Tag Archives: treasury

‘Populist’ Trump chooses Cabinet of billionaires and Wall Street insiders

She supported Trump for his populist vows  to “drain the swamp” in Washington of moneyed elites and Wall Street insiders who crashed the economy, so  when she learned of Trump’s Cabinet pick for Treasury Secretary — Steven Mnuchin — she felt betrayed.

OneWest, a bank formerly owned by a group of investors headed by Mnuchin, had foreclosed on her Los Angeles-area home in the aftermath of the Great Recession, stripping her of the two units she rented as a primary source of income.

“I just wish that I had not voted,” said Colebrook, 59. “I have no faith in our government anymore at all. They all promise you the world at the end of a stick and take it away once they get in.”

Less than a month after his presidential win, Trump’s populist appeal has started to clash with a Cabinet of billionaires and Wall Street elites.

In addition to Mnuchin, Trump has chosen Wlibur L. Ross Jr., a billionaire investor in distressed assets as Secretary of Commerce Department and Chicago Cubs owner and billionaire Todd Ricketts as deputy commerce secretary.

‘Now backing his buddies’

Less than a month after his presidential win, Trump’s populist appeal has started to clash with a Cabinet of billionaires and millionaires that he believes can energize economic growth.

The prospect of Mnuchin leading the Treasury Department drew plaudits from many in the financial sector. A former Goldman Sachs executive who pivoted in the early 2000s to hedge fund management and movie production, he seemed an ideal emissary to Wall Street.

When asked about his credentials to be Treasury secretary, Mnuchin emphasized his time running OneWest — which not only foreclosed on Colebrook but also on thousands of others in the aftermath of the housing crisis caused by subprime mortgages.

“What I’ve really been focused on is being a regional banker for the last eight years,” Mnuchin said. “I know what it takes to make sure that we can make loans to small and midmarket companies and that’s going to be our big focus, making sure we scale back regulation so that we make sure the banks are lending.”

But the prospect of Mnuchin leading the Treasury Department prompted Colebrook and other OneWest borrowers who say they unfairly faced foreclosure to contact The Associated Press. Colebrook wishes she could meet with Trump to explain why she feels betrayed by his Cabinet selection after believing that his presidency could restore the balance of power to everyday people.

“He doesn’t want the truth,” she said. “He’s now backing his buddies.”

The Trump transition team has been sensitive to preserving trust with its voters. Senior adviser Kellyanne Conway publicly warned that supporters would feel “betrayed” if former critic Mitt Romney was named secretary of state, for instance.

Wealth from Great Recession foreclosures

For Mnuchin, the fundamental problem stems from the Great Recession. His investor group was the sole bidder to take control of the troubled bank IndyMac in 2009. The group struck a deal that left the Federal Deposit Insurance Corporation responsible for taking as much as 80 percent of the losses on former IndyMac assets and rebranded the troubled bank as OneWest.

The combination of OneWest’s profitability, government guarantees and foreclosure activities drew the ire of activist groups like the California Reinvestment Coalition. It found the bank to be consistently one of the most difficult to work out loan modifications with even though OneWest never drew a major response from government regulators.

By June of 2014, five years after taking over OneWest, Mnuchin sold the bank for $3.4 billion at a tremendous profit.

Colebrook said she learned the hard way about OneWest’s tactics, after the regional bank acquired her home lender, First Federal Bank of California, in late 2009.

 

Missouri to recognize married gay couples for tax purposes

Democratic Gov. Jay Nixon on Nov. 14 issued an executive order directing the Missouri Department of Revenue to accept the jointly-filed state tax returns of all legally married couples, including same-sex couples legally married in other states, who file joint federal tax returns as required under Missouri law.

Nixon, in a statement, said, “Missouri is one of a number of states whose tax code is directly tied to that of the federal government and under Missouri law, legally married couples who file joint federal tax returns with the IRS must also file joint state returns with our state Department of Revenue.”

He added, “As a result, accepting the jointly-filed state tax returns of all legally-married couples who file federal returns is the only appropriate course of action, given Missouri statutes and the ruling by the U.S. Department of the Treasury.”

The U.S. Department of the Treasury and the Internal Revenue Service ruled in August that legally married same-sex couples would be treated as married for federal tax purposes, regardless of where the couple lives. The Treasury’s ruling implemented federal tax aspects of the June 26th Supreme Court decision invalidating a provision of the 1996 Defense of Marriage Act.

Missouri tax law states that couples filing a “joint federal income tax return shall file a combined return,” and that any terms used in Missouri tax law shall have the same meaning “as when used in a comparable context in the laws of the United States relating to federal income taxes.”

The governor said his executive order applies only to the specific issue of tax filing status and does not authorize or sanction same-sex marriage in Missouri, which the state’s constitution does not recognize.

Under the executive order, any federal exemptions or deductions that married couples can receive that are reflected in their federal adjusted gross income will therefore be reflected on their state tax return. However, the order does not change the eligibility for any state-level exemptions, deductions or credits.