Herbert Sandler

Herbert Sandler
Born	(1931-11-16) November 16, 1931 New York City, U.S.
Died	June 5, 2019(2019-06-05) (aged 87)
Occupation(s)	Banking executive, philanthropist
Known for	Co-CEO of Golden West Financial Corporation and World Savings Bank; role in subprime mortgage crisis; philanthropy

Herbert Sandler (November 16, 1931 – June 5, 2019) served as co-chief executive officer alongside his wife Marion Sandler at Golden West Financial Corporation and World Savings Bank. He passed away at the age of 87. Due to Golden West's lending strategies, Time listed the Sandlers among the "25 People to Blame for the Financial Crisis".

Early life

Born in New York City on November 16, 1931, Herbert Sandler was raised in a Jewish household in the Bronx.

Education

After graduating from Stuyvesant High School, Sandler earned a Bachelor of Arts degree from City College of New York in 1951 and subsequently received an LLB from Columbia Law School in 1954.

Career

The Sandlers established Golden West Financial Corporation in 1963 as a vehicle to acquire Golden West Savings and Loan Association, which later evolved into World Savings Bank. Under their stewardship, Golden West grew into one of the nation’s largest thrift institutions, managing roughly $125 billion in assets, holding $60 billion in deposits, and employing around 12,000 people. Over a span of 39 years, the company delivered an average compound annual growth rate of 19% in earnings per share and was featured ten times on Fortune magazine’s list of most admired U.S. companies. Morningstar honored the Sandlers as "2004 CEOs of the Year."

Despite these achievements, Golden West's lending methods faced criticism for their role in precipitating the housing market downturn. In 2006, Wachovia Bank acquired Golden West for $24 billion. The Sandlers held approximately a 10% stake, yielding about $2.4 billion from the transaction, with $1.3 billion subsequently donated to the Sandler Foundation.

Role in subprime mortgage crisis

Although Herbert and Marion Sandler publicly opposed predatory lending and substandard underwriting standards, their company’s conduct during the early 2000s conflicted with these stated values, particularly amid the 2008 housing crisis. They are credited with pioneering the "Pick-A-Pay" mortgage product, which permitted borrowers to remit less than the interest owed each month, thereby increasing overall debt burdens. Analysts associate Wachovia’s near-collapse in 2008 with its acquisition of this portfolio containing "Pick-A-Pay" loans.

Martin Eakes from the Center for Responsible Lending observed that prepayment penalties restricted borrowers’ ability to refinance into affordable loans, prompting North Carolina to outlaw such fees. The Sandlers defended prepayment penalties as safeguards against unscrupulous brokers who marketed low-interest loans with concealed charges. Herbert Sandler referred to independent brokers disparagingly as "the whores of the world," yet by 2006 these brokers accounted for 60% of World Savings’ loan originations—a practical necessity given their dominance in that sector. Although World Savings was expected to verify loan terms by contacting applicants directly, it managed to reach only about half.

Philanthropy

The Sandlers were instrumental in founding and generously supporting organizations such as the Center for Responsible Lending, dedicated to fighting predatory mortgage and payday lending practices; the Center for American Progress, a progressive policy institute; ProPublica, an investigative journalism organization; and the American Asthma Foundation.

Their philanthropic vehicle, the Sandler Foundation, created in 1991, has contributed hundreds of millions of dollars toward advancing scientific research, protecting civil liberties, and promoting social justice causes. In 2006 alone, they donated $1.3 billion—marking it as the second-largest charitable gift made in the United States that year.