[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE NEED FOR H.R. 2885,
THE CREDIT MONITORING CLARIFICATION ACT
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MAY 20, 2008
__________
Printed for the use of the Committee on Financial Services
Serial No. 110-112
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43-698 PDF WASHINGTON DC: 2008
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HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama
MAXINE WATERS, California DEBORAH PRYCE, Ohio
CAROLYN B. MALONEY, New York MICHAEL N. CASTLE, Delaware
LUIS V. GUTIERREZ, Illinois PETER T. KING, New York
NYDIA M. VELAZQUEZ, New York EDWARD R. ROYCE, California
MELVIN L. WATT, North Carolina FRANK D. LUCAS, Oklahoma
GARY L. ACKERMAN, New York RON PAUL, Texas
BRAD SHERMAN, California STEVEN C. LaTOURETTE, Ohio
GREGORY W. MEEKS, New York DONALD A. MANZULLO, Illinois
DENNIS MOORE, Kansas WALTER B. JONES, Jr., North
MICHAEL E. CAPUANO, Massachusetts Carolina
RUBEN HINOJOSA, Texas JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri CHRISTOPHER SHAYS, Connecticut
CAROLYN McCARTHY, New York GARY G. MILLER, California
JOE BACA, California SHELLEY MOORE CAPITO, West
STEPHEN F. LYNCH, Massachusetts Virginia
BRAD MILLER, North Carolina TOM FEENEY, Florida
DAVID SCOTT, Georgia JEB HENSARLING, Texas
AL GREEN, Texas SCOTT GARRETT, New Jersey
EMANUEL CLEAVER, Missouri GINNY BROWN-WAITE, Florida
MELISSA L. BEAN, Illinois J. GRESHAM BARRETT, South Carolina
GWEN MOORE, Wisconsin, JIM GERLACH, Pennsylvania
LINCOLN DAVIS, Tennessee STEVAN PEARCE, New Mexico
PAUL W. HODES, New Hampshire RANDY NEUGEBAUER, Texas
KEITH ELLISON, Minnesota TOM PRICE, Georgia
RON KLEIN, Florida GEOFF DAVIS, Kentucky
TIM MAHONEY, Florida PATRICK T. McHENRY, North Carolina
CHARLES WILSON, Ohio JOHN CAMPBELL, California
ED PERLMUTTER, Colorado ADAM PUTNAM, Florida
CHRISTOPHER S. MURPHY, Connecticut MICHELE BACHMANN, Minnesota
JOE DONNELLY, Indiana PETER J. ROSKAM, Illinois
ROBERT WEXLER, Florida KENNY MARCHANT, Texas
JIM MARSHALL, Georgia THADDEUS G. McCOTTER, Michigan
DAN BOREN, Oklahoma KEVIN McCARTHY, California
BILL FOSTER, Illinois DEAN HELLER, Nevada
ANDRE CARSON, Indiana
Jeanne M. Roslanowick, Staff Director and Chief Counsel
C O N T E N T S
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Page
Hearing held on:
May 20, 2008................................................. 1
Appendix:
May 20, 2008................................................. 31
WITNESSES
Tuesday, May 20, 2008
Beales, J. Howard III, Associate Professor of Strategic
Management and Public Policy, School of Business, George
Washington University.......................................... 12
Bennett, Leonard A., Consumer Litigation Associates, P.C......... 14
Fortney, Anne P., Partner, Hudson Cook, LLP...................... 10
Holland, Robin, Senior Vice President, Global Consumer Services,
Equifax Inc.................................................... 9
APPENDIX
Prepared statements:
Brown-Waite, Hon. Ginny...................................... 32
Carson, Hon. Andre........................................... 33
Kanjorski, Hon. Paul E....................................... 34
Beales, J. Howard III........................................ 36
Bennett, Leonard A........................................... 45
Fortney, Anne P.............................................. 64
Holland, Robin............................................... 80
Additional Material Submitted for the Record
Kanjorski, Hon. Paul E.:
Letter to Chairman Barney Frank from the Federal Trade
Commission, dated May 20, 2008............................. 88
EXAMINING THE NEED FOR H.R. 2885,
THE CREDIT MONITORING
CLARIFICATION ACT
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Tuesday, May 20, 2008
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 10:05 a.m., in
room 2128, Rayburn House Office Building, Hon. Barney Frank
[chairman of the committee] presiding.
Members present: Representatives Frank, Kanjorski, Waters,
Maloney, Watt, Moore of Kansas, Clay, McCarthy, Baca, Miller of
North Carolina, Scott, Green, Cleaver, Perlmutter; Bachus,
Royce, Jones, Biggert, Price, and Heller.
The Chairman. This hearing of the Committee on Financial
Services will come to order.
We are here today to have a legislative hearing on H.R.
2885, the Credit Monitoring Clarification Act. The chairman of
the Capital Markets Subcommittee, Mr. Kanjorski of
Pennsylvania, is the sponsor and the lead person on this
committee on this issue as on many others.
So I will be convening the hearing, but I will be turning
over the gavel to Mr. Kanjorski, who will be the prime sponsor
and guide as we go forward on this legislation. I think we have
a bill where there is conceptual agreement. There are some
questions about the specifics, so this is a hearing in which I
think it will be very important to focus on how to do this and
make, I think, an important contribution to the good
functioning of the financial community.
So, with that, I am going to turn it over to the gentleman
from Pennsylvania, who will be making the opening statement and
conducting the hearing.
Mr. Kanjorski. [presiding] Thank you, Mr. Chairman.
The Committee on Financial Services will come to order.
Without objection, all members' opening statements will be made
a part of the record. I thank you, Mr. Chairman, for convening
the full committee hearing on H.R. 2885, the Credit Monitoring
Clarification Act. Congressman Royce and I have worked on this
issue for several years, and our legislation enjoys the support
of many members of the Financial Services Committee.
If promoted and sold in a truthful manner, credit
monitoring services can help consumers maintain an accurate
credit file and provide them with valuable information for
fighting identity theft. Credit monitoring is also often
provided free-of-charge to victims of data security breaches,
and as a result has gained wide acceptance in the marketplace.
In 1996, we enacted the Credit Repair Organizations Act,
otherwise known as CROA. This law protects consumers against
the problematic and unethical credit practices of credit repair
organizations. In enacting CROA, we put in place a broad
definition of what constitutes a credit repair organization. In
the decade following the enactment of CROA, products such as
credit monitoring services have come into the market. In recent
years, however, some parties have begun to interpret the CROA
definition of a credit repair organization to include credit
monitoring services, exposing the providers of credit
monitoring services to legal ambiguity. These interpretations
also result in the provision of confusing credit repair notices
to credit monitoring consumers.
Additionally, because CROA prohibits advance payments, the
providers of legitimate credit monitoring products cannot offer
annual subscriptions. The Federal Trade Commission has for
several years indicated support for differentiating the
treatment of credit monitoring services for the treatment of
repair organizations under CROA.
In testimony and correspondence, the Commission has
regularly noted that it ``seized little basis on which to
subject the sale of legitimate credit monitoring and similar
educational products and services to grow specific prohibitions
and requirements, which were intended to address deceptive and
abusive credit repair business practices.''
To address the Commission's concerns, we have worked for a
number of years on the legislation. In the 109th Congress,
during the mark-up of the Accountability and Trust Act in the
Financial Services Committee, we offered an amendment that
passed in a voice vote to clarify the treatment of credit
monitoring under CROA. Since then, we have worked to revise and
include our legislative proposal to include new consumer
protections and refine the credit monitoring exception.
As introduced, H.R. 2885 would provide an activity-based
exemption from CROA for credit monitoring services. The users
of these services would get new consumer protections, too.
Additionally, our bill updates the credit repair disclosures
required under CROA to reflect changes made by the Fact Act in
2003 that provide consumers with access to free credit reports.
Today's hearing will help us to determine how we can
further improve H.R. 2885. In an effort to strike the right
balance we have modified this legislation considerably over the
years. We will continue to do so going forward, I suspect. The
Commission has advised us that the exemption for legitimate
credit monitoring services must be carefully considered and
narrowly drawn.
Consumer groups also want to ensure that the legislation
does not ultimately undermine CROA's existing consumer
protections against fraudulent credit repair organizations. I
agree with both of them. To achieve the goal of workable credit
monitoring exemption under CROA, that maintains strong consumer
protections, the Commission has previously urged the Congress
to continue to reach out to stakeholders. Today's hearing acts
on that recommendation by bringing together a number of
stakeholders who detail concerns and find common ground.
In sum, I am pleased that we have the opportunity here to
learn more about the benefits of credit monitoring and to learn
more about the concerns with our legislation. We need to ensure
that as we move forward with the consideration of H.R. 2885, we
do not allow bad actors to use the proposed exemption to
circumvent CROA's protections. It is therefore my hope that we
can work with all interested parties going forward to perfect
the language of the bill.
Are there any other members with opening statements?
Mr. Bachus.
Mr. Bachus. Thank you, Chairman Kanjorski. I want to thank
you and Congressman Royce for your leadership in bringing the
Credit Monitoring Clarification Act before this committee.
As you know, Ranking Member Biggert of the subcommittee and
I are both co-sponsors of this legislation and we both commend
you and Mr. Royce for all of your fine work on this
legislation. I also thank Chairman Frank for agreeing to hold
this hearing.
