Hospital Mortgage Insurance Act of 2003
Legislative Activity
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Became Public Law No: 108-91.
October 3, 2003
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Introduced in House
February 11, 2003
Referred to the House Committee on Financial Services.
February 11, 2003
Committee Consideration and Mark-up Session Held.
February 13, 2003
Reported by the Committee on Financial Services. H. Rept. 108-27.
March 6, 2003
Placed on the Union Calendar, Calendar No. 18.
March 6, 2003
Mr. Miller, Gary moved to suspend the rules and pass the bill, as amended.
March 12, 2003 • 12:10 PM
Considered under suspension of the rules. (consideration: CR H1755-1756)
March 12, 2003 • 12:11 PM
DEBATE - The House proceeded with forty minutes of debate on H.R. 659.
March 12, 2003 • 12:11 PM
At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
March 12, 2003 • 12:16 PM
Considered as unfinished business. (consideration: CR H1774-1775)
March 12, 2003 • 1:24 PM
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 419 - 0 (Roll no. 56).(text: CR H1755)
March 12, 2003 • 1:42 PM
On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 419 - 0 (Roll no. 56). (text: CR H1755)
March 12, 2003 • 1:42 PM
Motion to reconsider laid on the table Agreed to without objection.
March 12, 2003 • 1:42 PM
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
March 13, 2003
Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
July 31, 2003
Senate Committee on Banking, Housing, and Urban Affairs discharged by Unanimous Consent.
September 2, 2003
Measure laid before Senate by unanimous consent. (consideration: CR S10986-10987)
September 2, 2003
Passed Senate with an amendment by Unanimous Consent.
September 2, 2003
Message on Senate action sent to the House.
September 3, 2003
Mr. Ney moved that the House suspend the rules and agree to the Senate amendment.
September 17, 2003 • 10:29 AM
DEBATE - The House proceeded with forty minutes of debate on the motion to suspend the rules and agree to the Senate amendment to H.R. 659.
September 17, 2003 • 10:29 AM
Resolving differences -- House actions: On motion that the House suspend the rules and agree to the Senate amendment Agreed to by voice vote.(consideration: CR H8290-8292; text as House agreed to Senate amendment: CR H8290)
September 17, 2003
On motion that the House suspend the rules and agree to the Senate amendment Agreed to by voice vote. (consideration: CR H8290-8292; text as House agreed to Senate amendment: CR H8290)
September 17, 2003 • 10:38 AM
Motion to reconsider laid on the table Agreed to without objection.
September 17, 2003 • 10:38 AM
Presented to President.
September 22, 2003
Signed by President.
October 3, 2003
Became Public Law No: 108-91.
October 3, 2003
Voting History
1 vote recorded • Roll call available
Floor Debate
18 membersWhat members said about H.R. 659 on the floor
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BB+13
Floor Debate
18 membersWhat members said about H.R. 659 on the floor
Reserving the right to object. Mr. President, the Senator from Florida has asked if I would yield for just a short time before I begin. Is that agreeable? I thank the Chair. Mr. President, is it…
Reserving the right to object.
Mr. President, the Senator from Florida has asked if I would yield for just a short time before I begin. Is that agreeable?
I thank the Chair.
Mr. President, is it possible for me to yield for 3 minutes to the Senator from Florida?
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.
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.
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.
No. That is all right.
Mr. President, I send an amendment to the desk on behalf myself, Senator Boxer, and Senator Kennedy.
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.
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.
I believe both sides will accept the definition, and I would be happy to take a voice vote.
Mr. President, on behalf of Senator Boxer and myself, as well as Senators Harkin, Feingold, Durbin, Lautenberg, and Nelson, I send an amendment to the desk. Mr. President, the bill before the Senate…
Mr. President, on behalf of Senator Boxer and myself, as well as Senators Harkin, Feingold, Durbin, Lautenberg, and Nelson, I send an amendment to the desk.
Mr. President, the bill before the Senate in its current form allows huge conglomerates, with just limited restrictions on marketing, to freely share vast quantities of personal customer information with commonly owned companies even if a consumer asks that the information not be shared.
Let me list the types of information we believe could be shared among companies that have common ownership--called affiliates--under the bill: Information mined from your check and credit card payments such as your political or charitable contributions, your magazine subscriptions, your liquor purchases, the location and identity of stores you frequent; the stocks you own and stock trading patterns; the cash you have in the bank; when your certificates of deposit mature; how much you owe on a credit card and what rate you get; your insurance claims history such as whether you pay your premiums on time, how many claims you have made and whether claims were paid out; how many times a consumer called the company's call center or complained about the company's service; an employee's work history, including performance ratings, use of sick days, vacation, and salary.
To make matters worse, the bill permanently preempts States from taking stronger action.
What we have before the Senate today is a weak privacy standard built for businesses at the expense of consumers which legislatures in all 50 States are forever barred from improving.
I am particularly concerned that financial institutions in California, with the lone exception of the California Credit Union, negotiated and signed off on State legislation resolving this issue, and now the same financial institutions are trying to eliminate the California law with national legislation.
I will spend just a moment on that because it is important. Essentially, the banks and financial institutions in California worked with the State legislature in crafting the Californlia law that has an opt-out for affiliate sharing. The reason they did so was because waiting in the wings was a well-funded initiative to pass an even stronger privacy law. They knew the people of California would pass that privacy law.
Senator Jackie Speier, who was the author of the California privacy bill, has sent Senator Boxer and I a letter. I will read two paragraphs from the letter.
``It has recently come to my attention that the financial services industry has been criticizing the contents of your amendment to S. 1753, substituting the newly-enacted and stronger California privacy standard on affiliate sharing in the `corporate family of companies,' as unworkable and unreasonable. This same industry recently called my California bill `workable and reasonable,' specifically removing their opposition to my measure and lavishing praise upon it, even helping to gather votes. Industry made it clear that my bill met their workability concerns, progress made with their active participation. If my bill was workable for industry in California, then why shouldn't it be the national standard?''
``One industry representative stood with me on that day and said my bill `encompasses all aspects of the workability needed to ensure protection of consumers' privacy,' while another called it `a balanced measure that will provide meaningful privacy protections to consumers while also addressing the workability concerns.' . . . Now the story is different, as industry sees a political opportunity to preempt California's standard on affiliate sharing with a weaker one.''
I ask unanimous consent the entire letter be printed in the Record.
Mr. President, while I was in California, I met with the CEOs of the major banks. It became very clear to me at that time what they were going to do. They were going to come back here and they were going to get a national standard that clearly preempted the California opt-out.
Incidentally, we have modified the amendment I have sent to the desk. I know there was some criticisms of the amendment. We have tightened it up. I think it will stand the test of scrutiny. This amendment protects American consumers' basic privacy rights. It creates a national opt-out standard for affiliate sharing. This would give consumers the choice of whether their personal information can be shared among unrelated companies in a corporate family of companies.
Under the amendment, a company would have to notify a consumer that it intended to share the consumer's information with unrelated affiliates and give the consumer the opportunity to opt out of this sharing. If the consumer does nothing, the institution is perfectly free to share the information.
This amendment is fully sensitive to the real-life demands of business. Where there is a legitimate business need for the information, this amendment provides exceptions to the opt-out.
First and foremost, related affiliates--which are defined as affiliates in the same line of business with the same functional regulator and with the same brand name--are exempt from the opt-out.
Second, the amendment does not affect the ability of companies to have common databases with their affiliates so long as the information is not accessed, disclosed, or used by the affiliate. This is one of the arguments they have raised that this exception is a big loophole. Answer, untrue. While a common database can exist, the amendment explicitly states that an affiliate cannot access or use the information in a manner inconsistent with the consumer's opt-out.
Third, to use consumer information to complete transactions; fourth, to protect against or prevent actual or potential fraud or identity; next, to comply with Federal, State, or local laws and to do data processing, billing, or mailing. This amendment does not affect the ability of affiliated companies to do any of these six things. There are a number of other standard exceptions.
Before I go into detail describing the amendment. I will spend some time talking about the shortcomings of the ``National Consumer Credit Reporting System Improvement Act'' with respect to a person's natural privacy and why this amendment is needed.
At the outset, I recognize the author of the bill, Chairman Richard Shelby. He has met with me and I am grateful for that meeting. He has listened to my concerns. He has made longstanding efforts to balance the rights of individual privacy with legitimate business needs. I deeply respect the commitment of Senator Shelby to consumer privacy. It is well known. He deserves recognition for his work to strengthen the privacy provisions of the Driver's Privacy Presentation Act and for introducing legislation to require an opt-in for affiliate sharing in the 106th Congress.
In the 107th Congress, he joined me as a cosponsor of the Identity Theft Prevention Act. Many of these provisions he has incorporated in the bill on the floor today, and I thank him.
I also thank Senator Sarbanes. I think his record on privacy is equally impressive. He fought hard to create the opt-out standards for nonaffiliated third parties during enactment of the Gramm-Leach-Bliley financial services modernization law. I have the utmost respect for his work on privacy legislation. He is a champion of consumer privacy.
The American people should know this about both of these Senators. It is just that Senator Boxer and I have a very strong view on the need to give consumers this opt-out on affiliates.
I also recognize this bill has a number of provisions I strongly support. It entitles every consumer to a free credit report. That is great. It creates fraud alerts. Great. It creates a national standard for truncating credit card numbers on store receipts. That is great.
I was delighted, because when I introduced identity theft legislation earlier this Congress, the chairman and CEO of Visa, Carl Pascarella, came and held a press conference and indicated that Visa was not going to wait for the bill, they were going to go ahead and truncate all but the last four digits, in any event, on their credit cards. As of June, all the new merchant terminals using the VISA system--affecting tens of millions of Visa credit cardholders--do have that truncation. Shortly, Visa will have all other stations truncating as well.
This morning Senator Kyl and I held a hearing on hackers getting into data bases and how you prevent that from happening. Visa testified, and it is clear they have taken this very seriously with a very elaborate system to get at the problem and to use technology to solve it.
So all these provisions were included in legislation that I have offered over the last 4 years, and I am very grateful to both the chairman and ranking member, who are here on the floor, that they have been incorporated into this bill. So I say, thank you, Senator Shelby; thank you, Senator Sarbanes.
Now, I think, though, that some of these needed provisions just become window dressing, if you really can't protect a person's privacy. The affiliate sharing provisions of the legislation would set that back because the information age is going to move ahead rapidly. That is one of the problems: Technology finds a way of moving ahead so fast before we have a chance to see that there is an appropriate regulatory system in place.
