Steve Mnuchin, a former executive at Goldman Sachs and former chairman of OneWest Bank, is President-elect Donald Trump’s choice to lead the Department of the Treasury during his administration, Trump’s transition team announced Wednesday morning.
Mnuchin previously served as the finance director of Trump’s campaign and has a long history of working in finance and mortgages.
According to information provided by Trump’s transition team, Mnuchin spent 17 years at Goldman Sachs. During that time, he oversaw trading in government securities, mortgages, money markets, and municipal bonds, and eventually became the company’s chief information officer.
After leaving Goldman Sachs in 2002, Mnuchin founded Dune Capital Management, a private equity firm.
Mnuchin and his partners at Dune Capital formed OneWest after buying the remains of IndyMac Federal Bank from the Federal Deposit Insurance Corp. in 2009.
Mnuchin and his partners sold OneWest to CIT Group in 2015, but recently two housing advocacy groups accused OneWest of violating federal fair housing laws by redlining minority neighborhoods and engaging in discriminatory lending practices during Mnuchin’s time as chairman.
In a complaint filed with the Department of Housing and Urban Development, the California Reinvestment Coalition and Fair Housing Advocates of Northern California accused OneWest of failing to locate bank branches in communities of color and extending very few or no mortgages to borrowers of color prior — a process commonly referred to as redlining — to the bank’s sale.
“Our analysis of OneWest suggests the bank has no significant branch presence in communities of color, and not surprisingly, its home loans to borrowers and communities of color are low in absolute terms, low compared to its peer banks, and low when compared to what one would expect, given the size of the Asian American, African American, and Latino populations in California,” Kevin Stein, deputy director of the California Reinvestment Coalition, said.
Trump, in a press release announcing the selection of Mnuchin, praised Mnuchin’s time at OneWest, stating that he ran the bank “very professionally” and sold it for a significant profit.
“Steve Mnuchin is a world-class financier, banker and businessman, and has played a key role in developing our plan to build a dynamic, booming economy that will create millions of jobs,” Trump said.
“His expertise and pro-growth ideas make him the ideal candidate to serve as Secretary of the Treasury,” Trump continued. “He purchased IndyMac Bank for $1.6 billion and ran it very professionally, selling it for $3.4 billion plus a return of capital. That’s the kind of people I want in my administration representing our country.”
As CNN Money notes, Mnuchin will certainly be questioned about OneWest’s lending and foreclosure practices during his confirmation hearings.
From CNN Money:
During Mnuchin's tenure, OneWest was charged by federal regulators with filing false documents during foreclosures. Employees also failed to make sure they had the correct loan documentation before the bank seized a home. The scandalous behavior is known as robo-signing. OneWest eventually admitted its wrongdoing in a consent decree with regulators.
As one might expect, Democrats and progressive groups began voicing opposition to Mnuchin’s appointment in earnest on Wednesday.
Rep. Maxine Waters, D-CA, the ranking member of the House Committee on Financial Services, said that Mnuchin “got rich” off the financial crisis.
“Donald Trump ran a campaign on anti-Wall Street rhetoric, but appointing a former hedge fund manager, Goldman Sachs executive, and bank CEO as Treasury Secretary shows his true colors,” Waters said in a statement.
“Mr. Mnuchin is a Wall Street insider with ties to big banks that have a troubling past of putting profits ahead of consumers and taxpayers,” Waters continued.
“In fact, fair housing groups have alleged that Mr. Mnuchin’s former bank, OneWest, routinely discriminated against minority homeowners during the foreclosure crisis,” Waters continued. “This is a man who got rich off of the foreclosure crisis -- not unlike Mr. Trump himself -- and will now have oversight over significant swaths of our financial regulatory system.”
The Progressive Change Campaign Committee had some choice words for Mnuchin’s appointment as well, calling Mnuchin a “self-dealing, Wall Street tool,” among other things.
“Trump’s supporters did not vote for him to put a second-generation Goldman Sachs banker who made a fortune foreclosing on working families’ homes in charge of the economy,” the group said in a statement. “Steven Mnuchin is yet another out-of-touch billionaire who is more concerned with self-dealing for Wall Street than protecting Americans from the too big to fail banks.”
On the other hand, Tim Pawlenty, the former governor of Minnesota who now leads the Financial Services Roundtable, praised Mnuchin’s selection and pledged to work with him in his time at the Treasury.
“Steve is a seasoned and results-oriented leader who is really smart, interested in public policy, and understands the urgent need to boost economic growth and opportunity," Pawlenty said.
In a statement, Mnuchin said that he is eager to help the President-elect implement his economic vision.
“I am honored to have the opportunity to serve our great country in this important role. I understand what needs to be done to fix the economy,” Mnuchin said. “I look forward to helping President-elect Trump implement a bold economic agenda that creates good-paying jobs and defends the American worker.”