of the aisle that will help you. there's good professional people that work there under very difficult circumstances. there's not enough people there. so i hope you'll be effective with president-elect trump because i understand he's calling on a freeze. i'm not sure how that coincides with your desire to make sure you have adequate personnel at irs. but i assume you'll have an opportunity to talk to the president and hopefully get the number of people you need because they can't do it with their current workforce. >> i can assure you the president-elect understands the concept. he'll get that completely. that's a very quick conversation with donald trump. >> i want to follow up on senator wyden's point on a couple of issues. i wear another role in the senate. i'm the ranking democrat on the senate foreign relations committee. i want to deal with the sanctions for one moment. i heard you in regards to enforcing the sanctions, particularly those that are aimed at deal with those who

sponsor terrorism. we also have sanctions against countries that are violating our international norms on democratic principles. russia is top on that list. i'm going to ask you questions for the record as to your views on the current sanctions and strengthening sanctions. we have bipartisan legislation to strengthen the sanctions, particularly with russia's attack against america's democratic election institutions. but i want to make sure i understand. you are committed to enforcing the sanctions against russia? >> 100% so. and i think the president-elect has made it very clear that he would only change those sanctions if he got, quote, a better deal than we got something in return, whether it was on nuclear arms or other areas. but, yes, senator, i've talked to you about this. >> in response to the questions asked about using the irs, make sure it's not used for partisan reasons, you will enforce these sanctions without regard to a

person's party, affiliation or office? >> of course. i think terrorism is the -- trump and supporting terrorism and supporting illegal activities is the most important issue, and i hope that's not a bipartisan -- i hope that is a bipartisan issue and where there are sanctions, i assure you, i will use them to the maximum amount allowable by law. >> and i appreciate that answer. senator warren and i are going to be sending you a letter. if you are confirmed, to investigate the allegations that mr. scaramucci, who was recently naumd as the white house director of engagement in intergovernmental affairs and senior adviser to the president, may very well have violated the sanctions against russia in his dealings. and i accept that you would investigate this issue to see whether there was a violation of the sanction law. >> of course. anything that you send to me, i will either myself or make sure that my staff properly investigates.

and have your respect that i would do that 100%. >> i thank you for that. >> i want to follow up on the second point of senator wyden which really has me concerned, and that is that you pointed out that you would treat in your international roles an american company that's deal with foreign markets equally, even if it's a trump enterprise entity. you are taking an oath to defend the constitution of the united states, and the constitution of the united states, there's the clause and you have to make sure that if you are deal with a trump entity that it's not getting a favor in exchange for trying to influence the president of the united states and the trump administration. so how do you go about knowing that there's no special breaks being given to a trump enterprise if you don't have full access to that type of information? >> well, senator, let me first say, and i think we all acknowledge this, whichever side we're on, that we are in a

unique situation that we have a president who has the vast amount of money that -- >> we know that. of course, but he's not doing what every other president -- every other president has done. every other president set up a blind trust or divest. what you are dooring, divesting. he's not doing that. so my question to you, how do you if confirmed, deal with compliance to the constitution, to make sure that a trump enterprise is not getting special treatment which would violate our constitution? >> well, senator, let me first say, and i think this is a very important issue for the american public so i can understand why you're asking it. but let me first say, i know that the president-elect is absolutely following the law and is committed to following the law and has set out a series of -- although it's not a blind trust, he has removed himself from his business. he has put his sons in charge of his business. he's committed that --

>> but as i understand -- >> excuse me one second. he's going to hire an ethics officer, and i can assure you that in my job of treasury secretary, whatever responsibilities i have to monitor these issues, which are very important, i can assure you that i will do. >> what you didn't answer and we'll follow up with some questions, how do you determine, make sure there isn't a break given to a trump enterprise, which would violate our constitution? i understand it's complying with the law but the constitution is the supreme law of the land. >> well, as you know, i've employed lots of lawyers, but i'm not a lawyer. but the good news is, we have a big group of lawyers in the treasury department and in a big ethics group and i can assure you that we'll make sure that we absolutely follow the law and the constitution and i have every reason to believe that the president-elect absolutely wants to adhere to it and will do so. >> senator brown? >> thank you, mr. chairman.

and mr. mnuchin, thank you for the conversation. and my office about -- >> thank you for meet with me. >> taxes and china and banking issues. let's clear up one thing. banks are not, in your words, highly innocented to do modifications for their borrowers. that's why we had a systemic breakdown and so many families lost their homes and banks were forced to pay billions of dollars in fines and remediation. i want to talk about your situation. i understand your defensiveness both in individual meetings, mine and others, and in this committee about what happened at one west but let me lay this out. in 2006, businessman donald trump responded to a question about the possibility of a real estate crash by saying, quote, i hope -- i sort of hope that happens because then people like me would go in and buy, unquote. you didn't just buy properties. you bought the baunk, the abiliy to help families stay in their homes. that's not what you did.