In 1996 Congress, through the leadership of this committee,
enacted the Credit Repair Organization's Act, or CROA, to help
consumers by putting an end to unfair and deceptive practices
of entities that promised that they could remove negative but
accurate data from a consumer's credit report. In its effort to
help consumers, Congress imposed a number of requirements on
credit repair organizations.
Perhaps most significantly we prohibited these businesses
from charging customers fees before they had performed the
services they promised, but industry practices have changed.
CROA was enacted before certain monitoring products became
popular, as consumers sought new ways to track their credit
histories and to protect themselves against identity theft.
As I said earlier, the gentleman from Pennsylvania,
Subcommittee Chairman Kanjorski, and the gentleman from
California, Mr. Royce, took leadership on this issue and worked
closely with the Federal Trade Commission to ensure that their
legislation will allow these legitimate credit monitoring
products to be offered without running afoul of CROA.
Under the legislation, firms offering credit monitoring
services must provide consumers with certain disclosures and
the opportunity to counsel without paying a penalty or fee.
H.R. 2885 also updates the more general disclosures that must
be provided to customers or consumers under CROA to conform the
statute to changes made by the Fair and Accurate Transactions
Act, or the Fact Act of 2003, which this committee fashioned in
a bipartisan way, and I think has been one of the great
successes of bipartisan cooperation in the past Congress.
H.R. 2885 will build on this and is substantially similar
to provisions that were included in data security legislation
that passed the committee in the 109th Congress, but was never
considered by the full House. So, once again, Mr. Kanjorski, I
want to thank you; I want to thank Representative Royce and the
other co-sponsors of this legislation; I want to Chairman Frank
for holding the hearing; and finally, I thank the witnesses for
being here today and for the testimony you will offer.
Thank you very much.
Mr. Kanjorski. Thank you, Mr. Bachus.
I would like to recognize the Congressman from Kansas, Mr.
Moore, who has been instrumental in support of this
legislation.
Mr. Moore of Kansas. Thank you, Mr. Chairman, and I thank
you for holding this important hearing today on H.R. 2885, the
Credit Monitoring Clarification Act. As we all know, identity
theft and misuse of personal data are extremely serious
problems in our society.
The consequences of identity theft can become increasingly
severe the longer it goes undiscovered, and it is very
important that consumers have all the available tools to
monitor their sensitive personal data and direct fraudulent
activity early in the process. Credit monitoring services are
important tools that empower consumers with information about
changes to their credit report and explanations for these
changes so consumers can take immediate action to protect
themselves in the event of an error on their credit report.
Additionally, these products help consumers make educated
decisions that will improve their credit status. Unfortunately,
the continuation of these services is endangered due to an
unintended consequence of a 1996 law enacted by Congress, the
Credit Repair Organizations Act, CROA, to protect consumers
against the problematic and unethical practices of credit
repair organizations.
I don't believe that Congress enacted CROA with the intent
of diminishing access to credit monitoring products which were
not yet in existence at the time the law was enacted. For this
reason, I am a co-sponsor of H.R. 2885, which would clarify
that credit monitoring products are not subject to the same
restrictions as credit repair products under CROA.
As we move forward, Mr. Chairman, we should make every
effort to ensure that H.R. 2885 is narrowly crafted so it will
prevent unscrupulous persons from gaining access to this
exemption. But, I hope this hearing is a precursor to passage
of this legislation in committee and in the full House.
Thank you, Mr. Chairman, I look forward to hearing the
witnesses' testimony today. Thank you.
Mr. Kanjorski. Thank you, Mr. Moore.
And now, we will hear from the gentlelady from Illinois,
Mrs. Biggert.
Mrs. Biggert. Thank you, Mr. Chairman, and I would like to
thank Chairman Frank for holding today's hearing on a bill to
clarify congressional intent regarding a Credit Repair
Organizations Act or CROA provision that defines credit repair
organizations.
I would also like to thank my colleagues, Congressman
Kanjorski and Congressman Royce, for introducing H.R. 2885. I
am honored to be a co-sponsor of this bill along with Ranking
Member Bachus. Today is not the first time that we worked on a
technical corrections bill.
For example, last week, the House passed a bill, the Credit
and Debit Card Receipt Clarification Act, to clarify a
misinterpreted fair and accurate credit transactions act or
Fact Act provision. The vague provision resulted in confusion,
a loophole, and lawsuits regarding which credit card numbers a
business must truncate on a consumer's credit card receipt.
Similarly, the bill we will examine today, H.R. 2885, aims to
clarify the intent of Congress regarding a provision in CROA
that defines credit repair organizations.
Everyone has heard or seen the ads about credit repair
services: ``Bad credit; no credit; we can erase your bad
credit, 100 percent guaranteed.'' But let's face it. Only time
and prudent financial planning can repair a person's credit
report, and that's why many credit repair ads are so
misleading--to prevent consumers from paying for illegitimate
credit repair services.
Credit repair organizations are not allowed under current
law to charge an up-front fee for their credit repair services.
On the other hand, credit monitoring services, which are
primarily provided by the three major credit bureaus, are
legitimate services allowing a consumer to monitor activity on
their credit report to detect and dispute, for example,
incorrect data or fraudulent activity.
Pre-credit monitoring services often will be provided to a
consumer giving him a tool to detect fraudulent activity as a
result of a data breach. Another use of credit monitoring
services, and my favorite, is when for an up-front fee, a
consumer uses a credit monitoring service to evaluate his or
her credit scoring report. The consumer then works to improve
his or her credit working by working to pay bills on time and
lower his or her debt. That is financial literacy and personal
responsibility at their best.
The up-front fee for the credit monitoring service is
legitimate. Unfortunately, once again, some trial lawyers filed
lawsuits against credit bureaus claiming that credit monitoring
service falls under CROA's definition of credit repair
organization.
As I mentioned earlier, credit repair organizations are not
allowed to charge an up-front fee for their credit repair
services. In short, certain trial lawyers want CROA interpreted
to mean that a credit monitoring service is a credit repair
service and therefore cannot charge an upfront fee. If a credit
monitoring service charges an up-front fee, it is in violation
of the law.
I was recently told by Credit Bureau representatives that
for fear that they will be sued again under CROA, credit
bureaus are waiting to roll out new credit monitoring products
and services that could help consumers today. It is important
that legitimate credit monitoring services not be considered
credit repair services. We should work to ensure that
legitimate uses of credit monitoring are not hampered by a
technical glitch in the law, and I think that H.R. 2885 does
just that.
With that, I look forward to hearing today's witnesses and
their testimony on H.R. 2885.
I yield back.
Mr. Kanjorski. Thank you, Mrs. Biggert.
I would now like to recognize the gentleman from Georgia,
Mr. Scott, who also has been instrumental in supporting this
bill and helping to draft it.
Mr. Scott?
Mr. Scott. Thank you so much, Mr. Chairman. And it is
indeed a pleasure to work with you on this bill, H.R. 2885,
which will strengthen existing consumer protections that are
addressed in the Credit Repair Organizations Act and will help
address the need for further consumer protections. But first, I
would like to recognize one of our guests here, Ms. Robin
Holland, a wonderful person from Equifax, in Atlanta, Georgia.
Let me say just a few things about her because she is a
very dynamic person. She is a senior vice president for global
consumer services at Equifax, and her function is to oversee
Equifax's consumer support operations, which includes credit
reports and consumer fraud inquiries. She is a frequent guest
on CNN and NBC Nightly News. She also teaches workshops on
identify theft and she helps consumers control their credit.
Welcome to the committee, Ms. Holland. It is a pleasure to
have you here.
Now, let me just say why H.R. 2885 is so important.
Legitimate credit monitoring services strongly support H.R.
2885, because they know that this will help improve upon
already successful initiatives that are implemented in CROA.
Consumers who received notices from credit monitoring service
organizations regarding activity on their credit reports can
then access their credit reports in view of the action there.
By accessing their reports, in many instances, consumers
find they are potential victims of identity theft, or the
report may reveal that an incorrect item was placed on the
report, whichever way, this is very important for consumers to
have. CROA was extremely important in combatting harmful credit
repair activities; however, CROA's definition of credit repair
organizations could apply to any organization that supplies
credit monitoring services; and, as such, should be amended so
these legitimate companies offering credit monitoring services
are protected from lawsuits or the prospects of new litigation.
This bill in no way weakens consumer protection
initiatives. Instead, consumers will receive important new
protections under this legislation. No existing law gives a
consumer the right to cancel the credit monitoring subscription
before the end of its term and receive a pro rata refund. This
bill would give consumers this new right. This legislation
would also assure that consumers are given clear and concise
disclosures about their right to free, annual credit reports.
In all, we will indeed benefit from the enactment of H.R. 2885
by serving business and consumers alike.
I look forward to the testimony of the distinguished
witnesses.
Thank you, Mr. Chairman.
Mr. Kanjorski. Thank you very much, Mr. Scott.
Now, we will hear from our colleague, Mr. Royce of
California, who has been instrumental in this. I daresay those
people in the public, and particularly the media, say that the
two sides of the aisle do not cooperate on matters. I can
attest to the fact that they are dead wrong.
Mr. Royce and myself are co-sponsors of so many pieces of
legislation, and if anyone wants to check our philosophical
differences, they are also extreme.
Mr. Royce?
Mr. Royce. I don't know if they are that extreme, Mr.
Chairman, but I do thank you. I thank you for all of your work
on this issue, and I thank you also for helping to arrange this
hearing today. I think it was in the 109th Congress that you
and I first introduced this legislation; and it was following
the passage of the Credit Repair Organizations Act in 1996 that
these credit monitoring services first began to emerge.
