In many classic Hollywood western films, one of the most common cliché phrases used to introduce new local lawmakers was frequently “there’s a new sheriff in town.”
With the recent confirmation of Steven Mnuchin as America’s new Secretary of Treasury, the nation’s financial community is scrambling to familiarize itself with its new ‘sheriff’, the man charged with helping shape America’s financial policies and direction for the next four years.
Beyond the realm of punditry and speculation, there are several significant biographical facts about the new Treasury Secretary that are beyond dispute:
- Much like his boss, the President, Mnuchin is a native of New York City; his family has deep roots there, given that his father was a partner at Goldman Sachs and founder of the Mnuchin Art Gallery in the city.
- Mnuchin holds a Bachelors Degree from Yale University
- Following in his father’s footsteps, Mnuchin spent 17 years at Goldman Sachs, where he oversaw trading in government securities, mortgages, money markets, and municipal bonds, and rose to become the company’s Chief Information Officer.
- In 2004, Mnuchin served as Founder, Co-Chief Executive Officer and Chairman of Dune Capital Management, a leading investment firm specializing in public equity markets, real estate and the entertainment industry. In 2009, he also founded OneWest Bank Group LLC, where he served as both Chairman and CEO.
- Prior to the inauguration of President Trump, and his nomination as Treasury Secretary, Mnuchin served as finance director for Trump’s presidential campaign.
In announcing Mnuchin’s nomination, the Trump Administration also stressed the fact that he brought with him a track history of financial success; President Trump explained that Mnuchin had previously “purchased IndyMac Bank for $1.6 billion, ran it very professionally, and sold it for $3.4 billion plus a return of capital. That’s the kind of people I want in my administration.”
So it is obvious even to a casual observer, that Mnuchin brings with him to the Treasury Secretary’s office a plethora of financial experience spanning a wide range of business sectors.
Still, some critics of the Trump Administration found it odd that after having run a heavily ‘populist’ campaign, the President would turn to someone who would be—by almost anyone’s definition—a very ‘establishment’ Republican. In fact, Mnuchin is the third Goldman Sachs alumni to hold the Treasury Secretary job in recent years (Goldman veterans Robert Rubin and Henry Paulson preceded Mnuchin in the Clinton/GW Bush administrations, respectively).
During his Senate confirmation hearings, Mnuchin was also often criticized for the foreclosure practices of his former company, OneWest Bank; the most frequent criticism of the bank’s practices being that it was very quick to seize and foreclose homes of borrowers who fell behind in their mortgage payments, rather than seek to find a solution.
Which leads to the core question for most in America’s financial community: what to expect from America’s new Treasury Secretary? After all, the US Treasury Department is massive—with more than 80,000 employees and jurisdiction over a wide range of government agencies from the Internal Revenue Service to the US Mint, to the Office of Foreign Assets Control, responsible for implementing and enforcing economic and trade sanctions. In addition, it’s likely that President Trump will turn to Mnuchin—and his decades of financial industry expertise—to craft broader economic policies ranging from an overhaul of the US tax code to possible new tariffs on goods and services.
Perhaps first and foremost among his duties as Treasury Secretary will be Mnuchin’s role in reviewing ‘Dodd-Frank’, the massive overhaul of the US financial services sector passed in 2010 in the wake of the Great Recession. In alignment with his boss—the President—Mnuchin has been a critic of Dodd-Frank, which he’s blamed for impeding economic growth and reducing bank lending.
Based on prior comments, other positions that Mnuchin may actively advocate as Treasury Secretary include:
- Possible privatization of mortgage giants Fannie Mae and/or Freddie Mac
- A massive overhaul of the US tax code; Mnuchin has said he hopes to have that proposal before Congress by the end of this summer
- Helping re-shape US trade policy, with a much greater emphasis on promoting US businesses over foreign competition, which Trump has made a pillar of his presidency.
Although his resume speaks to someone who could easily fit into prior GOP Administrations, most would agree that Secretary Mnuchin reports to a ‘unique’ Republican president. So while specific details of his policies remain to be seen, America’s financial community will be closely watching to see what it’s new ‘financial sheriff’ has in store for them over the next four years.