so my questions are these. you've been saying let's look at the record. i really want yes or no answers because i have a lot of questions and what i will say is factual in my view. i'd like you to confirm with yes or no. is it true that community groups say that one west specifically the california -- the california reinvestment coalition, is it true the community groups say that one west foreclosed on 60,000 families nationwide and denied three-fourths of mortgage modification applications? >> i am not aware of that. i know they've -- >> well, they did. >> if you know they did, then why -- >> because i want to hear it from you. if you -- >> i don't have it from me. >> i'm going to keep interrupting. i apologize if you see that as rude. >> i dont see that as rude. >> is it true one west regulatorsed is you have deficient mortgage practices foreclosed on 10,000-plus

borrowers without proper procedure in at least 23 who were current on their mortgages? >> so what i would say is we followed the same procedure -- >> yes or no. did the occ say that? >> the fdic followed. we inherited the fdic -- >> the occ is separate. >> let hum answer the question. >> is it true that one west independent audit firm said it violated the service members civil relief act by initiating foreclosures on 54 active duty military families? that's what the independent audit firm said. >> you have the document in front of you, i don't. >> well, they do. >> let me just say -- >> i'm pretty surprised you don't know these things because you've been rather defensive for probably good reason about what happened at one west. >> i -- >> is it true the california attorney germ -- >> i want to comment for the record. we did foreclose on certain people in the military. it was quite unfortunate it was inappropriate. we responded to those people and made them whole.

as i said, every single person had the opportunity to have their mortgage reviewed and we corrected any errors. our errors were less than anybody else. >> okay, i'm going to cut you off. >> it's not that i'm being defensive. i'm proud of our -- >> i wouldn't be proud of all these findings. is it true the california attorney general's office said one west back dated 96% of the documents they examined and the their investigation. did they say that? >> first, let me comment that i sought the leaked memo as you did. i think it's highly inappropriate that somebody at the attorney general's office was -- >> so is there no truth in that about back dating 26% -- >> what i would say is the primary regulator was the occ. they were the ones who had the obligation to -- >> occ said the -- they said you had these deficient mortgage practices which you couldn't remember when i asked you about occ. now you're saying occ in

response to california attorney general. is it true that one of the employees who was in charge of the modification, one of one west employee's is accused one west of not having any process in place to help its 3,000 fha and va mortgage borrowers avoid foreclosure? and that this same employee, who was in charge of modifications, has accused one west of not having a process in place to help those va mortgage borrowers avoid foreclosures and submitting false claims? >> it seems to me, in all due respect, you want to shoot questions at me and not let me explain -- >> e >> i'll let you explain after -- i'll let you explain when i'm done. >> well, then -- at least understand, these are complicated questions. >> they are complicated. >> let me at least explain them otherwise there's no point in shooting them all at me and i don't have the ability to respond. >> you don't but all of these are factual things. if you want to follow up with a

response later in more detail. one example of -- and you can answer this and take as long as you need. one example of an insider loan was the media deal. the fbi denied a foia request. have you been questioned by law enforcement on this? yes or no. >> i have not. and i saw that you wrote that letter yesterday. i assume that the fbi did a thorough review of my background report. i have no idea why they didn't prove the foia issue. i've been told we have no reason to believe it's any issue associated with me. >> fair enough. i am glad -- >> you should direct that to the fbi. >> okay, and i will. i accept your answer. i accept your answer. you're not being investigated but i find it interesting that you know about the letter i sent yesterday. the letter i sent with all those questions detailing all of the issues i just asked about with bank west, west bank -- >> one west.

>> one west, i apologize. >> that's right. my father forgot the name sometimes as well. >> the letter i support you back in early, mid-december about this you've not even taken the time to answer and it really laid out all of this. the one west purchase went well for the treasury secretary desing ide designee but it was bad for investors and taxpayers. we can talk more about taxpayer cost on this whole process and the amount of money that he bought it for, sold it for but mostly subsidized by taxpayers. >> senator, your time is up. you take as much time as you want to answer. >> first of all, senator, i did enjoy meeting you. i don't believe we had the opportunity to meet before that time. and if i'm confirmed, i look forward to spending more time with you. >> thank you for saying that. >> i know that you have some, although we may not agree on everything, there were certain things we did agree on when we

met. and i have a lot of respect as you as a senator to hear your issues. now i did tell you, i did acknowledge that you sent me the letter. i was advised by the staff that the appropriate thing was for me to come here and answer questions or meet with all of you independently and answer questions that you have. and if i don't satisfy that, you have the ability to submit questions afterwards, which i'll respond to. when i came to your office, i told you that, and i said i would spend as much time with you as you wanted answering those questions that they were quite significant. and, you know, because i knew they were complicated. so i did tell you, although i wouldn't respond to them in writing at that point, that i did understand your questions and i wanted to address them. >> senator thune. >> thank you, mr. chairman. mr. mnuchin, welcome.

we haven't had a single year where the growth rate has exceeded 3%. a lot of the current administration describes that as the new normal. that's a reasonable expectation in terms of the growth rate in our economy? historically if you go back to world war ii, what is a reasonable growth rate? >> hang on. i'm just looking at some of my notes. the short answer is i've said publicly and i believe that we should be able to get to 3% to 4% sustained gdp. i think that that's absolutely important. i think that as a country, the most important issue we have is economic growth. that whatever issues we have, as republicans or democrats, i think we can agree that with more growth, it's a lot easier to solve these issues and we should all be focused on things that help grow the economy. in 1984, we had 7%.

