[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
H.R. 3655, THE BEREAVED CONSUMER'S BILL OF RIGHTS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMERCE, TRADE,
AND CONSUMER PROTECTION
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JANUARY 27, 2010
__________
Serial No. 111-93
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_____
U.S. GOVERNMENT PRINTING OFFICE
76-005 WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
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
JANICE D. SCHAKOWSKY, Illinois SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York PHIL GINGREY, Georgia
JIM MATHESON, Utah STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin
Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont
Subcommittee on Commerce, Trade, and Consumer Protection
BOBBY L. RUSH, Illinois
Chairman
JANICE D. SCHAKOWSKY, Illinois CLIFF STEARNS, Florida
Vice Chair Ranking Member
JOHN SARBANES, Maryland RALPH M. HALL, Texas
BETTY SUTTON, Ohio ED WHITFIELD, Kentucky
FRANK PALLONE, New Jersey GEORGE RADANOVICH, California
BART GORDON, Tennessee JOSEPH R. PITTS, Pennsylvania
BART STUPAK, Michigan MARY BONO MACK, California
GENE GREEN, Texas LEE TERRY, Nebraska
CHARLES A. GONZALEZ, Texas MIKE ROGERS, Michigan
ANTHONY D. WEINER, New York SUE WILKINS MYRICK, North Carolina
JIM MATHESON, Utah MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina
JOHN BARROW, Georgia
DORIS O. MATSUI, California
KATHY CASTOR, Florida
ZACHARY T. SPACE, Ohio
BRUCE L. 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................................. 1
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 2
Prepared statement........................................... 5
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 10
Hon. Phil Gingrey, a Representative in Congress from the State of
Georgia, opening statement..................................... 10
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 11
Hon. Steve Scalise, a Representative in Congress from the State
of Louisiana, opening statement................................ 12
Hon. Joe Barton, a Representative in Congress from the State of
Texas, prepared statement...................................... 76
Witnesses
Chuck Harwood, Deputy Director, Bureau of Consumer Protection,
Federal Trade Commission;...................................... 14
Prepared statement........................................... 16
Patricia Brown Holmes (Ret.), Chair, Illinois Cemetery Oversight
Task Force, Partner, Schiff Hardin LLP......................... 26
Prepared statement........................................... 28
Paul M. Elvig, Former President, International Cemetery,
Cremation and Funeral Association.............................. 31
Prepared statement........................................... 33
Randall L. Earl, Treasurer, National Funeral Directors
Association, Owner, Brintlinger and Earl Funeral Homes......... 53
Prepared statement........................................... 55
Submitted Material
Statement of Funeral Consumers Alliance.......................... 80
H.R. 3655, THE BEREAVED CONSUMER'S BILL OF RIGHTS
----------
WEDNESDAY, JANUARY 27, 2010
House of Representatives,
Subcommittee on Commerce, Trade,
and Consumer Protection,
Committee on Energy and Commerce,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:10 a.m., in
Room 2123 of the Rayburn House Office Building, Hon. Bobby L.
Rush [Chairman of the Subcommittee] presiding.
Members present: Representatives Rush, Schakowsky, Stupak,
Green, Barrow, Whitfield, Gingrey and Scalise.
Staff present: Michelle Ash, Chief Counsel; Anna Laitin,
Professional Staff; Timothy Robinson, Staff; Will Cusey,
Special Assistant; Daniel Hekier, Intern; Elizabeth Letter,
Special Assistant; Sarah Kelly, Intern; Shannon Weinberg,
Counsel; Brian McCullough, Senior Professional Staff; and Sam
Costello, Legislative Analyst.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. The Subcommittee on Commerce, Trade, and Consumer
Protection is called to order.
We are convening for the hearing on the Bereaved Consumer's
Bill of Rights Act of 2010 and I want to, before we begin
giving opening statements, I want to welcome all who are
gathered and welcome our witnesses for the day, and I want to
thank the members of the subcommittee for their presence.
The chair recognizes himself for 5 minutes for the purposes
of an opening statement.
In early July, 2009, horrific allegations of unlawful grave
desecration shocked the Nation as news about the unauthorized
removal of hundreds of human bodies and the reselling of grave
plots at Burr Oak Cemetery in Alsip, Illinois, which is in my
district, came to light, and as chair of this subcommittee and
the representative of the first city of Illinois I wasted no
time in conducting a field hearing in Chicago on July 27, 2009.
My primary purpose in holding the field hearing was to hear
bereaved survivors share their feelings of intense loss and
bewilderment upon the learning of what happened at Burr Oak. I
also wanted to learn more about their past dealings with Burr
Oak, the staff and the red flags of gross neglect they had
witnessed at the cemetery.
Upon returning to Washington, any suspicions that Burr Oak
was an aberration or a mere figment of society's imagination
quickly diminished. A little more than a month following our
Chicago field hearings fresh allegations of unlawful grave
desecration and the resell of grave plots at Eden Memorial Park
and a Jewish cemetery in Mission Hills, California and the
Melwood Cemetery in DeKalb County, Georgia also came to light.
Thus ushers in a period of deep sorrow, grief and loss for some
survivors and the loved ones responsible for finalizing funeral
arrangements and services. These very consumers in their state
of bereavement become easy selling targets for an abundance of
unnecessary goods and services that get slipped into funeral
and burial packages. Consumers also fall prey to a host of
misrepresentation by managers and sales staff that range from
bogus claims about what State laws actually require to patently
false interpretations of their own written regulations.
The same bereaved consumers equal free cash for
unprincipled owners and managers of cemeteries and
crematoriums. The question is why. The easy answer is very
easy. Sometimes it is just too easy for those who are out to
earn a quick buck to prey on misinformed consumers. Lacking the
experience with the funeral and burial section, these consumers
cannot be reasonably expected to effectively negotiate fair
practice, choices and contractual terms that apply to burial
goods contracts and leases on land on graveyard property.
Planning for one's own or even a loved one's death is
typically a once-in-a-lifetime experience. It is also
compounded by all kinds of unpredictability. But just as death
often comes like a thief in the night, bereaved consumers
should not be left wondering who in fact was and is the real
thief, death or the cemetery sales sources.
I introduced in September the Bereaved Consumer Bill of
Rights. Today this subcommittee is reviewing this draft bill in
its first hearing under new legislative session. This bill is
all-encompassing and there are many parts to this bill. I have
been earnest in respecting existing State laws as I drafted
this bill. The bill will authorize both the FTC and the States'
Attorneys Generals and other designated State entities to
enforce its requirements.
In closing, I want to thank each one of our witnesses again
for appearing today and I look forward to this hearing and I
yield back the balance of my time.
Now, I recognize the ranking member of the subcommittee,
Mr. Whitfield, for 5 minutes for the purposes of opening
statement.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. Chairman Rush, thank you very much and we
are delighted that you are having a hearing on this important
subject.
Certainly when families face death and have to find
themselves making decisions about the disposal of bodies and so
forth, they are particularly vulnerable. And although we hope
that people will act in good conscience, unfortunately we find
ourselves having to write Federal and State laws and
regulations to prevent the unscrupulous few from preying on the
bereaved as profit centers in their state of emotional
disarray. Thankfully, almost all funeral and cemetery
businesses are honest actors who seek to assist the families
and never violate the law but as you said, bad actors do
persist. Incidents in Georgia, Florida and more recently
Illinois indicate a few rogue operators do not respect the law
or the same values that we hold.
Allegations of illegal disinterment are being investigated
at Burr Oak Cemetery in Illinois. Evidence suggests several of
the workers may have engaged in reprehensible conduct to
desecrate burial plots and resell those plots for profit. It is
my understanding they face criminal charges and could be
sentenced to prison time if they are convicted.
