This hearing will come to order. Thank you, mr. Secretary, for attending today. This is secretary mnuchins first hearing since being sworn in in february and we look forward to our discussion. Many of this committees priorities fall within the jurisdiction of the Treasury Department, including housing financial reform and development of policies to encourage a healthier economy. We look forward to working with you and your staff on these priorities and improving the lives of americans. Housing finance reform remains the most significant piece of Unfinished Business following the crisis and it is important to build bipartisan support far ath forward. Last week, we received testimony from director nell watt. The hearing reinforced why conservatorship is unsustainable, namely g. S. E. s having zero capital, tax pay ornse the hook for losses an the government taking all risks. A number of groups released proposal in recent months, including the milkin institute, several writing jointly for the urban institute and many others. Three years ago, seven republicans and six democrats on this committee voted in support of a comprehensive Housing Finance reform bill. A key goal this congress is to build on this bipartisan legacy and create a Sustainable Housing structure for future generations. I look forward to working with you, secretary mnuchin, and your staff, as the committee develops the Bipartisan Legislation that will fix the broken finance system. Im encouraged by President Trumps executive order for regular on Core Principles for the system. I understand that the administration will be identifying rules and regulations that are inconsistent with the Core Principles soon. I will review this report and work with you and members of the committee to develop measures to improve the Financial System. Financial regulation should help the Financial System and grow the economy. We want our nations banks to be well capitalize and well regulated without being bound by nnecessary compliance costs. It imposes burdens on Financial Institutions and companies, often disproportionately on smaller ones. Community banks and Credit Unions lack the infrastructure to handle the overwhelming Regulatory Burden of the past few years yet in many ways are treated the same as the worlds iggest institutions. One area id like this committee to address is the 50 billion threshold for regional banks. We discussed whether 50 billion is the appropriate threshold and i hope we Work Together to craft a more appropriate standard. My goal is to work with you, secretary mnuchin, senators of the committee and financial regulators to look for ways to foster Economic Growth while maintaining resiliency in the economy. Senator brown. Senator brown thank you, mr. Chairman. Thank you, mr. Speaker, nice to see you two days in a row. I thank the chairman for calling this hearing. Tissuery played a key role in our government since its creation more than two centuries ago. That role expanding in the wake expanded in the wake of the Great Recession then Great Depression when it be became clear the rules in place were inadequate. Given the greater greater role the secretary plays in oversight of wall street it makes sense that he convey his views and those of the administration to member os of this committee and to the public. So far thats been insufficient. Questions posed to the secretary by me and by other senators have gone either unanswered or were answered by non sequiturs. I hope today will give an opportunity to all of us for more forthright conversations. On tuesday we herd an ordinary hearing. Three will work in National Security positions in treasury if confirmed. The fourth will work in National Security at commerce. One senator after another felt compelled to ask nominees, to ask each of them, if they would put the law and the constitution and their country and their country ahead of loyalty to the president. Amazing and unprecedented that we thought we had to ask that question. Given all the troubling revelations from the white house and about the white house, such a question is vital for every nominee in a sensitive position. This was hours before we learned that President Trump very likely asked f. B. I. Director comey to shut down an investigation. Honesty is critical. Our National Interests are undermined whether National Security or domestic Economic Security when our leaders traffic in falsehoods. You can be the lead if we dont believe you. When i say we, i moan the American Public. China was a champion of currency manipulation, then it wasnt. Wealthy taxpayer would not get a tax cut, then they would. The deficit would be eliminated in eight year, then it wouldnt. Wall street was getting away with murder, now it has too big a compliance burden. The interest loophole would be closed, now maybe not. We must invest 1 trillion in our, quote, third world infrastructure but now that seems to be no rush. No cuts to medicaid that was promised, now a 900 billion cut to medicaid is fine. The president launched the examination of doddfrank with the claim that creditworthy borrowers cant get loans but the spigot isnt dry and we dont need to in the president s words, original words, perhaps, prime the pump. Loans are at record levels. These are facts that bear repeating. Bank loans and profits are at record levels. The president was elected saying wall stret caused tremendous problems for us, were going to tax wall street, his words. Now that hes in office he seems to