President-elect Donald Trump will nominate Steven Mnuchin to head the Treasury Department, one of the senior-most positions in his administration, according to a person with knowledge of the situation but not authorized to speak publicly.
A film producer, banker and investor with no government experience who served as Trump’s finance chairman during the campaign, Mnuchin is expected to be named to the Cabinet position Wednesday.
Mnuchin is a 17-year veteran of Wall Street powerhouse Goldman Sachs, where his father had served on the management committee. He left in 2002 and founded a hedge fund called Dune Capital Management. He also sits on the board of directors of retailing giant Sears Holding Corp. He had two companies that were involved in providing capital for movies such as the “X-Men” franchise and “Avatar.”
He’s sure to face questions about his banking ties in California, which suffered greatly during the housing crisis in 2008.
“Steven Mnuchin…made himself enormously wealthy by cashing in on the country’s financial collapse,” the group Americans for Financial Reform said in a statement Tuesday night. “He purchased a bailed-out bank for pennies on the dollar and then aggressively foreclosed on tens of thousands of families. Anyone concerned about Wall Street billionaires rigging the economy should be terrified by the prospect of a Treasury Secretary Mnuchin.”
Consumer advocacy groups charge that Mnuchin as a banker exacerbated the foreclosure crisis in California. He led a group of powerful investors in 2009 that purchased the assets of failed lender IndyMac Bank, which had specialized in loans to weaker borrowers and was taken over by the government during the financial crisis. As part of the deal, the government agreed to absorb some of the potential losses.
From the ruins of IndyMac came OneWest Bank, based in Pasadena, Calif. It was owned by a holding company led by Mnuchin and composed of hedge fund giants. They included billionaire George Soros and John Paulson, who famously made billions betting on the collapse of housing finance. They were part of the plot of the book and movie “The Big Short.”
Just four years later, they all roughly doubled their investments when it was announced that New York-based CIT Group would purchase OneWest Bank for $3.4 billion. Mnuchin sits on the CIT board of directors.
“We expect that the Senate will dig into Mr. Mnuchin’s track record, and we imagine the many families who lost their homes at the hands of OneWest will be watching closely and will also want to share their experiences as part of any confirmation hearings,” Paulina Gonzalez, executive director at the California Reinvestment Coalition, a housing advocacy group, said in a…