Senator hatch committee will come to order. Welcome to everyone to this mornings hearing. We will discuss the nomination of mr. Steve mnuchin to serve as secretary of treasury for the Incoming Trump administration. I want to officially welcome mr. Munchin to the finance committee. I appreciate your willingness to appear before us here today and serve in this important position. The position of treasury secretary is among the most important in the executive ranch. The next treasury secretary will be asked will be asked a lot of questions that are going to be very, very important here today. They will be we are going to be talking about advancing policies to improve our nations economic and fiscal outlook. This position oversees both the collection of taxes and the management of our debt and in addition, as Congress Works to reform our nations tax code and fix our broken health care system, it is absolutely essential that we have a cooperative partner overseeing reasury. That is, quite frankly, something thats been missing for the past eight years as the obama treasury has become increasingly opaque and nonresponsive to inquiries from congress. So as we consider mr. Munchin mnuchin, communicating on policy ill be among my type my top priorities. I believe the president elect has selected a nominee who will provide a Clear Channel of communication and be willing to work with congress on these allimportant efforts. We discussed coming over here that he is going to need to work very closely with members of this committee and he has committed to do so. Another priority for me will be the advancement of progrowth trade policies. While ustr is the Principal Agency for trade policy, treasury plays a key role in several important areas, including the development of International Investment agreementings and oversight of customs revenue functions. As the new administration comes in, i want to make sure first and foremost that our trade policies do no harm. Proposals to, for example, impose unilateral import tariffs as the key tool of International Policy need to be carefully evaluated to ensure they do not hurt us at home. In addition, i want to make clear that any new trade agreements establish the high standards for u. S. Stakeholders. Consistent with the trade Promotion Authority statute enacted in 2015. Finally, i expect you to engage in much better consultations with the Committee Regarding u. S. Trade policies than we have had under president obama. I look forward to a productive conversation about these issues today and in the coming months. Objectively speaking, i dont believe anyone can reasonably argue that mr. Mnuchin is unqualified for this position. So i hope we dont have those type of stupid arguments. He has three decades of experience working in the Financial Sector in a wide variety of capacities. He has been a leader and manager throughout his career, demonstrating an ability to make tough decisions and to be accountable. And he has a reputation for being a Problem Solver and an excellent communicator. Indeed, we have heard from numerous organizations and associations and a wide variety of industries all expressing their admiration for mr. Mnuchin and their support for his nomination. Put simply, if the confirmation process focused mainly on the question of the nominees qualifications, there would be little if any opposition to mr. Nuchins nomination. Unfortunately, that is not the world we are living in. Today we are in the midst of an unprecedented effort to stall and prevent confirmation on the cabinet nominations of the incoming president. It is disappointing that we have taken this turn in the senate where the minority openly and in so many words is committed to obstructing nominees to positions across the board. In many cases, knowing full well that they cannot prevent the outright confirmation of nominees at all. My colleagues sometimes our content to unfairly and in some cases maliciously maligned, more or less, every other nominee before they can assume their post. I hope that is not true of our Senate FinanceCommittee Members ere today. With regard to mr. Mnuchins nomination, we have seen quite a bit of consternation over the process and the timing of hearings. We have heard demands that we convene and Additional Panel of witnesses come a step that has no precedent in the modern history of this committee. There was even a mark hearing on this nomination yesterday held outside the committee, focused on issues essentially unrelated to mr. Mnuchins qualifications. Let me be clear. While my colleagues may believe that nominees in the Incoming Administration should be treated differently than those of any Previous Administration on this committee, we have followed the same vetting and hearing process that has been in place for decades and applied to both republicans and democrats alike. With regard to the substantive arguments being made in opposition to mr. Mnuchin, im hesitant to go into too much detail before giving the nominate a chance to review any accusations that have been made. That said, i do want to note a ew simple facts. First, no one has credibly alleged that any laws, regulations, or industry standards were violated by government is run by mr. Mnuchin. On the contrary, speaking of the main set of allegations regarding foreclosure practices of onewest thanked them all independent valuations of the companys actions resulted in high marks. This includes reviews by the fdic Inspector General and the department of treasury. Second, any claims that mr. Mnuchins businesses contribute d to the housing and foreclosure crisis that precipitated the financial collapse of 2008 are similarly lacking in merit. Mr. Mnuchin had no involvement in the Mortgage Market in the years leading up to the collapse. In fact, it is my understanding that after purchasing indymac and all of its toxic mortgage assets, mr. Mnuchins Company OfferedLoan Modifications to the vast majority of its delinquent borrowers and was one of the first institutions to make offers to forgive portions of the loan principal balances in order to reduce foreclosures. To that point, mr. Mnuchin is joined by a guest today, ms. Fai th bautista, president and ceo of the National AsianAmerican Coalition and head of the National Diversity coalition. In those capacities, she worked with many homeowners to work out Loan Modifications with onewest bank. She is here today to support mr. Mnuchins nomination. Finally, i will know that those making claims that mr. Mnuchins connections to the mortgage and Banking Industry is on its own disqualifying car conveniently forgetting that the current treasury secretarys tenure at a major wall street bank included overseeing Business Units that were sanctioned by the s. E. C. And others for prack uses that harmed innocent investors. Yet when his nomination came up for the senate, this connection to wall street and the financial crisis was deemed orgivable. Like i said, i will let mr. Mnuchin defend himself from this baseless line of attack, which come a given the lack of credibility and the accusations, should not be too difficult for a man of his talents. For now, i simply hope we can have a fair and open discussion during the Committee Hearing this morning. And during the course of what will likely be a long hearing. I hope that going forward, my colleagues will apply the same standards both in terms of process and policy substance, that have applied to nominees in Previous Administrations, including theirs. Once again, i want to thank mr. Mnuchin for being here today and i look forward to hearing his testimony and to look forward to seeing what my colleagues have in mind with regard to their questions of him. With that, i will turn to my Ranking Member, senator wyden, for his opening remarks. Senator wyden thank you very much, as determined, and welcome to you, mr. Mnuchin. This is our first hearing of the 115th congress, and theres a bit of housekeeping. First, congratulations to my friend, senator hatch, for his election to continue leading the committee on behalf of the majority. I want to welcome our two new members, senator mccaskill and senator cassidy. We are lucky to have you both. Now to the business at hand. Aside from the president , there may be no individual with a tighter grasp on the levers of our economy than the secretary of treasury. That has been true since the days of Alexander Hamilton. When you read about the nominee for treasury secretary, given all the power that this position holds, you hope not to see phrases like foreclosure machine, redlining, offshore funds, and predatory lending. Im sure todays hearing is going to cover a wide range of matters, whether it is mr. Mnuchins background and qualifications, or the