To provide for data-mining reports to Congress.

NATIONAL CONSUMER CREDIT REPORTING SYSTEM IMPROVEMENT ACT OF 2003--
Continued

The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, under the order, the Senator from California
has the floor. If I may propound a unanimous consent request, the
Senator from California is going to speak for approximately another
half hour or thereabouts. Following that, Senator Durbin and Senator
McCain wish to speak on matters unrelated to the matter now before the
Senate. To save a lot of confusion, I ask unanimous consent that
following the remarks of the Senator from California, Senator Nelson of
Florida be recognized for up to 3 minutes; following that, the Senator
from Illinois, Mr. Durbin, be recognized for up to 15 minutes;
following that, the Senator from Arizona, Mr. McCain, be recognized for
up to 20 minutes.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
Mr. McCAIN. Mr. President, we usually go back and forth, I tell my
friend.
Mr. REID. The Senator from Arizona wishes to go before Senator
Durbin?
Mr. McCAIN. Yes.
Mr. REID. That is fine. I thought it was the reverse order. I ask
that the unanimous consent request be modified so that Senator McCain
be recognized prior to Senator Durbin.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. FEINSTEIN. Reserving the right to object.
The PRESIDING OFFICER. The Senator from California is to be
recognized.
Mrs. FEINSTEIN. Mr. President, the Senator from Florida has asked if
I would yield for just a short time before I begin. Is that agreeable?
Mr. REID. That is in the unanimous consent order. It is up to the
leadership. However, after Senator Feinstein completes her statement
and Senator Nelson completes his statement, I rather doubt they could
do that, but somebody could move for a vote prior to that time. I don't
suggest anyone doing so. It could happen.
The PRESIDING OFFICER. The Senator from California.
Mrs. FEINSTEIN. I thank the Chair.
Mr. President, is it possible for me to yield for 3 minutes to the
Senator from Florida?
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 2054

Mr. NELSON of Florida. Mr. President, I rise to support the amendment
of the Senator from California and to point out that I think the
committee has done a very good job on the underlying bill. They address
the question of medical privacy in the bill where a big holding company
might have a subsidiary company, such as an insurance company, and an
individual, when they get a life insurance policy, will have to get a
doctor's examination, so that in the bosom of that health insurance
company would be medical records. That health insurance company may be
owned by a bank.
What the underlying bill does is protect against someone having their
personally identifiable medical information shared throughout that
holding company and shared with those who would want to market that
personally identifiable medical information.
However, the underlying bill does not protect on the personally
identifiable financial information, so that one part of a holding
company could have personally identifiable financial information such
as how much you take out of your ATM, what kind of purchases you make
on your credit card, what time of day or what time of the week you go
and make deposits in your ATM or take out from your ATM. Those things
that are personally identifiable ought to be private unless the
individual consumer says they are willing to have that information
shared among the holding companies.
That is one of the things the amendment of the Senator from
California addresses which, if we are going to take privacy seriously,
we need to address. That is why I support the amendment of the Senator
from California.
I yield the floor.
Mrs. FEINSTEIN. I thank the Senator from Florida and I thank the
Chair for allowing this opportunity for the Senator to make a
statement. I think he is referring to an amendment that I will
introduce at a later time having to do with clearing up the health
definition in the bill.
The health definition in the bill is archaic. The vast majority of
states have adopted more fully inclusive definitions, and we would like
to have that definition in the bill.
Prior to the break for lunch, I was beginning to explain why the bill
before us has a weak privacy standard on affiliate sharing.
Specifically, the underlying bill permits financial institutions to
share a customer's transaction and experience information with
affiliates with few, if any, restrictions. As I stated, transaction and
experience information could include extremely sensitive information
about individuals such as their bank account balance and data mined
from their check or credit accounts or where they buy goods.
If consumers cannot preserve the privacy of their bank balances or
the places they go to make purchases, they do not have meaningful
privacy protections. That is the weak privacy standard that will become
the national norm if this bill passes the way in which it is
envisioned.
Supporters of the existing weak standard argue that America's credit
environment has thrived since 1996. So they say, why mess with a system
that is working? I challenge that assertion.
First, because transaction and experience information remains
undefined. As I pointed out before lunch, we asked the CRS to look at
current law. We asked them how they would define ``transaction and
experience'' information. They said it has never been defined. So it is
questionable whether any privacy regime at all exists for the bulk of
affiliate-sharing practices.

[[Page S13864]]

Secondly, identity theft has emerged as a national epidemic in the
last 7 years. Both the chairman and the ranking member of this
committee have done their utmost and been very receptive to trying to
enact legislation to prevent identity theft.

The Federal Trade Commission recently published a study that
suggested 9.9 million Americans are victims of identity theft every
year. The cost is $50 billion annually. Studies have shown that much
identity theft occurs in the workplace. So increased affiliate sharing
will likely facilitate this crime. Potentially, thousands of employees
in affiliated businesses will have increased access to the currency of
identity theft, and that is Social Security numbers and other sensitive
identifying information, such as date and place of birth and mother's
maiden name.
In her testimony before the Senate Banking Committee, Vermont
Assistant Attorney General Julie Brill directly linked affiliate
sharing to identity theft. Here is what she said:

Many identity fraud cases stem from the perpetrator's
purchase of consumers' personal information from commercial
data brokers. Financial institutions' information sharing
practices contribute to the risk of identity theft by greatly
expanding the opportunity for thieves to obtain access to
sensitive personal information.

So that is what we are doing here. Now, this is a prosecutor who
should know. This is what she deals with. So why broaden the scope and
opportunity for identity theft to take place?
Assistant Attorney General Brill also cited work by researchers at
Michigan State University who studied 1,000 cases of identity theft and
found that 50 percent of the victims traced the theft of information to
an employee of a company compiling personal data on individuals.
Third, it is an open question whether affiliate sharing has offered
any price or service advantage to customers. According to an article by
Janet Gertz in the San Diego Law Journal, there is some evidence that
businesses use affiliate sharing to extract concessions from consumers.
Let me quote her:

By profiling consumers, financial institutions can predict
an individual's demand and price point sensitivity and thus
can alter the balance of power in their price and value
negotiations with that individual. Statistics indicate that
the power shift facilitated by predictive profiling has
proven highly profitable for the financial services industry.
However, there is little evidence that any of these profits
or cost savings are being passed on to consumers.

Just recently, for example, the Federal Reserve issued a report on
financial service fees and services showing that fees at larger
institutions are generally increasing and services are decreasing.
So we are letting exist this whole area where businesses buy other
businesses just to share consumers' data? And the consumer has no
control over their personal data. That is wrong.
My colleagues may hear during the debate on this amendment that the
affiliate sharing problem is addressed because S. 1753 allows consumers
to opt out of certain marketing solicitations by affiliates.
I want to go into this because this has been widely circulated by the
financial institutions. Senator Boxer and I were just questioned about
it at a press conference we held. In truth, these restrictions that
they say are there are grossly inadequate, and they barely scratch the
surface of the problem.
Let me describe some of the uses of affiliate sharing that the bill
does permit. First, internal credit reports: The bill permits companies
to use transaction and experience information to create internal credit
reports.
Martin Wong, general counsel of Citigroup's Global Consumer Group,
testified before the Senate Banking Committee in June that:

Citigroup is able to use the credit information and
transaction histories that we collect from affiliates to
create internal credit scores and models that help determine
a customer's eligibility for credit.

In other words, a bank can use transaction and experience from its
affiliates to determine if it is going to charge a higher interest rate
to certain credit card customers and give perks to others or to deny a
credit applicant a credit card.
In contrast to a traditional credit card report, a consumer has no
right of access to transaction and experience information used by a
bank to deny him or her credit. Nor would a consumer have any right to
correct any errors made in compilation of these internal credit
reports. So one can have their credit changed even without their
knowledge. It can be wrong, and the person would not know about it. It
all happens in this secret world of affiliate sharing.
Similarly, a health insurer could deny a customer a health insurance
or life insurance policy based on transaction and experience
information. For example, a life insurer might reject an insurance
applicant because of evidence in his card or check transaction record
that he visits liquor stores frequently, buys products at stores
selling mountain climbing equipment and therefore is at risk of injury,
or has purchased a gun.
These are just indications. These are just areas. But you can see
where this thing is going. Essentially, consumers can be denied
products or services and they will have no ability to determine why the
denial occurred.
The bill would permit prospective or current employers, without an
individual's knowledge or consent, to mine information about the
individual from other affiliates with whom the individual does
business. This could be used for hiring decisions, disciplinary action,
job evaluations, or other employment purposes. Again, all of this goes
on simply because you bank with a given bank. You think all these
things are protected and in fact they are data-mining checks, where you
go, who you are paying. This information is going out to a whole host
of other companies, sometimes thousands of companies.
Some affiliates are offshore and American consumer protection laws do
not apply to those countries. As United States companies continue to
acquire affiliates overseas, consumers may not even be able to depend
on existing consumer protection laws to protect information that is
shared with an affiliate.
Earlier this month, and many of us read about it, a woman in
Pakistan, transcribing medical files for the University of California
Medical Center in San Francisco, threatened to post patient medical
records on the Internet unless she was paid more money. While we have
strict laws governing medical files in the United States, these laws
are virtually unenforceable overseas.
The Senate bill does not prevent affiliated companies from
accumulating and sharing uncomplimentary information about customers,
such as if they have filed for bankruptcy, do not pay their credit on
time, or complain a lot. This information can be used to push
unprofitable customers into a different tier of customer services.
Example, where there are longer waits for a customer representative, or
eliminate the customer altogether. All of this happens because of the
ease with which this information can be shared among commonly held
companies.
Let me give an example. Business Week magazine has reported that
Sanwa Bank gives A's to its best customers, but those whose profiles
show they will generate less revenues get C's from the bank. The bank
tends to charge those earning C's more fees, and is more likely to put
them on hold when they call in for service. This type of profiling
certainly can occur in the context of affiliate sharing.
Even in the area of marketing, this bill is grossly inadequate. It
purports to give consumers the right to opt out of the sharing of
transaction and experience information for marketing, but there are
loopholes. The institutions are going around the Hill today, pointing
out they already do protect this.
Let me talk for a minute about the loopholes. The bill excludes
companies from the opt-out if they have a preexisting business
relationship with the consumer.
What is a preexisting business relationship? Your guess is as good as
mine because the bill doesn't define it. Presumably, a bank could argue
it has a preexisting relationship with a consumer if a consumer came
into the bank 5 years ago to cash a check, or even just made an inquiry
about an account. Additionally, if a consumer does exercise the opt-out
for marketing, which is in the bill, the opt-out expires after 5 years.
At that time, affiliates can then start marketing again to the
customer.

[[Page S13865]]

I find it disturbing that the supporters of the bill want to
permanently preempt States from enacting stronger affiliate-sharing
laws for credit reporting purposes, but only think customers'
preferences should be recognized for 5 years.
Last, but perhaps most fundamental, the Senate bill denies the
consumer the ability to define the parameters of his or her
relationship with a company, and this, I think, is really important.
Under the current bill, when a consumer purchases a product from a
megacorporation, the consumer automatically, without his or her choice
or consent, makes his or her information available to hundreds of
companies. Lawyers call this type of relationship, where one side has
all the bargaining power, an adhesion contract. Some courts rule these
types of contracts invalid because they do not reflect arm's-length
negotiation and could result in unconscionable terms for the consumer.

Our amendment is a substitute to the affiliate-sharing language in S.
1753. Supporters of the underlying bill claim the Government needs a
viable national standard to ensure the efficiency of our credit market.
This amendment provides such a standard. It gives consumers all across
the country--in Alabama, in Maryland, in Kentucky, in Colorado, in
Washington--the opportunity to have some say, some choice in how their
personal data is shared. With the privacy of Americans more at risk
because of the latest technological developments and identity theft,
with privacy invasions at its core becoming the fastest growing white-
collar crime in the United States, we believe strong national standards
are critical.
Our amendment reflects the terms of the California privacy law, which
the California Bankers Association just a very short time ago called
reasonable and workable, and are now lobbying against.
I read the letter of the author of the California bill, which I think
irrefutably states the turnaround the financial institutions have done
in this opt-out provision. Jim Bruner of the Securities Industry
Association stated at the press conference announcing the agreement on
California law on August 14, just a short time ago:

``While we would have preferred a national standard,'' [the
California law] ``encompasses all aspects of the workability
needed to ensure protection of consumers' privacy.''

And then they turned around and did a 180.
Jamie Clark of the California Bankers Association said at the same
press conference that the banks:
``. . . have no objection to the measure passing'' and
would tell its supporters to vote for the bill.

Clark added:

``We prefer a national standard so that you have a uniform
operating environment.''

But they didn't tell anyone in California, which has just passed a
new law which provides opt-out, that they could not live with the opt-
out standard.
They did not come back here saying the law was sloppily drafted. They
liked it then. When you do the law back here, all of a sudden it is
sloppily drafted.
Diane Colborn of the Personal Insurance Federation called the
California bill ``a balanced measure that will provide meaningful
privacy protections to consumers while also addressing the workability
concerns that our members and customers had.''
The California credit unions supported this legislation and still do.
I thank them for their support.
This amendment offers businesses in California and around the country
the chance to get a moderate, reasonable, uniform national standard on
personal privacy.
Under the amendment, companies would be required to give consumers
notice of their intent to share transactions and experience and other
information with their affiliates. Consumers would then have the
opportunity to opt out--to say, I don't want you to do it, or to do
nothing at which point the information could be shared. The company
would be notified and would give them, I hope, a choice of whether
their most personal information is shared among affiliates.
This amendment would also allow closely related affiliates in the
same line of business to share information with each other.
Specifically, companies would not need to provide an opt-out choice if
one, the affiliate is regulated by the same functional regulator--an
example of that is institutions that regulate financial service
institutions such as the Office of Thrift Supervision and the Office of
the Comptroller of the Currency would be considered the same functional
regulator; two, the affiliate engages in the same line of business. An
example of that is the selling of securities, banking services, and
insurance would all be considered independent lines of business; three,
the affiliate shares a common brand identification; and four, the
affiliate is a wholly owned subsidiary of the same company.
The amendment also has numerous other exceptions that were ironed out
after 4 years of negotiation in California to meet the practical needs
of business. The exceptions include the following: No. 1, information
maintained in common databases. This is another false rumor that is
being spread on this bill. This amendment allows employees of an
affiliate to have access to information maintained in a common
information system or database so long as the information is not
accessed, disclosed, or used.
That is the key. It doesn't require new databases. It doesn't mess up
their database. It just says you can't access it if the individual opts
out.
This exception is necessary because we don't want to disadvantage
companies that have streamlined operations by combining databases and
other information technology resources. On the other hand, this
amendment still permits consumers to have a choice over whether
information in the database can be used for secondary purposes.
This amendment, as the Gramm-Leach-Bliley and California law, has an
exception for transactional uses of information.
Information sharing ``necessary to affect, administer or enforce a
transaction requested or authored by the consumer'' or ``with the
consent or at the direction of the consumer'' is excluded from the opt-
out.
Our amendment has exceptions for affiliate sharing of personal
information that is necessary for companies to effectively manage their
operations. For example, for security purposes, institutional risk
control, and to respond to customer disputes or inquiries.
Proponents for unrestricted sharing of affiliate information argue
that it is needed to solve identity theft. They correctly point out
that companies can track unlawful purchases or suspicious activity by
monitoring unusual account activity, change of address requests, and
other suspicious behavior.
This amendment explicitly allows for affiliates to share information
``to protect against or prevent actual or potential fraud, identify
theft,'' et cetera.
In addition, the amendment has exceptions relating to a business, a
merger, a sale, a transfer; to comply with Federal, State, or local
laws; for outsourcing functions with vendors such as data processing or
billing; and, to identify or locate missing and abducted children,
witnesses, criminals and fugitives, parties to lawsuits, parents
delinquent in child support payments, organ and bone marrow donors,
pension fund beneficiaries, and missing heirs, or to report known or
suspected instance of elder or dependent adult financial abuses; and an
exception is also carved out for the United States of America PATRIOT
Act.
I deeply believe that without this opt-out the National Consumer
Credit Reporting System Improvement Act would create a permanent and
unworkable Federal standard that would set back the privacy of personal
information and allow sensitive personal data to be moved through
dozens, hundreds, and, in some cases, thousands of other companies.
This amendment is quite simple. It is about consumer choice.
I am puzzled at the ferocity with which the financial institutions
and the banks are lobbying against this amendment. They serve people.
That is what they are there to do--serve people. Shouldn't someone know
if this information is being marketed within the loophole? Shouldn't
someone have the opportunity to say, I don't want you to use my
information? In fact, I think I am going to change banks, if they do
this. Find a bank that won't do it. That would be my advice to
everybody.
I think consumers should be given the opportunity to tell a bank they
don't want their information shared with other companies. This is
America. We should have that freedom. We should have that right. If you
vote for this amendment, Americans will.
Do I have a few more minutes? If I could quickly set aside this
amendment and send one other amendment to the desk, I will not speak to
it.
I am happy to wait. I will yield the floor at this time and do it
later.
Thank you very much.
Mr. McCAIN. Mr. President, I don't mind waiting a few minutes if the
Senator from California wishes to proceed.

[[Page S13866]]

Mrs. FEINSTEIN. No. That is all right.
The PRESIDING OFFICER. Under the previous order, the Senator from
Arizona has the floor. The Senator from Arizona.

U.S.-Russia Relationship

Mr. McCAIN. Mr. President, a creeping coup against the forces of
democracy and market capitalism in Russia is threatening the foundation
of the U.S.-Russia relationship and raising the specter of a new era of
cold peace between Washington and Moscow. The new authoritarianism in
Russia is more than a test of America's ability to defend universal
values that have taken shallow root since the Soviet empire collapsed.
It presents a fundamental challenge to American interests across
Eurasia. The United States cannot enjoy a normal relationship, much
less a partnership, with a country that increasingly appears to have
more in common with its Soviet and czarist predecessors than with the
modern state Vladimir Putin claims to aspire to build.
On October 25, masked Russian security agents from the FSB, the
successor to the KGB, stormed Russian businessman Mikhail
Khodorkovsky's private plane during a stop in Siberia. He now sits in
prison awaiting trial, accused of tax evasion, fraud, forgery, and
embezzlement. Russia's richest man, founder and chief executive of its
most successful private company, a leader in incorporating Western
principles of accounting and transparency into business practice, and a
generous donor to charity, Khodorkovsky had committed what in the
Kremlin's eyes is the worst crime of all: supporting the political
opposition to President Putin. Such an alternative center of power
could threaten the Kremlin's supreme political control.
Upon assuming power in 2000, President Putin announced a now-famous
ultimatum to Russia's top business leaders, whose fortunes were made by
acquiring control of Russian assets privatized at fire-sale prices in
the 1990s. President Putin said to them: stay out of political life and
keep your fortune, or risk it by engaging in political activity. Most
of the oligarchs chose to remain quiet. Three did not. Business tycoons
Boris Berezovsky and Vladimir Gusinsky were forced into exile as a
result of their support for opposition political parties and free
media. Mikhail Khodorkovsky actually attempted to exercise basic
political freedoms guaranteed, in theory, for all Russians. He has been
thrown into jail as a result.
Admittedly, Messrs. Gusinsky, Berezovsky, and Khodorkovsky may not
provide to proponents of democracy and free markets in Russia the most
laudable personal histories upon which to wage a resolute defense of
our democratic principles. But failure to defend them would acknowledge
exactly what the Kremlin cynically alleges: that they are being
prosecuted because of the way they made their money. What has caused
these three Russian tycoons to be singled out are their activities in
support of opposition political parties and free media. In reality, a
concerted campaign to clean up Russian politics and society would reach
into every corner of the Kremlin and every boardroom in Russia, but
that is not happening. For better or for worse, there is a consensus in
Russian society that the past should remain in the past as Russia moves
forward. If Russian business and government leaders are in fact going
to be prosecuted for their conduct a decade ago, then perhaps the
former KGB officer named Vladimir Putin who assisted Stasi leaders and
Eric Honnecker in oppressing the German people should answer for his
crimes.
Mikhail Khodorkovsky's arrest, like the politically motivated
indictments of Berezovsky and Gusinsky, should be seen not as
prosecution for financial dealings done a decade ago--which would
implicate thousands of Russian businessmen and political figures--but
as part of a larger contest between the forces of statist control and a
liberal-oligarchic elite. Who wins will go a long way toward
determining whether Russia reverts to the traditions of its czarist-
imperial past or charts a new course as part of an integrating, liberal
international order. The consequences of this struggle, for both the
Russian people and the world, will be profound.
For the Russian people, President Putin's rule has been characterized
by the dismantling of Russia's independent media, a fierce crackdown on
the political opposition, and the prosecution of a bloody war against
Chechnya's civilian population. The ascent of former KGB officers
throughout Russia's ministries and in the Kremlin has enabled Putin to
use the long arm of the state to crush internal dissent, silence
opposing political voices, and subdue free media. During the first
Chechen war, more Russians got their news from Vladimir Gusinsky's
independent NTV than from state media. Today, there is almost no free
media in Russia. Intimidation, coercion, assassination of journalists,
and armed raids by the security services have put most independent
media outlets out of business. Beatings and assassinations of
journalists recall not the new Russia but the dark legacy of the Soviet
past. Those independent media outlets that remain feel forced to
practice the kind of self-censorship that characterized the Soviet
Union. Today, most Russians who read newspapers or tune into television
or radio hear only the voice of the Russian state--as they did under
totalitarian rule.
In a land where financial support for opposition political parties
comes largely from business, the arrest of Mikhail Khodorkovsky, like
the indictments of Berezovsky and Gusinsky, sends a chillingly clear
message to Russia's business community that their assets are safe only
if they steer clear of politics. Putin himself made this same threat to
the oligarchs in 2000; it is clear that his government is carrying it
out, and that Khodorkovsky is the latest victim.
Political assassinations also demonstrate the risk of speaking out
against state power. Earlier this year, State Duma deputy Sergei
Yushenkov, who had been investigating potential connections between the
1999 Moscow apartment bombings and the start of the second Chechen war,
was killed outside his Moscow apartment. State Duma deputy Yuri
Shendoshokhtin, who had been looking into the role of the FSB in the
Moscow bombings as well as a scandal surrounding the involvement of FSB
officers in illegal trade, was also killed in mysterious circumstances.
Both crimes remain unsolved. In today's Russia--as in Soviet Russia, as
in czarist Russia--the state uses its power to suppress political
dissent. The arrest of Mikhail Khodorkovsky fits in a long tradition of
political arrest and persecution stretching across the vast dictatorial
tundra of Russian history.
Under President Putin, Russian citizens in Chechnya have suffered
crimes against humanity at the hands of Russian military forces. It was
during Mr. Putin's tenure as Prime Minister in 1999 that he launched
the Second Chechen War following the Moscow apartment bombings. There
remain credible allegations that Russia's FSB had a hand in carrying
out these attacks. Mr. Putin ascended to the presidency in 2000 by
pointing a finger at the Chechens for committing these crimes,
launching a new military campaign in Chechnya, and riding a frenzy of
public anger into office. Since then, between 10 and 20,000 Chechen
civilians have been killed and hundreds of thousands displaced by
Russian security forces. At Putin's direction, the Kremlin recently
stage-managed an ``election'' in Chechnya that put Moscow's hand-picked
candidate in power. The principal voters were Russian conscripts forced
to serve in Chechnya. Moscow has made no effort to address the
political grievances of a population increasingly radicalized by the
brutality of Russian rule. Yes, there are Chechen terrorists, but there
are many Chechens who took up arms only after the atrocities committed
by Russian forces serving first under Boris Yeltsin's and then Putin's
orders.

