[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
     LEGISLATIVE HEARING ON H.R. 2309, CONSUMER CREDIT PROTECTION 
    IMPROVEMENT ACT; AND H.R. 2190, MERCURY POLLUTION REDUCTION ACT

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON COMMERCE, TRADE,
                        AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 12, 2009

                               __________

                           Serial No. 111-38


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman

JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JAN SCHAKOWSKY, Illinois             SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California           JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas           TIM MURPHY, Pennsylvania
JAY INSLEE, Washington               MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin             MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas                  PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York          STEVE SCALISE, Louisiana
JIM MATHESON, Utah                   PARKER GRIFFITH, Alabama
G.K. BUTTERFIELD, North Carolina     ROBERT E. LATTA, Ohio
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont

                                  (ii)
        Subcommittee on Commerce, Trade, and Consumer Protection

                        BOBBY L. RUSH, Illinois
                                  Chairman
JAN SCHAKOWSKY, Illinois             CLIFF STEARNS, Florida
    Vice Chair                            Ranking Member
JOHN SARBANES, Maryland              RALPH M. HALL, Texas
BETTY SUTTON, Ohio                   DENNIS HASTERT, Illinois
FRANK PALLONE, New Jersey            ED WHITFIELD, Kentucky
BART GORDON, Tennessee               CHARLES W. ``CHIP'' PICKERING, 
BART STUPAK, Michigan                    Mississippi
GENE GREEN, Texas                    GEORGE RADANOVICH, California
CHARLES A. GONZALEZ, Texas           JOSEPH R. PITTS, Pennsylvania
ANTHONY D. WEINER, New York          MARY BONO MACK, California
JIM MATHESON, Utah                   LEE TERRY, Nebraska
G.K. BUTTERFIELD, North Carolina     MIKE ROGERS, Michigan
JOHN BARROW, Georgia                 SUE WILKINS MYRICK, North Carolina
DORIS O. MATSUI, California          MICHAEL C. BURGESS, Texas
KATHY CASTOR, Florida
ZACHARY T. SPACE, Ohio
BRUCE BRALEY, Iowa
DIANA DeGETTE, Colorado
JOHN D. DINGELL, Michigan (ex 
    officio)
  


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................    19
    Prepared statement...........................................    21
Hon. George Radanovich, a Representative in Congress from the 
  State of California, opening statement.........................    23
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................    24
Hon. Phil Gingrey, a Representative in Congress from the State of 
  Georgia, opening statement.....................................    25
Hon. John P. Sarbanes, a Representative in Congress from the 
  State of Maryland, opening statement...........................    26
Hon. John Barrow, a Representative in Congress from the State of 
  Georgia, opening statement.....................................    27
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................    27
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................   211

                               Witnesses

Eileen Harrington, Acting Director, Bureau of Consumer 
  Protection, Federal Trade Commission...........................    28
    Prepared statement...........................................    31
    Answers to submitted questions...............................   172
Kathleen Keest, Senior Policy Counsel, Center for Responsible 
  Lending........................................................    43
    Prepared statement...........................................    45
John Beisner, Managing Partner, O'Meleveny & Myers, on Behalf of 
  the U.S. Chamber of Commerce...................................    82
    Prepared statement...........................................    84
Catherine O'Neill, Associate Professor of Law, Seattle University 
  School of Law, Member Scholar, Center for Progressive Reform...   115
    Prepared statement...........................................   118
    Answers to submitted questions \1\
Lynn Goldman, M.D., M.P.H., Professor, Johns Hopkins School of 
  Public Health, Principal Investigator, Johns Hopkins National 
  Children's Study (Former EPA Assistant Administrator for 
  Prevention, Pesticides, and Toxic Substances, Administration of 
  President William Jefferson Clinton)...........................   125
    Prepared statement...........................................   127
    Answers to submitted questions \2\
Richard Jackson, Executive Vice President of Operations, Ashta 
  Chemicals Inc..................................................   132
    Prepared statement...........................................   134
    Answers to submitted questions...............................   178

                           Submitted Material

H.R. 2309........................................................     2
H.R. 2190........................................................    10
Letter of May 12, 2009, from Ms. Matsui to the GAO, submitted by 
  Ms. Matsui.....................................................    92
Statement of the American Financial Services Association.........    99
Statement of the National Automobile Dealers Association.........   106
Statement of Bill McCollum, Florida Attorney General.............   112
Letter of May 12, 2009, from 43 environmental groups supporting 
  H.R. 2190......................................................   148
Letter of May 11, 2009, from The Chlorine Institute to Messrs. 
  Rush and Radanovich............................................   155
Report entitled ``Assessment of Test Results for Mercury in High 
  Fructose Corn Syrup,'' by Dr. Woodhall Stopford................   161
Report entitled ``Normal Mercury Levels in Food and Beverages,'' 
  by Dr. Woodhall Stopford.......................................   163
News release from the Corn Refiners Association, dated March 18, 
  2009...........................................................   166
News release from ChemRisk, dated January 30, 2009...............   169

----------
\1\ Ms. O'Neill did not respond to submitted questions for the 
  record.
\2\ Ms. Goldman did not respond to submitted questions for the 
  record.


     LEGISLATIVE HEARING ON H.R. 2309, CONSUMER CREDIT PROTECTION 
    IMPROVEMENT ACT; AND H.R. 2190, MERCURY POLLUTION REDUCTION ACT

                              ----------                              


                         TUESDAY, MAY 12, 2009

              House of Representatives,    
           Subcommittee on Commerce, Trade,
                           and Consumer Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:05 p.m., in 
Room 2322, Rayburn House Office Building, Hon. Bobby L. Rush 
[chairman of the subcommittee] presiding.
    Present: Representatives Rush, Schakowsky, Sarbanes, 
Barrow, Matsui, Radanovich, Gingrey, Scalise and Barton (ex 
officio).
    Staff Present: Christian Tanotsu Fjeld, Counsel; Anna 
Laitin, Professional Staff; Robin Appleberry, Counsel; Valerie 
Baron, Legislative Clerk; Michelle Ash, Counsel; Shannon 
Weinberg, Minority Counsel; Brian McCullough, Minority Senior 
Professional Staff; Jerry Couri, Minority Professional Staff; 
Will Carty, Minority Professional Staff; and Sam Costello, 
Minority Legislative Analyst.
    Mr. Rush. The subcommittee will come to order.
    Today's hearing is a legislative hearing. It is on two 
bills, H.R. 2309 and H.R. 2190.
    [The information follows:]

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 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. The Chair will recognize himself for 5 minutes 
for the purposes of opening statements.
    Today, as I said before, the subcommittee is conducting yet 
another legislative hearing on two more bills, H.R. 2309, the 
Consumer Credit and Debt Protection Act, and H.R. 2190, the 
Mercury Pollution Reduction Act. This hearing continues our 
trend to hold legislative hearings with the intent of moving 
bills towards eventually becoming law.
    H.R. 2390, the Mercury and Pollution Reduction Act, was 
introduced by the Vice Chair of the subcommittee, my friend and 
colleague from Chicago Ms. Schakowsky. The bill effectively 
bans the use of mercury in the production of chlorine and 
caustic soda and prohibits the export of mercury effective 
immediately.
    Mercury is well known to cause neurological damage, 
especially to children. The toxin is also found in fish, and 
when people eat contaminated fish, they also consume the 
mercury. Pregnant women who ingest the mercury in fish pass the 
toxic effects along to their developing fetus, which can lead 
to long-term neurological harm.
    Furthermore, studies indicate that unsafe mercury levels 
are more prominent in people of color and in poor communities, 
and this disparate impact along ethnic and racial lines is 
likely the result of fish and seafood consumption.
    It is my understanding that only four manufacturing plants 
still use mercury in the production of chlorine. It is also my 
understanding that the chlorine industry has made the 
transition away from mercury as a result of increased 
efficiency in alternative methods of manufacturing. As such, I 
am interested to know why Ms. Schakowsky's bill shouldn't 
become law as soon as possible due to the harmful effects of 
mercury and the cost savings associated with producing chlorine 
from other methods. I want to commend Ms. Schakowsky for her 
work on this bill.
    I am the author of the second bill we are considering 
today. H.R. 2309, the Consumer Credit and Protection Act, is a 
result of two oversight hearings this subcommittee has held on 
consumer credit issues this year. The bill provides the Federal 
Trade Commission with normal rulemaking authority under the 
Administrative Procedures Act, for all consumer credit and 
debt-related issues as opposed to its current cumbersome 
rulemaking authority under the Magnuson-Moss Act. This 
authority will empower the Commission to nimbly respond to 
current and future abuses perpetrated on consumers.
    My bill also directs the Commission to specifically address 
current abuses in the automobile and debt consolidation 
industries. It is my intent, during an eventual markup, to also 
add a directive rulemaking on pending legislation as well.
    I hope the witnesses will provide the information the 
subcommittee needs on how effective H.R. 2309 would be in 
protecting consumers not only from the credit and debt scams of 
today, but the scams of tomorrow, also.
    It is important that the FTC have the requisite flexibility 
and authority to address numerous credit fraud that plagues 
consumers. Moreover, I believe it is extremely important that 
the Commission retain this aggressive posture of consumer 
credit and debt regardless of the political leadership at the 
top. Both Democrats and Republicans are guilty of being asleep 
at the switch, and difficulties in the financial and housing 
market have shown us that we can no longer afford this type of 
political negligence. It is vital that we revitalize the 
Federal Trade Commission's work on behalf of consumers in order 
to prevent the types of widespread abuses that weren't 
addressed in the past.
    Today I hope to have an informative legislative hearing on 
these two bills and work with all of the affected stakeholders 
and my friends on the other side of the aisle. We may end up 
disagreeing, but as always, I believe in disagreeing in a civil 
and politically honest manner.
    With that, I yield back the balance of my time.
    [The prepared statement of Mr. Rush follows:]

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    Mr. Rush. The Chair now recognizes the Ranking Member of 
the subcommittee Mr. Radanovich for 5 minutes for an opening 
statement.