Unfortunately, because of the expansive definition of CROA,
credit reporting agencies found themselves subject to CROA when
trying to provide legitimate credit monitoring services.
So this broad definition has created a legal ambiguity. It
has created uncertainty in the marketplace for these credit
reporting agencies, and it has been the basis for several
frivolous lawsuits, class-action type lawsuits that have cost
the industry tens of millions of dollars.
Now, the Federal Trade Commission has consistently
expressed support for differentiating the treatment of credit
monitoring services from the treatment of credit repair
organizations under CROA. There was a hearing before the Senate
in July of 2007, and Lydia Parnes, who is the Director of the
Bureau of Consumer Protection at the FTC, said that as a matter
of policy, the FTC sees little basis on which to subject the
sale of legitimate credit monitoring and similar educational
products and services to CROA's specific prohibitions and
requirements, which were intended to address deceptive and
abusive credit repair business practices.
Now, those very arguments are reiterated in a letter that
each of us received today from the FTC. Credit monitoring
services offered customers several legitimate services related
to tracking the credit report, including notifying consumers
when there are significant changes to the credit report files.
These services can protect consumers against identity theft.
They limited the damage following security breaches.
So, in closing, the Credit Monitoring Clarification Act is
a small but critical piece of legislation which clarifies the
definition of a credit repair organization and provides much-
needed legal certainty in the marketplace. And, again, Mr.
Chairman, I would like to thank you for all your work on this
and we should thank the witnesses for coming today to testify.
I yield back the balance of my time.
Mr. Kanjorski. Thank you, Mr. Royce.
And now, we will hear from the gentleman from Georgia, Mr.
Price.
Mr. Price. Thank you, Mr. Chairman.
I, too, want to add my words of thanks to you and Mr. Royce
for your leadership on this issue and for chairing this
committee. I want to begin by associating myself with the
remarks of the other gentleman from Georgia in welcoming Ms.
Holland from Equifax, a wonderful corporate citizen in the
State of Georgia.
Mr. Chairman, as you well know, it often falls to us to
revisit legislation that has been passed by a previous Congress
due to the law of unintended consequences, where Congress does
something and the falling dominoes affect something that is
much further down the table or down the road. And I believe
that H.R. 2885, the Credit Monitoring and Clarification Act,
does that very important function. Again, I want to thank
Subcommittee Chairman Kanjorski and Congressman Royce for their
work for years, literally, on this issue and for their
leadership.
As has been stated, Congress in 1996 enacted the Credit
Repair Organization Act or CROA at the urging of consumer
report agencies to stop the unfair and deceptive practices of
entities that promised consumers they could alter or remove
negative but accurate and current data from a credit report.
And while the goal is very worthwhile, the term ``credit repair
organization'' was intended to apply solely to companies who
charge money in order to improve a consumer's credit record,
credit history, or credit rating.
It wasn't intended, as numerous lawsuits alleged, to cover
consumer reporting agencies or other entities that make
available credit information for monitoring or informational or
educational or credit literacy purposes. The issue that we must
address is that CROA was written too broadly, or at the very
least interpreted too broadly. As written, CROA covers any
service which directly or indirectly intends to ``improve a
credit report.''
As a result, the trial bar has predictably brought class
action suits against all three of the national credit bureaus
and many of their resellers. The trial bar has alleged that the
selling of a credit monitoring product serves at least the
implied purpose of ``improving'' a consumer's credit record. If
legislative relief is not provided, the potentially
catastrophic consequences of class action awards, I would
suggest would drive credit monitoring products from the
marketplace, or at the very least, adversely distort their
pricing and their delivery.
Mr. Chairman, as you know, these companies provide a needed
and a wonderful service. They should not fall prey to liability
due to inartful congressional action. It is important to
remember that CROA was enacted before any of the recently
developed positive and popular consumer education and credit
file monitoring products were created.
Credit file monitoring products have become a consumer's
first line of defense against identity theft, and credit file
monitoring products are routinely made available to victims of
security breaches. Congress should not allow unintended
consequences and an overly active trial bar to strip consumers
of the most powerful tools to combat identity theft that they
have at their disposal.
I hope that the chairman of the full committee will work
quickly with the sponsors of this legislation to ensure rapid
adoption by the House. I look forward to working positively to
that end, and I thank the chairman and yield back.
Mr. Kanjorski. Thank you, Mr. Price.
Are there any other members who desire to make an opening
statement?
There being none, we will now start with the introduction
of the panel. First, let me thank the panel for appearing
before the committee today, and without objection, your written
statements will be made a part of the record. You will each be
recognized for a 5-minute summary of your testimony.
First, we have Ms. Robin Holland, the senior vice president
of global operations at Equifax, which provides credit
monitoring services. I must say, from listening to Mr. Scott,
obviously, you are well-represented here on the committee, Ms.
Holland, so you had better be very good in your testimony.
Ms. Holland. Thank you.
STATEMENT OF ROBIN HOLLAND, SENIOR VICE PRESIDENT, GLOBAL
OPERATIONS, EQUIFAX INC.
Ms. Holland. Thank you. Mr. Chairman and members of the
committee, I want to thank you and thank your outstanding staff
for the opportunity to testify today on behalf of Equifax in
support of the reform of the Credit Repair Organization Act, or
CROA, as it is commonly called.
We have submitted written testimony for the record. And
with your permission, I just want to take a few minutes to
highlight that testimony. Let me first say a word about
Equifax. Equifax is the oldest, the largest, and the only
domestically publicly traded national credit bureau. Equifax is
proud of its history, and proud of its services, and, most
importantly, proud of its credit monitoring services. These
services help consumers to understand their credit score, their
credit report. They help consumers to better manage their use
of credit and, most importantly, it helps them guard against
identity theft.
Let me emphasize right at the outset that Equifax very much
supports CROA and its comprehensive and strict regulation of
credit repair organizations. These organizations routinely
promise consumers that they will help them improve their credit
score or their credit report by removing adverse but,
nonetheless, accurate and timely information from their
reports.
This is a deceptive, fraudulent, and ultimately, quite
incorrect representation, and the victims include consumers
whom I talk to every single day in my job, creditors, and the
National Credit Bureaus, including Equifax. Ironically,
however, CROA has been used wrongly and inappropriately to
attempt to punish consumer reporting agencies for offering
these great credit monitoring products.
And, let's be very clear about the difference between
credit monitoring products and so-called credit repair
services. Credit monitoring products, including the products
offered by Equifax, facilitate consumer access to credit
reports and scores. They provide proactive notification of
changes in their reports and scores. They provide explanations
of scoring algorithms and provide consumers with numerous
credit score-related tools, which include projects and
forecasts.
Simply stated, credit monitoring products are the very best
strategy to promote consumer financial literacy, something that
we all need to work together to increase in our country. And we
are also the consumer's very best strategy to prevent and
mitigate the cruel impact of identity fraud. CROA's definition
of credit repair services is so broad that it can arguably but
wrongly be interpreted as covering any of these vital credit
monitoring services, because these services directly or
indirectly can be used to approve a consumer's credit record,
credit history, or credit score.
CROA defines a credit repair organization as an entity
which purports directly or indirectly to help consumers improve
their credit report. For this reason, Equifax urges Congress to
enact legislation to make it absolutely clear that credit
monitoring is not credit repair. The FTC has expressed the same
sentiment, that is, that there is no basis for applying CROA to
credit monitoring services.
If CROA were to be misapplied to credit monitoring
services, it would mean that consumers would no longer be able
to buy these services on a subscription basis, and that
consumers would receive notices and warnings which are
appropriate for consumers faced with sales pitches for credit
repair services, but which are entirely inappropriate and
indeed confusing and deceptive when applied to credit
monitoring services.
And it would mean that entities offering consumer
monitoring services would potentially be faced with liability,
including the discouragement of all moneys paid by all persons
at least in a class action suit for the credit monitoring
service. Quite frankly, this would virtually drive credit
monitoring services out of the marketplace. It is for this
reason that we very much appreciate this committee's interest
in CROA reform.
We also appreciate efforts in the Congress where bipartisan
legislation has been introduced that makes clear that credit
monitoring activities are not credit repair activities. The
House bill also provides consumers with additional protections
including a very detailed description of their free reports and
I.D. for our protections under FACTA and the Fair Credit
Reporting Act, and it gives them the ability to cancel this
contract with the right to a pro rata refund.
Thank you for the opportunity to testify, and of course I
will be delighted to answer any questions.
[The prepared statement of Ms. Holland can be found on page
80 of the appendix.]
Mr. Kanjorski. Next, we will hear from Ms. Anne Fortney, a
partner with Hudson Cook.
Ms. Fortney.
STATEMENT OF ANNE P. FORTNEY, PARTNER, HUDSON COOK, LLP
Ms. Fortney. Thank you, Mr. Chairman, and members of the
committee, for the opportunity to appear before you.
I am Anne Fortney, a partner in the Washington, D.C.,
office of the Hudson Cook law firm. Our firm specializes in
consumer financial services, and we assist in compliance with a
variety of consumer protection laws. I bring to this practice
more than 30 years experience in the consumer financial
services field, including service as Associate Director for
Credit Practices at the Federal Trade Commission.
In private practice, I have worked extensively with credit
grantors and with the consumer reporting industry. I commend
you for holding this hearing and I offer testimony in support
of H.R. 2885, the Credit Monitoring Clarification Act.
I believe that this bill enhances consumer protections and
clarifies the scope of CROA. Some background may provide
context for my views.
