[Congressional Record Volume 144, Number 114 (Wednesday, September 2, 1998)]
[Senate]
[Pages S9877-S9883]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. JEFFORDS (for himself, Mr. Harkin, Mr. Bond, Mr. Kerry,
Mr. McConnell, Ms. Collins, Mr. Kennedy, Mr. Reed, and Mr.
Frist):
S. 2432. A bill to support programs of grants to States to address
the assistive technology needs of individuals with disabilities, and
for other purposes; to the Committee on Labor and Human Resources.
ASSISTIVE TECHNOLOGY ACT OF 1998
Mr. JEFFORDS. Mr. President, ten years ago Congress passed the
Technology-Related Assistance for Individuals with Disabilities Act,
referred to as the ``Tech Act''. My friend, Senator Harkin, was the
principal sponsor in the Senate. I was the principal sponsor in the
House. Both Houses of Congress worked together and passed the same
legislation on the same day. Once again, Senator Harkin and I, with
our colleague Senator Bond, joined forces to draft the Assistive
Technology Act of 1998 (ATA), which we are introducing today with the
co-sponsorship of Senators Kennedy, Frist, Collins, McConnell, Reed,
and Kerry. Once again, we are working toward expeditious consideration
of legislation that promotes access to assistive technology for
individuals with disabilities. With the assistance of our colleagues in
the Senate and the other body, I am confident that the ATA will become
law. The ATA authorizes funding for assistive technology activities for
fiscal years 1999 through 2004.
The ATA builds on the success of its predecessor, the Tech Act. The
Tech Act sunsets September 30, 1998. This will result in the
termination of federal assistance to nine states for promoting access
to assistive technology for individuals with disabilities, and place
the remainder of the states in jeopardy of diminished or no funding
during or after fiscal year 1999.
Through the ATA the Senate has the opportunity to reaffirm the
federal role of promoting access to assistive technology devices and
services for individuals with disabilities. The bill allows States
flexibility in responding to the assistive technology needs of their
citizens with disabilities, and does not disrupt the ongoing work of
the 50 State assistive technology programs funded under the Tech Act.
These programs make a difference. Access to assistive technology for
an individual with a disability means independence, ability to work or
attend school, and the opportunity to participate in community life.
Lack of access to assistive technology means dependence and isolation.
In my State of Vermont, Lynne Cleveland is the project director for
our Tech Project. Lynne testified before the Labor and Human Resources
Committee on April 29, 1998 on the impact of the Vermont Tech Project
on the lives of Vermonters with disabilities. For example, one of the
many things the Vermont Tech Project supports is a rehabilitation
engineering technician program, the only one in the nation, at Vermont
Technical College. Graduates of the program work for schools, non-
profit agencies, state agencies, and vendors helping others make
appropriate, cost-effective decisions regarding assistive technology
for individuals with disabilities and educating others about the need
for and value of the individual with a disability having a central role
in such decisions.
The Vermont Tech Project touches and changes the lives of individual
Vermonters of all ages and walks of life. For Bill, a man in his mid-
thirties who suffered a stroke, the Tech Project helped secure
assistive technology that enabled him to obtain employment designing
web pages. Equally important to Bill is that assistive technology
enables him to talk again with his children. For Ray, who lost his
vision in mid-life, acquiring assistive technology has allowed him to
continue as a snowplow dispatcher for the State of Vermont. For Ty, a
teenager born with a visual impairment, access to assistive technology
means she can pursue her goal of becoming a lawyer. For Annie, a first
grader with Downs Syndrome, having assistive technology means that she
can use the computer in a regular education classroom, learning and
playing games with her classmates. For Lillian, a senior citizen,
access to and training on a closed circuit television, enables her to
stay in her home rather than living in a nursing home. The Vermont Tech
Project has touched each of these individuals by working with others to
change policies, improve coordination, pool resources, and educate
people about the benefits of assistive technology.
[[Page S9878]]
Across the U.S., state assistive technology programs have brought
about a wide range of improvements in the last decade. State assistive
technology programs have contributed to changes in state laws, improved
coordination among state agencies and between the public and private
sector, all of which have expanded access to assistive technology.
These programs have increased public awareness of the value of
assistive technology, have educated individuals with disabilities about
how to select and purchase appropriate assistive technology, and
expanded the number of individuals in schools, the workplace, and other
settings of community life that can provide assistance in selecting,
securing, and using assistive technology.
The ATA allows this important work to continue. Title I of the bill
supports states in sustaining and strengthening their capacity to
address the assistive technology needs of individuals with
disabilities; title II brings focus to the federal investment in
technology that could benefit individuals with disabilities; and title
III supports micro-loan programs to provide assistance to individuals
who desire to purchase assistive technology devices or assistive
technology services. The legislation also draws attention to and
promotes consideration of the principles of universal design in the
design of future technology and using the power of the INTERNET to
bring best practices related to assistive technology to anyone's
keyboard.