Incoming Administrations policy agenda. I am going to begin with a topic that cuts across all of these matters, the truly disgusting in inequity and abuse of americas tax laws. The tax code today is a tale of two systems. For wage earners like cops and nurses, there arent any special tax dodges. The rules that apply to them are firm and involuntary. Once or twice a month, the taxes come right out of their paychecks. No cutting corners. The rules are different for the powerful and the wellconnected. They have armies of lawyers and accountants at their disposal. With the right advice, the most fortunate individuals in our country can decide for themselves how much tax to pay nd went to pay it. So lets look at mr. Mnuchins history. There is no clearer example that mr. Mnuchins hedge fund setting up outposts in anguilla and the Cayman Islands, an action that can be explained only by the islands 0 tax rate. It certainly wasnt for ease of commute or the infrastructure. In mr. Mnuchins case, millions of dollars of profits from hollywood exports like the movie avatar were funneled to an offshore web of entities and investors. When mr. Mnuchins tank was up for a merger that had the potential to deliver a huge financial gain, a foundation he chaired reportedly used taxexempt dollars to fund an astroturf campaign pushing for the deals approval. In the Public Comment period of a potential merger, that is the equivalent of stuffing the allot box. Mr. Mnuchin operates seven personal trusts, including one known as a Dynasty Trust that will shield tens of millions of ollars in taxes. In my view, if you look at our history, our nation wanted to reward merit, not to perpetuate dynasties. Now as the nominee for a cabinet position, mr. Mnuchin could be in line for a special elective federal tax deferral on money made by selling stocks and bonds. This is the very definition of getting to pay what you want, when you want. Now, there is a common answer when these kinds of tax tricks, under a spotlight come under a spotlight. It is said that people who use them are just following the laws on the books, and that might be true. The outrage in tax law is what is legal, and that every member of the senate has allowed it to stay legal. In my view, this outrage is going to change only when taxpayers are no longer divided into 2 very different sets of tax rules. This provides a seqgue in the imported policy question. Setting aside mr. Mnuchins finances and background, the tax reform agenda already being advanced by the president elect would perpetuate and in fact worsen the unfairness in the tax code. On the campaign trail, the president elect deliver lots of tough talk about fixing the taxes. He said he alone could fix it, because hes spent a career using the system to his advantage. As for the details, the few position papers that were put forward didnt get a whole lot of attention outside the business pages. But after mr. Mnuchins nomination was announced, he laid down a clear and specific marker. I will quote mr. Mnuchin directly any reductions we have in upper income taxes would be offset by less deductions, so there would be no absolute tax cut for the upper class. Let me repeat that, and for the sake of brevity, im going to start calling it the mnuchin rule. No absolute tax cut for the upper class. So lets take stock of what is already happening on capitol hill. The first major act of the unified republican government, repealing the Affordable Care act, would immediately violate the pledge of no tax cuts for the wealthy. Bottom line, the aca repeal scheme that was kicked off last week is a trojan horse of tax breaks for the most fortunate. It is paid for by taking tax benefits for Health Insurance away from millions of working people. Then it is back for round two. Under an emerging republican plan to fasttrack an even bigger tax break for the wealthy. In my view, this is proof that the Campaign Promises of fixing the tax system were pretty much a head fake. The president elect said he would close the carried interest loophole. It is a favorite of Investment Fund managers. But his plan actually gives them a 25 tax cut. N fact, it slashes tax rates for corporations and the wealthy across the board at a cost of trillions of dollars. Sounds to me like the mnuchin rule is already on the ropes. Now, what with the new administrations tax plan do for people of more modest income. Millions of working parents, mostly single, would get hit with tax increases because they lose head of household status hen they file. In my view, senators need to if you want to push folks out of the economic winners circle, thats how you do it. Given how Central Economic policy is to our jurisdiction, i hope the committee is able to discuss those today. Of course the treasury secretary handles more than taxes so theres other issues to raise. In my view, at a broad level, senators need to make a judgment call on what sort of person they want to head the Treasury Department. Mr. Mnuchins career began in trading Financial Products that helped to bring on the housing crash and the Great Recession. After nearly two decades of Goldman Sachs, he left in 2002 and joined hedge fund. In 2004, he spun off a hedge fund of his own. It was only a few lackluster years before dune began to wind down its investments in 2008. In early 2009, mr. Mnuchin led a group of investors that purchased the bank called indymac, and they renamed it onewest. Colleagues, onewest was truly unique. While mr. Mnuchin was ceo, the bank proved it could put more Vulnerable People on the streets faster than just about anybody else around. While mr. Mnuchin was ceo, a onewest Vice President admitted in a Court Proceeding to robosigning upwards of 700s 50 Disclosure Document so we a week. She spent less than 30 seconds on each and in fact she shortened her signature to speed the process along. Investigations found that the bank frequently mishandled documents and skipped over reviewing them. All it took to plunge families into the nightmare of potentially losing their homes was 30 seconds of sloppy paperwork and a few haphazard signatures. These tactics were in use etween 2009 and 2014, a period during which the bank foreclosed on more than 35,000 homes. Widow foreclosures on reverse mortgages, onewest did more of those than anybody else. Now, the bank defends its record on Loan Modifications, but it was found guilty of an illegal practice known as dual tracking. One Bank Department tells homeowners to stop making payments so they can pursue modification, while another department presses on and hurdles those folks into foreclosure. Onewest made only 2 loans to fricanamerican borrowers in 2014 and 2015, according to an analysis by the california reinvestment coalition, just a fraction of its branches occupied storefronts in minority communities. None were in predominantly africanamerican communities. But minorities still represented a disproportionately large share of the people that got booted out of their homes. Under mr. Mnuchin, onewest churned out foreclosures like chinese factories churn out trump suits and ties. With the combination of extreme foreclosure tactics and the bailout from the fdic, onewest became a rainmaker for mr. Mnuchin and his fellow investors. At precisely the same time, the foreclosure machine was running, onewest funds were poured into glamorous investments in hollywood. In 2012, onewest struck an agreement to loan hundreds of millions of dollars to a movie studio called Relativity Media. In 2014, while he was ceo of onewest Holding Company, mr. Mnuchin bought his own stake in relativity. He took his seat in the boardroom and was appointed cochairman could he even bought a private jet with relativitys cofounder. The Company Quickly tanked. Onewest pulled out 50 million, emptying several relativity accounts, including one earmarked for guild expenses that expanded wages for contractors. Mr. Mnuchin bailed out just before the studio declared bankruptcy. There have been press reports that the fbi has denied a freedom of information act request concerning Relativity Media on the grounds that disclosure is likely to interfere with a pending Law Enforcement proceeding. I have read the fbi background report on mr. Mnuchin and i saw no discussion of any such enforcement action in the report. That may be entirely appropriate. Mr. Chairman, i want to continue to work with you to find out hat the enforcement proceeding cited in the freedom of information act denial and how it relates to the nominee if he does at all. For mr. Mnuchin, Relativity Medias failure was not much of a setback. Considering the profits of onewests foreclosure machine was still pulling in. The Purchase Price of the bank was less than 1. 