In short, Mr. President, I am worried that what we are seeing in Mr.
Putin's government is a continuation of 400 years of autocratic state
control, and repression. Since the end of the Cold War, many Western
observers have optimistically argued that the way Russia is governed
has fundamentally changed. Sadly, this appears not to be true. Whether
ruled by the czars, Stalin, Brezhnev, or Putin, the Russian state has
remained supreme within Russian society. It seeks fundamentally to
control society, not to answer to it. The people serve the government,

[[Page S13867]]

not the reverse. This is not the behavior of a modern European nation;
it is a form of unenlightened despotism cloaked in the mantle of
international respectability, which Russia derives principally from its
relations with other great powers--particularly the United States.
The ascent of former KGB officers to positions of power throughout
the structures of the Russian state underscores this trend. Apparently
KGB veterans Igor Sechin and General Viktor Ivanov, both deputy chiefs
of presidential administration in the Kremlin, masterminded the assault
on Mr. Khodorkovsky. I would like to congratulate the KGB for arresting
one of the most pro-Western business figures in Russia today--someone
whose personal and corporate behavior, through charitable giving and
adopting Western standards of business, have brought more credit to
Russia in the last three years than anything the Russian government has
done. Meanwhile, the FSB has been unable to solve the murder of leading
independent journalists. It has failed to bring to justice any suspects
in the murder of democratic politicians. It has not been able to
identify a single case of corruption inside the Russian government. Not
a single Russian has been held to account for committing crimes against
humanity in the Soviet Gulag. The FSB can't do any of that--but it can
arrest Mikhail Khodorkovsky. What brave men they must be to kick down
the doors of a private airplane and arrest an unarmed man.
The FSB's dominance in the Russian Government has renewed the specter
of the imperial temptation that has guided Russia's external relations
for centuries. For too many of Russia's neighbors, it is like the old
Beatles song: ``Back in the USSR.'' Under President Putin, Russia has
refused to comply with the terms of the Treaty on Conventional Forces
in Europe. Russian troops occupy parts of Georgia and Moldova. Russia
has effectively annexed the Georgian province of Abkhazia, which it has
occupied for a decade. Moscow has supported attempts to overthrow
neighboring governments that appear too independent of Russia's
embrace. Russian naval forces recently attempted to assert control in
the channel connecting the Sea of Azov and the Black Sea from Ukraine.
Russian secret services are credibly accused of meddling in elections
in Azerbaijan and Georgia. Russian agents are working to bring Ukraine
further into Moscow's orbit. Russian support sustains Europe's last
dictatorship in Belarus. And Moscow has attempted to cynically
manipulate Latvia's Russian minority and enforced its stranglehold on
energy supplies into Latvia in order to squeeze the democratic, pro-
American government in Riga.
Under President Putin, Russia has pursued a policy in its ``near
abroad'' that would create an empire of influence and submission, if
not outright control. On October 9, Russian Defense Minister Sergei
Ivanov declared that Russia reserves the right to intervene militarily
within the Commonwealth of Independent States in order to settle
disputes that cannot be resolved through negotiation. At the same press
conference, President Putin declared that the pipelines in Central Asia
and the Caucasus carrying oil and natural gas to the West were built by
the Soviet Union, and said it is Russia's prerogative to maintain them
in order to protect its national interests, ``even those parts of the
system that are beyond Russia's borders.'' In the runup to the war in
Afghanistan, President Putin was given great credit for ``allowing''
the United States to use the military facilities and airspace of
sovereign countries in Central Asia. But Russia has no more right to
speak for these countries than we do. The Putin Doctrine, asserting a
right to imperial intervention in Russia's ``near-abroad,'' coupled
with the ascendancy of the FSB, recalls a discredited Russian imperial
past whose victims number in the millions. Russia's assertion of
political control over its neighbors speaks not to a modern vision of
Russian reform and renewal, but appears to reflect a czarist impulse to
dominate neighboring populations. It is the international dimension of
rising state control at home.
The dramatic deterioration of democracy in Russia calls into question
the fundamental premises of our Russia policy since 1991. American
leaders must adapt U.S. policy to the realities of a Russian Government
that may be trending towards neo-imperialism abroad and authoritarian
control at home. It is time to face unpleasant facts about Russia.
Russia is moving in the wrong direction--rapidly. While the United
States undertakes a necessary and comprehensive review of our policy, I
believe Russia's privileged access to critical Euro-Atlantic
institutions should be suspended. This access was obtained with the
understanding that President Putin was committed to free markets, the
rule of law, pluralist democracy, journalistic freedom, and the lawful
constraint of the intelligence and security services. These now appear
to be false premises.
The Russian Government is not behaving in a manner that qualifies it
to belong in the club of industrialized democracies. The United States
is hosting the next G-8 Summit at King Island, Georgia, in June 2004.
Russia has been invited to participate and has been working its way in,
but President Putin's conduct at home and abroad has worked Russia out.
Putin's Russia should have no place at the next G-8 Summit.
Congress should not consider the repeal of the Jackson-Vanik
amendment for Russia. It would be incomprehensible to consider easing a
law created in response to Soviet repression when the Russian
Government is continuing a similar pattern of behavior. I will oppose
any effort to repeal Jackson-Vanik as long as Russia is moving in the
wrong direction.
To any American businesses contemplating investment in or trade with
Russia, I would simply say that this is not a place where the rule of
law and Western codes of conduct prevail. You invest at your peril.
Many Members of Congress have heard from U.S. businessmen who have lost
money in Russia due to the absence of the rule of law. The American
business community should consider itself warned: the Kremlin's recent
behavior is a clear signal that your investments are not safe. I call
on my own Government, including the Export-Import Bank and the Overseas
Private Investment Corporation, to cease all guarantees of investment
in Russia due to the unacceptable risk of state interference and
expropriation, as demonstrated by the Russian Government's actions.
American taxpayer dollars should not be used to subsidize U.S.
investment in Russia as long as the rule of the FSB prevails over the
rule of law.
Clearly, in personal meetings, the President of Russia attempts to
reassure the President of the United States that he is a fellow
democrat. An accumulation of evidence forces me to draw the opposite
conclusion. I hope I am wrong, but I am increasingly concerned that in
Mr. Putin's soul is the continuity of 400 years of Russian oppression.
Under President Putin's leadership, Russia looks to the West for
prosperity, technology, and modernity, but seems to be striving in
every way to keep the values of the West out of Russia. Far from having
a vision for Russia in which democracy and freedom and the rule of law
thrive, I fear President Putin may have a vision for Russia in which
the capricious power of the police at home, and the menacing weight of
subversion and intimidation abroad, guide the state. Administration
policy must recognize the cold realities of Putin's Russia.
The responsibilities that follow from this are clear: it is time for
a hardheaded and dispassionate reconsideration of American policy in
response to the resurgence of authoritarian forces in Moscow. It is
time to send a signal to President Putin's government that undemocratic
behavior will exclude Russia from the company of Western democracies.
The wholesale suppression of free media and political opposition cannot
be ignored. American policy must reflect the sobering conclusion that a
Russian Government which does not share our most basic values cannot be
a friend or partner and risks defining itself, through its own
behavior, as an adversary.
Mr. President, I thank the forbearance of my colleagues. I yield back
the remainder of my time and yield the floor.
The PRESIDING OFFICER (Mr. Crapo). Under the previous order, the
Senator from Illinois is recognized for 15 minutes.

[[Page S13868]]

Mr. DURBIN. Thank you, Mr. President. I appreciate the indulgence of
Chairman Shelby and Senator Sarbanes for this opportunity.
Mr. SARBANES. Will the Senator yield to me for just 30 seconds?
Mr. DURBIN. Yes.
Mr. SARBANES. Mr. President, we are having two major statements on
unrelated issues. We have an amendment pending. We are trying to work
through these amendments. We think there is an opportunity to dispatch
them in good order. So I certainly encourage people who want to speak
on the pending Feinstein amendment to come to the floor so they can be
heard and we can complete that debate and then move to a vote on or in
relationship to that amendment and then follow on with the other
amendments and move this bill toward completion.
I know there is no one in the Chamber wishing to speak now, and we
certainly think the Senator from Illinois ought to be able to offer his
statement, so this is not directed at him. I want to certainly assure
him of that. But as we proceed, thereafter, if we could follow along, I
think it would be very helpful.
The PRESIDING OFFICER. The Senator from Illinois.

Honoring and Protecting Our Armed Forces

Mr. DURBIN. Mr. President, America's burden in Iraq grew heavier over
the last 7 days. In that period of time, 27 American servicemen were
killed and 35 wounded. We were awakened to newspaper headlines on
Monday morning of: ``U.S. Copter Hit, With 16 Dead.''
On Sunday, I received the sad news that the National Guard helicopter
which was downed was attached to the 82nd Airborne Division and piloted
by 1LT Brian Slavenas from Genoa, IL. It was shot down by a surface-to-
air missile near Falluja in Iraq.
Press accounts report that the missile was likely a heat-seeking
missile because it hit the engine, but, thankfully, it did not explode.
The helicopter went out of control, and First Lieutenant Slavenas
clearly did the best he could at crash-landing the crippled aircraft.
Quite possibly he saved the lives of those who survived. Sadly, he did
not.
This morning, I called the Slavenas family expressing my sympathy for
the loss of their son. I have read the press accounts about his short
but eventful and full life and the love which his family and so many
others had for him.
This morning I heard interviews on National Public Radio of his
friends talking about a great young man--this 30-year-old helicopter
pilot. He had just graduated from college a few months ago. He enlisted
in the Army right after high school and, having completed that stint,
he enlisted in the National Guard and went to officer training school
and he became a helicopter pilot. He earned a degree in engineering
from the University of Illinois. Although Brian stood 6 feet 5 inches
tall, he was a gentle giant. He was an accomplished pianist. His
brother Marcus said, ``He was very generous, very patient with people.
I just loved being with him. He was my favorite person in the whole
world.''
I ask unanimous consent that these articles of tribute to Brian
Slavenas be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Chicago Sun-Times]

(By Dave McKinney)

His brothers and his father served in the military, but
when 1st Lt. Brian Slavenas was called to active duty earlier
this year, his family tried to discourage him from shipping
out. He could have resigned his commission in the Illinois
Army National Guard and skipped the deployment that carried
his aviation unit to Iraq, Despite his family's concerns, the
30-year-old helicopter pilot who had graduated from college a
few months earlier decided it was his duty to go overseas
with his outfit. On Monday, relatives gathered at the family
home in the tiny farm town of Genoa to mourn his death spoke
with pride--and some regret--about his decision to continue a
family tradition of military service.
Brian Slavenas died Sunday when his CH-47 Chinook
helicopter was shot down by shoulder-fired missiles in a
attack that killed 16 U.S. soldiers. ``We know he didn't have
to be there. But he chose to go and to serve his country,''
said his oldest brother, Eric Slavenas, 39 a U.S. Army
veteran who participated in the invasion of Grenada in 1983.
``I miss him. I wish he were still here,'' Eric added. ``But
I'm not going to go against his decision. I back him 100
percent.''
Brian wasn't eager to go to Iraq when he left in April,
other family members said. He had completed study at the
University of Illinois at Urbana-Champaign in December with
an engineering degree and was eager to get on with his
career. Still, he felt obligated to go overseas with his
unit. ``He wasn't keen on the idea but he said, `Once you're
in, you can't cop out,' '' said his dad, Ronald Slavenas, a
former Army paratrooper who later served for a time with
Brian in the same Illinois National Guard unit.

Drawn by history, adventure

During his time overseas, Brian's letters, calls and e-
mails home were usually upbeat and often funny, his family
said. Brian liked the adventure of being overseas in such an
exotic location, Eric said, recalling that in one letter
Brian described how he sipped a glass of Tang as he flew over
the ancient ruins of Babylon. ``He enjoyed the sights he saw,
being in such a historic part of the world,'' Eric said. ``He
knew it was dangerous, but it was more of an adventure for
him.'' At times, Brian talked of possibly staying in the
military as a career, in part because he loved flying. ``I
think during the war, he got gung-ho about what he was
doing,'' said his brother, Marcus Slavenas, a 33-year-old
former U.S. Marine who served in Operation Desert Storm.
Brian had already served a stint in the Army, joining after
he graduated from DeKalb High School, where he played drums
and threw the discus. After finishing active duty, he joined
the National Guard, then went to officer school and became a
helicopter pilot. Along the way, he also obtained a private
pilot's license and earned his degree from the U. of I.
Although he stood a towering 6 foot 5 inches tall, Brian was
a ``gentle giant,'' according to his father. He was an
accomplished pianist and dedicated weight lifter who could
get along with just about anyone, his brother said. ``He was
very generous, very patient with people,'' Marcus said,
adding, ``I just loved being with him. He was my favorite
person in the whole world.''
Besides his two brothers and father, he is survived by his
mother, a stepmother, a stepbrother and stepsister.

may have saved lives

Brian, a member of the Peoria-based 106th Aviation Unit,
was activated in February and had been serving in Iraq since
April, said Brig. Gen. Randal Thomas, adjutant general of the
Illinois National Guard. He had been certified to fly the CH-
47 Chinook helicopter since 2002 and was flying at 150 mph at
about 200 feet off the ground when it was shot down near
Fallujah, Iraq. Thomas told reporters in Springfield.
``We're thankful that a number of individuals survived that
crash. It would be speculative to say the pilot did his job
and got that aircraft down and saved lives, but I'd sure like
to believe that,'' Thomas said.
The Slavenas brothers say they're upset the Army wasn't
taking more precautions to protect the slow-moving Chinook
helicopters from missile attacks like the one that killed
Brian. Since the attack, the military has banned Chinook
flights during the day because the choppers are too
vulnerable. ``I support our military. The only thing I
question is the tactics that were used in this situation,''
Eric said. ``Someone should have had enough foresight to see
ahead that a lumbering aircraft that only flies 180 miles an
hour makes a good target.''
Saying he ``just didn't believe this was our war,'' Marcus
isn't sure the conflict was worth his younger brother's life.
``Personally, I wish these people in Iraq well, but I don't
care about them like I do about my brother,'' he said. ``I
think maybe I would like to see American military used to
defend America and not police the entire world.''
And he regrets not trying harder to keep his brother from
going to Iraq.
``We all very strongly encouraged him not to go,'' Marcus
said. ``In retrospect, I'm going to kick myself--I wish I
would have tried harder.
____

[From American Morning (CNN), Nov. 4, 2003]

Interview With Family of Downed Helicopter Pilot

Soledad O'Brien, (CNN Anchor). There was more violence in
Iraq this morning. Another soldier was killed, the second in
as many days. The soldier was killed after an improvised
explosive device, or an IED, exploded in Baghdad. Another
U.S. soldier was wounded in that blast.
The attacks followed Sunday's downing of a U.S. helicopter
near Fallujah, the deadliest single attack on U.S. forces
since the invasion. According to eyewitnesses, the second of
two shoulder-launched missiles hit the CH-47 Chinook, as it
flew just a few hundred feet above the ground. The missile
struck the rear engine and started a chain reaction that
caused the helicopter to crash.
Most of the soldiers were heading out to begin a two-week
leave when the chopper was shot down. Sixteen soldiers were
killed, and among them was the pilot, First Lieutenant Brian
Slavenas, a member of the National Guard from Peoria,
Illinois.
A little earlier today, I spoke to his family about their
loss.
Mr. Slavenas, if I can begin with you. Brian actually could
have avoided deployment, but he chose not to. Tell me why.
Ronald Slavenas (Father of Chinook Pilot). Well, that's the
kind of person he is. He's a responsible person, and he took
on something and he brought it to completion. That's the
nature of Brian. He may not like the idea, but he followed it
through, and I've got to do it, and he did it.

[[Page S13869]]

O'Brien. I read that he felt obliged to serve his country.
He was a helicopter pilot in the National Guard.
Marcus, why don't you tell me a little bit about your
brother, the person, not necessarily the military man?
Marcus Slavenas, (Brother of Chinook Pilot). Not just
because he was my brother, but he was really one of the best
people I've ever known. Very clean living, very dedicated to
what he did. If he decided to do something he did it. He
focused on it and did it until he was excellent at it. He was
very kind to people. He was a good person. It was not based
on some rules. It wasn't based on religion. It's just the way
he was. He cared about those around him and tried hard always
to do his best.
O'Brien. Tell me--I know that he recently finished school.
He'd gone to school for engineering. Give me a sense of what
his plans were and his dreams were further down the road.
Unidentified Male. Well, we felt that Brian was probably
going to get out of the military and pursue a career in
engineering. He had a very promising career ahead of him. He
did well in his field. I know there were a lot of companies
that wanted to interview him. So, we were hoping and we all
felt that he was going to continue on with the engineering.
O'Brien. Mr. Slavenas, when you first saw the reports--I
have to imagine you saw the reports before you heard the news
that it was Brian who was actually piloting this chopper.
What was your reaction to this? And I've got to ask you,
did you think after a certain amount of time that it was
indeed your son who was among the lost?
R. Slavenas. Well, it crossed my mind. I thought he was
further west of the area of where it happened, but he's been
flying around all over Iraq, I guess, to Kuwait and back and
forth. The Chinook is like a shuttle service for different
units. He was flying support for different outfits. The last
one for the 3rd Armored Calvary, and I thought he was further
west. So, that was my kind of hope that maybe that wasn't
Brian, but then later on we found the news that it was Brian,
actually.
O'Brien. You served in the military, sir, and your three
sons all served in the military as well. What are your
thoughts about the U.S. involvement in Iraq and the
occupation of Iraq right now?
R. Slavenas. Well, now that we're in, we have to stay the
course. We just can't pull out. If we pull out, we'll have
pandemonium. They have so many different factions in Iraq--
the Sunnis, the Shiites, the Kurds, and what have you. And if
we pull out now without stabilizing the situation, we'll
have, as I said before, pandemonium. It would be a
revolution. That's my feeling.
So, we have to keep a stabilizing cap over it and hopefully
getting more help from other nations and other sources.
O'Brien. Marcus, you served in the military as well, and I
know you have strong opinions on this.
M. Slavens. Yes.
O'Brien. What's your take on U.S. involvement in Iraq right
now?
M. Slavenas. I don't believe we need to be there. I wish
the Iraqis well, and I hope they can figure out their
problems, but I don't want this to happen at the expense of
our boys. I would like to see them come home. And as far as
the troops go, while they're still there, I'm fully behind
them. Fight as hard as you can. Destroy the enemy and keep
yourselves alive and come back home. But as far as the
government is concerned, please try to get out of that
business and bring them back home as soon as possible.
____

[From the Chicago Tribune, Nov. 4, 2003]

For Families, Sad News Hits Home

(By Russell Working and Angela Rozas)

One soldier was going to visit his wife and three children,
the youngest of whom he had never met. Another was on his way
home to attend his mother's funeral. A third wanted to
surprise her family in California with a two-week visit.
On Monday, the Department of Defense began releasing the
names of the 16 soldiers killed when a transport helicopter
was shot down in Iraq, marking the single largest loss of
service members in that country since major combat ended in
the spring. Another 20 soldiers were injured. Many of the
dead had been heading home for vacation or emergency leave.
Around the country, families that had been anticipating happy
reunions instead were stunned by unexpected loss. As of
Monday evening, 377 U.S. service members had died since
military action began in Iraq. In that time, more than 1,836
have been injured as a result of hostile action.
Among those killed Sunday in the crash was 1st Lt. Brian
Slavenas, 30, an Illinois Air National Guard pilot from Genoa
who was one of two pilots on the twin-rotor CH-46 Chinook
that was shot down Sunday. Four crewmembers, also National
Guardsmen, were from Iowa. They were injured, but survived
the crash, said Illinois National Guard spokeswoman Lt. Col.
Alicia Tate-Nadeau. One of the Iowans was the senior pilot of
the aircraft, but it was unclear whether he or Slavenas was
flying the Chinook when it crashed, she said. Some 120
members of Slavenas' unit, the Peoria-based F Company of the
106th Aviation Battalion, are now deployed in Central Iraq.
Another 85 Guard soldiers are deployed from an aviation unit
housed in Davenport, Iowa.
Slavenas was a dedicated student who followed his father
and two older brothers into the military. He was so
unassuming it took him a week to tell his family he had
recently been promoted to first lieutenant, said his father,
Ronald Slavenas. His unit arrived in the Persian Gulf in mid-
April, and had been based in Balad, Iraq, since July 22, said
Chief Warrant Officer Ty Simmons, operations officer for the
company. On Monday, they were grieving Slavenas' death and
hoping for the recovery of the helicopter's crew, he said.
The crews spend their days flying over central Iraq, a
dusty desert region better known as the Sunni triangle, where
they move everything from Humvees and generators to drinking
water and soldiers on leave. During missions, they fly fast
and low, seeking to make themselves a more difficult target
as they navigate dust clouds, high-tension electric lines and
tan-colored towers that blend into the background of the
desert, Simmons said.
Brian Salvenas deployed with the unit to the Middle East in
March. Four months earlier, he had received a bachelor's
degree in industrial engineering from the University of
Illinois, said his mother, Rosemarie Dietz Slavenas, who
lives in Rockford. He studied piano in high school and
``played beautiful, beautiful Chopin nocturnes,'' his mother
said.
On Sunday, Ronald Slavenas thought of his son as he
listened to reports of a helicopter crash in Iraq, and
watched through the front curtain as a uniformed man arrived
on the doorstep of his two-story brick home in Genoa. ``My
heart sank,'' he said. ``I opened the door and said `He's
dead, right?' ''
On Monday, an American flag hung in the rain from the
second floor of his house. ``Brian was just a real
perfectionist,'' said Slavenas' brother Eric, 39. ``He wasn't
a gung-ho, go-to-war kind of guy.''

