The Senate voted to confirm Steven Mnuchin as President Trump’s Treasury secretary in a 53-47 vote Monday.
Mnuchin’s approval came over the objections of some Democratic senators who pointed to Mnuchin’s business record running a bank that hastily foreclosed on homeowners. It also drew fire from those who say that with the appointment of Mnuchin and other former bankers to key roles close to the White House, the administration is going back on its promise to get tough on Wall Street.
Democratic leader Sen. Chuck Schumer called the appointment of Mnuchin a “broken promise” by Trump to hold big banks accountable. Virginia Democratic Sen. Mark Warner said in a statement, in part, “though I did not support this nomination, I intend to work with him on areas of agreement,” adding that if Mnuchin does not help rein in Wall Street, “the American people will be watching.”
Mnuchin’s ties to Wall Street run deep; his father, Robert Mnuchin, was also a Goldman Sachs investor. Now, Goldman alumni in top administration jobs include National Economic Council Director Gary Cohn and Trump advisers Dina Powell and Stephen Bannon.
Mnuchin’s confirmation vote was contentious, but far less dramatic and the criticism more muted than for Education Secretary Betsy DeVos and Attorney General Jeff Sessions.
Mnuchin had invested in at least two real estate projects with Trump and most recently served as finance director for the Trump campaign. Mnuchin is a former investment banker at Goldman Sachs who left in 2002 and increased his fortune investing in several firms, the most controversial of which was the takeover of the failed IndyMac Bank, later renamed OneWest. Under Mnuchin and other investors’ leadership, OneWest foreclosed on tens of thousands of troubled homeowners, and some Democrats said he misled the Senate Health Education Labor and Pensions Committee during his confirmation hearing about shortcuts the bank used to foreclose on those properties. Some also objected that Mnuchin — whose net worth is reportedly close to half a billion dollars — initially failed to report about $100 million of his wealth in his disclosures, saying he did so on the advice of legal counsel.
During that hearing, Mnuchin staunchly defended his approach to foreclosures, saying every effort was made to keep people in their homes, but sometimes regulations got in the way of offering more loan modifications. Mnuchin and the other investors eventually sold OneWest to CIT Group for twice the price they paid for it.
More recently, Mnuchin bankrolled the production of Hollywood films, including Avatar, American Sniper and The Lego Movie.
Now that he has the top Treasury job, Mnuchin will need to fill top-level department positions. Among those, he is considering Jim Donovan, another Goldman Sachs banker, as his deputy. Justin Muzinich, a Morgan Stanley banker, is reportedly under consideration for another position.
In his new job, Mnuchin will tackle the administration’s tax policy. He helped draft a controversial tax proposal that would cut the corporate tax rate from 35 percent to 15 percent, the details of which Trump promised would be out in a couple of weeks.
Other key, closely watched areas will be the administration’s pledge to roll back financial industry regulations enacted under the Dodd-Frank financial reform law following the financial crisis. The Treasury Department is likely to be involved in the proposed renegotiation of trade deals including the North American Free Trade Agreement as well.