6 million. After five years of foreclosures and profits, it sold for 3. 4 billion to c. I. T. Group. Outside onewest and relativity, mr. Mnuchin spent years as a director of the Holding Company for sears. Obviously, an iconic american brand. He served on the committee that watchdog the Employee Pension fund. The record shows that plan was routinely mismanaged and underfunded. Retirees saw the pensions cut, losing a Monthly Health care stipend. It was enough to offset roughly one third of the premiums that seniors pay for Medicare Part b. Sears also shuttered hundreds of Stores Nationwide over the last few years. And recently announced another round of closures. Once again showing a truly impressive capacity to advantage himself while others fell behind, mr. Mnuchin joined a small group of investors that spun off the companys real estate into a separate trust. It was arguably the most valuable assets sears had left. So as retirees watched their pensions shrink and sears remaining workers worry about an uncertain future, this small number of powerful individuals made out just fine. Now i am going to wrap up, and i want to step back for a moment to talk about the role of the secretary of treasury. This is the person who is going to have enormous influence over americans hx and mortgages, the caliber of Job Opportunities they face, the safety and stability of the Financial System that holds and invests their hardearned money, and much more. This is a position that has the power to help reverse decades of yawning inequality that has hollowed out the middle class, dimmed the hopes of so many young people and left millions buried in debt. The treasury secretary ought to be someone with works on behalf of all americans, including those who still wait for the economic recovery to show up in their communities. When i look at mr. Mnuchins background, it is a real stretch to find hard evidence that he would be that kind of treasury secretary. Now, just finally, mr. Chairman, one other bit of housekeeping. I want to make it very clear that democrats have in no way been obstructing mr. Mnuchins confirmation. We are doing our job to truly vet this nominee. We are in fact, colleagues, doing it as weve been doing it for almost 20 years on a bipartisan basis. And if you have any questions about the fairness of it, ask tim geithner about what it was like in 2009. I want to point out that its your that at your request, mr. Chairman, i agreed to short then normal oneweek notice period to all so mr. Mnuchins hearing could be held today. Ultimately nominations hearings are about hearing what the nominee is for. So mr. Mnuchin that is what today is all about. We look forward to your testimony and i note also we have a couple of members of the house and we want to welcome hem as well. Senator hatch thank you, senator. We are pleased to welcome 2 of our house colleagues from the house of representatives. First, we will hear from representative kevin mccarthy, House Majority leader. Then we will hear from representative jeb hensarling, chairman of the House Financial Services committee. Rep. Mccarthy chairman hatch, Ranking Member wyden, leaders of the committee, im proud to be here to introduce an extremely capable investor, banker, financier, and fellow californian, Steve Mnuchin. The nominee to be the next secretary of the treasury for the United States. The secretary of treasury is a office, once held by luminaries of our history. From Alexander Hamilton to andrew mellon. It is an office that requires deep technical skill, strategic vision, and uncommon instincts, all qualities that stephen possesses and has demonstrated in the private sector. With decades of experience in banks, financial firms, and even movie production, he has a history of growing returns and achieving Financial Stability for his clients and shareholders. I think it says a lot about this man that he would leave such a successful career to apply his talents for the benefit of the American People as a whole. Steven is a patriot and an independent thinker. And america is in great need of such capable leaders. I believe our nation is enriched when we have people serving in government who have spent their lives serving outside of government. I know steven shares with us here in congress two fundamental priorities. To enable an economy that creates meaningful and good paying american jobs, and to improve the Economic Security for the American People. He understands that government doesnt create jobs, but government can create the structure and incentives for broad Economic Growth that benefits all at the expense of none. To do this, we have to rethink the way our country taxes, regulates, and trades. He shares with congress the goal of progrowth tax plan that makes tax rates fairer and encourages businesses to hire workers here in america. He knows firsthand the devastating impact of irresponsible financial regulations that stifled national and local lenders alike. Impedes Small Business creation and drags down job creation. And he will work with President Trump and congress on a trade policy that benefits American Workers and consumers. But a broad Economic Growth for the American People is our top goal, it is not our only goal. Prosperity means little if it can all be lost in another financial crisis. The American People must have a complete assurance that their government is doing everything within its power to make sure a financial crisis that happened in 2007 and 2008 never happen again. As a secretary of treasury, steven will work to defend the integrity of the American Peoples retirement accounts, will fight for the creation of not just good paying jobs, but secure jobs, and will work for the economic stability so that peoples investments in their homes and elsewhere are secure. So i thank you, chairman hatch and Ranking Member wyden, and the entire committee for this opportunity to introduce you to Steven Mnuchin. I hope the committee and the senate as a whole will give thoughtful consideration to this accomplished and qualified nominee for secretary of treasury. Sen. Hatch well, thanks, leader mccarthy. We appreciate having you here and the hard work you do over in the house. Lets go to congressman hensarling. Rep. Hensarling chairman hatch, Ranking Member wyden, distinguished members of the committee, it is an honor to appear before you today to speak in support of Steven Mnuchins confirmation as secretary of the treasury. President elect trump has outlined a bold agenda to tackle the Serious Problems that face hard working American Families, families who have seen their paycheck stagnate, their savings shrink, and the dreams diminished. To implement his agenda, the president elect has chosen a roster of a very impressive citizens to serve in his cabinet. Each of these individuals has achieved incredible success in their chosen field and are among the nations most respected leaders in business, military, and public service. Each one of them is clearly committed to the president elects vision of an america that is stronger, safer, more prosperous and teeming with opportunity, an america where washington is truly accountable to we the people. Its the most impressive and qualified list of cabinet nominees in memory, and i believe president elect trump was right to include Steven Mnuchin in this list. As we confront americas economic challenges together, mr. Mnuchins very successful background in investment banking, retail banking, and business will not only be vital to the Incoming Administration, but to those of us who serve in congress as well. He understands the urgent need to increase jobs, incomes, an opportunity, and has the critical experience necessary to help and do just that. He knows all too well that this economy simply isnt working for working americans. Nearly eight years after the last recession ended, americans are still stuck in the slowest recovery in generations. 