Mnuchin Asks Goldman, AmEx to Help Small Banks Win Contracts

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Treasury Secretary Steven Mnuchin has told large U.S. banks including Goldman Sachs Group Inc. and American Express Co. 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. 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 & 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.

To contact the reporters on this story: Jenny Surane in New York at jsurane4@bloomberg.net;Saleha Mohsin in Washington at smohsin2@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Alan Goldstein

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