Floor Statements

Mr. Speaker, I rise today to express my appreciation for the work Congress has done to pass H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003. H.R. 2622 includes numerous consumer protection measures designed to combat the growing crime of identity theft and to improve the accuracy of the credit reporting system. This landmark legislation will also ensure the continued vibrancy of our national credit markets.

Given the complexity of H.R. 2622, it is both appropriate and important to submit for the record a section-by-section summary of the legislation in order to help provide an understanding of the legislation and its impact on the Fair Credit Reporting Act.

The legislation provides significant measures to help consumers, financial institutions and consumer reporting agencies prevent and mitigate identity theft. For example, the legislation establishes requirements for the placement of fraud alerts on consumer credit files, investigation of changes of address, truncation of credit card and debit card account numbers on receipts, and the manner in which information identified as having resulted from identity theft is blocked.

In addition, the legislation establishes requirements for verifying the accuracy of consumer information and preventing the reporting of consumer information that results from identity theft. Financial institutions must also take certain steps before establishing new loans and credit accounts for consumers who have fraud alerts on their credit files.

Lastly, the legislation includes provisions entitling consumers to obtain free credit reports and access to their credit scores. This provision will likely do more for financial literacy and consumer education than any legislation in decades.

I am submitting this section-by-section analysis on behalf of myself and the gentleman from Alabama (Mr. Bachus), the Chairman of the Financial Institutions and Consumer Credit Subcommittee, who introduced H.R. 2622 and presided over a series of hearings over the past year that laid the groundwork for this landmark legislation.

Section by Section Analysis of the Legislation

Section 1. Short title; table of contents

This section establishes the short title of the bill, the

``Fair and Accurate Credit Transactions Act of 2003'' (the

FACT Act).

Section 2. Definitions

This section adds a number of definitions for use in

provisions of the Act that are not amendments to the Fair

Credit Reporting Act.

Section 3. Effective dates

This section specifies effective dates for the legislation.

Several sections are given specific effective dates. For

sections adding new provisions or standards where no

effective date is provided, this section provides a general

rule providing for the Federal Reserve Board (the Board) and

the Federal Trade Commission (FTC) within 2 months to jointly

determine the appropriate effective dates for the remaining

provisions, not to exceed 10 months from making their

determination.

Mr. Speaker, I rise in strong support of S. 1680, the Defense Production Act Reauthorization of 2003, and urge its adoption. The bill before the House is largely the same as H.R. 1280, and passed last spring by the Committee on Financial Services, and is the result of broad bipartisan and bicameral efforts to reauthorize and update this important Act.

Mr. Speaker, when the House acts today to send the bill to the President, it will be completing Congressional action that should have taken place no later than the end of September. The authorities in this Act are too important for the Nation to have been without them for the nine weeks.

That said, Mr. Speaker, what is before the House today is a very good product. First and foremost, it reauthorizes the Defense Production Act for five years. This is important for two reasons: Firstly, as the nation faces the uncertain times ahead, it will be important for the President to have the authorities in the Act, and secondly, because it will give Congress an opportunity to consider some much-needed modernization of the DPA decoupled from reauthorization cycle. It is my intent to ask the President to take the next year to ponder what sorts of modernization of the DPA is necessary, with the idea that any action on those or other recommendations would take place in the first session of the next Congress.

The bill we are considering today also adds as a specific goal of the DPA the protection of the nation's critical infrastructure. Given the increasing dependence of the nation's defense, financial services and in fact the fabric of our daily lives on our critical infrastructure, I believe this addition is both wise and important.

Finally, in addition to some other minor additions, the bill before us increases on a one-time basis the funding ceiling for a program to enhance the nation's ability to produce radiation-hardened electronics for use in, for example, defense satellites. This program is an example of one of the most important aspects of the DPA: creating a U.S. defense production capability where none now exists.

Most important of all of these, Mr. Speaker, is the reauthorization itself. The DPA is the tool that the President uses to meet a specific national security need--protective gear for our troops overseas, or specialized communications equipment--should we have a shortfall in

supplies. The DPA is also one of the President's prime tools should there be another terrorist attack, and can be important in the case of natural disasters.

I hope, Mr. Speaker, that we can undertake any needed reforms of the Act at the beginning of the first session of the next Congress, and then extend the authorization beyond 2008 at that point, so that these important authorities remain available to protect America, Americans and, and American interests, uninterrupted.

In closing, Mr. Speaker, I would like to commend the excellent and diligent work of the gentleman from New York (Mr. King), Chairman of the Subcommittee on Domestic and International Monetary Policy, Trade and Technology, the gentlelady from New York, (Mrs. Maloney), and the ranking member of the full Committee, the gentleman from Massachusetts (Mr. Frank), for their assistance in passing this important bill. With that, I yield back the balance of my time and urge immediate passage of

Mr. Speaker, I am inserting for the Record an exchange of correspondence between myself and the gentleman from Wisconsin (Mr. Sensenbrenner), the Chairman of the Committee on the Judiciary, regarding his committee's jurisdictional interest in the Senate amendment to H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003.

House of Representatives,

Committee on the Judiciary,

Washington, DC, November 19, 2003.

Hon. Mike Oxley,

Chairman, Committee on Financial Services,

House of Representatives, Washington, DC.