So the debate today over this bill is really part of a great struggle over whether Americans--ordinary Americans--will have basic control over the most elemental parts of their identity, and whether we can stop the misuse and commercialization of their most personal information.
Most Americans, I believe, consider their personal information their private property. I do. I consider my health data my personal data, my financial data my personal data. When I do business with a bank, I do not expect to see my mortgages purchasable on the Internet for $15 or $20. I do not expect somebody to buy my Social Security number over the Internet, or anything of that kind. Nor do I expect the bank with which I do business to give my data to a thousand--and it can be a thousand-- of their affiliates so their affiliates can contact me about traveling with them, investing with them, that they have a better scheme than my checking account. I do not expect that, and guess what. I do not think the majority of Americans do, either.
To give you a sense of the groundswell of public support for privacy, I would like to mention a survey of California voters by Fingerhut Granados Opinion Research on February 7 of this year.
The statewide survey found that by a massive 91-to-7 percent margin, California voters would favor a ballot proposition--and let me quote what it would say--that ``would require a bank, a credit card company, insurance company, or other financial institution to notify a customer and receive a customer's permission before selling any financial information to any separate financial or non-financial company.''
Mr. President, 91 percent would support an initiative to do just that. So they are supporting not opt-out, which is a lower, lesser standard, but they are supporting opt-in when it comes to affiliate sharing. Similar polls across this great land have reflected a landslide of support by Americans for stronger privacy laws.
In my 10 years in this Senate, I have never seen anything like it. There is a groundswell out there, let there be no doubt.
Here in the Senate we have taken some strong action to protect privacy in recent months. In one day, the Senate drafted and passed a bill upholding the ``National Do Not Call'' list. Recently, we passed legislation limiting e-mail spam. In each of these cases, Congress accepted the near unanimous will of the public that there should be limits on when and how commercial entities can invade ordinary Americans' privacy--be it at their homes from telemarketing calls or on their computers from endless e-mail spam.
These concerns are equally present in the debate over affiliate sharing, except the dangers to privacy are so much more insidious. Americans are fully aware of telemarketing calls because their dinners and evenings at home are interrupted by them. Americans are fully aware of spam because their e-mail is clogged with them. In the case of affiliate sharing, most Americans are not aware that their personal information travels from their bank to hundreds or even thousands of other companies.
What is an affiliate and why should we be concerned about the sharing of information among affiliates?
Affiliates are companies related by common ownership. As one example, Travelers Insurance, Diners Club International, Citi Financial, and Salomon Smith Barney are all affiliated companies owned by Citigroup. So the types of businesses that financial institutions can be affiliated with run the gambit: insurance companies, so you can be bugged by insurance companies; securities brokerages; mortgage lenders; travel agencies; retailers; automobile dealers; collection agencies; financial advisers; tax preparation firms. I even think they buy them just for this reason.
In 1999, Congress passed the Gramm-Leach-Bliley Act, which repealed portions of the Glass-Steagall Act that prohibited banks from entering into affiliations with other lines of business. So it became fair game. These financial institutions have moved, in a major way, to affiliate themselves with a tremendous array of businesses. These include insurance and securities brokerages, as I said, mortgage lenders, ``pay day'' lenders, finance companies, and on and on and on.
It could include investment advisers who are not required to register with the Securities and Exchange Commission. These are not mom-and-pop companies. The top dozen U.S. banks and financial institutions alone control thousands of health and life insurance companies, home mortgage companies, car loan lenders, housing developments, securities brokers, and other businesses.
Take a look at this. Citibank alone has 1,736 affiliates which they own. They own a mortgage company, an insurance company, a student loan corporation, Travelers Life and Annuity, Diners Club International, and Salomon Smith Barney holdings. This becomes a veritable goldmine of information trading for them, and the information that is traded is your personal information that lets an insurance company, or a mortgage company, or an investment banking company know where to go to get business.
Morgan Stanley has 628 affiliates, including the Discover Card, Dean Witter Realty, Southeastern Energy Corporation, and a number of insurance companies.
Wells Fargo, headquartered in my city of San Francisco, has 777 affiliates, including, again, a mortgage company, Advance Mortgage, Dial Finance Company, Pacific Rim Health Care Solutions, Tower Specialists, Norwest Auto Finance, and Auto Risk Managers. Again, a veritable treasure trove, a goldmine for the sharing of private, personal information.
Bank of America has 815 affiliates, including T-Oak Apartments, Stanton Road Housing, NationsBanc Insurance Agency, and General and Fidelity Life Insurance. By mining data from their affiliates, these corporations can compile vast dossiers on consumers to use to their commercial advantage. An affiliated company can call you up with full knowledge of your financial history and offer you credit cards, securities, loan consolidation, whether you need it or not, and you have no way to prevent the company from using your most intimate personal information.
Consider the following case: Several years ago, Nationsbank paid fines of $7 million to the Securities and Exchange Commission and other agencies over its sharing of confidential customer financial statements and account balances with affiliated securities firms. Nationssecurities used the account information to identify those bank customers who had expiring certificates of deposit. Sales representatives then marketed to these customers highly leveraged investments, mischaracteriz- ing them as straightforward U.S. Government bond funds. Investors, 65 percent of whom were over 60 years old, lost millions of dollars from this practice.
While Nationsbank paid a fine for its false and misleading sales practices, its sharing of customer information was perfectly legal under existing law. We need stronger laws to protect us from the potential predations of affiliate sharing. Unfortunately, the Senate bill does not rise to this test.
The 1996 Fair Credit Reporting Act standard on affiliate sharing, which is, for the most part, preserved in S. 1753, is not a strong national standard. The 1996 act permits financial institutions to share ``transaction and experience'' information with affiliates without restrictions. This experimental standard has proven vague and unworkable. Even though the 1996 act has been in effect for 7 years, no one can definitively say what the terms ``transaction and experience'' information mean.
When I asked the CRS to explain the FCRA standard, here is what they said:
The [Fair Credit Reporting Act] does not offer a definition
of a phrase, nor does the act provide any guidance with
respect to what types of information may be included.
Furthermore, none of the Federal bank regulators, nor the
Federal Trade Commission, have promulgated regulations
regarding the definition of ``information solely as to
transactions or experiences'' or what information may be
included in such.
Finally, discussions with industry representatives did
articulate a consistently used definition of what constitutes
a ``transaction or experience'' information.
In essence, both the House bill and the Senate bill maintain an exemption for the sharing of personal information, which nobody has defined.
Seven years after passage of the 1996 FCRA amendments, neither Congress, nor the Federal Trade Commission, nor any other agency has defined the term. An empty standard is a nonenforceable standard. I think America's personal privacy deserves better protection.
Consider again the sensitive information which could be shared among unrelated corporate affiliates if we allow the current standard to stand. This
chart refers to the information I have just been over: an employee's work history, including performance ratings, sick and vacation days, safety, whether the consumer is a complainer or not, can go out to all affiliates, your certificates of deposit maturity dates, so somebody can contact you when that certificate matures; stocks you own, so others can approach you. Then there are the personal things, such as political contributions, charitable contributions, your magazine subscriptions.
Think about that. These companies develop a personal profile on who you are and what you like, and then tell other companies about you. Today, I heard testimony at a Senate Judiciary Committee hearing about someone who shopped at Victoria's Secret who had their personal information used in that way. That is what this allows.
The collection of this information is not hypothetical. In Great Britain, unlike the United States, companies are required by law to file a report with the Government on the type of information they collect about consumers.
Here is what Citibank reported to the British Government about the type of information it was collecting about British citizens for marketing purposes. I think it is likely they collect the same information about United States customers. This information includes: personal identifiers, financial identifiers, identifiers issued by public bodies, personal details, habits, current marriage or partnerships, details of other family, household members, other social contacts, accommodations or housing, travel movement details, lifestyle, academic record, membership of professional bodies, publications, current employment, career history.
Mr. President, I am not aware of a time limitation.
Mr. President, I ask unanimous consent that I might be permitted to continue when the Senate resumes.
I thank the Chair.
Thank you, Mr. President. I appreciate the indulgence of Chairman Shelby and Senator Sarbanes for this opportunity. Yes. Mr. President, America's burden in Iraq grew heavier over the last 7 days. In…
Thank you, Mr. President. I appreciate the indulgence of Chairman Shelby and Senator Sarbanes for this opportunity.
Yes.
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.
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
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.
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.
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.
I send an amendment to the desk.
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.
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?
I ask unanimous consent this letter be printed in the Record.
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. 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
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.
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. President, we usually go back and forth, I tell my friend. Yes. Mr. President, I don't mind waiting a few minutes if the Senator from California wishes to proceed. Mr. President, a creeping coup…
Mr. President, we usually go back and forth, I tell my friend.
Yes.
Mr. President, I don't mind waiting a few minutes if the Senator from California wishes to proceed.
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,
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.
Mr. President, I am pleased to join this morning in bringing to the floor of the Senate, along with my able colleague from Alabama, the distinguished chairman of the Senate Banking, Housing, and…
Mr. President, I am pleased to join this morning in bringing to the floor of the Senate, along with my able colleague from Alabama, the distinguished chairman of the Senate Banking, Housing, and Urban Affairs Committee, S. 1753, the National Consumer Credit Reporting System Improvement Act of 2003.
This legislation is important to millions of Americans as we work to ensure fair, accurate, and effective credit reporting practices, and this legislation is designed to accomplish that objective.
First, I acknowledge and actually commend the distinguished chairman for the comprehensive series of six hearings on this legislation that were held in the Banking Committee. Chairman Shelby structured extremely productive hearings. There was a systematic approach to examining all aspects of this issue, and we heard from a broad range of interests in the witnesses who came before the committee. I think it is fair to say we covered all the bases.
Not all the bases got what they wanted. It never quite works that way when you do legislation. But I think we had a very open, transparent process, with people having an opportunity to present their positions. They were very carefully and thoughtfully considered. In the end, the legislation was reported out of the committee, on a voice vote, unanimously on September 23. I think that vote reflects the response to the chairman's willingness to work with all members of the committee.
Now, it goes without saying, each of us, if we could write the bill by ourselves, would have somewhat different aspects to the bill. There are areas where I would have sought to do more with respect to some consumer issues. But I think we sought to craft a balanced package here. We understand the need for a national credit reporting system for Americans all across the country. It means an opportunity to carry out their economic transactions swiftly, efficiently, and effectively. At the same time, of course, you have to be very alert to ensuring there are protections so people cannot be abused or taken advantage of in the process.
