BREAKING NEWS: Trump to pick Mnuchin for treasury secretary

Donald Trump plans to nominate Steven Mnuchin to serve as the next Treasury secretary - his first major economic policy decision as president-elect.

The Goldman Sachs alumnus was Trump's campaign finance chairman, and has long been seen as a top contender to run his Treasury Department.

Mnuchin's appointment will require confirmation by the Senate, where his extensive ties to the finance industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Steve Mnuchin, a Goldman Sachs alumnus, was Donald 

Trump's campaign finance chairman. | Getty

Trump to pick Mnuchin for Treasury secretary

The Goldman Sachs alum was the president-elect's campaign finance chairman.

By VICTORIA GUIDA BEN WHITE ZACHARY WARMBRODT

11/29/16

In a sign that Donald Trump is turning to Wall Street to help run his incoming government, the president-elect announced Goldman Sachs alumnus Steven Mnuchin as his pick to head the Treasury Department.
industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

If confirmed, the 53-year-old hedge fund CEO and Hollywood film producer would have a key role in shaping policies on taxes, financial regulation and the economy. He would be the third former Goldman executive to lead Treasury in recent decades following Henry Paulson and Robert Rubin. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Mnuchin would also be the second Goldman alum to take a senior place in Trump’s administration. Steve Bannon, the populist provocateur who will serve as one of Trump’s top White House advisers, spent the early part of his career as a Goldman investment banker.



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Mnuchin emerged as a front-runner for the Treasury position even before the election, when Trump told aides that he wanted the Goldman veteran for the job.

“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 Wednesday. “His expertise and pro-growth ideas make him the ideal candidate to serve as Secretary of the Treasury."

Trump selected Mnuchin, who served as national finance chair for the campaign, after considering several other candidates, including JPMorgan Chase CEO Jamie Dimon and House Financial Services Chairman Jeb Hensarling (R-Texas). Dimon told Trump transition officials he would provide outside counsel to the new administration but wasn’t suited to the Treasury job. Hensarling will be key to Trump’s efforts to rewrite banking laws from his position in the House.

Mnuchin shares Trump’s skepticism about the sweeping 2010 Dodd-Frank Act, which fundamentally reshaped the way Wall Street works, though he hasn’t gone nearly as far as the president-elect, who has said he wants to dismantle the landmark law.

In a CNBC interview Wednesday, Mnuchin said Dodd-Frank is "way too complicated" and that a top priority would be to strip back parts that prevent banks from lending.

The Yale University graduate spent nearly two decades at Goldman Sachs, where he was a partner and pioneer in the bank’s powerful fixed income, currency and commodities trading division. He eventually became chief information officer. He now serves as CEO of New York-based hedge fund Dune Capital.

Mnuchin has also had a successful career as a movie mogul, backing major films including “Suicide Squad,” which came out over the summer. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Dodd-Frank Goldman executives describe him as smart and well-liked, though perhaps lacking the powerful personalities of both Rubin and Paulson, who served as CEOs of the firm.

“I wouldn’t put him in a category of people like Rubin and Paulson in terms of charisma and presence, but there is no question that he is very smart and understands markets,” said one current Goldman partner who declined to be identified by name because he was not authorized to speak publicly about Mnuchin. “It’s certainly good for us to have someone who understands how the industry works.” 

The Treasury secretary wields tremendous power and influence over markets and the economy, overseeing the collection of all federal taxes and managing government revenue. Treasury will likely play a major role in helping to design and push through Congress an overhaul of both the corporate and individual tax code as well as implementing what could be a very large infrastructure spending plan. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Trump’s pick would also chair the Financial Stability Oversight Council — the financial industry’s uber-regulator that consists of all the major regulatory heads — which is tasked with addressing “systemic risks” outside of banking and coordinating oversight across agencies. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Democrats wasted little time before blasting the news that Trump was turning to an elite financier to run his Treasury Department. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

"Steve Mnuchin is the Forrest Gump of the financial crisis — he managed to participate in all the worst practices on Wall Street," Sen. Elizabeth Warren (D-Mass.) said. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, said Mnuchin's Wall Street ties "couldn’t run deeper." industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

"This isn’t draining the swamp — it’s stocking it with alligators," he said. industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Sen. Tammy Baldwin (D-Wis.), who has played a leading role in attacking the “revolving door” between industry and government, said it was more proof that in GOP-controlled Washington "Wall Street, big banks, hedge funds and the wealthy will be writing the rules to make a rigged system work for them.” industry will likely prove to be a major focus. Progressive groups have already signaled opposition.

Progressives and financial reform advocates had urged the next president to appoint economic advisers willing to crack down on Wall Street. Given the populist campaign that Trump ran, repeatedly bashing Hillary Clinton for her ties to Goldman and other Wall Street firms, there was some reason for them to hope that the president-elect might pursue nominees from outside the financial industry.



Other troubles could dog his confirmation as well. Warren has accused Mnuchin of profiting from mortgage foreclosures after he was part of the takeover of failed bank IndyMac.

IndyMac Bank collapsed during the financial crisis, with billions in distressed commercial loans, mortgages, and mortgage-backed securities. Mnuchin entered into an agreement with the Federal Deposit Insurance Corp. to buy the assets and share the losses, which turned out to be a profitable move. He renamed it OneWest.

Mnuchin defended the deal Wednesday, saying it "saved a lot of jobs" and was one of the proudest moments of his career.

"We bought the worst mortgage portfolio in the history of time," he said. "IndyMac was about 30 percent delinquent loans. All the loans that we unfortunately had to foreclose on, we didn't originate those."

Sen. Ron Wyden, the top-ranking Democrat on the Finance Committee, vowed a "full and thorough review" of Mnuchin's nomination from the panel in the coming weeks.

“Given Mr. Mnuchin’s history of profiting off the victims of predatory lending, I look forward to asking him how his Treasury Department would work for Americans who are still waiting for the economic recovery to show up in their communities," Wyden said in a statement.

Meanwhile, two California housing watchdogs alleged on Nov. 17 that OneWest, which was run by Mnuchin until last year, discriminated against blacks, Hispanics and Asians and avoided putting branches in minority communities.

The redlining accusation was made against CIT Group, which purchased OneWest in a $3.4 billion deal that closed last year. While the complaint doesn't name Mnuchin specifically, it could complicate his confirmation by the Senate. Mnuchin sits on CIT's board.

“It is concerning that he would be considered, given what we know of the bank that he helped run,” said Kevin Stein, deputy director of the California Reinvestment Coalition. The group filed the complaint along with Fair Housing Advocates of Northern California. Both are nonprofit coalitions.

Former OneWest CEO Joseph Otting fought back against the complaint. In a statement distributed by the Trump campaign, he said the lender, after acquiring IndyMac, “remained committed to fair lending and meeting the credit needs of all borrowers in its communities, including those in distress.”

Alex Isenstadt, Eliana Johnson and Lorraine Woellert contributed to this report.



http://www.politico.com/story/2016/11/trump-to-pick-mnuchin-for-treasury-secretary-231962