 OPENING STATEMENT OF HON. GEORGE RADANOVICH, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Radanovich. Thank you very much.
    Today we examine two pieces of legislation under the 
subcommittee's jurisdiction. The first bill is H.R. 2309, 
addressing credit and debt issues under the Federal Trade 
Commission's jurisdiction.
    As I have stated previously, I support cracking down on 
anybody who breaks the law or takes unfair advantage of others 
for their own gain. Mortgage and foreclosure problems have 
revealed deception, lying and stealing at all levels of the 
homebuying process from consumers falsely stating their income 
to mortgage companies deceiving consumers about their loans. 
There should be no tolerance for these practices, practices 
that have devastated many consumers with foreclosures and have 
put all taxpayers on the hook for these bad actors' deeds.
    Similarly, the economic downturn has caused many to find 
themselves over their heads with nonmortgage debt. I support 
the markets' creation of third-party entities who negotiate on 
these individuals' behalves, but I also see opportunities where 
abuse and fraud may arise. Therefore, I support the 
legislation's direction to the FTC to examine debt settlement 
practices and promulgate rules as necessary. However, my 
question within these proposed rules is what is lacking in the 
current law? Is there a problem so widespread that it requires 
an industrywide solution; and, finally, will the proposed rule 
solve the problem?
    My primary concern is that the examination be thorough and 
the evidence substantial before any rules are proposed. 
Industrywide rules impose costs on innocent, law-abiding 
citizens and, therefore, need to be thoroughly vetted to ensure 
they are justified and the best solution for the problem.
    This leads me to a larger concern with the bill's 
authorization of the general APA rulemaking authority with 
credit and debt practices. Congress imposed the more rigorous 
Magnuson-Moss rulemaking procedures on the FTC for a reason. 
Providing a blank check for more rules is a change Congress 
should not contemplate lightly, particularly when the impact 
will be sweeping. The benefit must outweigh the costs.
    The two provisions which I am concerned with are the grants 
of civil penalty authority in cases of implied knowledge, and 
the broad State attorneys general enforcement provision. The 
FTC may currently seek civil penalties only in a case where the 
defendant was on notice that their conduct was wrongful. This 
bill would make people liable without their knowledge that they 
are engaged in wrongful conduct.
    My second concern is the breathtaking extent of the 
proposed State attorney general's enforcement power. It would 
apply to an FTC-enforced statute regulating consumer credit or 
debt without transparency or checks and balances on that power. 
Additionally, because most suits prosecuting unfair, deceptive 
acts are not based on hard and fast rules, this authority will 
yield many inconsistent interpretations and outcomes.
    The second bill we are examining today, H.R. 2190, would 
ban the use of mercury cell technology to produce chlorine and 
caustic soda. I think we need to look carefully not just at the 
bill itself, but also at the other legal and regulatory actions 
at the Federal level on this matter. This legislation only 
addresses four plants in the United States. We should neither 
be cavalier about the bill's impact because it affects four 
plants, nor should we fully ignore its effects on policy.
    For starters, the last Congress took great care to 
overwhelmingly pass bipartisan legislation that banned export 
of elemental mercury beginning in 2013. This law represents a 
collaborative effort among diverse stakeholders and created an 
orderly transition for management and storage of mercury held 
by both public and private interests. I fear the provisions of 
this bill will unnecessarily undo our thoughtful work and make 
mercury repositories of chlorine factories for several years.
    In addition, I am concerned that parts of the bill 
unnecessarily duplicate existing reporting requirements on 
these facilities. I have problems requiring reports for the 
sake of requiring them, and I hope that at least one of our 
witnesses can point out to me both the practical need for and 
the legal gap being plugged by each of these mandates.
    From a larger policy perspective, I am concerned that this 
bill continues the trend of selectively deciding which 
products, technologies, and substances are OK for the public to 
have, and, in my view, some of the proponents of this bill are 
inconsistently applying their concerns about mercury depending 
on the technology or the product.
    Let me give you an example. H.R. 2190 states that the U.S. 
should develop policies that reduce exposure to mercury, 
particularly the exposure of child-bearing-aged women and young 
children. Yet in the last Congress, the Democrat Majority 
insisted on legislation forcing daycare centers, hospitals, 
schools, and nursing homes to use mercury-laced compact 
fluorescent light bulbs. If we are serious about this issue, 
Congress cannot send mixed signals to the American public about 
these public health threats.
    I want to thank today all of our witnesses for being here, 
and I want to thank you, Mr. Chairman, and know that I am eager 
to work in a bipartisan manner to address the concerns on both 
sides of the aisle on these issues.
    Thank you very much.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the sponsor of one of the bills 
that we are considering today, H.R. 2190. My friend from 
Chicago Ms. Schakowsky is recognized for 2 minutes.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you for holding this hearing today. I 
congratulate you on this legislation.
    Right now I want to focus my remarks on H.R. 2190, the 
Mercury Pollution Reduction Act, a bill that protects the 
public health by ending the hazardous use of mercury cell 
technology at chlor-alkali plants in the United States.
    Mr. Chairman, the dangers associated with exposure to 
mercury are well documented, and you mentioned some. According 
to the EPA, mercury pollution can do irreparable damage to 
cognitive functioning in adults and to an infant's developing 
nervous system. It is so dangerous that the Federal Government 
has warned pregnant women and those who may become pregnant not 
to eat fish with high levels of mercury, such as swordfish, and 
to severely limit their consumption of others, such as tuna.
    While H.R. 2190 only addresses mercury pollution from four 
remaining chlor-alkali plants that use mercury, it must be 
emphasized that the impact these plants have on surrounding 
communities is severe, and, even worse, unnecessary. Unlike 
coal-fired power plants, there are readily available 
alternatives that could and should be used. In fact, converting 
from mercury cell technology to membrane cell has proven not 
only to be drastically better for the environment, but also 
wise business practice, saving companies millions of dollars in 
energy-efficiency costs.
    I introduced this legislation because I believe that 
Congress has a responsibility to minimize the public's exposure 
to mercury pollution, especially when cleaner, safer 
alternatives exist.
    And I want to thank Oceana, an environmental organization, 
for their tireless efforts, and the committee staff for their 
diligent work on this bill.
    I urge my colleagues to support its passage, and I yield 
back the balance of my time.
    Mr. Rush. The Chair now recognizes the gentleman from 
Georgia for 2 minutes.

  OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Dr. Gingrey. Mr. Chairman, thank you so much for calling 
this hearing today so we can hear testimony on H.R. 2190, the 
Mercury Pollution Reduction Act. It is my hope that moving 
forward on these two bills, including H.R. 2309, the Consumer 
Credit and Debt Protection Act, we can work in a bipartisan 
manner to accomplish our shared goal of increased and enhanced 
consumer protection.
    H.R. 2309 would expand the role of the Federal Trade 
Commission by changing the rulemaking authority that relates to 
consumer credit and debt from the established and rigorous 
Magnuson-Moss procedures to the authority under the 
administrative procedures at APA.
    Mr. Chairman, at a hearing on this topic on March the 24th, 
I urged my colleagues to take caution in making this change in 
rulemaking procedure. Magnuson-Moss was designed in the 1970s 
to be onerous so as to avoid whimsical changes in FTC 
regulations. While I think the end goal here is commendable, I 
still have concerns that a simple legislative change will open 
the door to future unraveling of the Magnuson-Moss procedures.
    H.R. 2190 bans the manufacturer of chlorine using the 
mercury cell process, including the export of any mercury, 
within 2 years. As a physician for nearly 30 years, I believe 
it is critically important that we take proactive steps to 
ensure the health and safety of our citizens.
    During the 110th Congress, President Bush signed into law 
Senate bill 906, the Mercury Export Ban of 2008, that was 
introduced by then-Senator, now President, of course, Barack 
Obama. This legislation specifically outlawed the export of 
elemental mercury starting in 2013, similar, very much, to what 
is proposed in 2190. Therefore, given the duplicative nature of 
H.R. 2190 in regard to at least that section, I am concerned 
that we would be stretching our Federal resources too thinly on 
this important matter if the bill is enacted.
    Mr. Chairman, on both bills before us today, I urge my 
colleagues to exercise due caution, to consider the possible 
unintended consequences that we always should.
    I do look forward to hearing from our two panels today on 
these issues.
    Mr. Rush. The Chair now recognizes the gentleman from 
Maryland Mr. Sarbanes for 2 minutes for the purposes of opening 
statement.

OPENING STATEMENT OF HON. JOHN P. SARBANES, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MARYLAND

    Mr. Sarbanes. Thank you, Mr. Chairman. I appreciate you 
calling a hearing on these two important bills.
    I want to congratulate Ms. Schakowsky for her efforts with 
respect to the Mercury Pollution Reduction Act. It sounds like 
it is a pretty focused measure to address what is a kind of 
loophole right now in terms of a major source of mercury 
pollution, and I hope we can move quickly forward on this.
    With respect to the Consumer Credit Debt and Protection 
Act, I participated in the hearing that you called previously. 
It was very eye-opening in viewing how this subprime culture 
that we addressed mostly in our discussions with respect to the 
housing sector has also infected auto financing and other 
sources of credit, and how these loopholes exist in a way that 
allows predators to enter that space. And so this proposes 
giving the FTC--which, of course, comes with an exclusive focus 
on consumer protection--a role in the designing of a new 
regulatory framework with respect to the financial services 
industry, and a very important role at that.
    One of the anxieties many of us have is that as we design 
that new framework, it will not be done in a strategic way. We 
will end up with loopholes in it that people can take advantage 
of. And I think having an agency at the table that has got this 
very keen focus on the consumer is part of making sure that 
that strategic framework is as robust as it can possibly be.
    So I thank you for calling the hearing so we can hear these 
proposals discussed.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes my friend from Georgia Mr. Barrow 
for 2 minutes for the purposes of an opening statement.

  OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Barrow. I thank the Chair.
    I am going to limit my remarks to H.R. 2190, the Mercury 
Pollution Reduction Act.
    I am in a tough spot today because while I recognize the 
environmental benefits of banning chlor-alkali mercury 
technology, I am one of the few Members of Congress who 
actually represents one of the facilities that still uses that 
technology. While I am willing to acknowledge it is a good 
thing there are only four of these plants left in the country, 
I have to be sensitive and ask my colleagues to be sensitive to 
the 150 jobs and the multimillion-dollar impact this plant 
brings to my district.
    My colleagues have done a good job of highlighting 
environmental and health reasons to move this bill. I think 
they are obvious and compelling. I ask my colleagues to also be 
sensitive to the economic impacts, as I think those arguments 
are also obvious and compelling.
    The question is, can we serve both purposes and find a 
productive solution for all involved? I think we can. I 
respectfully suggest the bill, as written--and considering time 
and financial pressures, it is going to be very hard for the 
affected companies to comply with except to shut them down. It 
is not my goal to shut down an employer in my district. I won't 
consider that a success.
    The ideal solution, in my mind, would be the plant which I 
represent have the opportunity and the ability to transition to 
the new technology and preserve the jobs there for a long time 
into the future. I hope that is the intention of the committee, 
and I look forward to working to find a solution that secures 
the jobs and protects the environment.
    Mr. Rush. The Chair now recognizes the gentlelady from 
California. Ms. Matsui is recognized for 2 minutes for the 
purposes of opening statement.

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. I want to thank you very much for calling 
today's hearing. I would also like to thank our panelists for 
sharing their expertise with us.
    In today's economic recession, many families in my home 
district of Sacramento are struggling to make ends meet. I have 
heard countless stories of people struggling to keep their 
homes, their jobs, and their way of life. Many of my 
constituents were victims of predatory lending and were steered 
into high-cost, bad loans. Now, many of these homeowners are 
seeking assistance in modifying their loans to more affordable 
terms, yet many of these individuals are now being tricked by 
scam artists posing as so-called ``foreclosure consultants'' to 
save their homes. These scams are costing thousands of dollars 
and represent false promises to struggling homeowners.
    During last week's debate on the mortgage reform bill, I 
offered an amendment that was included in the final bill that 
directs the GAO to conduct a study of the government's current 
efforts to combat foreclosure rescue scams. It is clear that 
consumers are not being properly protected from these shameful 
practices.
    It is also clear that we can do more to protect the 
American people from harmful exposure to mercury. Mercury is a 
known toxin, and we should do all in our power to ensure that 
it stays out of our newborns' bodies.
    I look forward to hearing from today's witnesses, 
particularly from Dr. Lynn Goldman, who is the principal 
investigator of the National Children's Study, and who is an 
expert on mercury exposure.
    I thank you, Mr. Chairman, for holding this important 
hearing today. I yield back the balance of my time.
    Mr. Rush. The Chair thanks the gentlelady.
    Now it is my honor and privilege to recognize this panel of 
experts that have taken time out from their busy schedules to 
participate in this hearing. They come from well-established 
institutions, and they are, indeed, highly esteemed individuals 
in their line of work.
    First of all, to my left is Ms. Eileen Harrington. Ms. 
Harrington has made a habit of coming before this committee, 
and you are always welcome. And she often appears before this 
subcommittee, and she is the Acting Director of the Bureau of 
Consumer Protection at the FTC.
    Next to Ms. Harrington is Ms. Kathleen Keest. She is the 
senior policy counsel for the Center for Responsible Lending.
    And our next witness and panelist is Mr. John Beisner. Mr. 
Beisner is the managing partner of the firm O'Meleveny & Myers. 
He is appearing on behalf of the U.S. Chamber of Commerce.
    I want you to know, again, that you are welcome to this 
committee. And we are looking forward to your testimony. And 
you can please begin your testimony with 5 minutes of opening 
statements.
    The Chair recognizes Ms. Harrington.