301,000 manufacturing jobs disappeared in the last eight years. To get our economy back on track with sustained growth and higher incomes, mr. Mnuchin knows that washington must give all americans more freedom, the freedom to save, the freedom to invest, the freedom to innovate so they can dream big and pursue those dreams. I have no doubt mr. Mnuchin is ready and capable to hit the ground running and work as a partner with congress on president elect trumps progrowth, projobs agenda. Ive had the opportunity to meet and speak with mr. Mnuchin on several occasions about the trump administrations plans for fundamental progrowth tax reform, for banking and Capital Markets perform that work for all, and other vital items on the president elects agenda. Im deeply impressed by his knowledge, his talent, and commitment to work with congress on these priorities. The secretary of treasurys responsibilities are formidable, as we all know. As you may know, albert gallatin, who served as treasury secretary for president S Thomas Jefferson and james madison, once said the place of secretary of treasury is more laborious and responsible than any other. I have every confidence that Steven Mnuchin is up to the job, but more importantly, the man who will be our president in a little more than 24 hours has every confidence that Steve Mnuchin is up to the job. The American People have entrusted president elect trump with the oval office. The election is over and should not be relitigated now. That disserves and disrespects the American People. With the advice and consent of the senate, the president elect should be allowed to surround himself with honorable men and women to serving his cabinet. He has wisely selected Steven Mnuchin as treasury secretary. Now, as the senate fulfills the constitutional duty to advise and consent, i do not offer advice. As a house member, im not all that fond of receiving your advice. [laughter] rep. Hensarling but i do remain hopeful that the questioning of mr. Mnuchin will be fair and focused on his experience and ability to fulfill the duties of treasury secretary and carry out the president elects agenda. I asked you to realize the impressive qualifications he brings to office and confirm him without delay. Thank you, mr. Chairman. Sen. Hatch well, thank you. We appreciate both of you coming. We know you are busy in the house of representatives, but for you to come and testify for mr. Mnuchin, i appreciate it, as do all of us. Senator roberts to leave. I will turn to him before i start asking any questions. Sen. Roberts thank you, i will try to wrap this up quickly. Mr. Munchin mr. Mnuchin, pardon me. Probably happened to you a lot. If you are confirmed, will you pledge to work with this committee to make sure that Tax Collection Agency of the federal government can never again be used as a weapon against any political opponents of any president ial and administration . Mr. Mnuchin yes, senator, i absolutely pledge to do that. Sen. Roberts i have quite a few companies in kansas who are interested in your views on tax reform. We can talk about that later in the interest of time. I just have the observation i think that to date mike, what have you done with my here it is. Sen. Wyden, i have got a valium pill here you might want to take before the second round. Just a suggestion, sir. Sen. Wyden just another suggestion, we have a lot of colleagues waiting. If you could be brief, that would be helpful. Sen. Roberts i will be very brief. Mr. Mnuchin, from the distinguished Ranking Members remarks, i understand you are in charge of the Great Recession sen. Brown i hope that comment about valium does not set the tone for 2017 in this committee. I like sen. Roberts, but i cannot believe he would say that to the distinguished senator from oregon sen. Roberts i said that to the president of the United States. Sen. Brown perhaps you did, but i hope that does not set the tone sen. Roberts i have the time, please. Sen. Brown just outrageous. Sen. Roberts i dont know about outrageous, but maybe a pinprick of humor might help this committee from time to time, which i engage in. I appreciate the gentlemans contribution. He is a good member of the committee. We Work Together on the ethics committee. So i am sorry if i have, you know, incurred your wrath, sir. We will be all right. Sen. Wyden mr. Chairman, we have many colleagues waiting. Sen. Roberts fine, ron, im done. Sen. Hatch mr. Mnuchin, we will take your statement. Mr. Mnuchin chairman hatch, Ranking Member wyden, members of the committee, it is an honor to appear before you today. Im grateful and humbled by president elect trump selecting nominating me to serve as secretary of the treasury. It is an honor to be considered for this position. Thank you to all of the members ive had the opportunity to meet with during this process. Ive enjoyed meeting with you and learning more about the issues that are important to you. For those few members that i did not get a chance to meet with, if confirmed, i look forward to meeting with you as well. I would like to thank chairman hatch and his staff for taking so much time to work with me and support me through this process. In addition, i would like to introduce my fiancee, louise linton, and my children, who are with me today. And thank them for their unwavering support. I would like to introduce my brother, alan mnuchin, and his wife, and my father, robert mnuchin, who has always supported me and taught me that hard work, determination, and the ability to bring people together can make anything possible. I would like to acknowledge my late mother, Elaine Terner cooper, who was an inspiration to me. I would like to acknowledge my grandparents, who were also a tremendous influence in my life. My grandfather was a firstgeneration american whose father emigrated from europe. He truly embodied the american dream. He started out blowing glass bottles by hand and later built one of the largest glass Manufacturing Companies in the United States, with five factories employing thousands of workers. My first job ever was in his factory when i was in high school. It was there that i first learned the importance of humility, hard work, and commitment. For those of you who dont know my background, i studied economics at yale university. At the age of 22, after graduating from yale, i got a job at Goldman Sachs, where i spent the next 17 years. I started on a folding chair in the mortgage department. Nine years later, after many sleepless nights, i was put in charge of mortgages, u. S. Government bonds, municipal securities. Several years after that, i worked directly for future secretary of the treasury hank paulson as the firms chief information officer. In that role i oversaw 5000 people and a 1 billion budget. While at Goldman Sachs, i learned the importance of the Financial Markets in providing liquidity and capital to business, governments, and consumers. A few years later i decided to leave Goldman Sachs to build an investment business. After working briefly at esl investments, i started my own investment business, dune capital management. Throughout my career, my commitment was to my clients and shareholders, for whom i worked tirelessly to get the best results. 30 years later, my commitment is now to the American People, for whom i will work tirelessly by helping to grow our economy and create jobs. I am eager to share with you why i believe i will serve well as americas next secretary of the treasury. But first, i want to correct the record about my involvement with indymac bank. Since i was first nominated to serve as treasury secretary, i have been maligned as taking advantage of others, hardship in order to earn a buck. Nothing could be further than the truth. During the summer of 2008, i saw the devastation caused by the housing crisis when i watched people line up to get their life savings out of indymac bank. It was the middle of the financial crisis, and despite the global panic, i saw a way to save the bank. I applied for a banking charter and submitted a bid to the fdic for indymac. On december 31, just before midnight, we signed a binding agreement with the fdic. They later confirmed that our bid was almost 1 billion higher than the next best bid. We were willing to invest 1. 6 billion into the most costly bank failure ever to the fdic deposit fund. We did this because we believed in our ability to rebuild and create a successful regional bank. We believed in the recovery for the american economy. Let me be clear, my group had nothing to do with the creation of the risky loans in the indymac loan portfolios. When we bought the bank, we assumed these bad loans, which had been originated by previous management. Some of the individuals had to answer to federal authorities for their bad lending decisions. We invested 1. 