Written Testimony of
Adam J. Levitin
Professor of Law
Georgetown University Law Center
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
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…