Mr. DURBIN. Mr. President, there is another very important issue that
is associated with this story. I have learned within the last 24 hours
that all of the Chinook helicopters in the 106th unit, of which Mr.
Slavenas was a part, consist of seven helicopters from the Illinois
National Guard and seven from the Iowa National Guard. All of these
helicopters do not have the aircraft survivability equipment required
to protect them from the very threat that brought down this helicopter
on Sunday.
This is a recurring and troublesome issue. We have heard time and
again about National Guard forces which are activated and then
shortchanged when it comes to the best equipment. We expect the most
updated equipment to be given to the units that are in the fight. We
understand that Active Duty troops must receive what they need. But
consider where we are in the war in Iraq. It is supposedly a complete
and seamless integration of National Guard, Reserves, and Active Duty
forces. We expect the National Guard, under these circumstances, to
receive the necessary upgrades in the war theater.
These Chinook helicopters are supposed to be equipped with one or
more protective systems, such as the ALQ-156 system, to detect surface-
to-air missiles, along with an automatic flare dispenser as a
countermeasure. They are also supposed to be equipped with seat armor
to protect the pilot and crew.
What I have learned within the last 24 hours, from reliable military
sources familiar with the situation on the ground in Iraq, is many of
the Illinois and Iowa National Guard helicopters have flown for almost
6 months in the theater without the necessary aircraft survivability
systems. Some of them have received systems, some partial systems, but
only within the last week or two, many of the systems have been
scavenged from departing Guard units from other States that are leaving
Iraq. Many of the helicopters don't have seat armor. There are reports
that the radios don't function properly. Reliable military sources have
told me and my office about the level of protection for our helicopters
in Iraq and what they tell me is unacceptable. They tell me of
helicopters ill equipped to deal with the threat of shoulder-fired
missiles; units scavenging equipment from helicopters leaving the
theater to secure the protective gear they need. They report on
helicopters flying without seat armor to protect the pilot and crew,
and of helicopters flying without equipment designed to protect them
from known infrared missile threats; Guard units scrambling to find the
parts necessary to equip their craft with protective gear. Is this how
we equip our men and women who are called to active duty?
Today I am asking Secretary Rumsfeld to see to it the helicopters in
the theater are provided with the aircraft survivability equipment
necessary to meet the expected threat. If that equipment is not
available, I believe Secretary Rumsfeld should protect those

[[Page S13870]]

units until they are properly equipped or reassess when and where they
will fly.
I ask unanimous consent that this letter I am sending to Secretary
Rumsfeld be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Dear Mr. Secretary: We are concerned about reports that the
CH-47 National Guard helicopters attached to the 82nd
Airborne Division, the unit which included the helicopter
shot down by a surface-to-air missile in Iraq on Sunday, may
not have had necessary or fully complete aircraft
survivability equipment. As you know, 16 military personnel
died in that attack, including the pilot, First Lieutenant
Brian D. Slavenas, from Genoa, Illinois. The helicopter was
from the Iowa National Guard.
We understand that, while Guard units that are activated
may leave the United States without all the necessary
equipment, they are to be upgraded in theater. Sources tell
us that a number of the helicopters in the unit in question
were flying in Iraq for almost six months without necessary
equipment, and were only recently provided aircraft
survivability equipment, some of which was not complete. Some
may still be lacking this equipment.
First, we ask that you immediately ensure that the
helicopters in theater are provided with the aircraft
survivability equipment necessary to meet the expected
threat. If that equipment is not available, you should
protect those units until they are properly equipped, or re-
assess when and where they will fly.
We ask that you investigate, and respond as soon as
possible, whether the helicopter that was shot down on Sunday
had on board a fully-operational ALQ-156 system with an
automatic flare dispenser and whether it had seat armor;
whether all of the helicopters in this unit are fully
equipped at this time and the precautions being taken to
protect the crews and passengers of those not properly
equipped. The same questions need to be asked regarding all
activated Guard and Reserve helicopter and fixed-wing units.
We understand that the ALQ-156 is intended to protect
against the expected threat from some surface-to-air
missiles, but may not be as effective against other missiles.
Is the ALQ-156 adequate for the expected threat in Iraq? If
not, we would like to know when the helicopters will receive
the upgraded equipment and your assessment of the risk to
military personnel of flying without such upgraded equipment.
I appreciate your prompt response to this inquiry.
Yours truly,
Richard J. Durbin
U.S. Senator.

Mr. DURBIN. Mr. President, I am also calling on Secretary Rumsfeld to
investigate and respond as quickly as possible on whether the
helicopter that was shot down on Sunday had on board a fully
operational ALQ-156 system with an automatic flare dispenser and
whether it had seat armor. I also believe we need to know the status of
the other helicopters in this unit in reference to protective
equipment, and what steps are being taken to protect the crews and
passengers in those that are not properly equipped. I understand the
ALQ-156 system is intended to protect against the expected threat from
surface-to-air missiles, but may not be effective against other
missiles in the theater.
I am also asking the Secretary if that ALQ-156 is adequate for the
expected threat in Iraq. If not, I would like to know when the
helicopters will receive the upgraded equipment and his assessment of
the risk to military personnel of flying without such upgraded
equipment.
I find the reports I am receiving from military sources about the
lack of protective equipment on these helicopters to be alarming and
unacceptable. We know what a dangerous environment Iraq is. The threats
from surface-to-air missiles were well known even before this tragic
crash. The helicopter that was shot down was not on a mission directed
against regime remnants or terrorists. It was transporting soldiers to
the airport in Baghdad so they could leave for R&R.
We will not know for sure how it was shot down or how it was equipped
until the investigation is completed. This tragedy highlights the fact
that protective equipment cannot only be reserved for missions in the
fight. Every mission is in the fight in Iraq today.
The Senate passed the Iraq supplemental appropriations conference
report yesterday with more than $87 billion for equipment for our
troops in Iraq. If the funds are not adequate to protect our troops and
aircraft, the Congress must be advised immediately. If there is a
shortage of equipment, we must act immediately to secure it.
The dangers of war are well documented. Every soldier, sailor,
marine, and airman should know this Government has done everything in
its power to protect them, keep them safe, and give them everything
they need so they can complete their mission and come home safely.
We have given this administration every dollar for which they have
asked. Now they must give our soldiers what they need to be safe and
successful--the protective gear and body armor they need--as they work
on the ground among dangerous situations. Armor is needed for the
Humvees to protect them from rocket-propelled grenades, and they need
state-of-the-art equipment to protect our helicopters from shoulder-
fired missiles.
I call upon the Secretary to address these shortages immediately and
to investigate fully whether the helicopter that was shot down and all
of the helicopters in Iraq are adequately protected. We owe this to our
men and women in uniform and to their families who pray for their safe
return.
I yield the floor.
The PRESIDING OFFICER. The Senator from Maryland is recognized.
Mr. SARBANES. Mr. President, does the Senator from Colorado wish to
speak?
Mr. ALLARD. Yes.
Mr. SARBANES. Before the Senator begins, I want to renew the call we
made a few minutes ago. I know the chairman agrees with me in doing
this. To those who want to speak on the pending amendment, we hope you
will come to the floor and do so. We hope others who have amendments
they want to offer will be prepared, once we dispose of the current
amendment, to present their amendments so we can move along.
There is a possibility I think we can finish this bill in good order.
I know that is what everyone would like to accomplish. I know Chairman
Shelby is anxious to, on the one hand, move things along and, on the
other hand, ensure people have an opportunity to address these matters.
In order for them to do that, we need them to come to the floor, so we
are putting out that call.
Mr. REID. Will the distinguished Senator from Maryland yield for a
question?
Mr. SARBANES. I am happy to yield to the distinguished leader for a
question.
Mr. REID. My concern with this legislation is not as much the
legislation itself as it is that Thanksgiving is coming soon. We don't
have the luxury of waiting for days. This legislation could take days
with the order that is now in effect in the Senate. We have more than
20 amendments. If we take several hours on each amendment, we are not
going to finish this week. I ask that those people--Senator Feinstein
was here and she has indicated on her next two amendments she would
take a half hour on each.
I ask the floor staff, when they have an opportunity, we probably
should probably get two amendments locked in so we have at least time
limits on those two. I know Senator Boxer has some amendments. If we
could ask those Senators to come forward and agree to time limits on
them, that makes it much easier for the two managers to manage the
bill. I am quite confident that if the two leaders see the work on this
bill is not going very quickly, it will be an awfully late night
tonight because I know there are many things the two leaders want to
finish on Thursday and Friday. I think there was some expectation and
hope the bill would be completed by tomorrow.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. ALLARD. Mr. President, I thank the chairman of the Banking
Committee and the ranking member for giving me the opportunity to speak
on the bill. To accommodate them, if individuals come to the floor
willing to offer an amendment, signal me and I will clear the floor and
give them an opportunity to offer their amendment. I agree with their
goal of getting us out of here quickly and getting the work done. If
someone has an amendment, I do not want to hold up the process.
I rise in support of S. 1753, commonly referred to as the National
Consumer Credit Reporting System Improvement Act of 2003. I was pleased
to support the bill as a member of the Banking Committee, and I am sure
it will receive

[[Page S13871]]

strong support on the Senate floor as well.
I would like to thank Chairman Shelby and his staff for their hard
work. This is a balanced, sensible bill and clearly a product of their
willingness to listen to all interested parties. Chairman Shelby
compiled an extensive hearing record and provided a comprehensive
foundation for crafting this legislation.
He crafted a bill that provides a balanced approach to the concerns
expressed during the hearings and provides significant improvement, I
believe, to the Fair Credit Reporting Act. I thank him for working so
closely with committee members to ensure that our concerns were
addressed in this bill.
I would also like to acknowledge the efforts of the ranking member,
Senator Sarbanes, and his staff. As I mentioned, this bill received
strong bipartisan support in committee, and this is certainly due in
part to the diligence of Senator Sarbanes. His effort and his support
have made this a stronger and better bill.
Reauthorization of the Fair Credit Reporting Act is vital to the
functioning of our Nation's credit markets. I think that goes without
saying. Without the FCRA, credit would cost more or, in many cases,
simply would not be available to consumers.
S. 1753 ensures that the markets will continue functioning smoothly
by permanently reauthorizing the Fair Credit Reporting Act. As a former
State legislator and a strong champion of States rights, I do not take
Federal preemption lightly. In fact, I have a very high threshold for
Federal preemption. I believe, though, that FCRA meets the necessary
standard. The credit markets truly are national, and a patchwork
approach to credit reporting will quickly disintegrate the necessary
comprehensive approach we need.
When it comes to credit reports, accuracy is in the best interests of
both industry and consumers. I believe this bill will help improve
accuracy in credit reports. Consumers will have increased access to
their credit information and increased tools to combat identity theft.
The framework provided in the bill provides sufficient flexibility
for the act to adapt with time and changes in technology. I am
especially pleased that S. 1753 includes a bill I have worked on with
Senator Schumer referred to as the Consumer Credit Score Disclosure Act
of 2003. This provision would allow consumers applying for a mortgage
to receive a copy of their credit score. Credit scores are increasingly
being used in deciding whether to extend credit. Yet consumers do not
always have access to this information.
What I found out about credit scores and heard in reports back from
my constituents about things that affect their credit was that few of
them realize that the number of times you apply for a credit card, for
example, could impact your credit. It does when you look at the credit
score.

I always figure as long as you paid your bills on time or your credit
cards on time and the more credit cards you had and paid them on time,
it just showed what a better job you were doing in managing your
finances and would actually enhance your ability to get loans. That is
not true. If you got carried away and decided to apply for every credit
card you received in the mail, you could actually adversely impact your
credit rating, particularly as it applies through the credit score.
This provision contained in S. 1753 would ensure that consumers would
receive the critical information when applying for a mortgage, which is
generally the largest purchase a person will make during their
lifetime.
In addition to their actual numerical score, the consumer will be
entitled to receive information concerning the factors that helped
determine their score, as well as ways in which they can improve their
score. This provision will empower consumers to shop around and help
prevent them from becoming victims of predatory lending.
I believe expanding access to credit scores is an important victory
for consumers, and I am pleased it has been included in the bill we are
considering today. I am hopeful this will be the first step toward
giving consumers even broader access to credit scores.
As chairman of the Housing Subcommittee, I would also like to make a
few comments on the impact, the importance of the Fair Credit Reporting
Act as part of the home buying process. Because FCRA gives lenders
access to more accurate and more complete credit information, they are
able to more accurately price risk. This is important because for most
people, a home is the largest purchase they will make. The ability to
accurately price the risk as reflected in mortgage rates can make the
difference of thousands and thousands of dollars over the life of the
mortgage.
The availability of credit information stemming from the FCRA has
reduced the cost of home ownership for many and opened up previously
unavailable opportunities to others. In fact, home ownership rates are
currently at record highs. Permanent reauthorization of the Fair Credit
Reporting Act will help us continue on that path. This is especially
important as we work to expand the minority home ownership rates as
minorities are disproportionately impacted when credit becomes less
available.
The Fair Credit Reporting Act has been beneficial to consumers, and
the improvements contained in S. 1753 will extend those benefits. I am
pleased to add my voice to those in support of the bill, and I
encourage my colleagues to join me in voting for the National Consumer
Credit Reporting System Improvement Act of 2003.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Dakota.

Amendment No. 2054

Mr. JOHNSON. Mr. President, I wish to express my great high regard
and respect for my colleague from California, Senator Feinstein, but I
must rise in opposition to the amendment she offered earlier this
afternoon.
I think it is important for us to keep in mind that the Fair Credit
Reporting Act provided for a national preemption going back to 1996. It
has been an extraordinary success story for America's consumers,
particularly America's middle class and working families who previously
suffered the most from a lack of access to credit but now find
themselves having access to credit never before imagined and having it
done in an instant fashion.
The legislation before us is an enormously complex piece of
legislation. It takes the 1996 preemption and builds on it, and
strengthens consumer rights beyond anything we have ever known before.
Chairman Shelby and ranking member Sarbanes deserve great credit for
what they have been able to do. They put together a bill that had a
unanimous vote out of the Senate Banking Committee--no easy feat, we
all know.
To now on the floor of the Senate introduce a very complicated and,
some would suggest, improperly drafted amendment only serves to slow
the process and, in fact, perhaps even to jeopardize passage of the
reauthorization of the Fair Credit Reporting Act, something that must
be done before the first of the year, otherwise, the consequences would
be catastrophic not only to the business community and to our economy
but to American consumers who would be the biggest losers of all if we
were unable to pass legislation because of the additional burden put on
it by the Feinstein amendment.

I wish to very briefly touch on some problems that this amendment
poses. The amendment being offered is different from and far more
unworkable than the affiliate sharing restriction in the California
legislation, and I will comment on why this is so.
First, the amendment being offered is much broader in scope than the
California bill. Despite claims that they fixed the overly broad scope
because of drafting errors, that simply is not the case. Unlike the
California amendment SB-1, which applies specifically to financial
institutions, this amendment applies to any institution that has
affiliates, including retailers, manufacturers, nonprofits, labor
unions, churches, universities--basically, every type of organization
in the country that shares certain consumer report information.
Yet the most important exception by this amendment being offered is
provided only to financial institutions. Clearly, the drafters of the
amendment have spent a lot of time on the California bill, perhaps more
so than on the FCRA, because there does not seem to be the full
appreciation of the breadth of the very statute they are amending.

[[Page S13872]]

The Feinstein amendment provides exceptions to certain institutions
based on their functional regulator, a concept we defined in Gramm-
Leach-Bliley in the Banking Committee and which is specifically defined
in this amendment. It is limited to financial institutions such as
banks, securities firms, and insurance companies.
This means while financial institutions can qualify for what
proponents refer to as the ``silo'' exception, other covered businesses
cannot. I assume this is probably a drafting oversight, but it simply
reinforces my concern that this amendment has not been fully vetted by
the Banking Committee or by any other presence in the Congress. I doubt
very seriously that the sponsors are trying to give large financial
institutions a competitive advantage, but that is one of the
consequences of the amendment that has been offered.
The FCRA has a sweeping scope by design. Congress believed and still
believes that sensitive information bearing on credit, employment, or
insurance risk, no matter who is using it, should be protected. That is
why the FCRA is by no means limited to financial institutions, and
should not be.
The amendment being offered backtracks on the final version of the
California legislation with respect to the so-called common database
exception that was an integral part of the deal.
The amendment contains the original, unnegotiated version of the
common database exception, which was widely understood to be
unadministratable. This provision, which was intended to assure
companies with large information databases that they would not have to
undergo major systems revisions, fails to accomplish that goal.
The final version of the database exception prohibited information
from a common database to be further disclosed or used by an affiliate.
The amendment before us this afternoon prohibits not only disclosure or
use but even access itself.
What is the point of a common database if it cannot be accessed? I
understand that the California bill has come under fire recently for
including what some view as a giant loophole of the common database
exception, and I share Senator Feinstein's concern about the loophole
but it is not right to make a major change to a central provision and
continue to claim that this amendment mirrors SB-1, the California
legislation.
Even if all the California exceptions were added, the amendment would
still be far less workable than the affiliate sharing provision in the
unanimously adopted Senate Banking Committee bill.
With all the California exceptions, the only sharing not permitted
would be affiliate sharing used for solicitation and marketing
purposes.
It is simply not true, as some have suggested, that the California
opt-out applies to information shared for a broad range of purposes
other than marketing and solicitation. But if sharing for solicitation
is all that is subject to the California opt-out, then why not use the
far more straightforward approach of the bipartisan Banking Committee
bill? That is, why not target the opt-out only to solicitations of
noncustomers made possible by affiliate sharing?
As the Banking Committee has recognized, and as the Senator from
California has pointed out many times during today's debate, the real
consumer concern is getting bombarded by advertisements from unfamiliar
companies. We all sympathize with that. The bipartisan committee bill
addresses this concern head on with its targeted, focused provision on
affiliate sharing, while the pending amendment, even if it added all of
California's numerous exceptions, which it does not, is far more
cumbersome and overreaching on its face. In fact, the committee bill
gives consumers far more control. S. 1753 allows consumers to opt out
of all marketing from any affiliate. The pending amendment does not do
that.
For example, the California silo exception strips away consumer
control over information shared by affiliates in the same line of
business. By contrast, we believe consumers should not have to be
bombarded by marketing materials just because they have chosen to do
business with a large financial institution.
Sharing of information among affiliate entities has a significant
impact on the cost and availability of credit in ways that are not
always apparent to consumers. This is a critical point that I believe
has been lost in the course of this debate.
Former Treasury Secretary Robert Rubin testified back in 1997, for
example, that consumers could expect ultimate savings of as much as $15
billion per year from the increased efficiencies that affiliation
provides.
Treasury Secretary John Snow recently testified that affiliate
information sharing serves a critical purpose in the war on identity
theft.
FDIC Chairman Don Powell has noted that access to credit and the cost
of credit is far more favorable in the United States than in other
parts of the world due, in large part, to the relative ease of
information sharing between potential credit customers and potential
lenders.
Finally, Federal Reserve Chairman Alan Greenspan has noted that
information sharing has had ``a dramatic impact on consumers and
households and their access to credit in this country at reasonable
rates.''

The Senate bill ably balances the legitimate concerns of consumers
against the substantial benefits that information sharing brings to
this economy and to all consumers. As Chairman Shelby and ranking
member Sarbanes have noted, this is an enormously complicated area of
law, and the committee took great care to guard against unintended
consequences, spent literally months on the drafting and formulation of
this legislation.
Make no mistake, it is hard to imagine that what we are doing here
today is the last word on privacy. Our constituents will continue,
rightfully so, to demand that we review our current laws as information
technology develops. I believe we intend in a bipartisan fashion to do
just that.
At this point in time, giving consumers the right to opt out of
marketing, with no exceptions, is the right rule for American
consumers, while at the same time providing immediate and affordable
access to credit to all of our consumers, regardless of their economic
background, regardless of racial or other factors is something that I
think this Senate can take great pride in and we can take great
satisfaction in the quality of this bipartisan legislation.
I urge my colleagues on both sides of the aisle to mirror the
bipartisan vote of the Senate Banking Committee and to support the FCRA
reauthorization and oppose the Feinstein amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. I have listened carefully to the comments of Senator
Feinstein earlier, and I will make a couple of important points in
response to her amendment.
First, as a privacy advocate, I fully appreciate the interest and
concern at hand. Indeed, both Senator Sarbanes and I have been very
sensitive and worked together a lot on privacy concerns. As we took up
the Fair Credit Reporting Act, this was one of the key considerations
we sought to balance, even as the law itself requires. We did this in
what was a very comprehensive, transparent, and lengthy review of the
law and issues at hand as we considered reauthorizing our national
credit standard.
Second, the amendment of the Senator from California makes two basic
assumptions which ultimately guide her amendment's approach and goal,
as I understand it. No. 1, that there is something inherently nefarious
about the use of affiliate structures; No. 2, that consumers have no
rights or means to protect themselves with respect to the handling of
their transaction and experience information.

I believe that our consideration in the Banking Committee would
therefore be instructive in understanding the better approach adopted
in our bill and why I intend to oppose the amendment of the Senator
from California. To the first point: Why do affiliates exist? Companies
establish affiliates for a variety of legal, tax, and accounting
reasons--because laws require them to do it.
What do these structures mean for consumers? Some companies choose to
create separate legal entities known as

[[Page S13873]]

separately capitalized affiliates. Other companies elect to locate all
of their business lines in a single entity. Regardless of the structure
that a firm employs, consumer information is generally used in the same
fashion. Affiliates or the separate business line share it to service
their customers, fight fraud, or develop new business. The affiliate
sharing provisions contained in the Fair Credit Reporting Act exist to
make it clear that companies should not suffer because they have chosen
a particular corporate structure.
From the consumer's perspective, I believe there is no real
difference between a company making an internal transfer of information
among departments and sharing between affiliates. In fact, in many
cases where affiliate sharing is occurring, most consumers would not
recognize that the two parties are involved in the transfer. Rather,
they would be under the impression that information is merely being
moved within the single entity with whom they have chosen to do
business.
Second, there are real rules and provisions governing the manner in
which transaction and experience information is handled. First, we need
to consider what exactly transaction and experience information is.
Transaction and experience information involves checking and saving
account balances, credit card balances and repayment history, mortgage
balances and repayment history, and mortgage and brokerage account
balances and transaction activity. In many instances, the information
is the very information provided to the consumer reporting agencies
where, as consumer report information, consumers are afforded
significant rights under the Fair Credit Reporting Act.
More important, however, this is information that is routinely
provided to consumers as required by separate laws and regulations. For
example, the Truth in Lending Act, the Fair Credit Billing Act, the
Truth in Savings Act, the Electronic Funds Transfer Act, provisions of
the securities laws and the Uniform Commercial Code all provide
consumers substantive rights with respect to transaction and experience
information. These include disclosures and access rights and error
resolution procedures.
I believe the bottom line is that consumers already have access to
and rights concerning transaction experience information right now
under the law. But at the end of the day, I believe the main concern I
heard with affiliate sharing uses was the use for marketing purposes.
At the end of the day, I believe that is all that is really left
restricted, in some way, under California's approach after accounting
for the exceptions and exemptions.
So after spending more than a year considering the law carefully in
order to balance the needs of our national credit system, which we all
believe is crucial to the operation and strength of our economy, with a
need to protect consumers rights, the Banking Committee identified two
key areas for increased Federal protection: The sharing of medical
information and restricting affiliate sharing used for marketing
purposes.

