Hank Johnson: “I thank the gentleman from Michigan for the time. Mr. Chairman, I rise in opposition to H.R. 732, which would prohibit…”

“I thank the gentleman from Michigan for the time. Mr. Chairman, I rise in opposition to H.R. 732, which would prohibit the U.S. Government from entering into settlement agreements or enforcing settlement agreements if the settlement agreement includes a term that provides a payment to be made to a third party. In the class action context, these donations are known as cy-pres. Under existing laws, settlements from Federal enforcement actions can include payments to third parties to advance programs that assist with recovery, benefits, and relief for communities harmed by lawbreakers to the extent such payments further the objectives of the enforcement action. This bill would cut that ability off. It cuts off any payments to third parties other than individualized restitution and other forms of direct payment for actual harm. That restriction would handcuff Federal enforcement officials from actually doing justice. This legislation arose out of the Wall Street too-big-to-fail episode in 2008, which resulted in the Great Recession, where millions of Americans lost their homes to foreclosure because of the actions of these too-big-to-fail banks insofar as the subprime mortgage crisis is concerned. So the Department of Justice sued these big banks, which, by the way, have continued to just get bigger and bigger after they received their Wall Street bailout, and the American people who lost their homes did not receive a bailout.…”