President-elect Donald Trump’s reported pick for Treasury secretary headed a company that has been accused of racial discrimination in lending.
Trump is expected to announce the nomination of Steven Terner Mnuchin to lead the Treasury Department as early as Wednesday, The New York Times reports. Mnuchin, who was national finance chairman for Trump’s campaign and helped craft the president-elect’s tax proposals, has been a partner in the investment bank Goldman Sachs, run a hedge fund, and financed feature films such as Avatar and the X-Men franchise.
More recently, he was chairman of California-based OneWest, a company formed from the remnants of IndyMac, a failed mortgage lender that Mnuchin and other investors bought from the federal government in 2009. Mnuchin and his associates sold OneWest to CIT Group in 2015, and Mnuchin is a member of CIT’s board.
“During his tenure, OneWest faced allegations that it had foreclosed improperly on some borrowers,” the Times reports. “Fair-housing groups also filed a complaint with the federal government, alleging that OneWest was not meeting its legal obligation to make loans in minority neighborhoods.”
The California Reinvestment Coalition and Fair Housing Advocates of Northern California filed the complaint with the U.S. Department of Housing and Urban Development just this month. They “allege that OneWest has made few loans to nonwhite borrowers, operates a small number of branches in minority neighborhoods and has neglected foreclosed properties in those neighborhoods,” the Los Angeles Times reports. Mnuchin did not comment to the L.A. Times for the story on the complaint, which was published November 17.
The complainants said they still expect HUD to do a thorough investigation even if Mnuchin becomes part of the Trump administration. “We expect they will accept the claim, investigate and make findings consistent with what we're alleging,” California Reinvestment Coalition deputy director Kevin Stein told the Los Angeles paper. “Ultimately, we hope the bank is held accountable.”
Trump’s selection of Mnuchin is an example of him rewarding loyalty, according to The New York Times, as he was an early supporter of the businessman’s presidential candidacy. But they have not always been on good terms, the paper reports. Mnuchin once headed Dune Capital Management, which financed a building of Trump’s, and Trump sued the company in an effort to change the terms of the loan. The suit ended up being settled out of court.
And a Trump campaign ad, the paper notes, denounced investment banks like Mnuchin’s former employer Goldman Sachs, saying its chief executive, Lloyd Blankfein, was an example of a global elite that had “robbed our working class.”
As Treasury secretary, Mnuchin would oversee the nation’s general financial policies, including a mortgage refinancing program designed to help those affected by the housing market crash of a few years ago. That has some activists seeing conflicts of interest. “The notion that a candidate who got elected in part due to the ongoing consequences from the housing crisis would hire someone who profiteered from the housing crisis is just kind of appalling,” Jeff Hauser, executive director of the Revolving Door Project at the progressive Center for Economic and Policy Research, told The Washington Post.