In the wake of Burr Oak, the Governor of Illinois convened
a task force to look into this situation and make
recommendations for that State. I understand he signed a new
law earlier this month which makes changes to the regulation of
cemeteries in Illinois. Similarly, Georgia and Florida
responded quickly to their unique problems with new State laws.
So the question really becomes what role, if any, the
Federal Government should have beyond its current authority.
The Commission has the authority to bring action for either
violations of the Funeral Rule which is about transparency or
for violations of unfair or deceptive practices under its
General Section 5 authority provided the violator was under its
jurisdiction.
Chairman Rush has introduced H.R. 3655 to address problems
some people have identified in the funeral and cemetery
industry and we all commend him for taking that action
introducing this legislation intended to help consumers. While
all of us support the practice of accurate and meaningful
disclosure to consumers, the question does arise is the Federal
Government the best entity to do this or do the States do a
better job of it. We do know that all States have laws on their
books and regulate the industry but as the Illinois task force
concluded in its report, regulatory oversight by State
regulators happens to be one of the major problems in that
incident and so even if we require more disclosure, it may or
may not stop criminal activity that occurred. Another potential
problem of expanding the FTC's role is the perception by States
that the Federal Government will be the primary entity with
jurisdiction, and if that happens will the States have less
incentive and maybe since all of them have financial difficulty
anyway, just step back and let the Federal Government do it and
maybe the Federal Government may not be as effective.
In addition to required disclosures, the proposed
legislation seeks to fill the regulatory gap of the FTC's
enforcement authority by providing the Commission new authority
over non-profit entities operating in the funeral and cemetery
business. This would be a major expansion of the FTC's
enforcement authority and certainly should be considered
carefully, particularly in light of many other industries under
the FTC's jurisdiction that have substantial participation of
non-profits. If we want to consider sweeping non-profits under
the FTC's jurisdiction, I believe it would be better to examine
it in the context of the FTC's overall authority as it may have
additional implications for State and municipality entities
that operate as non-profits.
Chairman Rush, I do commend you for holding this hearing
and certainly this is an issue that is very important. It has a
great impact on our society and we look forward to working with
you to try to determine a proper course of action. Thank you
very much.
[The prepared statement of Mr. Whitfield follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. The chair now recognizes the gentlelady from
Illinois, Ms. Schakowsky, for 2 minutes for the purposes of
opening statement.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you, Mr. Rush, for holding this
hearing and for introducing this important bill and I am glad
to be a co-sponsor of your bill, the Bereaved Consumer's Bill
of Rights Act. I want to welcome our witnesses including two
Illinois witnesses, the Honorable Patricia Brown Holmes,
Chairman of the Illinois Cemetery Oversight Task Force and
Randall Earl of the National Funeral Directors Association who
is a funeral director in Decatur, Illinois.
Last year a cemetery in my State, as Mr. Rush has gone into
in some detail, made national headlines after some of its
employees horribly violated the dignity of individuals interred
at the cemetery in the name of nothing more than greed. Last
July this committee held a field hearing in Chicago where we
heard the heartbreaking testimonies from families, including
some of my constituents who no longer knew where to go to mourn
their loved ones. One of my constituents, Mrs. Rose Herd, went
to the cemetery to order headstones for her son, daughter and
mother and while at the cemetery a worker looked at the map and
said ``someone is buried on top of the others in that grave.''
Imagine having to hear that.
But one of the big takeaways that I had from that hearing
was something that is mentioned in our briefing paper which is
the asymmetrical regulatory framework between funeral homes
which are stringently regulated by the FTC on one side and the
cemeteries, crematory and mausoleums on the other which are
not, and I think that is exactly what our bill would do. It
would require the FTC to issue rules that would protect the
rights of consumers when they are facing one of the most
difficult times in life, burying a loved one or preparing for
their own funerals.
Again, Mr. Chairman, I thank you for holding this hearing
and I hope it is the first step toward passing this important
bill. I yield back the balance of my time.
Mr. Rush. The chair thanks the gentlelady and the chair
will also note that the gentlelady and four other members of
this subcommittee participated in the field hearing held in
Chicago, and I really want to place on the record my deep
seated appreciation for your participation at the field
hearing, each and every one of you.
The chair now recognizes Dr. Gingrey for 2 minutes for the
purposes of opening statements.
OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Gingrey. Mr. Chairman, I want to thank you for calling
today's hearing on H.R. 3655, the Bereaved Consumer's Bill of
Rights Act of 2009 in order to review the existing structure of
Federal regulations that oversee consumer protection of the
funeral industry, particularly at a time when purchasing
decisions are made in the midst of grief.
Unfortunately, we are here today largely in response to
incidents that occurred at Burr Oak Cemetery in Alsip, Illinois
that resulted in charges of the unauthorized removal of human
remains from graves and the subsequent reselling of those
plots. As the story continued to unravel, shocking details were
revealed and my deepest condolences go out to the families of
those whose remains were desecrated.
Mr. Chairman, my home State of Georgia, just outside of my
congressional district has also been the subject of a national
scandal on this very issue. Back in 2002, the Tri-State
Crematory in Walker County was at the center of a criminal
investigation where this company failed to cremate the remains
of over 300 people and even worse than that, they improperly
stored the remains, and for the families of northwest Georgia
that this scandal affected I feel nothing but sorrow for the
trauma that they experienced.
Clearly both of these incidents provide this subcommittee
with a good reason to review the ways in which funeral services
are regulated. Due to rampant abuses within the funeral
industry, the Federal Trade Commission issued the Funeral Rule
in 1984 to ensure more transparency on information that was
provided to consumers regarding pricing structure in funeral
services. According to the FTC at a field hearing that Chairman
Rush held in Chicago last July on this matter, compliance with
the Funeral Rule appears to be at a good level.
Mr. Chairman, H.R. 3655 seeks to address some of the
problems that continue to exist within the funeral industry;
however, despite its overall goal I do fear that H.R. 3655 may
be duplicative in nature because the Funeral Rule already
addresses a number of these regulations and unfortunately this
legislation would not have prevented what occurred at either
Burr Oak or Tri-State Crematory. At the same time, in the
aftermath of these scandals both the State of Illinois and my
home State of Georgia acted swiftly to address criminal
activity and I commend them for that quick action. As we move
forward on this legislation I believe we need to focus on the
existing tools of enforcement.
I look forward, Mr. Chairman, to hearing from today's panel
and I yield back the balance of my time.
Mr. Rush. The chair now recognizes the gentleman from
Texas, Mr. Green, for 2 minutes for the purposes of an opening
statement.
OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Mr. Chairman, for holding this
hearing on your legislation to protect the rights of those who
are arranging funeral services who are grieving from the loss
of a loved one. I don't think anybody on our committee hasn't
gone through that with one of our parents or our in-laws and
how traumatic it is, and our children will have to go through
that for us someday.
Bad actors exist in every industry but the thought that
someone would mislead and take advantage of a family that has
just lost a loved one is especially dishonest and troubling.
The last thing someone wants to do following the death in a
family is be pressured into purchasing unnecessary, overpriced
services, nor do they want to have to shop around to make sure
they are not being scammed into drastically overpaying for a
service.
A number of States have laws regulating practices related
to funeral services, others have not or do not have updated
laws on the books. Because of that, we need to set a floor for
the rights of individuals planning a funeral and burial.
Mr. Chairman, I strongly support your legislation, the
Bereaved Consumer's Bill of Rights, to develop and issue rules
prohibiting unfair and deceptive acts and practices for sellers
of funeral and burial goods and services. This legislation
required the Federal Trade Commission which currently regulates
funeral homes under the Funeral Industry Practices Trade
Regulation Rule to expand that rule to cover other entities
involving and providing funeral and burial services such as
crematories, cemeteries, caskets retailers and headstone and
market retailers.