This bill does so in the context of the Fair Credit Reporting Act in
a straightforward and narrowly tailored way and does not give
preferential treatment to certain business models over others.
This brings us to a third and very important point. The Fair Credit
Reporting Act deals with more than just financial institutions. The
sponsors, as you know as a member of the Banking Committee, Mr.
President, seek to impose a model that was tailored strictly for
financial institutions to all furnishers of credit information, subject
to the Fair Credit Reporting Act. This model is largely based on SB-1,
the California Financial Services Law.
The amendment's sponsors have tried to graft a banking bill on to the
Fair Credit Reporting Act. This effort, I believe, is misplaced, and
this effort does not mesh with how the FCRA, the Fair Credit Reporting
Act, works and to whom it applies. Gramm-Leach-Bliley made it
permissible for California and all other States to pass legislation
that regulates third party sharing activity. This bill would not affect
those provisions in the California law that come because of Gramm-
Leach-Bliley. With respect to the part of SB-1 that conflicts with the
Fair Credit Reporting Act, the California law was preempted, making it
unenforceable when it was enacted. This bill does not change or alter
that fact in any way.
The irony is that, even if we were to assume these provisions were
violated, California's attempt to overturn Federal law is actually
weaker than the Senate bill. The California law, as I have heard here,
as it is targeted at financial institutions, covers a much more limited
range than the broader Fair Credit Reporting Act, which deals with
information, not entities, and therefore includes retailers, auto
dealers, mortgage providers--anyone who furnishes credit.
Furthermore, California's rule is eaten by its exceptions and its
exemptions. Its provisions provide consumers with no real choices or
meaningful protection. The Senate bill covers the areas that consumers
care about--marketing and the sharing of medical information--by
providing real protection. Unlike the Senate bill, the California law
still exempts most of the largest financial service firms they claim
the law is intended to address.
The Senate bill was carefully tailored to address key concerns in a
more clear and a concise way. The Senate bill before us targets
unwanted solicitations without otherwise preventing sharing activities
that provide benefits to consumers. Unlike the California bill, the
Senate bill is designed to protect consumer interests. The
unenforceable portions of the California law were designed to promote a
specific business model by hobbling others.
I yield the floor.
The PRESIDING OFFICER. The Senator from California.
Mrs. BOXER. Mr. President, I rise in favor of the Feinstein-Boxer
amendment, and I note that there are a number of others on that
amendment as well. I hope colleagues will realize this amendment will
make this bill better, will make this bill stronger, and I am going to
take a few minutes to explain why in as simple a way as I can.
I stand here very proud that my State treasures privacy and they
acted on that value. After years of struggle, California put into law
the most tough financial privacy standard in the Nation.
Others can say oh, that is not true, and they can quibble, but the
facts are the facts. Every consumer group that you ask, any group that
is objective on the subject, will tell you that our law is the best and
is far better--certainly than the House bill, and better than the bill
that is before us today.
I do want to compliment my friend. You have made some good advances
here. I will talk about that in my statement. But we can do better, and
I offer this amendment with Senator Feinstein in a very friendly way,
in the hopes that maybe we can make this better.
The struggle to pass SB-1, California's financial privacy law, was
very long and very transparent. I want to say that State Senator Jackie
Speier did an unbelievable job. For 4 years, she worked with banks on
behalf of the consumers. The industry invested more than $20 million in
lobbying expenses and campaign contributions during those 4 years but
eventually a wonderful thing happened. The banks came to the table and
they negotiated with Senator Speier. The fact is, there was a reason.
They saw the handwriting on the wall. They saw that there was going to
be a State initiative. They had already gathered 550,000 signatures
quickly and Senator Speier's provision for more strict privacy was
supported in the polls. How about this? California Democrats in the
polls supported this initiative by 96 percent; and California
Republicans, 88 percent; Independents, 90 percent.
So Senator Speier had touched on a very important value of
Californians. I really do believe if you took a poll today, just a
really carefully worded one which went into every State in the Union,
there would be support for this Feinstein-Boxer amendment to make this
bill stronger.
I will explain it.
The committee went ahead and did some good things. It includes fraud
alerts for consumers and protection for credit card numbers on receipts
and free credit reports.
It is very important they say that you can't go outside and share the
information with outside companies. That is great. I salute Senators
Shelby and Sarbanes for that progress.

[[Page S13874]]

However, there is one major problem Senator Feinstein and I are
addressing in this amendment. We are saying, first of all, if a State
wants to go further than you have, we ought to have that chance. Your
bill ought to be a ceiling. All good wisdom doesn't reside here. We
always like to think it does, but it doesn't.
A lot of our States are ahead of us, and they want to do more. Yet
California finds itself left out because there is no preemption for our
State. We know we are not going to get that. We have 35 million people
in our State. We can't get an exemption. We understand that. We are
simply asking you follow the lead of our State on this one because I
think it is the fair thing to do.
Some people listening today might say, Well, the committee bill says
you can't go outside and share information. But you can share it with
your own affiliates that are in your little corporate family. What is
wrong with that? That is a logical question until you look at the
banking industry and look at how big these families can get.
Let us take a look at some of these families for which this bill
would allow affiliate sharing.
Let us take a look at Citigroup. They are small? They have 1,630
affiliates.
Bank of America. How well I remember the proud history of that bank
in my State. They have 1,323 affiliates.
JP Morgan, 967 affiliates; Wachovia Corporation, 886 affiliates;
Wells Fargo, 671; Bank One, 253.
When you say to all of these people you cannot share information
outside your family, you are in essence saying you can share it within
your families. We are talking about thousands of affiliates that will
get every bit of information about you and your financial transactions.
My colleagues can stand up here from night until morning and argue with
me on the point that we are wrong on this. I know we are right. This is
the right thing to do to protect our constituents.
Let me show you Bank of America affiliates. I want to show it in a
way that is pretty graphic. I will not read every one of their
affiliates. I am going to truncate and do this quickly.
We have nine charts listing all of these. These are Bank of America
banks: Commonwealth National Bank, First National Bank, National Bank
of Howard County, and American State Bank. I can't even pronounce some
of these. Bank of America Mexico; Finacero Bank of America. They will
know your transactions. That is just the first Bank of America chart.
Let us look at one other. We do have nine of these. I will go quickly.
Here is another one. Let us go to Bank of America insurance companies
and look at who they own: First National Insurance Services, American
Fidelity and Liberty, Bank of America Insurance Services, Inc., and
Home Focus Services. I don't know what they do, but they will know what
you do. General Fidelity Life. How about Boatman's Insurance
Agency? You do business with any one of these and more than a thousand
affiliates will know how much you earn, what your Social Security
number is, how did you pay, if you missed a payment, what your likes
and dislikes are.

Let us show a couple of others.
Bank of America and other affiliated companies: Oakland Trace
Redevelopment, Holly Springs Meadows, LLC, East Nashville Housing. You
go into a bank in California and East Nashville will know what you are
worth.
Dallas-Ft. Worth Affordable Housing, Old Heritage New Homes, Texas
Corporate Tax Credit Fund, and it goes on. Michigan, Osbourne Landing
Limited, it goes on and on. West Wood Manor Development, Elk Ridge
Apartments.
The point I am making--and I will show one last chart. We have 9 of
these charts listing Bank of America's 1,600 affiliates, for anyone who
really cares enough to examine each and every one of these affiliates.
Our point is we could go on and on and make our point with each and
every chart, but I am going to spare my colleagues. They have worked
long and hard already today. Here is the point: Do not share. That is a
simple message. This Senate supported ``do not call.'' We said people
deserve their privacy. If you don't want to get a call at night, you
shouldn't have to get a call at night.
We are saying if you decide--and our amendment simply says you have
to opt out automatically under this Feinstein-Boxer amendment--your
information would be shared, you have to take an affirmative step and
opt out. If you are a person who believes in your right to privacy, and
you don't want some company over in The Netherlands to know what you
are about, because there is one here--Bank of America Netherlands. How
about Odessa Park? These are worldwide affiliates. We are very proud of
Bank of America. Good for them. They have all of these affiliates. But
not good for them if they start to share information.
Under the underlying bill, they can share all sorts of information
with every one of these affiliates. Guess what. You get turned down for
a loan, let us say, because of information that was shared among the
affiliates. You have absolutely no right to know who told who what,
where, and when. What if it was wrong? There is no redress. There is no
way to correct the record.
All I can say is I have heard the debate, and I have heard our
amendment taken out of context: Oh, gee, that amendment will make it
worse for people. Wrong. I will tell you who is supporting our
amendment--people who have fought their whole lives for consumers and
for the rights of people to have privacy. That is who is supporting us.
The AARP, which represents many seniors, supports our amendment; the
ACLU fights for civil liberties and privacy; Consumer Federation of
America, Consumers Union, the National Association of Consumer
Advocates, National Community Reinvestment Coalition, Privacy Rights
Clearinghouse, Privacy Times, U.S. PIRG. These are people who
absolutely know our amendment is a step in the right direction.
I have a couple of other points to make. I will make them as quickly
as I can.
I want to share with you some of the quotes that were made by the big
banks when California passed its law. Did they complain about it? Not
at all. This is what they said.
This is Diane Colborn who lobbies for Personal Insurance Federation.
She called this workable, reasonable compromise a ``balanced measure
that will provide meaningful protections to consumers while also
addressing the workability concerns that our members and customers
had.''
Jim Bruner, who lobbies for the Securities Industry Association,
appeared before our committees in California. He said the measure is a
``good, workable, reasonable bill.''
The ink didn't dry on that bill before they came up here and started
wining and dining and talking to people--I guess you can't wine and
dine anymore, and that is a good thing--about why this bill couldn't go
too far. Don't go too far; it is a burden. I am so sorry about that. I
was so excited when California passed the privacy protections.

In closing my remarks, I will read some newspaper editorials.
From the New York Times: ``Buyer Beware,'' just written a few days
ago.

This (affiliate sharing) is a dark and unmapped universe in
which banks, credit card companies and insurers have free
rein to share detailed records among thousands of affiliates,
with customers largely powerless and unknowing. Bank
balances, buying habits, investment profiles and more can be
tapped into in ways that invite fraud, marketing assaults,
identity theft and unfair credit decisions.
The Senate measure contains no real solution for
indiscriminate data sharing. Far preferable is an amendment
to be offered by Senators Dianne Feinstein and Barbara Boxer
of California that would require advance notice from
businesses so consumers would have a chance to block planned
sharings that reached beyond relevant credit issues.
Rejection of this amendment would only compound businesses'
temptation to be marketers rather than the protectors of the
privacy of the American consumer.

We know in the underlying bill you cannot share for marketing
purposes, but there is a giant loophole dealing with preexisting
relationships, making it confusing and complicated. That is why I
believe the Feinstein-Boxer amendment will cure these problems.
From the San Jose Mercury News:

The financial services industry is guilty of a nasty bait-
and-switch on the people of California. Its lobbyists worked
with privacy advocates to help shape the law into what the
industry called a reasonable and workable compromise. All the
industry said it hoped for was a uniform privacy standard
across the nation.

[[Page S13875]]

Yet immediately after the California law was approved,
industry lobbyists went to Washington to try to erase it from
the boxes. The only national standard they are interested in
is one that gives them the unfettered right to sell their
customers' personal financial details to the highest bidder.
That was the San Jose Mercury News, in the heart of Silicon
Valley. This is a newspaper that very often is on the cutting
edge of the way we ought to be thinking about financial
issues.

I close with an editorial from The Los Angeles Times, October 29,
entitled ``Put Privacy on the List.''

Congress promised voters that it would improve consumer
rights with regular reviews of the Fair Credit Reporting Act,
initially passed 33 years ago to balance the competing
interests of business and consumers. Bills in the House and
Senate would make it easier for consumers to see credit
reports and report identity theft. But the legislation
wouldn't help consumers keep private their bank balances,
spending patterns and other sensitive data. Congress could
cover this gaping problem by adopting the amendment crafted
by Feinstein and Boxer, which keeps alive the protections at
the heart of SB 1.

Colleagues, I know sometimes we get bills where deals have been cut,
deals have been made, and everyone has put their hand out like after a
sports game, saying: OK, on blood oath, we will not take amendments. I
have been here long enough to know that.
I hope some colleagues will be open to this. We have done the right
thing. Strong percentages of the American people--if it mirrors
California, it would be 80 percent and above--support making sure that
your personal-private financial data cannot be shared within a family
of a company which could include thousands--1,600, 2,000, who knows--as
more and more mergers go on. We do not want that information to be
shared.
That is exactly the right course to take. I am hopeful we will get a
strong vote on the Feinstein-Boxer amendment.
I yield the floor.
Mr. DURBIN. Mr. President, I rise to speak in support of the
Feinstein-Boxer amendment to S. 1753 on the sharing of information
among affiliates. This amendment would give consumers the choice to opt
out of having their personal ``transaction and experience'' information
shared among affiliates. The privacy provision in the California law
represented by this amendment was the result of long negotiations among
consumer groups and banks, and in the end the banks in California
called this provision ``reasonable and workable.'' Reasonable and
workable. I am a cosponsor of this amendment because, in a reasonable
and workable way, it simply gives consumers some control over their
personal information.
Let me emphasize just a few key points about this amendment. The
amendment is still about an opt out, not a blanket restriction. It just
gives consumers the option of keeping their personal information
personal. Now the underlying bill also has an opt out, but that opt out
is minimal: it is just for marketing, just for new customers, and would
expire 5 years after the consumer requested it. The Feinstein-Boxer opt
out, by comparison, is for the exchange of transaction and experience
information; it is for uses other than marketing; it is for current and
new customers; and it has no expiration. It, therefore, provides more
protection for consumers who are concerned about protecting their
privacy.
Another thing to remember about this amendment: the amendment does
not alter preemption. With this provision States would still be
deprived, permanently, of the opportunity of enacting their own
legislation relating to affiliate sharing. If we are going to have a
national law, we need a reasonable national standard.
Mr. President, a lot has been said about this amendment and how it
would create all kinds of problems, so let me be clear about what this
amendment would not do.
The amendment would not prevent the extension of affordable credit.
Affiliates could still request credit reports and scores, as always.
The amendment would not prevent affiliates working under the same
name in the same line of business from working together: it contains an
exception for sharing among such close affiliates. It would not impede
the investigation for fraud or identity theft. It would not impede
transactions or the servicing of a product requested by the consumer.
It would not impede institutional risk control. It would not impede the
resolution of customer disputes or debt collection. It would not impede
efforts to locate missing and abducted children.
Mr. President, I say again: If we are going to have a national law,
we need a reasonable national standard. This amendment is just such a
standard. I urge my colleagues to support it.
The PRESIDING OFFICER (Mr. CHAFEE). The Senator from Maryland.
Mr. SARBANES. I will be quick because I know the chairman intends to
move ahead with respect to this amendment. I will make some very basic
points.
Some of this discussion has been along the lines that under existing
law this information is shielded and we are taking something away from
people. The fact is, under existing law there are no limitations on the
sharing of information with affiliates. That is the existing law.
What the committee has sought to do is place the limitation on the
sharing of information with affiliates for solicitation for marketing
purposes, which is the biggest complaint we have heard flowing out of
the sharing of information. That is what people have complained to us
about. We are trying to provide that protection for the consumer.
The California law and the amendment take a different approach. They,
in effect, say you cannot share information with an affiliate or the
consumer has to be given the opportunity to opt out. But the California
law has some exceptions or exemptions from that requirement. The
amendment that is pending has 17 such exemptions.
To evaluate this--it is very complex; I agree with my colleague from
California when she says this is a complex area; it is very complex--
but to evaluate these exemptions, you have to work through all of the
exceptions and see where that leads as opposed to what is in the
committee bill.
Let me give an example. One exception is if a company is in the same
line of business, a common brand, then the provisions of the amendment
do not apply with respect to restricting and sharing of information.
What the committee has reported out would, in fact, apply a limitation,
an opt-out limitation in that instance for soliciting for marketing
purposes.
As I said earlier, that is generally what we have heard as being the
source of people's concern and discontent. In that sense, what is in
the bill is for that purpose broader than what is in the amendment.
These extensive exceptions will involve a great deal of litigation.
We do have a preexisting customer relationship exception, our
provision, which we expect the regulators to define, to give it more
content and more meaning.
Second, the amendment has an exemption for a common database and the
information that goes into a common database. In fact, it says a person
does not disclose information or share information with an affiliate
solely because information is maintained in a common information system
or database and employees of the person and its affiliate have access
to that common information system or database. That is another
provision in the amendment, a major provision, which in fact restrains
or restricts the consumer's ability to opt out.
I could go on with this form of analysis, but I have probably given
enough to underscore my thoughts. I appreciate the commitment of the
two Senators from California, Mrs. Feinstein and Mrs. Boxer, on this
issue. They have been champions and leaders on this issue. Many Members
have been with them on these matters and presumably will remain with
them.
But we are trying to craft a bill to deal with the FCRA. It is not
comprehensive. We are dealing with that subject alone. What is in the
bill from the committee is a significant improvement over existing law.
I don't think there is any question about that. I think there is an
arguable case that, in fact, it may provide more protection for the
consumer than the amendment that is pending. Therefore, I am supportive
of the chairman and his efforts with regard to this issue.

The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Mr. President, I now move to table the Feinstein-Boxer
amendment and ask for the yeas and nays.

[[Page S13876]]

The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion to table amendment No.
2054. The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. FRIST. I announce that the Senator from Kentucky (Mr. Bunning),
the Senator from Kentucky (Mr. McConnell), and the Senator from Wyoming
(Mr. Thomas) are necessarily absent.
I further announce that, if present and voting, the Senator from
Kentucky (Mr. Bunning) would vote ``yes.''
Mr. REID. I announce that the Senator from North Carolina (Mr.
Edwards), the Senator from Massachusetts (Mr. Kerry), and the Senator
from Connecticut (Mr. Lieberman) are necessarily absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``nay.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 70, nays 24, as follows:

[Rollcall Vote No. 434 Leg.]

YEAS--70

Akaka
Alexander
Allard
Allen
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Breaux
Brownback
Burns
Campbell
Carper
Chafee
Chambliss
Cochran
Coleman
Collins
Conrad
Cornyn
Craig
Crapo
Daschle
DeWine
Dodd
Dole
Domenici
Dorgan
Ensign
Enzi
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Inouye
Johnson
Kyl
Landrieu
Lincoln
Lott
Lugar
McCain
Miller
Murkowski
Nelson (NE)
Nickles
Pryor
Reid
Roberts
Santorum
Sarbanes
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Talent
Voinovich
Warner

NAYS--24

Boxer
Byrd
Cantwell
Clinton
Corzine
Dayton
Durbin
Feingold
Feinstein
Graham (FL)
Harkin
Hollings
Jeffords
Kennedy
Kohl
Lautenberg
Leahy
Levin
Mikulski
Murray
Nelson (FL)
Reed
Rockefeller
Wyden

NOT VOTING--6

Bunning
Edwards
Kerry
Lieberman
McConnell
Thomas
The motion was agreed to.
Mr. SHELBY. Mr. President, I move to reconsider the vote.
Mr. SARBANES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendment No. 2059

Ms. CANTWELL. I call up the Cantwell amendment and ask for its
immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from Washington [Ms. Cantwell], for herself and
Mr. Enzi, proposes an amendment numbered 2059.

Ms. CANTWELL. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To provide for certain information to be provided to victims
of identity theft, and for other purposes)

On page 22, line 6, strike the quotation marks and the
final period and insert the following:
``(e) Information Available to Victims.--
``(1) In general.--For the purpose of documenting
fraudulent transactions resulting from identity theft, not
later than 20 days after the date of receipt of a request
from a victim in accordance with paragraph (3), and subject
to verification of the identity of the victim and the claim
of identity theft in accordance with paragraph (2), a
business entity that has provided credit to, provided for
consideration products, goods, or services to, accepted
payment from, or otherwise entered into a commercial
transaction for consideration with, a person who has
allegedly made unauthorized use of the means of
identification of the victim, shall provide a copy of
application and business transaction records in the control
of the business entity, whether maintained by the business
entity or by another person on behalf of the business entity,
evidencing any transaction alleged to be a result of identity
theft to--
``(A) the victim;
``(B) any Federal, State, or local governing law
enforcement agency or officer specified by the victim in such
a request; or
``(C) any law enforcement agency investigating the identity
theft and authorized by the victim to take receipt of records
provided under this subsection.
``(2) Verification of identity and claim.--Before a
business entity provides any information under paragraph (1),
unless the business entity, at its discretion, is otherwise
able to verify the identity of the victim making a request
under paragraph (1), the victim shall provide to the business
entity--
``(A) as proof of positive identification of the victim, at
the election of the business entity--
``(i) the presentation of a government-issued
identification card;
``(ii) personally identifying information of the same type
as was provided to the business entity by the unauthorized
person; or
``(iii) personally identifying information that the
business entity typically requests from new applicants or for
new transactions, at the time of the victim's request for
information, including any documentation described in clauses
(i) and (ii); and
``(B) as proof of a claim of identity theft, at the
election of the business entity--
``(i) a copy of a police report evidencing the claim of the
victim of identity theft; and
``(ii) a properly completed--

``(I) copy of a standardized affidavit of identity theft
developed and made available by the Federal Trade Commission;
or
``(II) an affidavit of fact that is acceptable to the
business entity for that purpose.

``(3) Procedures.--The request of a victim under paragraph
(1) shall--
``(A) be in writing; and
``(B) be mailed to an address specified by the business
entity, if any.
``(4) No charge to victim.--Information required to be
provided under paragraph (1) shall be so provided without
charge.
``(5) Authority to decline to provide information.--A
business entity may decline to provide information under
paragraph (1) if, in the exercise of good faith, the business
entity determines that--
``(A) this subsection does not require disclosure of the
information;
``(B) the request for the information is based on a
misrepresentation of fact by the individual requesting the
information relevant to the request for information; or
``(C) the information requested is Internet navigational
data or similar information about a person's visit to a
website or online service.
``(6) Limitation on liability.--Except as provided in
section 621, sections 616 and 617 do not apply to any
violation of this subsection.
``(7) No new recordkeeping obligation.--Nothing in this
subsection creates an obligation on the part of a business
entity to obtain, retain, or maintain information or records
that are not otherwise required to be obtained, retained, or
maintained in the ordinary course of its business or under
other applicable law.
``(8) Rule of construction.--
``(A) In general.--No provision of Federal or State law
(except a law involving the nondisclosure of information
related to a pending Federal criminal investigation)
prohibiting the disclosure of financial information by a
business entity to third parties shall be used to deny
disclosure of information to the victim under this
subsection.
``(B) Limitation.--Except as provided in subparagraph (A),
nothing in this subsection permits a business entity to
disclose information, including information to law
enforcement under subparagraphs (B) and (C) of paragraph (1),
that the business entity is otherwise prohibited from
disclosing under any other applicable provision of Federal or
State law.
``(9) Affirmative defense.--In any civil action brought to
enforce this subsection, it is an affirmative defense (which
the defendant must establish by a preponderance of the
evidence) for a business entity to file an affidavit or
answer stating that--
``(A) the business entity has made a reasonably diligent
search of its available business records; and
``(B) the records requested under this subsection do not
exist or are not available.
``(10) Definition of victim.--For purposes of this
subsection, the term `victim' means a consumer whose means of
identification or financial information has been used or
transferred (or has been alleged to have been used or
transferred) without the authority of that consumer, with the
intent to commit, or to aid or abet, identity theft or any
other violation of law.''.
On page 33, line 6, strike ``7'' and insert ``5''.
On page 41, line 19, strike ``(e)'' and insert ``(f)''.
On page 47, line 1, strike ``(e)'' and insert ``(f)''.