in 1998, we had 5%. in 2005 we had 3%. that was the last time we had appropriate growth rates. so i share the president-elect's concern of low growth. our number one priority from my standpoint is economic growth, and i can assure you, i will work tirelessly, if i am confirmed, to create growth in the economy and create pro-broeth programs. and i commit to work with all of you on that. >> we're going to break away from the hearing right now. we see the family getting off this u.s. air force jet that's just landed outside of washington, d.c. joint base andrews. you see some of the trump family members, the kids, grandkids, others walking down. they're going to be heading over to a series of events here, jake, in washington. a series of events that will underscore the, i guess, what we

can say the majesty of what is about to happen. the transfer of power to a new president. >> we see don jr., his family, eric trump, his family. there's tiffany trump, other members of the presidential transition team. we expect president-elect trump and vice president-elect pence at about 2:45 this afternoon east coast time to lay wreaths in a ceremony at arlington national cemetery. and then this evening, there will be what's called the make america great again welcome celebration at the lincoln memorial. a number of performers out on the mall for the crowd. we expect president-elect trump will speak at that perhaps as well. this is truly the beginning, as of right now, you're witnessing it right now, the beginning of president-elect trump's time in washington, d.c.

officially beginning right now as he touches base on that airplane at joint base andrews right outside washington, d.c. he will be here for the duration. >> he'll be walking out of this plane shortly. gloria, the president-elect and his family will be staying at blair house tonight, the official residence for visitors for guests from the white house. there he comes. you see the president-elect of the united states walking down. they're going to hold on to the sides. >> the future first lady melania trump. >> they are walking down, holding the sides as i hoped they would. this is a moment that i'm sure for the trumps themselves, it's hard to believe it's all falling into place right now. >> first of all, they aren't on their usual airplane, wolf. and they are at joint base andrews. and melania trump, who has not spent a lot of time in

washington, it must all be becoming very real for her at this moment. and so i think it's a different feeling for them as they leave trump air back in new york city. >> we also -- we don't know, by the way, melania trump is going to stay up in new york, at least for the end of the school year. they have a 10-year-old son barron. she's going to stay in new york through may or june. we don't know what happens after that if she and barron plan on spending most of their time in new york with the president-elect going up on weekends or whether she will come down and move into the people's house, the white house, dana bash. >> absolutely. and just i think to look at this scene, i don't care who you are. if you are used to flying on trump air with gold plated everything, to play in to joint base andrews on that plane and get out with that carpet and to get into that car knowing where

you're going, i mean, it's pretty remarkable. and even if you are donald trump, you've got to be taking it in and saying, wow. this is happening. i am now here on the ground headed to be the 45th president of the united states. and the fact that he got to this moment is just amazing. >> john king, tomorrow morning, there will be the official transfer before the swearing in ceremony up on capitol hill. the president-elect will sit down with the president of the united states and they'll have an opportunity to talk. >> and partisans will view this through their prism. democrats are still having sore feelings. i hope everybody takes a moment to look at the majesty of it. the president-elect, who will be president this time tomorrow, saluting as he comes down those steps. it's a signature moment. the president getting on marine one, off marine one, on or off. he salutes or waves. it will be donald trump for the next four years. eight years of barack obama. three successive two-term

presidents. we'll stay in blair house tonight across the street from the white house. the official guest residence. coffee with the obamas and then ride up to the capitol. we're focussing on the feisty confirmation hearings. the fight over the trump team. a lot of issues to be debated and questions about the agend athe priorities and speed and what will come first, the sequencing of the new administration. i hope everybody just takes a few minutes to just say, this is something to celebrate whether you are happy or mad at the results, this is a great country. coming into work today, they have the security barriers up everywhere. you can still get your coffee and go about your business. and this part should be celebrated by everybody. >> 228 years of the peaceful transfer of power. >> fight the next day. this part, i hope everybody would just respect the process and the majesty and let's see how trump grows into this. he's never been a politician or in elective office. we're about to learn a lot about this man. he should also have the opportunity given what he's done, which is remarkable,

taking offer the republican party, winning the presidency. >> it's been a contentious transition and president-elect trump begins with popularity ratings not where he'd want them to be compared to where president obama, president george w. bush and others have been. but senator rick santorum, let me bring you in here. this has to be, even though we know he is a man who is not of inconsiderable self-regard, it has to be somewhat humbling for him. >> i can't imagine. just look at the way he walked down the steps. it's a heavy moment. it's just a heavy moment. and having been up on that platform for a couple of inaugurals and watching the, you know, up close the interplay between the incoming and outgoing, it's -- it does sober you. and a lot of people say, well, donald trump has to do this.