6 billion into a failing Financial Institution when most investors were running for the hills. We renamed the business onewest bank and save thousands of jobs. We developed a prospering Community Banking franchise in southern california, as most banks were pulling back. Over the next two years, we bought two more struggling banks from the fdic. First fed of santa monica and la jolla bank. Both through competitive bidding. Combined, we had almost 70 branches and a robust lending business especially for small and mediumsized businesses. As chairman of the bank, i met with hundreds of Business People from all walks of life who were seeking loans to grow their business and prosper. Like many banks of the time, indymac and its reverse mortgage division, financial freedom, was unstable due to the large amount of distressed mortgages in its portfolios. We bought indymac. These legacy loans were included in the purchase. The responsibility landed on me to clean up the mess others make that we inherited. We worked very hard to help homeowners remain in their homes through modifications wherever possible. Ultimately, onewest extended over 100,000 Loan Modifications to delinquent borrowers to try to help them out of a bad situation. I am proud of the fact that Loan Modifications started at indymac under the leadership of the fdic. However, the fdic Loan Modification Program did not work for everyone. When the fdic took over indymac, they estimated that over half the foreclosures would not meet their test for the loan modification, and they demanded many policy conditions extend assistance to some pathetic borrowers by establishing affordable and sustainable payments by borrowers, increase the net present value of cash flows to the owner of the loan, and to stabilize housing markets. My group had to adhere to Servicing Agreements that limited our ability to make Loan Modifications that could have helped more borrowers. In the press it has been said that i ran a foreclosure machine. This is not an accurate description of my role at onewest bank. On the contrary, i was committed to Loan Modifications intended to stop foreclosures. I ran a loan modification machine. When we could do Loan Modifications, we did that. But many times the fdic, fannie mae, freddie mac, and Bank Trustees imposed strict rules governing the process of these loans. I am proud to be able to say our bank was able to do 100,000 Loan Modifications that allowed people the opportunity to stay in their homes. Unfortunately, not all the homes were able to be saved through these programs, and despite my best efforts, some were sadly subject to foreclosure. So sincere was my concern over this that in 2010 i instructed my lawyers to sue hsbc to allow us to do Loan Modifications on loans and mortgage trusts that they oversaw. We won on Summary Judgment and were consequently allowed to do more Loan Modifications and keep more americans in their homes. Similarly, in 2015, when hud issued a mortgagee letter 201511, i wrote hud and asked them to change the policy so we did not have to foreclose and Senior Citizens who were behind on small amounts of money on taxes and insurance. I was so troubled by this that i discussed it with our primary regulator, the office of the comptroller of the currency. Unfortunately, hud did not agree, and we were forced to foreclose and Senior Citizens even if they only owed one dollar. Not complying with these hud policies would have subjected the bank to penalties and losses from hud. Despite our inability to save every home from foreclosure, im proud of the fact that onewest bank was the only one of 14 banks that was able to complete the independent foreclosure review that was conducted by the occ. Every one of the 175,000 borrowers that were in the foreclosure process during 2009 and 2010 were able to have an independent review of their loan. We had a very low error rate. Independent government reviews routinely showed that we had the most effective Loan Modifications of any bank. If we had not bought indymac bank, the bank would likely have been broken up and sold in pieces to private investors, where the outcome for consumers could have been much more bleak. Overall, i helped many homeowners stay in their homes and escape financial ruin through my management of onewest bank. My experience confirmed that we must identify and eliminate unwise and burdensome policies which contributed to the disastrous outcomes that came in the wake of the financial collapse. Many americans are still suffering from the disastrous ripple effects the 2008 crisis had on our nation. Faithfully entering this does faithfully and sharing ensuring this does not happen again means supporting careful oversight of Financial System which prioritizes the needs of Everyday Americans over the wishes of the Financial Institutions or the federal government. I felt great empathy for the millions of hardworking American Families who lost their homes because the system failed them. If confirmed as treasury secretary, i will work diligently and compassionately for the American People so that we never see anything like the meltdown of 2008 ever again. I was deeply honored when donald trump asked me to join his campaign as finance chairman. I had the opportunity to travel with him and hear firsthand from hardworking americans about their concerns for the american economy. Over the last year, i visited over 50 cities and 26 states. I remember attending my first rally with him in indianapolis. It was an unforgettable experience. As we arrived into the stadium packed with 20,000 people, i saw the excitement that people had for a trump presidency. On our trip to flint, michigan, i went with the president elect to visit the Water Treatment facilities and saw firsthand the crumbling pipes and the devastation caused by that leadtainted water. We met with Water Engineers and saw the impact it had on the communities and the families. Across the country on my travels with the president elect, we heard the pain and heartbreaking stories of americans who had lost their jobs to workers in foreign countries. We heard the concerns of people in Small Business burdened by high taxes, just trying to make ends meet. In my meetings with you over the last month, you share the concerns of your constituents, like farmers who worry about the death tax wiping out the family farms, or workers who are nervous about whether their retirement accounts will be safe from ruin. One of the greatest reasons i was drawn to president elect Trumps Campaign was it was predicated on a commitment to stimulating prosperity for americans of all backgrounds, if they lived in the inner city of detroit, rural north carolina, coal country of ohio, or west virginia, or any place in between. I share the president elects goal of economically empowering every citizen. We will not rest in our mission until that is a reality. Among the president elects signature issues in this campaign was reviving trade policies that put the American Worker first. I will enforce trade policies that keep our currency strong on the world exchanges and create and protect american jobs. We will also make america the best place for companies to do business. Sensible regulation is a necessity for healthy markets. However, i saw firsthand how regulatory excess can inhibit lending by Financial Institutions, resulting in a lack of access to capital for Small Businesses and entrepreneurs. Alexander hamilton remarked that wealth of the nation may be promoted by multiplying the objects of enterprise. Hamilton knew the unique value of entrepreneurial activity to a thriving economy. From our nations earliest days, American Business has been the greatest repository of ingenuity and entrepreneurial spirit in the world. We need to unleash that power to generate jobs and create abundance for americans of all backgrounds. We will work diligently to limit regulations, lower taxes on hardworking americans and Small Business, and get the engine of Economic Growth firing on all cylinders again. In this age of unprecedented online attacks, we must also be vigilant about cybersecurity. If confirmed as secretary of the treasury, i will use my expertise in technology to protect americans information at the irs and keep our financial architecture safe from malicious attacks. I will use the Treasury Departments Office of terrorism and Financial Intelligence to stop the financing of terrorism. I will partner with other Government Agencies in our shared goal of allowing our Financial Markets to operate free from digital and physical threats. If i am confirmed as treasury secretary, i promise i will work hard with this committee, all members of congress, and the administration to put forth policies that will help American Families reach and maintain prosperity. We will make America Great again. Thank you, and i look forward to answering your questions. Sen. Hatch well, thank you, mr. Mnuchin. We appreciate your comments. I have some obligatory questions i ask all nominees we do on this committee. First, is there anything you are aware of in your background that might present a conflict of interest in the duties of the office to which you have been nominated . Mr. Mnuchin i am not i worked with the Ethics Office and disposed of investments that could create conflicts. Sen. Hatch do you know of any reason personal or otherwise that would prevent you from fully and honorably discharging the responsibilities of the office to which you expect to be nominated . Mr. Mnuchin i do