Ms. CANTWELL. Mr. President, this amendment is one more addition to
the great underlying Fair Credit Reporting Act that would establish a
process where business records can be accessed by consumers whose
identities have been stolen. I urge my colleagues to support this
amendment.
Mr. ENZI. Mr. President, I thank Senator Shelby and Senator Sarbanes
for their work. They have put in a lot of time working through
different changes in this to make it not only more acceptable but more
useful. We appreciate that.

[[Page S13877]]

I also want to give special mention to Senator Cantwell, the Senator
from Washington, for her perseverance, for her tenaciousness, for her
innovation, and for her flexibility. She did a marvelous job of working
on this bill. It is extremely important to the Nation.
This is an extremely critical part of fair credit.
In today's world of digital transactions and online living, nobody is
safe from the fastest growing crime in America known as identity theft.
Last year alone, the Federal Trade Commission estimated that nearly 10
million Americans were victims of this crime, and each paid an average
of $500 in order to repair the damage done by fraudsters and credit
abusers. To these millions of American families, $500 means mortgages,
car payments, student loans, child support, groceries. In the larger
context, $500 per victim means American families and businesses lost
more than $50 billion in recovery costs in 2003 alone. That is a $50
billion drag on our economy--an economy that is just starting to bounce
back. With the number of identity theft cases increasing at an alarming
rate, the economic costs will be even higher next year.
As such, I rise today in support of an amendment that will make it
easier for victims of identity theft to recover both economically and
emotionally from this devastating crime. This amendment is based on a
bill my colleague from Washington and I introduced in both 2002 and
2003. Even though the bill passed unanimously last Congress, we have
made a number of changes that I believe greatly improve the
legislation. I firmly believe this amendment will provide consumers
with the right information and businesses with the right safeguards to
facilitate quick and cost effective recovery from identity theft.
This amendment will allow victims to work with businesses to obtain
information related to cases of identity theft so they can start
reversing the lasting and damaging effects of this crime. In drafting
this legislation we have worked with all of the stakeholders to ensure
that the needs of both consumers and the needs of small businesses,
banks and other credit agencies were addressed.
Our amendment provides consumers with the right to ask businesses for
records relating to a transaction evidencing identity theft.
Businesses, in return, have the right to ask for specific kinds of
identity verification and clear proof that the individual asking for
the information is, in fact, a victim and not another fraudster. Also
important to note, our amendment does not require businesses, to keep
new records or seek out information not in their control. It simply
requires businesses to share current records with consumers who can
prove they have been victims of identity theft.
I am confident that we have drafted careful legislation that will
truly help victims of identity theft recover from this terrible and
expensive crime. I commend my colleagues on the Banking Committee who
have worked closely with us to make the numerous improvements to this
amendment. I urge my colleagues to support it.
In summary, the Federal Trade Commission estimated that nearly 10
million Americans were victims of identification crime and that each
paid an average of $500 in order to repair the damage done by the
fraudsters and credit abusers. That is $50 billion that is taken out of
our economy each year.
This amendment is based on a bill my colleague from Washington and I
introduced in 2002 and in 2003. Even though the bill passed unanimously
the last time, we have made a number of changes that I believe greatly
improve the legislation.
I firmly believe this amendment will provide consumers with the right
information and businesses with the right safeguards to facilitate
quick and cost-effective recovery from identity theft.
This amendment allows the victims to work with businesses to obtain
information related to cases of identity theft so they can start
reversing the damaging effect of the crime.
In drafting this legislation, we worked with all of the stakeholders.
Our amendment provides consumers with the right to ask businesses for
records relating to the transaction. Businesses, in return, have the
right to ask for specific kinds of identity verification and clear
proof that the individual asking for the information is in fact the
victim and not another fraudster.
It is also important to note our amendment does not require
businesses to keep records or seek out information not in their
control. It simply requires businesses to share current records with
consumers who can prove they have been victims of identity theft. I
think this will help consumers in a tremendous way.
I appreciate the work Senator Cantwell has put in on this amendment.
This $50 billion drag on the economy can be solved and will be
appreciated by consumers.
I thank my colleagues for supporting it and Senators Sarbanes and
Shelby for statements on the bill.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Mr. President, the managers are prepared to accept this
amendment. I commend Senator Cantwell and also Senator Enzi for the
work they have done in this regard.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. Mr. President, we are happy to take this amendment. I
wish to echo the chairman in thanking Senator Cantwell and Senator Enzi
for their work on this important issue. This is an issue they have been
addressing for quite some time, and we are very pleased that there are
important identity provisions as the bill came from the committee, and
I think this is a positive addition.
Mr. SHELBY. I urge adoption of the amendment.
The PRESIDING OFFICER. Is there further debate?
If not, the question is on agreeing to amendment No. 2059.
The amendment (No. 2059) was agreed to.
Mr. SHELBY. Mr. President, I move to reconsider the vote.
Mr. REID. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendment No. 2060

Mrs. BOXER. I send an amendment to the desk and ask for its immediate
consideration. I am very pleased to say both Senator Sarbanes and
Senator Shelby have signed off on this amendment.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from California [Mrs. Boxer], for herself and
Mrs. Feinstein, proposes an amendment numbered 2060.

Mrs. BOXER. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To address the duration of certain consumer elections and to
define the term ``pre-existing business relationship'')

On page 50, strike line 12 and all that follows through
page 51, line 3 and insert the following:
``(3) Duration.--The election of a consumer pursuant to
paragraph (1)(B) to prohibit the sending of solicitations
shall be effective permanently, beginning on the date on
which the person receives the election of the consumer,
unless the consumer requests that such election be revoked.
``(4) Definition.--For purposes of this section, the term
`pre-existing business relationship' means a relationship
between a person and a consumer, based on--
``(A) the purchase, rental, or lease by the consumer of
that person's goods or services, or a financial transaction
between the consumer and that person during the 18-month
period immediately preceding the date on which the consumer
receives the notice required under this section; or
``(B) an inquiry or application by the consumer regarding a
product or service offered by that person, during the 3-month
period immediately preceding the date on which the consumer
receives the notice required under this section.
``(5) Scope.--This section shall not apply to a''.

Mrs. BOXER. I ask unanimous consent that Senator Feinstein be added
as a cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. BOXER. Very briefly, this amendment closes what I consider to be
a little bit of a loophole in the marketing opt-out provision of the
bill. We do two things. The underlying bill says the marketing opt-out
expires after 5 years, unless a consumer opts out

[[Page S13878]]

again. We make the first opt-out permanent as long as the consumer
wants it.
Secondly, the definition of a preexisting relationship with a
company, with an affiliate, is drawn in such a way, it is very broad.
So what we say is, a person will be deemed to have this preexisting
relationship with the affiliate if they have purchased, rented, or
leased a service or good from the affiliate during the 18-month period
before the information sharing takes place or they have inquired about
an affiliate's product in the 3 months before the sharing takes place.
By adopting this simple amendment, we keep financial institutions
from violating consumer rights. I am very pleased that both sides of
the committee have signed off on this, and I would be happy to take a
voice vote on this at this time.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Mr. President, the managers are prepared to accept this
amendment.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. Mr. President, I actually wish to commend the Senator
from California because she has introduced some specificity into a
provision that is in the committee-reported bill. I am very frank to
say I think this will be very helpful, and I join the chairman in
supporting the amendment.
Mr. SHELBY. I urge the adoption of the amendment.
The PRESIDING OFFICER. The question is on agreeing to amendment No.
2060.
The amendment (No. 2060) was agreed to.
Mr. SHELBY. Mr. President, I move to reconsider the vote.
Mr. SARBANES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendment No. 2061

Mrs. FEINSTEIN. Mr. President, I send an amendment to the desk on
behalf myself, Senator Boxer, and Senator Kennedy.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from California [Mrs. Feinstein], for herself,
Mrs. Boxer, and Mr. Kennedy, proposes an amendment numbered
2061.

Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To address restrictions on the sharing of medical information
among affiliates, and for other purposes)

On page 81, strike lines 6 through 15 and insert the
following: ``to any person related by common ownership or
affiliated by corporate control, if the information is
medical information, including information that is an
individualized list or description based on the payment
transactions of the consumer for medical products or
services, or an aggregate list of identified consumers based
on payment transactions for medical products or services.''.
(c) Definition.--Section 603(i) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(i)) is amended to read as
follows:
``(i) Medical Information.--The term `medical information'
means information or data, other than age or gender, whether
oral or recorded, in any form or medium, created by or
derived from a health care provider or the consumer, that
relates to--
``(1) the past, present, or future physical, mental, or
behavioral health or condition of an individual;
``(2) the provision of health care to an individual; or
``(3) the payment for the provision of health care to an
individual.''.

Mrs. FEINSTEIN. Mr. President, this amendment essentially updates the
definition of ``medical information.'' It takes a medical definition
submitted by the National Association of Insurance Commissioners. It is
the definition that is used by a majority of our States. I ask
unanimous consent that a letter in support of this definition from the
American Medical Association, the American Cancer Society, the
California Medical Association, the Community Clinic Consortium, the
San Francisco AIDS Foundation, and the AIDS Health Care Foundation be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

American Medical Association,

Chicago, IL, November 3, 2002.
Hon. Dianne Feinstein,
U.S. Senate,
Washington, DC.
Dear Senator Feinstein: On behalf of the American Medical
Association (AMA), we applaud you for your amendment that
would improve the medical privacy protections in the National
Consumer Credit Reporting System Improvement Act of 2003 (S.
1753).
Your amendment would strengthen the protections in S. 1753
restricting the sharing of medical information for
employment, credit or insurance purposes, by broadening the
definition of ``medical information'' to ensure that it
covers all patient information held by physicians and other
health care providers, including mental and behavioral health
information.
Thank you for your efforts to protect sensitive patient
information in this important legislation.
Sincerely,
Michael D. Maves, MD, MBA.
____

American Cancer Society,

Washington, DC, October 30, 2003.
Hon. Dianne Feinstein,
U.S. Senate,
Washington, DC.
Dear Senator Feinstein: On behalf of the American Cancer
Society and its millions of volunteers and supporters, we
applaud your efforts to protect patient medical information
from improper use or disclosure by employers, insurers or
creditors.
Many cancer patients and their families are concerned about
the privacy of information relating to their medical care,
especially with the increasing use of electronic payments and
data keeping. As a result, the American Cancer Society
supports a definition of medical information that allows
medical research to advance, while at the same time, protects
the rights and needs of patients and their family members.
Sincerely,
Daniel E. Smith,
National Vice President, Federal and State Government
Relations.
Wendy K. D. Selig,
Vice-President, Legislative Affairs.
____

California Medical Association,

Sacramento, CA, October 31, 2003.
Hon. Dianne Feinstein,
U.S. Senate,
Washington, DC.
Dear Senator Feinstein: On behalf of the California Medical
Association and its 35,000 member physicians, we support your
efforts to protect patient medical information from improper
use or disclosure by employers, insurers or creditors.
Many patients and their families are concerned about the
privacy information relating to medical care, especially with
the increasing use of electronic payments and data keeping.
We support a tight definition of medical information of when
such information could be used. Your language accomplishes
this while at the same time allowing appropriate utilization
for research purposes.
Please let us know if we can do more to support your
efforts.
Sincerely,
Steven M. Thompson,
Vice President, Government Relations.
____

San Francisco Community

Clinic Consortium,

San Francisco, CA, October 31, 2003.
Re The San Francisco Community Clinic Consortium Supports S.
1753, the Medical Information Privacy Amendment to the
Fair Credit Reporting Act (FCRA).

Hon. Dianne Feinstein,
Hart Senate Office Building,
Washington, DC.
Dear Senator Feinstein: The San Francisco Community Clinic
Consortium--an organization of neighborhood health centers
serving 66,000 low-income and uninsured San Franciscans--
strongly supports the passage of S. 1753, the Medical
Information Privacy Amendment to FCRA.
The vague definition of ``medical information'' in FCRA
creates loopholes in FCRA protection that could prove harmful
to people like our clinic clients with stigmatized diseases
like mental illness, HIV/AIDS and long-term chronic
conditions. S. 1753 corrects the potential problems and
provides the more complete protections that people deserve.
S. 1753 would clarify and strengthen FCRA's definition of
medical information. It would also eliminate the false
distinction between medical information and medical
transaction information. This new definition is critical to
protecting the privacy of individuals with chronic illnesses.
Even the possibility of breaches of patient medical record
confidentiality undermines health care. Patients who know
their medical care information could and would be shared with
employers, credit organizations and insurance companies will
be less forthcoming with their health care providers and,
thus, the quality of health care they receive will be
compromised; this is neither necessary nor desirable.
SFCCC looks forward to continuing to work with you to
protect the essential privacy of individuals' medical and
health status information; this is a cornerstone of effective
health care. Please call (415 345-4233)

[[Page S13879]]

if you need additional information or assistance on this
matter.
Sincerely,
John Gressman,
President/CEO.
____

San Francisco AIDS Foundation,

San Francisco, CA, October 29, 2003.
Hon. Dianne Feinstein,
Hart Senate Office Building,
Washington, DC.
Dear Senator Feinstein: The San Francisco AIDS Foundation
strongly supports the passage of S. 1753, the Medical
Information Privacy Amendment to the Fair Credit Reporting
Act (FCRA). While the FCRA attempts to protect consumers from
having their medical information used for employment, credit
or insurance purposes, the vague definition of ``medical
information'' in FCRA creates loopholes in the protection
that would prove harmful to people living with HIV/AIDS,
mental illness and other stigmatized diseases. S. 1753
rectifies the problems in the underlying legislation and
provides the protections these consumers require and deserve.
The current definition of medical information in FCRA does
not protect the information consumers would supply on
documents such as life insurance applications, which ask what
medications a consumer is taking. Nor does FCRA protect
information obtained without consent. A specific example of
this is the reporting of unpaid medical bills from HIV
clinics. FCRA does not protect consumers from banks data
mining its customers' medical payment transactions to make
credit decisions. The majority of U.S. bankruptcies are due
to health care costs, which give banks an incentive to
determine a customer's creditworthiness based on health. The
ties between insurance companies and banks are continuously
strengthened as large banks often have hundreds of
affiliates, many of whom are also insurance companies. As
insurance companies move to electronic forms of payments,
they are giving banks large amounts of medical transaction
data about their clients. This may include the type of clinic
and specific service delivered.
S. 1753 would clarify and strengthen FCRA's definition of
medical information and eliminate the false distinction
between medical information and medical transaction
information. This new definition is essential for people
living with HIV/AIDS because it provides them with financial
privacy. After more than 20 years of dealing with the
epidemic, there is still significant cultural stigma attached
to HIV disease. Potential disclosure of medical information
and breaches in financial privacy create additional health
care access barriers. It is therefore essential that the
confidentiality of ones health status and medical information
be protected from inappropriate use in employment, credit or
insurance purposes.
The AIDS Foundation looks forward to working with you to
promote medical information privacy and health status
confidentiality. Please do not hesitate to call at 415-487-
3096.
Sincerely,
Ernest Hopkins,
Director of Federal Affairs.
____

AIDS Healthcare Foundation,

Los Angeles, CA, November 3, 2003.
Re Letter of support for privacy amendment to S. 1753.

Hon. Dianne Feinstein,
Hart Senate Office Building,
Washington, DC.
Dear Senator Feinstein:
AIDS Healthcare Foundation (AHF) would like to thank you
for sponsoring a legislative amendment to the Fair Credit
Reporting Act that will protect the privacy of personal
medical information in the form of payments for medical
services and products and other transactions. As the United
States' largest AIDs organization, and provider of medical
care to over 12,000 persons in the U.S., AHF is acutely aware
of the need to protect consumers from unauthorized use of
data pertaining to their medical treatment. Such information
is clearly private, and it is highly inappropriate for it to
be used for marketing or similar purposes. Such an abuse can
only erode the trust patients have in their medical providers
and the medical system in general. Thank you, again, for
sponsoring this amendment, which AHF is happy to support.
Sincerely,

Clint Trout,

Associate Director, Government
Affairs-Federal.
____

Congress of the United States,

Washington, DC, October 30, 2003.
Hon. Dianne Feinstein,
Hart Senate Office Building, U.S. Senate,
Washington, DC.
Dear Senator Feinstein: We applaud you for your efforts to
strengthen and improve the medical privacy protections
containd in your amendment to expand the definition of
``medical information'' under The National Consumer Credit
Reporting System Improvement Act of 2003 (S. 1753).
Although the original bill's medical privacy section
includes significant new consumer protections that black-out
the use of medical information for employment, credit, or
insurance purposes, it includes an inadequate definition of
the term ``medical information,'' which could result in
creating a loophole that weakens the bill's intended
objective. By describing ``medical information'' using the
National Association of Insurance Commissioner's (NAIC)
definition, which has been agreed upon and implemented by
insurance regulators in a vast majority of states, your
amendment closes existing loopholes and eliminates the
opportunity for unscrupulous use of sensitive medical
information.
We also support your amendment because it eliminates the
inconsistent differentiation between medical information and
medical transaction information, providing greater certainty
to the bill's language and to future interpretations of
legislative intent. This would be a marked improvement to the
underlying bill's definition of medical information, which as
currently written does not protect mental or behavioral
health information, data provided by consumers on life
insurance applications, or medical information obtained
without consent, such as the reporting of an unpaid bill from
a cancer center. We believe the effect of these harmful
oversights can be negated by passage of your amendment.
As you know, millions of consumers worry that their health
providers or insurers may be sharing their private
information with others. Beyond this concern, however, is a
feeling that they have less and less control over their
sensitive medical files. Medical information should have no
place in employment decisions or credit determinations and
related corporate entities should not be able to share it--
this information deserves the strongest protection under the
law, but beyond that, it is important that we give consumers
back some control over who can and cannot use this
information.
Both the National Consumer Credit Reporting System
Improvement Act and the Fair and Accurate Credit Transactions
Act, recently passed by the House of Representatives, contain
landmark provisions protecting consumers' private medical
information. This amendment builds upon these strides by
correcting important deficiencies in the Senate bill, and we
strongly urge its adoption by the Senate and its inclusion in
the legislation that emerges from the Conference Committee.
Again, we congratulate you on your thoughtful and bipartisan
amendment, and wish you success in its passage on the Senate
floor later this week.
Sincerely,
Rahm Emanuel,
Member of Congress.
Walter B. Jones,
Member of Congress.

Mrs. FEINSTEIN. I believe both sides will accept the definition, and
I would be happy to take a voice vote.
The PRESIDING OFFICER. Is there further debate?
The Senator from Alabama.
Mr. SHELBY. The managers are prepared to accept this amendment.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. I join with my colleague in accepting the amendment. I
commend the Senator from California. Actually, medical information is
something that people feel very keenly about and the Senator's
amendment will strengthen the provision that was in the bill adopted in
the committee. We thank her very much for the amendment.
Mr. SHELBY. I urge the adoption of the amendment.
The PRESIDING OFFICER. The question is on agreeing to amendment No.
2061.
The amendment (No. 2061) was agreed to.
Mr. SHELBY. Mr. President, I move to reconsider the vote.
Mr. SARBANES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Amendment No. 2062

Mr. DURBIN. I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follow:

The Senator from Illinois [Mr. Durbin] proposes an
amendment numbered 2062.

Mr. DURBIN. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To require reporting to national consumer reporting agencies
regarding Federal student loans in order to promote the responsible
repayment of such loans and ensure the completeness of information
contained in consumer credit reports and scores)

At the end of section 312, insert the following:
(c) Reports to Consumer Reporting Agencies.--
(1) Reports.--Section 430A(a) of the Higher Education Act
of 1965 (20 U.S.C. 1080a(a)) is amended to read as follows:
``(a) Agreements to Exchange Information.--
``(1) In general.--For the purpose of promoting responsible
repayment of loans covered by Federal loan insurance pursuant
to

[[Page S13880]]

this title or covered by a guaranty agreement pursuant to
section 428, the Secretary, each guaranty agency, eligible
lender, and subsequent holder shall enter into an agreement
with each national consumer reporting agency as described in
section 603(p) of the Fair Credit Reporting Act (15 U.S.C.
1681a(p)) to exchange such information as is required by the
Secretary concerning each borrower of a loan made, insured,
or guaranteed under this title who is served by the
Secretary, agency, lender, or holder, respectively,
regardless of the default status of the borrower. Such
information shall be reported to the agencies regularly,
shall be identified as pertaining to such a loan, and shall
include any positive or negative repayment information
relevant to the borrower.
``(2) Objections raised by borrowers.--For the purpose of
assisting the reporting agencies in complying with the Fair
Credit Reporting Act, such agreements may provide for timely
response by the Secretary (concerning loans covered by
Federal loan insurance), by a guaranty agency, eligible
lender, or subsequent holder (concerning loans covered by a
guaranty agreement), or to requests from the reporting
agencies, for responses to objections raised by borrowers.
``(3) Nonpayment.--Subject to the requirements of
subsection (c), such agreements shall require the Secretary,
the guaranty agency, eligible lender, or subsequent holder,
as appropriate, to disclose to the reporting agencies, with
respect to any loan under this part that has not been repaid
by the borrower--
``(A) the total amount of loans made to any borrower under
this part and the remaining balance of the loans;
``(B) information concerning the date of any default on the
loan and the collection of the loan, including information
concerning the repayment status of any defaulted loan on
which the Secretary has made a payment pursuant to section
430(a) or the guaranty agency has made a payment to the
previous holder of the loan; and
``(C) the date of cancellation of the note upon completion
of repayment by the borrower of the loan or payment by the
Secretary pursuant to section 437.''.
(2) Technical and Conforming Amendments.--The Higher
Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended--
(A) in section 427(a)(2)(G)(i) (20 U.S.C.
1077(a)(2)(G)(i)), by striking ``credit bureau
organizations'' and inserting ``reporting agencies'';
(B) in section 428C(b)(4)(E)(i) (20 U.S.C. 1078-
3(b)(4)(E)(i)), by striking ``credit bureau organizations''
and inserting ``reporting agencies''; and
(C) in section 430A (20 U.S.C. 1080a)--
(i) in subsection (b)--

(I) by striking ``such organizations'' and inserting ``the
reporting agencies''; and
(II) by striking ``(a)(2)'' and inserting ``(a)(3)(B)'';

(ii) in subsection (c)(2), by striking ``such
organizations'' and inserting ``the reporting agencies'';
(iii) in subsection (b)(4)--

(I) by striking ``(a)(2)'' and inserting ``(a)(3)(B)''; and
(II) by striking ``credit bureau organizations'' and
inserting ``the reporting agencies'';

(iv) in subsection (d), by striking ``credit bureau
organization'' and inserting ``reporting agency''; and
(v) in subsection (f), by striking ``consumer reporting
agency'' each place the term appears and inserting
``reporting agency''.