  STATEMENTS OF EILEEN HARRINGTON, ACTING DIRECTOR, BUREAU OF 
CONSUMER PROTECTION, FEDERAL TRADE COMMISSION; KATHLEEN KEEST, 
SENIOR POLICY COUNSEL, CENTER FOR RESPONSIBLE LENDING; AND JOHN 
BEISNER, MANAGING PARTNER, O'MELEVENY & MYERS, ON BEHALF OF THE 
                    U.S. CHAMBER OF COMMERCE

                 STATEMENT OF EILEEN HARRINGTON

    Ms. Harrington. Thank you, Chairman Rush.
    I am Eileen Harrington, the Director of the FTC's Bureau of 
Consumer Protection. I appreciate the opportunity to appear 
here today to discuss the Consumer Credit and Debt Protection 
Act and the FTC's role in protecting consumers of financial 
services. The Commission's views are set forth in the written 
testimony that we have submitted. My oral presentation and 
answers to your questions represent my own views.
    As we know, the current economic crisis continues to have a 
devastating effect on many consumers. Many are struggling to 
pay their bills, keep their homes, deal with abusive debt 
collectors, and maintain their credit ratings. Two months ago 
you asked the FTC to tell you what it has been doing to help 
consumers through this difficult time. We told you about how we 
have been using our tools, law enforcement, consumer education 
policy and research, to help protect consumers in financial 
distress from being taken advantage of by those who flout the 
law. When we came before you then, we recognized that we needed 
to do more, however, and we asked for your help.
    Your response, the Consumer Credit and Debt Protection Act, 
is directly on point. In particular, this bill would build on 
the new authority we obtained under the 2009 Omnibus 
Appropriations Act by enabling us to issue rules targeting the 
practices that caused the most harm to consumers in the broader 
credit and debt marketplace.
    Historically, the Commission has relied heavily on its law 
enforcement experience to inform its rulemakings undertaken 
under the Administrative Procedures Act with the express 
consent of Congress. This approach has served us well in the 
past, and will continue to do so here. Thus, in deciding which 
practices in the credit and debt market to target, we would 
rely on our casework to help identify any industrywide problems 
and pervasive consumer injury.
    The Consumer Credit and Debt Protection Act also would 
allow us to seek civil penalties against those who violate any 
such rules that the Commission issues in this area. This is 
significant because civil penalties deter would-be violators. 
The FTC strongly supports the enactment of this type of 
legislation.
    As you know, we are already using our new authority under 
the 2009 Omnibus Appropriations Act to develop new consumer 
protection regulations in the mortgage context. We expect these 
rules to address unfair and deceptive practices in mortgage 
lending, mortgage foreclosure rescue, mortgage loan 
modification, and mortgage servicing. The 2009 Omnibus 
Appropriations Act enhanced the Commission's ability to enforce 
these rules by allowing the FTC to obtain civil penalties 
against violators. Meanwhile, the Commission continues to 
vigorously enforce the FTC Act as well as other statutes and 
rules for which it has enforcement authority.
    In response to the current economic crisis, the FTC has 
intensified its focus on protecting consumers of financial 
services and has targeted particular illegal practices in 
mortgage advertising, lending and servicing. Let me give you 
two examples. This past Friday the Commission announced an 
enforcement action against Golden Empire Mortgage and its 
individual owner for alleged violations of the Equal Credit 
Opportunity Act and Regulation B. The Commission alleged that 
the defendants charged Hispanic consumers higher prices for 
mortgage loans than non-Hispanic white consumers. The FTC 
alleged that the credit characteristics or underwriting risk of 
the company's customers could not explain the differences in 
the prices charged.
    A second example. On April 6th, also since the last time we 
were here, the FTC joined with Treasury, HUD, the Department of 
Justice, and the Illinois attorney general to announce a 
coordinated crackdown on mortgage foreclosure rescue fraud. The 
Federal law enforcement component of that crackdown was done by 
the FTC.
    Although vigorous law enforcement is essential in providing 
more effective Federal oversight of the financial services 
sector, a broader legislative response may be appropriate here. 
Several bills have been introduced and proposals offered under 
which there would be some type of overall Federal regulator of 
financial services. There are differences in these bills and 
proposals to rationalize the oversight system, and there are 
numerous challenging issues that would have to be resolved to 
implement those concepts. Because of its unequaled 
comprehensive focus on consumer protection, its independence 
from providers of financial services, and its emphasis on 
vigorous law enforcement, we ask Congress to ensure that the 
FTC is considered as Congress moves forward in determining how 
to modify Federal consumer financial services. The Commission 
would be pleased to work with Congress and the subcommittee in 
developing and defining a new role for the FTC.
    Thank you for inviting the Commission to testify at this 
hearing. I would be pleased to answer any of your questions.
    Mr. Rush. Thank you.
    [The prepared statement of Ms. Harrington follows:]

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    Mr. Rush. Our next witness is Ms. Keest.
    Ms. Keest, you are recognized for 5 minutes for the 
purposes of opening statements.

                  STATEMENT OF KATHLEEN KEEST

    Ms. Keest. Thank you, Mr. Chairman, and thank you very much 
for inviting me to testify. In my remarks today, I am only 
going to focus, I think, on a couple of points, primarily the 
Magnuson-Moss rulemaking, and I may add a couple of remarks 
about the Attorney General's enforcement authority, as I used 
to be in the Attorney General's office myself. And I would 
refer the committee to my written testimony for the specifics.
    While we are not talking so much about mortgages today, I 
think since we are talking about consumer credit, we have an 
object lesson that we can learn from in what happened there. 
And the FTC's jurisdiction over consumer credit covers a lot of 
the same subject matter area that the Federal banking agencies 
did. And what we know is that from a regulatory perspective, 
that there are three tools that are needed to make sure that 
there are clear rules to the game, and that there is a referee 
on site to enforce those rules.
    We know, now, that the banking agencies, much to our 
dismay, didn't use any of them. The FTC, by contrast, really, 
it functionally only had one of those tools, and that was the 
tool that allows the referee to call a foul after it has 
already happened, and it is an important tool, but it is not 
sufficient.
    What are those three tools? One of them is to set the rules 
of the game that everybody has to play. And I am a strong 
believer in the fact that that is as important for ethical and 
honest business competition as it is for consumers. I do not 
believe it is a zero-sum game, and I think that has been part 
of the problem of thinking of it in that way.
    The second is the right to sort of keep an ongoing 
monitoring system where you can do prevention through 
monitoring. That is a tool that the banking industries have 
that the FTC doesn't, which leaves just the law enforcement, 
and that was the only tool the FTC had in practice. In theory, 
it had the rulemaking authority, but Magnuson-Moss, I 
understand--I am sorry Congressman Gingrey isn't here--I 
understand the purpose of it originally, but I can tell you 
that I have got gray hair now.
    The first year, my first year in practice, was when the 
last time the Magnuson-Moss rule was used by the FTC. The 
credit practices rule was started in 1975 when I was a brand 
new lawyer. That process took 10 years. I testified at one of 
the hearings; I was part of that two-book record that it took 
to get that rule in place. It was 10 years later when that rule 
finally went into effect. The amount of credit out there went 
from something like $190 billion to almost $500 billion in that 
time, and the market had already started to change.
    Now, that rule was very important, and it did a lot of 
things, but we were so far behind the eight ball by the time it 
happened--and in an agency that has got the breadth of 
jurisdiction this one does, devoting time and resources to a 
process that could take 10 years is a march down into a long, 
dark tunnel that they simply could not afford, and neither 
could consumers, because too much damage happens along that 
way.
    By contrast, the Federal banking agencies, once they got on 
the dime, they proposed their credit card rules. The OTS, the 
Federal Reserve Board and the NCUA proposed their credit card 
rules. It was proposed, there was input, there was a lot of 
discussion, and it was promulgated within less than a year; and 
now there is a year-and-a-half lead time for the issuers who 
are affected by that rule to gear up and do it, but they know 
what those rules are going to be, and they have got that time 
to do it.
    So I think the APA rulemaking is a critical, critical part 
of this.
    And I would just like to make a pitch for--Congressman, you 
mentioned sort of perhaps wanting to consider paydays along the 
way. In our testimony that we had suggested--that is, this 
credit practices rule, the last one that the FTC used, this 
Magnuson-Moss provision that had a delivery period that would 
make an elephant weep, it was a really good rule that took care 
of some of the most egregious abuses that were in the consumer 
credit market that day. It took care of the wage assignments 
that basically had people's paychecks going first to a creditor 
before it went to the groceries. It took care of the confession 
of judgment clauses that prevented people from raising a 
defense, which I can tell you as an old legal aid lawyer where 
a lot of people had them, and it took care of the in terrorem 
use of some of the tactics.
    My first client--the reason I spent 35 years doing this, it 
was my very first client who in my very first case, a loan 
company wanted to come in and clean out her house, the 
furniture in a 72-year-old widow's house, everything down to 
the two gray washtubs. And the credit practices rule got rid of 
that.
    And we have some segments of the market today that use 
practices which are a modern-day electronic equivalent of that, 
holding checks or the key to somebody's bank account. And they 
can do everything that credit practices rule took care of by 
the abuses with that check hold. And so we have suggested that 
now that we are approaching the silver anniversary of that 
credit practices rule, that the FTC review that to see if, 
perhaps, we can update that and take care of some of those 
abuses again.
    And if I still have a couple of minutes left.
    Mr. Rush. No. Sorry.
    [The prepared statement of Ms. Keest follows:]

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    Mr. Rush. The Chair now recognizes Mr. Beisner for 5 
minutes for his opening statement.