One of the things this legislation does--and I am going to refer to it in some detail very shortly--is it really seeks to address this issue of identity theft which has provoked so much misery and grief for people who are hit by it. It is really the central focus of people's attention now when they consider problems they are having with consumer financial matters. This legislation has some very significant provisions in that regard, and we were able to move those forward with the strong support of the members of the committee.
The Fair Credit Reporting Act, which this legislation, of course, affects provides for the ways in which credit information is gathered, disseminated, and used.
During the hearings, we received a number of recommendations for improving the operation of the act.
Among other things, the suggestions addressed: combating fraud and identity theft, protecting consumers' financial privacy, clarifying the credit scoring process and the use of credit scores, enhancing regulatory and enforcement authority, improving the accuracy of credit reports, improving consumers' understanding of the credit reporting process, combating abusive marketing practices, and finding ways to improve the financial literacy and education of all consumers.
I believe we have taken important steps to address all of these issues. The Senate bill includes a number of provisions that will result in enhanced consumer protections by helping to ensure accuracy of credit report information and fair practices in the collection and use of credit information and in the granting of credit.
Among other things this legislation will: provide consumers with free credit reports annually from the national credit bureaus and provide consumers with an easy method to obtain their free credit reports. This has heretofore not been available. It will require a summary of consumers' rights to opt out of prescreened offers; provide for accuracy guidelines; lengthen the statute of limitations for all FCRA violations; enhance identity theft penalties; extend the situations in which adverse action notices are provided to consumers; prohibit the sale, transfer, or collection of identity theft debt, so that such bad debt will not be perpetuated in the credit system; provide consumers with the right to opt out of marketing that results from affiliate information sharing, with certain exceptions to that right. Finally, of course, it will help enhance the financial literacy of all Americans.
Let me discuss some of these items in a little more detail.
First, accuracy. I don't think it needs much elaboration for people to understand that accuracy of credit reporting information is integral to our reporting process. Erroneous information on credit reports can often take a significant investment of time and money to remove. They can be extremely costly to consumers by significantly raising borrowing costs. Insurers, mortgage banks, and other financial institutions rely significantly on credit scores to make credit decisions. Therefore, inaccuracies in the underlying credit reports can make it more difficult and more expensive for Americans seeking to make major purchases. Yet we heard testimony in those extensive hearings, to which I referred earlier, that credit report inaccuracies is one of the major problems that plague consumers. This legislation addresses that with substantial measures in that regard.
In order to enhance the accuracy of credit reports, the bill directs the Federal banking agencies, the National Credit Union Association, and the Federal Trade Commission to issue guidelines and promulgate regulations with respect to the accuracy and completeness of credit report information.
Second, free credit reports. The bill allows consumers to receive a free credit report annually from each of the three national credit reporting agencies. The bill also requires the FTC to take steps to make it easier for consumers to obtain their free report, including: setting out rules requiring that a centralized, streamlined method be established so consumers can easily obtain free reports, and actively publicizing and conspicuously posting on its Web site--the FTC Web site--the rights available to consumers under the FCRA, including the consumer's right to a free report.
The provision of free credit reports is a significant step in helping consumers
to ensure the accuracy of their credit report information, and helping them identify possible instances of identity theft.
As to prescreening, under the FCRA, credit reporting agencies may generate for creditors prescreened lists of individuals with certain credit characteristics to be targeted to receive a direct mailing. This prescreening process results in much of the unsolicited mail credit offers that consumers receive and about which they often complain.
The success of the FTC's Do Not Call Registry has highlighted the frustration of Americans with unsolicited telephone offers. Under the Senate bill, creditors making such unsolicited offers of credit to consumers by mail will be required to include a summary of the consumers' rights to opt out of prescreening in their offers to consumers. In addition, this Senate bill increases the effective period of the telephone opt-out of prescreening from 2 to 7 years.
With regard to adverse action notices, under the current law, the FCRA, a consumer receives an adverse action notice after denial or cancellation of insurance, a denial of credit, or a denial of employment, based on information in the consumer's credit report. This adverse action notice then triggers a consumer's right to a free credit report and other of CRA disclosures.
Those are the provisions that have heretofore been in the law. What has happened, of course, is that, as the industry has grown more sophisticated in the technology, we are having a move to risk-based pricing. So there are many circumstances in which a consumer may apply for credit, but rather than receiving an outright denial, which is what happened in earlier days, which then was an adverse action and gave the consumer certain rights, the consumer may receive credit at an elevated rate or cost because of information on the consumer's credit report. In these situations, because a consumer has received credit, albeit at more rigorous terms, the consumer is not considered to have experienced an adverse action. Therefore, no FCRA rights are triggered.
This legislation now before us incorporates a recommendation made to us by the Federal Trade Commission to update the provision of adverse action notices so consumers are aware that information in their credit report is negatively affecting the rates they are paying for credit. Therefore, because they become aware of it, it gives them an opportunity to examine that information and to correct it if, in fact, it should be inaccurate.
Finally, in addition, the Senate bill takes important steps to improve the financial literacy of consumers by establishing a financial literacy and education commission within the Federal Government, which will coordinate the promotion of Federal financial literacy efforts, and will develop a national strategy to promote financial literacy and education.
I commend Senators Enzi and Stabenow, along with Senators Corzine and Akaka, and many others, for their leadership in this important area of financial literacy. Senator Enzi and Senator Stabenow and Senator Corzine and Senator Akaka, for a long time--really, since I have known them--have been interested in this issue. We are pleased there is a title in the bill that carries forward important efforts in this regard.
Let me turn to identity theft. I indicated at the outset that this was an issue of increasing concern across the country. Before I do that, I will simply mention a step that we took in this legislation with respect to affiliate sharing. This legislation contains provisions relating to the ability of financial companies to market to their customers based on private financial information of the customer that has been shared among affiliates.
The bill would require affiliates who share customer information for solicitation or marketing purposes--and most of the concern we have heard in this area has been with the use of this information for solicitation or marketing purposes--to disclose such sharing to consumers and to provide them with an opportunity to opt out of the marketing resulting from such sharing of information.
There are exceptions in the legislation with respect to this provision for preexisting customers, for service providers, and for the institutions responding to a consumer request. So on the solicitation for marketing, we are trying to address much of the concern that has been expressed to us, but we have been trying to do it in a very careful way so that the basic purposes of the legislation can be carried forward.
I want to spend just a few moments on identity theft because it is such an important issue now. We heard some absolute horror stories before the committee from witnesses who had experienced identity theft and what it has done to their lives--virtually destroyed their lives. Obviously, we have to deal in every way that is reasonably possible with this issue. It has become an increasing problem in recent years.
The Federal Trade Commission reported that the number of identity theft complaints it received last year far exceeded complaints about any other type of consumer fraud. Americans have serious concerns about this issue. Businesses incur significant costs dealing with identity theft. Honest citizens who are victims of identity theft incur very high costs in money, in time, in anxiety, and in an effort to correct and restore their spoiled credit histories and good names. Someone steals their identity and then uses it, and their whole credit record is being destroyed. Then it is almost impossible for them to function in a normal economic way in our society.
This bill contains a number of important provisions that will address identity theft, and I commend not only the chairman but the members of the committee--all of the members of the committee--who were prepared to focus on this issue and give it a very high priority as we sought to move this legislation forward.
The bill will allow consumers to place fraud alerts on their consumer reports. It will allow military personnel to place alerts on their reports indicating their active duty status. So there is a special concern for our men and women in the military.
The bill provides for free credit reports after a fraud alert. Consumers will be able to get two free credit reports in the year after a fraud alert is placed in their file, as they seek to clean up the situation and to remedy it.
As to account blocking, the bill will allow identity theft victims to direct consumer reporting agencies to stop furnishing information regarding the accounts associated with identity theft.
``One call'' policy: The bill will require that the national credit reporting agencies that receive consumer calls about identity theft direct the complaint to the other national agencies so that identity theft victims need not contact each agency separately. They can make one contact, and then the information is disseminated on identity theft.
With regard to notification of fraudulent information, the bill will require debt collectors who learn that information in a consumer report is fraudulent, maybe the result of identity theft, to notify the creditor of the fraudulent information.
On truncation of account numbers, the bill will require that businesses truncate credit or debit card numbers on electronic receipts.
And on prohibition of the sale of identity theft, the bill protects consumers by prohibiting the sale, transfer, or collection of a debt where a consumer is an identity theft victim with respect to that debt. This will help to prevent identity theft debt from being perpetuated within the credit system.
I want particularly to note the leadership of Senator Cantwell with respect to identity theft. Her identity theft legislation actually passed on the floor of the Senate last year, and this bill incorporates many of the provisions that were in her legislation, including an extension of the statute of limitations and the blocking provisions. I know she has worked closely with Senator Enzi in that regard in trying to address this identity theft issue.
I also want to acknowledge the work that Senator Feinstein has also done on the identity theft question. We are most appreciative of her efforts in this regard as well.
This is just a summary of a number of the provisions of this legislation
which I think extends important protections to consumers. The bill provides a number of important improvements in the credit reporting system.
As I mentioned earlier, this legislation was voted out of the committee on a voice vote. There are certain provisions of the existing legislation that will expire on January 1, 2004. Therefore, it is important this legislation be enacted before the end of this session.
I close by again thanking the chairman for the very fair and balanced way in which the hearings were conducted and in which the markup took place. We sometimes put down or minimize the importance of process. It is not a very catchy word, ``process,'' but a good deal of what we try to do here and when you try to make this democratic process work involves process. It involves how you go about considering issues and how open and fair you are in doing it; how the majority treats the minority and how the minority responds to the treatment it receives from the majority. I believe a good process contributes to good legislation, that it is an important part of formulating legislation and arriving at the building of a consensus to address important problems.
I simply want to say to my colleagues that I think the process that was followed in this instance was as it should have been, and I think the fact we bring this legislation to the floor out of the committee with a unanimous vote is, in part, a consequence of that process. I again thank and commend the chairman in that regard.
I yield the floor.
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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…
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.
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.
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.
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.
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.
I ask unanimous consent that Senator Feinstein be added as a cosponsor.
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
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.
Mr. President, I thank the leadership for moving to floor consideration of S. 1753, which amends the Fair Credit Reporting Act. This bill, which was approved unanimously by the Senate Banking…
Mr. President, I thank the leadership for moving to floor consideration of S. 1753, which amends the Fair Credit Reporting Act.
