Written Testimony of
Adam J. Levitin
Professor of Law
Georgetown University Law Center
Before the
House Financial Services Committee
Subcommittee on Financial Institutions and Consumer Credit
&
Subcommittee on Capital Markets and Government Sponsored Enterprises
Joint Hearing on “H.R. 1697: The Communities First Act”
November 16, 2011
2:00 pm

Ms. Chairman Capito, Mr. Chairman Garret, Ranking Member Maloney, Ranking Member Waters, Members of the Subcommittees:

Good afternoon. My name is Adam Levitin. I am a Professor of Law at the Georgetown University Law Center in Washington, D.C., where I teach courses in bankruptcy, commercial law, contracts, and structured finance. I have previously served as Special Counsel to the Congressional Oversight Panel supervising the Troubled Asset Relief Program (TARP). I am here today to testify against H.R. 1697, the so-called “Communities First Act.” I oppose the bill for several reasons:

• The Communities First Act will actually destroy communities by encouraging mortgage foreclosures that hurt families, neighboring property owners, and local government.
• The Communities First Act encourages spurious accounting practices that debase the informational currency on which American capital market investors depend.
• The Communities First Act would make it impossible for accounting rules to be updated unless they met a pseudo-scientific cost-benefit analysis standard.
• The Communities First Act would enable banks to game the regulatory system by picking their regulator.
• The Communities First Act would gut the Consumer Financial Protection Bureau. Fundamentally, the Communities First Act is a regulatory subsidy for big and small banks, with some extra morsels tossed in for the small banks. It does nothing for communities. I urge the Subcommittees to reject the bill for the narrow, special interest pleading that it is.

Full testimony below…

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Written Testimony of Adam J. Levitin