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Mnuchin Asks Goldman, AmEx to Help Small Banks Win Contracts

Stock MarketsSep 06, 2019 05:47PM ET
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(Bloomberg) -- Treasury Secretary Steven Mnuchin has told large U.S. banks including Goldman Sachs Group Inc (NYSE:GS). and American Express Co (NYSE:AXP). they should do more to help black- and women-owned community banks win federal contracts.

Mnuchin in a letter this week asked some of the country’s biggest banks to participate in the Financial Agent Mentor-Protege Program, in which large lenders counsel their smaller rivals -- those with assets of less than $2 billion -- on how to become financial agents for the Treasury Department.

“Our goal is to expand networks within the financial-services industry and to facilitate the inclusion of a broader range of financial institutions in Treasury business opportunities,” Mnuchin said in a letter to banks seen by Bloomberg. “The collective network of America’s banks, large and small, is a national strength that is critical to our functioning economy.”

Treasury’s office of minority women and inclusion is leading the effort, a team that Mnuchin, who previously led a community bank, has said he meets with once a month. An administration official verified the letter.

Citigroup Inc (NYSE:C). was the first financial-agent bank to participate and worked closely with the Treasury Department to develop the program, according to a case study published by the lender. For the past decade, the New York-based company has managed the Treasury’s OTCnet application, which helps federal agencies accept payments. When it re-bid for the work, the firm included Industrial Bank, a black-owned firm in Washington.

“We hope this program serves as a template and look forward to its continued expansion,” Harold Butler, Citigroup’s head of Treasury and Federal Reserve banking services, said in an emailed statement.

In April, JPMorgan Chase (NYSE:JPM) & Co. announced that it was working with Harbor Bank of Maryland and Liberty Bank and Trust Co., two regional black-owned companies, as part of the Treasury program.

A representative from Treasury declined to comment, and officials at Goldman Sachs and American Express said they had no immediate comment.

(Updates with JPMorgan in penultimate paragraph.)

Mnuchin Asks Goldman, AmEx to Help Small Banks Win Contracts
 

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