                   STATEMENT OF JOHN BEISNER

    Mr. Beisner. Good afternoon, Chairman Rush and Ranking 
Member Radanovich. I am John Beisner. I am a partner at 
O'Meleveny & Myers, and I am appearing on behalf of the Chamber 
of Commerce and the Chamber's Institute for Legal Reform.
    My focus today is a narrow one. It is on section 4 of the 
Consumer Credit and Debt Protection Act, which would expand the 
authority of the States attorneys general to enforce Federal 
credit laws. Under section 4, as I understand it, States would 
be empowered to bring civil lawsuits whenever they believe 
their residents are harmed by a violation of a regulation 
promulgated under the bill or any FTC regulation related to 
consumer credit or debt. This legislation is part of a recent 
trend to expand State AG authority to enforce Federal laws.
    Obviously, protecting consumers from unfair trade practices 
is an important legislative goal, but giving State AGs broader 
authority to bring civil lawsuits can create some potential for 
litigation abuse. The problem is that when State AGs are 
authorized to bring lawsuits, the State officials and their 
staffs may not be the ones who actually handle the litigation. 
Some officials like to hire private attorneys to handle such 
cases. Having private attorneys enforce Federal law can create 
some problems.
    First, when State AGs hire private attorneys, they 
frequently do so on a contingency fee basis. In other words, 
even though they are working for the States, the private 
lawyers are promised a percentage of whatever they win in 
court. That makes these contracts very attractive. The private 
attorneys get to go into court as a representative of the 
State, which gives them instant credibility with the courts; 
and if they win, they get to keep a substantial portion of the 
money. This is where things get troubling.
    Private attorneys are not bound by the same ethical rules 
as Federal enforcement officials. As a result, people make 
political contributions in the hopes of landing lucrative legal 
contracts with the States.
    Federal officials are subject to ethics rules that ensure 
that decisions to hire private attorneys are not based on 
political contributions. Federal officials must also follow 
Executive Order 13433, which limits the Federal Government's 
ability to hire private attorneys under contingent fee 
arrangements. But these laws do not apply when State AGs 
contract with private attorneys. The safeguards that protect 
the integrity of the Federal enforcement efforts presently do 
not apply to the State AGs, even though they may be enforcing 
Federal law.
    Now, I want to be very clear that the vast majority of 
State attorneys general exercise enforcement powers very 
responsibly, but there have been some troubling media reports 
of State officials handing over large cases to private lawyers 
who contributed to their campaigns.
    In Mississippi, Attorney General James Hood has been 
criticized for hiring friends and contributors on a contingency 
fee basis. In Pennsylvania, Governor Rendell faced criticism 
for hiring a campaign contributor to sue on behalf of the 
State; and Rhode Island State officials have been criticized 
for hiring a prominent contributor to State officials to lead 
the State's litigation against lead paint companies.
    A second problem with contingency fee arrangements is they 
can create an incentive for lawyers to pursue cases most likely 
to bring them the most money. But when it comes to enforcing 
public laws, the most lucrative cases may not be the most 
important. Public prosecutors must use their discretion every 
day to decide which cases they should pursue in the public 
interest, but when attorneys with their own financial interests 
are making that decision or participating in those decisions, 
public interest considerations may be ignored.
    A third problem with contingency fee arrangements in 
enforcement actions is that they can shortchange taxpayers. 
When government lawyers prevail in litigation, the State gets 
all the money. In the contingency fee arrangement, the private 
attorneys get a significant percentage, reducing the amount 
going to taxpayers.
    For these reasons, the Chamber respectfully suggests that 
in any legislation expanding State AG authority to enforce 
Federal laws, you should consider including safeguards to 
protect the public interests and guard against abuses. The 
first suggestion would be to require disclosure of private 
attorney retention agreements. When State officials hire 
private attorneys to enforce Federal law, they should disclose 
the arrangements to the U.S. Attorney General for publication 
in the Federal Register. Such transparency will help ensure 
that Federal laws are implemented consistently and fairly.
    Secondly, it is suggested that State officials be barred 
from rewarding large campaign contributors with potentially 
lucrative contracts to enforce Federal laws.
    Finally, it is suggested that the applicability of 
Executive Order 13433 be expanded. That order puts limitations 
on Federal officials from hiring private lawyers on a 
contingency fee basis. The same standard should apply to State 
officials enforcing Federal law. These safeguards would help 
ensure the transparent, proper use of authority to enforce 
Federal law in a manner wholly consistent with the goals of 
this legislation.
    I thank you for the opportunity to testify today, and I 
look forward to answering any questions you may have.
    [The prepared statement of Mr. Beisner follows:]

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    Mr. Rush. The Chair thanks the gentleman and all of the 
witnesses.
    The Chair recognizes himself for 5 minutes for the purposes 
of asking questions of these witnesses.
    In the subcommittee's last hearing on consumer credit 
issues, I asked the FTC Chairman, John Leibovitz, about the 
Commission's record in protecting consumers from unfair and 
deceptive practices in the past several years. I noted that the 
FTC arguably didn't do enough to stop the mortgage lending 
practices during the housing era or housing boom, I might add. 
The Chairman argued that the FTC argued that the FTC is 
``hamstrung'' by the burdensome rulemaking process under 
Magnuson-Moss, and he assured me that if Congress gave the FTC 
the authority to issue rules under the Standard Administrative 
Procedures Act, the FTC would indeed be more effective in this 
particular area. Today we are considering legislation that 
would give to FTC this authority that Chairman Leibovitz 
requested at one of our hearings.
    My question to Ms. Keest--and I would also like to get a 
response from Ms. Harrington--Ms. Keest, Congress has duly 
given the FTC streamlined rulemaking authority on a case-by-
case basis. We have taken another approach in this bill. The 
Chairman has requested we give the FTC broad APA authority to 
issue rulings on anything involving consumer credit or debt.
    My question is should we trust the FTC's discretion to 
essentially use this authority, or will we be better off 
sticking with direct rulemaking?
    Ms. Keest. I think it is extremely important to give them 
discretion for the simple reason that the velocity at which the 
market changes is far too fast to have to come back and make a 
record every single time.
    For example, the last time before Congress passed the 
H.R.--the predecessor of H.R. 72, 1728, last week, it had been 
15 years before Congress acted on consumer mortgage issues. And 
there is a lot that goes on, and there is a lot that the FTC 
has on its plate. There is a lot that Congress has on its 
plate. And in the meantime, the markets develop and move, and I 
don't really think it is feasible to wait for specific 
direction as every problem comes up one by one.
    Mr. Rush. Ms. Harrington, do you want to comment briefly on 
this?
    Ms. Harrington. You can trust us.
    And let me just tell you, let me give you some examples of 
how we used the Administrative Procedures Act rulemaking that 
the Congress has given us on a case-by-case basis.
    In the area of telemarketing, the Commission issued the 
rules that the statute required, and then it went back several 
years later and did the ``do not call'' amendment. It took us 
less than a year to do that, and I was managing that project. 
And at the same time I was managing that project, I was 
managing amendments to the FTC's franchise rule, a very 
important rule that protects investors in franchises by 
requiring that they be given itemized disclosure statements.
    It took us 8 years to do that amendment. It took us less 
than a year to create ``do not call.'' And that is the way that 
we have used our discretionary authority under the 
Administrative Procedures Act rulemaking that we have been 
given on a case-by-case basis.
    Mr. Rush. I know that payday loans play a necessary role in 
the economy. Payday loans are available to poor people when no 
one else will lend to them. This is especially true of the type 
of short-term loans that poor consumers need to get by in 
emergencies. And I don't like the fact that people have to take 
out payday loans, but it is the reality of where I come from. I 
also recognize that there are some extreme and multiple abuses 
in the industry, and reform is needed. And I have been a long-
time champion in the Congress of cracking down on this abusive 
payday lending.
    My question is, how do we regulate the payday loan industry 
without destroying it?
    Ms. Keest. I think that is one of the areas that we can 
take an incremental approach on. There is a lot of controversy, 
and there is a lot of experimentation going on with States that 
have regulated by different means, ranging from do whatever you 
want to prohibition and everything in between. And as time 
comes in, we will have a better sense of what works and what 
doesn't work.
    And in the meantime, I think that the proposal or that the 
recommendation that we have made to look at one tactic which I 
think is kind of the--it is sort of one of the tools that 
really makes things not work so well for consumers is the 
check-hold system. So I would very much welcome--and we did, in 
fact, recommend that that be one thing that the FTC look at. 
And if we could start incrementally there, then we can kind of 
work and see what is happening and see what is working out in 
the States.
    Mr. Rush. The Chair now recognizes the Ranking Member Mr. 
Radanovich for 5 minutes.
    Mr. Radanovich. Mr. Chairman, I did want to have a 
discussion on the States and the attorney generals on the 
enforcement of this.
    Ms. Harrington, welcome to the committee.
    Does the Commission take a position on the State attorney 
general enforcement of these laws?
    Ms. Harrington. The Commission has favored the scheme under 
which Congress has enacted statutes giving the FTC rulemaking 
authority and providing the States with enforcement authority 
in Federal courts of the rules that are promulgated by the FTC. 
We are very supportive of that arrangement.
    Mr. Radanovich. Do you worry about inconsistencies and 
confusion concerning a broad array of industries if the 
rulemaking authorities are given the authority for the attorney 
generals to weigh in?
    Ms. Harrington. The protection that the Congress has put 
into the statutes to make sure that we can guard against that 
is the provision that the States notify the FTC before filing 
so that we have an opportunity to talk with them and to take a 
look at complaints before they are filed. And the FTC also has 
the authority, under the statutory provisions that have been 
used, to intervene in actions in the event that there is some 
concerns about inconsistency.
    So I think that the Congress has fairly anticipated that. 
And what we have seen now in probably a half a dozen or more 
instances in which the Congress has given the FTC specific APA 
rulemaking authority is an absence of that kind of 
inconsistency. This has worked very well.
    Mr. Radanovich. Now, in your opinion, if this bill does 
include giving State AGs the enforcement authority, can you 
define how it might be given, as narrowly as possible?
    Ms. Harrington. If the States are given the authority to 
enforce rules issued by the FTC under the statute, then that 
would be their authority. It would be very much like 
telemarketing, 900 numbers, certain other credit rules that the 
States are able to enforce.
    Mr. Radanovich. The legislation contains a provision for 
any State AG to notify the Commission 60 days in advance of 
filing an action, if feasible. Otherwise, it can proceed 
without notifying the Commission. Is that a concern for you?
    Ms. Harrington. What I would be concerned about is 60 days 
is probably way too soon. We do these cases, the States do 
these cases. Sometimes it takes fewer than 60 days to work up 
the whole case, work up the complaint and be ready to file. So 
I think that 60 days is probably unreasonable. And several of 
the other statutes provide for notice if feasible, or there is 
some term like that.
    We haven't had a problem. We work very closely with the 
States in consumer protection. We have different working groups 
on different subject areas: telemarketing, payment systems, 
whatever, their monthly phone calls. Everybody knows what 
everybody is doing here. There aren't many surprises in this 
area because there is an awful lot of work to do in consumer 
protection, and there aren't that many resources at the Federal 
and the State level to do it with. So we need to work closely 
together, and the left hand needs to know what the right hand 
is doing.
    Mr. Radanovich. Thank you.
    Mr. Beisner, welcome to the committee. I do have a question 
regarding the State AGs as well.
    Were there no rules promulgated, we could have 52 
interpretations of what is fair and deceptive, and that, of 
course, would be by 51 attorneys general and the FTC. What is 
the likelihood of inconsistent interpretation of the FTC's 
standard that it would create confusion and concern in a broad 
array of industries, and how could this impact industry at 
large?
    Mr. Beisner. I should make clear at the outset of 
responding to the question that the Chamber has no position on 
the delegation of authority to the AGs to enforce.
    But I think there is some possibility of inconsistency just 
in the decisionmaking about where to enforce the priorities 
that would be given to certain areas, enforcement by certain 
State attorneys general. So I think there is some possibility 
of inconsistency on that just in the enforcement decisions that 
would be made when you have got that many people making 
decisions about where the enforcement resources should be 
devoted.
    Mr. Radanovich. How do we make sure that the primacy of 
FTC's interpretations of the standard? How do we ensure that 
the FTC has primacy?
    Mr. Beisner. I think that a methodology for doing that is 
through the agency itself making clear its interpretations of 
what rules it wishes to enforce on that, and to ensure that the 
notice provisions in here and so on are such that the agency 
does have the opportunity to participate in making decisions 
about enforcement.
    Mr. Radanovich. Thank you, Mr. Chairman.
    Mr. Rush. The Chair now recognizes the gentlelady from 
California, the wonderful coast of California, Ms. Matsui for 5 
minutes.
    Ms. Matsui. Thank you, Mr. Chairman.
    As you know, a government effort has been initiated by the 
Treasury Department, HUD, Justice Department, and the FTC to 
combat mortgage foreclosure rescue scams and loan modification 
fraud. As I mentioned in my opening statement, during debate on 
mortgage reform on the Anti-Predatory Lending Act, I offered an 
amendment that was included in the final bill to direct the GAO 
to evaluate ongoing government actions to combat foreclosure 
rescue fraud and to educate consumers about the risk of these 
scams.
    In addition, I want to thank Chairman Rush for joining me 
in sending a letter today to the GAO Comptroller General to 
urge him to begin reviewing the administration's efforts to 
combat foreclosure rescue scams.
    Mr. Chairman, I ask unanimous consent to enter this letter 
into the record.
    Mr. Rush. Hearing no objection, so ordered.
    [The information follows:]