While at the FTC, I first learned of problems caused by
credit repair organizations. Consumers paid substantial fees in
advance to companies that promised to clean up or repair poor
credit histories by removing negative but accurate information
from consumer reports.
The consumer reporting and credit granting industries were
burdened with frivolous accuracy disputes generated by credit
repair organizations. Although these organizations could not
deliver on their promises to remove all negative information
from their credit report histories, in the process, they were
sometimes successful in deleting some information.
Their tactics undermined the integrity and the reliability
of the consumer reporting system. In 1996, at the urging of the
Federal Trade Commission and the consumer reporting industry,
Congress enacted CROA to combat these unfair and deceptive acts
and practices. CROA included a broad definition of a credit
repair organization in order to ensure that these organizations
could not easily evade coverage.
When CROA was enacted, credit monitoring services had not
yet been developed. Even as these services were being
developed, no one thought that CROA applied. These services are
valuable tools to educate consumers about their credit
practices and to protect them against identity theft and other
problems that might negatively affect their credit. They are
legitimate services offered by consumer reporting agencies,
their affiliates, and retailers. Banks and other creditors also
provide credit monitoring for their customers, and these
services are often offered to consumers following a data
security breach. The FTC has recognized the value of credit
monitoring for consumers.
There is no similarity between credit repair tactics and
credit monitoring services. No matter what the form of credit
repair, and there are many variations now on this form, the
tactics are always the same. And the result is always the same:
fraud on consumers and fraud on the consumer reporting and
credit granting system.
In addition, no credit repair organization can offer credit
monitoring services, because no one can provide these services
without a contractual relationship with a consumer reporting
agency or reseller for access to the credit reporting data. And
no consumer reporting agency would permit such a contractual
relationship.
Even though the valuable services offered by credit
monitoring companies bear no resemblance to the deceptive
tactics of credit repair organizations, some have interpreted
CROA broadly to reach credit monitoring.
The reason is that these services might be marketed as a
tool that could assist consumers in improving their credit.
Well, credit monitoring can, in fact, help consumers manage and
thereby improve their credit.
As a result of the interpretation that CROA may apply to
credit monitoring, companies offering these services have been
subject to costly litigation. Typically, the litigation does
not involve claims of unfair or deceptive credit repair
tactics, but simply an argument that CROA technically applies.
Courts have not reached a consensus on whether or how CROA
should apply to credit monitoring, and many cases have settled.
Until Congress amends CROA, companies offering credit
monitoring will continue to face the threat of new litigation.
For these reasons, CROA must be amended. I believe that a
narrowly tailored exemption is the best solution. H.R. 2885
would accomplish this. The bill would provide credit monitoring
companies with an exemption from CROA, and at the same time
create new disclosure and pro rata refund requirements
specifically for credit monitoring.
Those protections do not exist today. The bill, therefore,
would benefit consumers as well as the industry.
True credit repair organizations could not hide behind a
claim that they were credit monitoring companies under this
bill. Consumer reporting agencies would not allow credit repair
organizations to access consumer credit file information and
the FTC could still prosecute credit repair organizations under
CROA and the FTC Act.
In conclusion, I encourage Congress to enact H.R. 2885 to
amend CROA.
Thank you. I am happy to answer any questions the committee
may have.
[The prepared statement of Ms. Fortney can be found on page
64 of the appendix.]
Mr. Kanjorski. Thank you very much, Ms. Fortney.
Next we will hear from Mr. Howard Beales, an associate
professor of strategic management at George Washington
University.
Mr. Beales?
STATEMENT OF J. HOWARD BEALES III, ASSOCIATE PROFESSOR OF
STRATEGIC MANAGEMENT AND PUBLIC POLICY, SCHOOL OF BUSINESS,
GEORGE WASHINGTON UNIVERSITY
Mr. Beales. Thank you, Mr. Chairman, and members of the
committee, for inviting me to testify today.
My name is Howard Beales, and I teach in the business
school at George Washington University. I have a Ph.D. in
economics from the University of Chicago and more than a decade
of experience in addressing consumer protection issues at the
Federal Trade Commission.
Most recently, I was the Director of the Bureau of Consumer
Protection there from 2001 through 2004. I am appearing today
as a former official who had responsibility for enforcing CROA
and an academic with a long-standing interest in consumer
protection regulation.
CROA is an unusual statute. Rather than prohibit credit
repair outright, CROA imposes a business model that is simply
not workable. No credit repair organization may charge for its
service before the service is fully performed. In other
markets, payment after the fact is confined to services where
there is a face-to-face relationship between the buyer and the
seller or a continuing relationship.
Otherwise, it is not a feasible way to conduct most
consumer transactions. In addition, there must be a written
contract, a 3-day cooling-off period, and extensive
disclosures. Imagine what it would be like to get your lawn
mowed if sellers followed that business model. Give the
difficulties of the CROA business model, it is not surprising
that there are few cases that involve organizations that admit
they are subject to CROA. Instead, they try to avoid the
statute.
Imposing an unworkable business model on a business that is
almost always fraudulent, like credit repair, is not
particularly problematic if the definition is tightly drawn. In
CROA, however, the definition is extremely broad. It includes
anyone who sells any service to improve any consumer's credit
record, credit history, or credit rating, or provides advice
about those subjects.
Read literally, this language would cover some of the FTC's
consumer education materials, such as ``Building a Better
Credit Report,'' which will let you learn how to improve your
credit score. They are available for free from the FTC, but
they are also available for a charge of $1 from the Federal
Citizen Information Center in Pueblo, Colorado. For $1 more,
you can pick up a copy of your credit score, co-sponsored by
the Consumer Federation of America, and learn how to raise your
score, also payable before the advice is rendered. It is absurd
to think that Congress meant to restrict such obviously
valuable consumer education efforts.
But to avoid that conclusion, you have to look beyond the
statutory language. There is, after all, a wealth of advice
about improving your credit rating. Valuable, real world
businesses face exactly this problem. One example, this credit
monitoring which alerts consumers about changes in their credit
report. These services enable consumers to correct information
that was only included in their credit report because of fraud.
Again, there is no conceivable public purpose in restricting
these services.
Another example is services that evaluate what consumers
might do to improve their credit scores. Consumers in the
modern world need to understand what influences their score and
how they can improve it. That is, consumers need advice about
how to improve their credit rating. It can't be done by
changing the past, but consumers can change their credit rating
by changing their behavior.
Some changes, like consistently paying on time, take time.
Others, like paying down outstanding debt, can affect scores
more quickly. But there are also urban myths about how to
improve scores, like closing unused accounts, that will
actually reduce scores if consumers follow that advice.
Consumers in the language of CROA need accurate advice. It is
possible to avoid the absurd results. Doing so, however,
requires looking beyond the simple language of the statute.
Some courts have been willing to do so. Others have not,
depending in part on the facts of the case.
Unfortunately, as is often true, bad facts make bad law,
and some of the cases have involved some bad facts. Hillis v.
Equifax involves some good facts. The case involves Score
Power, a service that included access to a simulator, that
allowed consumers to see how various actions would affect their
credit score over time.
The court looked beyond the statutory language of CROA and
concluded that credit rating and credit record all refer to a
consumer's historical, tangible, and displayable credit record.
The critical question was whether the defendants had implied to
the average consumer that they would perform a form of credit
repair or were merely engaged in legitimate credit counseling.
The line drawn in Hillis is a reasonable one, but other cases
have not reached the same results.
To avoid losing valuable services, a line must be drawn to
distinguish legitimate credit monitoring from illegitimate
credit repair. The Hillis line is reasonable, but it is a line,
and it creates the need to prove that a credit repair fraud is,
in fact, making claims to consumers that it can modify the
historical credit record. Congress, rather than the courts,
should draw the line.
Courts have been attempting to discern what Congress meant
and they have come to different conclusions. Whether drawn by
Congress or the court, any line that distinguishes fraud and
legitimate business will create new opportunities for fraud.
That is inherent in distinguishing between fraud and legitimate
conduct, and it is not without costs. But there are also
obvious costs of prohibiting legitimate products that are
useful to consumers. It is Congress, not the courts, that
should seek to strike the best possible balance in drawing a
line.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Beales can be found on page
36 of the appendix.]
Mr. Kanjorski. Thank you very much, Mr. Beales.
Now, we will hear from Mr. Bennett, an attorney with
Consumer Litigation Associates.
Mr. Bennett?
STATEMENT OF LEONARD A. BENNETT, CONSUMER LITIGATION
ASSOCIATES, P.C.
Mr. Bennett. Good morning, and thank you for the
opportunity to appear on behalf of the National Association of
Consumer Advocates, the low income clients of the National
Consumer Law Center and the U.S. PIRG.
Let me begin with a couple of caveats. I try cases, but the
folks that I represent, myself in particular, do not support
the type of litigation that is suggested to have been such a
detriment to the credit industry. The NACA members, for
example, were not the folks who tried to pioneer into
legitimate credit monitoring and tied to CROA.
And the advantage today, not just in terms of the
opportunity for bipartisan agreement on this bill, but you
actually have an opportunity for agreement between consumer
groups and the CRAs and legitimate entities that sell credit
monitoring, there is no dispute amongst which you have heard
here about the interests that this committee could further by
separating legitimate credit monitoring, useful information.
Information sold by Ms. Holland's company--and I know, Ms.
