[Congressional Record Volume 140, Number 117 (Thursday, August 18, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 18, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. RIEGLE (for himself, Mr. Feingold, Mr. Simon, Mrs. Boxer, 
        and Ms. Moseley-Braun):
  S. 2402. A bill to provide for public access to information regarding 
the availability of insurance, and for other purposes; to the Committee 
on Banking, Housing, and Urban Affairs.


                THE HOMEOWNERS INSURANCE DISCLOSURE ACT

 Mr. RIEGLE. Mr. President, today I rise to introduce the 
Homeowners Insurance Disclosure Act of 1994, a bill aimed at making 
homeowners insurance available, affordable, and accessible to all 
Americans. This bill will help us determine which insurance companies 
refuse to provide coverage merely due to location, charge more for 
insurance coverage, or offer restricted coverage without justification.
  Many urban areas have insurance problems because of insurance 
discrimination based on the racial and socioeconomic characteristics of 
a geographic area. This phenomenon is known as redlining. As the 
chairman of the Committee on Banking, Housing, and Urban Affairs, I 
have come to understand the inextricable link between financial 
services, like insurance, and housing. As one Federal judge has 
written: ``lenders require their borrowers to secure property 
insurance. No insurance, no loan; no loan, no house; lack of insurance 
thus makes housing unavailable.''
  That is why we have included provisions in virtually every bill the 
committee has passed during my chairmanship to ensure that credit is 
available to all communities. The committee included provisions in the 
Financial Institutions Reform, Recovery, and Enforcement Act, and 
amended the Home Mortgage Disclosure Act to require regulators to 
notify the Justice Department about instances of lending 
discrimination. And we have also held hearings to make sure that fair 
lending laws are being enforced aggressively and effectively. Since 
lenders require their borrowers to secure property insurance, 
addressing homeowners insurance discrimination is a logical progression 
of the committee's efforts to guarantee not only an adequate flow of 
capital into distressed communities, but also access to financial 
services.
  The bill that I am introducing today is patterned after the highly 
successful Home Mortgage Disclosure Act and would require the 
disclosure by insurance companies of the type, cost, and location of 
policies by census tract in 100 urban areas and by 5-digit zip code in 
25 rural areas across the Nation. The bill would also require the 
disclosure of loss data, which is critical in determining whether 
differences in premium costs are due to actual losses or racial and 
ethnic stereotypes. The bill does not preempt States from imposing more 
stringent requirements and would exempt companies from Federal 
reporting standards if those that are prescribed by the State are 
equivalent or higher. Finally, the bill merely requires insurance 
companies to provide data similar to what they are already giving to 
the National Association of Insurance Commissioners, but which is not 
currently available to the Federal Government.
  Although the Fair Housing Act of 1968 banned redlining, this problem 
has been ongoing for the last 26 years. The issue first gained 
attention after a series of urban riots in the late 1960's, inducing 
the Federal Government to create the National Advisory Panel on 
Insurance. The Panel's reported noted that:

       Insurance is essential to revitalize our cities. It is a 
     cornerstone of credit. Without insurance, banks and other 
     financial institutions cannot make loans. New housing cannot 
     be constructed and existing housing cannot be repaired.
       New businesses cannot be opened and existing businesses 
     cannot expand, or even survive. Without insurance, buildings 
     are left to deteriorate; services, goods, and jobs diminish. 
     Efforts to rebuild our nation's inner cities cannot move 
     forward. Communities without insurance are communities 
     without hope.

