[Congressional Record Volume 140, Number 51 (Tuesday, May 3, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              PRESCREENING BY THIRD PARTY DATA PROCESSORS

  Mr. PRYOR. I rise in support of S. 783 and would like to commend the 
managers of this bill for bringing it to the floor. I would also like 
to take a moment to engage the senior Senator from Michigan, the 
chairman of the committee, in a brief colloquy.
  As the chairman knows, section 103 of S. 783 clarifies and expands 
upon current Federal Trade Commission [FTC] interpretations of the Fair 
Credit Reporting Act regarding permissible prescreening activities. One 
of those activities involves demographic or other analysis performed by 
third party data processors on behalf of credit grantors on information 
contained in consumer reporting agency files.
  It is my understanding that the prescreening activities performed by 
these data processing entities have been sanctioned by the FTC. It is 
further my understanding that section 103 of S. 783 is not intended to 
change the status of the prescreening services provided by these 
entities, and in fact, the committee's report helps clarify the status 
of third party data processors under the act by incorporating the 
interpretive language adopted by the FTC, is this correct?
  Mr. RIEGLE. The Senator is correct. We are aware that these entities 
exist and what services they provide credit grantors, and as the 
Senator mentioned, we specifically included language in the committee 
report dealing with this issue. In particular we are aware that 
consumer reporting agencies may provide these entities a list with the 
name and address of each consumer identified by the prescreening 
process; addition information regarding any individual consumer on the 
list may be furnished to the entity provided it is not identified or 
identifiable with the consumer. We are also aware that the prescreening 
process may also include demographic or other analysis of the consumers 
on the list by the consumer reporting agency or by a third party 
employed for that purpose before the list is furnished to the credit or 
insurance provider.
  Mr. PRYOR. I thank the chairman for his clarification.
  Mr. BRYAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Nevada suggests the absence 
of a quorum. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BRYAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1670

   (Purpose: To express the will of the Senate on the closing of the 
             Securities and Exchange Office in Seattle, WA)

  Mr. BRYAN. Mr. President, I send an amendment to the desk offered by 
Senator Bond and I on behalf of Senator Gorton, and I ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Nevada [Mr. Bryan], for Mr. Gorton, 
     proposes an amendment numbered 1670.

  Mr. BRYAN. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place in the bill, insert the following 
     new section: ``Securities and Exchange Commission, Seattle 
     district office:
       It is the sense of the Senate that the Securities and 
     Exchange Commission district office located in Seattle, 
     Washington shall not be closed, nor its services, operations, 
     or staff be reduced from the levels in effect on January 1, 
     1994. None of the operations of the Seattle office shall be 
     transferred to another office of the Securities and Exchange 
     Commission.''


sec seattle district office amendment to s. 783, fair credit reporting 
                                  act

  Mr. GORTON. Mr. President, I am offering a sense of the Senate 
amendment to the fair credit reporting bill regarding the Securities 
and Exchange Commission's decision to close the Seattle office. Earlier 
this year, the SEC announced that the Commission's Seattle district 
office would close in July. The plan is to close the Seattle office and 
incorporate its functions into the San Francisco and Los Angeles 
offices. As soon as I heard about this, and knowing how hard the 
Seattle SEC office has worked to forge a solid working relationship 
with Northwest firms, I immediately contacted the Commerce 
Appropriations Subcommittee. Since then, I have received numerous 
letters of concern. These letters have ranged from the attorney 
general, county executives, bankers, lawyers, small businesses, and 
other citizens who are concerned about the impact this move would have 
on the Pacific Northwest. I agree. This decision is very unwise and 
extremely shortsighted.
  Yesterday, Mr. Levitt, the Chairman of the SEC, visited Seattle and 
met with several people, including members of my local office staff. I 
understood his visit was to be centered around listening to people's 
and businesses' concerns and opposition to this closure. Unfortunately, 
this was not the case. He came not to listen. Instead, he insisted tht 
this closure was a done deal and would not hinder the Pacific 
Northwest.
  I do not believe this should be a closed issue. In a recent letter to 
Mr. Levitt, I expressed some of my concerns on this issue.
  Mr. Levitt contends that this modification of the SEC offices is 
necessary because of Seattle's relatively small securities industry 
constituency. This is not true. The business of the SEC in Seattle is 
growing, not diminishing. In fact, the population and the business in 
the Pacific Northwest is growing proportionally greater than that of 
the rest of the country. With the rise of many software, bio-technology 
and other growth companies in this region, the ability to raise 
investment capital has become more and more critical. Furthermore, with 
thoughts of putting a permanent APEC office in Seattle, the Northwest 
is developing as a financial center.
  Second, by allowing the closure of the Seattle office, it is saying 
that the services provided now in the Northwest can be provided just as 
efficiently in California. That also is simply not true. As Seattle is 
growing, Federal regulators need to be onsite in order to provide both 
service and protection. Moreover, the needs of the Northwest will not 
remain as a high priority as it is in the Seattle office. Enforcement 
roles and investors' problems cannot be solved with a 1-800 number as 
Mr. Levitt is suggesting. Without a doubt, the ability of our companies 
to deal directly with its major regulatory authority on a regional 
level is much more effective and has proven to have a real 
significance.
  What is true is that Congress and the SEC have always recognized the 
importance of encouraging and easing the ability of small business to 
raise investment capital. The follow through of this decision will do 
the exact opposite. It will inhibit the investment of capital in the 
Pacific Northwest.
  Furthermore, what is true is that this decision to close the Seattle 
SEC office was not handled appropriately and through the proper 
channels. Instead of listening and responding to the residents of the 
Pacific Northwest before anything was decided, it was handled almost 
secretly and then forced upon us. With a decision as important as this 
is to the businesses and the citizens of the Pacific Northwest, it is 
imperative to keep everyone involved in the decisionmaking process. 
Moreover, after the announcement, opposition to the decision has been 
met with closed ears and closed doors.
  What is true is that the Seattle SEC office is the only office in the 
Northwest. By closing it we are stating that having this agency is not 
vital to this area. By closing the operation of the Seattle office, the 
needs of the Pacific Northwest will not be adequately met.
  Finally, what is true is that for almost 60 years the Seattle SEC 
office has provided the area's investing public and small business 
invaluable assistance. To continue with the economic development of the 
Northwest, it is critical to leave the Seattle office open.
  Mr. BRYAN. Mr. President, I represent to my colleagues that the 
amendment has been cleared on this side of the aisle.
  Mr. BOND. Mr. President, I thank the manager of the bill for his kind 
efforts. There is no objection on the Republican side.
  The PRESIDING OFFICER. Is there further debate on the amendment? If 
not, the question is on agreeing to the amendment of the Senator from 
Washington.
  The amendment (No. 1670) was agreed to.
  Mr. BRYAN. Mr. President, I move to reconsider the vote by which the 
amendment was agreed to.
  Mr. BOND. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

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