Mr. DURBIN. Mr. President, I announced my intention to offer this
amendment at an earlier date. Since the announcement of that intention,
we have been negotiating with Sallie Mae, the Government-sponsored
enterprise which is the largest provider of student loans in the
country. The reason for this amendment was a new policy of Sallie Mae,
as of a few months ago. In fact, about a year ago Sallie Mae decided to
stop reporting repayment information to two of the three major credit
bureaus in the United States. It turns out that the Higher Education
Act, which governs Sallie Mae, required that defaults on student loans
be reported to all three national credit bureaus but, by regulation,
positive repayment information only went to one.
As a consequence, many responsible students who had paid off their
student loans were not provided the credit information on their own
backgrounds so that it was clear that they paid off their loans. So
these students who had turned to a credit bureau for a mortgage or a
loan on a car would have an outstanding student loan. It worked to
their disadvantage. This decision by Sallie Mae worked a terrible
disadvantage to students who had done the right thing.
I made it clear to the chairman, Mr. Shelby, as well as Senator
Sarbanes, that I thought this was an injustice that needed to be
corrected. Fortunately for me and for the students involved, Sallie Mae
has sent a letter. I understand Chairman Shelby, if I am not mistaken,
has received a copy of this letter from Sallie Mae; is that correct?
Mr. SHELBY. If the Senator will yield, we do have a copy of the
letter from Sallie Mae.
Mr. DURBIN. I ask unanimous consent this letter be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Sallie Mae, Inc.,

Washington, DC, November 4, 2003.
Hon. Richard C. Shelby,
U.S. Senate, Committee on Banking, Housing and Urban Affairs,
Washington, DC.
Hon. Paul S. Sarbanes,
U.S. Senate, Committee on Banking, Housing and Urban Affairs,
Washington, DC.
Dear Senators Shelby and Sarbanes: I am writing to update
you on how Sallie Mae reports the credit performances of our
customers to the national credit bureaus.
Our goal is to ensure that our customers get the credit
they have earned. To that end, we have been reporting to one
of the national credit bureaus all along, as required by law.
When we learned recently that one of our borrowers has not
had full access to his credit history, we began negotiating
again with the other two credit bureaus so that we could
resume reporting to them.
I am pleased to let you know that following extensive
discussions with the other two credit bureaus, Sallie Mae has
agreed to resume reporting to them and will provide each with
credit information for our customers. We will keep you and
your staffs apprised as we move forward in implementing this
decision.
We are pleased that the credit bureaus are being responsive
to our concerns and we look forward to working with them.
Thank you for your interest in this important issue. Please
feel free to contact me if you have questions or need
additional information.
Sincerely,

Rose DiNapoli,

Vice President, Government & Industry
Relations, Sallie Mae.

Mr. DURBIN. The letter makes it clear that Sallie Mae is reversing
its position; that from this point forward they will report repayment
of student loans to all three major credit bureaus. This is what my
amendment sought to achieve, so I am going to withdraw this amendment
and thank both Senator Shelby and Senator Sarbanes for their
cooperation and urge them to join me in offering an amendment to the
Higher Education Act which codifies in law this new policy that the
Sallie Mae agency has now decided to implement.
There is no reason responsible college students, having paid off
their loans, should be penalized because Sallie Mae refuses to notify
all three major credit bureaus in America. I am glad with this letter
they have decided to change their policy. I hope at a later time to
offer this amendment to the Higher Education Act and thank the members
of the committee for their cooperation in this regard.
Mr. DURBIN. Mr. President, Section 312 of the bill before us is
entitled ``Procedures to enhance the accuracy and completeness of
information furnished to consumer reporting agencies.'' My Responsible
Student Amendment addresses exactly that: the completeness of
information furnished to consumer reporting agencies. My amendment is
designed to ensure that young Americans who have positive credit
histories established by responsibly repaying their student loans will
be able to take a clean shot at the American dream when they try to buy
their first home. It does so simply by requiring what until recently
was standard practice for student loan providers; regular reporting on
all loan repayments to each of the three major credit bureaus.
Until recently, responsible repayment of student loans was rewarded
as would be expected, with a positive credit history. Responsible
repayment was responsibly reported by student loan providers, in the
typical fashion, to all three major credit bureaus. One of those
providers, the biggest, is Sallie Mae. Sallie Mae was founded in 1972
as a government-sponsored enterprise, GSE. In 1997, the company
initiated the privatization process. Sallie Mae, in other words, was
born and raised on the taxpayers dime. One might hope that it would
therefore feel some responsibility to keep taxpayers' interest in mind.
About a year ago, however, Sallie Mae, by far the largest provider of
Federally guaranteed student loans, suddenly stopped reporting
repayment information to two of the three major credit bureaus. It
turns out that The

[[Page S13881]]

Higher Education Act, which established the Federal student loan
program, requires that defaults on student loans be reported to all
three national credit bureaus, while positive repayment information
only has to go to one. Is this the way we want to reward responsible
repayment of student loans? Don't we want a system that rewards
responsible repayment, rather than one that shrugs and says that that
information doesn't matter?
What is the result of Sallie Mae not reporting to two of the three
major credit bureaus? Thousands of young people--whose main or only use
of credit has been their student loans from Sallie Mae--suddenly have
major gaps in their credit histories. Stories in the Washington Post
and the American Banker have described the case of one typical 31 year
old, named Eric Borgeson. Mr. Borgeson is an architect who lives in
Edwards, CO. Mr. Borgeson, who graduated from college 10 years ago, had
a perfect credit repayment record on his three Sallie Mae loans. Then,
midway through the home-buying process, his credit score dropped by 40
points. Sallie Mae had pulled his perfect repayment records from his
credit reports with two of the three major credit bureaus. As a result,
he ended up with a lower credit score and a significantly higher
interest rate on his mortgage, that he estimates will cost him nearly
$200 more per month in interest payments.
Why has Sallie Mae stopped reporting to two of the three major credit
bureaus? The answer is simple: pre-screened lists. Credit bureaus
typically sell lists of their customers, pre-screened to meet certain
criteria based on the information in their credit reports. Sallie Mae's
competitors were using such lists to offer Sallie Mae's customers
better deals. Rather than meet the competition, Sallie Mae simply
decided to pull its customers' information from bureaus that wouldn't
agree to stop selling pre-screened lists.
Sallie Mae claims that it is simply protecting its customers from
unwanted solicitations. Sallie Mae knows, however, that there is a toll
free phone number people can call to keep their name off of such pre-
screened lists. If it really was concerned about protecting its
customers from unwanted credit card solicitations, it could simply
publicize that number: 888-567-8688.
The group of consumers in question here is a unique group of
consumers. Just starting their careers, still paying off their loans:
if there is any group of consumers that benefits from competition among
loan providers and consolidators, this group is it. This is a group
that often wants to hear from Sallie Mae's competitors. Those still
repaying their student loans may get offers from consolidators who will
combine all their loans and charge a lower overall interest rate. Those
who have finished repaying their student loans are often establishing
homes, careers, and families and therefore using credit cards more than
average users. They, therefore, may benefit from being able to compare
the credit card package they have with the offerings of competitors.
By trying to shield its customers from competing offers, Sallie Mae
does them a disservice twice: it punches a big hole in their credit
histories, resulting in higher rates on mortgages and other new loans,
and it prevents them from learning of better deals for other financial
services. Each of these alone could cost consumers thousands of
dollars.
My amendment prevents that from happening. It amends the Higher
Education Act by adding the word ``each,'' requiring reporting to each
of the major ``consumer reporting agencies''--credit bureaus--and
making clear that both positive and negative information should be
accurately reported.
Responsible repayment of student loans should be rewarded by
inclusion in accurate and complete credit histories. This amendment
will ensure that result.

Amendment No. 2062 Withdrawn

I need no further time. I ask unanimous consent to withdraw my
amendment.
The PRESIDING OFFICER. Is there objection? Without objection, the
amendment is withdrawn.
Mr. SARBANES. Mr. President, I commend the able Senator from Illinois
because he saw a problem and fastened on it and as a consequence, we at
least have a solution, at least at the regulatory level. I understand
the Senator may well pursue it statutorily, although Sallie Mae is not
under the jurisdiction of our committee, as he understands.
I share his concern. I think this was an unacceptable situation which
existed. Because of the actions of the Senator from Illinois and also
the Senator from Wisconsin, Mr. Kohl--who also took a keen interest in
this issue--I think we have the resolution of it. I appreciate the
Senator's action.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. I take a minute to commend Mr. Durbin, the Senator from
Illinois, for his good work in this area. He has recognized this as a
very important issue and has done something about it. Whether it is
Sallie Mae or anybody else, what we are interested in is all the
reporting we can get that would affect someone's credit. I again
commend Senator Durbin for the work he has done. I am sure he will
follow up and make sure this is part of the law.
Mr. DURBIN. Mr. President, I thank my colleagues. My colleague,
Senator Herb Kohl, shares my feeling on this issue and introduced a
similar amendment and joins with me in saluting this change and making
it clear we are going to move forward.
Mr. KOHL. Mr. President, I rise today to join Senators Durbin, Shelby
and Sarbanes in expressing our concern about an issue that could affect
countless graduates who work hard to pay off their student loans.
A little over a year ago, Sallie Mae--one of the largest originators
of student loans and the largest secondary market for student loans--
made a quiet decision that had a huge impact on college graduates.
Sallie Mae refused to report student loan repayment histories to two
out of three major credit reporting agencies. That means graduates--
most of whom have good records of paying on their student loans--have
huge holes in their credit histories holes that prevent them from
establishing credit or getting the best rates to buy their first home.
I recognize that our credit reporting system is essentially
voluntary. There is no legal requirement that any private business
report information to any credit bureau. However, Sallie Mae is an
exception. U.S. Department of Education regulations require Sallie Mae
to report student loan credit report histories to at least one of the
three major credit reporting agencies.
Until last year, they reported to all three agencies. Then, Sallie
Mae decided to stop reporting to two of the agencies. Some say they
stopped because those two agencies routinely sold lists of Sallie Mae
customers to competitors who could offer better deals. Sallie Mae
maintains that they were protecting their customers from unwanted
solicitations.
Whatever the reason, the result is clear: students who have worked
hard to complete their education are hurt by this policy. Graduates
entering the workforce and attempting to establish credit--even those
who may have excellent records paying off their student loans--end up
with incomplete credit records. On that basis alone, they may be denied
credit.
This is a significant problem. Leaving out positive credit
information on student loans can lead to a lower credit score for
consumers. Lower credit scores penalize consumers in the form of higher
credit card and mortgage interest rates, more expensive insurance, and
even the risk of being excluded from the marketplace altogether.
Sallie Mae's decision has been especially detrimental to new home
buyers. Mortgage credit is generally based on a merged credit report
which incorporates information from all three credit repositories. It
can only provide an accurate credit history if all three reports are
complete.
The Washington Post recently highlighted the story of a 31-year-old
architect who applied for a mortgage to buy a new house. Because Sallie
Mae did not report his years of on-time student loan payments to all
the credit bureaus, his credit score dropped 40 points--and his
mortgage rate increased 1.5 points--costing him $200 dollars more per
month in interest payments.
After learning of this problem last month, I have been in touch with
Sallie

[[Page S13882]]

Mae to urge them to resume full credit reporting to all three of the
major credit reporting bureaus. I have also been in touch with the
chairman and ranking member of the Banking Committee, and with Senator
Durbin. I appreciate their willingness to work with me to ensure that
student loan repayment histories are fully reported to all the major
credit bureaus.
I am especially pleased that today, Sallie Mae announced that they
have reached agreement with the credit bureaus and will now begin
reporting to all three once again. I appreciate their efforts to work
with our offices to solve this problem and ensure that their customers
get the credit they have earned. I commend Sallie Mae for doing the
right thing and fixing this problem promptly.
This is truly a positive step forward, but I think we should take one
more at the appropriate time. Congress should codify these new
agreements in law by requiring Sallie Mae to report to all three major
credit bureaus. This will guarantee graduates that their student loan
payment histories will always be reported and their credit scores will
be complete. It will make sure that we do not face further problems in
the future.
Senator Durbin and I have both been working on amendments that would
do just that. While I will not offer an amendment on this bill, I look
forward to working with Senator Durbin, Chairman Shelby, and Senator
Sarbanes to address this issue in the future.
Mr. REID. Mr. President, I know the two managers are on the floor. I
want to bring to their attention that Senator Cantwell has been waiting
to speak for some time on an amendment which was adopted. If you could
work them into the order, I would appreciate it.
Ms. CANTWELL. Mr. President, my colleague from Wyoming and I tried to
accommodate Members who were here in the last few minutes, trying to
get several amendments adopted.
I want to spend a few minutes going into more detail about the
Cantwell-Enzi Restore Your Good Name Act that has been incorporated
into the Fair Credit Reporting Act.
I would first like to thank the chairman and ranking members of the
committee for their strong support of this underlying bill that has
been incorporated, along with the last amendment that we just voted on
by voice a few minutes ago, dealing with business records.
It was roughly 2 years ago that the chairman of the Banking Committee
and I spoke at a national platform for the attorneys general of America
to address the issue of privacy and some of the biggest challenges to
privacy at that time. We both made known our view that this country
needed stronger legislation in the area of identity theft.
I commend the chairman and the ranking member for their strong step
forward, a really critical step forward, to protect Americans from what
is the fastest growing crime in America--identity theft.
Unfortunately, even though the Senate passed the Cantwell-Enzi
legislation last year, the House failed to act on it and the number of
victims has continued to grow. In fact, 9 million Americans have been
the victims of identity theft. This underlying bill incorporates some
of those good ideas that my colleague from Wyoming worked so hard on in
the Banking Committee and that we worked through the Judiciary
Committee to pass. I certainly commend my colleague, Senator Enzi, for
his dedication to this issue. Consumers in America are going to be more
protected because of his efforts. It has been a pleasure to work with
him on these challenging issues, to make sure those protections are put
in place.
The underlying bill that we have passed changes the framework by
which consumers can now restore their good name and protect their
identity. It does so, first and foremost, as Senator Enzi and I
suggested, by formulating an affidavit process. So many people in
America are victims of identity theft. But I can tell you this: it is
not a crime for which you can call 911 and get immediate response. The
biggest problem, once you are a victim of identity theft, is proving
that you are in fact the person whose identity has been stolen.

I like to say that, in the case of the perpetrator who steals your
television set right out of your living room, chances are that he is
somewhere in the neighborhood. But the crime of identity theft could
involve someone anywhere in the country, or for that matter, outside
the United States, working with a ring.
So part of what we are trying to do, first and foremost, is to give
victims and law enforcement tools to help victims reclaim their
identity. The affidavit process that now must be accepted by business
owners and credit agencies as proof that you are a victim of identity
theft is the first step in making sure that your credit record is
corrected and perpetrators are prevented from continuing to ruin your
credit.
Second, the credit provisions that Senator Enzi was successful in
getting added in committee represent a tremendous step in solving the
problem that so many Americans face when their identity is stolen--that
the perpetrators continue to pose as them, running up large credit
bills.
In the case of a constituent I recently met in Washington State, the
perpetrator who stole the constituent's license succeeded in buying
five different vehicles. My constituent has continued to be a subject
of investigation by law enforcement as she has tried to prove that it
was, in fact, her identity that was stolen, that she was the victim. So
a critical part of this legislation is the fact that individuals will
be allowed to go to a credit agency and get that information blocked so
that their good name is restored.
The amendment that we just adopted deals with another aspect of this
problem, which is getting access to business records. Law enforcement
in the State of Washington have been very successful at dealing with
crimes of identity theft because identity thieves are often criminals
who are involved in larger activities. There is a high correlation
between people who are involved in identity theft--who use that stolen
identity to get access to cash and resources in the State of
Washington--and people who are involved with methamphetamine
production. These criminals are involved in both drug activity and
identity theft.
With this amendment, police can now get access to business records.
Any victim, or law enforcement official acting on behalf of the victim,
will have access to business records within 20 days after the victim
provides identification, an affidavit and a police report to the
business. This gives consumers a real tool to correct the harm caused
them by this crime. This is a very fundamental part of this bill.

The last aspect of the identity theft bill that is part of the
amendment we just agreed to deals with the statute of limitations. In
the 2001 Supreme Court case of TRW v. Andrews, the Court ruled that the
statute of limitations in these cases runs for 2 years from the time
the crime is committed. But what we have found is that some victims of
identity theft don't even realize they are victims until a year or 2
years after the identity theft has occurred. The statute of limitations
therefore impacted the ability of victims to get justice. The
underlying amendment we just agreed to extends the statute of
limitations to give victims of identity theft 5 years from the time the
crime was committed.
This underlying bill with the amendment we just agreed to represents
a critical first step in dealing with one of the most important issues
I think we will deal with in this information age, which is the issue
of privacy. While this body has tried to deal with this issue in myriad
ways by protecting the financial and health records of individuals, and
by making sure that either opt-in or opt-out legislation have been
cleared with consumers, I think we have much more work to do in the
area of privacy. But you can be sure the Fair Credit Reporting Act
before us today and the Cantwell-Enzi amendment and language adopted
with it take a very positive step in dealing with one of the biggest
privacy threats to Americans today--identity theft.
With these tools, law enforcement and individual consumers whose
identities have been stolen will have the tools to make the process of
reporting and resolving identity theft go smoother. While some may have
said businesses would oppose the underlying amendment, or some of the
features of the Cantwell-Enzi amendment, businesses have seen record
losses of $22

[[Page S13883]]

billion a year from identity theft, and they have joined in this effort
to make sure we pass strong national legislation.
I again thank Senator Sarbanes and Senator Shelby for their hard
work, and certainly Senator Enzi for his effort and his stewardship in
making sure we have good legislation in the process that can go on to
passage and that will better protect consumers in America.
I yield the floor.
The PRESIDING OFFICER (Mrs. Dole). The Senator from New York.
Mr. SCHUMER. Thank you, Madam President.
I thank Chairman Shelby and Ranking Member Sarbanes for the wonderful
job they did on this legislation. An important measure such as this
that sails through the floor in 1 day is a tribute to the statesmanlike
and fine legislative hand of our new chairman of the Banking Committee
and, of course, the steady and wise old hand of our former chairman of
the Banking Committee and now the ranking member.
I have been ready to offer an amendment on an issue related but not
directly on point to this legislation; that is, debit cards. Right now,
millions of Americans use debit cards. They are great. You don't need a
checkbook when you have a debit card. It solves many problems. It is a
real measure of convenience. They are easy and they save a little time.
You don't have to go to the bank and get cash. It is a win-win, except
for one catch: Most consumers think when they pay with a debit card it
is free; that it doesn't cost anything. However, many banks are now
charging the consumer when he or she uses the debit card as much as
$1.50. In my State of New York, about half the banks charge anywhere
between 25 cents to $1.50. When I have asked consumers, they don't
know. My wife didn't know.
What I want to do is what I did in the House on credit cards and what
I was able to do here in the Senate with ATMs--not eliminate the fees,
because that is up to each bank but, rather, disclose them.
There are a couple of problems with disclosure. One is because it is
not the banks that own the machines--the ATMs--rather, it is the
stores.
It is a little more difficult to get that information out to the
consumer even when the consumer swipes the card. What we have done here
is ask the Federal Reserve to within 6 months study this issue and show
us how it can be done.
In addition, there is another point our amendment has that we ask the
Federal Reserve to study; that is, at least putting it on the monthly
bank statement in clear letters what the fees are for debit cards. That
is not done now. There are kids in college who were mailed these cards,
and they used them to buy a Coke. The Coke was a dollar. The fee was a
dollar. If they knew it cost $1, they probably wouldn't do it anymore.
I would like to engage in a colloquy with the chairman of the
committee.
As the chairman knows, after a long fight Congress enacted
legislation so that every ATM--no matter if it is run by a bank or
private operator--tells you when you are being charged. Customers have
come to know and expect that warning. But there is no warning when you
use your card at a store and use it as a debit card. As often as not,
you are charged. Is that correct?
Mr. SHELBY. If the Senator will yield, I understand the concerns. I
think it is also true that debit card transactions and ATM transactions
have some significant differences. Namely, the retailer owns the debit
machine while the bank owns the ATM machine. This makes a ``point of
sale'' disclosure--as we achieved in Gramm-Leach-Bliley--more difficult
since banks cannot easily adjust the equipment and the software.

Mr. SCHUMER. I ask unanimous consent that the letter the chairman,
the ranking member, and myself are submitting to the Federal Reserve
Board be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate, Committee on Banking, Housing, and Urban
Affairs,
Washington, DC, November 6, 2003.
Hon. Alan Greenspan,
Chairman, Board of Governors of the Federal Reserve System,
Washington, DC.
Dear Chairman Greenspan: We are writing to request a study
by the Board of Governors of the disclosure of fees imposed
by financial institutions on consumers in debit card
transactions. Our request is outlined in the attached
document.
As you know, consumers are increasingly using debt cards as
an alternative to cash or credit cards. In 2001, there were
estimated to be over 250 million bank cards in circulation
with a debit function, and today it is estimated that debit
payments make up almost 12 percent of retail payments. The
reasons for this growth are clear. Debit cards offer
convenience for consumers, and they offer substantial cost
savings for banks through more efficient electronic
processing.
Debit cards can be used by a consumer in two ways. In an
online transaction, the consumer enters his/her personal
identification number (PIN), and the debit occurs through an
electronic transfer of funds over a local debit network,
e.g., InterLink or Plus, from the consumer's bank to the
merchant's bank. In an offline transaction, the consumer
signs his/her name on a receipt, and the transaction occurs
over a MasterCard or Visa network linked to the bank.
However, depending on how the consumer chooses to use his
or her debit card, banks charge and make different amounts of
money. In an offline transaction, banks charge a merchant
from approximately 1.5 percent to 1.99 percent of the total
value of the transaction, similar to credit card transactions
that utilize the Visa or MasterCard networks. For example, in
a $100 transaction, the merchant would be charged up to $2.00
for the processing of the transaction over the Visa or
MasterCard network. In an online transaction, banks charge
the merchant a flat fee of about thirty cents.
As those numbers illustrate, banks typically make more
money when consumers use their debit cards in the offline or
credit card-like function. In fact, it has been estimated to
us that in a typical transaction banks make three to four
times more money on offline transactions than on online
transactions.
In part to make up for this revenue differential, banks
have introduced new debit card fees in the form of a charge
to the consumer for each PIN-based, online transaction he or
she makes. This fee comes on top of the flat fee already
charged to the merchant.
However, the consumer may be unaware of these fees at the
time of the purchase. He or she has no explicit disclosure of
the fee at the point of sale, and no option to accept or deny
the additional charge, or to pay cash or use a different
payment to avoid the fee. The evidence of the debit car fee
shows up only later on the consumer's monthly bank statement.
The debit card fees are published together with ATM fees,
making it difficult for the consumer to distinguish or
understand the charges. Many consumers end up calling the
retailer to complain about the fee in the mistaken belief
that it was the retailer, not their bank, that initiated the
charge.
The growth of debit cards and the rise in debit cards fees
makes this an important issue. The number of parties involved
in the debit cards transactions--retailers, consumers,
electronic payment networks, and banks--makes this a complex
issue. As always we appreciate your support and the diligence
and expertise of the staff at the Federal Reserve Board in
helping us to consider and to address the disclosure of debit
cards fees to consumers.
Sincerely,
Richard Shelby,
Chairman.
Paul Sarbanes,
Ranking Member.
Charles Schumer,
United States Senator.

