WASHINGTON -- A House Banking subcommittee approved legislation Wednesday that would let private citizens act like bounty hunters on behalf of the Federal Deposit Insurance Corp.
The bounty-hunter provision is part of a legislative effort to improve collection of judgments against individuals for violations of bank laws and regulations.
People who filed successful federal actions on behalf of the FDIC could keep 30% of the first $1 million collected and lesser percentages of larger amounts.
The bill, approved on a voice vote of the subcommittee on financial institutions, would also give authorities new powers to collect on judgments and would allow the government to seize assets before obtaining a judgment.
Prospects Unclear
One co-sponsor, Rep. Chalmers Wylie, R-Ohio, expressed hope that the bill could be considered soon under expedited procedures.
But Rep. Charles E. Schumer, D-N.Y., warned that the bill is headed for trouble in the Judiciary Committee.
"I can't support the bill yet," said Rep. Schumer, chairman of the Judiciary subcommittee scheduled to take up the bill after it clears the full banking committee.
Fairness of Attachments
In particular, he said, he is concerned about the fairness of pre-judgment attachments.
"There has to be something in the statute that prevents people who make illicit millions from spending it or stashing it away," Rep. Schumer said.
"But when the assets of major enterprises are seized" and those accused see no way out but to plead guilty, "that doesn't strike me as fair," he said.
However, Rep. Frank Annunzio, D-Ill., the bill's primary sponsor, told Rep. Schumer that "these are extraordinary times."
"The American taxpayers have been cheated out of thousands and thousands - millions - of dollars," he said.
Immediate Restitution
Other provisions of the bill would make all court-ordered restitution due immediately.
Any restitution order would be treated as a lien against all of the defendant's property; courts would be authorized to appoint a temporary receiver to administer the defendant's assets to ensure payment of the claim.
In testimony Tuesday, bank regulators told the panel that the greatest problem in collecting court-ordered restitution has been finding the money.
Once convicted, they said, criminals often squander their assets or hide them from the government through transfer to relatives or overseas.
The Department of Justice, for example, reported that as of January it had collected only 4% of the $403 million in ordered restitution.
