouse
Wyden
The nomination was confirmed.
Mr. McCONNELL. Mr. President, I move to reconsider the vote on the
nomination, and I move to table the motion to reconsider.
The PRESIDING OFFICER (Mr. Daines). The question is on agreeing to
the motion to table.
The motion was agreed to.
____________________