Mr. SCHUMER. Mr. Chairman, I know you have been in support of the
Feds doing the study so we can see what to do next year in terms of
legislation; I ask if that is amenable to you?
Mr. SHELBY. Absolutely. Senator Sarbanes and I agree with Senator
Schumer and support further study of this issue. We have planned and
drafted a letter to the Federal Reserve Board asking them to conduct a
comprehensive review of this issue.
Mr. SCHUMER. I ask the ranking member for his views on this letter
and what we have to do in terms of disclosure on debit cards.
Mr. SARBANES. I share the chairman's view. I think the Senator from
New York has spotlighted a very important issue, but probably the best
way to proceed now is with this joint letter to the Federal Reserve.
Then we would have the benefit of their study of this issue as we move
ahead to try to address it.
Mr. SCHUMER. I thank the ranking member. We will make progress on
debit cards. I will not go into all the details of the study. The
letter is quite detailed. The Federal Reserve is willing to do it.
I make two other points after commending my colleagues on the bill
overall. I am proud to be a cosponsor and supporter of this bill. There
are two parts of the bill in which I was particularly interested. One
is identity theft which has become an epidemic.

[[Page S13884]]

When your identity is stolen, it can take years to bring back your
credit rating, even through no fault of your own. The criminals are
getting very good at identity theft.
I introduced comprehensive legislation in this regard much earlier
this year. The chairman has added provisions very similar to those I
have introduced. As a result, this bill does a good job. Right now,
becoming a victim of identity theft is as easy as saying your ABC's.
With this legislation, it will be tougher.
My hometown, New York City, has the unfortunate distinction of being
the identity theft capital of the world. I am glad we were able to do
something quickly in that regard.
Second, on credit scoring, this is another issue on which the Senator
from Colorado and myself worked long and hard. We thank the chairman
and ranking member for incorporating that into the legislation.
The bottom line is, consumers have been kept in the dark about what
their credit score is and how it is computed. This legislation, by
adding the Schumer-Allard provision, lifts the veil of secrecy over
credit scores. When a bank is going to charge you more for your
mortgage, which could mean hundreds and hundreds of dollars every
quarter, much more money every month, now you will be able to find out
why and if there is incorrect information as to why you are being
charged more. Maybe it is because you have a whole lot of credit cards,
for instance, even if you pay your bills on time. You will be able to
correct it.
This is fine legislation. I am speeding things along here because I
know people want to move quickly. I thank the chairman.
The PRESIDING OFFICER. The Senator from New Jersey.

Amendment No. 2064

Mr. CORZINE. Madam President, I have a couple of general remarks
about the overall legislation and I have an amendment at the desk which
I call up, No. 2064.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from New Jersey [Mr. Corzine] proposes an
amendment numbered 2064.

Mr. CORZINE. Madam President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To require financial institutions and other users of consumer
reports to provide notice to appropriate Federal agencies in cases in
which consumer information is compromised)

On page 16, line 25, strike the period at the end and
insert the following: ``; and
``(C) prescribe regulations requiring each financial
institution and each other person that is a creditor or other
user of a consumer report to notify the Federal Trade
Commission (and any other agency or person that such
rulemaking agency determines appropriate) in any case in
which there has been, or is reasonably believed to have been
unauthorized access to computerized or physical records which
compromises the security, confidentiality, or integrity of
consumer information maintained by or on behalf of that
entity, except that such regulations shall not apply to a
good faith acquisition of information by an employee or agent
of such entity for a business purpose of that entity, if the
information is not subject to further unauthorized access.''.

Mr. CORZINE. I understand the amendment will be agreed to by both of
the managers but let me first say that this amendment is about
disclosure of breached customer data that may exist in our system.
Frankly, 85 percent of businesses that have sophisticated computer
systems have identified breaches in their system. My amendment asks for
the reporting of those breaches to the FTC so we can get a database and
understand it.
Mr. SHELBY. Madam President, the managers are prepared to accept the
amendment offered by Senator Corzine. It is a good amendment and makes
a lot of sense.
Mr. SARBANES. The amendment of the Senator from New Jersey makes a
positive contribution to this legislation. I am certainly happy to
accept it.
I also thank the Senator for all the work he did in the committee on
so many provisions in this legislation. He had a major hand in shaping
the bill. I deeply appreciate that.
Mr. CORZINE. I appreciate that recognition.
The reality is the chairman and ranking member showed great
stewardship and leadership to get this bill in a position where it has
broad support in this body. It is going to make a big difference in the
financial marketplace for consumers.
Both the reauthorization and additional elements embedded in this
bill have truly improved our credit system, which is already the finest
in the world. I thank the ranking member. I want to make sure the
chairman knows that I appreciate the bipartisanship, the cooperation,
and comity that has accompanied the framing of this bill. I very much
appreciate the inclusion of the disclosure of breached consumer data as
part of the bill.
There are some elements of this bill that I will highlight that
others have given emphasis to. It is particularly important to
strengthen the controls on personal, financial, and medical data in
this bill; however, nothing is more important, in my view, than someone
having the ability of requesting a credit file on themselves from the
credit agencies once a year. People ought to be able to understand how
they are being viewed in the system, if ever they are going to correct
issues. That, to me, is one of the most important controls.
Very much to the credit of the ranking member, there is emphasis on
promoting financial literacy embedded in this legislation that creates
a real foundation for how we can talk to the general public, teach the
principles of proper financial management, which is one of the most
important elements in individual personal finances. When citizens find
they are on the short end of their credit reports and they are in court
to solve a bankruptcy, they wish they had learned more in school
regarding managing personal finances.
The identity theft issue, which is part of why I have offered the
breached customer data amendment, is so important. This is an epidemic
in our society. The number of breaches, the number of extraordinary
cases of individual pain that has come from people breaching our
technologically connected world today is overwhelming. The protections
we have started to talk about--fraud alerts, limitations on transfer of
debt, and this free credit report a year--will go a long way toward
trying to shape it up.
We could go further in this area, in my own view. As the Senator from
New York discussed, this is an important piece of legislation. I wish
we had done a little more to control the use of financial information,
particularly among affiliates in some of our most complex organizations
where there are 1,000 or 1,500 affiliates, some spread out but not as
broadly controlled as some Members might think relative to what I know
is in the case of the world financial markets.
But that said, this is a fine piece of legislation. The manager and
ranking member should be congratulated, as should all of the members of
the committee, including the Presiding Officer.
With that, I will yield the floor.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, has that amendment been disposed of?
The PRESIDING OFFICER. It has not.
Is there further debate?
If not, the question is on agreeing to amendment No. 2064.
The amendment (No. 2064) was agreed to.
Mr. SARBANES. I move to reconsider the vote.
Mr. REID. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I have spoken to the two managers of the
bill, and at this stage it appears we have two amendments left, both
from the Senator from Wisconsin, Mr. Feingold. He has agreed, with the
permission of the managers, to offer one amendment, then offer the next
amendment, and debate both those amendments at the same time; and then
we would vote on both amendments following his debate on both
amendments and, of course, the adequate response from the managers of
the bill.
Senator Feingold is here and he is in agreement with that, so we do
not need a unanimous consent agreement, but

[[Page S13885]]

people should understand what he intends to do at this time, and what
we intend to do.
Following that, it is my understanding, from speaking to the two
managers, there are no other amendments. I think there may be a
statement or two that Senators wish to give on the bill, but other than
that, I know of no substantive amendments.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. Madam President, I would anticipate we would be ready
to go to final passage. I think we can move fairly quickly. I know
Senators have conflicting demands on them, and we are trying to move
along.
Mr. REID. Madam President, I have a statement that will take about 3
or 4 minutes that I will give at some time.
The PRESIDING OFFICER. The Senator from Wisconsin.

Amendment No. 2065

Mr. FEINGOLD. Madam President, I send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Wisconsin [Mr. Feingold] proposes an
amendment numbered 2065.

Mr. FEINGOLD. Madam President, I ask unanimous consent that reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To provide for data-mining reports to Congress)

At the appropriate place, insert the following:

SEC. __. DATA-MINING REPORTING ACT OF 2003.

(a) Short Title.--This section may be cited as the ``Data-
Mining Reporting Act of 2003''.
(b) Definitions.--In this section:
(1) Data-mining.--The term ``data-mining'' means a query or
search or other analysis of 1 or more electronic databases,
where--
(A) at least 1 of the databases was obtained from or
remains under the control of a non-Federal entity, or the
information was acquired initially by another department or
agency of the Federal Government for purposes other than
intelligence or law enforcement;
(B) the search does not use a specific individual's
personal identifiers to acquire information concerning that
individual; and
(C) a department or agency of the Federal Government is
conducting the query or search or other analysis to find a
pattern indicating terrorist or other criminal activity.
(2) Database.--The term ``database'' does not include
telephone directories, information publicly available via the
Internet or available by any other means to any member of the
public without payment of a fee, or databases of judicial and
administrative opinions.
(c) Reports on Data-Mining Activities.--
(1) Requirement for report.--The head of each department or
agency of the Federal Government that is engaged in any
activity to use or develop data-mining technology shall each
submit a public report to Congress on all such activities of
the department or agency under the jurisdiction of that
official.
(2) Content of report.--A report submitted under paragraph
(1) shall include, for each activity to use or develop data-
mining technology that is required to be covered by the
report, the following information:
(A) A thorough description of the data-mining technology
and the data that will be used.
(B) A thorough discussion of the plans for the use of such
technology and the target dates for the deployment of the
data-mining technology.
(C) An assessment of the likely efficacy of the data-mining
technology in providing accurate and valuable information
consistent with the stated plans for the use of the
technology.
(D) An assessment of the likely impact of the
implementation of the data-mining technology on privacy and
civil liberties.
(E) A list and analysis of the laws and regulations that
govern the information to be collected, reviewed, gathered,
and analyzed with the data-mining technology and a
description of any modifications of such laws that will be
required to use the information in the manner proposed under
such program.
(F) A thorough discussion of the policies, procedures, and
guidelines that are to be developed and applied in the use of
such technology for data-mining in order to--
(i) protect the privacy and due process rights of
individuals; and
(ii) ensure that only accurate information is collected and
used.
(G) A thorough discussion of the procedures allowing
individuals whose personal information will be used in the
data-mining technology to be informed of the use of their
personal information and what procedures are in place to
allow for individuals to opt out of the technology. If no
such procedures are in place, a thorough explanation as to
why not.
(H) Any necessary classified information in an annex that
shall be available to the Committee on Governmental Affairs,
the Committee on the Judiciary, and the Committee on
Appropriations of the Senate and the Committee on Homeland
Security, the Committee on the Judiciary, and the Committee
on Appropriations of the House of Representatives.
(3) Time for report.--Each report required under paragraph
(1) shall be--
(A) submitted not later than 90 days after the date of the
enactment of this Act; and
(B) updated once a year and include any new data-mining
technologies.

Mr. FEINGOLD. Madam President, the Fair Credit Reporting Act was
designed to make sure that personal financial information about
consumers is fairly maintained and accurately reported by credit
agencies and provided only to the appropriate people. Maintaining the
privacy of the consumer is one of the central objectives of the Fair
Credit Reporting Act. My amendment will ensure that the Federal
Government is not overstepping its role in obtaining and using this
highly personal information.
My amendment will require all Federal agencies to report to Congress
on the practice of datamining but it would not impose any limits on the
use of datamining. This amendment will provide the American people with
critical information about the use of datamining technology and the way
highly personal information, such as credit reports and other financial
information, is obtained and used by our Government.
The untested and controversial intelligence procedure known as
datamining is capable of maintaining extensive files containing both
public and private records on each and every American. Periodically,
after millions of dollars have been spent, we learn about a new
datamining program under development. Congress and the public should
not be learning the details about these programs only after millions of
dollars are spent testing and using datamining against unsuspecting
Americans.
Coupled with the expanded domestic surveillance undertaken by this
administration in the wake of September 11, the unchecked development
of datamining is a potentially troubling step that threatens one of the
most important values that we are fighting for in the war against
terrorism; and that, of course, is freedom. My amendment would simply
require all Federal agencies to report to Congress within 90 days and
every year thereafter on datamining programs used to find a pattern
indicating terrorist or other criminal activity and how these programs
implicate the civil liberties and privacy of all Americans. If
necessary, information in the various reports can be classified.
The amendment does not end funding for any program, determine the
rules for use of the technology or threaten any ongoing investigation
that uses datamining technology. All it does is ensure that Congress
has complete information about the current datamining plans and
practices of the Federal Government. With this information, Congress
will be able to conduct a thorough review of the costs and benefits of
the practice of datamining on a program-by-program basis and make
considered judgments about which programs should go forward and which
ones should not.
My amendment would provide Congress with information about the nature
of the technology and the data that will be used. The amendment would
require all Government agencies to assess the efficacy of the
datamining technology and whether the technology can deliver on the
promises of each program. In addition, the amendment would make sure
that the Federal agencies using datamining technology have considered
and developed policies to protect the privacy and due process rights of
individuals and ensure that only accurate information is collected and
used.

Congressional review and oversight is necessary in order to find out
whether and how Government agencies, such as the Department of Homeland
Security, the Department of Justice, and the Department of Defense,
plan to collect and analyze a combination of intelligence data and
personal information such as individuals' traffic violations, credit
card purchases, travel records, medical records, communications
records, and virtually any information contained in commercial or
public databases. Through comprehensive data mining, everything from
people's

[[Page S13886]]

video rentals or drugstore purchases made with a credit card to also
their most private health records could be fed into a computer and
monitored and reviewed by the Federal Government.
Using data mining, the Government hopes to be able to detect
potential terrorists. There is no evidence, however, that data mining
will, in fact, prevent terrorism. Data mining programs under
development are being used to look into the future before being tested
to determine if they would have even been able to anticipate past
events like September 11 or the Oklahoma City bombing. Before we
develop the ability to feed personal information about every man,
woman, and child into a giant computer, we should learn what data
mining can and can't do and what limits and protections are needed.
We must also consider the potential for errors in data mining. Most
people don't even know what information is contained in their credit
reports. Subjecting unchecked and uncorrected credit reports to massive
data mining makes the prospect of ensnaring many innocents very real.
If a credit agency has data bout John R. Smith on John D. Smith's
credit report, even the best data mining technology might reach the
wrong conclusion.
Most Americans believe that their private lives should remain
private, especially from the Government. Data mining programs run the
risk of intruding into the lives of individuals who have nothing to do
with terrorism but who trust that their credit reports, financial
records, shopping habits and doctor visits would not become a part of a
gigantic computerized search engine, operating without any controls or
oversight.
The executive branch should be required to report to Congress about
the impact of the various data mining programs now underway or being
developed, and the impact those programs may have on our privacy and
civil liberties so that Congress can determine whether the proposed
benefits of this practice come at too high a price to our privacy and
our personal liberties.
Some may argue that this amendment does not belong in the bill before
us. I respectfully disagree. As we consider legislation dealing with
individuals' credit reports and their financial privacy, I think it is
both relevant and important that we find out whether and to what extent
the Government is reviewing databases containing highly personal
information.
So I urge my colleagues to support this very simple reporting
amendment. All it asks for is information to which Congress and the
Americana people are entitled.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Madam President, I intend to oppose this amendment and
all amendments that are not within the four corners of the Fair Credit
Reporting Act legislation.
The committee spent a great deal of time, as the Presiding Officer
knows, as a distinguished member of the Banking Committee, carefully
considering the reauthorization and reform of the Fair Credit Reporting
Act national standards.
The committee bill is carefully crafted, and it balances protecting
consumer interests and ensuring the efficiency of our credit markets.
The committee bill was unanimously approved, as the Presiding Officer
knows, by a voice vote in the committee, which is hard to get. It was
unanimous.
Extraneous amendments, I believe, alter this balance and focus and
threaten our ability to maintain the strong, bipartisan consensus
necessary to pass this important legislation this year.
As a result, the managers of the bill--Senator Sarbanes and I--intend
to oppose including this amendment and all non-Fair Credit Reporting
Act-related amendments, regardless of their merit. This might have some
merit, but I think it can be better served at another place on another
day.
At the proper time, I will move to table the amendment. Right now, I
yield to Senator Sarbanes.
Mr. FEINGOLD addressed the Chair.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Madam President, if I could respond briefly to the
chairman, first, I congratulate the chairman and ranking member for
putting this bill together. I intend to support it. I am pleased to
support it. I recognize the managers had to achieve a balance, and they
do not want to disrupt that balance.
I think I can pretty confidently assure my colleagues that a mere
reporting requirement by Federal agencies could not possibly upset the
balance they have so skillfully achieved. So I would argue in the case
of this amendment--and my second amendment, which is also only about
Federal Government reporting information--that it does no violence to
what they have achieved and actually is, in this case, very consistent
with the purposes of the bill that have to do with people's privacy of
their financial records.
So I urge the chairman and ranking member to consider that this would
be different from many other amendments that could upset the balance.
Mr. SARBANES. Madam President, I understand the data mining amendment
encompasses the legislation which the Senator introduced and which is
pending in the Judiciary Committee, if I am not mistaken. At least I am
informed of that. So it is not within the scope of the work of our
committee, I say with all due respect to the Senator.
I share some concerns about the issues he is raising, and I think
they are worth paying attention to. But we have tried very hard to deal
only with amendments that are relevant to the Fair Credit Reporting
Act. A number of Members on both sides of the aisle, upon hearing that,
have refrained or withheld from offering amendments that are outside
that parameter, and we are very grateful to them for doing that.
Obviously, it has enabled us to move this legislation along.
I think we have had a very open process in dealing with amendments
that affect the provisions of the FCRA. We tried to keep it open and I
think, in a sense, we have bent over backward to do that. But we have
tried to dissuade the offering of amendments that are outside that
scope.
I think this amendment falls into that category, and therefore I will
be supportive of the chairman in the statement he made. This is not to
speak to the substance of the Senator's amendment in any developed way;
I assure him of that. But it seems to me this is not within the scope
of what we do in the Banking, Housing, and Urban Affairs Committee.
Mr. FEINGOLD. Madam President, I will briefly respond with great
respect. There were a number of other amendments with great substance
that I would have very much wanted to offer, but did not in the spirit
of trying to make sure nothing of great moment occurred on this bill.
These are merely reporting amendments.
I understand the Senator's point. These are amendments that could
have been possibly accepted; they are not particularly controversial.
In any event, I respect what the managers have had to do in order to
get the bill through.
I am prepared to move on to the next amendment, unless they want to
continue to debate this. If the managers prefer, we could move on in
the next amendment.
Mr. SHELBY. Madam President, I move to table the amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. SHELBY. Madam President, I ask unanimous consent that the vote be
deferred temporarily.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 2066

Mr. FEINGOLD. Madam President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Wisconsin [Mr. Feingold] proposes an
amendment numbered 2066.

Mr. FEINGOLD. Madam President, I ask unanimous consent that further
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To require a report to Congress regarding Federal
acquisitions of American-made products)

At the end of title VII, add the following:

SEC. 712. BUY AMERICAN REPORT.

(a) In General.--Not later than 60 days after the end of
each fiscal year, the head of

[[Page S13887]]

each Federal agency shall submit a report to Congress on the
amount of the acquisitions made by the agency from entities
that manufacture the articles, materials, or supplies outside
of the United States in that fiscal year.
(b) Content of Report.--The report required by subsection
(a) shall separately indicate--
(1) the dollar value of any articles, materials, or
supplies purchased that were manufactured outside of the
United States;
(2) an itemized list of all waivers granted with respect to
such articles, materials, or supplies under the Buy American
Act (41 U.S.C. 10a et seq.); and
(3) a summary of the total procurement funds spent on goods
manufactured in the United States versus funds spent on goods
manufactured outside of the United States.
(c) Public Availability.--The head of each Federal agency
submitting a report under subsection (a) shall make the
report publicly available by posting on an Internet website.