  The Panel concluded that there was a serious lack of property 
insurance in these inner cities, and that this shortage had been 
exacerbated by the recent riots. It recommended the creation of State-
run Fair Access to Insurance Requirements [FAIR] programs for residents 
of high risk neighborhoods who are unable to purchase insurance in the 
voluntary market, and a Federal program to protect against loss due to 
riots. Numerous States responded and developed FAIR plans.
  Unfortunately, problems persisted. In 1974, the Federal Insurance 
Administration noted that the FAIR plans were being used to ``relegate 
significant numbers of risks to second-class coverage, treatment, and 
cost on the basis of arbitrary underwriting judgments that ultimately 
benefited neither the consumer nor the insurer.'' Similarly, in 1978, 
HUD issued a report which concluded that redlining was widely practiced 
by insurers, that it had an ``undeniable racial component,'' and that 
the practice ``was not based on any sound underwriting standards but 
rather on highly subjective criteria that would appear to result from 
unfounded generalizations or preconceptions about urban property 
risks.''
  Federal efforts to address redlining languished during the Reagan-
Bush era, but the issue reemerged in 1992 when the Los Angeles riots 
revealed potential problems with the availability and affordability of 
insurance. This committee heard testimony about the tremendous shortage 
of property insurance in the Los Angeles area, including the California 
Department of Insurance's finding that 61 percent of the businesses 
damaged in the riots after the Rodney King verdict were uninsured 
because coverage was too expensive or not available. An additional 4 
percent said the agent that they contacted would not quote rates in 
their area.

  But the problem is not confined to California alone. At a hearing 
before the Committee on May 11, 1994, we heard testimony about how one 
insurer drew a line around the entire city of St. Louis and labeled it 
``ineligible property.'' In addition, we learned that testers from the 
National Fair Housing Alliance experienced discrimination while seeking 
homeowners insurance 47 percent of the time in Louisville, 60 percent 
of the time in Atlanta and Milwaukee, and an incredible 95 percent of 
the time in Chicago.
  In Milwaukee, a district sales manager of a large insurance company 
was taped giving the following advice to several subordinates:

       Very honestly, I think you write too many blacks. * * * You 
     gotta sell good, solid, premium paying white people * * *. 
     They own their homes, the white works * * * . Very honestly, 
     black people will buy anything that looks good right now * * 
     * but when it comes to pay for it next time * * * you're not 
     going to get your money out of them * * *. The only way 
     you're going to correct your persistency is to get away from 
     blacks.

  Other States have their fair share of problems. In Georgia, insurance 
regulators are investigating charges of insurance discrimination. Texas 
recently fined Allstate $850,000 for discriminatory practices, and the 
Ohio Insurance Department fined Farmers Insurance for determining rates 
by ZIP Codes instead of by municipality, which led to underpricing 
insurance in the suburbs. In the Washington metropolitan area, some 
current and former employees, as well as a local chapter of the NAACP, 
recently alleged that GEICO, a local insurance company, systematically 
screens out blacks. In one instance, a supervisor of one of these 
employees said that the owner of a large house and several luxury cars 
in southeast Washington, ``must be a drug dealer.''
  Numerous studies have documented this widespread discrimination 
against low-income minorities. One study performed by the Missouri 
Department of Insurance indicated that policy holders in certain 
minority low-income ZIP Codes in St. Louis and Kansas City paid 
significantly more than policy holders in white low-income ZIP Codes, 
and that substantially more of the policies sold in the minority low-
income ZIP Codes were limited policies compared to those sold in low-
income white ZIP Codes. At the same time, insurers paid more in claims 
in the white low-income neighborhoods than in minority low-income 
neighborhoods. In other words, residents of minority low-income ZIP 
Codes paid more for their insurance, but received less comprehensive 
coverage and were paid fewer claims than residents in white low-income 
ZIP Codes.
  A study released in February 1993 by ACORN, analyzing by ZIP Code St. 
Louis, Kansas City, Milwaukee, Chicago, and Minneapolis-St. Paul, found 
that homeowners in inner city neighborhoods were underinsured as 
compared to those in wealthier areas, and housing units in minority 
areas were less likely to be insured than those in predominantly white 
areas of comparable income levels. Moreover, the study showed that 
insurance agents are five times less likely to offer inner city 
homeowners a chance to buy insurance than they are residents of high-
income areas.
  The Texas Office of the Public Insurance Counsel also released its 
own report on redlining in automobile insurance. It found that Houston 
drivers in predominantly minority ZIP Codes paid higher premiums for 
liability insurance, not including theft and vandalism, relative to 
drivers with the same driving records in predominantly white ZIP Codes. 
The office also discovered underwriting guidelines that excluded 
applicants on the basis of marital status and place of birth, as well 
as those that mandated minimum coverage amounts of $70,000, even though 
median house value in the State is $42,500.
  And finally, the General Accounting Office recently issued a report 
noting that most currently available data are not useful in determining 
whether availability, affordability, and accessibility problems in fact 
exist. The report concluded that:

       Data that are collected for homeowners insurance will be 
     more useful in examining availability and affordability once 
     the data are collected on a ZIP-Code level (beginning in 
     1994) and analyzed in conjunction with Census Bureau data. 
     However, data on accessibility are not collected. Reducing 
     the size of the reporting unit to census tracts would, in 
     most cases, increase the value of data by enabling more 
     homogeneous units to be analyzed.

   The report stated further that ``to review affordability-related 
issues, premium and coverage amounts as well as loss data would be 
needed.'' Accessibility determinations would require data ``on 
marketing activities and agents' locations.'' And availability could be 
determined with information on ``the number of properties insured, by 
company and by type of policy.'' The Homeowners Insurance Disclosure 
Act would provide exactly the type of information that the GAO 
requests.
  This persistant form of discrimination demands immediate 
congressional action. There are those who have realized this need 
already, and I commend Representatives Collins and Kennedy and Senators 
Feingold and Bryan for their leadership on this very important subject. 
I urge my colleagues to support this bill so that we can make 
affordable homeowners insurance a reality for all Americans.
 Mr. FEINGOLD. Mr. President, I am pleased to join with the 
Senator from Michigan [Mr. Riegle], the chairman of the Senate Banking, 
Housing, and Urban Affairs Committee, in introducing legislation 
focused on the problem of insurance redlining. Although I will only 
have had the opportunity to work with Senator Riegle for 2 years, it 
has indeed been an honor, and a privilege to serve with him. His 
leadership on the Banking Committee, as exemplified in his introduction 
of this critical piece of legislation, will be sorely missed.
  On March 10, 1994, I introduced similar legislation, S. 1917. On May 
11, 1994, Senator Riegle chaired a hearing on the problem of redlining. 
Although I do not serve on that committee, Senator Riegle graciously 
invited me to join him at that hearing and to participate in the 
committee's questioning of the witnesses. Subsequently, my staff worked 
closely with Senator Riegle's staff in preparing the measure being 
introduced today.
  Mr. President, there are few issues of greater importance to millions 
of Americans. ``Communities without insurance are communities without 
hope.'' That was the conclusion over 25 years ago by the National 
Advisory Panel on Insurance. This panel was charged with examining the 
riot-stricken areas of our Nation in 1968, and they determined that the 
key to revitalizing our inner cities and bringing economic opportunity 
to all Americans rested on the ability of these communities to obtain 
affordable, quality insurance. With proper insurance, you can buy your 
own home, you can start a small business, and you can purchase an 
automobile so you can expand your employment opportunities.
  Unfortunately, in 1994, too many of our low-income and minority 
communities have been denied access to the necessary insurance that is 
required to obtain that home loan or small business loan. The 
underwriting industry is supposed to be based on economic principles 
such as loss claims and associated risk. But as decades of research, 
studies and reports have shown, these economic principles have 
frequently been replaced by much more reprehensible factors such as the 
race or income status of the insurance applicant.
  This legislation would, among other things, give Federal agencies and 
affected individuals the ability to effectively detect and address the 
problem of insurance redlining and enforce the Fair Housing Act. It 
would accomplish this by requiring insurance companies to disclose and 
report the number and types of policies made along census tract lines 
along with the race and income of the applicants and whether the 
applicants were accepted or rejected. Such information would be 
invaluable to Federal prosecutors and individuals seeking redress from 
discriminatory redlining practices. And of course, insurance companies 
that are in compliance with the law would have nothing to fear from any 
such disclosures.
  I am pleased that the Clinton administration has expressed its 
support for legislation to address this problem and has urged Congress 
to act quickly on this important matter. The House of Representatives 
has recently passed similar legislation by an overwhelming margin. 
Hearings also already have been held in the Senate Commerce Committee, 
chaired by my friend from Nevada, Senator Bryan. As a result of the 
strong interest in this issue by the Members of the Senate, I am 
confident we can move forward on this issue in the very near future.
  In conclusion, I would like to again thank Senator Riegle for his 
work in this area. I look forward to working with him and others in 
making sure that we do all that we can to end the practice of insurance 
discrimination.
                                 ______