i think donald trump will in his first few days, i think we have -- i have hope that he's going to begin to sort of feel the weight even more than he has. it's not been a traditional transition. now that he's here, now that he's got all of the trappings of the presidency around them, it does change you. i've talked to a lot of folks about it. it does change you. we'll wait and see. i'm optimistic. i really am optimistic. >> normally once he becomes president he wouldn't have a motorcade unless the weather was bad to go from joint base andrews in maryland outside. they would take marine one and land on the south lawn of the white house. he's not yet president of the united states. this is probably going to be about a 20-minute ride. the police escorted motorcade into washington, d.c., and, of course, heading over eventually to blair house where he's going to be staying. angela rye, your thoughts as we

watch history unfold. >> definitely an historic moment. i think that it's been a very interesting campaign. it was run very much like a reality show, and i think it was unconventional. this populist type president that appealed to aunger, that appealed to trusteration in this country, and i think capitalized on it in a lot of ways. it's also interesting to see this happening while the hearings are happening on the hill as contentious as they are. but he has nominated some folks able to withstand that pressure and that pressure will not let up in the coming days. there are a lot of mixed emotions around this inauguration. folks who are really, really excited and happening about what's to come and folks who are lamenting the passage of time that's really gone by with the first black president serving two terms. so interesting to see and i'll be watching. >> gloria, they've said really nice things about each other. the outgoing president and the

incoming president. even yesterday, they were talking about how gracious this process has been at their level. >> well, as it should be, wolf. and talk about this being a moment. i'm sure it was as rick santorum said a moment for donald trump walking down those steps. not only is he going to have coffee with the outgoing president and his wife, but inside his desk will be a note that will be written by the current president of the united states, a personal handwritten note to the incoming president with some advice for him about what he is about to undertake. he will also be handed the nuclear codes. and everything i have been told about that from people who have worked for presidents in the past is that that is such a sobering moment for anyone to know that those are within your

reach. and i think that all of us can be in awe of the process that we are watching, which is this peaceful transfer of power that we do so well in this country, no matter how divisive the election was. we have to take a look at it and say this is important. >> the motorcade, the president-elect's motorcade leaving joint base andrews. we're going to continue to monitor that. but i want to go back to the senate finance committee hearing. steve mnuchin, the treasury secretary nominee is in the hot seat once again. >> -- complex securities, so i don't necessarily -- i think if we have proper regulation, a lot of the need for title 2 also goes away. >> i've run out of time. thank you, mr. chairman. >> senator bennet. >> thank you, mr. chairman and mr. mnuchin for your willingness to serve and for your meeting yesterday for clarity.

so "the wall street journal" yesterday, dollar sinks as trump talks it down. do you believe the dollar is too strong? >> again, i believe in the short term -- >> as treasury secretary, are we ever going to hear you say that the dollar is too strong? >> as treasury secretary, i don't see it as my role, okay, commenting on the dollar on short-term movements. i have commented on what i believe are the long term. >> let me ask you a different question. in 2011, due to the dysfunction in congress, we almost failed to raise the debt ceiling here. and as a result, rating agency downgraded our nation's debt for the first time in history. the stock market lost 17% of its value and didn't recover for almost a year and consumer confidence fell 22% in just a few months. a completely self-inflicted wound on the american economy.

this unforced error hurt americans retirement savings and dealt a blow to growth and job creation. during the campaign, mr. trump suggested he could somehow refinance or renegotiate our existing debt while he walked away from the idea initially later in the campaign, he again suggested he could pay our creditors less than what they are due. you go back and say, hey, guess what? the economy just crashed. i'm going to give you back half. you also suggested the united states never has to default, quote, because you print the money. do you agree with these statements? >> senator, first of all, thank you for asking the question about the debt ceiling which i want to comment on. >> good, because i have another question. >> it's a very important issue for all of us. if i'm lucky enough to be confirmed will be something -- >> please don't filibuster. i appreciate that. >> on the president has made it clear and i think it's perfectly

clear that honoring the u.s. debt is the most important thing. >> okay so, then -- >> i hope that when we get to the point, if i'm confirmed that we have to have the debt ceiling that we won't go through another one of these issues because there certain things that i would have the power to postpone this. but i firmly believe the u.s. has the obligation to honor its debt. >> can you commit to working with the congress to pass a clean debt ceiling? >> i will commit to absolutely work with the congress, the house and the senate so we don't get to the last minute and run out of money. >> is that a yes, you'll be passing a clean debt ceiling? >> i don't know your technical definition of a clean debt ceiling? >> i would like to raise the debt ceiling sooner, rather than later so we dont have a risk of

defaulting -- >> i'm grateful for that answer. thank you. the nonpartisan tax policy center found the president-elect trump's tax plan would increase the debt by $7.2 trillion over ten years. the president-elect has proposed increasing defense spending anded and ed said he will not touch entitlements like medicare or social security. he's own suggested reducing spending on nondefense discretionary spending. in 2015, nondefense discretionary spending comprised about 17% of the budget, $583 billion. this includes funding for veterans benefits, transportation, national parks and investments in research. even if we didn't spend a single penny on any of these priorities for an entire year, which i would not suggest, but even if we didn't, that would only pay for about 8% of mr. trump's tax plan. is the tax plan that increases the debt by $7.2 trillion an acceptable outcome to you? >> i believe the $7.2 trillion

number was the first tax plan and not the second tax plan. i believe it scored dynamic closer to -- >> the first tax plan was $11 trillion. the second, i think is -- >> you must be referring to static and not dynamic. the dynamic number was closer to $2 trillion. but -- >> the dynamic is $3.6 trillion. so in any case, what we're doing is adding mountains of debt. >> let me just comment that i have discussed the debt with president-elect. we are both concerned that we've gone from $10 trillion to $20 trillion of debt. we think that the way to reduce the debt is by economic growth and that will create the opportunity for us to pay down the debt. let me make a comment on the -- >> senator thune said well that our history -- in our history, the average growth rate we've seen is about 3.2%. it would be great to get to 4%.