Mr. Chairman, the incident at Burr Oak Cemetery in Illinois
and the several others that made news in recent years
demonstrate the further action needed to be taken to provide
peace of mind to those who recently suffered a loss. This
legislation will provide basic requirements while not
interfering with States' efforts so grieving families know they
will not be misled or taken advantage of.
Again, Mr. Chairman, I want to thank you for both the bill
and also holding the hearing, and welcome our witnesses, and I
yield back.
Mr. Rush. The chair now recognizes the gentleman from
Louisiana, Mr. Scalise, for 2 minutes.
OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF LOUISIANA
Mr. Scalise. Thank you, Mr. Chairman.
All of us here today at some point in our lives have
experienced the death of a loved one and have gone through the
grieving process. During this painful time, we should be able
to take comfort in knowing that our loved one's remains are
being treated with dignity and respect. This comfort should be
based on trust of the funeral home, the cemetery, the crematory
handling the remains as well as on the integrity of the funeral
service profession as a whole. Unfortunately, we have seen
instances where this trust has been violated in appalling ways.
The most recent example being Burr Oak Cemetery which has
prompted this legislation we are examining today and the
previous field hearing this subcommittee held in July.
The desecration of graves and the mishandling of remains
that took place at Burr Oak Cemetery were despicable and
hopefully we never see this happen again. I believe we can all
agree that no one should be taken advantage of during this time
of heightened emotional distress. In the case of Burr Oak
Cemetery and in similar cases in Florida and Georgia the States
acted quickly to determine what led to these horrible acts and
what laws and regulations were broken or needed to be improved
or put in place to prevent this from happening again. This
leads me to question whether Federal legislation is the most
appropriate.
Again, let me stress that the cases in Illinois, Georgia
and elsewhere are terrible and I am pleased that we are
examining ways to protect consumers while they are grieving the
loss of a loved one. But I also have to question whether this
is an issue best decided by the States who are closer to these
violations and in a better position to respond swiftly. While
it certainly is important that families not fall victim to
unfair or deceptive acts related to funeral services, it is
also important that we examine any detrimental consequences of
Federal legislation that may impede on the ability of State and
local governments' ability to decide what is best to protect
their local citizens. I look forward to hearing from our
witnesses today as they share their thoughts on what actions
should take place or be taken by Federal, State and local
authorities to address this problem.
Thank you, Mr. Chairman, and I yield back.
Mr. Rush. The chair now recognizes the gentleman from
Georgia, Mr. Barrow, for 2 minutes.
Mr. Barrow. Thank you, Mr. Chairman. I waive.
Mr. Rush. The chair thanks the gentleman.
And now it is my privilege and honor to introduce the
panelists who have taken time off from their busy schedules to
appear before this subcommittee and the chair wants the
panelists to know how much we appreciate the fact that you have
taken time out to be a part of this process. I want to begin to
introduce you. From my left there is Mr. Chuck Harwood. He is a
deputy director of the Bureau of Consumer Protection for the
Federal Trade Commission. Mr. Harwood, welcome.
Seated next to Mr. Harwood is Judge Patricia Brown Holmes,
who has been previously mentioned. She is from Illinois. She is
the chairman or the chairperson of the Illinois Cemetery
Oversight Task Force. She is also a partner with the Schiff
Hardin Law Firm and as was indicated, her work resulted in the
Illinois governor signing a piece of legislation earlier this
month, and I really want to congratulate you and your committee
and the outstanding work that you have done for the citizens of
the State of Illinois.
Seated next to Judge Holmes is Mr. Paul M. Elvig. He is the
former president of the International Cemetery, Cremation and
Funeral Association, and seated next to Mr. Elvig is Mr.
Randall L. Earl who was also mentioned previously. He comes
from the State of Illinois and he is the treasurer of the
National Funeral Directors Association and he is the owner of
the funeral home, Brintlinger and Earl Funeral Homes, in
Decatur, Illinois.
Again, I want to welcome you and it is the customary
practice of this committee that you be sworn in. Would you
please stand and raise your right hand.
[Witnesses sworn.]
Mr. Rush. Let the record indicate that the witnesses have
all answered in the affirmative.
And now we will ask that you present this committee with
your opening statements and you are recognized for 5 minutes
for that purpose, and I will start with Mr. Harwood. You are
recognized for 5 minutes for the purposes of opening
statements.
TESTIMONY OF CHUCK HARWOOD, DEPUTY DIRECTOR, BUREAU OF CONSUMER
PROTECTION, FEDERAL TRADE COMMISSION; THE HONORABLE PATRICIA
BROWN HOLMES (RET.), CHAIR, ILLINOIS CEMETERY OVERSIGHT TASK
FORCE, PARTNER, SCHIFF HARDIN LLP; PAUL M. ELVIG, FORMER
PRESIDENT, INTERNATIONAL CEMETERY, CREMATION AND FUNERAL
ASSOCIATION; AND RANDALL L. EARL, TREASURER, NATIONAL FUNERAL
DIRECTORS ASSOCIATION, OWNER, BRINTLINGER AND EARL FUNERAL
HOMES
TESTIMONY OF CHUCK HARWOOD
Mr. Harwood. Thank you, Mr. Chairman, and members of the
subcommittee.
My name is Charles Harwood. I am the deputy director of the
Federal Trade Commission's Bureau of Consumer Protection.
The Federal Trade Commission extends our condolences as we
did last summer, to the families affected by the awful events
at Burr Oak Cemetery. And, Mr. Chairman and members of the
subcommittee, we hope your efforts and the efforts of the
agencies and organizations in Illinois that have responded to
this tragedy have provided some comfort for the many families
who are affected by this tragedy.
Given the horrific events that took place at Burr Oak
Cemetery which were examined at the subcommittee's hearing last
summer which I had the pleasure to attend, we appreciate the
opportunity to discuss H.R. 3655. The Commission's formal views
were presented in its written submission. My oral statement and
responses to any questions are my views and not necessarily the
views of the Commission or individual commissioners.
H.R. 3655 seeks to provide more effective consumer
protection against fraud and abusive practices in connection
with the provision of funeral goods and funeral services. The
Federal Trade Commission fully supports these goals and we
appreciate the subcommittee's leadership in this area.
The Commission's testimony highlights some important,
specific aspects of H.R. 3655. First, the Commission's Funeral
Rule currently applies primarily to funeral homes. H.R. 3655
would expand the Commission's jurisdiction in this area to
cover not-for-profit entities and specifically cemeteries.
Second, H.R. 3655 would apply new disclosure rules to all such
cemeteries and also to third-party retailers of funeral goods.
Third, in connection with prepaid funeral and burial contracts,
H.R. 3655 would require new disclosures of fees and costs among
other things. Finally, the bill would give the Commission APA
rulemaking authority to promulgate rules to implement the
bill's requirements. To that end, H.R. 3655 would direct the
Commission to conduct a rulemaking within 1 year of enactment
to extend the key consumer protections in the Commission's
Funeral Rule to cemeteries, crematories and retailers of
caskets, urns, monuments and markers. Because the authority
contained in the bill includes non-profit members of the
funeral industry, the rule promulgated under the bill would
reach the vast majority of cemeteries whether they are for-
profit or not-for-profit, including not-for-profit cemeteries
owned or operated by religious organizations, States or
municipalities. In contrast, the current FTC Funeral Rule
concerns primarily funeral homes which are mostly for-profit
entities. It does not reach non-profits.
The Federal Trade Commission Act under which the original
Funeral Rule and subsequent Funeral Rule was promulgated,
generally excludes not-for-profit companies from the
Commission's consumer protection jurisdiction. The proposed
expansion of jurisdiction provided by H.R. 3655 would enable
the Commission to reach many more members of the funeral
industry. This expanded authority coupled with H.R. 3655's new
disclosure and record-keeping requirements makes new consumer
protection tools available to the FTC and to State enforcers.