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    Ms. Matsui. Ms. Keest, your organization prides itself on 
preventing mortgage fraud and providing consumer protection for 
the consumer in the marketplace. How big a threat are these 
foreclosure scams to the American homeowner today?
    Ms. Keest. They are a huge threat.
    First, I want to thank you, Congresswoman Matsui, for your 
leadership on the issue of foreclosures.
    It is a chronic problem. And every time the foreclosure 
rates rise, they come out of the woodwork. And the best way to 
get rid of them is to bring the foreclosure rates down. So 
hopefully we can do that. But that being said, they are going 
to be a presence.
    And so I think it is one of the things that the State AGs 
and the States and the FTC I know have all taken to heart and 
put it at the top of the priority list, because right now that 
is the biggest equity-skimming scam out in there. And so it is 
number one right now, I would say.
    Ms. Matsui. How would the U.S. actually assess the current 
efforts of the government to educate and to get the word out to 
the homeowners of these scams?
    Ms. Keest. I will say that every time I go on a government 
Web site, I see it on its front page, so I recognize that they 
are really trying to do things. I don't know how many 
homeowners look to the Web pages of government agencies first 
when they are faced with that, so I am not sure what the 
outcomes would be. I would hope that one of the things that GAO 
would do would be to look at and evaluate those kinds of 
efforts.
    Ms. Matsui. Is there a particular area that you believe 
that the government or FTC should focus on to combat these 
scams during its rulemaking process?
    Ms. Keest. I think I would have to say part of the--one of 
the things that they need to do is to make sure that there is 
some substantive practices that are prohibited as opposed to 
dealing with disclosures, because the disclosures pretty much 
can always be worked around. So I would hope they would take 
stock of what some of the most common techniques are, the deed 
theft issues, that sort of thing, and consider substantively 
declaring them to be unfair, which is going to take care of the 
inconsistent enforcement problems and level the playing field 
for everybody.
    Ms. Matsui. That said, I would like to hear more on the 
government's efforts to prevent foreclosure rescue and loan 
modification scams.
    What specific role, Ms. Harrington, does the FTC play in 
joining with other government agencies in combating foreclosure 
rescue scams?
    Ms. Harrington. Multiple roles.
    First of all, the FTC operates the Consumer Complaint 
Center. It is Consumer Response Center and Consumer Sentinel, 
which is the complaint database. So we are the place where 
people complain to. And if you go to the Treasury Web site, 
makinghomeaffordable.gov, and need to make a complaint, that 
will come over to the FTC. So we collect the complaints, number 
one.
    Number two, we do law enforcement work. In the last year, 
we have brought 11 cases against mortgage foreclosure rescue 
scams, and we have more in our pipeline.
    Number three, we do consumer education. We do it in our Web 
site, but also there are a lot of other ways. In the initiative 
that we announced on April 6th, we announced that we had 
recruited and enlisted some of the largest mortgage servicers, 
including Chase, and, I think, Bank of America, and Wells Fargo 
and others, to put right in the delinquency notices that go out 
to homeowners when they are first behind on their mortgage 
payment a warning sheet from us about mortgage foreclosure 
rescue scams and how to spot them.
    We also made audio recordings, and we gave them to all of 
the mortgage-servicing companies to play when people call them 
and are put on hold. We have really--and they are good. They 
are not like--they are interesting. But they warn people about 
what to watch out for.
    So we are doing education. We are trying to reach consumers 
who are most at risk right at the point of where they are at 
risk.
    And we continue to work. For example, FinCEN, which is the 
Department of Treasury data center where banks and financial 
institutions make suspicious activity reports to, the FinCEN 
people are working with us. They have created a special team of 
analysts to analyze suspicious activity reports concerning 
entities that we are watching as possible parties to mortgage 
foreclosure fraud. So there is a lot of criminal/civil/cross-
government cooperation on this issue, better than I have ever 
seen.
    Ms. Matsui. Thank you very much.
    Mr. Rush. The Chair now recognizes the Ranking Member of 
the full committee Mr. Barton of Texas for 5 minutes--or for 2 
minutes.
    Mr. Barton. I won't take the 5 minutes.
    I have looked--of course, this panel is talking about the 
Consumer Credit and Debt Protection Act. The next panel will 
talk about the mercury bill. I think it is a good thing to have 
these legislative hearings.
    I can tell you, Mr. Chairman, that the Republicans on the 
subcommittee are on board on moving these bills, but we 
certainly think we should take a look at them.
    My only question on the Consumer Credit and Debt Protection 
Act would be to Mr. Beisner. Your testimony talks about the 
potential abuse of giving the attorneys general the authority 
to enforce a Federal statute. Is there anything you would care 
to elaborate about that?
    Mr. Beisner. I think fundamentally the view that we are 
trying to express is that when Federal enforcement officials go 
about enforcing a law they are subject to a series of ethical 
requirements in the way they go about doing that; and what is 
being suggested here is that if that authority to enforce 
Federal law is being given to State Attorneys General there 
ought to be a similar set of safeguards with respect to 
enforcement of that law. Not interfering at all with whatever 
decisions may be made about enforcing State laws, but the 
Federal principles ought to be the same so that there can be 
good efforts made to ensure the integrity of that law 
enforcement process. And it is just to ensure that that 
integrity will be there.
    I don't mean, as I said earlier, to suggest that there is 
any suggestion that the vast majority of the State Attorneys 
General are going off on the wrong track with these enforcement 
decisions. But when you give, as some of them do--certainly not 
all of them, but some of them do give that enforcement 
authority to private attorneys. There is a special need to 
ensure that ethical considerations are being observed in that 
circumstance. Because they are not government officials, and 
they are not subject to the same requirements as a Federal 
office of enforcing the law is.
    Mr. Barton. Mr. Chairman, that is my only question. We 
certainly don't oppose the intent of H.R. 2309. If staff and 
members could work on some of the concerns that have just been 
raised, I think we could probably reach an accommodation.
    But, with that, I yield back.
    Mr. Rush. The Chair thanks the Ranking Member, and the 
Chair would like to emphasize it is the Chair's intention to 
work with the Republicans so that we can come up with a 
bipartisan bill. So I think there is a lot of--if we all say--
--
    The Chair now recognizes the gentlelady from Illinois, Ms. 
Schakowsky, for 5 minutes--or 2 minutes, rather--5 minutes, 5 
minutes for purposes of questioning the witnesses.
    Ms. Schakowsky. Thank you, Mr. Chairman.
    I am wondering--and maybe you said this already. I am 
sorry. I had to leave. If you could walk us through how a 
single rulemaking under Magnuson-Moss procedures could take 10 
years and how the new procedures then would make the agency 
more effective in protecting consumers.
    Ms. Harrington. Certainly. There are a variety of mandatory 
provisions in Magnuson-Moss rulemaking that aren't found in 
Administrative Procedures Act rulemaking. For a Magnuson-Moss 
rulemaking, there must be an advance notice of proposed 
rulemaking. Under APA 553 rulemaking, that is not required. The 
NPR not only must be issued but it must address certain 
matters, and it must be submitted to Congress in advance so 
that the Congress--and the Congress can essentially veto the 
rulemaking. That is not true with Administrative Procedures Act 
rulemaking.
    At the notice of proposed rulemaking stage there are also 
very significant differences. Under Magnuson-Moss----
    Ms. Schakowsky. Excuse me. Did you already do this for the 
committee?
    Ms. Harrington. No.
    The proposed rule must be based on a Commission 
determination that the practice is to be deemed unfair and 
deceptive are prevalent. That is, if cease and desist has been 
issued against an act or practice or other information 
indicates a widespread pattern. There is a requirement of a 
showing of prevalence before the notice of proposed rulemaking 
can go or has to be included with a notice of proposed 
rulemaking. There are no findings of that type required under 
the Administrative Procedures Act before an NPR may be issued.
    There is also a requirement that the Notice of Proposed 
Rulemaking be submitted to Congress 30 days before it is 
published in the Federal Register. There is no similar 
requirement under the Administrative Procedures Act.
    There is a requirement under Magnuson-Moss for a public 
comment period. That is not always required under APA 
rulemaking. Generally, it is not a public comment period under 
an APA rulemaking when there is some sort of emergency rule 
that an agency is issuing.
    There are express ex parte restrictions under Magnuson-Moss 
rulemaking. There aren't under the Administrative Procedures 
Act. Although I can tell you as a matter of practice at the FTC 
when we do APA rulemaking in the notice, we include ex parte 
restrictions. So that is pretty much the same.
    OK, here is where it really gets bogged down. Under 
Magnuson-Moss, there has to be an opportunity for a public oral 
hearing. And if a hearing is requested by anyone--anyone can 
request a hearing in a Magnuson-Moss rulemaking--then there has 
to be a presiding officer appointed. And there has to be a 
supplementary NPR published before any hearing that outlines 
the hearing issues which may lead to addition or deletion of 
issues based on public comment to the notice of the hearing.
    Then there is a process that is required for the 
identification of interested parties and their representatives 
to attend this hearing. Interested parties have to be given the 
opportunity to do direct and cross examination of other 
interested parties. So in some of the rulemakings, for example, 
the one that Ms. Keest mentioned that went on for 10 years, 
interests that did not want this rule to be issued engaged in 
perpetual rounds of examination and cross examination.
    Then there is a requirement that all of this be 
prescribed--transcribed verbatim. And just getting the 
stenographer to transcribe, you know, days and weeks and months 
of Kathleen cross examining Eileen and Eileen cross examining 
Kathleen, this is what is required, that takes time.
    Then the staff has to issue a staff report at the end of 
all of these hearings, and the presiding officer has to issue a 
recommendation or a decision. And then there is a public 
comment period required on all of this. That is just at the NPR 
stage.
    Under the Administrative Procedures Act, generally comments 
are submitted in writing. There is no requirement for a public 
hearing. At the FTC when we do APA rulemaking, we always do 
public workshops. We want to be very transparent. But it 
doesn't take very long.
    And then at the final rule stage for a Magnuson-Moss rule 
there has to be a statement of basis and purpose issued to 
accompany the rule; and it must state the prevalence of acts or 
practices that are treated by the rule, the manner and context 
in which they are unfair or deceptive and the economic effect 
of the rule, taking into account small businesses and 
consumers.
    And specifically on the economic analysis there has to be a 
cost-benefit analysis of each of the rules provisions. The 
statement of basis and purpose needs to address all of the 
comments and explain why the Commission did not adopt any 
particular--I see you looking at this and I am going on and on. 
And this is just describing it. You know, living it and doing 
it takes 10 years.
    The Administrative Procedures Act, at the conclusion of the 
comment period, a rule can be issued. It needs to contain a 
concise and general statement of basis and purpose, not this 
really detailed.
    And then, finally, the standard for judicial review is 
different.
    Ms. Schakowsky. I know the chairman is giving me extra 
time, but the time is up. I see even just by how long it takes 
to explain it how it is. But I am really encouraged by the 
notion that we can reach some agreement here, Mr. Chairman; and 
I really appreciate that explanation. Thank you.
    Mr. Rush. The Chair thanks the gentlelady.
    The Chair really thanks these witnesses. You have been 
extraordinary in your sharing with the members of the 
subcommittee your thoughts, and they are really going to be 
taken into much great consideration as we proceed. I just again 
want to thank you for taking the time off of your schedule, and 
you will be contacted for further input as we proceed.
    Let me just ask, if you would, we will keep the record open 
for 72 hours, and so within the 72-hour period you may or may 
not be getting written questions from members of the 
subcommittee, those who are present and those who are not 
present. And if you would be really timely in your responses 
that certainly would be a benefit to the subcommittee.
    Thank you very much, and we will dismiss the first panel. 
Thank you so much. It was good. In a respectful manner. Thank 
you so much.
    Mr. Radanovich. Mr. Chairman.
    Mr. Rush. The Chair recognizes Mr. Radanovich. 
    Mr. Radanovich. Thank you, Mr. Chairman.
    I request unanimous consent that three items be included in 
the record. That would be a statement of the American Financial 
Services Association, the National Automobile Dealers 
Association, and the Florida Attorney General Bill McCollum.
    Mr. Rush. Hearing no objection so ordered.
    Mr. Radanovich. Thank you, Mr. Chairman.
    [The information follows:]

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    Mr. Rush. The Chair now calls the second panel, panel 
number II.
    The Chair wants to welcome this distinguished panel of 
experts who are here to provide input and testify on the bill, 
H.R. 2190, the Mercury Pollution Reduction Act; and I will 
introduce the panel starting from my left to my right.
    First of all, I want to make sure that everybody recognizes 
Ms. Catherine O'Neill. She is an Associate Professor of Law in 
the Seattle University School of Law.
    Next to Ms. O'Neill is Ms. Lynn Goldman, who is a medical 
doctor.
    Dr. Goldman is a Professor at the Johns Hopkins School of 
Public Health.
    And seated next to Ms. Goldman is Mr. Richard Jackson. He 
is the Executive Vice President of Operations for ASHTA, A-S-H-
T-A, Chemicals.
    Again, I want to welcome the witnesses. I want to thank you 
for taking the time off of your busy schedules to share with 
the subcommittee today.