not. Sen. Hatch do you agree without reservation to respond to any reasonable summons to appear and testify before any duly constituted committee of the congress if you are confirmed . Mr. Mnuchin absolutely, i look forward to it. Sen. Hatch finally, do you commit to provide a prompt response in writing to any questions asked you buy any addressed to you by any senator of this committee . Mr. Mnuchin well, i provided over 5000 pages to the staff, i think i have the record of that. If there is any additional questions, i will respond to them properly. Promptly. Sen. Hatch all right, i have to go outside for a minute. Instead of my starting to question period, i will turn to the Ranking Member, my partner in this matter, and then i will ask questions when i come back. Sen. Wyden thank you very much, mr. Chairman. Mr. Mnuchin, medicare finances about taxing. It would be your responsibility if confirmed, with the attempt to repeal the Affordable Care act, medicares solvency is threatened. What steps are needed in your view to strengthen this program that every senior in america relies on . Mr. Mnuchin well, first of all, senator, thank you very much. I very much appreciated the opportunity for us to meet yesterday and especially the opportunity to talk about tax reform with you, which i think is very important. I completely agree with you that medicare is very important and a very important program, and the safety of that is an important issue, and if confirmed, that is something that i look forward to working with your staff on and make sure we have the appropriate policies. Sen. Wyden now, if you are confirmed, mr. Mnuchin, you would be the managing trustee for medicare. Now, wouldnt you like to offer something by way of discussion about what you would be doing if confirmed . This is an important part of the job. Mr. Mnuchin senator, i acknowledge it is a very important part of the job, and there is many parts of this job i consider myself an expert on and understand, and there are certain parts of this job that, if confirmed, i will work diligently with this committee and others and there is obviously a significant staff. This is a very important issue and as ive said, im committed to be very responsible in my position there, and make sure that i properly provide the support from the Treasury Department and take my responsibility very seriously. Sen. Wyden i will just tell you that without any specifics on a matter that is so important that you would have direct responsibility over, i find it troubling that you will not discuss medicare. So, lets go to terrorism financing. The country is financed fighting isis and other terrorist groups and the Treasury Department plays a key role in fighting this battle. What would be your idea on additional taxes for strengthening how the department fights terror . Mr. Mnuchin let me first say that i strongly believe and understand that there are very important tools within the Treasury Department to combat terrorism. And, that many of these tools, such as sanctions, are extremely effective and keep the Armed Services out of harm. I am fully committed to the maximum amount of law to both enforce the existing sanctions in a very strict way, and i will work with the president elect as he sees fit on additional sanctions. And there are also other programs within treasury i believe are very effective in fighting terrorism. It is a very important part of the treasury and i know that that has been done very effectively under Previous Administrations. Sen. Wyden we all agreed that is important. We are trying to assess your qualifications. You havent been willing to talk about medicare, you havent been willing to talk specifics on terror. Let me take one more crack on qualifications on Foreign Investments because this is Something Else as treasury secretary you would have responsibilities on to protect the country if a foreign investor makes an investment in the United States in a way that has National Security implications. If a foreign investor with a with ties to a Foreign Government invests in President Trumps businesses, should the committee on Foreign Investment automatically and with close scrutiny examine the transaction . Mr. Mnuchin senator, first let me say yes, i think that would be appropriate, but let me go back here other question because i apologize if i did not answer the specifics on your terrorism searching forwas any specifics in order to be able to assess your qualifications. Senator, i well, believe there are very important sanctions as it relates to the sanctions against iran and other countries. I would absolutely enforce those, and i would encourage the president to use additional sanctions when appropriate. I understand there are certain classified programs that i will be part of at the nsa and use that and work with the National Security group to the maximum amount that is available by law. Sen. Wyden we did not hear what you would do to fight isis, no specifics on medicare, lets hear about this most current question with respect to the committee on Foreign Investment. What would you do if you were dealing with President Trumps businesses . Mr. Mnuchin i would deal with his business is no different than i would deal with any business that comes before the committee, and i would take my role as chair the committee very, very significantly. It is a very important issue and i think perhaps in previous secretaries have not enforced some of these things. Necessarily as much as perhaps they should have in protecting the American Workers and American People and american technology. I think this is one of the most important jobs i would have as secretary of the treasury. Sen. Wyden the president is not like anybody else, he is the commanderinchief. Any foreign involvement in his business could compromise National Security. I will reflect on that answer as well. Can i pursue an additional question . Sen. Hatch go ahead. Sen. Wyden mr. Mnuchin, you ran a hedge fund for a few years starting in 2004. I am trying to get my arms web of shelluchin accounts and Bank Accounts in the Cayman Islands and anguilla. How many employees did you have anguilla . Mr. Mnuchin no employees or customers that resided there. Sen. Wyden did you have an office there . Mr. Mnuchin not an office ourselves there. Sen. Wyden just a po box . Mr. Mnuchin let me explain to you sen. Wyden yes or no . Im already over my time. Mr. Mnuchin hopefully other senators will differ time, because i think this is important. Sen. Hatch go ahead and answer it. He should get a chance to answer the question. It is a legitimate question. Go ahead and answer it. Mr. Mnuchin i, like all other hedge funds and many private equity funds, set up offshore entities that are primarily intended to accommodate nonprofits and pensions that want to invest through these offshore entities. As it relates to my own taxes to situation, these entities were in their text as taxed as u. S. Corporations or u. S. Partnerships and in no way did i use them whatsoever to avoid any u. S. Taxes. They were merely as an accommodation, the Pension Funds and nonprofits institutions in a small number of foreign investors, as treasury secretary, if i am confirmed, i would look at these rules and make sure. I think you did a good job in stopping one of the abuses of offshore deferred fees but i would diligently look at these things and i can assure you i paid all my taxes as was required. Sen. Wyden we will come back to this question about offshore deals or commonly called blockers. Again, im very troubled about the question of how you are going to unrig the system if you have a record of taking advantage of tax shelters that have a 0 tax rate. Sen. Hatch as you can see, you are going to get questions like this. What was legal at the time is still being criticized. I am sure you have heard of allegations that you profited from predatory lending during the housing crisis, and Investor Group you headed formed by a reformed indymac, a failed institution responsible for low and no doc Mortgage Loans into a viable institution called one west, which you described here, which offered Loan Modifications often above and got what other institutions did two more than 100,000 borrowers. At least thats the way it looks to me. Meanwhile, during all the turmoil, the Obama Administration set up a Loan Modification Program called hamp. Many members of congress from both sides of the aisle and others have fell far short of its goals and has significant design flaws. Design flaws and in testimony before congress, the special instructor general Neil Borofsky identified that there have been countless published reports of hamp participants who end up worse off for having engaged in effort to obtain relief