Dear Chairman Oxley: In recognition of the desire to

expedite conference consideration of H.R. 2622, the ``Fair

and Accurate Credit Transactions Act of 2003,'' I will not

request that Members of the Committee on the Judiciary be

appointed as additional conferees. However, certain of the

provisions contained in the Senate-passed version of H.R.

2622 do fall within the Rule X jurisdiction of the Committee

on the Judiciary, and the Committee on the Judiciary takes

this action with the understanding that the Committee's

jurisdiction over these provisions is in no way diminished or

altered.

Section 115 of the Senate version of H.R. 2622 makes some

minor amendments to 18 U.S.C. 1028, the existing identity

theft provision in the criminal code. These amendments add

possession of false identification documents to the criminal

prohibition and increase the penalty from the 3 to 5 years.

Section 151 of the Senate version of H.R. 2622 adds new

provisions to Sec. 609 of the Fair Credit Reporting Act that

provide for a new right to consumer victims of identity theft

to obtain records from businesses of fraudulent transactions

conducted in their name. The right is only enforceable by the

public agencies under existing law. However, new

Sec. 609(e)(9) provides for a new affirmative defense for the

businesses so that they can show they have searched for the

records and do not have any.

Section 156 of the Senate version of H.R. 2622 amends the

current statute of limitations under the Fair Credit

Reporting Act. Under current law, the statute allows the

claim to be brought until the later of two years from the

date on which the liability arises or two years from the date

of discovery if there has been willful misrepresentation.

The bill would change this to the earlier of two years

from the date of discovery, irrespective of

misrepresentation, or five years from the date on which

the liability arises.

I understand that our staffs have worked out a mutually

acceptable resolution of these provisions that will be

included in the conference report. I appreciate your

willingness to work together on these provisions. I would

appreciate your including this letter in the Congressional

Record during consideration of the conference report on H.R.

2622 on the House floor. I appreciate your attention to these

matters.

Sincerely,

F. James Sensenbrenner, Jr.,

Chairman.

Mr. Speaker, I move to suspend the rules and agree to the conference report on the bill (H.R. 2622) to amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the conference report and insert extraneous material thereon.

Mr. Speaker, I yield myself 6 minutes.

Mr. Speaker, I am proud to bring before the House today the conference report on H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003. This is a bipartisan bill that will foster economic growth and development throughout this country. When 9/11 hit our country, Congress responded quickly with the passage of the USA PATRIOT Act and the Terrorism Risk Insurance Act. When corporate scandals threatened to undermine the integrity of the stock market, we responded with the passage of the Sarbanes-Oxley Act. And today, as the laws governing our national credit markets are set to expire, we must again respond swiftly and responsibly with the passage of this bipartisan solution to keep the American economy stable and growing and assure that the American consumer continues to enjoy the benefits of a robust national credit granting system.

One of the hallmarks of the modern U.S. economy is quick and convenient access to consumer credit. Though it would seem unimaginable a generation ago, consumers can now qualify for a mortgage over the telephone, walk into a showroom and finance the purchase of a car in one sitting, and get department store credit within minutes. As the distinguished Federal Trade Commission chairman Tim Muris has stated, the ``miracle of instant credit'' created by our national credit reporting system has given American consumers a level of access to financial services and products that is unrivaled anywhere in the world. The protection and growth of these services, as provided for in this legislation, are critical to the success of our economy.

Since the Fair Credit Reporting Act's uniform national standards were established in 1996, we have achieved some of the lowest mortgage rates and credit rates on record, with more competition and more offerings for consumers than ever before. This has led to the record level of credit available today to all Americans, regardless of income level. Over the past 30 years, the availability of nonmortgage credit to households in the lowest income bracket has increased by nearly 70 percent, including a nearly threefold increase in the number of low- income households owning credit cards just in this last decade. The increase of available credit, coupled with the declining price of this credit, has also fueled the record homeownership levels we are experiencing today, again with the largest gains achieved by low- and moderate-income groups. These improvements in the credit and mortgage systems have saved consumers nearly $100 billion annually, according to some estimates.

In addition to preserving our vital national credit system, this legislation is an extremely comprehensive consumer protection bill. The protections are designed to meet head-on the growing crime of identity theft which has accompanied the expanding credit market in our country. The FTC released a study in early September which revealed the damaging extent of this crime in our country. Ten million Americans were victimized by identity thieves last year alone, costing consumers and businesses over $55 billion, not counting the 300 million hours spent by victims to try to repair damaged credit records. The financial costs are staggering, with over $10,000 stolen in the average fraud.

The Committee on Financial Services has worked tirelessly to explore and find solutions to this destructive crime. Over 100 witnesses have come before the committee since last April to discuss the renewal of the Fair Credit Reporting Act, and many of them focused their statements on the urgent

need to increase safeguards designed to protect consumers and businesses alike from this crime. With the bipartisan support in the House, as well as valuable input and assistance from our friends in the Senate, we have a bill before us today that empowers both consumers and businesses as we attempt to eliminate this terrible crime. Congress needs to pass strong, uniform identity theft protection; and it needs to do it now.

This conference report preserves many key elements designed to fight identity theft from the bill that passed the House with close to 400 votes. These strong new identity theft provisions standards established by the bill will be national, ensuring uniform protection for consumers in all 50 States.