This bill, which was approved unanimously by the Senate Banking Committee, will ensure that millions of Americans continue to have access to affordable credit under a uniform national standard that includes significant new consumer protections.
Similar legislation was passed out of the House of Representatives recently by an overwhelmingly bipartisan vote of 392 to 30. Only occasionally do we have the chance to vote for a bipartisan bill that so ably balances the needs of consumers and business.
Under the leadership of Chairman Shelby and ranking member Sarbanes, we have achieved a product that is good for everyone. In the area of consumer credit, we have a rare convergence of interests. What is good for consumers helps business to expand, which in turn helps to give consumers more choice. The end result is a stronger economy.
I urge my colleagues not to squander this opportunity to send a decisive message that we are committed to protecting and improving a pillar of this Nation's economy, and that is the consumer credit market.
It is a testament to the success of our national credit reporting system that few people have heard of the Fair Credit Reporting Act or FCRA. FCRA is the statute that governs the collection and use of personal credit data that make up an individual's credit report. That credit history, in turn, allows Americans to access the credit markets in whatever form meets their needs. For example, millions of Americans have refinanced their mortgages over the past year to take advantage of historically low interest rates. Others have applied for low-cost auto financing. Most Americans have some form of revolving credit line that helps them to meet certain payment needs.
Very rarely do we stop to ask ourselves why is it that we can walk into a bank, walk into a store or credit union, or apply over the phone or the Internet for credit with a mortgage broker and a few minutes later get approval. These people do not know us, they have never seen us, and yet they have the information they need to make an objective and sound credit-granting decision.
When I was growing up, if you needed a loan, you had to walk down the street to the local banker, who had probably known you your whole life. He lent you money because he knew your family, he knew you were a hard worker, and he trusted you to make a good loan. Or maybe because the banker had certain preconceived notions about you or your family, you did not get credit that you deserved.
Today, that has all changed. Today, the national marketplace for credit has transformed this loan-granting process. Uniform credit information allows lenders, big or small, to make sound lending decisions based on an objective evaluation of past credit performance. These objective indicators are critical to the safety and soundness of our financial institutions.
Poor lending decisions affect all of us through institutional instability and an increased cost of credit.
The FCRA, which was passed in 1970 and amended in 1996, has created a national credit marketplace based on standardized information related to consumer credit histories for all of us, regardless from which state we come. That same statute has standardized consumer rights related to accuracy and access. And the reason we are here today on the floor of the Senate is to improve and to protect this system.
Unless Congress acts, important preemption provisions of the FCRA will expire on January 1, 2004. Under the pressure of that deadline, Banking Committee Chairman Shelby and Ranking Member Sarbanes have done an extraordinary job of creating an exhaustive hearing record on this law, and putting together a bill that both enhances the underlying statute and also permanently extends the preemption provisions to guarantee uniformity, to the benefit of consumers and businesses alike. When I introduced the first reauthorization bill, S. 660, back in March, I had no idea the process would move forward with such bipartisan spirit, with unanimous approval from the Senate Banking Committee, and a 392-30 vote out of the House. But these votes are testament to the critical importance: the urgency of this legislation.
The United States is unique in having what is known as ``full file'' credit reporting. Unlike in other countries, where only consumers with negative credit history have any kind of record, our system encourages data furnishers to report both negative and positive credit history-- all on a voluntary basis. This information allows lenders to make informed decisions about a given consumers credit risk, and to make better, safer, and more objective lending decisions.
This means that when you pay on time, this positive payment history gets reported to centralized credit bureaus. Of course, of you're late or you miss payments, that information goes into your file as well. But unlike the ``no news is good news'' system that exists in so many countries, our full-file reporting system means that consumers can build up a solid credit history through on-time and responsible payments, and that history will follow us wherever we go. So when the time comes to apply for a mortgage or other loan, a lender can see that you know how to handle your finances.
This full-file reporting system has led to another critical development in our credit markets, and that is risk-based pricing. Until fairly recently, credit granting was a binary business. In other words, either you qualified for credit or you didn't. Now, lenders can take a chance on a borrower by charging a higher interest rate to account for that risk instead of simply rejecting a loan application. This type of pricing has helped to fuel America's small businesses. It has also helped those with impaired credit histories or with little history at all to enter the mainstream credit markets, opening up new opportunities.
I would like to spend just a few minutes highlighting the magnitude of what's at stake today with some statistics.
A recent study of the consumer credit marketplace shows the growth of credit card access over the last 30 years, and the results are striking. In 1970, only 2 percent of families in the lowest income bracket had a credit card. In 2001, that number stood at 38 percent. In the highest bracket, the 33 percent of households that had at least one credit card in 1970 had risen to 95 percent.
Even more striking are the statistics related to access to credit by race. Between 1983 and 2001, the number of white families who held credit cards increased by 69 percent. During the same period, the number of Hispanic families increased by 85 percent, and the number of African-American families increased by 137 percent.
It is worth noting the significance of these figures extends far beyond simple borrowing power. Today, you can't rent a car without a credit card. You can't buy movie tickets over the phone without a credit card. And with only a few exceptions, you can't shop on the Internet without a credit card.
The results are just as noteworthy in the area of mortgage lending. Over the last three decades, white non-Hispanic families experienced a 20 percent increase in access to mortgage loans, while minority groups experienced a 65 percent increase over the same period. Those rates coincided, not surprisingly, with a parallel increase in homeownership rates. I think we all understand the important social and economic benefits of homeownership.
The study also notes the critical role that automated underwriting has played in democratizing our credit markets. Automated underwriting, which would be next-to-impossible without a uniform national credit standard, now accounts for over 90 percent of mortgage lending, up from 25 percent in 1996. According to this report, and this is an astonishing statistic:
Before the advent of automated underwriting, approving a
loan application took close to three weeks; in 2002, over 75%
of all loan applications received approval in two or three
minutes.
Even more important, the automated underwriting systems greatly reduce racial and gender bias that in the past resulted in redlining, which unfairly prevented certain groups from owning homes, and which kept too many financial services companies out of markets inaccurately and unfairly deemed to be high risk.
This study also concludes that certain changes to FCRA, and in particular restrictions on the type of data
that might be reported about a consumer, would be especially harmful to consumers at the lower end of the credit spectrum. In particular, minority, lower-income and younger borrowers would be the hardest hit. This conclusion is critical, and gets to the heart of what a uniform national credit reporting system is about. The last thing we want is to reintroduce discrimination into the lending system, which would mean that minorities and low-income people would be forced to high-cost unregulated lenders for credit.
Failure to maintain a uniform national standard would also have a staggering impact on the cost of credit. Even credit cards, which often carry higher interest rates than other types of non-revolving lines, have seen significant decreases in cost, which the study attributes largely to the competition in the market and to prescreening, which is made possible on a large-scale basis by the FCRA. For example, in 1990, only 6 percent of all credit card balances paid interest rates under 16.5 percent. By 2002, 15 percent of all card balances paid rates below 5.5 percent, and 71 percent of all credit card balances carried interest rates under 16.5 percent. In 1990, while more than 93 percent of all credit card balances paid interest rates over 16.5 percent, that number had plummeted to 29 percent in 2002.
I note here that consumers who do wish to receive pre-screened offers have the right to opt out of the system. In fact, S. 1753 makes that opt-out even easier and long-lasting.
While some of these interest rate declines may be due to a general drop in interest rates, much absolutely has to do with companies' ability to differentiate risk among borrowers and to price credit accordingly. Credit scoring models have increased in their predictive power and one result is increasingly competitive cost of credit. Any reduction in the type of information available to lenders would significantly degrade the predictive power of most models.
The study further indicates an increasingly efficient marketplace, leaving aside the role of interest rates. One chart shows mortgage rates back in the early 1980s hovering around 3.5 percentage points above the 10-year Treasury bill. In the last few years, spreads have closed to about 2.5 percentage points. The national credit marketplace has increased competition, with all the positive effects we learned in Economics 101. One of the main reasons we have a competitive national marketplace is because we have a national credit reporting standard that permits consumers, no matter where they live, no matter where they move, to apply for credit and to receive an answer in a matter of minutes. America is the envy of the world in terms of immediate access to credit for all of our citizens.
There are ongoing attempts to mischaracterize the fundamental nature of the FCRA as a privacy statute. And while there are certainly important privacy components to this statute, components which the Banking Committee bill strengthens significantly, the FCRA fundamentally is about the economy. And all too many of us know firsthand that the last thing our economy needs now is an attack on the consumer credit markets.
Under the able leadership of Senators Shelby and Sarbanes, the Banking Committee's bipartisan legislation takes groundbreaking new steps to give consumers greater control over their financial lives; fight the growing crime of identity theft; and promote much needed financial literacy and education efforts. Under the act, every American will be able to get one free credit report a year--a significant milestone. The public will also know that their private medical information will never be used inappropriately in making credit- granting decisions. And the act takes important new steps to empower consumers to reduce unwanted credit solicitations.
It is my understanding that some Members may be offering amendments that include wholesale replacement of significant portions of this carefully-crafted bill with a substitute proposal that has moved through a State legislature under a highly charged and political atmosphere. While I look forward to discussing these proposals, I am frankly very concerned that we not get into a situation where we are playing politics with access to credit. One of these amendments in particular is drafted in such a way that we would end up catching labor unions, churches, universities, charities, and a host of other groups in the FCRA net, a consequence that is clearly unacceptable.
As we move forward with this legislation to strengthen and protect our consumer credit markets,I would urge my Senate colleagues to look to the model of bipartisan lawmaking that has surrounded reauthorization of key provisions of the Fair Credit Reporting Act: a unanimous vote out of the Banking Committee and an overwhelming House vote of 392-30 on final passage. We owe it to our constituents to continue working together to secure final passage of this critical economic bill. I urge my colleagues to join me in supporting this legislation, which is so important to America's consumers and businesses alike.
Madam President, I send an amendment to the desk and ask for its immediate consideration. Madam President, I ask unanimous consent that reading of the amendment be dispensed with. Madam President,…
Madam President, I send an amendment to the desk and ask for its immediate consideration.
Madam President, I ask unanimous consent that reading of the amendment be dispensed with.
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
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.
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.
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.
Madam President, I send an amendment to the desk.
Madam President, I ask unanimous consent that further reading of the amendment be dispensed with.
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.
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.
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.
My understanding is the Senator intends to table my other amendment.