you said between 3% and 4%. but there's no way that's going to fill the gap that is projected in these tax plans. and i can accept the fact that the president-elect may have changed his mind or you differ with him. i'm just trying to understand whether you would find it acceptable to bury the american people under this kind of proposed debt. >> again, i think as you know, we had a rather modest campaign staff relative to the other people out there, okay? so one of the things i look forward to, if i'm confirmed is having access to all the people at treasury able to model these things. we were forced -- we had some internal models but were forced to rely upon external models. certain assumptions we agreed with. some we didn't. what's important is that president trump has a pro growth economic tax plan. and we are sensitive to the costs of that plan.

yesterday i did have the opportunity to meet with senator wyden. we talked about the process for tax reform. i will be the person from the administration taking the lead on that. and i would look forward to working with the house and the senate. both republicans and democrats to move forward on tax legislation. >> i'm out of time, mr. chairman. i realize that. i want to make one observation which is that mr. mnuchin, in fairness to him, has twice praised the employees at the treasury department today and i just want to say that's a refreshing and welcome change from what we have heard up until now in a lot of these hearings. >> senator isakson. >> thank you, mr. chairman. mr. mnuchin, welcome. i'm sorry i've been in and out of the room but i've been listening outside while i've been outside. >> thank you. >> i'm pretty much up to date. i'm really going to talk about something i had not prepared myself to talk about until i heard some of the other questions and testimony that

went on. i want to talk about mortgage-backed securities. fannie mae and freddie mac in 2008. your purchase of india mac was in 2008? >> december of 2008 we committed to it. >> beginning of the crisis was in july of 2008 when merrill lynch drove down their portfolio, subprime securities by 71 cents on the dollar. is that not correct? >> i think that's correct. >> started a domino effect around the world that collapsed the mortgage-backed securities and their values. >> that is correct. >> when you purchased indymac it had a number of those loans in its portfolio? >> it had mortgage-backed securities. >> within which were included those loans? >> yes, that's correct. >> wat wall street did is wall street packaged lons and put them into a security based on high yield. is that not correct? >> what happened is they had secure tiesed the loans themselves and they got stuck

keeping them. in many cases most of the mortgage-backed securities they didn't buy. most of them were failed sales. >> is it not true that the freddie and fannie guaranteed insured loans pretty much at the direction of the congress of the united states when it came to the affordable housing loans? is it not true that congress directed them to have a larger percentage of affordable housing loans in their portfolio? >> absolutely. and i believe that, unfortunately what led them to buy a lot of bad loans. >> what i want everybody to understand when they are talking about these mortgage issues, i was in the real estate business for 31 years. and was in congress at the time this went on. but what happened in a lot of these loans is they were made because the inducement or direction of congress to take more of them. what was called an affordable housing loan ended up being a subprime loan, if you will, which ended up being a high risk loan. you had a high interest rate on

it which was a high coupon was packaged together into securities and sold around the world. is that not correct? >> that's true. they had all different types of acronyms. load docs, subprime. they just should have been called bad loans. that's what they were. >> and your indymac as i remember and i recall tried everything it could to recalibrate those loans, restructure those loans and renegotiate those loans to keep as many as possible from not going into foreclosure. >> that's true. not only for the loans we owned but loans we serviced for fannie mae and freddie mac. matter of fact, the one person who came to my home and protested at my home it was a fannie mae loan and i wasn't able to do anything about that. calls to fannie mae that i was able to get a loan modification for that person. but many times people thought we owned the loans, and we did not. they were owned by fannie mae and freddie mac and other security holders. >> the main point for the sake

of this argument and a lot of the questions you'll get is a lot of them were originated at the encouragement of the united states government and congress of the united states. that's what -- and they were called affordable housing loans. a lot of people bought those loans. and they inherited the problem. they didn't originate the problem. there's a world of difference between originating a loan and buying a loan. >> correct. the loans that we originated on the mortgage side going forward were good loans and had nothing to do with those terrible legacy loans. so, thank you for pointing that out. >> that's the important point. if you originate something, you own it. but if you acquire something that's a bad debt or a bad piece of paper, you are -- shame on you for buying it but it's not your problem for creating it and that's the important thing to know. >> that is true, senator. thank you. >> i say shame on you and not shame on you in that you did something wrong but shame on you that you inherited something bad. >> yes, i understood that.

