The new 'Government Sachs' isn't Goldman Sachs

Former investment banker for Goldman Sachs Steven Mnuchin (R) participates in a swearing-in ceremony, as President Donald Trump (L) looks on in the Oval Office of the White House February 13, 2017.
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Veterans of Goldman Sachs may enjoy top billing in President Donald Trump's administration, but executives from one little-known bank could soon wield enormous influence over Wall Street.

OneWest is a midsized lender with headquarters in Pasadena, California. It entered the national spotlight when Steven Mnuchin was nominated to lead the Treasury Department. Mnuchin bought the bank, formerly known as IndyMac, from the federal government in 2009.

Now, according to people familiar with the discussions, the Trump administration is considering two of his deputies to head key regulatory agencies: former OneWest general counsel Brian Brooks for the Consumer Financial Protection Bureau and former OneWest chief executive Joseph Otting for the Office of the Comptroller of the Currency.

Another person with ties to OneWest, Tom Vartanian, has also been floated to lead the OCC, according to a person close to the administration. Vartanian, a partner at the law firm Dechert, represented investors in the $1.6 billion deal to purchase OneWest.

The three agencies — Treasury, OCC and CFPB — have broad authority to craft regulations that affect the nation's biggest banks and financial institutions, from running stress tests to setting mortgage lending standards. They were critical conduits for implementing sweeping reforms of the financial system following the 2008 crisis and will likely be an important channel for Trump to make good on his promise of rolling back those rules.

Mnuchin on OneWest foreclosures: Unfortunate & inappropriate

The White House did not respond to a request for comment on the positions. Discussions are still in early stages, according to those familiar with the talks, and it was unclear when final decisions would be made. The CFPB's current director, Richard Cordray, isn't slated to depart until next year, though some industry experts believe the White House may try to remove him before then. Comptroller Thomas Curry's term ends in April.

"It would be an honor to serve again in the government after 34 years in the private sector to help the president recalibrate the regulation of financial institutions and ensure that they remain absolutely safe and sound," Vartanian said.

Trump has vowed to "do a number" on financial industry rules instituted under President Barack Obama, and replacing Cordray or Curry would be an important first step. Both had long careers in regulation and enforcement, while their potential replacements have worked primarily in the banking industry itself.

"Fairly quickly, you could start to have an effect on the way the agency administers its discretion within existing rules," said Oliver Ireland, a partner at Morrison Foerster.

Three career paths with OneWest in common

Brooks was a managing partner at O'Melveny & Myers when he worked with Mnuchin on the purchase of OneWest. The bank was previously known as IndyMac, and Mnuchin bought the subprime mortgage lender from the Federal Deposit Insurance Corp. after IndyMac collapsed during the housing crisis.

Brooks then joined OneWest as vice chairman and chief legal counsel and left shortly before the bank was sold to CIT Group in 2015. He is now executive vice president at Fannie Mae and oversees fair lending, marketing and communications.

Otting was chief executive at OneWest and a visible defender of the bank during community protests accusing it of aggressively foreclosing on homeowners and during the bank's merger with CIT. However, Otting was fired after the acquisition occurred.

Vartanian is a well-known figure within the financial industry, with a four-decade career that included stints at regulatory agencies but that has focused primarily on representing banks. He advised Bank of America on its purchase of the troubled mortgage lender Countrywide during the financial crisis and has written several books on banking regulation.

The three men's ties to OneWest could pose obstacles to their confirmation. Though the heads of the CFPB and OCC are presidential appointees, they still require approval by the Senate. Democrats repeatedly attacked Mnuchin for his management of the embattled lender, labeling him the "foreclosure king" and highlighting personal stories of OneWest customers who lost their homes.

The criticism was not enough to derail Mnuchin's confirmation, but Democrats are likely to deploy similar arguments against other OneWest nominees. They hope to highlight Trump's ties to the banking industry as evidence that he has broken campaign pledges to "drain the swamp" of special interests in Washington.

"I have a hard time imagining Midwestern state swing voters will appreciate government by bankers," said Jeff Hauser, executive director of the Revolving Door Project.

— Tune into CNBC at 7 a.m. ET on Thursday, Feb. 23, for a live interview with Steven Mnuchin