This legislation includes provisions that allow consumers to place fraud alerts, allowing consumers to block information from being given to a credit bureau, providing identity theft victims with a summary of their rights, giving consumers the right to see their credit scores, giving all consumers the right to a free copy of their credit report, restricting access to consumers' sensitive health information, simplifying the way consumers can limit unsolicited marketing offers, ensuring improved accuracy of credit reporting procedures, and providing consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking.

This legislation also provides valuable tools and resources to financial institutions to ensure accuracy and prevent identity theft. These provisions include requiring creditors to take certain precautions before extending credit to consumers who have placed fraud alerts in their files; prohibiting merchants from printing more than the last five digits of a payment card on an electronic receipt, and others.

Mr. Speaker, this is a rather lengthy and long statement, and I will submit this for the Record.

I want to thank my ranking member, the gentleman from Massachusetts, for taking on this challenging and important legislation. Also to the chairman of our Subcommittee on Financial Institutions, the gentleman from Alabama (Mr. Bachus), who sat through hours of hearings, over 100 witnesses in eight separate hearings; to Chairman Shelby who chaired the conference committee and also, of course, is the chairman of the Banking Committee in the Senate, as well as Ranking Member Sarbanes for working in good faith on this effort.

Mr. Speaker, this was indeed truly a bipartisan, bicameral effort. We worked very closely with the White House and the Treasury to put together this conference report. This is good public policy. It is good for the country's economy, maintaining this constant flow of credit that we have come to take for granted. This is positive legislation, and I urge all Members to give it their strong support.

This legislation also provides valuable tools and resources to financial institutions to ensure accuracy and prevent identity theft. These provisions include:

Requiring creditors to take certain precautions before extending credit to consumers who have placed ``fraud alerts'' in their files; prohibiting merchants from printing more than the last 5 digits of a payment card on an electronic receipt; requiring banks to develop policies and procedures to identify potential instances of identity theft; and requiring financial institutions to reconcile potentially fraudulent consumer address information.

It is our duty to protect our national credit system and the economic growth that this system promotes by continuing to provide Americans with the most affordable and accessible credit market in the world today. We must ensure that the U.S. remains the engine of growth for the global economy.

I want to thank my ranking member from Massachusetts, Mr. Frank, for taking on this challenging and imperative legislative project and for engaging all the major stakeholders in crafting a bipartisan piece of well balanced, highly effective legislation. I would also like to thank my friends from the Senate Banking Committee, Chairman Shelby and Ranking Member Sarbanes, for working in good faith to resolve differences between the House and Senate products. And finally, a huge debt of gratitude is owed by Members of this body to the gentleman from Alabama, Spencer Bachus, who wrote the House version of this bill; presided over countless hearings in his capacity as Chairman of the Financial Institutions and Consumer Credit Subcommittee; and helped lead the House conferees to a successful outcome in our negotiations with the Senate. Without the gentleman from Alabama, we would not be standing on the House floor today about to pass this historic consumer protection legislation.

The final FCRA legislation states that no requirement or prohibition may be imposed under the laws of any State with respect to the conduct required under the nine specific provisions included in the new identity theft preemption provision of the law. Accordingly, States cannot act to impose any requirements or prohibitions with respect to the conduct addressed by any of these provisions or the conduct addressed by any of the federal regulations adopted under these nine provisions. All of the rules and requirements governing the conduct of any person in these areas are governed solely by federal law and any State that attempts to impose requirements or prohibitions in these areas would be preempted.

I should note that the legislation lists the provisions to be preempted. However, to the extent such provisions would enjoy preemption under another provision in the FCRA, the other provision would control.

One of the central elements of the approach taken by the bill that the House passed overwhelmingly last September was to make the new fraud prevention and mitigation provisions contained in the legislation the new uniform national standards on those subject matters. The bill was drafted in this way because identity theft is a national concern, not only because of its impact on our system of granting credit, but because it knows no boundaries. The consumer victim may be in one State, the financial institution victim in another State, and the perpetrator may be in a third State. The credit bureaus that receive and report information relating to a fraudulent account may be in yet a fourth State.

In drafting the House bill, we were careful to stipulate--and to clarify in a colloquy on the House floor among the gentleman from Massachusetts, Mr. Frank, the gentleman from Alabama, Mr. Bachus, and myself--that the uniform national standards for identity theft were limited to the subject matters that the bill's provisions actually address, such as fraud alerts, blocking bad credit information, and truncating credit card account numbers at the point of sale. Thus, for example, this national uniformity would not affect State criminal statutes, or State laws governing the public display of social security numbers.

The conference committee further refined this standard, by providing that the new uniform national standards on identity theft created by this legislation apply with respect to the conduct required by those specific provisions.

I strongly urge my colleagues to vote for this Conference Report.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Alabama (Mr. Bachus), the chairman of the Subcommittee on Financial Institutions and Consumer Credit, who has done such a wonderful job on this bill.

Mr. Speaker, I yield 2 minutes to the gentlewoman from New York (Mrs. Kelly), the chairwoman of the Subcommittee on Oversight and Investigations.

(Mrs. KELLY asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 2 minutes to the gentlewoman from Illinois (Mrs. Biggert).