 STATEMENTS OF CATHERINE O'NEILL, ASSOCIATE PROFESSOR OF LAW, 
 SEATTLE UNIVERSITY SCHOOL OF LAW, MEMBER SCHOLAR, CENTER FOR 
  PROGRESSIVE REFORM; LYNN GOLDMAN, M.D., M.P.H., PROFESSOR, 
JOHNS HOPKINS SCHOOL OF PUBLIC HEALTH, PRINCIPAL INVESTIGATOR, 
 JOHNS HOPKINS NATIONAL CHILDREN'S STUDY (FORMER EPA ASSISTANT 
ADMINISTRATOR FOR PREVENTION, PESTICIDES, AND TOXIC SUBSTANCES, 
  ADMINISTRATION OF PRESIDENT WILLIAM JEFFERSON CLINTON); AND 
RICHARD JACKSON, EXECUTIVE VICE PRESIDENT OF OPERATIONS, ASHTA 
                         CHEMICALS INC.

    Mr. Rush. We will begin by testimony from Ms. O'Neill.
    Ms. O'Neill, we ask that you pull the mike close to you, 
that you turn it on, and that you restrict your comments, 
please, to 5 minutes. Thank you and welcome.

                 STATEMENT OF CATHERINE O'NEILL

    Ms. O'Neill. Thank you, Mr. Chairman and members of the 
subcommittee.
    My testimony makes four points today. First, mercury 
contamination poses a grave threat to the neurological health 
of children in the United States. The danger for mercury 
pollution is particularly acute for groups that rely heavily on 
fish as a food source and so raises environmental justice 
concerns.
    Second, the chlor-alkali industry presents an easy case for 
eliminating this toxic pollutant. One simply doesn't need 
mercury to produce chlorine and caustic soda. In fact, 
alternative technologies that don't use any mercury at all have 
been used by the industry for 30 years. Yet four plants in the 
U.S. still refuse to update the processes.
    Third, the cost of delaying action on these outmoded plants 
are large in economic terms and unconscionable in human terms. 
For each year of delay, another cohort of children will be born 
with neurological damage due to mercury contamination. This 
damage is irreversible. While chlor-alkaliplants contribute 
only a portion of the mercury releases, it is a portion that is 
entirely preventible.
    Fourth, H.R. 2190 ensures the long-term viability of the 
chlor-alkali plants in the communities they support. Facilities 
that convert to the newer, more efficient mercury free 
technology are likely to remain competitive and provide jobs 
for years to come.
    We have long known that mercury is a potent neurotoxin 
threatening those exposed in utero and during childhood to even 
very small amounts of methylmercury. We have also come to 
appreciate that the harms of mercury contamination aren't 
distributed equally. Rather, they are borne disproportionately 
by groups that rely heavily on fish, including Native 
Americans, African Americans, other communities of color and 
low-income fishers.
    It is not acceptable simply to tell women and children to 
stop eating fish for several decades of their lives, yet that 
is basically the regulatory strategy we are using. Tennessee, 
for example, has recently issued such an advisory for the 
stretch of the Hiwassee River adjacent to the Olin chlor-alkali 
plant there, warning women and children to eat no fish from the 
river due to mercury.
    The good news is that mercury releases from the chlor-
alkali industry at least are entirely unnecessary. The industry 
developed alternative mercury free technologies years ago.
    The phaseout called for by H.R. 2190 very sensibly 
capitalizes on this opportunity to eliminate thousands of 
pounds of mercury releases each year, while leaving intact the 
industry's ability to bring its products to market. Even if, as 
the industry suggests, the plants that currently use mercury 
can reduce some fraction of their emissions, the point remains 
that no mercury releases are necessary for this industry. Given 
mercury's potency, even a tiny amount can be harmful. An oft-
quoted illustration is that it takes just a teaspoon of mercury 
to contaminate a 25-acre lake. We should therefore be looking 
for every opportunity to eliminate mercury releases.
    An additional advantage of the newer mercury free 
technologies is that they are as much as 37 percent more energy 
efficient. While it might seem tempting simply to wait for the 
chlor-alkali industry to convert to these more efficient 
processes of its own accord, that would be a mistake.
    The cost of delaying action on these outmoded plants are 
not trivial. For each year of delay, another cohort of children 
will be born with neurological damage. Researchers have 
estimated that, in fact, as many as 630,000 children are born 
each year with neurological damage caused by anthropogenic 
sources of mercury. This damage will affect the intelligence 
and life prospects of these children for their entire lives. It 
is unacceptable to stand by for even a few years and permit 
this harm to more children for what amounts to the chlor-alkali 
industry's convenience.
    Finally, H.R. 2190 takes a long-term perspective on the 
viability of the chlor-alkali facilities in the communities 
they support. Evidence suggests that plants that use mercury 
cell technology merely be able to sustain operations for a few 
more years. Plants that have controverted to the more efficient 
membrane health technology, by contrast, are likely to be 
remain competitive and provide jobs for decades.
    In addition, H.R. 2190 functions to stimulate the new jobs 
required for the conversion. Recent chlor-alkali plant 
conversions have created some 250 such jobs for architects, 
designers, plumbers, electricians, and mechanics.
    In sum, H.R. 2190 overcomes our current myopia to ensure 
the environmental health and economic well-being for all those 
affected for the long haul.
    Thank you, and I welcome any questions.
    Mr. Rush. The Chair thanks Ms. O'Neill.
    [The prepared statement of Ms. O'Neill follows:]

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    Mr. Rush. The Chair recognizes Ms. Goldman for 5 minutes.

            STATEMENT OF LYNN GOLDMAN, M.D., M.P.H.

    Dr. Goldman. Thank you very much Mr. Rush, and also thank 
you to Mr. Radanovich for the opportunity to testify before you 
today about H.R. 2190.
    My name is Lynn Goldman, and I am a pediatrician and 
environmental health scientist and a professor at the Johns 
Hopkins School of Public Health who formerly served at the U.S. 
EPA as Assistant Administrator for the Office of Prevention, 
Pesticides, and Toxic Substances. And I have done research on 
mercury and its health effects on children. These comments that 
I have represent my point of view and not any point of view of 
Hopkins or any other organization I have ever been associated 
with.
    As you know very well, mercury is a toxic metal; and it 
exerts its toxicity on children through formation of 
methylmercury in water. And this transformation is almost 
inevitable. When there is release of mercury into the 
environment, unfortunately, that mercury then contaminates 
fish.
    There has been a lot of research that has demonstrated the 
toxic effects of mercury on the health of children, especially 
with in utero exposure; and, in fact, in the year 2000 the 
National Academies of Sciences released a report called 
Toxicological Effects of Methylmercury that not only documented 
these effects but also recommended a limit on exposure, that 
is, only 0.1 microgram per kilogram of body weight per day. Or 
if you had a 22-pound child we are talking about only 35 
billionths of an ounce each day that is allowable. So you can 
understand why even what might appear to be small releases of 
mercury can amount to quite a bit when it comes to toxicity.
    As has already been mentioned, EPA has estimated that 
630,000 children every year are born with mercury levels in 
their blood that are above this. And in fact in my own research 
at Hopkins we can validate this with children in Baltimore. 
They are born with too much mercury in their blood.
    In the past, there used to be controversy about this. There 
was a time when we thought, well, some studies showed the 
effects of mercury and others did not. But even studies that in 
the past appeared to be negative have now shown to be positive. 
Because what happened is that the benefits from eating fish can 
blur the effects of mercury.
    So very, very tedious and careful methods have been needed 
in order to show that, despite the benefits of fish eating, 
that mercury itself is hazardous. In fact, over the last few 
years after the publication of the National Academy study, we 
have three new studies--one in Oswego, New York; one in New 
York City after the World Trade Center; and one in Boston--that 
all show these effects. I don't think that the effects are at 
all disputable in terms of the neurotoxicity of mercury on 
babies.
    So what do we do? To manage the risk, we tell women of 
childbearing age to eat less fish, even though we know that 
there are actually benefits of eating fish. Well, then we can 
say, only eat the fish that have lower levels of mercury. But 
to do that we need to keep the mercury out of the environment. 
Because we have the threat of not having fish that women will 
find safe to eat if we keep polluting the environment with 
mercury. This is a very important issue. It must be addressed.
    We know that the ``mercury cell'' chlor-alkali 
manufacturing process is not an essential use of mercury. We 
know that Japan has phased this out. We know that Europe has 
phased this out. We know that we have almost succeeded through 
voluntary means of phasing this out in the United States. But, 
unfortunately, minus a mandate, we are not going to get to zero 
with this issue. We have found that there continue to be a 
handful of companies that use the mercury cell process and even 
though their production is less than 5 percent of the total 
production of chlorine and of caustic soda production that it 
continues.
    What is the problem with that?
    Well, first, it creates the demand for mercury, which means 
that there is continued upstream pollution of mercury from 
mining, from manufacturing of the mercury.
    Second, there are then continued releases of mercury so 
that there are downstream releases either through fugitive 
emissions from these plants and perhaps in the bodies of the 
workers in these plants, certainly demonstrated around the 
environment of these plants, and even in the product that is 
coming from these plants there are minute amounts of mercury.
    So, in conclusion, elimination of mercury cell manufacture 
for chlorine and caustic soda will reduce the U.S. emissions of 
mercury. It also will contribute to our efforts to reduce 
mercury pollution globally. And in my experience with this 
issue we have too long taken positions that would say, on the 
one hand, let's not take care of this problem in the U.S. until 
they take care of it globally and then, on the other hand, for 
the current administration walking into global negotiations and 
saying we are not going to take care of it globally because it 
is basically a domestic problem.
    We need to attack this problem on both fronts, and I do 
urge support of H.R. 2190. It is in the best interest of our 
children. Thank you.
    Mr. Rush. Thank you very much, Dr. Goldman.
    [The prepared statement of Dr. Goldman follows:]

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    Mr. Rush. Our final witness is Mr. Jackson.
    Mr. Jackson, you are recognized for 5 minutes.