Finally, as highlighted in the Commission's written testimony,
a number of years ago the FTC committed itself to improving
compliance with the funerals cost disclosure provisions and
during questioning, I would be glad to talk more about that.
But ensuring similar compliance with H.R. 3655 by several
thousand newly covered entities will require a commitment of
FTC resources. Making available new resources will permit the
FTC to continue other consumer protection initiatives while
also ensuring that we can effectively implement and enforce the
requirements of H.R. 3655.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Harwood follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. The chair now recognizes Judge Brown Holmes and
Judge, you are recognized for 5 minutes for the purposes of
opening statements.
TESTIMONY OF PATRICIA BROWN HOLMES
Ms. Holmes. Thank you, Mr. Chairman and members of the
subcommittee, for the opportunity to be here today to testify
about the findings and recommendations of the Illinois Cemetery
Oversight Task Force. I am Retired Judge Patricia Brown Holmes,
the chairperson of that task force, and I appear here today in
my capacity as a private citizen because the task force is no
longer in effect because the legislation was passed.
Mr. Chairman, all of us expect that our loved ones will be
treated with the same dignity and respect in death as in life
and many of us believe that the protection of those rights is a
duty and a responsibility that is properly entrusted to our
Government. That is why the citizens of the State of Illinois
were shocked in July, 2009, when we learned of the horrific
events taking place in historic Burr Oak Cemetery in Alsip,
Illinois, a place where Emmett Till, Dinah Washington, and Ezra
Charles were buried along with my father.
According to reports that appeared in print and broadcast
media, it was alleged that workers at the Burr Oak Cemetery had
over a period of several years, unearthed hundreds of corpses
and then dumped them in the weeds in the cemetery or double-
stacked them in existing graves. The empty burial plots were
then allegedly resold to members of the public who had no
knowledge that the graves were being reused.
On July 16, in the wake of these appalling reports,
Governor Quinn signed an executive order forming the Cemetery
Oversight Task Force and appointed me chair along with 11 other
blue ribbon panel members. Our task was to examine the
circumstances surrounding the Burr Oak Cemetery fiasco and to
attempt to conduct a comprehensive review of pertinent Illinois
laws and the laws of other States to recommend policies, laws,
rules and regulations that should be implemented to ensure the
respectful and humane treatment of the deceased, and to
essentially recommend legislation to better protect and serve
the people of the State of Illinois.
The testimony and evidence presented to our task force
during the 2 months of hearings was shocking. It revealed a
systemic failure of oversight and regulation of the cemetery
industry in our State. The task force concluded that although
there were a number of laws in Illinois that did address
various aspects of the death care industry, a regulatory
disjunction existed with respect to the operation and
management of cemeteries. The task force concluded that there
was a direct connection between the hodgepodge of regulations
governing the death care industry and a lack of regulatory
oversight that contributed to the deteriorated condition of
Burr Oak Cemetery and other cemeteries, circumstances that
allowed the alleged activity to flourish.
With an eye towards assuring that this historic event did
not repeat itself, the report issued by our task force on
September 15 set forth three primary recommendations. First, we
recommended that regulatory authority over the funeral and
burial practices be consolidated into one department, in our
case, the Department of Financial and Professional Regulation
which, in Illinois, currently licenses more than one million
professionals in nearly 100 industries. Second, our task force
recommended that legislation be adopted requiring cemetery
management operations to be treated as a profession and that
only qualified persons be authorized to own, operate, or work
in the cemetery in our State based on our finding that the
practice of cemetery management and operation affects the
public health safety and wellbeing of our citizens. Third, we
recommended that our General Assembly amend and consolidate
various statutes for the purpose of first, creating a uniform
system of oversight and regulation, second, strengthening the
licensing and regulatory requirements in those statutes and
third, creating new consumer protections.
With the passage and signing of the Cemetery Oversight Act
on January 17, Illinois now has a comprehensive regulatory
framework making it a national model for cemetery oversight,
establishing new and stricter standards for the care and
operation of cemeteries. For example, the Act requires
licensure for private, non-religious cemeteries, the creation
of a consumer bill of rights protecting consumers purchasing
burial merchandise and services, and the establishment of a
statewide data base that will help future generations locate
the remains of a loved one. The new Act also prohibits
cemeteries from requiring cash payment for services and
merchandise. It establishes protections for whistleblowers and
it creates a cemetery relief fund to assist abandoned and
neglected cemeteries. I am very privileged to have participated
in the passage of that landmark legislation which is an example
of our democratic process at its best.
We look forward to your bill, Mr. Chairman, and hope that
it will complement the State's bill and I will answer further
questions at the conclusion. Thank you.
[The prepared statement of Ms. Holmes follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Schakowsky [presiding]. Thank you.
Mr. Elvig.
TESTIMONY OF PAUL M. ELVIG
Mr. Elvig. My name is Paul Elvig and I am with the
International Cemetery Cremation and Funeral Association. I am
also past president of the National Cemetery Regulators
Association many years ago.
I would like to thank the chairman, the vice chair and all
members of this committee for the interest you have taken, keen
interest you have taken in what is no doubt one of the most
outrageous acts most of us have heard in our lifetime. I have
been around this business, if you will call it that, for the
last 40 years and as a regulator I have looked into consumer
complaints from misspelled markers on tombstones to the sexual
molestation of the dead by a very sick person. I share that to
show you that there are many, many aspects of potential crime,
if you will, against the dead.
Our association, the ICCFA is proud to call ourselves the
guardian of Americans' heritage. We think your interest is
showing your interest in being a guardian of our heritage in
this country. We are concerned and we don't oppose this bill.
We support the concepts but we certainly are concerned about
unintended consequences and that is obviously something we
always have to look at when we talk about new legislation.
There are thousands upon thousands of cemeteries in this
country that are run by volunteer organizations, church
organizations, community clubs, grange halls, you name it, that
are running on frankly just nickels and dimes and donations.
And as we would look at possibly imposing upon those cemeteries
the guidelines, for example, that the FTC presently has for
funeral homes, we are talking about increased cost of operation
that could very well bankrupt already a very shoestring
industry if you want to call it that.
Our state regulator in Washington State just shared with
several of us on our legislative committee that he has had a
cemetery come into his office, one of these ones I mentioned,
and put the keys on his table and say we are through. We can't
run this cemetery. Who does? And so we would urge that as we
would look at legislation, as we would look at regulation, we
be certain that we not break the backs of many organizations
who have already been hurt by the cremation increase in this
country and who are seeing their revenue sources literally dry
up. That is a major concern to us.
We have enjoyed in the past working with the FTC and have
participated in hearings and have offered our evidence but one
thing I want to mention under the FOIA request we made with the
FTC, we found that there were 1.2 million complaints filed with
them on every subject from computer network fraud to you name
it. But out of that there were only 241 complaints, that is out
of 1.2 million, there were 241 complaints about funeral homes
and cemeteries and the cemeteries represented even a small
fraction of that. That was less than two tenths of one percent
and so as we look to correct problems, we ask that we keep that
perspective in mind as to how broad are these problems.
Now, having served as the president of the National
Cemetery Regulators, I have had the privilege of reviewing
State law and it varies considerably. It varies by the State.
It varies by the issues a State's faced whether it be a
cemetery that is situated in a desert scene where there is not
normal dirt to make burial, to cemeteries in Hawaii, to
cemeteries in Vermont that have hundreds of years of history.
And so having reviewed State law nationwide, I want to say that
what we are seeing in State statute is custom statute to fit a
custom situation. So when we do hear about scandals that
happened right in your State, right in Illinois, the outrage
there, these folks went to work and they did their job. They
introduced State legislation to address that issue in that
particular community under those particular circumstances and
so we strongly favor the concept that States ought to continue
in their role of regulating and we certainly don't want to see
States read into any action from this committee as saying it
has all been handled. That is a concern. It really is a
concern. Having been a bureaucrat and in State government, I
know how easy it is to say somebody else is handling the
problem.