Mr. Speaker, I yield 3 minutes to the gentlewoman from Florida (Ms. Harris).

Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Sessions), a distinguished member of the Committee on Rules, who has an important measure in this legislation.

Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Gillmor), a valuable member of the committee.

(Mr. GILLMOR asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr. LaTourette), a former prosecutor, who has done such great work, particularly in the identity theft part of the legislation.

(Mr. LaTOURETTE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, does the gentleman have any further speakers?

Mr. Speaker, I reserve the balance of my time.

I have the right to close, is that correct, Mr. Speaker?

Mr. Speaker, I yield myself the remaining time.

First of all, I want to thank the staff. I always tend to forget to do that, and we have been through a lot on this bill. This is a complicated piece of legislation that got more complicated as we took on this whole issue of identity theft, and throughout this process, the staff on both sides of the aisle have been just superb, working late nights and early mornings to get us where we are today, and I want to personally thank them for their efforts. They know who they are, and I know who they are and we most appreciate it, and also to the Members, I think this is, Mr. Speaker, perhaps a textbook example of how the legislative process ought to work in terms of hearings, in terms of everybody having an opportunity to have their say, involving Members on both sides of the aisle, many of them newer Members, freshmen Members, to really get their feet wet on an important piece of legislation that we bring to the floor today and this conference report that will close it out.

This is truly a historic day, and I think in the real traditional way that we have started in the Committee on Financial Services of turning out good legislation in a bipartisan manner, and for that, I am very thankful to all concerned.

Mr. Speaker, I ask unanimous consent that the Committee on Financial Services be discharged from further consideration of the Senate bill (S. 1768) to extend the national flood insurance program, and ask for its immediate consideration in the House.

Mr. Speaker, I offer an amendment in the nature of a substitute.

Mr. Speaker, I rise in support of the conference report for H.R. 2417, the Intelligence Authorization Act for Fiscal Year 2004, and to note the Financial Services Committee's interest in three sections of the report. All of the sections seek to improve this country's ability to fight the financing of terrorists, and I wholeheartedly support them.

Section 105 of the report establishes an Office of Intelligence and Analysis within the Department of the Treasury, headed by an Assistant Secretary appointed by the President after consultation with the Director of Central Intelligence. Formation of the office is necessary because the Treasury's Office of Foreign Assets Control and its Financial Crimes Enforcement Network are essential tools in the fight against the funding of terrorism, but today lack access to some ``secure'' information essential to that effort. Establishment of the office creates a secure channel for that information to flow, as necessary, to FinCEN and OFAC, and for them to send back appropriate information.

Section 374 modernizes the definition of financial institutions that may be served administrative subpoenas, as rigidly controlled by the existing Right to Financial Privacy Act. When that Act was written, banks were really the only ``financial Institutions'' a terrorist might have used to stash or transfer money. As our efforts to stamp out terror financing have become more successful, a lot of that activity has moved over into other, less-traditional sorts of financial-services businesses--even, for example, to dealers in precious commodities such as gold or diamonds. The USA PATRIOT Act appropriately expanded the definition of ``financial institution'' to include these other financial-services businesses. This section establishes parity in the definition of ``financial institution'' between the PATRIOT Act and the RFPA, allowing the judicious use of administrative subpoenas in terror cases to reflect this larger universe of businesses that might be exploited. Here I must note my discomfort that the conference report ignores the Financial Services Committee's request that Section 374 include the right to injunctive relief as provided for in Section 1118 of the Right to Financial Privacy Act.

Section. 376 allows for the ``in camera'' review of sensitive information that leads to imposition of `'special measures'' isolating rogue countries or banks, as defined under Sec. 311 of the PATRIOT Act. Under the previous version of Sec 311, there is no ability to protect this sensitive information should it be necessary for the imposition of the ``special measures,'' and that omission argues against use of the powers as effectively as we would like. For example, if the Central Intelligence Agency should have information that a bank were doing business with a terrorist, it quite possibly would be counterproductive to expose the CIA's sources and methods to indict individuals or shut down the bank, but the Treasury's ``special measures'' under Sec. 311 could effectively isolate the bank if the sensitive information could be used ``in camera.'' This section merely provides protection of that sensitive information that might be used to support the imposition of those measures.

Mr. Speaker, these three sections are all important tools in the fight against terrorism, and I strongly support their inclusion. I regret that Section 1118 was not reference in the report's Section 374, and the Financial Services Committee reserves the right to address that issue later. Meanwhile, I support the conference report and ask for its immediate passage.

Mr. Speaker, let me thank the gentleman from Ohio (Mr. Ney) for his leadership on this issue. I certainly share the sentiments expressed by the gentleman from Massachusetts (Mr. Frank) regarding the need to really get at reforming this flood insurance program. The 1- year extensions year after year were something that I think grated on a lot of folks, the taxpayer groups and the environmental groups. Had it not been for the gentleman from Oregon (Mr. Blumenauer) and the gentleman from Nebraska (Mr. Bereuter), we probably would not be here today. I want to give them particular acknowledgment for their efforts to craft a compromise, and it was not easy. We have been through this I do not know how many years.