                  STATEMENT OF RICHARD JACKSON

    Mr. Jackson. Good afternoon, Mr. Chairman and members of 
the subcommittee. Thank you for the opportunity to testify 
before you today concerning H.R. 2190, the Mercury Pollution 
Reduction Act of 2009.
    My name is Richard Jackson. I am the Vice President of 
Operations at ASHTA Chemicals in Ashtabula, Ohio. My testimony 
is on behalf of ASHTA and is intended to address the impact 
that this bill may have on our company and on the environment. 
While others in the chlor-alkali industry may be impacted by 
this proposed legislation, we do not intend to speak for them.
    ASHTA is a privately held company with offices and its only 
production facility in Ashtabula County, Ohio. Our plant has 
been in operation since 1964. We currently employ nearly 100 
people, with an annual payroll of approximately $7 million in 
an economically depressed part of northeast Ohio. We support 
local businesses and contractors with close to $2 million in 
annual capital investments and over $3 million in annual 
expenditures on maintenance, operating supplies, and contracted 
services.
    While domestic mercury cell production may represent less 
than 5 percent of all chlorine caustic soda in the United 
States, production of chlorine and potassium hydroxide, or KOH, 
using the same mercury cell process represents about 50 percent 
of the total production in the United States; and it represents 
100 percent of our production. KOH is used as the principal 
source of alkalinity in many critical operations, including 
cleaning and disinfecting water treatment, liquid fertilizers, 
alkaline batteries, photo processing, herbicides, and runway 
de-icers, to name just a few. In many of these applications, 
there is simply no substitute for KOH.
    In our process, mercury is contained in closed electrolytic 
cells where it serves as a flowing cathode to extract potassium 
from potassium chloride. Strict safety procedures and process 
controls are followed to prevent workplace exposure and to 
minimize mercury emissions. Today, less than 1/10th of 1 
percent of total global mercury emissions comes from the U.S. 
chlor-alkali industry; and less than 1/10,000th of 1 percent 
comes from ASHTA, as illustrated in Exhibit 1 of our testimony.
    ASHTA does not propose to challenge the bill's findings 
regarding the effects of mercury on human health in the 
environment. However, ASHTA strongly disagrees with the 
findings that mercury cell production is obsolete and, most 
importantly, that the elimination of mercury cell production by 
ASHTA will materially impact the presence of mercury in the 
environment.
    ASHTA has an excellent environmental health and safety 
record and a long history of working in cooperation with 
regulatory agencies such as the United States EPA and the Ohio 
EPA. We are and have consistently operated within our permits 
and in compliance with the regulations that govern our site.
    ASHTA has also aggressively improved our environmental 
performance by making substantial financial investments to 
minimize mercury in water, air, and waste. We have eliminated 
the release of storm water and process water from our process 
areas in support of the Great Lakes Water Quality Initiative, 
and we achieved early compliance with the Maximum Achievable 
Control Technology, or MACT, under the mercury cell chlor-
alkali NESHAP regulations.
    ASHTA has also completed additional environmental projects 
to minimize fugitive emissions from our chlor-alkali process 
and work areas. This resulted in a significant reduction in our 
air emissions of mercury to less than 1/10th of one gram per 
day, which is less than 1/10th of one pound per year.
    With the substantial reductions in mercury emissions 
achieved by ASHTA we believe that there are no human health or 
environmental issues that justify mandating this phaseout of 
mercury cell technology. Forced conversion or closure of 
ASHTA's facility will have no measurable effect on the global 
or local mercury emissions, human health, or the environment of 
the United States, the State of Ohio, or the city of Ashtabula, 
where most of our employees live and work. It would, however, 
have a substantial adverse effect on the KOH supply in the 
United States in those businesses which rely on it.
    It could also result in the closure of ASHTA's only 
production facility and the loss of nearly 100 high-paying 
jobs. This in turn would negatively impact many of our 
customers and would also result in a large increase in the 
number of railcar shipments of chlorine across our Nation's 
mainline railroads in order to serve the needs of our adjacent 
customer who buys 100 percent of the chlorine we produce.
    ASHTA has repeatedly evaluated the economics of converting 
our plant to membrane cell technology, and each time we have 
concluded that the economic risk to our company did not justify 
conversion. Particularly considering our long-standing record 
of environmental compliance and at a time when our country and 
local community are in the worst economic condition since the 
Great Depression, requiring us to make further significant and 
financial investment to convert to membrane technology is 
unwarranted, it is confiscatory, and it is bad public policy. 
Therefore, we urge you to consider the broader impact the 
adoption of this bill would have; and we urge you to defeat the 
proposed legislation.
    Mr. Chairman and members of the subcommittee, thank you for 
your valuable time; and I will gladly answer questions at the 
appropriate time.
    [The prepared statement of Mr. Jackson follows:]

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    Mr. Rush. The Chair thanks all of the witnesses, and the 
Chair recognizes himself for 5 minutes for the purpose of 
questioning the witnesses.
    According to the EPA, concentrations of mercury in blood 
and hair are higher in African Americans than other ethnic 
groups. In 2004, a study found in its survey samples that 
African American and Mexican American children have higher 
mercury hair concentrations than White children; and this study 
further linked higher mercury levels with the consumption of 
fish.
    In her written testimony, Professor O'Neill cites a study 
that found that 27.4 percent of women who are Native Americans, 
Asian Americans or from the Pacific or Caribbean Islands have 
mercury levels that pose a risk to developing fetuses. This is 
nearly three times the national average.
    My question to both Dr. Goldman and Professor O'Neill, can 
you explain the disparate impact on mercury on people of color 
and on poor communities?
    Dr. Goldman. I can tell you what we know, and that is--and 
our research, by the way, shows the same thing--with higher 
levels in African American babies at birth and also Asian 
babies have higher levels. And what we know is that people who 
are poor, in immigrant communities as well are more likely to 
fish for subsistence, to go and to get fish in places that have 
mercury pollution and where the fish are accumulating that 
pollution.
    And that is also why--one of the other statistics that you 
cited about Native Americans, that is also why often those 
populations have more exposure. And we think that that is the 
most important reason.
    Mr. Rush. Would you care to add some additional comments, 
Ms. O'Neill?
    Ms. O'Neill. Yes, thank you.
    This finding is backed up by the National Environmental 
Justice Advisory Council, who in 2002 found the issue of 
exposure via fish consumption--because this is the primary 
route of exposure to mercury and a number of other pollutants--
to warrant a full-blown study on just this issue. So this 
study--and I served as a member of the work group that drafted 
it--made just these findings.
    And the studies show--and these studies were conducted in 
Detroit, Michigan, studies in the south, studies in the 
northeast and really all around the country and certainly in 
the Pacific Northwest--that when we are talking about these 
communities of color, whether we are talking Asian American 
communities, African American communities, certainly Native 
American communities, that the place of fish, whether both 
culturally and economically in their diets and in their lives 
is such that they are going to be the ones who are most exposed 
and the most harmed by contamination.
    Mr. Rush. Thank you.
    Mr. Jackson, in your testimony I believe I heard you say 
that your company did not alter its production methods because 
of the economic impact on your company, that there were 
alternatives but you chose not to use alternatives because it 
would have an adverse economic impact on your company. Is that 
correct?
    Mr. Jackson. Had we gone and done some of the conversions 
and so forth and put ourselves at financial risk through the 
financing of these, it would have put us at way too great a 
risk from any reasonable business operation. Basically, we 
would have had to choose to put ourselves at such a risk that 
we could not effectively compete. And through the markets that 
we have been through, effectively it would have been the same 
result as what this bill as currently written. It would take us 
out of business.
    Mr. Rush. So you are saying that you could not afford the 
transition from your current method to----
    Mr. Jackson. No, we were able to meet and beyond any of the 
regulations, all of the current regulations and previous 
regulations, regarding environmental compliance. Investment in 
those regulations, to meet those regulations, as laid out by 
the United States EPA and other regulatory bodies, we complied 
with every one and went beyond each one, as I noted in my 
testimony; and we saw no reason to take it beyond that level, 
because, clearly, we were meeting the objective of the 
environmental regulators at that time.
    Mr. Rush. Thank you.
    The Chair's time has ended. The Chair now recognizes the 
Ranking Member for 5 minutes.
    Mr. Radanovich. Thank you, Mr. Chairman.
    Mr. Jackson, in the world of mercury, whatever you do is 
such a small part of that, it seems like. Of the four 
industries that this bill affects, it seems to be a small 
fraction of the number in the mercury world. Isn't there other 
places to look for substantially more reductions than your 
industry?
    Mr. Jackson. Well, there is still a number of places and 
sources of mercury. Europe continues to use more mercury cell 
technology than we do for the same process.
    Gold mining is one of the most horrific uses of mercury, 
especially artisanal miners in the Malaysian area as well as 
Brazil and so forth, rain forest areas, unfortunately. These 
areas have significant impact on the mercury in the 
environment, as well as the power industry through their 
continued additional Chinese power plants that go in and put 
high-level mercury that is deposited throughout the world, not 
just close to the stacks of the Chinese power industry but 
throughout the world and effectively hitting every water body 
in the world. That is really the source of the mercury.
    Mr. Radanovich. Dr. Goldman, I want to ask you a question.
    It seems to me the trend right now--and people for energy 
purposes are encouraging compact fluorescent light bulbs which 
contain mercury. They are going into homes all over the 
country. It seems to me that that would be a bigger thing to go 
after than it would be something as small as this. What is your 
thought on that?
    Dr. Goldman. First, to the chlor-alkali mercury cell 
technology, Europe is phasing them out by 2020. So they have a 
clear deadline for taking them out of production. Globally, it 
is a major source; and it is hard for us to tell developing 
countries not to do something that we continue to do. I think 
you understand that.
    But in terms of the compact fluorescents, there are lower 
mercury bulbs that have been developed; and I think that the 
market--EPA should be pushing the market toward those, as well 
as the new LED light bulbs and to move to LED technology that 
is a nonmercury technology, which at this point it is not quite 
at a place where you can replace light bulbs in your home but 
needs to be done.
    Because it is a problem, and it is beginning to contribute 
quite a bit to not only the potential for breakage in the home 
and having to deal with all of that but also that--just another 
set of items that we are disposing of that we have to segregate 
and so forth, and it is just kind of better to not create that.
    As a mom, for me it is just one more thing that I have to 
think about segregating and disposing of some special way; and 
I would really rather not have to deal with that.
    Mr. Radanovich. Isn't it--I think this might be a case 
again that we experienced on lead poisoning, a hearing we did 
where it is either all or nothing. It seems like any presence 
of any mercury anywhere--say, for example, lead is used on a 
part of a handlebar on a bicycle, apparently where it needs 
some of that malleability to force the handlebars to stay on 
straight. And yet the probability of that getting into a child 
is--you know, I suppose there is a probability but very, very 
small. Isn't this the case that we are seeing here with this, 
that nothing is good unless it is all gone?
    Dr. Goldman. The thing about lead that is slightly easier 
than mercury is it is easier to immobilize. And the thing that 
is hard to understand about mercury is that when you see that 
little liquid stuff jiggling around that there is vapor coming 
off of it, unlike lead which does not vaporize at room 
temperature.
    Lead can also be a major problem. Kids have gotten lead 
poisoning from all kinds of weird things. I have seen a kid get 
lead poisoning from sucking on their baby monitor, which who 
would let their kid suck on a baby monitor, you know. But there 
is all kinds of weird things that can happen. But at least lead 
in waste, you can kind of immobilize it.
    It is very difficult to immobilize mercury. That is the 
major issue. Until it is converted to methylmercury, and then 
it doesn't vaporize anymore, but then you have the toxic 
compound that is right there in the environment. So it is a 
very different kind of a metal.
    Even though you are right, in some ways, there are 
molecules of mercury that we could chase around forever and 
never be able to deal with. And I think you are right to be 
pointing to that because you aren't going to be able to get rid 
of every molecule in mercury.
    Mr. Radanovich. Thank you.
    Mr. Jackson, do you think by your company's following the 
EPA rules that you follow right now, is that sufficient in your 
mind to control the release of mercury?
    Mr. Jackson. We believe they are. We think that the EPA 
rules have been great guidance as far as our industry. We have 
seen much more stringent regulations in the last NESHAP through 
the maximum tubal control technology, which basically took our 
industry--and the Chlorine Institute has kept records of this 
over the last 11 years--has basically taken our industry and 
reduced the amount of mercury released from our industry by 94 
percent.
    ASHTA itself has already taken more than that, down to 98 
to 99 percent. We believe fully that the little bit of mercury 
that we continue to put out in waste, it is well managed, it is 
controlled, it goes into restricted waste landfills, it is 
completely immobilized. The mercury in the water--we don't 
release any water from our site, but there is no vapor pressure 
on the mercury from our product or water. So the idea of a 
child breathing mercury or being exposed to it through any of 
our products directly is just not really practical.
    Mr. Radanovich. Thank you, Mr. Jackson.
    I appreciate all the witnesses, and I yield back.
    Mr. Rush. The Chair now recognizes the gentlelady from 
Illinois, Ms. Schakowsky, for 5 minutes.
    Ms. Schakowsky. Mr. Jackson, can you explain to me why the 
EPA issued a health advisory in March of this year warning 
residents that fish caught in the Ashtabula River were 
contaminated with mercury?
    Mr. Jackson. I think if you look at fish advisories 
throughout the United States the location next to chlor-alkali 
industries has very little to do with where fish advisories are 
created. The fact is that the areas of which the fish advisory 
are I believe are well apart from any outfall that we have ever 
had. We currently do not release water at all from our 
facility, so we don't feel like we would have impacted a fish 
advisory at all.
    The Midwest is a large burner of coal, and in coal fires 
that are in the releases from coal production energy is put 
into the upper atmosphere. It travels west to east. And as you 
can look at the Northeast corridor that is where your largest 
deposition of mercury has occurred.
    Ms. Schakowsky. So you think your plant has nothing to do 
with it? I only have 5 minutes. So you are saying you don't 
think you have anything to do with it. Aside from no water 
emissions, are you saying there is zero air emissions?
    Mr. Jackson. No, we are not saying there is zero air 
emissions. Less than 1--.1 grams per day is what we have 
measured from our facility. Much--probably 10 times less than 
the EPA recommended standard.
    Ms. Schakowsky. Now, you cited an EPA 1997 report. That is 
where you got your numbers. About less than 1/10th of 1 percent 
of mercury emissions in the world. Are you aware of the United 
Nations Environmental Program study of December, 2008?
    Mr. Jackson. I have been looking for that report. I have 
not seen the data from it yet.
    Ms. Schakowsky. Well, what it says is that, actually, the 
chlor-alkali industry is responsible for a significantly higher 
proportion of global mercury emissions, 2.43 percent. So 
given--and maybe we can get more information from Dr. Goldman, 
Ms. O'Neill--but, given those figures, do you still believe 
that eliminating the use of mercury and chlor-alkali production 
won't make an impact on the presence of mercury in the 
environment?
    Mr. Jackson. It will not make a measurable impact. You 
could take away----
    Ms. Schakowsky. Even if it were two point----
    Mr. Jackson. Even if you took all the chlor-alkali 
industry, mercury cell chlor-alkali industry I would say out of 
the world, clearly out of the United States, the impact on the 
lakes and rivers and streams and the amount of mercury in the 
fish would have virtually no impact.
    Ms. Schakowsky. Let me get a response to that from either 
one of you, or both.
    Dr. Goldman. I think certainly that it would have an 
impact, and it would have an impact in the immediate time 
period just with the current existing production of these 
materials and also the associated mining and smelting that 
needs to be done in order to produce the mercury that is 
purchased.
    But, also, if you look for it into the future and with the 
rapid pace of economic development globally, which will 
increase the demand for these products of chlorine and alkali, 
that if the world continues using this method there will be 
even more increase in mercury production, more releases of 
mercury. And this is a cumulative, persistent problem.
    Ms. Schakowsky. Thank you.
    Ms. O'Neill.
    Ms. O'Neill. Thank you.
    I think it is certainly the case of the natural sources of 
mercury that we are not going to be able to control. But the 
fact is, and I think Dr. Goldman said it, that when there are 
nonessential uses, human made contributions that we can 
prevent, we should do so. The impact will be material from this 
industry.
    Mr. Jackson quoted the emissions of ASHTA, but, of course, 
we have to remember that H.R. 2190 would phase out the use from 
the entire mercury cell process within the chlor-alkali 
industry. And the Chlorine Institute's numbers show releases 
from this group on the order of four tons, if you include 
releases to the environment and to end products that might end 
up in human food, as we have seen from the recent report in the 
Washington Post. And potentially as much as eight tons if you 
account for the unaccounted for mercury and the fugitive 
emissions which EPA still suggests are on the order of 
potentially to about half ton per source. So these are not 
needed for the processes. We can still bring all these products 
to market without the mercury, and as a nonessential source of 
mercury it is one that we can eliminate.
    Ms. Schakowsky. Thank you.
    I would like, Mr. Chairman, to submit for the record a 
letter from 43 environmental groups in support of H.R. 2190.
    Mr. Rush. Hearing no objection, so ordered.
    Ms. Schakowsky. Thank you.
    [The information follows:]