Mr. President, I send a substitute amendment to the desk and ask for its immediate consideration. It is our intention to adopt the substitute and ask it be treated as original text but we will wait…
Mr. President, I send a substitute amendment to the desk and ask for its immediate consideration.
It is our intention to adopt the substitute and ask it be treated as original text but we will wait for the other side before we adopt the amendment.
Mr. President, I am pleased to bring before the Senate S. 1753, the National Consumer Credit System Improvement Act of 2003. This bill was unanimously approved by the Senate Banking Committee on September 23 of this year by a voice vote.
The Fair Credit Reporting Act, is a very important, highly complex law that governs crucial aspects of the consumer credit system. This national system is huge--involving trillions of dollars and millions of people, and is at the heart of the economic well being of this country. The bipartisan bill before the Senate is the product of extensive hearings and deliberations by the Senate Banking Committee. Over the course of the past 5 months, the Banking Committee held six hearings related to the reauthorization of the seven expiring FCRA national standards as well as the effectiveness and efficacy of the FCRA as a whole.
The committee's process helped us identify key areas that required reform or improvement, while at the same time, reinforcing the importance of our national credit reporting system to the operation of our financial markets and economy as a whole. The committee bill incorporates many important reforms while creating permanent national standards. This bill reflects a
careful balance between ensuring the efficient operation of our markets and protecting the rights of consumers.
Over the 6 years since the FCRA was last amended, significant changes have occurred in our credit markets. There are now participants, new technologies, new underwriting practices, and new products. Indeed, there is more that has changed than has remained the same in the operation of the credit markets since the last time Congress considered the FCRA. These changes have been largely positive. They have expanded access to credit to more Americans and permitted loan approvals in hours rather than weeks.
However, these new developments have had some unintended consequences.
Identity theft. As our economy has grown more automated, more electronic transactions occur without the lender and borrower ever meeting face to face. As a result, the transfer of information has become much more pervasive, and a new crime has emerged that takes advantage of this flow of information. This crime is called identity theft, and the incidence of this crime has grown geometrically in recent years.
Identity theft involves a person using someone else's personal information without their knowledge to commit fraud or theft. Practically speaking, the crime involves misappropriation of such personal information as a victim's name, date of birth, and social security number. Identity thieves then use this information to open new credit card accounts, to divert current accounts from victims to themselves, and to open bank accounts in victims' names, among other things. The bad charges and the hot checks usually happen while the victims, banks, credit card companies and other firms are unaware that something is amiss.
In the wake of unauthorized activity and skipped payments, the creditor usually takes action and ultimately cuts the thief off. At this point, the creditor's losses are curtailed, but the nightmare is just beginning for the ultimate victim of identity theft--the individual whose identity the thief assumed. In most instances, the victims first become aware of the fact that they have been targeted when the creditor seeks payment. It is also when they begin to experience the negative consequences--dealing with law enforcement and the collection agencies.
Thereafter, when the results of the criminals' handiwork shows up on their credit reports, they face the considerable task of restoring their good name and credit rating.
This bill attempts to combat this growing crime while also helping consumers restore their credit standing and give victims assistance. The bill contains a number of provisions that deal with identity theft:
S. 1753 directs Federal banking regulators, the National Credit Union Administration and the Federal Trade Commission to develop guidelines and regulations to identify and prevent identity theft;
The bill mandates the inclusion of fraud alerts in credit files, to notify users of credit reports that a consumer could be a victim of identity theft;
The bill will restrict the amount of information available to identity thieves, by requiring the truncation of credit and debit card account numbers on electronically printed receipts; and
S. 1753 increases the punishment of identity theft crimes.
S. 1753 also provides victims of identity theft with meaningful assistance something they do not really have today:
The bill requires the FTC to prepare a summary of rights of identity theft victims;
S. 1753 establishes procedures to block the reporting of and the refurnishing of identity theft-related activities; and it requires the national credit reporting agencies to coordinate and share identity theft complaints.
Another aspect of this bill is accuracy. The committee also focused its attention on how best to ensure the accuracy of credit information. Accurate credit reports are absolutely crucial to the efficient operation of our credit market. Indeed, the changing nature of our credit markets has made accuracy more important than ever. Credit report information is increasingly used as the key determinant of the cost of credit and insurance in this country.
In addition, technology has permitted lenders to use credit information to more precisely assess risks posed by borrowers. Gone are the day when lenders merely stamped loans as ``approved'' or ``not approved.'' Today, the lenders employing credit history data, use mathematical models to analyze credit risk and create risk-based prices for credit cards, mortgages and other products. Use of risk-based pricing allows lenders to extend credit to a broader range of borrowers on credit terms, which match the credit risk they pose. Additionally, its use results in very few credit applicants being rejected. Again this is a very positive development, but not one without a cost.
Currently, credit applicants who are rejected received adverse action notices and access to a free credit reports. This allows such consumers to review the accuracy of their credit report information. Due to risk- based pricing, consumers are often not given the adverse action notice when information contained in their credit report significantly impacts the cost of the credit offer. Rather, they receive a counteroffer with credit offered at a higher price or with more restricted terms.
This development presents a huge concern. The adverse action notice is the primary tool in the FCRA to ensure mistakes in credit reports are discovered. To address this situation, the committee bill requires regulators to promulgate rules to provide consumers notice when, because of information contained in a consumer's credit report, the creditor makes a counter offer to the consumer on terms that are materially less favorable than the most favorable terms available to a substantial portion of consumers.
These notices will make consumers aware of the need to check their reports to ensure their accuracy. The need for ensuring the greatest possible accuracy in credit information does not end with these new notices. For example, in large credit transactions, such as mortgages, rate differences, as the Presiding Officer knows, can translate into hundreds of thousands of dollars over the course of a loan. Even in smaller dollar credit transactions, such as credit cards, rate differences can mean large amounts of money.
With the practice of credit card companies reviewing credit reports and adjusting rates in real time becoming more prevalent, the application of risk-based pricing to consumer finances is practically an everyday event.
Credit reporting information is increasingly used as the key determinant of the cost of credit or insurance. With the rewards for good credit so meaningful in this country, and the penalties for bad credit so costly, it is more critical than ever before that credit reports accurately portray consumers' credit histories.
The committee bill addresses this in several ways. One, the bill provides consumers the right to obtain a free copy of their credit report annually through a centralized system and request of their credit scores or information about credit scores in certain circumstances. This is a big change.
S. 1753 directs the Federal banking regulators, the National Credit Union Administration, and the Federal Trade Commission to develop guidelines to ensure greater accuracy and completeness of information in credit reports.
Furthermore, it directs the Federal Trade Commission and the Federal Reserve to conduct ongoing studies on the accuracy of consumer reports and the resolution of consumer complaints.
Privacy protections are addressed in this bill. S. 1753, the bill before us, contains a number of important new privacy protections for consumers. The committee-designed protections are based on our extensive deliberations and focus on core areas of concern in the privacy arena; namely, direct marketing and medical information.
The bill contains important new medical information protections which significantly limit creditors' use of consumer medical information and restrict the dissemination of medical information in credit reports. These provisions require the coding of medical information that is included in credit reports and prohibits creditors from obtaining or using medical information in determining a consumer's eligibility for credit.
S. 1753 also requires affiliated companies to give consumers notice and an
opportunity to opt out of direct marketing. In addition, the bill requires the regulators to study information-sharing practices of affiliated companies and the level of consumer understanding.
Financial literacy was another topic of our committee deliberations. The committee understands that informed, knowledgeable consumers are best positioned to take advantage of new credit products and to reduce the likelihood of falling prey to negative developments, such as identity theft. Financial education is crucial to the effective operation of our credit markets since the Fair Credit Reporting Act places significant responsibility on the consumer to ensure the accuracy of their credit reports. For these reasons, the bill establishes the Financial Literacy and Education Commission to review and create Federal programs and coordinate the existing financial literacy efforts already established.
The committee has devoted a significant amount of time and energy in this bill to build a complete and thorough record on the highly complex issues involved with the Fair Credit Reporting Act. The legislation we are considering today, which was passed unanimously out of the Banking Committee, reflects the time and consensus achieved during that process.
It contains language that was developed by a number of my colleagues on both sides of the aisle, and I thank all of them for their efforts. I also particularly thank the ranking member and former chairman, Senator Sarbanes, for his insight and the significant contributions he and his staff have added as we have moved through this process over the course of the year.
I believe we have achieved the difficult objective of striking the proper balance between enhancing the rights of consumers and improving the efficient operation of our credit markets.
Mr. President, I now yield the floor to my distinguished colleague from Maryland, the ranking Democrat.
Mr. President, I thank the Senator from South Dakota for permitting me to do this. I ask unanimous consent that the substitute amendment be adopted and considered original text for the purposes of further amendment and that no points of order be waived by this agreement.
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…
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
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.
Mr. President, I now move to table the Feinstein-Boxer amendment and ask for the yeas and nays.
Mr. President, I move to reconsider the vote.
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.
I urge adoption of the amendment.
I urge the adoption of the amendment.
The managers are prepared to accept this amendment.
If the Senator will yield, we do have a copy of the letter from Sallie Mae.
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.
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.
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.
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.
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.
Madam President, I move to table the amendment.
Madam President, I ask unanimous consent that the vote be deferred temporarily.
Madam President, I suggest the absence of a quorum.
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. President, I ask unanimous consent the order for the quorum call be rescinded.
Mr. President, on behalf of Senator Nelson of Florida, I send an amendment to the desk and ask for its immediate consideration.
Mr. President, Senator Sarbanes and I have reviewed the amendment. We have no objection to the amendment.
Mr. President, I suggest the absence of a quorum.
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…
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 Senator from Arizona wishes to go before Senator Durbin?
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.
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.
Will the distinguished Senator from Maryland yield for a question?
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.
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.''
I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2060
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.
Madam President, has that amendment been disposed of?
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
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.
Madam President, I have a statement that will take about 3 or 4 minutes that I will give at some time.
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
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.
I am happy to yield to my friend from Delaware.
Mr. President, I ask unanimous consent the order for the quorum call be rescinded.
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.
Will the Senator yield to me for just 30 seconds? Mr. President, we are having two major statements on unrelated issues. We have an amendment pending. We are trying to work through these amendments.…
Will the Senator yield to me for just 30 seconds?
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.
Mr. President, does the Senator from Colorado wish to speak?
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.
I am happy to yield to the distinguished leader for a question.
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.
I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2059
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. 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.
I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2061
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.
