CONYERS Floor Statement In Opposition To H.R. 732, the "Stop Settlement Slush Funds Act of 2017"

Dean of the U.S. House
of Representatives
John Conyers, Jr.

H.R. 732, the “Stop Settlement Slush Funds Act of 2017,” would prohibit the federal government from entering into or enforcing any settlement agreement requiring donations to remediate harms that are not “directly and proximately” caused by a wrongdoer’s unlawful conduct.

I oppose H.R. 732 for several reasons.  

To begin with, the bill would prohibit these types of settlement agreements even though they have been successfully used to remedy various harms, particularly those caused by reckless corporate actors. 

For example, these settlement agreements helped facilitate an effective and comprehensive response to the predatory and fraudulent mortgage lending activities of financial institutions that nearly caused the economic collapse of our Nation and that led to the Great Recession. 

In fact, settlement agreements with two of these culpable financial institutions—Bank of America and Citigroup—required a donation of less than 1% of the overall settlement amount to fund foreclosure prevention and remediation programs to help harmed consumers.

Contrary to the Majority’s claim, the Justice Department did not use any of these settlement agreements to fund “activist groups.”

Notwithstanding the production of hundreds of pages of documents by the Justice Department, along with hundreds of pages of documents produced by private parties, we have not seen a shred of evidence that the government included unlawful or politically motivated terms in its settlement agreements with Bank of America or Citigroup.

The Majority also asserts that these settlement agreements are used by the Justice Department and other agencies to circumvent the congressional appropriations process. 

But, existing law already prevents agencies from augmenting their own funds. By law, donations included in settlement agreements must have a clear nexus to the prosecutorial objectives of the enforcement agency.

And, both the Government Accountability Office and the Congressional Research Service have concluded that settlement agreements providing for secondary remediation do not violate Congress’ constitutional power of the purse.

Finally, H.R. 732 would prevent the remediation of systemic harms in civil and criminal enforcement actions.

These settlement agreements allow parties to resolve their civil or criminal liability by voluntarily remediating the harms caused by their unlawful conduct. 

For some types of unlawful conduct—such as discrimination based on race or religion—secondary remediation of harms may be the only remedy available for systemic violations of the law.

The victims of such conduct are typically not themselves parties to the underlying action.

Therefore, secondary remediation in the form of voluntary compliance and training programs serves as an important tool in these cases to protect victims of discrimination. Yet, H.R. 732 would effectively prohibit such relief.

Given these serious problems and others presented by the bill, I strongly oppose H.R. 732, and I reserve the balance of my time.

H.R. 732, the “Stop Settlement Slush Funds Act of 2017” by Beverly Tran on Scribd

Voting is beautiful, be beautiful ~ vote.©

CONYERS Statement For Judiciary Markup Of H.R. 1667, The "Financial Institution Bankruptcy Act of 2017"

Dean of the U.S. House
of Representatives
John Conyers, Jr.

Mr. Chairman --  As you know, I am an original cosponsor of H.R. 1677, the “Financial Institution Bankruptcy Act of 2017.”  I agreed to cosponsor this legislation for several reasons.

To begin with, H.R. 1667 addresses a real need – recognized by regulatory agencies, bankruptcy experts, and the private sector – that the bankruptcy law must be amended so that it can expeditiously restore trust in the financial marketplace after the collapse of a systemically significant financial institution.

As many recall, the failure of Lehman Brothers and subsequent bankruptcy in 2008 caused a worldwide freeze on the availability of credit. This, in turn, triggered the near collapse of our Nation’s economy and clearly revealed that current bankruptcy law is ill-equipped to deal with complex financial institutions in economic distress.

H.R. 1667 would establish a specialized form of bankruptcy relief designed to facilitate the expeditious resolution of a large, systemically significant financial institution. 

Under the bill, the debtor’s operating subsidiaries would continue to function outside of bankruptcy, while the debtor’s principal assets, such as its secured property, financial contracts, and the stock of its subsidiaries, would be transferred to a temporary “bridge company.”

The bridge company, under the guidance of a trustee, would then liquidate these assets to pay the claims of the debtor’s creditors.  The bill would also temporarily prevent parties from exercising their rights in certain qualified financial contracts.  

Each critical step of this process would be done under the supervision of a bankruptcy judge and subject to appeal. 

Another reason why I support this bill is that it appropriately recognizes the important role the Dodd-Frank Act has in the regulation of large financial institutions.   

Without doubt, the Great Recession was a direct result of the regulatory equivalent of the Wild West.      