I want to conclude by saying this--that there is something
not mentioned in this bill that I would beg you to consider and
that would be to federally criminalize the illegal disruption
of a human dead body that has been buried or brought to a
crematory. That is such an outrage there ought to be a Federal
law against it. There is when we look at veterans cemeteries.
We have veterans buried in non-veteran cemeteries who aren't
protected that way and so I would urge that as you refine this
bill that you look at criminalizing and putting away these, I
won't use words I want to call them, those who would disturb
the dead that are lying in peace. We can't let that outrage
exist and I ask your help in that.
Thank you so much.
[The prepared statement of Mr. Elvig follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. Thank you.
The chair now recognizes Mr. Earl for 5 minutes.
TESTIMONY OF RANDALL L. EARL
Mr. Earl. Mr. Chairman and members of the subcommittee,
thank you very much for the opportunity to present the view of
the National Funeral Directors Association on H.R. 3655.
I am Randall L. Earl, a licensed funeral director from
Decatur, Illinois and have been practicing my profession for 40
years. I own and operate the 125 year old Brintlinger and Earl
Funeral Home in Decatur and serve Burr Oak as well as B and E
Crematory in also Decatur. We have nine full-time employees and
seven part-time employees. We perform approximately 400
funerals a year.
I am appearing here today in my capacity as an elected
official of the National Funeral Directors Association. NFDA is
the leading funeral service organization in the United States
and provides the national voice for the funeral service
profession. One of NFDA's missions is to safeguard the trust
and integrity of the funeral profession. In that regard, we
strongly support H.R. 3655 and the intent in which it was
proposed. However, before I discuss the specifics of H.R. 3655,
I think it would be helpful to your deliberations to provide
some background on our experience with the FTC rule.
NFDA and its members today strongly support retention of
the FTC rule as the uniform standard for funeral homes as well
as a rule that protects consumers served by funeral homes.
Since the rule was enacted, the marketplace for funeral and
burial goods and services has changed dramatically. With the
introduction of many non-traditional sellers, most recently for
example, Wal-Mart and Amazon.com began selling caskets directly
to consumers. When consumers do business with these non-
traditional providers they see none of the protections afforded
by the FTC rule when they purchase the same goods from funeral
homes. It is therefore necessary in our judgment to establish a
separate rule as outlined in H.R. 3655.
We believe the rule which is enforced by FTC has benefited
consumers by providing basic protections and safeguards to
consumers who do business with funeral homes. We also believe
that the Funeral Rule has benefited funeral providers. Many
NFDA members have reported that the rule has made them better
businessmen and women by helping them explain to consumers the
cost of all different components of a funeral thereby giving
families a greater understanding of the cost involved. In
addition, to maintain compliance levels funeral homes now offer
continuous staff training and education that reinforces the
professionalism of the funeral home staff. As evidenced by the
scandals at Burr Oak Cemetery, Menorah Gardens Cemetery, Tri-
State Crematory and many other incidents, there is no question
that consumers are being injured because cemeteries and other
sellers of funeral or burial goods or services are not subject
to uniform Federal standards or a haphazard and inconsistent
set of State laws.
As a result, NFDA strongly supports H.R. 3655 which
requires the FTC to establish a Federal rule that applies the
same or similar disclosures and standards of practice provided
under the Funeral Rule to all sellers of funeral or burial
goods or services not now covered by the rule. We are
particularly supportive of the inclusion of all non-profit and
religious organizations as well as State and local political
subdivisions. We strongly believe that consumers should enjoy
the same protections regardless of where or whom they purchase
funeral or burial services.
In conclusion, Mr. Chairman and members of the
subcommittee, NFDA believes this bill outlines for the FTC a
rule that NFDA has long argued was necessary given the
dramatically changed marketplace and the rise of new and non-
traditional sellers who now offer consumers many of the same
funeral or burial goods or services provided by funeral homes
but without protections afforded by the Funeral Rule. While
H.R. 3655 does impose some modest requirements on funeral
homes, we believe them to be appropriate and consistent with
our policy. Finally, while we understand this rule might not
have prevented the widely reported scandals that occurred at
Burr Oak, Menorah Garden Cemetery or the Tri-State Crematory,
NFDA believes H.R. 3655 will raise the bar for everyone and
correct many of the existing problems that led to those
situations. As we know, after 26 years under the FTC rule we
are better funeral directors for the experience and have a much
greater awareness that good consumer practices are good
business practices as well.
Thank you for the opportunity to present the views of the
National Funeral Directors Association on this very important
legislation. I will be happy to answer any questions you might
have.
[The prepared statement of Mr. Earl follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. The chair thanks all of the witnesses for their
opening statement and the chair now recognizes himself for 5
minutes for the purposes of asking questions of the witnesses.
The chair wants to thank at this point the Funeral Consumers
Alliance, AARP and the National Funeral Directors Association,
NFDA, for their support of this legislation.
I want to start by questioning Mr. Harwood. Mr. Harwood, in
your testimony you expressed some sound supports of provisions
of this legislation that expands the FTC's authority to include
non-profit, municipal and religious cemeteries. Why do you
think this provision is seen as so essential to this bill?
Mr. Harwood. Mr. Chairman, currently the cemetery industry
consists of both for-profit entities and not-for-profit
entities. In our experience, a majority of cemeteries are not-
for-profit and the numbers vary but, you know, there are many
thousands of not-for-profit cemeteries. Some are owned by
cities and counties. Some are owned by religious organizations.
Some are associated with other entities. The FTC's legislation,
the FTC law wouldn't currently reach those entities because we
have no jurisdiction under our consumer protection authority
over not-for-profit entities.
When we looked at this issue last in 2008 and discussed
whether we should consider extending some of the Funeral Rule
provisions to the cemetery industry, we concluded that doing so
would create an odd regulatory situation because the regulation
only reached some cemeteries and left out a majority of the
cemeteries that would otherwise be affected. Secondly, we were
concerned that consumers would be confused if some cemeteries
were covered and other cemeteries were not. Your legislation
addresses that concern by making all cemeteries subject or
potentially subject to the same regulation.
Mr. Rush. Judge Holmes, this provision of and inclusion of
the for-profits, and not-for-profits, and municipal and
religious cemeteries, and do you have, did you discuss this
provision in the topic and this provision addresses? Did you
have the opportunity to discuss that in your deliberations?
Ms. Holmes. Yes, Mr. Chairman, we did and the solution that
the bill came up with which I think is a great solution,
religious cemeteries, public cemeteries and cemeteries that
have fewer than 25 burials in the past 2 years are what is
called partially exempt. So while they may not have to acquire
licenses for their individual workers, they do still have to
comply with various portions of the Cemetery Oversight Act,
those portions that would be consumer-related. They have to
reasonably maintain the cemetery property. They must comply
with the mapping of their cemetery. They must keep an index.
They must submit to periodic inspection of the cemetery. They
must submit to the Consumer Bill of Rights so they must follow
all of the Consumer Bill of Rights although they don't have to
comply with the licensure rules that the for-profit cemeteries
would have to comply with. So we thought that was a really good
compromise.
Mr. Rush. Thank you.
Mr. Elvig, in your testimony you raised some concerns about
this provision along the lines of constitution and
jurisdictional concerns. What is your position? Do you agree
with Mr. Harwood or do you have another position?