Mr. FEINGOLD. Madam President, I have come to this floor on several
occasions this year to discuss the crisis in American manufacturing and
some steps that I think Congress should take to stop the flow of
manufacturing jobs overseas.
One step that I believe we should take to support American
manufacturers is to ensure that the Federal Government buys American-
made goods whenever reasonably possible. Congress enacted such a policy
when it passed the Buy American Act of 1933. This law was enacted to
ensure that the Federal Government supports domestic companies and
domestic workers by buying American-made goods.
However, the Buy American Act includes a number of waiver provisions
which allow agencies to buy foreign-made goods in certain defined
circumstances. I am concerned that agencies may be using these waiver
provisions to get around the spirit, if not the letter, of the law.
That's why, earlier this year, I introduced the Buy American
Improvement Act, which would strengthen the existing act by tightening
its waiver provisions.
Unfortunately, it's virtually impossible to get hard numbers on the
Federal Government's purchases of foreign- and domestic-made goods.
Under current law, only the Department of Defense is required to report
annually to Congress regarding its use of waivers of the Buy American
Act and its corresponding purchases of foreign-made goods. As for other
agencies, there is no real disclosure or accountability in the waiver
process.
I think that Congress and the public should know how taxpayer dollars
are being spent, and that's what my amendment would do. The amendment
is very simple and, I hope, noncontroversial. It would just require all
Federal agencies to prepare an annual report that details their
purchases of foreign-made goods. That's it. It would not make any
changes in the Buy American Act; that law and its waiver provisions
would remain the same. All that would change is that we would all know
whether the Buy American Act is working.
My amendment would require that the annual report to be submitted by
agency heads include the following information: the dollar value of any
articles, materials, or supplies purchased that were manufactured
outside of the United States; an itemized list of all applicable
waivers granted with respect to such articles, materials, or supplies
under the Buy American Act; and a summary of the total procurement
funds spent by the Federal agency on goods manufactured in the United
States versus on goods manufactured outside of the United States. The
amendment also requires that the heads of all Federal agencies make
these annual reports publicly available on the Internet.
Some may argue that this is a burdensome requirement. The truth is
that it is similar to the reporting requirement that the Defense
Department complies with every year. If the Pentagon, with its many
procurement contracts, can report to Congress annually on its purchases
of goods, so too can all other Federal agencies.
I am pleased that this amendment is supported by an array of business
and labor groups including the AFL-CIO, Save American Manufacturing,
the U.S. Business and Industry Council, and the International
Brotherhood of Boilermakers.
Madam President, 2.5 million American manufacturing jobs have been
lost since January 2001. The current unemployment rate is 6.1 percent.
The stagnant economy and continued loss of high-paying manufacturing
jobs underscore the need for the Federal Government to support American
workers and businesses by buying American-made goods. This amendment is
a modest step toward that goal.
I understand that the managers will oppose this and all amendments
that are deemed to be non-relevant to the bill. I respect their
prerogative to do so. I would have preferred to offer this important
amendment to another bill. But opportunities to offer amendments have
been few and far between this year, and it is the right of all Senators
to offer amendments. I hope that my colleagues will not oppose this
amendment simply because they do not feel it belongs on this particular
bill. The question is not whether this amendment belongs on the bill;
the question is whether it is good law. I think it is and I hope others
will agree.
The American people deserve to know how their tax dollars are being
spent, and to what extent these dollars are being used to support
foreign jobs. I urge my colleagues to support American companies and
American workers by supporting this amendment.
I yield the floor.
Mr. SHELBY. Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. CARPER. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CARPER. Madam President, as we approach the end of actually a
rather short, abbreviated debate on this legislation, I want to say a
few words encouraging my colleagues to join the Presiding Officer,
myself, and our respective Republican and Democratic floor managers in
supporting this measure.
Let me begin by saying to Chairman Shelby and our ranking Democrat,
Senator Sarbanes, that I think it is rather remarkable that we have
come through the deliberations of the past year. We had extensive,
balanced hearings on this legislation that gave people from all sides
of the issue the chance to comment on what they would like to see us do
with respect to reauthorization of the Fair Credit Reporting Act.
This is the way the process is supposed to work. We have a deadline,
and that deadline is to act by December 31. Our chairman and ranking
Democrat have orchestrated a series of hearings, as I said earlier,
which allowed financial institutions to come in, allowed consumer
groups to come in, and other folks--rank-and-file citizens--to share
with all of us on the Banking Committee how they think we ought to
proceed.
We did not have one hearing; we have had a whole series of hearings.
I think what emerged from those hearings is a consensus that we aspire
to have, but all too rarely see. I am proud to be part of this process,
and I suspect the Presiding Officer feels the same way.
Our national credit granting standards that are created under the
Fair Credit Reporting Act allow all Americans quick and easy access to
credit, whether it is to purchase a home, to purchase a car, or any
number of other consumer goods. There is compelling evidence that
failure to reauthorize the expiring provisions of the Fair Credit
Reporting Act would have significant economic consequences, and not
very positive ones.
I am pleased to say that the legislation before us today extends
these uniform standards. It makes them permanent. We avoid any adverse
impact on our national credit granting system, and we avoid any
negative impact on our national economy.
The legislation before us also makes a number of improvements to
current law. I think this is an important point. It is one made by
others, but I want to make it again. Earlier this year, the Federal
Trade Commission released a survey indicating that millions of
consumers have been victimized by the crime of identity theft. My own
family understands how disruptive and devastating this crime can be, as
one of our relatives in your State, Madam President, was victimized
over a period of several years by identity theft. It

[[Page S13888]]

was an awful experience for her and not a pleasant one for her family.
The bill before us responds to this increasing trend by requiring the
creation of a system of fraud alerts. This system of fraud alerts
allows the victims of identity theft and also allows active duty
military personnel to flag their credit reports for potential fraud.
For example, if a consumer believes they have been the victim of
identity theft, then that consumer can make one call and have a fraud
alert put on his or her credit report. The alert will notify users of
that report that this consumer could be the victim of a fraud. This
alert, in turn, requires the users of this report to take extra steps
before establishing new credit or establishing a credit limit.
In the year after the fraud alert is placed in the file, a consumer
will be able to receive not one, but two free credit reports to make
sure the information in their credit report is correct. In addition,
consumers will have the ability to block information on their credit
report that is the result of identity theft.
Importantly, the bill increases the maximum penalty for those who
commit the crime of identity theft.
This legislation also gives consumers more control over the
information that is contained in their credit reports. First of all,
consumers will have easy access to a free credit report on an annual
basis. This is a significant right that will allow consumers to review
the information contained in their credit report and to make
corrections to it.

To ensure consumers are aware of these rights, the Federal Trade
Commission must actively publicize how consumers may obtain a free
credit report and how to dispute information contained in that report.
I oftentimes use the analogy of if a tree falls in a forest, there is
nobody there to hear it. My colleagues have probably heard that;
probably used it a time or two. In this case, if a consumer has the
ability to obtain a free copy of their credit report annually, but they
don't know they have that right, is there a benefit that inures from
this legislation?
In the legislation, we put the onus on others and the Federal Trade
Commission to publicize how consumers can obtain a free credit report.
In addition, the bill gives consumers important protection for their
medical information. One of our colleagues on the floor today was
asking if they deal with a particular financial institution, a company
that has access to some of the medical data, can they then share
medical data with other affiliates of that company?
The answer is no; that is protected and prevented by this
legislation. This bill prohibits the use of medical information in the
credit granting process. In addition, as I just said, the legislation
creates a system for consumer reporting agencies to code medical
information so that someone looking at a credit report cannot discover
a consumer's medical history.
Finally, the bill before us establishes the Financial Literacy and
Education Commission. I believe this is an essential part of the
legislation--it may not have gotten a lot of credit, but it is an
important part of this bill--because a lot of consumers in this country
have no knowledge or at least limited knowledge of how our credit
system works. This new commission will be charged with reviewing
financial literacy efforts throughout the Government to eliminate
duplicative efforts. Importantly, the Commission will also coordinate
the promotion of Federal financial literacy efforts, including outreach
among State, and local governments, nonprofit organizations, as well as
private enterprises.
This legislation creates many new tools for consumers. I have
mentioned some of them. But if consumers lack basic financial literacy,
they may not be able to use these tools with the kind of effectiveness
that is intended.
Again, let me go back to where I started. We have seen this year a
number of occasions when legislation has come to the floor without
going through committee. We have seen legislation come to the floor for
our consideration, sometimes rather complex legislation, and it has not
had the benefit of the hearings it should have. The system has worked
in this case: excellent hearings, the ability for us as Democrats and
Republicans to work together to receive a whole lot of input from a
broad cross-section of people and interest groups in this country, the
ability to bring a bill out of committee on a unanimous voice vote.
This is legislation that I think is going to be disposed of today.
I am proud to at least have been a small part of that process and
pleased to lend my support. I urge my colleagues to do the same for
this legislation.
I yield the floor.
The PRESIDING OFFICER. The assistant Democratic leader.
Mr. REID. Madam President, this is my opportunity to say a word or
two about the National Consumer Credit Reporting System Improvement
Act.
We always hear about how divided the Senate is and how divided we are
politically, that there is so much partisanship. My experience
indicates that when there is something that really is extremely
important that needs to get done, we do it.
As I look back, there was the terrorism insurance, which was
difficult to do, but in a bipartisan method we stepped forward and did
that. We had significant problems after 9/11 with the airline industry.
It was difficult to do, but we stepped forward with legislation that in
fact allowed the airline industry as we know it in America to continue.
Fair credit reporting is an important issue, and the two sides have
joined together. I think one reason we were able to do this was the
experience and the abilities of the two managers of this bill. The
Senator from Maryland has heard me brag about him on many occasions. He
is a person of great intellect, a Rhodes scholar, someone who is very
quiet. But whenever Senator Sarbanes speaks, everyone should listen
because he does not speak impulsively. He is aware of every word he
says. His being the ranking member on this Banking Committee every day
gives me comfort because it is an area of the law that I do not fully
understand.
I have never been on the committees of jurisdiction that deal with
these most important issues. This committee has wide-ranging
jurisdiction. It deals with certainly much more than banking--housing,
mass transit.
I also say, as I said this morning earlier about my friend from
Alabama, the distinguished chairman of the committee, he is a fine
legislator. We on this side of the aisle always look forward to the
senior Senator from Alabama being part of legislation. Everyone in the
Senate is a person of their word. I do not know anyone in the Senate,
of the 99 other Senators, whose word we cannot trust.
The Senator from Alabama certainly is a man of his word, but the
reason I have such great admiration for him is that he is willing to
listen. He is willing to listen to someone who disagrees with him.
That this legislation arrived at the point it has, is the result of
two fine legislators working through the committee system and reporting
a bill to the Senate. This bill is proof that with enough hard work and
commitment, we can move substantive, quality legislation through the
Senate. Again, I applaud and commend the two managers of this
legislation.
I have personally spent some time on this legislation, working with
Members trying to work out an arrangement to allow us to have the bill
on the floor today. We have been able to do that. We have worked to
limit the number of amendments. The majority leader originally said he
would not accept the agreement that we had. There were more amendments,
so we went back and worked and whittled down the amendments. As a
result of that, we were able to bring this to the floor.
I am very happy to see us moving this bill forward. It is very close
to passage. It is an excellent example of what we can accomplish when
Members make a dedicated effort to pursue a reasonable compromise. This
legislation is not what Senator Sarbanes wants, it is not what Senator
Shelby wants; it is what the committee wanted. They had to work with
their Members. It is a compromise. Legislation is the art of
compromise. That is not a bad word. That is the only way we can get
legislation passed--consensus building--and they have done that.
This legislation will help safeguard the security of consumers'
credit data

[[Page S13889]]

at the same time it guarantees those consumers rapid, widely available,
and inexpensive credit.
It is a win for the people all over Nevada. It's a win for a family
in Elko who receives a better mortgage rate because a mortgage bank can
be confident about the information in the parents' credit history. The
family pays a lower rate for their mortgage and, as a consequence, will
pay thousands less over the lifetime of the loan, and that money can be
redirected toward childcare, college, a family vacation.
It is a win for the used car dealer in Reno, or anyplace else in
Nevada, who receives more complete and reliable information about
prospective buyers. He can review an applicant's credit history and
feel greater confidence about the degree of risk he is assuming when he
extends credit to his customers.

It is a win for the public who will receive better protection than
ever before against identity theft.
The United States has the lowest cost, most effective consumer credit
market in the entire world, due in part to the Fair Credit Reporting
Act. This bill will preserve and extend the best elements of this law
and add important new provisions and make it even better.
In closing, I am glad to see that our hard work negotiating this
legislation has paid off with a solid bill, and I look forward to
seeing consumers and business reaping the benefit of this legislation
for years to come.
Mr. CARPER. Will the Senator from Nevada yield for just a moment?
Mr. REID. I am happy to yield to my friend from Delaware.
Mr. CARPER. The Senator from Nevada has again heaped praise on our
chairman and our ranking Democrat, as others of us have done, and that
is important. I failed to mention this in my remarks and I want to
atone for that omission now, that we are blessed with wonderful staff,
as we all know, on both the Republican and the Democratic sides, and on
the subcommittee and the full committee. I want to take a moment to
also express my thanks to them and say to my own counsel, Margaret
Simmons, who has done great work on this bill, a special thank you.
None of us do this stuff by ourselves, as we all know. In this case, we
have been greatly assisted by their efforts.
I thank the Senator for yielding.
The PRESIDING OFFICER. The Senator from Wisconsin.

Amendment No. 2066 Withdrawn

Mr. FEINGOLD. Madam President, with regard to the second amendment I
offered concerning the reporting for the Buy America Act, at this time
I will withdraw the amendment, with my appreciation to the chairman for
his interest in the matter, and I defer to his comments.
Mr. SHELBY. If the Senator will yield, I believe that is a good
amendment. I think it ought to be in other legislation. I am going to
work with Senator Feingold. We all want to promote jobs in America. We
believe the American worker can produce anything as well as, if not
better than, any worker in the world. If we promote Buy America, I
think we are saying something to our workers and our industry and our
economy down the road, notwithstanding what others will argue.
So I commend the Senator from Wisconsin for bringing this up tonight.
We are going to continue to work on this and try to put it in the
proper legislation, where it is going to go somewhere.
Mr. FEINGOLD. Madam President, I thank the Senator from Alabama for
his important statement to finally make some progress in strengthening
the Buy America Act. I look forward to working with him on this matter.
The PRESIDING OFFICER. Without objection, the amendment is withdrawn.
Mr. FEINGOLD. My understanding is the Senator intends to table my
other amendment.
The PRESIDING OFFICER. The motion to table is pending.
Mr. SHELBY. Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SHELBY. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER (Mr. Alexander). Without objection, it is so
ordered.

Amendment No. 2067

Mr. SHELBY. Mr. President, on behalf of Senator Nelson of Florida, I
send an amendment to the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Alabama [Mr. Shelby] for Mr. Nelson of
Florida, proposes an amendment numbered 2067.

The amendment follows:

(Purpose: To ensure proper disposal of consumer information and records
derived from consumer reports)

At the end of title II, add the following:

SEC. 216. DISPOSAL OF CONSUMER REPORT INFORMATION AND
RECORDS.

(a) In General.--The Fair Credit Reporting Act (15 U.S.C.
1681m) is amended by adding at the end the following:

``Sec. 627. Disposal of records

``(a) Regulations.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Federal Trade Commission shall
issue final regulations requiring any person that maintains
or otherwise possesses consumer information or any
compilation of consumer information derived from consumer
reports for a business purpose to properly dispose of any
such information or compilation.
``(2) Exemption authority.--In issuing regulations under
this section, the Federal Trade Commission may exempt any
person or class of persons from application of those
regulations, as the Commission deems appropriate to carry out
the purpose of this section.
``(b) Rule of Construction.--Nothing in this section may be
construed to alter or affect any requirement imposed under
any other provision of law to maintain any record.''.
(b) Clerical Amendment.--The table of sections for the Fair
Credit Reporting Act (15 U.S.C. 1681 et seq.), as amended by
this Act, is amended by adding at the end the following:

``627. Disposal of records.''.

Mr. NELSON of Florida. Mr. President, most companies are required to
adopt rules to ensure the proper disposal of a consumer's private
financial records. I learned last year, before comprehensive privacy
regulations took effect, that some companies do not have protocols in
place outlining the proper way to dispose of private consumer
information when it is no longer needed. Last year, thousands of files
containing sensitive customer records were discarded in a dumpster. If
the wrong person came across these files, he or she would have had
everything necessary to commit numerous crimes, including identity
theft.
Since this incident, the company has acted to correct its privacy
policies and the Federal Trade Commission issued its safeguards rule.
The rule applies to credit reporting agencies and financial
institutions that maintain consumer records and also contains guidance
for businesses, which includes the storage and proper disposal of
records.
Although check-cashing businesses, ATM operators, real estate
appraisers, and even couriers are covered by the safeguards rule,
rental property companies that assess the creditworthiness of tenants
and businesses that maintain consumer accounts, such as cell phone
companies and utilities, are not covered by the rule.
Improper disposal of a credit report could compromise driver's
license information, Social Security numbers, employment history and
even bank account numbers. My amendment will close the loophole and
further protect credit information by requiring the Federal Trade
Commission to issue regulations regarding the proper disposal of
consumer credit information.
Mr. SHELBY. Mr. President, Senator Sarbanes and I have reviewed the
amendment. We have no objection to the amendment.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. Mr. President, I support this amendment. Senator Nelson
of Florida has focused on an important issue involving the disposal of
consumer financial records. We commend the amendment to our colleagues.
Mr. SHELBY. I urge the adoption of the amendment.
The PRESIDING OFFICER. The question is on agreeing to the amendment.

[[Page S13890]]

The amendment (No. 2067) was agreed to.
Mr. SHELBY. Mr. President, I move to reconsider the vote.
Mr. SARBANES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. SHELBY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Unanimous Consent Request--H.R. 1904

Mr. REID. Mr. President, there has been a lot of talk the last few
days and different offers by the majority to go to conference on the
Healthy Forests initiative and a number of other pieces of legislation.
For the majority to say that going to conference is the only way to
legislate between the two Houses is really, for lack of a better
description, a bogus argument. Almost every day both Houses pass
legislation for which a conference is not appointed. As I mentioned
earlier today, just last night the Senate passed H.R. 3365, the Fallen
Patriots Tax Relief Act. We amended it and sent it back to the House
without asking for conference.
On other measures, we have done the same thing--H.R. 1584, H.R. 1298,
H.R. 733, H.R. 13, H.R. 4146, and H.R. 659 just to name a few.
If there is any concern about holding up legislation, we believe the
shoe fits the majority. The Healthy Forests initiative is something
that needs to be done. We cannot understand on this side why the
leadership has refused to send the bill to the House; that is, H.R.
1904, the Healthy Forests initiative, which passed here overwhelmingly
just a few days ago. The House may not want to go to conference. They
may like our legislation or they may want to amend it and send it back.
But at least we ought to give the House this opportunity rather than
holding the bill hostage. That is what is happening now. By refusing to
send it to the House, the majority is holding the bill hostage.
I ask unanimous consent that the enrolling clerk be directed to
immediately send H.R. 1904, which is the Healthy Forests initiative, as
amended by the Senate, to the House of Representatives.
The PRESIDING OFFICER. Is there objection?
Mr. SHELBY. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, what is the regular order at this time?
The PRESIDING OFFICER. The regular order is the motion to table
amendment No. 2065.
Mr. SHELBY. I believe the Senator from Wisconsin has an amendment
pending.
Mr. DASCHLE. Mr. President, before the Senator from Alabama moves to
table, first of all, I know we are getting close to the end of
deliberations on this bill. I think that it merits broad bipartisan
support.
I appreciate very much the efforts that have been made by the
chairman and ranking member. Both Senators have worked very closely
together to get it to this point. Obviously, there are outstanding
issues that still have to be resolved. We have a couple of amendments.
I wanted to take a moment--I didn't realize we were this close to
having the vote on the amendment itself--to draw a distinction in this
legislation.
Obviously, because of the extraordinary effort that has been made on
both sides to work together and the assurances I have been given by the
chairman that it is not his intention to conduct a conference that
would not involve the ranking member and members of the minority with
regard to this bill and issues to be resolved in conference, I will
recommend to our caucus that we move forward with a conference on this
bill. I wish I could say that with regard to other legislation, but we
have not been given the same assurances. We are not at that point yet.
But in this case, we certainly intend to work with our colleagues and
with the chairman in particular. I applaud him for his efforts and
thank him for the kind of working relationship that our two colleagues
have. It is a tribute to both of them. I acknowledge that prior to the
time we take our vote.
Mr. SHELBY. Mr. President, I would like to respond to the Democratic
leader.
First of all, we have gotten to where we are tonight on the Fair
Credit Reporting Act coming out of the Banking Committee by working
together in a bipartisan way. Senator Sarbanes and the Democrats on the
committee have been involved in the formulation of this legislation as
so many members of the Banking Committee have. That is why we are here
today. That is why we believe we have put together a far-reaching, very
complex piece of legislation. We are going to continue--assuming this
bill passes and goes into conference--to work together because that is
the only way we are going to pass this legislation. This legislation,
the Fair Credit Reporting Act, would expire at the end of this year. We
know we are working on a deadline. We are working on a good piece of
legislation. We want to continue that.
I yield to the Senator from Maryland.
Mr. SARBANES. Mr. President, I simply want to observe that we had a
fair and open working relationship in the committee in bringing the
legislation forward. All Members participated from both sides. I would
expect that same relationship to then continue in the conference
committee. We have been dealt fairly by the chairman. I presume we will
continue to be dealt fairly by the chairman. I just wanted to add that
perception to this relationship.
Mr. DASCHLE. Mr. President, with that explanation of our
circumstances involving this bill, as I say, we will not object to
going to conference. I wish our colleagues well as we finish our work
on this legislation before the end of the year.
I yield the floor.
Mr. SHELBY. Mr. President, if it is proper at this time, I move to
table the Feingold amendment, and I ask for the yeas and nays.
The PRESIDING OFFICER. The question is agreeing to the motion to
table amendment No. 2065. The yeas and nays have already been ordered,
and the clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. FRIST. I announce that the Senator from Kentucky (Mr. Bunning),
the Senator from Kentucky (Mr. McConnell), and the Senator from Wyoming
(Mr. Thomas) are necessarily absent.
I further announce that if present and voting, the Senator from
Kentucky (Mr. Bunning) would vote ``yes.''
Mr. REID. I announce that the Senator from North Carolina (Mr.
Edwards), the Senator from Massachusetts (Mr. Kerry), the Senator form
Connecticut (Mr. Lieberman), and the Senator from Florida (Mr. Nelson)
are necessarily absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``no.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote.
The result was announced--yeas 61, nays 32, as follows:

[Rollcall Vote No. 435 Leg.]

YEAS--61

Alexander
Allard
Allen
Baucus
Bennett
Bond
Breaux
Brownback
Burns
Campbell
Carper
Chafee
Chambliss
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
Daschle
DeWine
Dole
Domenici
Ensign
Enzi
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hollings
Hutchison
Inhofe
Inouye
Johnson
Kyl
Landrieu
Lincoln
Lott
Lugar
Miller
Murkowski
Nelson (NE)
Nickles
Pryor
Roberts
Rockefeller
Santorum
Sarbanes
Sessions
Shelby
Smith
Snowe

[[Page S13891]]

Specter
Stevens
Sununu
Talent
Voinovich
Warner

NAYS--32

Akaka
Bayh
Biden
Bingaman
Boxer
Byrd
Cantwell
Clinton
Conrad
Corzine
Dayton
Dodd
Dorgan
Durbin
Feingold
Feinstein
Graham (FL)
Harkin
Jeffords
Kennedy
Kohl
Lautenberg
Leahy
Levin
McCain
Mikulski
Murray
Reed
Reid
Schumer
Stabenow
Wyden

NOT VOTING--7

Bunning
Edwards
Kerry
Lieberman
McConnell
Nelson (FL)
Thomas
The motion was agreed to.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SHELBY. Mr. President, I would like to take a few moments to
thank some of the staff who did outstanding work on the Banking
Committee--Kathy Casey, chief of staff of the Banking Committee; Doug
Nappi, our general counsel; Mark Oesterle, one of our counsel.
I also thank some of the Democratic staff who worked with us on this:
Steve Harris, who is Democratic chief of staff; Marty Gruenberg; Lynsey
Graham Rea, and Dean Shahinian. They have all worked together in a
bipartisan fashion. I believe that is why this legislation was brought
out of the committee unanimously and we will be able to pass it,
because we had a lot of input from Members and committee staff on both
sides of the aisle. It makes a difference.
Mr. SARBANES. Mr. President, I move to reconsider the vote.
Mr. SHELBY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Maryland is recognized.
Mr. SARBANES. Mr. President, I echo the chairman in expressing my
deep appreciation to the staff people he enumerated: Kathy Casey, Doug
Nappi, and Mark Oesterle on the Republican side, and Steve Harris,
Lynsey Graham, Dean Shahinian, and Marty Gruenberg on the Democratic
side.
We are fortunate in the Banking Committee that we have a very
committed, able, dedicated staff on both sides of the aisle.
Furthermore, they have been able to work with one another in a very
productive and cooperative fashion. The chairman and I are keenly aware
of the fact of how much we rely upon them, and we want them to know how
much we appreciate their terrific effort, which was reflected in this
legislation and in many other matters with which the committee deals.
The PRESIDING OFFICER. The Senator from Alabama is recognized.
Mr. SHELBY. Mr. President, I ask unanimous consent that the vote
occur on passage of the bill on Wednesday--tomorrow--with no
intervening action or debate, at a time determined by the majority
leader, after consultation with the Democratic leader. Further, I ask
unanimous consent that following that vote, the Senate insist on its
amendment, request a conference with the House, and the Chair be
authorized to appoint conferees on the part of the Senate, with a ratio
of 4 to 3. I also ask unanimous consent that S. 1753 then be returned
to the calendar.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. STEVENS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Coleman). Without objection, it is so
ordered.

____________________