In title I the ATA streamlines and clarifies the expectations,
including expectations related to accountability, associated with
continuing federal support for state assistive technology programs. It
targets specific, proven activities, as priorities, referred to as
``mandatory activities''. All state grantees must set measurable goals
in connection to their use of ATA funds, and both the goals and the
approach to measuring the goals must be based on input from a state's
citizens with disabilities.
If a state has received fewer than 10 years of federal funding under
the Tech Act for its assistive technology program, title I of the ATA
allows a state, which submits a supplement (a continuity grant) to its
current Tech Act grant for federal funds, to use ATA funds for
mandatory activities: a public awareness program, interagency
coordination, technical assistance and training, and outreach. Such a
state also may use ATA funds for optional grant activities: alternative
state-financed systems for assistive technology devices and assistive
technology services, technology demonstrations, distribution of
information about how to finance assistive technology devices and
assistive technology services, and operation of a technology-related
information system, or participation in interstate activities or
public-private partnerships pertaining to assistive technology.
If a state has had 10 years of funding for its assistive technology
program through the Tech Act, the state may submit an application for a
noncompetitive challenge grant under the ATA. Grant funds must be spent
on specific activities--interagency coordination, an assistive
technology information system, a public awareness program, technical
assistance and training, and outreach activities.
In fiscal years 2000 through 2004, if funding for title I exceeds a
certain level, states operating under challenge grants may apply for
additional ATA funding, provided through competitive millennium grants.
These grants are to focus on specific state or local level capacity
building activities related to access to technology for individuals
with disabilities.
Title I of the ATA also authorizes funding for protection and
advocacy systems in each state to assist individuals with disabilities
to access assistive technology devices and assistive technology
services, and funding for a technical assistance program, including the
National Public Internet Site, and specifies administrative procedures
with regard to monitoring of entities funded under title I of the ATA.
Title II of the ATA authorizes national activities, including
increased coordination and communication among federal agencies with
regard to addressing the assistive technology needs of individuals with
disabilities. Title III of the Act authorizes a broad range of
alternative financing mechanisms to assist individuals with the
purchasing of assistive technology through micro-loans.
Providing access to assistive technology for individuals with
disabilities was a simple promise in 1988. Today it is much, much more.
The ATA represents the bridge to the next century for individuals with
disabilities. Across that bridge lies increased independence, realized
potential, new partnerships, unimagined challenges, and unlimited
opportunities.
Mr. HARKIN. Mr. President, I support the Assistive Technology
Act of 1998. This Act will enable States and the Federal Government to
build on their work under the Technology-Related Assistance for
Individuals with Disabilities Act of 1988, or Tech Act, which sunsets
this year, and to establish new directions in assistive technology
policy for the 21st Century.
In 1988, I was proud to be the chief Senate sponsor of the Tech Act,
and was very fortunate to work with then-Representative Jeffords, who
was the chief House sponsor. In developing this new Act, I have been
fortunate to work with Senator Jeffords again, and also with Senator
Bond, whose commitment and leadership have been invaluable.
The issue of assistive technology is deeply important to me. My
brother Frank is deaf. Assistive technology is part of our
relationship. Frank and I talk all the time, using a TDD; we watch
television together using a closed-caption decoder. My nephew Kelly was
injured in the Navy and is a quadriplegic. But he lives independently,
in large part because of assistive technology. For example, Kelly is
able to drive his van by using a wheelchair lift and hand controls.
But assistive technology doesn't just work for people with
disabilities. We hear all the time that defense research often has
everyday applications. The same is true of assistive technology
research. I saw a television commercial recently, advertising voice-
activated software for business executives. Well, that technology was
originally development for people whose disability kept them from using
a keyboard. And if you've ever watched the closed-captioned news in a
noisy restaurant or so you didn't wake up your husband or wife, you've
used assistive technology. The more assistive technology we develop,
the more all of us will benefit from it.
Under the Assistive Technology Act of 1998, States will be able to
continue the consumer-responsive programs of technology-related
assistance for people with disabilities they have developed over the
past ten years.
The Act will help States establish and strengthen systems to inform
people with disabilities what their assistive technology options are,
so they can take advantage of them. It will enable States to help
schools and employers accommodate assistive technology users, so they
can live independently, and get an education and a job. And the Act
will create a one-stop Internet site where consumers, family members,
assistive technology professionals, and anyone else who's interested
can access all the information there is about assistive technology.
The Act also recognizes that the Federal government must work more
efficiently, and with the private sector, if we are going to make
assistive technology more accessible. It requires federal agencies and
offices that conduct assistive technology research to work more closely
together, to take advantage of each other's abilities and information
and to better utilize federal resources. It enables the Federal
government to increase its research, and to make grants to outside
researchers, for assistive technology and universal design. It offers
help to small businesses to research, develop, and bring assistive
technology to the market. And the Act enables the Federal government to
work with the information technology industry, to increase the
industry's voluntary participation in efforts to make information
technology more accessible to people with disabilities.