Holland, your phrases are justified--versus those, for example,
that are sold by the Lexington Law Group, who was one of our
nemeses. The Credit Repair Organizations Act is an issue in
CROA that apart from the committee, when we deal with the
credit reporting agencies and we talk outside of this committee
hearing, it is something we share. Ms. Holland and I spoke
before the committee that credit repair is a detriment, is a
scourge, to both the industry as well as to the consumers on
whose behalf we advocate. And the question here is not whether
or not legitimate, pure credit monitoring, should be subject to
CROA, but rather, how do you separate that?
I beg to differ with my colleague and the conclusion that
was suggested that credit repair organizations cannot use
credit monitoring. That is demonstrably incorrect, and I have
included in my written testimony from the Web site of the
Lexington Law Group, one of the consumer nemesis, one of the
first offenders in our view under CROA, the products that they
sell as part of their credit repair package, they sell credit
monitoring. They sell something called report watch and
identity theft insurance.
While legitimate companies such as Equifax may not sell to
those credit repair organizations, the bill, H.R. 2885, as
currently drafted, is so broad in the new exemptions it offers,
and the definition or lack of credit monitoring as to open a
floodgate, the last floodgate to render CROA ineffective. The
people we represent, the advocates, the attorneys general, the
JAGs, the consumer organizations who have to as private
attorneys general enforce CROA, will have absolutely no means
to do so.
And it is an interest that I expect both the consumer
reporting agencies and consumer groups share. The credit repair
is a disaster if it is unfettered, unbounded, and unregulated.
The bill as drafted needs changes, and, I know that certainly
the committee has been receptive. We appreciate the time that
staff and committee members have offered us.
But the changes, just to outline a couple I have recognized
in my written materials, the first is that the exemptions after
credit monitoring that allow anything related to providing
advice to identify theft victims, which is what Lexington Law
Group already has, is so broad, the advantage that industry
would advocate from this bill is by saying if there's credit
monitoring then it won't be credit repair.
That simplifies it, but as an attorney, our attorneys
haven't read it. The affect of it is if this bill is enacted
would conclude, if you have credit monitoring, they will not be
with the services sold with it, the governance and CROA. And
that's fine for legitimate companies who are moving in a
direction with this advice, score, interpretation, and so
forth. But moving the other direction, like the Lexington Law
Group, you have companies who will begin to add credit
monitoring.
And it doesn't have to be a legitimate credit report such
as the quality report from Atlanta's Equifax. It could be a
small company out in California that doesn't maintain an
extensive database, but could claim we are offering you a copy
of the report that this side company now sells. To the extent
that this committee is able to free legitimate companies from
the governance of CROA, it will have the reciprocal effect in
the other direction.
We appreciate the time that you have given us. We
appreciate the good work that both sides of the aisle and this
committee have offered and we remain willing to work with
anyone as we hope to with industry to improve this bill.
[The prepared statement of Mr. Bennett can be found on page
45 of the appendix.]
Mr. Kanjorski. Thank you very much, Mr. Bennett, and thank
you to the whole panel for your testimony. It looks like we
have some difference of opinion, but no difference of opinion
that we want to get somewhere where we are not quite sure how
we get there.
I have some questions that I am sure the rest of the panel
will have. Let us start with the proposition, Mr. Bennett. You
said that probably all members of the panel want to accomplish
the conceptual idea of what we have in mind, but exactly how do
we do it? Is it possible for the various interest groups to
come together and really define and accept?
Have you tried to work that out, if I may ask the whole
panel?
Mr. Bennett. Well, Congressman, I was busy making trouble
as a trial lawyer a week or two ago, and didn't have an
opportunity to work with that professor. I do know Ms. Holland.
I know Ms. Fortney. I know Mr. Pratt. We spoke CRAs. Pat and I
spoke. Ms. Holland and I spoke last week. I have a very good,
friendly relationship with the chief litigation attorneys for
Equifax and I asked to set up a meeting so that we could try to
come up with something.
We have, Congressman, for years when we're off the record
in CRA and consumer lawyers are talking. They are both just
pounding their fists and pulling their hair out about credit
repair, and so I really think that there is the possibility in
the bill to accomplish that. Ms. Holland could offer a better
side of that, but our side; we would work hard for that.
Ms. Holland. We are always interested in working with
anybody who wants to do what is right by consumers. At Equifax,
we have a legislative affairs team, which I am not a part of,
but certainly I contribute to that. And I echo Mr. Bennett's
comments that certainly we would be willing to work together,
because at Equifax we always want to do what is best for the
consumer.
Mr. Kanjorski. Thank you, Ms. Holland.
I would really like to get working on this. Our problem is
how we craft the credit monitoring exception; and, if we do not
do it correctly, we fail in our attempt to solve what I
consider to be a serious problem. I think all of the sponsors
of the legislation recognize it, and obviously the panel
recognizes it as a serious problem.
Is there anybody who has an idea of what the test could be
that would allow the FTC to quickly determine who is a
legitimate credit monitoring provider? Is there some test out
there that is a magic set of words such that if they do not hit
this test, they just do not comply? And, on the other hand, if
they do, they are in the box?
Ms. Fortney, let us draw on your 30 years of experience.
Ms. Fortney. And I have worked on this legislation as well.
I think as everybody has discussed, it is difficult to come up
with what would be essentially a bright-line test, because it
should be something that is easily discernable.
So, if there were litigation at the stage of a motion to
dismiss, a court could recognize that a company is, or is not,
within the definition of a credit repair organization. We
recognize that there are concerns with the current, what is
referred to as an activity-based exemption. We are very willing
to work with everyone to see if there are ways that exception
could be more precisely drawn.
I do disagree with Mr. Bennett. I think that if the
exception is drafted in such a way that it is clear that only
companies that have access to credit monitoring services from
consumer reporting agencies, as defined in the Fair Credit
Reporting Act, or resellers that worked with those agencies;
again, I have not looked at the materials of the Lexington Law
Firm or similar companies, but I doubt very much if those types
of companies have an ongoing contractual relationship with
consumer reporting agencies or their resellers in order to
provide a credit monitoring product. And we know that credit
repair organizations and other companies that want to commit
fraud will say just about anything, but the test really is what
do they do.
Mr. Kanjorski. Well, I assume, Mr. Bennett, that it would
not be very hard to set up an organization that appears to be a
credit monitoring organization, but is not using the
information and the thoroughness that is usually associated
with the likes of the highly credible monitoring organizations.
Is that correct?
Mr. Bennett. Absolutely, Congressman, and with due respect
to Ms. Fortney, who has considerably more experience than me in
the field, the bill as currently written doesn't make the
exemption to limit it to--I hate to use the phrase ``legitimate
consumer reporting agencies''--but legitimate consumer
reporting agencies. It is so limited. And I understand just
from secondhand accounts that the FTC has considered the
possibility of a party-specific carve-out as opposed to an
activity carve-out that there could be ways, if we worked
through the legislation together, to use definitions that have
not only a legislative definition, but significant, objective
case law interpreting it, such as what is a consumer reporting
agency or a national consumer reporting agency.
Those types of changes, we think, can strengthen it. In the
case of the consumer reporting agencies, it is a stretch,
despite that we are often on the opposite side. It really would
be a stretch to say that Equifax would engage in deceptive
conduct. I don't think that is where the concern would come
from, but there needs to be a protection that would be sort of
a fall-back, that despite the efforts of the committee and the
interests to craft the right language to draw that sort of
backstop in the event that as Mr. Pratt calls the savvy CROs
come up with ways around this to prohibit deceptive acts and
practices in this regard.
Mr. Kanjorski. Thank you.
Mr. Beales, I know you are anxious to contribute something.
I will give you a few minutes, because my time is running out.
Mr. Beales. Thank you.
I don't think there is a magic solution. I mean, we
certainly looked hard for it in the time that I was at the
Federal Trade Commission, because this was very much an issue
and we didn't think that the statute should be applied, you
know, to credit monitoring, and the FTC still doesn't.
The difficulty is that any line creates factual questions
about which side of the line are you on. I think, as I said in
my testimony, the line in Hillis is reasonable. Are you making
promises about changing your historic credit record? That's
what credit repair is all about. But it does create a factual
question that complicates litigation from sort of either side,
because you have to be able to establish that was the claim
that a real credit repair organization was actually making.
And it creates a factual question the other way, too,
because it's not immediately obvious that there was no such
claim. And even in Hillis, that was exactly what happened. So I
think it can be done. You can craft a line that will work
pretty well, but you can't craft a line that is bullet-proof
and incapable of being circumvented without one that looks at
facts.
Mr. Kanjorski. Well, I think you have hit on something that
I would like to ask the whole panel. We want to move this
legislation, and it is touchy and difficult, and we do not want
to flub it, to tell you the truth. And I think as I recognize
from the panel's testimony and discussion here today, and from
everybody I am familiar with, we want to do by all sides the
right thing and accomplish the end result.
In order to do that, maybe I could ask the panel to
cooperate in a strange way. Beyond this hearing date that you
will make yourselves available for a roundtable discussion with
the staff so that we can literally pin you down for several
hours and put the pressure on you to come up with a legitimate
standard or definition that we can use to accomplish our end.
Could the panel agree to be available in that way with the
staff to accomplish that end?
Ms. Fortney. Yes, sir.
Ms. Holland. Yes.
Mr. Kanjorski. Without charging exorbitant fees?
Well, I would appreciate it, and maybe we could prove that
there are ways to accomplish good legislation in a speedy
fashion. And that is what we want to attain here, so as I cut
off my questioning period, I want to thank you in advance for
your cooperation with the staff.