Mr. Elvig. Well, my position would be different. Our
position would be different from an angle and that is that when
you start talking about municipal cemeteries or religious
cemeteries, and religious cemeteries can be the gamut from
Muslim cemeteries, Jewish, Catholic to Protestant, a variety of
religious cemeteries, we are talking about certain
constitutional protections as to how much you can regulate and
what success you may have in the courts in trying to prosecute
in those cemeteries. And so our concern is that as one moves
through the subject of municipal and religious cemeteries, what
constitutionality you may have. Could a Federal Trade
Commission rule honestly be imposed upon the City of Los
Angeles if it operated a cemetery, for say. I am dealing with a
cemetery in Florida that it is publicly operated right now that
is in a court case. How much jurisdiction can really be held
over that Florida cemetery? So our concerns are there and it
would seem to me that there would a lot of homework necessary
and for that reason we would think that if the FTC was to adopt
a rule they should adopt it for cemeteries and not a combined
one of funerals and cemeteries.
Mr. Rush. Thank you. The chair's time has expired.
The chair now recognizes Mr. Whitfield for 5 minutes.
Mr. Whitfield. Well, I want to thank the panel for your
testimony today. We genuinely appreciate your taking time to do
so.
Judge Brown Holmes, you may be the most objective person
here today because you are not a regulator and you are not in
the business, and you spent a lot of time looking into this
subject matter. And it sounds like to me that you all have been
quite successful in addressing the problem in Illinois, and I
am sure you have not looked at other States or maybe you have
to a degree but just from your perspective, do you feel like
that a Federal law would be helpful to address some of these
concerns nationwide?
Ms. Holmes. You know, it is a good question and I have
thought about that, and I actually do think that a Federal law
could serve to preempt in States that don't have regulations
right now. The kind of disaster that we had in Illinois had
there been a Federal law that required consumer protection,
this may not have happened but we had nothing. We had a very
disjointed system in our State and so it was the tragedy that
brought about the need to get in and do the regulation. Quite
possibly if the Federal government said to States do something
about this or here is the rule. The rule must be complied with
and there is authority with the FTC utilizing these State
attorneys general, the state attorneys general could then get
in and make certain that this type of thing did not happen in
those States where there is no regulation. We did look at some
States and what we found is that it was the tragedy that then
brought about the need for the rule and regulation. I think if
we get in and have the rule and regulation in the beginning,
possibly it stops the tragedy.
Mr. Whitfield. Unfortunately, I have not had the
opportunity to read 3655 but I note generally and understanding
the chairman's reputation of always having good legislation
except maybe on occasion, I am sure this is an effective bill
but you seem to be saying that preemption would be important
because a lot of these States do have different rules and
regulations and I don't believe this bill has Federal
preemption, does it?
Ms. Holmes. No, no, no, what I mean is the Funeral Rule
prior to the 1984 Act established particular rules. The funeral
industry has changed as a result of it. There is an opportunity
for States to opt out if their regulation is better than the
Funeral Rule so it puts that in the forefront of the minds of
the funeral industry. The cemetery industry, however I think
for some reason what it appears to us has been parsed out. I am
not certain why. We didn't investigate why that is but it
appears to me and from all of the individuals who testified
before us the average consumer joins the funeral director and
the cemetery. They don't look at them as a separate entity, a
separate business, a separate industry; but what we found and
learned is that they are, and it appeared to us to be, sort of
unusual. One portion of that industry is very heavily regulated
and the portion of the industry that is basically almost in
perpetuity is not regulated. And so it would seem to me that if
there are some regulations particularly given that it is at
that back end that there seems to be the most abuse that it
would be extremely helpful in drawing attention to the issue
and preventing this from occurring.
Mr. Whitfield. OK.
Mr. Harwood, someone in their testimony brought up this
issue of non-profits and in some instances States or
municipalities are operating cemeteries, for example. Can the
FTC assess civil penalties on another governmental entity for
violations?
Mr. Harwood. My understanding and I may have to correct
this, but my current understanding is that where a municipality
functions in a role that would be a businesslike role that we
have the authority to assess civil penalties in those
situations. It is not exercised often. It is obviously not good
for intergovernmental relations but the authority does exist
where necessary to do so.
Mr. Whitfield. OK, so you can do so then?
Mr. Harwood. Yes, that is my understanding.
Mr. Whitfield. Now, the Funeral Rule that was adopted by
the FTC was that required by statute or did you all just do
that under self initiation?
Mr. Harwood. The Funeral Rule dates from 1974 and it was
actually initiated, well '72 actually, it was actually
initiated by the FTC under its rulemaking authority called the
Magnus Moss Act rulemaking authority so it was actually
initiated by the FTC.
Mr. Whitfield. And would your current regulations give you
any authority over the incident that happened in Illinois at
that cemetery?
Mr. Harwood. Well, my understanding is that cemetery was
not a not-for-profit cemetery so to that extent our authority
would reach the cemetery. The funeral itself doesn't contain
provisions currently that would have addressed the conduct that
we are concerned about there, the exhuming of bodies and those
sorts of things.
Mr. Whitfield. OK. Well, thank you. I see my time has
expired, Mr. Chairman.
Mr. Rush. The chair recognizes the gentlelady from
Illinois, Ms. Schakowsky, for 2 minutes.
Ms. Schakowsky. Thank you, Mr. Chairman.
Mr. Earl, do you find what Ms. Brown Holmes has said that
people see the whole funeral and burial process as one and I
wonder if you could describe how that impacts you if there is
some things that go on at the cemetery level?
Mr. Earl. Well, I smiled when Judge Holmes said what she
did because that is absolutely true. Any time there is a
situation with a crematory, a cemetery, it doesn't matter what
it is we were the first to be called. National Funeral
Directors Association was the first to be called when all of
these situations have happened and occurred because everyone
turns to their funeral director when they have this problem.
Consumers look to us as funeral directors to solve problems.
That is what we do and when they call upon us they want us to
take care of one of the biggest problems they have ever had in
their life. And when I in my testimony as I am testifying the
third-party sellers and all these things that we have today did
not occur in 1984 when the rule was put into place, and so we
have a different world out there today to deal with, and that
is why we feel so strongly that the rules have to be changed.
They have to be changed to protect the consumer. The funeral
homes have complied. I mean you have heard the testimony here
today. The funeral homes have complied with the rule and it has
helped the profession as a whole but in order to protect the
consumer of today we have to have new laws to prevent some of
the things that are happening today.
Ms. Schakowsky. I just have a few seconds. Mr. Chairman,
can I ask one more question?
Mr. Rush. Sure.
Ms. Schakowsky. OK, it seems as if one of the most basic
responsibilities of a cemetery is to keep clear and orderly
records that reflect who is buried there. Families have to be
able to find their loved ones. Mr. Elvig, you were saying that
someone turned in the keys and said as a small cemetery they
could not comply with any stricter rules. Is it really too much
to ask that even for a small cemetery that they keep good,
retain the records and that they respond to these consumer
protections?
Mr. Elvig. Congresswoman, not at all, that is not too much
to ask. As a matter of fact, small, large and middle-size
cemeteries they have to rely on quality records to know what
they can even sell and what they can use, where they can put
markers. Recordkeeping in cemeteries are not separable. Good
records are very critical. I have urged cemeteries and we are
seeing an interesting trend as they convert to electronic
record systems, mapping systems, card file systems, we have
asked cemeteries across this country to consider giving their
old records that were written in pen and ink on cards to
archives, the State archives and the likes for research but
cemeteries need accurate records.
Ms. Schakowsky. All right, so what is it that a small, not-
for-profit cemetery thinks they could not comply with if we
were to change the rules and cover them?
Mr. Elvig. For example, when you look at the Federal Trade
Commission's present rules on funeral homes, on price lists, on
disclosures, on the types of rule they have it would impose--
just asking a small volunteer cemetery to come up with a
written price list for all of the varieties of graves and
markers and vaults and liners and urns that are available you
are talking about a cost, and yet if you are only burying 35
people a year you are talking about a burden on those
cemeteries. I know I have been in them. I have audited them. I
watch them close.