>> one last point. i have been told by my state director of revenue that the irs is not sending out -- that the federal government is not sending out w2 forms to the state revenue -- >> correct. >> i would hope you'd pay attention and try to direct them back to doing that because the only way to keep bogus loans and intrusion into our portfolios is for the people to get back their income tied to their social security and the federal government to get their report on that at the same time for us to get it. if you'd work on seeing to it that those practices are ended somewhere around the country, i'd appreciate that. >> i'll be committed to work with you and your staff on that issue. >> thank you for your willingness to serve and congratulations on your nomination. >> thank you. >> thank you, mr. chairman and mr. mnuchin to you and your family. welcome to the hearing today.

since the beginning of the great recession, no state was hit harder than the state of nevada. you're probably well aware of that. we led the country in bankruptcies, foreclosures and unemployment. so you can imagine that we're a little sensitive as to who becomes the next treasury secretary having gn through that over the last eight or nine years. you calm into my office in january -- on january 4th, and we had a good discussion. i appreciate the visit. i asked you some questions. and i'd like to ask you the same questions today. >> absolutely. >> the question was, how many nevada homes were in one west's bank's portfolio? >> unfortunately, and i'll go back and request that information from the bank. i no longer have that information, but i will work with the bank to try to get that for you. >> how many nevadans did one west bank foreclose on while you owned the bank? >> again, i have the information that's in public reports, but

i'm absolutely committed to go back and get that information for you from the bank. so i apologize. i don't have that with me today. and i do appreciate how hard your state was hit in the foreclosure crisis. >> do you know how many nevadans one west bank provided assistance to through loan modifications? >> again, i'll go back and try to get all that information. >> here's the reason i ask you these questions over again. this is the seventh time i've asked. so i asked you when you were in my office and had my staff follow up on it three times by text and twice by phone and we still can't get the answers to these questions. i'm not quite sure with two weeks -- well, your own comments were that you guys had responded to 5,000 pages. 5,000 pages of questions asked. why were these three questions not asked if you had 5,000 pages of questions that you answered? >> first of all, let me apologize to you because i do recall you asking them in your

office, and there's no excuse they haven't been answered. i was not aware that my staff also got those questions. so i apologize to you. and i assure you personally that as soon as i get out of this hearing, i will request that information from the bank. we're responding to a lot of other information so i apologize. this is important to you. and you have my commitment that we will get that. >> in 2008 when one west purchased indy west can you tell me what motivated that transaction? was it a way to save the bank? a way to make money or to keep people in their homes or some other reason? >> i think it was all three of the above. so, you know, we -- i saw the opportunity that i thought that there was going to be a banking crise, i and i saw the opportunity that we thought we could turn around the regional bank and turn it from what was a

lousy mortgage bank into a regional bank. i have to convince my investors they'd make money, but i saw it as also a great goal of building a business. now i just may comment and, yes, my investors made a lot of money on one west but i just comment of if we had just invested in jpmorgan and bank of america and handful of other stocks we would have made a lot more money. and i wouldn't have to have worked nearly as hard. so a big part of the financial return ultimately was, we invested in the market at a very depressed period of time. >> were you motivated ---or let me ask it this way. was it an objective of one west bank to foreclose on nevadans in order to receive compensation from the fdic in their shared loss agreement? >> no, quite the contrary. so again, when we bought indymac from the fdic it was inherent in

these agreements. we committed to do loan modifications. so when we bought the bank, that was the agreement. as i've said before, we were proud of loan modifications started there. and we actually had a bunch of incentives, whether it was other things in the loss share agreement where it was actually much better for us to do loan modifications. as i've said before, i can assure you what prevented us from doing more loan modifications was another the net present value test or was what was the qualification in so we were required to get updated income and people had to have -- had to be able to effectively requalify for the loan. so as i've said before, not only from a social basis did i want to keep people in their homes but we were economically motivated to do that. >> how much did the fdic pay one west for the losses?

>> what do you mean by how much did they pay us for the losses? >> what was the compensation for the fdic for foreclosing on homes? share loss agreement. >> the way the shared loss agreement, and i would comment, i think there's been like 400 shared loss agreements, i think, according to the fdic's public data, they believe that they saved $40 billion by using the shared -- >> the answer is $1.2 billion. $1.2 billion. >> but that's after we absorbed $2 billion of losses. >> so you're not saug that's not a motivation to foreclose on a home is $1.2 billion? >> no, it's not a motivation because there were restructuring fees that were put through when we did loan modifications. and we wanted good loans. we were not, again, let me just be clear. we wanted good loans. having good loans that performed under the lost share agreement was absolutely critical. >> one more question. did one west bank specifically

target muinority communities in nevada for foreclosures? >> absolutely not. >> mr. chairman, my time has run out. >> your time is up. senator casey. >> mr. chairman, thank you. mr. mnuchin, appreciate you being here with your family. and i wanted to start with a subject that you've already answered some questions about. the issue of mortgage foreclosures but also modifications. i'm holding in my hand, i gerue, a four-page document entitled, and this is a channel 4 in pittsburgh investigative report just announced this week. "trump picked for treasury secretary foreclosed on hundreds of homeowners in western pennsylvania." it's dated january 16th. mr. chairman, i'd ask consent to have those part of the record. >> without objection. >> let me just read you part of it, mr. mnuchin, because i know

