Commerce secretary nominee Penny Pritzker could be looking at a difficult confirmation process over her financial background and her family's asset management that includes subprime lending, offshore trusts, and a pioneering approach to tax code loopholes.
For instance, the Hyatt heiress served as chairwoman of Superior Bank, a pioneer in bundling subprime loans into securities that collapsed in 2001, the New York Times notes:
In the 1990s, Superior focused on subprime lending — high-interest loans that are marketed to people with shaky finances. It was a pioneer in bundling them into securities — selling some portions, while retaining riskier ones — a practice that later spread and led to the 2008 financial crisis.
Outside accountants signed off, allowing the owners to take cash out of the bank as dividends. But in 2001, regulators said that Superior was undercapitalized because it had overstated the value of the toxic assets on its balance sheet.
In a sign of the closeness of her own role, Ms. Pritzker wrote a letter assuring employees that its owners would save the bank, adding, "Our commitment to subprime has never been stronger." But the deal fell through, and the bank was declared insolvent two months later.
Worth an estimated $1.85 billion, Pritzker withdrew her name during the president's first term, as the financial crisis put pressure on assets she managed and her family restructured their finances. The Pritzker family has a history of advancing the use of offshore trusts to dodge the U.S. financial system, a practice that Pritzker conceded she is a "beneficiary" of in a 2008 interview with the Times.
The finances of Republican nominee Mitt Romney were a notable campaign issue for many Democrats in 2012.