Ms. Schakowsky. Thank you.
Mr. Rush. The chair now recognizes the gentleman from
Georgia, Dr. Gingrey, for 2 minutes for the purposes of opening
statement.
Mr. Gingrey. Mr. Chairman, I thank you. I have to admit I
came here this morning out of respect for my chairman and my
ranking member and to make an opening statement and then
hopefully to catch up on my e-mails but quite honestly this
panel is fantastic. Each and every one of you has done a
wonderful job and I have been so interested I haven't even been
able to look at my e-mails.
So I am going to ask my question of Judge Holmes. Judge
Holmes, I don't know if you ever heard of Lewis Grizzard. Of
course, we are talking about the crematory up in Georgia close
to my district but I mention Lewis Grizzard. He was a humorist
from Georgia, a columnist for many years for the Atlanta
Journal Constitution and he spent some of his career in Chicago
and then came back to the great State of Georgia. He died a
number of years ago far too young but Lewis Grizzard said that
nothing good comes out of Illinois and particularly nothing
good comes out of Chicago. He didn't have the opportunity to
meet Judge Holmes, obviously and based on your testimony I
think that he would have liked you very much.
Let me direct my question to you. You mentioned that
duplicative and overlapping regulations for funeral products
cause confusion amongst consumers in Illinois. It was an issue
your task force addressed. Do you have concerns that
duplicative regulation by the State and the Federal Government
could cause similar confusion?
Ms. Holmes. No, I don't because the way I read the House
bill, I actually thought it was excellent, very concise, to the
point, very consumer-friendly, very consumer-oriented, and I
read our bill and they mesh together very well. Ours is a
little more stringent, I think, and so I would like the
opportunity if I were the State I would say well, I would like
the opportunity to implement our rules and regulations because
they are stricter but if I were a State that had no rules or
regulations or if I were one of the States that had a
hodgepodge of rules that don't really get to the issue and the
Federal Government said to me do something about this, then
fine, let's do something about this. I have a friend, and it
sort of goes to Congressman Schakowsky's question regarding the
small funeral home, she--her family owns the South View
Cemetery in Georgia, in Atlanta, Georgia, very small, owned by
a small family. It is the funeral, cemetery, I am sorry, it is
the cemetery where Martin Luther King was buried before his
body was exhumed and taken to their foundation, and she runs
that cemetery tremendously. She has rules. She has regulations.
She gives price lists. She follows a set of rules that she has
imposed, her family has imposed on themselves and it is a
beautiful cemetery, and she does it with very little money. So
it can be done and the way we view this House bill, the way I
view this House bill, it is not asking you to do anything that
you ought not do anyway if you have good conscience and good
ethics. And I think that if it is imposed on the States to do
this, if the Federal Government either says here is a baseline,
you can go beyond the baseline, I think that gets us to a point
where the States do something and we don't have to chase the
tragedy.
Mr. Gingrey. Thank you very much.
Mr. Chairman, thank you for your indulgence and I really
appreciate the testimony of all the witnesses. I yield back.
Mr. Rush. The chair thanks the gentleman.
The chair now recognizes Mr. Stupak for 2 minutes for the
purposes of questioning the witnesses.
Mr. Stupak. Thank you, Mr. Chairman. Thanks for holding
this hearing.
Let me ask Ms. Holmes and Mr. Earl this question if I may.
Regulation of prepaid funeral and cemetery contracts in
Michigan was enacted in 1986. Michigan law regulates the sale
and provision of certain funeral and cemetery merchandise and
services including prepaid funerals. All prepaid funeral money
must be placed in a State-regulated escrow account by the
funeral providers so that it is available when the funeral
occurs. Even with these regulations in 2009, there were plenty
of scams if you will, concerning prepaid funerals in Michigan.
How would this bill address the growing problem of prepaid
funeral arrangements that are invalidated, renegotiated after
the death or altered in a way to mislead the customer? Mr. Earl
and Ms. Holmes or anyone else, Mr. Elvig.
Mr. Earl. I will address it to a certain extent. This House
rule would not pertain to pre-need funerals at all.
Mr. Stupak. So even if the money is in escrow there still
is--we are still going to have problems even underneath this
bill? And we have people that just embezzled the escrow money
and people died and the money was gone and we were caught up in
the one. We had 70 funerals.
Mr. Earl. The bill would not address that. You are correct.
Mr. Stupak. OK, so OK.
Ms. Holmes. And our task force did not address pre-need
because there was another task force that was investigating
pre-need but I do think you have hit on another aspect that
does need to be covered.
Mr. Stupak. OK, Mr. Elvig.
Mr. Elvig. If I could comment.
Mr. Stupak. Sure.
Mr. Elvig. I have been a regulator and an auditor. It is
very difficult to address because of so many facets to pre-
need. For example, divorce, people remarrying and not
addressing their pre-needs in divorce, cemeteries being dragged
in and saying OK, now you settle it 20 years later on who gets
to use what. It really comes right back to what does a State
agency do. How does a State regulate unique to its State and
that is why we have taken the stand that the States probably
are in the best position to regulate like Michigan.
Mr. Stupak. Sure, but then now with the Internet, you know,
you are seeing more and more of this on the Internet. The
marketplace for funeral goods and services has really changed
with the Internet and more businesses are selling their
products on the Internet so even if we do have local rules like
Michigan, I mean you still have those scams but I think the
Internet has made it easier to bring more uncertainty to this
area where when people prepay or see a director they think
there is some certainty other than death that they are dealing
with here.
Mr. Elvig. That is correct, sir.
Mr. Stupak. So how do we deal with that, I guess we still
go back.
Mr. Elvig. I think that first off you have made a very good
point and the other good thing by the way about the Internet
has opened up for the consumers still more opportunities to
compare shop.
Mr. Stupak. Sure.
Mr. Elvig. To decide what they really want and that is a
concern we have that as we look at structuring rules and we
look at structuring FTC rule that we don't close the door on
the future that this industry will evolve in by consumer
demand.
Mr. Stupak. Right.
Mr. Elvig. We need to listen to those who want to use the
services. Well, nobody wants to use the service but when they
need to use it.
Mr. Stupak. Correct.
Mr. Elvig. You are right on there.
Mr. Stupak. OK.
Mr. Rush. The gentleman's time is up.
The chair now recognizes the gentleman from Louisiana, Mr.
Scalise for 2 minutes.
Mr. Scalise. Thank you, Mr. Chairman.
Judge Holmes, in your task force's work you proposed actual
legislation that was adopted in Illinois? Was it specific
recommendations that you all proposed?
Ms. Holmes. We didn't write the bill, no. We proposed
recommendations. We made findings. We handed those findings
over to our state legislature. There was Representative Monique
Davis, Representative Dan Brady and several senators who worked
on it.
Mr. Scalise. Some legislators were part of the task force
and they drafted the actual law.
Ms. Holmes. So they worked on the--they drafted the actual
legislation but they took our recommendations into account.
Mr. Scalise. Did they take all of them? Were there any left
out?
Ms. Holmes. There were a couple of provisions that were
left off but I am not thinking of what they are right away but
they were minor in our view. They took every one of our major
recommendations.
Mr. Scalise. OK and I will include Mr. Elvig and Mr. Earl
in this, too. As you look at the law now as it stands in
Illinois and of course you all touched on the fact that there
are laws in each State but you probably have 50 different
variations of the law and regulation process, first, would
Illinois now be considered model legislation or is there a
State that has kind of a model law? And, you know, and I know
in South Louisiana where the district I represent we have
cemeteries that are above ground because of the water table so,
in fact, many of the cemeteries are considered tourist
attractions, believe it or not, and so there are different
situations there. Are the laws that you see across the country,
is there a model law that you would recommend or how does it
work in terms of what you have seen from your research, both
Judge Holmes as well as other panelists.