I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2062
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.
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.
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.
I move to reconsider the vote.
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.
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. 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. 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…
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.
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.
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Madam President, I ask unanimous consent that the order for the quorum call be rescinded. Madam President, as we approach the end of actually a rather short, abbreviated debate on this legislation, I…
Madam President, I ask unanimous consent that the order for the quorum call be rescinded.
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
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.
Will the Senator from Nevada yield for just a moment?
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.
Mr. President, I rise in support of the legislation currently being considered, ``The National Consumer Credit Reporting System Improvement Act of 2003.'' Before I get into the substance of the…
Mr. President, I rise in support of the legislation currently being considered, ``The National Consumer Credit Reporting System Improvement Act of 2003.''
Before I get into the substance of the legislation, I would like to acknowledge the stewardship and leadership of Banking Committee Chairman Shelby and Ranking Member Sarbanes in developing this bipartisan proposal--which passed unanimously out of the Senate Banking Committee. Their efforts, and the work of their respective staff, are to be commended.
Through a series of six hearings they took a thoughtful, deliberative approach toward the myriad issues involved in fashioning this legislative proposal. In those hearings we heard from a variety of sources--regulators, industry participants, consumer advocates, and most importantly consumers themselves. Those hearings proved an invaluable tutorial to me and I imagine all the other members of the Banking Committee. More importantly, those efforts, and the comity shown by Senator Shelby, created an environment of bipartisanship in the effort to enhance our national consumer credit reporting system-- which is embodied in the bill now before the full Senate.
The Fair Credit Report Act has been central to the provision of credit in America. It has improved access to credit, and enhanced the security and accuracy of consumer financial information used in assessing creditworthiness. The expansion of our credit system, which the FCRA has helped drive, has proved enormously beneficial to our nation and our economy. It provides consumers with the ability to finance purchases of a car, pay a child's college tuition, purchase a new home, open up a new business or pursue some other lifelong dream.
Credit is the grease that makes the wheels of the economy turn-- particularly our consumer-oriented economy which accounts for nearly 10 percent of our overall GDP. And the FCRA has provided millions more Americans, many of whom lacked the financial resources to pursue their dreams and those who historically have been shut out, with access to our credit system--particularly minority and low-income households.
But we should not lose sight of the fact there's a great deal more that we can do before we claim that the playing field is truly level. With several of its provisions set to expire at the end of this year, it is imperative that Congress act now to reauthorize the FCRA, lest we risk a severe disruption to our economy that could result from a breakdown in our national credit system.
This legislation does that. In fact, it does more than just reauthorize the FCRA--a worthy objective in its own right. It enhances the obligations of those who use and store consumer credit information, it strengthens consumer control over their personal financial and medical information, it strengthens consumer protections against identity theft, and importantly it promotes consumer financial literacy. And this legislation includes important provisions that will strengthen consumer protections against the serious, and growing, threat of identity theft.
It's a serious crime and is rapidly becoming an epidemic. In fact, identity theft is the single largest consumer crime in America, as reported by the Federal Trade Commission. People whose identities have been stolen can spend months or years, at considerable cost, cleaning up the mess thieves have made of their good name and credit record. And while doing so, victims lose employment opportunities, can be refused loans, education, or even be arrested for crimes they didn't commit.
This bill directs federal banking regulators to develop guidelines and regulations to fight identity theft. It allows consumers who have, or may have, been a victim of identity theft to put banks and others on notice to guard against the continued use of their stolen identity through the use of ``fraud alerts.'' It prohibits debts resulting from identity theft from being sold or transferred for collection, and it enhances criminal penalties for identity theft. It requires financial institutions to disclose when their customer data systems have been compromised. And the bill provides consumers with access to one free credit report per year from the credit reporting bureaus.
This access will allow consumers to monitor the accuracy of the information contained in their credit files and ensure that information resulting from identity theft does not end up destroying their financial reputation. These are all important provisions, and they are sorely needed.
I also want to speak to an element of this bill that has received little public attention, but will, I believe, be particularly beneficial in the long run--that is the provisions of the bill which promote consumer financial literacy. The Chairman and Ranking Member of
the Banking Committee noted the importance of the financial literacy provisions in their opening statements. They, and others, including Senators Stabenow, Akaka and Enzi, deserve recognition for their commitment to improving the financial literacy of Americans young and old.
This bill seeks to harmonize the currently fragmented approach the federal government has taken towards promoting financial literacy. It establishes a Financial Literacy and Education Commission to streamline and improve financial literacy and education programs of the Federal Government, including curriculum development, for the benefits of all Americans.
And by providing consumers with a free credit report, and access to the information used by creditors to judge their creditworthiness, this bill equips consumers with the tools to competitively shop for sources of financing and will lead consumers to make better informed, more judicious, credit-related decisions. And, I might add, improved financial literacy will also help consumers protect themselves against identity theft.
The various elements of this legislative proposal that I've just outlined will prove beneficial to consumers, our credit system and our economy. It's a bipartisan bill that does a lot of very good things, and was put together in a balanced manner. Is it a good piece of legislation? Yes. Is it perfect to me? Certainly not. I personally think more can be done to give consumers greater control over the ways in which financial institutions share their personal information with their affiliates, for marketing, solicitations and other purposes. And I think we will need to revisit FCRA at some point to look at issues related to the increased use of credit scores as a determinant of one's suitability to gain employment, obtain car or medical insurance or rent an apartment.
In that regard, I want to thank Chairman Shelby for graciously incorporating into this bill language I offered in committee that calls for a study of the impact credit scores and credit-based insurance score have on the availability and affordability of financial products so that we can explore this issue more broadly as we move forward.
But whatever issues I, or other members, may wish to raise with regard to S. 1753, there is no doubt that this legislation makes significant improvements to current accuracy and security standards of our consumer credit reporting system and our efforts to fight identity theft.
The standards contained in the legislation will make our credit system more robust and provide access to credit to even more Americans who seek it. In doing so, this legislation will prove beneficial not only to consumers, but also more broadly to our nation's economy.
I urge my colleagues to support S. 1753 when it comes up for final passage.
I call up the Cantwell amendment and ask for its immediate consideration. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with. Mr. President, this amendment is…
I call up the Cantwell amendment and ask for its immediate consideration.
Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.
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. 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
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.
Mr. President, I am in strong support of S. 1753 to renew uniform national standards for managing consumer credit information. These provisions are due to expire January 1, and this legislation is…
Mr. President, I am in strong support of S. 1753 to renew uniform national standards for managing consumer credit information. These provisions are due to expire January 1, and this legislation is vitally important so that economic empowerment can become a reality for all Americans.
Since it was first enacted in 1970, the Fair Credit Reporting Act has served an important role in this Nation. Indeed, it is astounding to consider the fundamental changes which have occurred in our credit system.
In 1970, credit card charges over $20 required the store owner to call the creditor who would then have an employee go through a card catalog system to approve the transaction. Today, it takes just seconds, even when you are on the other side of the world. While we take this innovation for granted, it demonstrates how much our system of payments has changed.
In addition, the provisions of the Fair Credit Reporting Act have also been responsible for many of the advancements in how we choose financial products which best meet our needs. Today a fairer and faster system of assessing an individual's financial responsibility means that consumers now have quick access to competitive offers for credit, insurance, or other financial products.
Clearly, our current credit system has benefited individuals at every level of the economic ladder, and that has meant new opportunities for people who never before had access to credit. Judgments based on race and gender have been taken out of the equation of creditworthiness.
No longer is collateral necessary when qualifying for a loan. People can now move on to the ladder of economic success simply by proving they can responsibly handle their financial affairs. Given this opportunity to reauthorize the Fair Credit Reporting Act, we must ensure that our actions do not result in increases to the cost of credit or lower access to credit. Both would have harmful effects on our recovering economy. At the same time, we must ensure that the law applies to everyone fairly and that the system to protect consumers against questionable material on credit reports operates efficiently and effectively.
Recently, in the Banking Committee, we heard testimony about the harm caused to consumers who had false information on their credit reports as a result of mistakes or fraud. The legislation before us contains initiatives to increase the accuracy of credit reports, including providing consumers with one free credit report each year. This free report will give consumers a better understanding of the factors financial institutions take into account when pricing a product and when deciding whether to extend credit.
Free credit reports will also ensure the accuracy of reports since consumers are best able to identify incorrect and false information. This will go a long way in stopping identity theft, a destructive crime that is, unfortunately, growing more common each day.
This legislation also continues one of the most important provisions from the 1996 act, and that is affiliate sharing. Consumers clearly benefit when they are able to call a single person in their financial institution and that customer service agent is able to access each of their different accounts at once. We all know the frustration of being transferred from person to person when we are attempting to get questions answered. With these provisions, more institutions are able to develop systems to minimize the need to transfer customers from department to department. It also saves consumers time and money when financial institutions are able to realize greater efficiencies by consolidating customer service and administrative functions for their affiliate businesses.
Let me be clear. Privacy of personal information is extremely important, and I continue to work to implement reasonable protections. However, we must strive for a balance and we must not sacrifice the efficiency of our credit system in the name of privacy. In many ways, I believe our responsibility is like that of doctors in the Hippocratic oath: First do no harm.
Just as importantly, affiliate sharing assists financial institutions in their antiterrorism efforts by helping them detect and prevent money laundering. A customer service agent who can review all of the consumers' accounts is more likely to spot potential problems or concerns.
The average American moves every 6 years. This is about 17 percent of the U.S. population, more than two-thirds higher than any other country. Our national uniform credit system plays a significant role in increasing the mobility of labor and in the ability of consumers to move while keeping portable credit reputations that preserve their access to low-cost credit. Advances such as these have ripple effects that help our communities tremendously. The families served find themselves with more money since the costs of their financial needs decrease, they have access to credit and loans to meet the needs of their families, and they are able to establish a good credit record so that they are eligible to obtain a home mortgage.
Because of the Fair Credit Reporting Act, families are able to build wealth, many for the first time. They are able to provide greater stability for their families, and in turn they become more involved in their communities. It is the modern American dream so many consumers are beginning to realize because of our efficient and effective credit system. It is important that Congress act quickly to renew these uniform national standards for managing consumer credit information. Consumers and the financial sector will most definitely feel the impact if these provisions expire. The benefits to our communities and our economy are endless.
I certainly thank Chairman Shelby for his excellent work on this legislation. His ability to resolve issues and work with all the parties is a true testament to his leadership. It is a privilege to serve on his committee.