sometimes when these reports refer to individuals, you may know them. you may not. i'm not going to ask if you know this person, but here's just a couple of excerpts. according to channel 4 in pittsburgh. nelly manelik lost her husband to cancer. lost her son to an overdose and then she lost her home to one west bank. she says, and i'm quoting from her words here. one thing i'll never get over is my son's death. she lives in westmoreland county, east of pittsburgh, in ruffs dale. here's what nelly hoped would have happened. she said and i quote, they, meaning one west, they should have worked with me to meet a payment that i could make. the report goes on to say, she filed bankruptcy but even then

could not save her house. she said it caused her a lot of depression. and then it lists a couple of examples from other communities that were foreclosed on. a house in white oak was foreclosed in 2014. a house in north ver sails in 2013. penn hills in 2012. a house in pittsburgh in 2011. but again, the headline says hundreds of homeowners in western pennsylvania, depending on where you draw the line. that's probably ten counties roughly. so one region of a state of 67 counties. one of the reasons i highlight that is to, number one, focus on the impact those foreclosures had on one community and one state but also to ask you some questions so i can make sure the record is clear to the extent we can get to these in this line of questioning about modifications

and foreclosures. one of the statements you made in my office when we met and i appreciated the time we had, you said one west, quote, did lots of modifications, unquote. and then on the question of foreclosure itself, you said at the time we only did 30 to 35,000 foreclosures. is that correct? >> that was for the period of time that we were talking about 2009-2010. >> so that's just 2009 and '10 number? >> i believe 36 with 2009 and 2010 versus 175,000. the 100,000 loan modifications was over a slightly longer period of time. >> let me just get this. over the whole period, that you were the leader of one west, how many foreclosures total nationwide? >> i don't have that, but i can find the number. let me just comment since

there's a lot of talk about this foreclosure business. 93% of the loans that we serviced, we serviced for third parties. we sold this business. so i never wanted to be in the mortgage servicing business. i didn't want to be in the reverse mortgage business. i wanted to build a regional bank. so one west is no longer. we sold years ago the servicing business because we didn't want to be in that. we sold that business. obviously, the loan that you're talking about, i mean, it sounds like an absolutely horrible situation and i simp theympathi that person. >> i appreciate. let me get to the second question here on modifications. there seems to be some discrepancy here about in numbers on modifications. you say in the -- in your testimony today, and i'm quoting you hear, at the bottom of age 2, ultimately one west extended over 100,000 loan modifications to delinquent borrowers.

now extended isn't the same as a modification. >> extended means they were put on modifications. whether that's -- >> that's not a completed modification? >> no, but again, they were offered and they were put on a loan modification. >> but, in fact, in fact, according to a document that also i'll make part of the record, this is a one-page document from hamp, the home affordable modification program, that mr. chairman, i would ask that it be made part of the record. making home affordable summer results. that's the name of the document. in fact, let me just say one more, mr. chairman, in terms of total modifications, it was really only 22,908 so we'll put that into the record. more questions later. >> without objection. we'll now turn to senator cassidy. >> mr. mnuchin, nice to see you.

>> thank you. >> as you can tell by where i am, i'm fairly junior on this panel. i will note you've been somewhat assaulted by innuendo. my sympathies for being assaulted by innuendo. >> thank you. >> as regards economic growth, i wrote an editorial with a friend in t"the wall street journal" that showed if we had the economic growth from 2001 to 2014 as we had from '93 to 2000, in 2014, we would have had a $500 billion surplus despite entitlement spending, despite whatever as opposed to the $500 billion deficit we had. so i appreciate your acknowledgment that pro-growth policies cover a multitude of sins. so good for you. >> thank you. >> that said, i represent a lot of rural parishes. and there's two things driving economic growth in such parishes. typically utility companies want

to sell more and community bachks. and since dodd/frank passed, the number of community banks has just plummeted. omg, as my daughter would say. your thoughts as regards, how do we revive the fortunate community banks which in my mind is how do we revive the prospects of rural america? >> well, thank you and first of all, i enjoyed the opportunity to meet with you and talk about a bunch of these issues. and i think as i mentioned before, i am very concerned that we have and continue to be in the business of putting community banks and small regional banks out of business. that the regulatory cost -- >> can i interrupt for a second? >> of course. >> one guy, i dont know what his bank is worth. $80 million. he told me that 64 regulatory visits in a 52-week period. the marginal cost for this small bank is like, why am i not selling. i'm sorry, continue. >> that sounds about right from

my experience. that's about the right ratio. so i agree with you completely. as i've said if we want to have economic growth, for us to end up with four or five big banks in this country, you know, and deal with the two big to fail and everything else, or the too big to succeesucceed, we need t banks. regional bau aal banks, communi. those people understand the people in the community and can make good loans. >> also related to that and something you were speaking, i think, with them, that it doesn't seem like we have an absence of capital in our society right now. we've got a lot of capital. >> that's correct. >> it's just that we can't get capital down to evangeline parish and bring prosperity to evangeline parish. you don't need to know where evangeline parish is. it shows it's a smaller parish in terms of population. i presume you agree with that.