We will get in contact with you in the next several days so
that those meetings can be arranged, and we would like your
wholehearted support and intellectual talents and capacities to
be really lasered onto this problem to see if we can solve it
within a reasonably short period of time.
So thank you very much. And now, for 5 minutes of her
insightful questioning, my good friend, Mrs. Biggert from
Illinois.
Mrs. Biggert. Thank you, Mr. Chairman. This is a general
question, but it seems like credit monitoring services seem to
be like other subscription services. You pay a fee, and then
you receive the service in monthly installments, like cable
television or magazines, I guess. Does CROA prohibit these
kinds of arrangements in which providers can charge
subscription fees for services? Mr. Bennett and Ms. Fortney?
Mr. Bennett. I don't believe it does. Absolutely not unless
it's something other than credit monitoring. Certainly no one
in our organization would accept or have accepted the cases
that have been criticized in the testimony today. My office,
certainly--and we extensively litigate credit reporting
generally--wouldn't go near such a case. I don't believe that
the law would so restrict credit monitoring.
It's really the ancillary services and not so much those
that are at issue with a company like Equifax that really cross
the line.
Mrs. Biggert. Well, the company offers the credit
monitoring and additional credit repair services. Wouldn't
those services then fall outside the exemption that H.R. 2885
allows?
Ms. Fortney. I believe they would.
And also to answer the question about the subscription,
your analogy to cable television is a very good analogy,
because people do pay for that, I believe, in advance. There
are many types of subscriptions that are paid in advance.
Credit monitoring is paid in advance on a monthly subscription
basis, and the problem with CROA is that CROA prohibits the
receipt of any fees in advance before the services are
rendered. And that is really the heart of the difficulty.
The companies that are offering credit monitoring are not
engaging in the deceptive practices that led to the enactment
of CROA. And the lawsuits don't allege that; they're focusing
on just a very technical definition. So if the bill is able to
make clear in the definition who is included and who is
excluded, then the credit repair organizations will remain as
they should under CROA, and the credit monitoring companies
will be able to be exempted.
But we have also discussed the fact that the exemption
would bring with it certain additional consumer protections,
pro-rata refunds. If the subscription is paid, for instance, on
something other than a monthly basis, if it is paid on an
annual basis, the consumer who cancels would be able to get a
pro-rata refund. Also disclosures explaining more to consumers
about what is involved in credit monitoring.
Mrs. Biggert. Thank you. So I guess the question is, how do
you draw the line in the sand?
Ms. Fortney. That is the question.
Mr. Bennett. Congresswoman?
Mrs. Biggert. Mr. Bennett?
Mr. Bennett. The problem is in terms of the drafting, the
CROA definition is expansive. And the reason it's an issue for
credit monitoring is because it includes essentially any
service offering advice about improving your credit record, and
that can include an identity theft victim, who needs help
getting identity theft accounts off their trade line; it
doesn't just mean illegitimate. But the H.R. 2885 language only
puts someone back into the CROA definition if it's
representations that they're going to modify or remove adverse
information that is accurate, which is Mr. Beales' concern,
which is our concern. Because credit repair organizations don't
say that; they're a lot more savvy now. They don't come out and
say, ``We will help your remove inaccurate information.'' They
say, ``We will help you remove adverse information.'' They
don't really tie themselves down like that.
And so the CROA definition is different than the exclusion.
Mrs. Biggert. Okay. Thank you. And I just had one more
question for Mr. Beales, quickly. How has the Internet changed
the credit monitoring business?
Mr. Beales. Well, I'm not sure that I can answer that. But
it seems like it has really made it possible in a way that it
probably wasn't before. I mean, if you had to rely on snail
mail to get your notification that something had changed in
your credit report, it's a little hard to imagine how a credit
monitoring business--
Mrs. Biggert. I just wondered if you knew that there was
more, because of the pop-ups and all the things, the
advertising on the Internet.
Mr. Beales. I'm sure--I mean that's the way the product is
most often delivered is over the Internet. So in that sense,
I'm sure there is more of it than there was with less Internet
use.
Mrs. Biggert. Okay. Thank you. I yield back.
Mr. Kanjorski. Thank you, Ms. Biggert.
And now, the gentlelady from California, Ms. Waters.
Ms. Waters. Thank you very much, Mr. Chairman.
For the panel, I have become very concerned about the use
of credit scores in areas that seem to have little relation to
a customer's ability to make timely payments, such as the use
of credit scores to set up car insurance premiums. Last week, I
introduced H.R. 6062, the Personal Lines of Insurance Fairness
Act of 2008, with Representative Gutierrez, and tomorrow the
Oversight and Investigations Subcommittee will hold a hearing
on this practice.
But I'm interested in the role, if any, credit monitoring
services play in the practice of using credit scores to set
insurance premiums. Specifically, can any of you tell me if
there has been any research on whether or not use of these
services has a positive or negative impact on a consumer's
credit score for those consumers who choose to use them? In
short, is it worth the subscription fee? And on average, how
much do consumers pay for these services?
Many consumers subscribe to these services because they are
offered for the first 30 days free of charge. Do you know
anything about this?
Ms. Holland. Ms. Waters, let me just first say that the
credit monitoring service is a very, very valuable tool. And
while I can't speak to the insurance fees, but what I can say
to you is that these tools, what I strongly believe--I speak to
consumers every day, and what I find is that there is a need
for consumers to have a better understanding of their credit,
their credit score, and what are the right types of decisions
you make related to that? That's not a black/white, poor/rich
issue. That is an issue that everyone needs to understand.
And so these credit monitoring services really help
consumers and educate them about: Here's a change in your
credit file; here's how that change has impacted your credit
file. They can see this information, they can act on the
information almost instantly. And so to me, I think not having
these tools and resources, these credit monitoring services
actually would do a great disservice to consumers who have--
those--
Ms. Waters. Okay. Before you go any further, what does this
bill do to the so-called important services you are describing?
How does this bill help or hurt, and what impact does this have
in dealing with the agencies that repair credit?
Ms. Holland. Well, number one, how it helps the consumers
is that if they subscribe to these services, they don't need
these credit repair organizations. They don't need these bad
actors with bad scripts, who promise them things that they
cannot deliver.
What this does is put them in control; it gives them the
knowledge and the power to make sure that they are making good
decisions and that they are able to have good credit scores
that allow them to get the best offerings, whether it is to buy
a refrigerator or to buy a car, or anything.
Ms. Waters. Let me just ask, if I may, I think it was Mr.
Bennett?
Mr. Bennett. Yes?
Ms. Waters. Mr. Bennett, would you describe again why you
think this bill does not help, and that this bill empowers,
perhaps, the repair agencies to do the kind of work that many
of us are concerned about.
Mr. Bennett. Yes, certainly. We began with an assumption
which I have not raised here, that there is no threat to credit
monitoring. These cases, or the few of them that were
discussed, the credit monitoring services prevailed on all
important issues. When they settled, they settled for free
credit monitoring. That was what was paid to the people who
these other non-NACA lawyers represented.
That trade-off versus the trade-off of the unfettered
ability to use credit repair so long as you sell credit
monitoring or something that could be a credit monitoring
product, we think is a trade-off, and we're surprised that
industry supports it in that fashion. It would eliminate the
last ability that we have against credit repair organizations;
which to be candid, we represent consumers, NCLC represents
low-income consumers. These are amongst the most vulnerable of
individuals out there who are targeted by credit repair.
If you do a Google search for, ``How do I fix my credit
report?'' or ``Identity theft,'' credit repair organizations
pop up first. And so the balance--you're using a hammer to swat
a fly with respect with credit monitoring. The trade-off, as
currently crafted, opens up the people we represent, we think,
to far more villainous trade-off.
And I think with respect to the credit repair, if you were
to do a search--and we have heard a lot about these cases
against credit monitoring, and there are a couple of them.
But as long as the statute of CROA has been around, try
finding cases where our side can get around the exclusions that
are already used, the nonprofit exclusion, the ability to break
things down into services to require payment before credit
repair is done. We aren't necessarily winning the battle;
otherwise, we wouldn't have the credit repair problem in
general. And to carve out an exclusion as opposed to with
bipartisan support correct CROA in a way to help the industry,
to help consumers, this committee has an opportunity. It can
help credit monitoring legitimate services, and it could help
protect the people who we represent, who you all represent,
against the real bad apples.
Ms. Waters. Thank you. I yield back.
Mr. Kanjorski. Thank you very much, Ms. Waters.
And now, we will have the gentleman from California, Mr.
Royce.
Mr. Royce. Thank you, Mr. Chairman.
Maybe we could go to Ms. Holland. Ms. Holland, could you
explain for us, maybe, the effects that this previous wave of
lawsuits had on your company and the products and services that
you offer, as well maybe as what we might expect going forward
if Congress fails to enact a legislative fix here? Could you
get into some of those details for us, Ms. Holland?
Ms. Holland. Mr. Royce, at a minimum, the lawsuits have had
an effect in terms of ongoing innovation and development of
credit monitoring services and products. You know, at Equifax
we introduced the first product in 2000, and because of
consumer feedback, we have continued to refine those products
and make offerings that consumers tell us that they want.
So when you talk about lawsuits that are going on related
to CROA, what ends up happening is, is that those developments
and innovations are stalled, because companies such as Equifax
are concerned about CROA, and therefore they're not going to be
able to build and make these services for consumers.
What we believe with this amendment is that consumers get a
more robust notice. They get their rights as it relates to a
free report. They get a pro-rata refund. They're able to cancel
any of these services if they don't want them at any time, with
no penalty of any fee.