I also thank Senator Sarbanes for his tireless advocacy on behalf of consumers. Similar legislation has already passed overwhelmingly in the House. I urge all of my colleagues to join this truly bipartisan coalition of Senators in acknowledging the benefits the Fair Credit Reporting Act has brought to our Nation.
I yield the floor.
Yes. 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…
Yes.
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
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.
Mr. President, the bill we have before the Senate, the National Consumer Credit Reporting System Improvement Act of 2003, is clearly a bipartisan effort recognizing that our credit system has truly…
Mr. President, the bill we have before the Senate, the National Consumer Credit Reporting System Improvement Act of 2003, is clearly a bipartisan effort recognizing that our credit system has truly developed into a national market. The bill will provide consumers with greater tools to improve the accuracy and correctness of information contained in their credit reports as well as to provide important tools for consumers in combating identity theft. This bill is a very proconsumer bill and goes a long way towards enhancing consumer protections in our credit markets.
When the Fair Credit Reporting Act was first adopted in 1970, consumers spending had reached 566 billion dollars. At the time, that was quite an outstanding figure. By 2002, that figure had risen to over $7 trillion.
In just this past decade alone, we have seen tremendous growth in the availability of credit. Much of this can be attributed to the technological advances in the way consumers can apply for credit, the review of credit applications by financial institutions, and the development of new and unique financial products. The incredible growth in the availability of credit in the housing, consumer, and small business markets is a testament to our financial markets. Accordingly, it also is a symbol of the national structure of our credit markets. I believe that this bill will further enhance the credit markets and provide significant consumer protections.
Two areas that I would like to focus on are financial literacy and identity theft.
With respect to financial literacy, I have witnessed how financial literacy programs can make a difference for individuals who wish to, but never thought they could, purchase a home. In Wyoming, I have worked with a consortium of financial institutions, real estate professionals, colleges and universities, and non-profits to provide compressed video classes on how to buy a home. These classes have proven to be vital in reaching home-buyers and families in the rural areas of the State. To date, more than 4,000 families and individuals have taken part in the classes. The great success of this program has demonstrated to me the power that we can give to individuals and families over their finances if we gave them the tools.
In addition, I also worked with consumer credit counseling services that helped over-extended individuals and families to rearrange their life and breakout of debt. Credible advice makes a difference for financial power.
The Federal Government has a vast variety of financial literacy and education programs for Americans of all ages. Unfortunately, consumers have to struggle through the many Federal agencies' programs and initiatives to find the right financial literacy material for their needs. Title V of this bill will provide a one-stop-shop for consumers to reach the many, various financial literacy programs that the Federal Government provides. In addition, the Title will help bring consistency and focus to the Federal Government's overall financial literacy goals--something that does not appear apparent at this time.
Title V is built upon the successful model of the Trade Promotion Coordinating Committee in that it would being the appropriate Federal agencies together to review and evaluate current financial literacy programs by the Federal Government. The Financial Literacy and Education Commission will make recommendations on how to coordinate and improve existing programs as well as how to reduce redundant and duplicative programs. I believe that the long-term cost savings to the Federal Government as a result of this review will be great. In addition, the commission will set forth a national strategy recommending changes to the President and Congress on how the Federal agencies can improve their financial literacy efforts.
I thank Chairman Shelby for incorporating the bipartisan effort to promote financial literacy as Title V of the bill. In addition, I thank Senators Sarbanes and Stabenow as well as the other members who supported this effort.
With respect to identity theft, the FTC recently released a study showing that more than 27.3 million consumers have been a victim of identity theft in the past five years and that the number is growing quickly. A little more than a month ago, one of my own staff became a victim of this crime. As you know, Senator Cantwell and I have introduced identity theft legislation to
help victims to recover their identities, that legislation passed the Senate last Congress.
According to the Federal Trade Commission, identity theft is the fastest growing crime facing consumers today. Victims are faced with potential financial ruin when their identities, bank accounts, and credit histories are taken away from them by unscrupulous criminals.
Unfortunately, many victims face an uphill battle to restore their identities. In addition, Federal and local law enforcement officials are placed at a disadvantage by not having all of the available information to discover identity theft rings or patterns of id theft criminals.
I believe that the provisions in the bill before us take a great step in helping the victims of this crime recover as well as providing proactive tools to help consumers prevent their identities from being stolen. In addition, the bill will give greater significant to the Identity Theft Affidavit and to the collection of information to combat identity theft crimes.
The National Consumer Credit Reporting System Improvement Act of 2003 is one of the most important pieces of consumer legislation that we have seen in years. It is truly a bipartisan bill that will enhance the fundamental structure of our credit markets as well as providing consumers with the necessary tools to use the credit markets and to protect against identity theft. I urge my colleagues to pass quickly this very important piece of legislation.
Madam President, I see the chairman of the committee is here. I will speak for a minute while he is getting affairs in order to respond briefly to the Senator from Kentucky about the Healthy Forests…
Madam President, I see the chairman of the committee is here. I will speak for a minute while he is getting affairs in order to respond briefly to the Senator from Kentucky about the Healthy Forests initiative.
The statement has been made that hundreds of thousands of acres have burned in the last few years. But we have had millions of acres burned. We understand what it means to have wildfires. As a neighbor to California, Nevada sent 500 firefighters and dozens of pieces of equipment to help fight the fires in California. We in Nevada understand what fires are all about. I think most everyone in the country understands how devastating these fires have been. But for anyone to come to the floor and suggest we are fiddling while Rome burns, that is simply untrue.
Here is what we are concerned about. We have a situation where we have been eliminated from the conference process. Remember that the Senate is 49 to 51. It is not as if there is a huge majority. We have been eliminated from conferences. People are saying, Isn't it nice that the Medicare conference is allowing two Democrats in on the conference. But for any other Democrats to come, the conference is closed. For most conferences, we don't have anybody.
What we have suggested on this bill and on the CARE Act and a number of other matters is that we go ahead and send what has been passed in the Senate to the House. If the House doesn't like it, they can send it back with amendments. We have done that many times. This is not an unusual procedure. We need only look at what we did last night with the Fallen Patriots Tax Relief Act. That is how that happened. There was no big cry of concern about that.
We haven't had the opportunity to do complete research. H.R. 1584, the Clean Diamond Trade Act; H.R. 1298, AIDS Assistance Bill; H.R. 733, McLaughlin House National Historic Site Act; H.R. 13, Museum Library Services Act; H.R. 3146, TANF Extension; and H.R. 659, Mortgage Insurance Act--these are just a few of the pieces of legislation we have handled in this manner.
If the majority wants this act to pass--and I am sure they do--the best thing to do would be to take what has taken place here in the Senate and send it across the hall to the House. If there is something they do not like about it, send it back to us with an amendment. It happens all the time. It is not unusual. In fact, in years past that is how it was done. Conferences were not used as much as they are used now.
The way we have been treated with conferences, they are going to have a lot less because you can't have conferences where there is no conference. Basically, the majority meets in secret, and when they complete their secret meetings, they bring the conference report and say take it or leave it. That is the wrong way to do things.
That is what this is all about. We want the Healthy Forests initiative to pass. We wanted it to pass yesterday--not tomorrow but yesterday. It is an important piece of legislation. That is indicated by the vote that came out of the Senate.
Therefore, take what we passed, send it to the House, and if they don't like it, they can send it back with amendments.
I am happy to yield to my friend from Idaho.
Yes. It is absolutely true. That is the point I tried to make last night dealing with the CARE Act and today. I apologize; I was in a meeting with Senator Daschle and I was unable to listen to your speech. But the answer is absolutely yes. That is the point I was making.
No. I say to my friend the bill is not moving because the majority has decided to harp on the fact that there is not a conference named----
Please. I have the floor. The fact of the matter is conferences have been held around here. What I am saying is the majority has a choice. If they want the healthy initiative bill--which we badly want--then I think what we should do is take what has been passed and send it to the House. If they don't like it, let them bring it back with amendments.
There are two ways of doing it. One way is the way the Senator from Idaho suggests. The conferees could be appointed and take it over to the House, and we meet someplace else. That is the normal way.
Frankly, since we have lost control of the majority, we haven't held conferences. I have talked about that at some length on previous occasions. I touched on it briefly here today.
We want a bill passed.
The Senator from Idaho is absolutely right. The Democratic leader, in representing the Democratic caucus, has said let us not do a conference because it is meaningless, anyway. Let us take our bill we have passed and work on it. We had a big vote here. Send it to the House, and they can come within a matter of hours with something they don't like about it, and we will be happy to review that when it comes back in a matter of hours.
I want to tell my friend from Alabama how much I appreciate his patience while we finished this little scrum on the floor today.
I look forward to this most important piece of legislation. This is brought to the floor on a bipartisan basis. We have spent time speaking with the Senator from Alabama at some length in getting the bill here, dealing with the same problem we are having in the conferences.
I wish that all Senators had the sense of what legislation is all about as does the Senator from Alabama. He, in my mind, is truly a legislator. I have enjoyed working with him in the House and in the Senate. There is no question that this bill is here as a result of his reaching out to the Democrats on the committee. They have told me that. There are Democratic amendments in the mark now before the Senate. On behalf of those in the minority, through the Chair, we express our appreciation to the Senator from Alabama, the chairman of the Banking Committee.
Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 659) to amend section 242 of the National Housing Act regarding the requirements for mortgage insurance…
Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 659) to amend section 242 of the National Housing Act regarding the requirements for mortgage insurance under such Act for hospitals.
Mr. Speaker, I yield myself such time as I may consume.
This morning we are considering H.R. 659, the Hospital Mortgage Insurance Act of 2003. This legislation will make substantial improvements to the FHA Hospital Mortgage Program, making it easier for hospitals to obtain mortgage insurance.
This vital program provides credit enhancement, merges public and private resources, and makes available billions of dollars in new hospital construction and improvements.
Hospitals, Mr. Speaker, face significant financial challenges when providing care to patients, we all know that, who are covered by Medicare and Medicaid. At the same time, improvements in technology and health care knowledge necessitate capital improvements such as additions and renovations to existing buildings. It is generally accepted that modern health care facilities will improve the quality of life and the health of the population.
In an effort to assist States to provide modern health care facilities, Congress enacted section 242 of the National Housing Act in 1968.
Section 242 permits FHA to insure mortgages of hospital sponsors used to finance the replacement, modernization and rehabilitation of inefficient existing facilities. Low interest rate costs attributable to FHA insured financing, as well as the development of more cost- efficient facilities, substantially reduces both provider and Federal and State reimbursement.