The Dodd-Frank Act goes a long way toward reinvigorating a regulatory system that makes the financial marketplace more accountable and, hopefully, more resilient.

In particular, Title II of the Dodd-Frank Act establishes a mandatory resolution process to wind down large financial institutions, which is a critical enforcement tool for bank regulators to ensure compliance with the Act’s heightened regulatory requirements.

H.R. 1667 is an excellent complement to Dodd-Frank Act’s resolution process and will help facilitate the rapid administration of a debtor’s assets in an orderly fashion that maximizes value and minimizes disruption to the financial marketplace. 

Finally, I am pleased to note that H.R. 1667 is the product of a very collaborative, inclusive, and deliberative process, which should be the norm, not the exception when it comes to drafting legislation. 

While an excellent measure, the bill unfortunately does not include any provision allowing the federal government to be a lender of last resort, which nearly every expert recognizes is a necessary element to ensure financial stability.

I recognize, however, that this is an issue not within the jurisdiction of the Judiciary Committee. 

Accordingly, I support H.R. 1667 and I yield back the balance of my time.

Voting is beautiful, be beautiful ~ vote.©

GOP Economics: Export American Jobs Rather Than American Products

By John Conyers, Jr.

Dean of the U.S. House
of Represesntatives
John Conyers, Jr.

Earlier this year, GOP standard-bearers Paul Ryan and Ted Cruz penned an op-ed in the Wall Street Journal highlighting their support for the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership, two massive trade deals with Asia and Europe. Congressman Ryan and Senator Cruz built their argument on a simple premise: Trade is good for exports. "These two agreements," wrote Ryan and Cruz, "would mean greater access to a billion customers for American manufacturers, farmers and ranchers."

So it's curious that -- given this supposed emphasis on exports -- the party of Paul Ryan and Ted Cruz is now fighting hard to destroy one of our main instruments for promoting the sale of American products to foreign markets: the Export-Import bank. This 81-year-old institution, which helps U.S. firms finance export operations, sustained 164,000 export-related American jobs last year and has created orsustained 1.3 million private sector jobs since 2009. In sharp contrast to Ryan and Cruz's two beloved trade agreements with Asia and Europe -- which are nearly certain to cost American jobs and undercut workers' livelihoods -- the Export-Import Bank operates at no cost to taxpayers.

On June 30th, just as Congress was quietly passing legislation to "Fast Track" the trade agreements over widespread Democratic objections, GOP leaders allowed the Export-Import Bank's authorization to expire. The bank is now temporarily out of commission, and Republicans show no interest in allowing a vote to revive it. 

When Franklin Roosevelt created the Export-Import bank during one of the darkest periods of the Great Depression, he was addressing the need for a coherent national economic strategy to promote job creation and livable wages. By providing loans at low interest rates to foreign entities to buy American goods, the federal government could, he reasoned, directly support domestic job creation and living standards in a cost-effective way. This vision has been borne out over the last eight decades. The bank had been an important part of our national economic strategy since foreign countries have often demanded financing as a precondition for importing American goods. Foreign competitors including China have created and expanded their own export-import banks to compete with the United States. Last year, the Export-Import bank actually returned $675 million to our federal Treasury, mostly through the interest and other fees it charges on its loans.

In rejecting federal export promotion tools, rejecting investments in highways and green energy, and rejecting essential funding for education and healthcare, the Republicans are left with just one element of an economic strategy: NAFTA-style trade agreements that force U.S. workers into direct competition with workers in countries like Vietnam, where the minimum wage runs below 60 cents per hour. As economists David Autor, David Dorn and Gordon Hanson demonstrated in their research on U.S.-China trade relations, increasing direct competition with large low-wage countries increases unemployment and reduces wages in the United States. Deals like the Trans-Pacific Partnership simply empower multinational corporations with maximum influence to shape rules and standards at the expense of everyone else. In short, under the GOP economic strategy, there's just one sure thing we'll export to the rest of the world: American jobs. 

While quite a bit has changed in the 81 years since Franklin Roosevelt launched the Export-Import Bank, one fact remains the same: America needs a coherent national economic strategy focused on raising wages and living standards. We can implement such a strategy by investing in education, innovation, infrastructure, sensible export promotion, and a strong safety net--the genuine determinants of success in a competitive global economy. Having seen the consequences of the GOP's cut-and-run economics, Americans are ready for an affirmative agenda.

Voting is beautiful, be beautiful ~ vote.©