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    Mr. Rush. The Chair thanks the gentlelady.
    The Chair now recognizes Mr. Scalise from Louisiana for 5 
minutes.
    Mr. Scalise. Thank you, Mr. Chairman.
    First, a question for Dr. O'Neill.
    Your testimony refers to allegations about mercury and high 
fructose corn syrup via caustic soda. Dr. Robert Stopford, a 
renowned expert on the health effects of mercury who graduated 
from Harvard Medical School and directs the toxicology program 
at Duke University Medical Center, has conducted research in 
this area, but he found that no quantifiable mercury was found 
in any of the sampled surveys, and high fructose corn syrup 
does not appear to be a measurable contributor in mercury food. 
Have you looked at Dr. Stopford's research findings, and if you 
can just comment on what he reported.
    Ms. O'Neill. And perhaps Dr. Goldman can speak to this as 
well.
    I am not familiar with that study; and the studies to which 
I am referring are the ones recently published in the 
Environmental Health Perspectives, where they found that 50 
percent of the samples showed measurable quantities of mercury.
    My point is not that this is the primary route of 
contamination. In fact, we know that fish is the primary route 
of human exposure to mercury; and that is the graver source of 
concern, particularly given fish's health benefits that we have 
to forego if they are contaminated with mercury.
    My point is to recognize that if we are using mercury by 
this process it ends up somewhere. We have to buy it. It ends 
up in the river. It ends up going out the stacks. It goes out 
as fugitive emissions into the environment and ends up in the 
water and ends up in product as a contaminant. And I think EPA 
and the industry and the textbook discussions of the process 
recognize that this is necessarily the case when you are using 
mercury cell technology.
    Mr. Scalise. Dr. Goldman.
    Dr. Goldman. I guess I should start by congratulating you, 
looking at the sticker on your jacket.
    Mr. Scalise. Thank you. I am operating on 3 hours of sleep, 
so I apologize.
    Dr. Goldman. No, I understand. I have been there.
    I have read, actually, that study; and I think that it 
probably is true, that they can measure very minute amounts of 
mercury and the HFCS. And I also did not think that it was 
enough to be concerned about toxicologically. I mean, from the 
standpoint of whether you eat that or not, I would be more 
concerned for my child to be eating too much high fructose corn 
syrup just because it is not the best diet. It is basically the 
diet most kids want to eat, and we want them to eat vitamins 
and protein and other things.
    But I think it is indicative of just kind of the problem 
that we generally have probably contamination of mercury in the 
environment that is not only through emissions and from plants 
and fugitive emissions but possibly in a little bit that goes 
out in the product. But I would not want people to be worried 
about eating this product on that basis.
    Mr. Scalise. A recent U.S. geological survey report found 
that methylmercury emissions from around the world, primarily 
in Asia, end up in the North Pacific, contaminating 40 percent 
of tuna as well as other seafood. Considering the vast 
expansion of coal-fired power plants in China and India, how 
much do you think that is contributing to some of the things 
that you are looking at?
    Dr. Goldman. I think it is a major concern. I think there 
is pretty good evidence that a large fraction of the mercury 
that we are exposed to is local, and another large fraction is 
from global emissions, and then there is a lot of it that is 
just from reentrainment. Some of the mercury is just deposited 
and then reentrains and comes back. So there is recirculation 
of mercury that has already been released.
    So all of those have to be addressed on different fronts, 
and the global emissions I think need to be addressed through 
the UNEP and actions to try to get everybody in the world to 
take action to reduce mercury emissions. And the fact that 
there are many new coal-fired power plants being built in China 
every week is a great concern and not just from the standpoint 
of mercury but also from the standpoint of global warming that 
things need to be done in order to turn that around. You were 
talking about 6 billion people in the world, all of whom want 
to live just like we do; and we have got to take action to make 
sure that the things that seem to be little things----
    Mr. Scalise. A lot of them criticize----
    Dr. Goldman (continuing). Things that seem to be little, 
but if we multiply it times 6 billion, it is not a little, it 
is a lot.
    Mr. Scalise. Let me ask Mr. Jackson, because it looks like 
on the solid waste reporting requirements in Subsection C of 
the bill that relate to nonhazard waste--I don't know if you 
have looked at that. Would there be any value in your company 
actually having to report on its lunchroom trash contents?
    Mr. Jackson. We don't see this as any benefit whatsoever. 
We see it as onerous upon us. We have no--the idea of our 
office waste or food waste from employees, we don't even know 
how to manifest it or send it off.
    The other thing I think the committee should recognize is 
that all even nonhazardous waste landfills are regulated so 
that the waste that goes in there, hazardous or nonhazardous, 
is basically treated the same as if it were hazardous. So the 
release of any potential mercury that could have slipped into 
the trash can with an office paper, which is just totally 
impractical----
    Mr. Scalise. I see I am out of time. I yield back. Thanks.
    Mr. Rush. The Chair thanks the gentleman.
    This concludes this portion of this hearing. And, again, 
the Chair thanks all the participants for your involvement, for 
the sacrifice of your very important time. We really appreciate 
your contribution to the deliberation of this subcommittee on 
these very important issues. Thank you so very much and safe 
travels. Thank you. God bless.
    Mr. Radanovich. Mr. Chairman.
    Mr. Rush. The Chair recognizes the Ranking Member for a 
unanimous consent request.
    Mr. Radanovich. Thank you, Mr. Chairman.
    I ask unanimous consent that the following documents be 
included in the printed record: a letter to you and I from 
Arthur Dungan of the Chlorine Institute dated May 11, 2009; a 
report titled the Assessment of Test Results for Mercury in 
High Fructose Corn Syrup by Dr. Woodhall Stopford; a report 
titled Normal Mercury Levels in Food and Beverages by Dr. 
Woodhall Stopford; a statement from the Corn Refiners 
Association dated February 3, 2009; a news release from the 
Corn Refiners Association dated March 18, 2009; and a news 
release from ChemRisk dated January 30, 2009.
    Mr. Rush. Hearing no objection, so ordered.
    Mr. Radanovich. Thank you, Mr. Chairman.
    [The information appears at the conclusion of the hearing.]

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    Mr. Rush. The subcommittee now stands adjourned.
    [Whereupon, at 4:07 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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