To be eligible for section 242 financing, a hospital must obtain a Certificate of Need from a designated State agency, or in the absence of a Certificate of Need authority, a State-commissioned feasibility study. In addition, the hospital must demonstrate that there are reasonable State or local minimum licensing and operating standards already in effect.
However, as a result of continuing Federal policy encouraging deregulation, Certificate of Need authority has ``sunset'' in some States. In fact, over the last 20 years, at least 18 States have repealed their Certificate of Need process and programs.
The problem has been further compounded by at least two other factors. In some States retaining Certificate of Need authority, some projects will not qualify for the CON process. In others, the relevant State agency often lacks the authority to commission alternative feasibility studies.
I remember addressing the Ohio Certificate of Need program for indigent care while serving in the State Senate in Ohio. Ohio was not alone in reforming that program. For example, several States repealed their Certificate of Need program, including Arizona, California, Indiana, Kansas, Minnesota, Missouri, Oregon, Pennsylvania, Texas and Utah.
One unintended consequence of those changes was to make it more difficult for hospitals in these States, particularly in rural areas, to obtain FHA insurance. This raised the cost of lending for hospitals, making it more difficult for them to improve existing facilities or build desperately needed new facilities.
This bill addresses that problem by giving HUD the freedom to devise new requirements for hospitals to be eligible for FHA mortgage insurance. It will significantly reduce the cost to providers of complying with expensive, pre-deregulation Certificate of Need eligibility requirements; and it will provide major economic stimulus to State and local communities as well as construction and permanent employment opportunities.
Two noncontroversial amendments have been added to the bill. One exempts critical-access hospitals from meeting the 242 statutory requirement that 50 percent of the patient-days in the facility be for acute care.
This will allow FHA to insure mortgages for small, rural hospitals with long-term care nursing facilities, an important change for communities in which there is not a large enough population to support two separate entities. This exemption will last for 3 years, during which time HUD will submit a report to the authorizing committees concerning its effect on the fund and eligibility.
The other amendment requires HUD to perform a study on the barriers to insuring mortgages for federally qualified health centers. The original amendment, to make them eligible for section 242 insurance, was dropped and this was inserted.
In order to ensure our health care system remains the best in the world, we must support continued advances in technology and improvement in medical care. The Hospital Mortgage Insurance Act of 2003 seeks to do just that by helping hospitals around the country, and especially in our rural areas, to continue modernizing their facilities and improving the quality of life for their patients.
Mr. Speaker, I urge Members to support this important piece of legislation. I thank the gentleman from Ohio (Mr. Oxley), and I thank our ranking member, the gentleman from Massachusetts (Mr. Frank), and our staff for the work on this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation, and insert extraneous material thereon.
Mr. Speaker, I yield myself such time as I may consume.
I thank the ranking member of the committee, and I also thank the ranking member of the subcommittee, the gentlewoman from California (Ms. Waters). There has been a great bipartisan spirit on this bill and others, and we appreciate Members working together for the betterment of the people.
Mr. Speaker, I yield back the balance of my time.
Mr. President, I rise in support of the Fair Credit Reporting Act which we are debating on the floor today. I think it is important as we move through this debate and take up amendments to the…
Mr. President, I rise in support of the Fair Credit Reporting Act which we are debating on the floor today. I think it is important as we move through this debate and take up amendments to the legislation that we continue to ask the question, Why do we need this legislation in the first place? What are we trying to accomplish with the bill?
First and foremost, this is legislation that is intended to serve and protect the interests of consumers in the United States of America. In this legislation we are providing consumers access to a national credit system. If we look at the financial services, or our commerce system across the entire country, it is our job to look out for the interests of consumers where interstate commerce and business is concerned, and this legislation does just that. It provides access to a national credit system, and it does so at a reasonable cost. We strike a balance between the needs of the consumers and the impact on our economy so that in the long run both consumers and America's economy are well served.
We work to ensure consistency and fairness in the legislation. Any bill we take up here which might affect consumers or any other interests in the country, we would want to work to ensure it is consistent, it is fair, and that it creates a level playing field wherever possible.
As indicated and described by Senator Johnson in his remarks, the existence of this national credit system has resulted in speedy approval for consumer decisions and requests and credit cards and other financing mechanisms. As a result, we have seen access to credit dramatically increase since 1970 when the first credit acts were signed into law.
That improvement in access to credit markets and credit opportunities has been most dramatic for those at the lowest end of the income ladder. That is something we should recognize as being good for all of those consumers but also for our country as well. The reason we are here is for those consumers.
If we look at the result of the work that was done beginning in 1970, the Credit Reporting Act in 1996, and now with this legislation to reauthorize that legislation, the results have been a more accurate system, a stronger economy as described in detail by a number of the previous speakers, and now with some of the new provisions we will also have greater protection from identity theft and a system that is adapted and modernized to meet the new technologies and the new opportunities that exist today.
Senator Sarbanes described the details of the legislation. I will not go through all of the provisions that enable us to enjoy these very positive results, but I will reemphasize the fact that this is strong bipartisan legislation. Chairman Shelby and ranking member Sarbanes worked through six hearings in our committee to conduct exhaustive investigation as to the results of the legislation that has been enacted before, the new opportunities created by technology, and different opinions on different provisions. We have a very strong committee record. I am pleased to have participated in most of those hearings to ensure that we are taking the disparate views into consideration and improving the strong legislation that is already on the books.
We want to avoid having 50 States adopting 50 different standards in each
of the areas that have been discussed--whether it is enforcement, access for consumers to credit reports, information sharing, or whatever the issue. We don't want to have 50 different systems for each of these areas. That would be a more costly system for consumers. That would mean we would have a less accurate system. That would also mean-- I think this is an important point--we would come back to this debate with a disparate patchwork, and it would also mean greater susceptibility to identity theft.
When we are looking at the issue of information sharing or opt-ins and opt-outs, some of the privacy issues that are very important, we have to be sure we at least give law enforcement the same level playing field criminals have in that we at least ensure law enforcement has the most consistent system possible to do its job in protecting against identity theft. A patchwork of laws and legislation would increase the risk of identity theft, not decrease it.
At the end of the day, this is a consumers' bill. That is exactly what we want it to be. We give consumers greater access to reports. We have all been frustrated with mistakes, or errors, or oversights in our own credit reports. We want to make sure consumers have that access. We give them the protection from identity theft. We improve the enforcement mechanism for those who commit crimes involving credit reporting or identity theft. We have very commonsense provisions for information sharing among affiliates that exist so they can make sure the information they are acting on is accurate and fair and adequately represents the consumers' interests in these.
Again, I give great credit to the staff of the committee and to the chairman and ranking member for the work they have done.
I look forward to this debate. I hope we can quickly conclude the work on this legislation so our national credit system can remain strong as it has been for decades, but also so it can be improved to respond to what is in a changing world.
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…
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?
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.
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?
I ask the ranking member for his views on this letter and what we have to do in terms of disclosure on debit cards.
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.
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.
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…
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.
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.
Bill Text
7 versions available
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 659 Enrolled Bill (ENR)]
H.R.659
One Hundred Eighth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the seventh day of January, two thousand and three
An Act
To amend section 242 of the National Housing Act regarding the
requirements for mortgage insurance under such Act for hospitals.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Hospital Mortgage Insurance Act of
2003''.
SEC. 2. STANDARDS FOR DETERMINING NEED AND FEASIBILITY FOR HOSPITALS.
(a) In General.--Paragraph (4) of section 242(d) of the National
Housing Act (12 U.S.C. 1715z-7) is amended to read as follows:
``(4)(A) The Secretary shall require satisfactory evidence that the
hospital will be located in a State or political subdivision of a State
with reasonable minimum standards of licensure and methods of operation
for hospitals and satisfactory assurance that such standards will be
applied and enforced with respect to the hospital.
``(B) The Secretary shall establish the means for determining need
and feasibility for the hospital, if the State does not have an
official procedure for determining need for hospitals. If the State has
an official procedure for determining need for hospitals, the Secretary
shall require that such procedure be followed before the application
for insurance is submitted, and the application shall document that
need has also been established under that procedure.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect and apply as of the date of the enactment of this Act.
(2) Effect of regulatory authority.--Any authority of the
Secretary of Housing and Urban Development to issue regulations to
carry out the amendment made by subsection (a) may not be construed
to affect the effectiveness or applicability of such amendment
under paragraph (1) of this subsection.
SEC. 3. EXEMPTION FOR CRITICAL ACCESS HOSPITALS.
(a) In General.--Section 242 of the National Housing Act (12 U.S.C.
1715z-7) is amended--
(1) in subsection (b)(1)(B), by inserting ``, unless the
facility is a critical access hospital (as that term is defined in
section 1861(mm)(1) of the Social Security Act (42 U.S.C.
1395x(mm)(1)))'' after ``tuberculosis''; and
(2) by adding at the end the following:
``(i) Termination of Exemption for Critical Access Hospitals.--
``(1) In general.--The exemption for critical access hospitals
under subsection (b)(1)(B) shall have no effect after July 31,
2006.
``(2) Report to congress.--Not later than 3 years after July
31, 2003, the Secretary shall submit a report to Congress detailing
the effects of the exemption of critical access hospitals from the
provisions of subsection (b)(1)(B) on--
``(A) the provision of mortgage insurance to hospitals
under this section; and
``(B) the General Insurance Fund established under section
519.''.
SEC. 4. STUDY OF BARRIERS TO RECEIPT OF INSURED MORTGAGES BY FEDERALLY
QUALIFIED HEALTH CENTERS.
(a) In General.--The Secretary of Housing and Urban Development
shall conduct a study on the barriers to the receipt of mortgage
insurance by federally qualified health centers (as defined in section
1905(l)(2)(B) of the Social Security Act (42 U.S.C. 1396d(l)(2)(B)))
under section 1101 of the National Housing Act (12 U.S.C. 1749aaa), or
other programs under that Act.
(b) Report.--Not later than 6 months after the date of enactment of
this Act, the Secretary of Housing and Urban Development shall submit a
report regarding any appropriate legislative and regulatory changes
needed to enable federally qualified health centers to access mortgage
insurance under section 1101 of the National Housing Act (12 U.S.C.
1749aaa), or other programs under that Act to--
(1) the Committee on Banking, Housing, and Urban Affairs of the
Senate; and
(2) the Committee on Financial Services of the House of
Representatives.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.