Steven Preston (SIADD)

Steven C. Preston (born August 4, 1960) is the current United States Secretary of Housing and Urban Development, serving in the cabinet of President John McCain. He took office on June 5, 2008 in the cabinet of President George W. Bush. Prior to this, he was the the 22nd Administrator of the U.S. Small Business Administration from 2006 until his appointment as HUD Secretary. Before entering public service, Preston spent nearly 25 years in financial and operational leadership positions in the private sector.

Early life and business career
Preston grew up in Janesville, Wisconsin and attended Parker High School where he was class valedictorian, president of the student congress, and a varsity wrestler. He earned a B.A. with Highest Distinction in political science from Northwestern University in 1982 and an MBA from the University of Chicago Graduate School of Business in 1985.

During the first half of his private sector career, Preston worked in investment banking and corporate finance. Preston joined Lehman Brothers in 1985, ultimately serving as a Senior Vice President in the Investment Banking Department.

In 1993, Preston moved to First Data Corporation where he was Senior Vice President and Treasurer. He managed capital structure strategies, financial risk management, and investor relations during a period of rapid growth.

Preston moved to The ServiceMaster Company in 1997 where he served as Executive Vice President and Chief Financial Officer for seven years before heading the company’s Strategic Services effort. In 2000 CFO magazine named him one of the “Next Wave” of financial executives that would make a difference in the next decade.

Administrator of the SBA
Preston was nominated to be the 22nd Administrator of the U.S. Small Business Administration on April 25, 2006. Small business advocates questioned the nomination since Preston had never started or worked for a small business. In his Senate confirmation hearing Preston said SBA is “a big business that supports the needs of small businesses … an organization that requires sophisticated financial management, operational responsiveness, and a customer service culture among the workforce” and SBA leadership must have “a mind for big business but a heart for small business.” SBA Administrator Preston addresses Minority Enterprise Development Week Conference

Preston was unanimously confirmed by the Senate on June 29, 2006. He took over SBA at a time when the agency was under fire for its disaster loan operation’s response to Hurricanes Katrina, Rita and Wilma. Preston pledged to improve processing and disbursement of SBA disaster loans to storm victims at his confirmation hearing. Ultimately, the agency distributed approximately $6 billion in loans to those victims. Under Preston, SBA completely reworked disaster operations, implementing reforms that cut key processing times for disaster loan applications by up to 90 percent.

On the day Preston was sworn in, CBS “Evening News” criticized the agency’s lax enforcement of small business contracting rules, a failure members of Congress said resulted in more than $12 billion in contracts going to large companies like Microsoft and Rolls Royce. Preston attempted to bring transparency to the process by closing loopholes, tightening the small business contract definition, and developing a new scorecard for federal contracting agencies. The SBA ordered agencies to eliminate inaccuracies in the federal small business contracting database and recertify their size status regularly. By correcting erroneous data, the federal government was required to reduce its previously reported small business procurements by $4.6 billion, causing total contracts to fall below the 23 percent congressional mandate. Some small business advocates did not think Preston’s reforms went far enough. House Small Business Committee Chairwoman Nydia Velazquez (D-NY) said, “The fact that large businesses are being awarded with small-business contracts, and that there is no system in place with penalties or consequences for this, is extremely concerning.”

In 2006, SBA ranked dead last among federal agencies in the Partnership for Public Service’s Best Places to Work Survey SBA improved its ranking 30 percent in the 2009 survey, the most improved among large federal agencies. The score for SBA leadership improved 36 percent in the survey.

Preston drove many other operational reforms throughout the agency, including changing the loan guaranty program to make it more effective and easier to use. Sen. John Kerry (D-MA) praised the reforms: “Preston is widely credited with correcting major problems at the Small Business Administration … Mr. Preston inherited an agency in disarray, and he’s worked hard to right its course and to improve relationships with Congress … We may have some differences on policy, but he’s always been professional, responsive, and dedicated to the mission.”

Bush Administration
With less than nine months left in his Administration, President Bush nominated Preston to be HUD Secretary on April 18, 2008.

As his predecessor departed amidst scandal, housing advocates and Senate Banking, Housing, and Urban Affairs Committee chairman Chris Dodd (D-CT) criticized Preston for his lack of previous housing policy experience. With the housing crisis unfolding, President Bush said he needed someone with Preston’s background in finance: “I looked for a leader with an impressive background in finance; someone who understands the important role the housing market plays in the broader economy. I sought a reformer who would act aggressively to help Americans obtain affordable mortgages … and be able to keep their homes. I sought a consensus-builder who’s earned the respect of Republicans and Democrats, who can get things done.”

Preston was confirmed by the U.S. Senate by unanimous consent on June 5 and sworn in the same day.

During his tenure, the federal government implemented some of the most sweeping and controversial changes to housing and financial policy since the Great Depression, including: the Housing and Economic Recovery Act of 2008; the Economic Stabilization Act of 2008; the Troubled Asset Relief Program; government takeovers of Fannie Mae and Freddie Mac; and expanded FHA refinancing.

Though he emphasized the importance of government action in crisis by saying “mortgage markets have remained open almost entirely due to government support,” Preston said the private sector should ultimately restore the housing market. He argued too many homeowners who should be getting help were still falling through the cracks, and urged financial institutions to “be bold” in their actions to assist troubled homeowners. Preston warned Congress and state attorneys general would continue to intervene if private financial institutions didn’t act strongly enough, specifically citing a congressional plan to allow bankruptcy judges to modify mortgages.

In responding to criticisms that few financial institutions had enrolled in the Hope for Homeowners program, the cornerstone of the 2008 housing bill, Preston said the program was too expensive and complex for borrowers and lenders to use.

While at HUD, Preston continued to be an outspoken advocate for transparency, effectiveness, and efficiency in government programs. He initiated reforms to enable the Federal Housing Administration to handle its increasing volume of loans; broke ground on two public housing developments in New Orleans that had been stalled due to lack of funding; and finalized regulations that had been stalled since 2002 to help consumers find lower costs mortgages and avoid harmful loan offers.