Thread by @osuphantom

Kamala Harris Fact-check

Claim: Did Kamala Harris let Steve Mnuchin off the hook during the foreclosure crisis?

Answer: No, she did not.

Background; During the 2008 financial crisis Steve Mnuchin was CEO of OneWest; a national bank that was called a “foreclosure machine”.

It has been noted that OneWest stood out among other players in the crisis as a particularly aggressive bank when it came to foreclosing versus restructuring.

It is estimated that OneWest potentially foreclosed on 80,000 CA homes illegally.

money.com/steve-mnuchin-…

CA, one of the states hardest hit by the crisis experienced ~240,000 foreclosures during the crisis making OneWest one of the bigger players.

When Kamala Harris became AG in 2011 the crisis had passed but the legal fallout was still on going.

Harris, much to the dismay of the Obama Administrtion, pulled out of a nationwide AG group seeking to hold the banks accountable; she didn’t think the settlement on the table went far enough.

wsj.com/articles/SB100…

In the end the pressure that move and the work her office put into to investigating these banks further created resulted in a far larger settlement; almost $25B for CA homeowners alone.

latimes.com/politics/la-po…

By her own admission it wasn’t perfect; but when families are struggling to hold onto their homes or get out from underwater mortgages they cannot afford to hold out for perfect.

So where does OneWest play into this? As one of the major players in the crisis it made for a pretty big target but as AG Harris chose not to go after bank for a very simple reason; as a State AG she was unable to subpoena OneWest because it was a national bank.

While under Cuomo v. Clearing House Assc states can enforce their own laws, subpoenas from states for national banks violate the OCC’s visitorial oversight.

No subpoena? No case.

Despite this the CA DOJ did recommend civil charges be pursued against OneWest.

Against the bank, not Steve Mnuchin. He was never going to be the target of any action despite being the CEO of the bank and it certainly would not have been criminal charges.

Even with the recommendation Harris knew her office had limited resources and had to choose which cases to pursue to achieve the best outcome for CA homeowners.

An almost impossible civil suit that had a maximum fine of $200M or a national settlement with billions in relief.

She choose the later and frankly I question anyone who wouldn’t have done the same.

So the recap;

Was Steve Mnuchin ever going to be charged? No.

Was Harris able to effectively prosecute OneWest bank without subpoena power? No.

Was a symbolic $200M suit and better use of AG office resources than a $20B+ one? No.