These two gentlemen have toiled in the vineyards trying to get this legislation passed, and it is a real tribute to their perseverance that we are here today. And I also thank the gentleman from Massachusetts (Mr. Frank) for his incisive leadership as well, as well as the gentleman from Louisiana (Mr. Baker) because he was an integral part of forming the compromise that led to a unanimous vote in the subcommittee as well as the full committee and bringing this to the floor today.

This program is vital. We proved that by letting it expire some time for the first part of the year and then came back and made it retroactive as indicated, but we found out very quickly it was incredibly important from a lot of housing groups that we needed to move and move fast. It was, I think, the first bill that was passed in the last year to make up that difference.

This gives us an opportunity to really reform this program in the right way. We hopefully are in a situation where the other body can take a look at this. We would, of course, agree to a short-term extension but at the same time get some assurances that we can really address this problem. There are too many people out there who depend on this program, there are too many taxpayers who have been ripped off over the years by the abuse of this program, and that is what the reform really does.

From the environmental side, from the taxpayer side, this is good legislation, crafted by the committee and made better by the gentleman from Louisiana (Mr. Baker) and his efforts. I want to thank all of them for their efforts. Also I see the gentleman from Texas (Mr. Green) who has also been a participant in this and has some very important issues to raise in terms of property values that have arisen in his Houston district. We were pleased to add that language to the legislation as well.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2420) to improve transparency relating to the fees and costs that mutual fund investors incur and to improve corporate governance of mutual funds, as amended.

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 to insert extraneous material thereon.

Mr. Speaker, I yield myself 5 minutes.

Mr. Speaker, I stood on this floor last year and spoke of the need to reform and improve the accounting profession, financial reporting, corporate governance, and Wall Street research practices. Congress responded admirably by passing the Sarbanes-Oxley Act which has proved successful in improving the transparency of financial statements and stemming the alarming rate of corporate fraud.

Now, we necessarily turn our focus to mutual funds. We are in the midst of what one former SEC chairman calls the ``biggest financial scandal of the past 50 years.'' An industry representative has lamented the ``shocking betrayal of trust.'' Indeed, the scandals are deeply troubling for a host of reasons.

First, we have become a Nation of investors, 95 million strong, and the investment vehicles of choice are mutual funds. It is imperative that Congress ensures that these investors, representing 54 million households, are protected.

Second, the nature of the misconduct by trusted fiduciaries, fund executives, directors, and portfolio managers is especially egregious. Secret deals were reached to provide special trading privileges to large, preferred customers. Fund managers and executives were caught market-timing their own funds, and fund directors were found asleep at the switch.

Third, the mutual fund fraud is widespread. We are not talking about the actions of a few boiler room operations; we are talking about pervasive financial fraud by all segments of the fund industry, including the most trusted companies.

Finally, the regulators charged with investor protection failed to detect or deter improper and illegal practices which have apparently been occurring for a number of years. It is inexcusable that these activities were not uncovered until this year.

Long before the current scandal came to light, the Committee on Financial Services has called for reform. I am proud of the work of my colleagues, particularly the gentleman from Louisiana (Mr. Baker), chairman of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. The gentleman from Louisiana (Chairman Baker) held oversight and legislative hearings long before it was fashionable to scrutinize the fund industry. He and I shepherded this legislation through the committee in July, but not without some resistance.

The legislation before the House today, the Mutual Funds Integrity and Fee Transparency Act, is a comprehensive reform package which contains numerous provisions to aid investors.

I will not go into all of the details but, importantly, it will provide for greater transparency of fund fees, costs, expenses, and operations so that investors can make better informed decisions and help market forces to drive fees down for fund investors. It will strengthen fund management, particularly the board's independent directors, and it will curb the trading abuses which have recently been revealed.

We know there are some who believe this legislation goes too far; there are some who think it does not go far enough. To those people, I would say that we have achieved a good balance here. It is proinvestor, it is tough, but it does not regulate for regulation's sake.

Again, I would like to commend the gentleman from Louisiana (Mr. Baker) for his outstanding leadership on these issues and for crafting a fine piece of legislation. He was ahead of the curve yet again.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 6 minutes to the gentleman from Louisiana (Mr. Baker), the chairman of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I thank the gentleman for his continued leadership and tenacity on this issue. A few of us were kind of isolated and lonely when this whole issue began. And I suspect that we are now seeing the fruits of your efforts in taking on this difficult issue.

And I would say that based on the testimony that Chairman Donaldson gave to the other body just yesterday it is pretty clear that the SEC not only supports our efforts but would indeed support an independent chair. So from that standpoint, obviously, this is the beginning of the process, not the end. And to that end, obviously we will consider other measures going forward.

But I think, clearly, as the gentleman pointed out, this is an excellent bill that deals with some of the real abuses that have been out there in the public eye for the last several months. And this is how our process works. As you know, very much like what ended up as Sarbanes-Oxley, this is the House's ability to get our hands around this issue and show that the Members of the House are quite concerned about these burgeoning scandals and are not willing to sit back and allow this to happen on our watch.

Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Delaware (Mr. Castle), distinguished member of the committee.

Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Kelly), the distinguished chairman of the Subcommittee on Oversight and Investigations.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. Harris), a valuable member of the committee.

(Ms. HARRIS asked and was given permission to revise and extend her remarks.)

Mr. Speaker, does the gentleman from Pennsylvania (Mr. Kanjorski) have any further speakers?

