'Mining profits': Trump’s ex-treasury secretary pumps over $1B into 'struggling' lender
Donald Trump's administration had plenty of turnover during his four years in the White House, but one person who stayed with Trump throughout most of his term was investment banker Steve Mnuchin. The former treasury secretary arrived in February 2017 — the month after Trump was sworn in as president — and stayed with him until January 2021.
Since leaving the White House, Mnuchin, now 61, has kept busy in the private sector — including, according to Bloomberg News reporters Hannah Levitt and Bre Bradham, a major banking deal in 2024.
Mnuchin, they report, has been "mining profits from a struggling U.S. bank": New York Community Bancorp (NYCB).
Levitt and Bradham explain, "Mnuchin's Liberty Strategic Capital led a group of investors that injected more than $1 billion into New York Community Bancorp while effectively taking control of the ailing lender to apartment landlords. The deal, announced Wednesday, (March 6), installed former Comptroller of the Currency Joseph Otting as chief executive officer."
That "intervention," according to Levitt and Bradham, "sent the troubled lender's stock soaring, giving their coalition an instant paper profit and a shot at earning billions more."
The reporters note that Mnuchin and Otting have "a track record of stirring up controversy as they chase returns."
"Before their posts in Trump's administration," according to the Bloomberg News journalists, "Mnuchin led an investor group that bought failed mortgage lender IndyMac after the 2008 financial crisis and, rebranding it OneWest, installed Otting as CEO. By the time they cashed out at more than double their purchase price, the lender was beset with accusations it had hurt communities as a 'foreclosure machine.'"
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Levitt and Bradham add that Mnuchin "later irked his critics again after leaving the Treasury and raising money for Liberty from sovereign wealth funds in the Middle East, including Saudi Arabia's Public Investment Fund."
"Now, his firm has landed this year's highest-profile U.S. regional bank deal," they report. "Unlike IndyMac, which got into trouble making residential mortgages, NYCB's woes stemmed from financing office buildings and apartment complexes. Last week, the lender's disclosure of 'material weaknesses' in its monitoring of loans pushed down its shares and credit ratings even further. As news emerged Wednesday that NYCB was seeking fresh equity, the stock dipped to $1.70 — from more than $13 last year."
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Read Bloomberg's full report at this link (subscription needed).
