by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Senate Democrats — led by senators Elizabeth Warren of Massachusetts and Vermont Independent Bernie Sanders — hope to defeat Steven Mnuchin, President-elect Donald Trump’s nominee for Treasury Secretary, by focusing on his alleged role in the 2008 collapse of California’s IndyMac bank.
Warren has launched a web page on the official United States Senate website that calls Mnuchin, “the foreclosure king” because, as she and left-wing activists charge, he threw thousands of homeowners onto the street after he bought IndyMac. Mnuchin’s Senate confirmation hearing begins Thursday.
But the Daily Caller News Foundation’s Investigative Group (TheDCNF) has uncovered extensive evidence that the person who triggered IndyMac’s financial crisis, which led to one of the largest bank failures in American history, was Senate Minority Leader Chuck Schumer of New York.
Schumer started a $100 million-a-day run on the bank after he gave reporters a letter on June 26, 2008, addressed to federal regulators saying he was “concerned that IndyMac’s financial deterioration poses significant risks to both taxpayers and borrowers.”
The letter spooked depositors who in the next 11 days withdrew a record $1.3 billion from the bank.
News reports filed at the time squarely place the blame the bank’s failure on Schumer. The Los Angeles Times, for example, reported July 2, 2008, that “the letter stunned some Wall Street analysts, who said Schumer was in effect sealing the lender’s fate by raising the prospect of its failure.”
Schumer’s action was so irresponsible that the federal Office of Thrift Supervision explicitly blamed Schumer for IndyMac’s collapse, saying in a July 11, 2008, press release that “the immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York.”