have forgotten the tremendous problems that wall street create for middle class families across america. That same amnesia seems to have affected a number of my colleagues who seem to forget what wall street did 10 years ago to our economy, to country, to our a mortgage thats 120 of the value of their loan. Bank lending has grown 6 annually over the last three years. Loan growth was 8 this past year. Lending stalled in the First Quarter of this year. Why . Because demand wasnt there. The fact is the wealthiest americans may have recovered from the Great Recession, recovered and then some, but many, many families like these cleveland homeowners have not. If we want to improve our economy we would be better off having means other than the discredited trickle down approach. Secretary mnuchin, the time is yours. Mr. Mnuchin i would like to introduce my fiancee who is with me as well as other member os they have department. It is an honor to appear before you today for the first time as treasury secretary. During my confirmation hearing, i promised to work with congress to create and maintain prosperity for all americans. I want to reaffirm that commitment to you today. Let me begin by discussing the treasurys recent report on Foreign Exchange policies of our Major Trading partners. Ensuring that American Business consumers and workers face a level Playing Field is one of the essential components of this administrations agenda. When foreign governments engage in currency manipulation, it makes the Playing Field uneven, which is why were regularly why we regularly monitor these practices. After careful study, the Treasury Department has found that no Major Trading partner met the criteria for currency manipulation in the current reporting period. We will continue to follow this important issue and have established a monitoring list of economies that warrant close attention. This list comprises china, germany, japan, korea, switzerland and taiwan. Additionally, we are committed to rethinking our foreign agreements and trading practices to ensure they are both free and fair to American Business and workers. In my discussions with the i. M. F. And finance ministers of the g20, i have emphasized this goal and will continue to do so. Turning to our domestic agenda, its been more than 30 years since we have had comprehensive tax reform in this country. Combined with often imprudent regulations crafted in the midst of the crisis, the entire american prosperity has slowed. I believe that a goal of 3 g. D. P. Or higher Economic Growth is achieveable if we make historic reforms to both taxes and regulation. There are about 100 people working at the treasury on the issue of tax reform. It is our goal to bring relief to middle income americans and make American Business competitive again. We will do this all while simplifying the tax system. On regulatory reform, treasury is preparing its initial report in response to the president s executive order on Core Principles for regulating the United StatesFinancial System. These principles provide a road map for the administrations approach to Financial Services regulation. We have taken a systemic approach in our work by meeting with a variety of stake holder groups to hear what works, what does not work, and what can be improved. Our initial report contains recommendations to provide relief for Community Banks and make regulations more efficient, effective and appropriately tailored. Housing finance reform is another priority of mine. This has been an unresolved issue for far too long and once we are committed to and one we are committed to fixing. We will ensure there is both ample credit for housing and that we do not put taxpayers at risk. This committee has done extensive work on this along with your work on Community Financial institution regulatory relief. My hope is that we can partner on both of these issues. I look forward to working with the congress to develop a solution. Finally, another area that is crucially important to treasury is our commitment to combating terrorist activities and financing. We have announced a number of sanctions against individuals and entities associated with destabilizing regimes like syria, iran, and north korea. This work is essential to the administrations efforts to continue to keep americans safe. The first few months of this administration have been significant. We have been working hard at treasury to develop and implement policy to allow the economy to grow. This will make the dream of prosperity once again a reality for all americans. Thank you. Thank you, secretary mnuchin. I want to thank you personally for your responsiveness on this issue. We want to Work Together on these issues and certainly your expertise and assistance can get us to the right results. I want to take my first question, ask my first cre about Housing Finance reform my first question about Housing Finance reform and the status quo. As i indicated in my opening marks, last week, director watt said this was critical. Do you agree that the status quo is unsustainable and Congress Must move on this issue . Mr. Mnuchin i do agree with that. We are committed to working with you on a solution on house regular form. I think we need to on housing reform. We need to fix fannie and freddie. We are committed to make sure there is proper liquidity in the housing markets. Its a very, very important part of the american economy. And we need to make sure there is ample credit for the middle