>> i do, completely. >> now related to that and again, this is something for my edification. but it strikes me that there's two possible goals of tax reform. one is to create more capital. i think under the reagan tax cuts is high marginal rates deprived capital to those who need it but it seems as if we have enough capital floating around, although choke-holded at certain points. and the other point of tax reform would to be align and sentence. you spoke early are with thune that you want to incent folks to keep the money within the business. >> create jobs. >> would you agree with what i'm saying? you are the economist. of the two -- is there a third reason to do tax reform, against fairness, so if you throw those all in, it seems as if capital, though, creation of capital is the one which isn't the priority

so much as to align and sentence, perhaps create certainty. continue. you go. >> i agree with you. the only other thing i would say because i do think we have a lot of capital in the united states now but we have a business tax system that is incenting u.s. companies keeping that capital abroad. the other thing we want to incent is that money comes back to the united states both now as well as going forward. and that money can be deployed to create new business here and create jobs and that we stop things like inversions because it makes economic sense for u.s. companies to do business here. >> so the incentives both for the company to use their money more wisely, to invest it within to create jobs but also to keep companies from moving abroad? >> correct. >> on behalf of all those folks in evangeline parish and elsewhere who want prosperity, i

thank you for your offer to serve and i look forward to supporting your nomination. >> thank you, senator. your time is up. senator warner. >> thank you. it's a pleasure to see you, mr. mnuchin. appreciated our visit and congratulations on your nomination. i've got a series of topics so i'm going to try to move quickly as well. the united states, obviously, enjoys enormous advantages, particularly around the status of us being the reserve currency. that allows us lower interest rates and everything from student loans to mortgages. senator bennet already raised this but i want to raise it again. the president-elect's comments about potentially renegotiating the debt during the campaign were unprecedented. i want you to affirm to this body that on a goog forward basis, it will be your policy, as much as you can influence the president-elect, that we would never again question america's willingness to question its --

>> i agree with that 100% and let me also just thank you for meet with me and acknowledge as an incredibly successful businessperson, i appreciate your service here. >> i don't want that to eat into my time. >> sorry. >> there are -- i have been very troubled by even some folks in elective office who have somehow said we can ignore the debt ceiling without consequences. there are even some that are going out and saying, somehow we could prioritize those debt obligations and potentially pay off bond holders. many foreign. many chinese. and ignore obligations to pay states, which would then affect their bond ratings, to honor the commitments, the united states government has made to pay salaries of fbi employees, et cetera. it is your policy that the united states in terms of its debt obligations needs to honor all its debt obligations and should not have any ability to prioritize those obligations. >> absolutely.

and i hope you will woirrk withe so we get that done. we've already spent the money. we have the obligations. there should be no uncertainty that we're paying the bills. >> that's extraordinarily important and those who somehow argued for prioritization would wreak havoc in the financial markets. i want to reraise what senator bennet raised. if you get this role, words that you say and the president-elect will say will have consequences. we've already seen this. the actions of the president-elect in terms of commenting on the strength of the dollar, unprecedented. no president, democrat or republican, has ever done this before. it has effects. now you will simply be a senior adviser in the cabinet of the president but how do we ensure, since words have such consequences, that there will be an ability for the trump administration on economic policy to try to speak with a single voice? >> well, if i am confirmed, i

think that once we all get in office, and have regular access, both myself and the administration, i think you will see that. and again, there may be times where, you know, there's a view that the dollar is slightly too strong, but i do believe we'll speak with a unified voice. >> then expect the president-elect, but then president, would continue to break all precedent and be willing to weigh into these matters unlike any other prior president. >> as you know, this president is willing to do a lot of things that other presidents haven't done, and i think many of them are great. >> let's move to another area. one area that i've had a huge amount of concern and interest in and a number of us on this panel is on the fannie and freddie. and i know there were some people that potentially interpreted some of your comments about recap and release which would in a sense say, even

though the american taxpayer was paid back the $188 billion that we invested in those failing institutions at a moment of crisi crisis, i think both of us would say that's high risk capital and should get a better return. but those who simply say let's refloat these two entities and basically ignore some of the underlying challenges. do you support that position of recap and release that some have advocated. >> let me be clear. i did make some comments about this. my comments were never that there should be recap and release. what my comments were, and first of all, i've been around the mortgage industry for 30 years. i've seen this for a long period of time. so this is an area that i do believe i have expertise in. for very long periods of time, i think that fannie and freddie have been well run without creating risk to the government. as well as they've played an important role. i know you're running out of time --

>> mr. chairman, can i get an extra 30 seconds? >> can i just answer this so you get more tomb. these are very important entities to provide the necessary liquidity for housing finance and what i've committed to is that i will work with both the democrats and republicans. what i've said and i believe, we need housing reform. we shouldn't just leave fannie and freddie as is for the next four or eight years under government control without a fix. that i believe we can find a bipartisan fix for these so on the one hand, we don't end up with a giant bailout. on the other hand we don't run the risk of completely limiting housing finance. >> i appreciate those comments and look forward to working with you. since i took most of the 30 seconds on your statement i have two quick questions hopefully can answer them with yes or no answers. one is, in light of those comments about recap and release, you commit not to