In a tense hearing Thursday morning, the new administration’s Treasury Secretary nominee Steven Mnuchin faced scrutiny from Democratic senators concerned about him profiting handsomely off homeowners who lost their homes during the housing crisis.
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In prepared remarks read at the Senate Finance hearing on Thursday, Mnuchin defended his role at OneWest, claiming that the bank modified loans to help 100,000 clients keep their homes. “What I would say is we follow the same procedures that the FDIC followed”.
“Never before has the Senate considered such an ethically challenged slate of nominees for key cabinet positions”, Senator Chuck Schumer of NY, the minority leader, said in a statement.
Mr Wyden painted Mr Mnuchin as one of the powerful and well-connected as he criticised the nominee’s hedge fund for setting up outposts in Anguilla and the Cayman Islands – “an action that can be explained only by the island’s zero per cent tax rate”. He said banks would prefer to make a loan modification than to foreclose “which is very costly to the bank”.
Mnuchin, a wealthy Hollywood financier who has backed more than 30 films in the last three years, was questioned by the Senate Committee on Finance, which is composed of 14 Republicans and 12 Democrats.
Organizers are also draw attention to Mr. Mnuchin’s history at Goldman Sachs, the investment banking behemoth that Donald Trump reviled on the campaign trail but to which he is now turning to fill several high level posts in his administration, including Treasury.
Financial Freedom, a unit of OneWest bank, is being probed over alleged complaints it deliberately targeted seniors with dementia and other memory-loss related issues, among other things, the person said.
Mnuchin’s bank sued to foreclose on the home, where she had lived for 40 years.
Stabenow asked if that means Mnuchin helped others avoid paying taxes. He declined to say, for example, whether Fannie Mae and Freddie Mac should remain in government receivership or be recapitalized and returned to the private market.
Mnuchin may have a point that the characterization of his bank as a foreclosure machine could have a touch of partisan spirit to it – there were lots of troubled banks during the financial crisis that desperately needed buyers.
Mnuchin noted that the bank was in compliance with federal regulators under his watch, and said government rules tied the bank’s hands in some cases, forcing foreclosures. “I ran a ‘Loan Modification Machine.’ Whenever we could do loan modifications, we did them”.
“The most troubling loan we had was actually to the Octomom”, Mnuchin said during the hearing. He hit the Trump administration talking points of lowering taxes on businesses to encourage them to keep operations in the USA, saying he thinks 3 to 4 percent sustained GDP growth is reasonable and playing down analyses that Trump’s tax plan would expand the national debt by trillions.
“Now perhaps the IRS just started with way too many people”, Mnuchin added. Mnuchin dodged questions, however, about what specific level of debt he finds “unacceptable”.
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He said he shares Trump’s goal of economic empowerment for every citizen, implementing trade policies that put Americans first, and restoring America’s competitiveness for businesses. She plans to lead a march back to Mnuchin’s residence today following the demonstration outside Goldman Sachs.