class to buy homes. While oat the same time making sure that the taxpayers are not at risk. As you know, the treasury has a big line outstanding to those two entities. Senator crepo as you know, in the 1 senator crapo as you know, we had to make a lot of compromises to achieve Bipartisan Legislation. As the committee again focus focuses on Housing Finance reform, what do you think are the key compromises that need to be achieved . Mr. Mnuchin i think were open to working with you as i suggested. We need to find a solution that creates necessary liquidity while making sure we dont put taxpayers at risk. And while weve been busy working on tax reform and focusing on regulatory issues, during the second half of this year, i will focus on housing reform and look forward to speaking to many of you on ideas. Senator crapo one issue is whether there should be an explicit government guarantee provided through the housing system. Do you believe that such a guarantee is necessary and if so , do you think how do we deal with implementing adequate taxpayer protections in exchange or any government guarantee . Mr. Mnuchin i think its early for me to make a conclusion on whether a guarantee is necessary. That is something we would like to study very carefully and if there is a guarantee, we would want to make sure that there is ample credit and real risk in front of that guarantee so that taxpayers are not at risk. Senator crapo i want to move quickly to the executive order the president has issued. I notice i only have a couple of minutes left. I did not remind all our colleagues that we need to pay close attention to the five minutes for questioning. Because im confident that every senator on this committee wants to have his or her opportunity to speak with you. So ill just, in my last two minutes, quickly bring up thed orer that President Trump signed in february outryanning the outlining the administrations Core Principles for regulating the u. S. Financial system. It requires you to report within 120 days on the extent to which existing law and regulations promote those Core Principles and to identify laws and regulations that inhibit the regular lace of the u. S. Financial system in a manner consistent with them. I strongly agree with those Core Principles and am looking very much forward to working with you on the effort. Can you tell the committee some of the issues you have looked at and some find wegs may expect to see in your re30r9 . Yes, thank you. Weve had a very large group at treasury working on this. One of the things that i emphasized to the team ahead of time was we wanted to make sure we reached out to many different groups and got feedback that this was not something that treasury was designing on its own. I know certain people refer to this as a review of doddfrank. Thats one of the things were looking at put its much broader than that. In looking at the Core Principles. We have met with over 16 different groups, many of them having 50 to 100 people. Weve had Community Banks, weve had small and mediumsized banks. We have reached out to each one of the regulators and had working groups with each one of the independent regulators to make sure we have input from them. And we will be issuing a series of reports, the first one coming out shortly which will be on banking and i will say, one of the big focuses will make sure that as we have different regulators, we have proper coordination between them, and this is something ive also been working on at fsoc where i take my responsibility as chair very seriously. Senator crapo thank you very much. Senator brown. Senator brown at your nomination hearing on january 19, and as a member of the finance committee i was there. You stated that one west, the bank you were affiliated with, d not engage in misconduct related to mortgage practices. Since, theres been a lot of news, include regular ports in ohio from one of perhaps our states most conservative newspapers, some 1,900 signings in ohio reports that onewest did in fact engage in robo signing. Earlier this week your former company, financial freedom, settled with the department of justice for 89 million, related to violations of federal law. Do you stand by that january 19 testimony . Mr. Mnuchin yes. Let me first comment, let me first say, im no longer on the board of c. I. P. So i only have access to Public Information and what ive read. But ild learned there were issues, we put in policies to correct those issues immediately. Mr. Brown im sorry to interrupt but my question was, you said that onewest did not forgetting the settlement, you said onewest did not engage in robosignings. Do you stand by that statement . That you said under oath to the finance committee . Mr. Mnuchin i do and i believe in a series of questions that were issued to me after that hearing we responded on the definition of what we expected robo signing. And again i am no longer at the bank so i cant comment on anything. Senator brown chairman crapo mentioned the executive order you gave us some detail, im preesh ty of that as you and your team at treasury work through this, are you review regular forms to the Mortgage Market that would address actices that took place in indymac and onewest. There are customers, there are Community People that you didnt mention but the practices that took place at onewest and indymac, protecting home buyers, banning robo signings and other harmful practices, are you looking at are you reviewing those reforms . Mr. Mnuchin