Trump Treasury pick Steven Mnuchin's former bank accused of 'widespread misconduct'

Mnuchin's role in housing crisis called into question
Mnuchin's role in housing crisis called into question

California investigators found repeated violations of foreclosure laws at OneWest when the bank was being run by President-elect Donald Trump's Treasury secretary pick Steven Mnuchin, according to a memo obtained by The Intercept.

A spokesman for Mnuchin called the report "garbage."

During 2009 to 2015, when Mnuchin headed the bank, investigators "uncovered evidence suggestive of widespread misconduct," according to the 2013 memo from then-California Attorney General Kamala Harris' office. The period includes the aftermath of the Great Recession, which was triggered in part by banks approving risky mortgages.

Among the allegations, according to The Intercept: The bank "rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions."

Will Mnuchin's past come back to haunt him?
Will Mnuchin's past come back to haunt him?

The investigators recommended that Harris file a civil enforcement action against the Pasadena-based bank, but her office declined to prosecute without explanation, The Intercept said.

"This memo is meritless," Mnuchin spokesman Barney Keller said by email to CNBC.com. "OneWest was the only bank in the country to complete the grueling independent foreclosure review by the OCC and received the top rating from government regulators for compliance. Steven Mnuchin and OneWest managed to issue over 100,000 loan modifications including thousands that reduced borrower principal, on loans that he did not even originate. Memos like this belong in the garbage, not the news."

Mnuchin, a former Goldman Sachs partner who headed Trump's campaign fundraising efforts, is expected to face a tough confirmation hearing.

The Intercept said his spokeswoman, Tara Bradshaw, declined to comment on the alleged violations, but added: "The attorney general's office made no finding of any violation and took no action against OneWest."

Harris, a Democrat, began her first term as a U.S. senator on Tuesday.

Read the full report from The Intercept here.