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, the answer is yes. The rules will ban joint management by the same individual but not the same firm, both the registered investment company and other unregistered investment vehicles. Those rules will address the conflicts of interest that are presented by such an arrangement, including the conflicts raised by the gentleman.

Mr. Speaker, I yield myself such time as I may consume.

In closing, let me also commend my friend from Pennsylvania, as well as the gentleman from Massachusetts (Mr. Frank), the ranking member, for their leadership and their assistance on this issue.

As the gentleman knows, the gentleman from Louisiana (Mr. Baker) has been very active on this issue for a number of months; and as I indicated to him, his efforts going forward were most appreciated, and we come to this day where we are going to pass this bill by a large margin, and that is due to the work of all three gentlemen that I mentioned. It is good to be in a situation where the committee works so well together on a number of issues. As the gentleman from Illinois indicated, when we bring up the conference report on the bill that all of us worked so hard on, we are going to be a very effective responder to some of those problems that developed in the area of consumer demand, as well as identity theft which will come forward, we hope, in the next few hours.

Mr. Speaker, I yield back the balance of our time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I was returning from an official delegation trip to Iraq on Monday evening, and was absent from the House floor during the rollcall votes on S.J. Res. 22, recognizing the Agricultural Research Service, S.J. Res. 18, commending the service of Inspectors General; and H. Con. Res. 299, honoring Sargent Shriver. Had I been present, I would have voted ``aye'' on each of these resolutions.

Mr. Speaker, by direction of the Committee on Financial Services and pursuant to clause 1 of rule XXII of the rules of the House of Representatives for the 108th Congress, I move to take from the Speaker's table the bill (H.R. 2622) to amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes, with a Senate amendment thereto, disagree to the Senate amendment, and agree to the conference asked by the Senate.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, this is a simple motion to get us into conference with the Senate on H.R. 2622, the Fair and Accurate Credit Transactions Act, which the Senate passed yesterday. We have a lot of work to do in a short amount of time.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the motion.

The previous question was ordered.

Mr. Speaker, will the gentleman yield?

I thank my friend from Massachusetts for yielding.

Mr. Speaker, let me say to my good friend that this is a bill that passed this House a few weeks ago with, I think, 392 votes and had strong bipartisan support because of the work that the committee did in working with all sectors of the committee on this important issue. All of us know that we need to reauthorize the Fair Credit Reporting Act by the end of this year, and so time is of the essence. I am prepared to not only associate myself with the remarks of the gentleman from Massachusetts but also to support his motion to instruct.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks on the motion to go to conference and the motion to instruct on the bill, H.R. 2622, and to insert extraneous material thereon.

Mr. Speaker, I recommend to my colleagues the following column by the distinguished commentator Morton M. Kondracke in the November 6 edition of Roll Call. Mr. Kondracke has eloquently stated the stakes facing all of us in Iraq. His incisive and knowledgeable commentary should be read by all.

[From Roll Call, Nov. 6, 2003]

Iraq Reconstruction Is a Noble Cause That Mustn't Fail

(By Morton M. Kondracke)

In January 1946, seven months after V-E Day, the eminent

novelist John DosPassos wrote after a trip to Europe that

U.S. servicemen were telling him, ``We've lost the peace. We

can't make it stick.''

In an article in Life magazine, he wrote that ``A tour of

the beaten-up cities of Europe . . . is a mighty sobering

experience. Europeans, friend and foe alike, look you

accusingly in the face and tell how bitterly they are

disappointed in you as an American.

``They cite the evolution of the word `liberation.' Before

the Normandy landings, it meant to be freed from the tyranny

of the Nazis. Now it stands in the minds of the' civilians

for one thing: looting.''

If this sounds familiar in the aftermath of the Iraq war,

it goes on: ``Instead of coming in with a bold plan of relief

and reconstruction, we came in full of evasions and

apologies. . . . We have swept away Hitlerism, but a great

many Europeans feel that the cure has been worse than the

disease.''

It was another year after this article was written before

Secretary of State George Marshall delivered his celebrated

speech at Harvard University launching the Marshall Plan for

European relief.

By contrast, Congress gave final approval this week, six

months after the Iraq war, to the contemporary version of the

Marshall Plan: the $20 billion downpayment on Iraqi

reconstruction. At that, reconstruction was already under

way.

We succeeded grandly in Europe in one of the most generous

and idealistic--and also pragmatic--undertakings in American

history.

Prior to America's making the effort, DosPassos noted,

Winston Churchill made a speech in which he warned Americans,

``You must be prepared for further efforts of mind and body

and further sacrifices to great causes, if you are not to

fall back into the rut of inertia, the confusion of aim and

the craven fear of being great.''

It's sad that we don't have a Churchill around to affirm

the morality of what America is doing in Iraq: We have

toppled a monstrous dictator and we are trying to rebuild his

shattered country, turn it into a democracy and make it an

example to a region that knows only authoritarianism and

despotism.

It is a noble cause that President Bush has undertaken. His

adversaries at home and abroad say that he got us into it by

deception, but what could possibly have been his motive?

The ``war for oil'' charge is simply laughable. The ``war

for politics'' charge--that it was done to help Republicans--

is outrageous.

