Written Testimony of David Min Before the Oversight and Investigations Subcommittee of the House Financial Services Committee, 'Settling the Question: Did Bank Settlement Agreements Subvert Congressional Appropriations Powers?'

Abstract

Written testimony on the question of whether the recent settlements negotiated by the U.S. Department of Justice with various financial institutions alleged to have engaged in fraud and misrepresentation related to the structuring and sale of residential mortgage-backed securities bypassed Congress's appropriations authority. I point out that these settlements (in particular, provisions allowing banks to donate to charitable groups engaged in foreclosure prevention and neighborhood stabilization efforts) are clearly permissible under the Miscellaneous Receipts Act, and further argue that they serve a number of important public policy goals that greatly outweigh the relatively minor (and largely theoretical) concerns that they raise.