Ms. Holmes. For our task force we reviewed several
different States and we took the ones that we thought were--we
took sort of the best of the best. Florida had a really good
law. California had a really good law, both born from tragedy.
And we consider our law now to be a model, a national model
because we did take the best of the best, and we focused on
consumer protection.
Mr. Scalise. Gentlemen.
Mr. Earl. I would just add that we look--the funeral
profession looks at the FTC rule as being a standard for every
State. It is a minimum standard for all funeral homes in every
State. As has been mentioned, if a State has a higher standard
they can opt out of the rule but we also believe that there
should be the same standard for all cemeteries, all third-party
sellers, some type of a standard and that is all we are asking
for so that there is something. There are many States out there
that have much better laws than what we are talking about but
there are some that have none, zero, so that is what we are
asking for in the bill that you are speaking of.
Mr. Elvig. If I could just add that your comments are right
spot-on again concerning the style of burials in Louisiana,
above ground because of the water and your State statute
addresses that, at least that is what Fran Mayo use to tell me.
She was a regulator in your State. Washington State we have
Mount Rainier and what do we do about scattering cremated
remains in that park and on that mountain. What about the State
of Montana where the grounds are frozen a good portion of the
year? How do you handle burials and holding bodies for burial
in frozen grounds? Issues vary State for State and that is one
of the strong reasons for looking to State answers to its State
issues so we would urge that that be kept in mind as you look
at this bill is the uniqueness of State situation.
Mr. Scalise. Thank you, Mr. Chairman. I yield back.
Mr. Rush. The chair would entertain by unanimous consent
extend this hearing for an additional round of questions. Each
member will be allowed to ask one question of the witnesses and
the chair would also like to announce that there is a vote
expected in about 15 minutes so I think that one additional
question should be able to give us ample time to get over to
vote.
The chair would recognize himself for 1 minute to ask a
question of Mr. Harwood. Mr. Harwood, are you familiar with the
recent sting in Massachusetts of funeral homes by State
licensing investigators which has resulted in a 25 percent
violation rule with respect to compliance with the FTC's
Funeral Rule? My question is that is did the FTC assist
Massachusetts at all in those enforcement activities and what
is the state of enforcement activities at FTC now as it relates
to the Funeral Rule?
Mr. Harwood. Mr. Chairman, we learned of the Massachusetts
sweep or sting when it was reported in the press and we did not
assist the State in its enforcement sweep. That being said, we
have historically worked with States that are engaged in
funeral enforcement and in each of the last 3 years we worked
with at least one State. For example, on the work we have done
this year we worked with Tennessee. Last year we worked with
Minnesota. The year before that we worked with Pennsylvania on
enforcement rule. So we have a history of working with States.
In the case of Massachusetts, they appear to have a law that
lets them enforce the Funeral Rule without Federal involvement
and that is precisely what they did here.
Mr. Rush. The chair now recognizes the ranking member, Mr.
Whitfield, for one additional question.
Mr. Whitfield. Judge Holmes, I would like to ask you
another question. Cemeteries frequently have financial
difficulties on maintenance at cemeteries and I notice that you
indicated that you all established a cemetery relief fund in
Illinois and would you expand on that, and how did you fund
that?
Ms. Holmes. Well, it is my understanding right now it is
not funded of course because the bill just passed but it is my
understanding that it will be funded by fines that it will be
started at least by fines that will be levied against
individuals who may be in violation of some of the rules that
will promulgated by the Illinois Department of Professional and
Financial Regulations, as well as by the licensure fees. So now
all cemetery owners will have to pay a small fee and what we
were told is they are talking about grading the fee based on
the number of burials or the size and acreage of the land, et
cetera, and so having some money that I think will be the
upstart for the fund.
Mr. Whitfield. OK and that license, that is required of the
funeral home as well as.
Ms. Holmes. Yeah, the funeral directors are already
required to be that. It is the cemeteries are not.
Mr. Whitfield. Cemeteries.
Ms. Holmes. And so the cemeteries will now be required
based on whether it is private, religious, et cetera, their
levels of licensure. I think religious are exempt.
Mr. Whitfield. OK, thank you.
Mr. Rush. Ms. Schakowsky, you are recognized for one
additional question.
Ms. Schakowsky. Thank you.
Mr. Harwood, the legislation under consideration today
would give the FTC the authority to promulgate these
regulations under the standard process of the Administrative
Procedures Act. How would this provision impact FTC's ability
to take action in this area?
Mr. Harwood. Under the FTC's current rulemaking authority
which I referred to earlier as the Magnus Moss Act it takes the
FTC between 3 and 10 years to promulgate a rule. In fact, the
Funeral Rule took longer than that but we had--but we were in
the learning curve with the Magnus Moss Act at that point.
Recently, it has taken us between 3 and 10 years. Where we have
been able to use the Administrative Procedures Act, the Act
provided for in this rule, this legislation, we have been able
to promulgate a rule in a year and so this legislation would
allow us to do the same for I think here.
Ms. Schakowsky. Thank you.
Mr. Rush. The chair recognizes Dr. Gingrey for one
additional question.
Mr. Gingrey. Mr. Chairman, thank you.
You know, I do have a question and it is going to be of Mr.
Elvig but I just wanted to make this comment. We have all seen
the horrific views of what is going on in Haiti and how they
are dealing with the hundreds of thousands of the bodies of the
deceased and of course they have no choice I don't think in
this situation. We have all seen film clips, of course, from
the Holocaust and they had a choice but, you know, it just
shows you how important this subject really is. How very
important this subject is that people shouldn't be re-gifted in
death and that is basically what was happening in the cemetery
in Illinois and even worse in the cemetery in Georgia. So I
just appreciate the opportunity, Mr. Chairman, to discuss your
bill and to have a hearing on it and to get the information
from the experts.
My question, Mr. Elvig, in your testimony you state that
ICCFA believes that the funeral and cemetery industry is best
regulated at the State level, not at the Federal level, yet
people say and the testimony here today that some States really
do not have very strict cemetery or funeral home laws. A law is
made OK, but there is very little enforcement by the States, do
you agree with that?
Mr. Elvig. Well, unfortunately, Mr. Congressman, I don't
agree with it. I have been through State laws. I have gotten to
know most State regulators one-on-one. I have had them call me
about issues they are facing. They do regulate. They go to
where the problems are, and they respond to those problems, so
I think to say that the States are not carrying their weight is
not accurate nor is it adequate. This issue is Illinois, for
example, was addressed at that State level and addressed quite
well by the Judge and her committee. Again, they deserve to be
complimented, but again, that is reacting to an event and not
trying to impose nationwide. Yes, the States are regulating.
Yes, the States are doing their job. ICCFA files presently are
full of information that where the States are moving on various
fronts. Many times they seem to be small fronts. The simple
issue of what constitutes maintenance in a cemetery. You can
argue about that until the cows come home. Maybe you could use
some cows but eating the grass but whatever the case is you are
talking about State per State issue that is unique State per
State and the regulators are doing their job.
Mr. Rush. That concludes the questioning portion of this
hearing, and that being said the chair asks for unanimous
consent for testimony of the Funeral Consumer's Alliance that
their testimony be entered into the record and hearing no
objection, so ordered. The chair wants to announce that the
record will remain open for 2 weeks to allow subcommittee
members to submit questions to the witnesses to round out the
attending record, and the chair again wants to express his
appreciation to the fine testimony of each and every one of
you. You have contributed greatly to our deliberations and to
this legislative process and we owe you our heartfelt gratitude
for your experience, and your time, and your testimony.
And now the chair will announce that this committee and
this hearing is adjourned and thank all the members for their
participation. The committee now stands adjourned.
[Whereupon, at 11:30 a.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]