that the program promised. Excuse me. Failed modification often leave borrowers with wet with more outstanding principal and less equity, depleted savings and worse credit scores. Using provocative language that we have heard supporting your actions in the foreclosure and crisis, you could say that they then treasury secretary geithner was a predatory loan modifier using that type of logic. One west haveid any interplay with the obama program,ations hamp and was that always successful in preventing foreclosures on struggling american homeowners or could more have been done by the administration . Mr. Mnuchin senator, thank you very much for the question. That is a very important issue. When we did the indymac deal with the fdic we committed to the fdic that we would continue the fdic Loan Modification Program. It was after that it the Obama Administration came up with hamp and we had no obligation to do hamp. We could have continued to do fdic Loan Modifications, but we felt it was the appropriate thing to voluntarily go into the program asry hamp were other major banks. So, we voluntarily went into that program. The hamp Loan Modification Program was a very prescriptive program, including us having to follow net present value calculations that were determined by the treasury model heee which was better differ closing on a home, or providing a loan modification. Extent that the net present value with higher on for closing, we unfortunately have to follow the hamp rules or we would have been severely penalized if we had not proceeded with foreclosures. Sen. Hatch these were not your rules . Mr. Mnuchin they were not our rules, they were rules driven by the administration under hamp. Sen. Hatch which administration . Mr. Mnuchin the Obama Administration. Sen. Hatch let me ask one more question. That is a wide agreement tax laws become much too complicated. There are stories of people getting their Tax Liability not isare commonplace, that producing cynicism about the tax laws and creating an ever greater tax gap or difference between what is owed versus what is actually paid. It is clear that there is a major problem and something needs to be done to address the problem. To your credit, mr. Mnuchin, youve talked about your desire to simplify the tax code. Thank you. I am glad you are talking about that because i agree with you. My question to you is how to address this problem. Do you have any suggestions for how to make the Internal Revenue code less complex or at least keep it from getting more complicated . Would you recommend a moratorium on tax regulations or legislations, and should the tax law simply try to raise revenue for the government and stop try to achieve so many other social goals or societal goals . Mr. Mnuchin yes, senator, i agree with you completely. One of the things that has been a great honor to travel with the president elect, and i have been a chief architect of his economic plans. We believe the most critical issue is creating Economic Growth, and passing tax reform is a major component of that. In our tax reform plan, we andeve tax simplification fewer deductions are critical. You mentioned the tax gap and that is something i have been reading about and studying and something i am interested in. I was particularly surprised that in looking at the irs numbers, the irs headcount has gone down dramatically, almost 30 over the last number of years. I dont think theres any other Government Agency that has gone down 30 and especially for an agency that collects revenues, this is something i am concerned about. Perhaps the irs just started with way too many people, but i am concerned about the staffing of the irs. It is an important part of fixing the tax gap. I am very concerned about the lack of firstrate technology at the irs, the issue of making sure that we protect the american publics privacy when they give information to the irs, Cyber Security around that , and also Customer Service for the many hardworking americans that are paying taxes. Sen. Hatch senator grassley, you are next. Sen. Grassley let me go along the line of the first statement i want to make, i do not expect you to answer unless i have some misunderstanding of our position discussed in my office. Progrowth tax reform will be a top priority for you and i agree and look forward to working with you and president elect donald trump on that point as part of any tax reform proposal, it will be important that adequate transition rules are included to provide a smooth transition for businesses that may be unpredictably negatively impacted. As we discussed in our meeting, congress has already effectively put in place transition rules for some alternative energy, including wind. The production tax credit is currently scheduled to phase out over the next few years, ending in 2020. Based upon our conversation, i believe we are in agreement that you would support the current phase out as part of any tax reform proposal. Question two i have been a strong proponent of the irs private Debt Collection program as has senator schumer. Congress updated and made it mandatory the irs private Debt Collection program. This program is designed to chip away at the tax gap by requiring the irs to contract with private debt collectors, collecting in active tax debt owed. These are the tax debts not being worked by the irs. Absent this program would likely never be collected. Adding up to 187 million in 2017. Out of that 187 million the Treasury Department has provided debt collectors to collect a net of 8 million. This certainly is not due to the inactiven active staff available for the irs to assign. According to the Government Accountability office report, the irs has over 130 billion of outstanding debt on its books. So hamstringing this program by refusing to release inactive debt or the programming should be considered unacceptable by anybody. Can you give me assurances that the department of the treasury under your leadership will work to implement the program to the full extent of authorized law and bring in this tax money that is not being collected . Mr. Mnuchin yes, senator, thank you for having spent time with me, i appreciate the opportunity to speak with you about important issues. On these issues, i absolutely agree with you that we do need to have phase out rules when we change things and i support the phaseout of that as you suggested. On the irs, i think most aspects of taxes should be handled by the irs. But as you have described, to the extent we have 100 plus billion dollars of receivables that are just sitting there and we can collect tens of millions or hundreds of millions of dollars for the american public, particularly in an environment where we are looking for money for so many programs, this i agree with you seems like a very obvious thing to do. Sen. Grassley my last question, in 2006 i was successful in enacting legislation to enhance the irs Whistleblower Program,. The program has been one of the most effective programs in addressing tax evasion, leading to the recovery of more than three and 4 10 of billion dollars in taxes that would have otherwise have been lost to fraud. However, there has been resistance within the irs to the Whistleblower Program. The ongoing concern has been poor communication with whistleblowers who often wait in the dark years with no feedback from the bureaucracy. Another concern is that the irs has chosen to interpret the whistleblower law narrowly to the detriment of whistleblowers several instances. For example, the irs has interpreted the terms collected proceeds which is the base for determining the amount of award to exclude criminal penalties and certain other proceeds such as penalties assessed for undisclosed foreign Bank Accounts. Two questions and i will say them both. Should you be confirmed, can i count on you to be supportive of the Whistleblower Program and work to ensure its success, and would you be willing to review the irss Administration Program , including its very narrow interpretation of the words collected proceeds . Mr. Mnuchin absolutely, you have my assurance and i will further say that the majority of americans voluntarily file their tax returns honestly. We are aware there is tax fraud. There is tax evasion as you said. We need to be diligent. I believe that the whistleblower laws are very important part of that. I will work very hard with you on that, thank you, senator. Sen. Grassley thank you and very much. Sen. Hatch thank you. Senator stevan on thank you. Congratulations on your nomination, and welcome to your beautiful family as well. I do want to follow up on information we just received last night that were additions to your recent financial disclosures. I havent had a lot of time to look at