      By Mr. FEINGOLD:
  S. 2405. A bill to amend certain Federal civil rights statutes to 
prevent the involuntary application of arbitration to claims that arise 
from unlawful employment discrimination based on race, color, religion, 
sex, national origin, age, or disability, and for other purposes; to 
the Committee on Labor and Human Resources.


           the civil rights procedures protection act of 1994

 Mr. FEINGOLD. Mr. President, I introduce a bill that is 
related to S. 2012, the Protection From Coercive Employment Agreements 
Act of 1994, which I introduced on April 13, 1994. This bill mirrors a 
House bill just introduced by Representatives Patricia Schroeder, 
Edward Markey, and Marjorie Margolies-Mezvinsky as companion 
legislation to S. 2012.
  This bill, however, approaches a rapidly growing problem in a 
slightly different, but equally effective manner. The problem is the 
practice of requiring employees to submit claims of discrimination or 
harassment to arbitration as a term or condition of employment or 
advancement, and prohibiting the employee from resolving their claim in 
a court of law.
  While S. 2012, would proscribe employers from implementing such 
requirements, this bill amends seven specific civil rights statutes to 
make clear that the powers and procedures provided under those laws are 
the exclusive ones that apply when a claim arises. The legislation 
would invalidate existing agreements between employers and employees 
that require the employment discrimination claims to be submitted to 
mandatory arbitration.
  The statutes this bill would amend are title VII of the Civil Rights 
Act of 1964, section 505 of the Rehabilitation Act of 1973, the 
Americans With Disabilities Act, section 1977 of the revised statutes, 
the Equal Pay Act, the Family and Medical Leave Act, and the Federal 
Arbitration Act [FAA]. The amendment to the FAA extends the protections 
of the bill to claims of unlawful discrimination that arise under State 
or local law and other Federal laws that prohibit job discrimination.

  Mr. President, I want to reiterate that this legislation, as in the 
case of S. 2012, is in no way intended to bar the use of voluntary 
arbitration, conciliation, mediation, or other informal quasi-judicial 
methods of dispute resolution. In fact, I strongly support the use of 
voluntary dispute resolution methods as a way of reducing the caseloads 
of civil and criminal courts where appropriate.
  This bill closes a widening loophole in the enforcement of civil 
rights laws in our Nation. An entire industry--Wall Street--and a 
growing number of companies and firms in many other industries have 
been able to circumvent formal legal challenges to their unlawful 
employment practices in court, a right intended to be protected by the 
statutes this bill amends. Employers can tell current and prospective 
employees, ``If you want to work for us, you'll have to check your 
rights at the door.''
  Mr. President, this practice must be stopped now. It is simply unfair 
to require an employee to waive in advance his or her statutory right 
to seek remedy in a court of law in exchange for employment or a 
promotion. This bill will restore integrity in the relations between 
employees and employers.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2405

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Civil Rights Procedures 
     Protection Act of 1994''.

     SEC. 2. AMENDMENT TO TITLE VII OF THE CIVIL RIGHTS ACT OF 
                   1964.

       Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e 
     et seq.) is amended by adding at the end the following new 
     section:


                 ``exclusivity of powers and procedures

       ``Sec. 719. Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers and 
     procedures expressly applicable to a claim arising under this 
     title, such powers and procedures shall be the exclusive 
     powers and procedures applicable to such claim unless after 
     such claim arises the claimant voluntarily enters into an 
     agreement to resolve such claim through arbitration or 
     another procedure.''.

     SEC. 3. AMENDMENT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT 
                   OF 1967.

