Senate Dems Probe Wall Street Ties of Foreclosure King Steven Mnuchin

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Senate Dems Probe Wall Street Ties of Foreclosure King Steven Mnuchin

"Working people need a Treasury Secretary who will work for them, not Wall Street," says Sen. Sherrod Brown

Sen. Sherrod Brown (left) and Treasury Secretary nominee Steven Mnuchin. (Brown: AFGE/flickr/cc + Mnuchin: Reuters)

When former Goldman Sachs partner Steven Mnuchin was nominated by President-elect Donald Trump last month to serve as Treasury secretary, Sen. Sherrod Brown (D-Ohio) joined a chorus of critics in saying the pick wasn't "draining the swamp—it's stocking it with alligators."

Now, Brown wants to know how his Wall Street background will influence "Foreclosure King" Mnuchin's views on everything from fair lending practices to Fannie Mae and Freddie Mac to regulation of large regional banks.

"What additional steps will you take to provide Congress and the American public confidence that you are not using the power of the United States Treasury to benefit your current or former business partners, or disadvantage their competitors?"
—Sen. Sherrod Brown, to Steven Mnuchin

"Today, a Treasury secretary is expected to be an expert in financial market operations and regulation, in addition to industrial and international trade policy, terrorist financing and sanctions, and tax and fiscal policy," wrote Brown, the ranking Democrat on the Senate Banking, Housing, and Urban Affairs Committee, in a letter (pdf) to Mnuchin on Wednesday. "Many of your predecessors had long histories and extensive experience relevant to these areas, but I am currently unaware of your views and record on a host of these issues."

Then, citing his time at financial institutions including Goldman Sachs and OneWest Bank (which "engaged in a laundry list of predatory practices" under Mnuchin's leadership), Brown asked 11 questions probing the nominee's positions. 

The questions include:

  • As chairman and CEO of a financial institution that has been labeled a "foreclosure machine" do you believe the federal government should maintain its loss mitigation and foreclosure prevention programs or not? Will you support the regulatory efforts of the Office of the Comptroller of the Currency, including those affecting mortgage servicers or not?
  • As a recent former board member of a large regional bank, what are your views on the proper role of regulation in overseeing large regional banks?
  • How will your past business—and presumably social—connections to hedge fund partners who invested in preferred shares of Government Sponsored Enterprises, Fannie Mae and Freddie Mac, inform your views on efforts to reform those Enterprises?
  • [T]hough the law requires that you recuse yourself from participating in decisions that could benefit you or your close family financially, what additional steps will you take to provide Congress and the American public confidence that you are not using the power of the United States Treasury to benefit your current or former business partners, or disadvantage their competitors?

The letter requests Mnuchin's responses by January 6, 2017.

"Working people need a Treasury Secretary who will work for them, not Wall Street," Brown said in a statement. "The American public deserves to know where Mr. Mnuchin stands on the important housing and finance issues that he will oversee. While he made a fortune from the financial crisis, far too many Ohioans have yet to recover from it."

Just last week, Brown's colleague Sen. Elizabeth Warren (D-Mass.) took to Twitter urging people to come forward if they had been "hurt by Steve Mnuchin, OneWest Bank, or Financial Freedom."

Warren's tweets included a link to a post on the official website of the Senate Democrats, which asks Americans "to share their personal stories of being impacted by the 'Foreclosure King.'"

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