that. We just received it last night. You failed to include your position as a director of Cayman Islands corporation and manager chairman or director of additional shell corporations and holding companies, nearly 100 million in real estate, as well as a number of other things, including more than 900,000 worth of artwork held by your children. A number of things. As we gory secretary, into tax reform, would you support closing tax loopholes in the tax code that extremely wealthy people use such as taxes . F, to avoid paying weve heard about the cayman and thefor years, buildings that have had thousands of companies who have used it as addresses. Would you be willing to close those loopholes . Mr. Mnuchin first of all, let me just comment. I very much appreciated the opportunity to meet with you and i traveled to your state many times and have great admiration your state. The president elect had a very significant economic speech in detroit. We have been very focused on time in your state and i appreciate everything you have done. Let me just comment on i realized last night you did get a memo on changes to my senate questionnaire, so thank you for giving me the opportunity to comment on that. As you all can appreciate, filling out these government forms is quite complicated. There were many things i expected in this job including having to sell everything. But the amount of paperwork and filling out the forms, even for me having experience in business, was quite a job. In an effort to get the Committee Information early, we submitted a preliminary questionnaire prior to us having the 278 form finished and prior to signing the agreement with the Ethics Office. Let me first say that any oversight was unintentional. You did mention that there was 100 million of real estate. I was advised by my lawyer that we did not need to disclose that on the questionnaire because it did not need to be disclosed on the 278. There was some confusion about the complexity. We work tirelessly with the Committee Staff and i want to thank all of the staff, i know they worked very long hours. They were extremely thorough and i appreciate their work. We delivered over 5000 pages and i can assure you that they actually read every 5000 pages , because when i met with the staff with my lawyers and accountants, we answered some very specific questions. Sen. Stabenow excuse me, i dont want to arrived, but i have very limited time. I appreciate that information and the clarification. My question goes to what you were disclosing, particularly the Cayman Islands. Did you use the Cayman Island corporation to avoid paying taxes . Would you support closing tax loopholes that very wealthy people have consistently used in the Cayman Islands to avoid paying taxes . That is my question. Mr. Mnuchin let me be clear, i did not use a Cayman Islands entity in any way to avoid taxes for myself. I paid u. S. Taxes on all that income, ok . Me foras no benefit to the cayman entity. It was set up to accommodate nonprofit and Pension Funds that want to invest through offshore in a certain number sen. Stabenow you help others avoid taxes . Mr. Mnuchin there you go again. Im not going to make a comment he didnt avoid. They followed the law. Because i have experience as a hedge fund manager, i am committed to tax simplification. I think it makes no sense to encourage Hedge Fund Managers to set up entities in the Cayman Islands or anywhere else where i did not have any physical people, this is there are people who set up offshore businesses and put all of their people offshore and you have heard of inversions and those types of things. They are perfectly legal and her the American Workers. The hedge fund world, these are set up to make accountants rich. I would like to work with the irs to close these tax issues that make no sense to make sure we are collecting the proper amount of taxes. Sen. Stabenow you would support closing the loopholes . Mr. Mnuchin i would support changing the tax laws to make sure they are simpler and more effective, yes. Sen. Stabenow thank you. Thank you very much, senator hatch. Your willingness to go through this, and serve the American People. We need the kind of vision that president prompt has a nosy aided has enunciated for the country and you have committed to work with him to achieve for the country. As a part of that, one of the things you have mentioned today and i am paraphrasing you but i believe you said that we have a regulatory excess in the United States in many circumstances that can at his inhibiting lending and inhibiting capital formation, two very important things that are critical to a progrowth economy. Could you elaborate on that . Mr. Mnuchin sure. Let me first say i absolutely believe in proper regulations. Before i had the opportunity to put in a bid for indymac bank, i charter, andued a i worked very closely with the ots at the time. By the way, i was a big fan of you merging the ots and the occ and getting rid of another another regulatory agency. At the time, i worked with the ots and the fed and the regulators explained to me at the time and i told him i understood the responsibility of being given a banking charter, i took it very seriously. I must say that i enjoyed working with a very, very smart regulators. I have tremendous respect for them. In one of the few things that the wall street journal actually wrote nice about me, they made a comment that i told everybody we had to treat the regulators like our best clients, which i believe. The regulators and the relationships within and following the regulations, nothing was more important, given the trust they had put in us. Having said that, i witnessed firsthand multiple regulators the occ, the fdic consumer , protection bureau, the Federal Reserve, and in certain cases there was overlapping regulation. My biggest concern is that this regulation is killing community bank. We are losing big Community Banking business. We are losing the ability for small and mediumsized banks to make good loans to small and mediumsized businesses in the community where they understand those credit risks better than anybody else. Appreciate the engine of growth is with small and mediumsize businesses. In my role working with , i would regulators make sure that we did what we could to have proper regulation, but eliminate overlap as well as banks are lending to small and mediumsized businesses, and we dont end up with a world where we only have four big banks. Sen. Crapo you let into my next question. It is closely related. As you know, as the secretary of the treasury, you have a Important Role as the chairperson of fsoc. In my view, they have focused vily on statutory mandates some of it statutory while , ignoring others. One of the statutory mandates that the dodd frank act requires them to do is this is the statutory language advised congress and make recommendations in such areas that will enhance the integrity and efficiency and competitiveness and stability of u. S. Financial markets. I am not aware of them fulfilling that role. We do not get a lot of advice from fsoc. Will you pledge as the chairperson that the Council Considers ways to make u. S. Financial markets more efficient and advise and work with congress to achieve those outcomes . Mr. Mnuchin i absolutely will, senator. Let me just comment on the vocal rule. I do support the vocal rule. The concept of proprietary trading does not belong with banks with fdic insurance. But the Federal Reserve just put out its own report that that rule has completely limited liquidity in many markets. The Federal Reserve is concerned that the interpretation of the rule doesnt allow banks to create enough liquidity for customers. That is something i would absolutely want to look at. Senator wyden by the way, i wanted to thank you, im in great esteem with having the mnuchin rule with the buffet rule and volcker rule, that is a great accomplishment and thank you for putting meet with these great people. Just some of the testimony from earlier today. Treasury secretary nominee Steve Mnuchin may be one of the people to enter into the cabinet for the president elect donald trump, who becomes president tomorrow. Taking a look at the scene where that will be taking a look at te that will be taking place. First time that the west front was used for the inaugural swearingin and ceremony was for the first reagan inaugural. A number of things to let you know about for our coverage, including tomorrow. You will want to join us live at 7 00 a. M. Eastern live coverage of starting at 7 00 a. M. Eastern. Counter rally a going on against the trump agenda. Live coverage starting at 9 00 a. M. Eastern. You can find that over on cspan 2. All of our coverage also on www. Cspan. Org