The ``war for ideology'' analysis makes more sense--i.e.,

that ``neo-conservatives'' in Bush's administration wanted to

topple Saddam Hussein from Day One. But why did they want to

do so, if they didn't think he represented a menace to U.S.

security?

Bush's Democratic foes are charging that Bush trumped up

evidence of Hussein's possession of weapons of mass

destruction. But the fact is that every intelligence

service in the world believed he had them--how else could

Bush have won a unanimous vote at the U.N. Security

Council to give Hussein one final chance to account for

them?

How and why the United States got into the war in the first

place will be hashed out for the rest of this presidential

campaign and beyond, but the important thing now is to win

the peace.

Whatever their differences on whether the war should have

been fought or how the peace is being won, even Bush's

harshest foes ought to admit that what he's undertaking is an

idealistic enterprise.

If Democrats are proud of America's intervention in Kosovo

and remorseful of our failure to intervene to prevent

genocide in Rwanda, how can they not support an effort to

establish democracy in Iraq?

Moreover, what Bush is doing is not only Wilsonian, it's

also pragmatic. In 1946, the danger was that if America

failed in Europe, Russia would take over. In 2003, if the

United States fails, Saddam Hussein and Osama bin Laden

succeed.

There's no question that the effort is going to be

difficult--or even that Bush miscalculated the difficulties

and didn't plan well enough for them.

But contrary to the charge that he ``has no plan,'' he

plainly does now. As stated by U.S. Iraq Administrator Paul

Bremer, it is to (1) ``establish a secure environment by

taking direct action against terrorists . . . and restore

urgent and essential services to the country, (2) expand

international cooperation in the security and reconstruction

and (3) accelerate the orderly transition to self-government

by the Iraqis.''

Can this be brought off? The jury is very much out. Our

forces and Iraqis who side with us are under constant attack,

at least in Sunni-dominated areas of the country. The

international community--ever so solicitous of Iraqi

citizens' welfare under economic sanctions--either wants us

to fail or has been scared off by bombings.

The vast majority of Iraqis clearly want stability and

self-rule. For our sake and for theirs, it's imperative that

we stay the course and do this right--and not allow vicious

killers to force us out too early.

It would be a catastrophe, both for the Iraqis who are

working with us and for our standing in the world, if this

effort were to fail. Fortunately, polls indicate that most

Americans want to stay the course. It's time for Bush's

critics to quit just carping and contribute constructive

ideas on how to make this effort succeed. If it does, all of

us will be very proud.

Mr. Speaker, I was absent from the House floor during today's rollcall votes on H. Con. Res. 176, supporting the goals and ideals of Financial Planning Week, and H. Con. Res. 94, the Direct Support Professional Recognition Resolution. Had I been present, I would have voted ``aye'' on both resolutions.

Mr. Speaker, I commend to the attention of my colleagues the following article by former General Electric Chairman and CEO Jack Welch.

Jack Welch provides an important lesson in corporate management to those who don't understand what makes an economy grow. Growth comes from businesses that are constantly striving to make themselves more competitive in a global marketplace.

As the article points out, many in the media believe a story isn't complete unless there is some bad news. Sometimes I think if the modern media had existed in biblical times, it would have written, ``Moses laid down the Ten Commandments today, Five of which were immediately denounced by civil rights and environmental activists.''

Jack Welch's article makes for instructive reading about why our economy just posted one of its strongest performances in recent memory.

The `But' Economy

(By Jack Welch)

Guess what? There is an economic recovery under way, but

you never would have known it last week when earnings reports

came out. Even though many companies from battered sectors--

including some companies left for dead just two or three

years ago--recorded positive results, their successes were

almost universally reported with the word ``BUT'' prominently

featured. The stories in the papers and on TV went something

like this:

Sales were up--but analysts warned that cost cutting

explained most of the gains.

Earnings were up--but the mood of optimism was tempered by

concerns about global competitiveness.

Cash flow was up--but the company still faces harsh tests

in coming months.

Now, I am not claiming that the economy is fixed. It's not.

And there are, obviously, challenges ahead if a full recovery

is going to occur. It's undeniable, however, that most

companies are posting significantly improved results. Not

only can millions of hard-working people celebrate--they

should. They've earned the right. That's why we can't rain

all over the their efforts--their motivation and innovative

spirit and can-do attitudes. Those good feelings, as any

economist will tell you, are key drivers of company

productivity and consumer confidence. The fact is a recovery

will be a lot harder if we keep saying ``but'' about damn

good news.

Two particularly glaring ``but'' stories from last week

come to mind--Xerox and Lucent.

Xerox has been through the ringer. It's had accounting

difficulties. It's paid millions of dollars in fines. It has

experienced market-share erosion from product misses and

noncompetitive costs, and its employees and shareholders have

suffered. Two grueling years later, however, Anne Mulcahy and

her team appear to be turning the ship around. The company

reported that its earnings grew 18% in the third quarter.

From the reporting on it, though, you would have thought the

company was still taking on water. The good results, it was

reported, mainly came from cost cutting. Of course they did!

While innovation is the lifeblood of business, cost

competitiveness is a given if you want to win in the global

economy.

Lucent is an even more dramatic case. For the first time

since March 2000--that's 10 quarters--the company actually

posted a profit, thanks to the persistence and creativity of

Pat Russo, her top team, and tens of thousands of employees.