And so we strongly believe that CROA as it exists right now
will do a disservice to these companies that offer these
monitoring products, and quite candidly with the clause of
disgorgement of all revenues, very well could drive these
products out of the marketplace, which in turn to me is harmful
to consumers.
Mr. Royce. And why would that be harmful to the consumers?
Ms. Holland. Well, because--
Mr. Royce. Maybe Mr. Bennett feels we would be better off
without these industries to begin with. Explain the benefit to
the consumer, then.
Ms. Holland. Well, the benefit of the credit monitoring
services is that consumers literally have at their fingertips
tools and resources to make better decisions and to manage
their credit. And so when you have these tools and services go
away, they're going to be subject to bad actors and these fly-
by-night companies, who could care less about them, who could
absolutely care less. Not a week goes by that I don't talk to a
consumer who says, ``Hey, I paid `X' amount of money.'' They
said they were going to delete all of his negative information,
and they didn't do it. Well, then our company explains to them,
``You know, no one can do that for you.''
Mr. Royce. But you are a lot easier target. I mean, for
lawsuits of tens of millions of dollars, you're an easy target.
The fly-by-night operators, whom we were originally trying to
get in CROA, they're hard to find.
Ms. Holland. Right.
Mr. Royce. They're not easy to locate, because they just
strike and move on, or change their name, or--
Ms. Holland. Right. They change their name. They come up
and start a different company under a different name. But you
know, Equifax is always going to be there, right there on
Peachtree Street in Atlanta. And so we're an easy target.
Mr. Royce. Yes. Well, I'll follow up with Ms. Fortney,
because she has a background in this, too. And on the argument
you just made, Ms. Fortney, are you aware of instances in which
CROA is impeding the introduction of new consumer services into
the marketplace?
Ms. Fortney. Yes. In addition to the problems that
companies offering credit monitoring services currently have--
and the litigation is ongoing, the litigation and the threat is
always there--and the reason why there have been relatively few
lawsuits is because relatively few companies offer credit
monitoring services.
But the threat of the litigation has been an impediment to
companies coming out with tools that can help consumers better
manage their credit. References to tools such as credit score
simulators, things of that kind, have not been put on the
market in some instances, because those tools can, in fact,
help consumers improve their credit. And as we have seen today,
the difficulty with CROA is that the definition of a credit
repair organization includes anyone who represents directly or
indirectly that they can help consumers improve their credit,
even if they can do so.
So very much so, the law as currently drafted, is impeding
the introduction of new tools that can help consumers better
manage their credit.
Mr. Royce. I yield back.
Mr. Kanjorski. I assure you, we did not cut off the
microphone. I am sorry.
Mr. Moore from Kansas?
Mr. Moore of Kansas. Thank you, Mr. Chairman. A question
for Ms. Fortney and Mr. Beales. It appears that the FTC
generally is in agreement that CROA should not be applied to
legitimate credit monitoring services. Do you believe that's an
accurate characterization of the FTC's position on the issue?
Ms. Fortney. That is my understanding of their position,
yes.
Mr. Beales. And mine as well.
Mr. Moore of Kansas. Very good. It's also my understanding
that the industry worked with the FTC in getting CROA enacted
into law. Why didn't, in your opinion, the FTC issue an opinion
letter explaining why it was not the intent of CROA to have
credit monitoring services fall into the definition of credit
repair organizations?
Ms. Fortney. The FTC no longer issues staff opinion letters
under the Fair Credit Reporting Act. And the reason they don't
is that the courts were not required to follow them or even
defer to them, and in some instances the courts refused to do
so.
So although the Commission, as I understand it, does
support the industry's concerns here, drafting or writing a
staff opinion letter would probably not put an end to the
litigation or solve the problem.
Mr. Moore of Kansas. Do you agree, Mr. Beales?
Mr. Beales. Well, I think some of the difficulty is the
same one that you're having here, is how do you draw the line?
An opinion letter would have to craft a line based on the
language of the statute or the intent; but it would have to
draw a line. And that has been the difficulty is finding a
reasonable way to draw the line without creating too many of
the kinds of problems Mr. Bennett is worried about.
Ms. Fortney. The other problem is the Commission does not
have rulemaking authority under CROA. So whatever line the
Commission were to draw in a letter would not necessarily solve
the problem.
Mr. Moore of Kansas. Thank you very much. Thank you, Mr.
Chairman.
Mr. Kanjorski. Thank you, Mr. Moore.
Now, we will hear from the gentleman from Georgia, Mr.
Price.
Mr. Price. Thank you, Mr. Chairman. And I want to thank the
panelists. I think this has been helpful, although I think that
we continue to struggle with the differences between--you all
have been very polite to each other, and I appreciate that, but
I think there are some differences here that I would like to
try to explore.
Mr. Bennett, would you agree that there are indeed
individuals who have taken advantage, for lack of a better
term, of CROA for frivolous or unnecessary, or lawsuits that
the vast majority of the American people would say, ``Well,
that just ought not apply.''
Mr. Bennett. Yes. And in fact, the vast majority, if not
the entirety of our organization would similarly agree.
Mr. Price. How do you reconcile that then with your
testimony that you gave just a moment ago, and your printed
testimony where you state that credit monitoring isn't governed
by CROA under current law?
Mr. Bennett. Because in those cases, lawyers filed--non-
consumer lawyers, without backgrounds in the area filed those
cases. And from a practical standpoint--I pay mortgages, I run
my law firm, we have to win our cases to prevail--those
individuals made a foolhardy decision to pursue a case that did
not have significant merit. And on the important dispositive
motions, in Hillis, for example, they lost.
Mr. Price. But as we have heard from Ms. Holland, there are
consequences of those suits, correct?
Mr. Bennett. There are, and we agree, Congressman, we
absolutely agree with a couple of things. We agree that credit
monitoring can provide services that are advantageous. And
similarly we agree that CROA could be better crafted to more
narrowly exclude legitimate non-deceptive credit monitoring
from the bill. It's just a matter of how do we--
Mr. Price. Identify that line.
I appreciate that, and I would echo the sentiments and the
comments of the chairman, that hopefully we will be able to get
together and come up with that bright line.
Ms. Holland, I would like to explore a little bit further.
I know that you said that the effects of these lawsuits would
significantly, and may have significantly decreased the amount
of innovation and development and also the potential for
driving products out of the marketplace. I am interested in the
issue of identity theft and the benefit to consumers for
gaining this credit monitoring information to them; and if H.R.
2885 isn't passed, what the consequences are to consumers who
are trying to protect themselves from identify theft.
Ms. Holland. I think that if you no longer have credit
monitoring services such as we offer, that you are taking away
one of the number one tools that consumers use to protect
themselves from identify theft. If we take a look, the FTC had
a survey, and they basically stated that 11 percent of the
consumers found out about identify theft using a credit
monitoring service. When you hear about these data breeches
that occur at these companies, the first thing they do is offer
the consumers who are impacted a credit monitoring service.
So you are taking away a tool that has been the number one
tool that people go to; it is the go-to tool for preventing and
mitigating identify theft. And so I think despite the fact that
it increases financial literacy, what I said earlier is a great
thing that you lose is the whole protection against identify
theft.
Mr. Price. Mr. Bennett, would you agree with that?
Mr. Bennett. I do agree. I think that one of the advantages
to what I'll call non-deceptive pure credit monitoring is that
you can see what's coming. And I think it fits in best with a
number of protections that you and this committee have
supported under FACTA and other FCRA protections. The Alert
systems, for example. Credit monitoring is a sort of diversion
of a paid alert system.
Mr. Price. I'm running out of time, and I want to get to
another point of your written testimony, and that is where you
state that H.R. 2885 would expose every ID theft victim to
unregulated credit repair. Seeing as how you agree with Ms.
Holland about the importance of credit monitoring companies for
individuals to protect themselves from identify theft, but then
state that this would in essence, I guess, harm consumers who
are concerned about identify theft, what is the specific
language--if you're aware of, and if not maybe you can get back
to us--what is the specific language in H.R. 2885 that you
believe results in exposing every identify theft victim, to
unregulated credit repair?
Mr. Bennett. It is Section 2(b)(1)(c), that it excludes
governance under CROA if the product is sold in conjunction
with the provision of materials or services to assist the
consumer who is a victim of identify theft. I cite the
Lexington Law Group, which is sort of the poster child.
Mr. Price. Right.
Mr. Bennett. And the Lexington Law Group says, ``Lexington
Law Group can assist you in identify theft restoration. They
will work to clean up your credit report, increase your credit
score by challenging all the negative credit report items
occurred. We also,'' and so forth.
Mr. Price. Okay. I understand. I am out of time, but I
thank you, Mr. Chairman. I hope we can work on that specific
language to make it so that it's amenable to responsible
individuals in the consumer efficacy industry. But I just want
to reiterate once again that I think these companies are
providing a remarkable and valuable service to all Americans,
and I hope that we will be able to prevent the problems that we
have from CROA.
Mr. Kanjorski. Thank you very much, Mr. Price.
And now, Mr. Scott, you are recognized for 5 minutes.
Mr. Scott. Thank you, Mr. Chairman. What is it about the
current definition of credit repair organization that brings
about a difficulty or a gray area here, where we need to amend
it for clarification because of the opening up of possibilities
of lawsuits?
Ms. Fortney. The definition includes--there are a number of
activities that make an entity a credit repair organization
under the statute. And the definition includes representations
directly or indirectly that the entity can help consumers
improve their credit.