       The Age Discrimination in Employment Act of 1967 (29 U.S.C. 
     621 et seq.) is amended--
       (1) by redesignating sections 16 and 17 as sections 17 and 
     18, respectively; and
       (2) by inserting after section 15 the following new section 
     16:


                 ``exclusivity of powers and procedures

       ``Sec. 16. Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers and 
     procedures expressly applicable to a right or claim arising 
     under this Act, such powers and procedures shall be the 
     exclusive powers and procedures applicable to such right or 
     such claim unless after such right or such claim arises the 
     claimant voluntarily enters into an agreement to resolve such 
     right or such claim through arbitration or another 
     procedure.''.

     SEC. 4. AMENDMENT TO THE REHABILITATION ACT OF 1973.

       Section 505 of the Rehabilitation Act of 1973 (29 U.S.C. 
     795) is amended by adding at the end the following new 
     subsection:
       ``(c) Notwithstanding any Federal statute of general 
     applicability that would modify any of the procedures 
     expressly applicable to a claim based on right under section 
     501, such procedures shall be the exclusive procedures 
     applicable to such claim unless after such claim arises the 
     claimant voluntarily enters into an agreement to resolve such 
     claim through arbitration or another procedure.''.

     SEC. 5. AMENDMENT TO THE AMERICANS WITH DISABILITIES ACT OF 
                   1990.

       Section 107 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12117) is amended by adding at the end the 
     following new subsection:
       ``(c) Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers and 
     procedures expressly applicable to a claim based on a 
     violation described in subsection (a), such powers and 
     procedures shall be the exclusive powers and procedures 
     applicable to such claim unless after such claim arises the 
     claimant voluntarily enters into an agreement to resolve such 
     claim through arbitration or another procedure.''.

     SEC. 6. AMENDMENT TO SECTION 1977 OF THE REVISED STATUTES OF 
                   THE UNITED STATES.

       Section 1977 of the Revised Statutes (42 U.S.C. 1981) is 
     amended by adding at the end the following new subsection:
       ``(d) Notwithstanding any Federal statute of general 
     applicability that would modify any of the procedures 
     expressly applicable to a right to make and enforce a 
     contract of employment under this section, such procedures 
     shall be the exclusive procedures applicable to a claim based 
     on such right unless after such claim arises the claimant 
     voluntarily enters into an agreement to resolve such claim 
     through arbitration or another procedure.''.

     SEC. 7. AMENDMENT TO THE EQUAL PAY REQUIREMENT UNDER THE FAIR 
                   LABOR STANDARDS ACT OF 1938-.

       Section 6(d) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 206(d)) is amended by adding at the end the following 
     new paragraph:
       ``(5) Notwithstanding any Federal statute of general 
     applicability that would modify any of the powers or 
     procedures expressly applicable to a claim based on violation 
     of this subsection, such powers and procedures shall be the 
     exclusive procedures applicable to such claim unless after 
     such claim arises the claimant voluntarily enters into an 
     agreement to resolve such claim through arbitration or 
     another procedure.''.

     SEC. 8. AMENDMENT TO THE FAMILY AND MEDICAL LEAVE ACT OF 
                   1993.

       Title IV of the Family and Medical Leave Act of 1993 (29 
     U.S.C. 2601 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 406. EXCLUSIVITY OF REMEDIES.

       ``Notwithstanding any Federal statute of general 
     applicability that would modify any of the procedures 
     expressly applicable to a claim based on a right provided 
     under this Act or under an amendment made by this Act, such 
     procedures shall be the exclusive procedures applicable to 
     such claim unless after such claim arises the claimant 
     voluntarily enters into an agreement to resolve such claim 
     through arbitration or another procedure.''.

     SEC. 9. AMENDMENT TO TITLE 9 OF THE UNITED STATES CODE.

       Section 14 of title 9, United States Code, is amended--
       (1) by inserting ``(a)'' before ``This''; and
       (2) by adding at the end the following new subsection:
       ``(b) This chapter shall not apply with respect to a claim 
     of unlawful discrimination in employment if such claim arises 
     from discrimination based on race, color, religion, sex, 
     national origin, age, or disability.''.

     SEC. 10. APPLICATION OF AMENDMENTS.

       The amendments made by this Act shall apply with respect to 
     claims arising on and after the date of the enactment of this 
     Act.

                          ____________________