It was time for a party. But Lucent's turnaround was spray-

painted with ``but'' this and ``but'' that. The company's

good results were subjected to the usual harangue about

telecom industry spending and attributed mainly to cost-

cutting. Oh no--not that again.

The good news out of other sectors got much the same

treatment. Time Warner, which has angered its shareholders

for a couple of years now, reported increased revenues and

operating income in the third quarter. That news was pretty

much lost in commentaries about the continuing saga of the

company's Internet activities. Meanwhile, Citicorp and a slew

of other banking industry giants were showing sensational

results. What did you hear? Reserve provisions for bad loans

were down. This ``but'' could have actually been cast as

``because.'' For instance, ``Earnings were sensational

because, among other factors, reserve provisions are down as

a result of improved risk management and a stronger

economy.''

Of course, you have to wonder--why all the grumpiness? Why

has every cloud got a dingy gray lining? There are probably

many reasons but two come right to my mind.

Go back to 1999, the last year that positive results were

routinely reported. There was no ``but'' economy grousing

then. And that's exactly the problem. The media (and pretty

much everyone else) believed that trees did indeed grow to

the sky. Very few asked, ``How solid are these results? How

long can they last? Will these markets grow forever?''

When the bubble burst, a lot of people got burned--and not

just shareholders. Many people in the media had hyped

companies that flamed out because they were based on

unrealistic business models or turned out to be rotten to the

core. They felt burned too. Today, when the media reports

good news, it feels safer to stick ``but'' in every sentence.

The other reason is political. Back in the days of Clinton-

bashing, the ideological divide in the country seemed like it

couldn't get wider. Well, it has. Bush-hating has pushed it

to new levels. Never before have Democrats and Republicans

been more vitriolic in their disdain for each other; it feels

like war. And frankly, what would be worse for the Democrats

right now than an economic recovery? That's an awful big

battle to lose as the election approaches.

Now, I'm not suggesting ``irrational exuberance'' again.

First of all, it's not warranted (yet) and giddiness about

the economy didn't really help last time. And I'm also not

asking that people forget what happened during the boom. Some

companies and executives absolutely earned the right to get

nothing but disrespect and doubt.

If we are ever to get competitive again, though, we can't

indiscriminately put a negative spin on what is legitimately

good news. We live in a global economy; India and China get

stronger and better every single day. To have a fighting

chance, companies need to get every employee, with every idea

in their heads and every morsel of energy in their bodies,

into the game.

The facts are, companies are not bricks and mortar, but

people, with blood and sweat and tears. People are the reason

for the recent recovery, and people are the reason it will

continue--if it does. That's why we need to tell the people

who have earned it not ``but,'' but ``Bravo.''

Mr. Speaker, I am pleased to rise today in support of H. Res. 414, a resolution which I am co-sponsoring and which encourages China to move to a more flexible exchange rate. As Chairman of the Financial Services Committee, which has jurisdiction over domestic and international monetary policy as well as economic growth and stabilization, I believe that this is an important measure which deserves the support of the House.

I commend Mr. English for his leadership in introducing this important resolution, which seeks to encourage China to continue taking concrete steps to reform its economy and move towards a more flexible exchange rate mechanism. I note that the U.S. Chamber of Commerce, the National Association of Manufacturers, the United Steelworkers of America, and the American Iron and Steel Institute all support this resolution.

I also want to commend the gentleman from New York (Mr. King) who chairs the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology, which held the first House hearing on this subject.

I support this resolution because it helps signal to the Chinese government that this House is monitoring closely the efforts of both the Chinese and U.S. governments to position China to develop a more appropriate exchange rate and infrastructure to support that exchange rate. The goal is to ensure that serious progress continues to be made.

For some time now, our own dynamic economy has been undergoing a dramatic shift towards services sector jobs. It is unclear how the Chinese exchange rate regime contributes to, or accelerates, this trend. However, the trend should not be confused with the notion that the U.S. economy will someday outsource all production of physical goods.

The manufacturing sector in this country is a significant source of innovation, patent development and, therefore, economic growth. We cannot permit potentially unfair competition to undercut this important activity. We should not accept that possibly unfair competition will require hard-working Americans doing a good job to be unemployed.

China is the world's most populous country. It is becoming one of the United States' most important trading partners. It has recently served as a source of strength in Asia, as well as an engine of economic growth globally. U.S. companies and consumers benefit from a strong and growing China, but only if that growth is based on a fair system.

China's economic growth and potential should lead it to adopt 21st Century exchange rate policies as well. If China is going to be serious about its WTO commitments, it must also recognize that fair competition requires market-determined exchange rates in addition to opening its markets to foreign companies.

It is true that such large changes cannot occur overnight, especially in a command economy. It is also true that a financial system must be strong and resilient in order to absorb the kind of capital market volatility that accompanies floating exchange rates. Finally, it is true that China's fragile banking system needs to be strengthened if a floating rate system is to be launched successfully. Change is needed for the good of China's own economy.

Mr. Speaker, these facts should underscore the importance of China moving clearly and unambiguously towards banking sector reform. They cannot serve as an excuse for delaying these necessary reforms.

I urge all of my colleagues to support the resolution.