And the reason is that when credit repair organizations
were first coming on the scene, that is exactly what they said,
``We can help you improve your credit. We can repair your
credit. We can remove negative information.'' In fact, they
still say that.
So the definition includes, as part of the activities that
would make an entity a credit repair organization, the fact
that the entity is representing directly or even indirectly
that it can improve the consumer's credit.
Well, in fact, credit monitoring services and related tools
do help consumers improve their credit; but the definition
doesn't depend on whether the representation that the entity
can help improve the credit is accurate or inaccurate; it's
just if the entity directly or indirectly makes that
representation.
Mr. Scott. And that is what opens up this window of
possible liability that brings about the need to correct that
to prevent that liability, that brings on the lawsuits, that
then in effect affects the innovation of products that Ms.
Holland talked about. Is that a correct assessment?
Ms. Fortney. That is correct.
Mr. Scott. All right.
Now, Mr. Bennett, why would you object to that? That seems
to be perhaps a technical adjustment we need to make. Where am
I losing something? Why are you objecting to that?
Mr. Bennett. Well, again in principle--and I think that
Congressman, you have said it best--a technical adjustment
would be necessary. But in principle, we don't disagree. I
think that having non-deceptive, having the legitimate credit
monitoring that Equifax sells available and not governed by
CROA is an objective we share and we will support.
The problem is the deceptive services sold by other
companies, they do fit that definition. What is happening is
with H.R. 2885, you are taking credit monitoring and you are
providing the use or the inclusion of credit monitoring as a
free pass. And the bill does it legitimately in the case of
Equifax. But that free pass is not limited just to legitimate
companies that use credit monitoring, but in the cases of
credit repair organizations that will now add credit monitoring
products to their illegitimate credit repair services, and now
those illegitimate services benefit from the ambition of this
community, this committee, and our interests at having
legitimate and pure credit monitoring.
It is where that line is drawn, Congressman, and I think
that we probably agree that credit repair is a really horrific
problem for the industry and for consumers.
Mr. Scott. Do you agree with that, Ms. Fortney? Where do
you differ from what he just said?
Ms. Fortney. Where I differ is that I agree that credit
repair organizations will attempt to--if this bill is enacted
in its present form, they will attempt to characterize their
activities such that they would then come within the exception.
The issue, though, is if that is all they did--if all they
did was offer credit monitoring through a consumer reporting
agency as defined--or reseller as defined in the Fair Credit
Reporting Act--if all they did was provide legitimate identify
theft help after somebody has been a victim, they wouldn't be a
credit repair organization. That's not what makes them a credit
repair organization. What makes them a credit repair
organization is all the other activities that are also included
in the definition of a credit repair organization that brings
them under the scope of CROA.
Mr. Scott. All right. Well, thank you for that. And I agree
with you, Mr. Chairman, that this is a great committee, and
it's going to be very helpful to us in crafting this bill. And
both of your points of view certain illuminate this situation.
Now Ms. Holland, let me ask you to explain for us exactly
how subscribing to a credit monitoring product will help a
consumer guard against identify theft or to mitigate identify
theft?
Ms. Holland. When a consumer subscribes to a credit
monitoring service, they are given a--
Mr. Scott. You might want to get a little closer to the
microphone.
Ms. Holland. When consumers subscribe to a credit
monitoring service, they are sent an alert, and that alert
tells them if there has been a change to their credit file,
such as a line of credit has been opened or a balance has
changed. When they receive that alert, they are able to go
online, access their credit repair, and evaluate what that
change was. If that change was not initiated by them, they have
no knowledge of it, they could be an indication of fraud, and
they can immediately begin the fraud process.
So almost instantly they know about changes in their file,
and they can act upon it.
Secondly, after you have become a victim, as we have seen
with all the data breeches, they now, if their information has
been sold or it's on the black market, they now have a credit
monitoring service, so they're going to continue to get those
alerts. They can act upon it, they can protect their file with
anything from a fraud alert. And so there are so many tools. It
puts the power in the consumer's hand. And they now can be
proactive, using this service to protect themselves against the
horrible effects of identify theft.
Mr. Scott. Well, thank you very much, and I think you're
right on it, because the weakness in our system is that the
consumer is laissez-faire.
Ms. Holland. Yes.
Mr. Scott. I mean this will help engage that consumer in
his own financial affairs to take control.
Thank you, Ms. Holland. Thank you, committee.
Mr. Kanjorski. Thank you, Mr. Scott.
And now, Mr. Clay from Missouri.
Mr. Clay. Thank you very much, Mr. Chairman.
Ms. Holland, I am a co-sponsor of H.R. 2885, the Credit
Monitoring Clarification Act. We are in agreement that this
legislation is necessary as CROA was established before credit
monitoring services.
The intent was never to equate these services with credit
repair organizations. You oversee the consumer reports
operations of Equifax, Inc., a major credit reporting agency
that also offers a credit monitoring service. How has
regulation under CROA restricted the service that your
organization offers consumers as a credit monitoring
organization, and how will this change under H.R. 2885?
How does this benefit the consumer, since that is who we
are primarily concerned with?
Ms. Holland. Absolutely. At Equifax, we certainly believe
in empowering consumers, because knowledge is power. CROA as it
currently exists really hinders our ability to continue to
develop products that meet the consumer marketplace's needs.
So, for example, we conduct quite a lot of focus groups, and we
have ideas that will enhance these credit monitoring products.
But because of how CROA exists right now, without this
amendment that we're proposing, we really have, you know, taken
kind of back seat and stalled on some of those products in
introducing them and continuing the research and what we can
continually do to enhance those products.
What we believe the amendment does--because remember, it is
all about the consumer here--we are all about wanting to
protect and empower consumers--the first thing that is very
important is a consumer can get this credit monitoring service
under our amendment. They can cancel it at any time. They're
not going to be penalized; they're not going to have to pay a
fee. And they're entitled to a pro-rata refund.
Secondly, they are going to get clear--and what I always
call when I deal with consumers--``user-friendly'' notices
about what their rights are. Not notices that are in little-
bitty font type. You know, we have all seen them. The notices
that clearly say, ``Here is what your rights are under a free
credit report.''
And I think most importantly that taking away--financial
literacy to me is so important when I talk the consumers every
day, and when I go out and do seminars, is that it also will
allow them to increase their knowledge of financial literacy.
And they in turn can make better choices and have a better
life.
Mr. Clay. Thank you for that response.
Anyone else on the panel, can you elaborate on how you
think this bill will benefit consumers?
Ms. Fortney. Well, I agree with Ms. Holland that the bill
will assure the continuation of credit monitoring services and
will also enable companies offering other valuable tools for
consumers to bring them onto the marketplace and to offer those
products to consumers.
The other thing is that defending a class action lawsuit
based on even technical definitions of CROA is an enormously
expensive, burdensome undertaking for a company, and does
interfere with the ability of a company to devote its resources
to doing the things that it is in business to do.
And so I think that even though a lot of these lawsuits
have settled, as long as the definition of credit repair
organization and CROA remains the way it is, companies are
going to be faced with the threat of new litigation, are going
to have to defend new lawsuits, and that also impedes their
ability to offer products and services to consumers.
Mr. Clay. Thank you for that response.
Mr. Bennett?
Mr. Bennett. Since I am the official who has criticized the
bill, let me switch to the other side. This bill does a number
of good things, and certainly aspires to do others. In terms of
strengthening CROA itself, this is an opportunity where all of
us at this table, I'm sure, would like to see a bill that makes
the illegitimate non-credit monitoring credit repair, the savvy
folks who have been circumventing CROA allows this committee to
put some teeth back in as to the illegitimate; at the same time
when it plugs those holes to make sure that the legitimate
credit monitoring companies don't get caught up in it. And we
support that, we would be enthusiastically in support of it if
CROA could serve that function as well as it's considered.
We have discussed some of the necessary improvements. We
think absolutely, drawing the line about deceptive conduct has
to be in the bill. It has to be such that deceiving and
manipulating--whether you call it credit monitoring like
Lexington Law Group does or not--is different than what Equifax
is doing, and what Tru Credit or TransUnion is doing.
And so this bill offers a great opportunity not only from
industry's standpoint to make sure that credit monitoring
services don't get caught up, but to refortify the original
commitment against the illegitimate companies.
Mr. Clay. And do you find credit monitoring services to be
pretty effective as far as notifying the consumer? The red flag
goes up in their credit report?
Mr. Bennett. I do think--I mean there is a question as to
cost, trade-offs, but those are business decisions. In terms of
whether it is good to have more information for consumers,
absolutely. The more information consumers have, honest
information, non-deceptive information, the better our clients
are empowered.
Mr. Clay. Thank you.
Thank you, Mr. Chairman. I yield back.
Mr. Kanjorski. Thank you very much, Mr. Clay.
The Chair notes that some members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 30 days for members to submit written questions to these
witnesses, and to place their responses in the record.
Before we adjourn, without objection, a letter from the
Federal Trade Commission, dated May 20, 2008, will be made a
part of the record.
I want to thank the panel, and take special time to thank
you, because I think you have really made a contribution in
your testimony today, and more than that, your willingness to
serve as an advisory panel over the next several weeks to see
if we can, in fact, get some standard that will allow us to
move forward with this legislation. So individually and
collectively I want to thank you on behalf of the committee for
that most generous offer. Thank you.
And now this panel is dismissed, and the hearing is
adjourned.
[Whereupon, at 11:40 a.m., the hearing was adjourned.]
A P P E N D I X
May 20, 2008
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