Finally, the Act will help States establish, or expand, loan programs
for people with disabilities or their representatives to access to meet
their assistive technology needs.
I have often said that disability is a natural part of the human
experience, that in no way diminishes the right of individuals to live
independently,
[[Page S9879]]
enjoy self-determination, pursue meaningful careers and enjoy full
inclusion in the economic, political, social, cultural, and educational
mainstream of American society. Assistive technology enables people
with disabilities to exercise that right.
There have been amazing changes in technology since we wrote the Tech
Act, ten years ago. Technology can do more for more people than ever
before--and that trend is going to continue. But that also means the
consequences are greater than ever if we don't make assistive
technology, information technology, and our society generally, more
accessible, because the more technology can do, the further people with
disabilities will fall behind if they can't use it.
Mr. President, this Act enjoys broad support in the disability
community and the assistive technology community, and is endorsed by
the National Governors Association. I hope my colleagues will join
Senators Jeffords, Bond, and me, and our other cosponsors, in
supporting this worthwhile Act.
Mr. BOND. Mr. President, today with my colleagues Senator
Jeffords and Senator Harkin I introduce the Assistive Technology Act of
1998. This important piece of legislation will provide technical
assistance to the more than 50 million citizens in the United States
with disabilities.
The Tech Act, passed in 1988, has proven time and again its
invaluable assistance in helping persons with disabilities acquire
assistive technology that improves their functional capability and
quality of life. This technical assistance allows students to learn
better in school, adults to acquire jobs, and seniors to live more
independently. I have seen the success of the State Tech Act projects
first hand in my home State of Missouri. It is estimated that 750,000
Missourians of all ages live with a disabling condition. Ms. Diane
Golden, of the Missouri Assistive Technology Project, informed me that
Missouri's state office handled 4,000 direct cases this past year, not
including thousands of calls regarding information and referrals.
Mr. President, Missourians know the impact of the State Tech Act
Projects.
Wanda, an elder Kansas City woman lost most of her hearing late in
life. For three years, she lived without the ability to talk with
friends or to call her doctor in an emergency. Wanda's inability to use
the telephone, in addition to other age related issues, was threatening
her ability to continue living in her own home.
Missouri Tech Act Project staff worked with Wanda to identify an
adaptive telephone that would allow her to continue to live
independently. The cost of the device was prohibitive for this woman
and no public funding source was available. Nevertheless, Project staff
located a private funding source for the adaptive telephone and as a
result Wanda has been able to continue to live independently.
Realizing that thousands of individuals throughout the state were
facing the same need for adaptive telephone equipment, the Project
developed a statewide telecommunication equipment distribution program
that provides Missourians, with all types of disabilities, adaptive
telephone equipment. The program has been operational for a year and
has provided more than one million dollars of adaptive telephone
equipment to thousands of Missourians.
Another Missourian, Mary, an 8-year-old young girl, who is non-vocal,
needed an augmentative communication device that would allow her to
communicate at home and school. Medicaid had approved purchasing the
device just before its conversion from a fee-based system to a managed
care system. The new managed care plan was unfamiliar with augmentative
communication devices and the family was having no success in securing
the device. Project staff worked with the managed care provider to
explain the importance and cost-effectiveness of augmentative
communication devices and as a result, secured funding for Mary's
device.
Understanding that most, if not all, of the managed care plans under
contract with Medicaid would be unfamiliar with augmentative
communication devices and other types of assistive technology, Project
staff worked with the Missouri Medicaid plans to educate them about the
importance, cost-effectiveness, and coverage of assistive technology.
As a result, numerous plans routinely approve assistive technology. As
a result, numerous plans routinely approve assistive technology devices
and many call the Project for assistance when they receive requests for
assistive devices of which they are unfamiliar.
These examples are just a small sampling of the successes of the
Missouri Technology Assistance Project. Some other accomplishments of
the Project include development of an educational technology access
informational packet that the Department of Education distributed to
more than 17,000 schools nationally; passage of a sales tax exemption
for the purchase of assistive technology in Missouri; establishment of
a short-term equipment loan program; development and distribution of a
Consumer Guide to Missouri Assistive Device Lemon Laws; and
establishment of a web page with postings of equipment for their
recycling program.
Missouri's success is one example of the many accomplishments of
other State Tech Act Projects since the inception of the Tech Act in
1988. The Assistive Technology Act of 1988 will guarantee that states
continue to serve the disabled community, their families, friends,
teachers, and employers.
The bill we are introducing also provides improvements to the current
State Tech Act Projects. Some notable improvements include better
coordination and information sharing; Microloan programs to help
assistive technology end users in obtaining assistive devices;
incentive grants to assure better accountability of all programs; and
increased small business investment in assistive and universally
designed technology research and development. These improvements and
new initiatives strengthen the work currently done by the State Tech
Act Projects, encourage improvements to current programs and are
forward looking in the acquisition, development, and service delivery
of assistive technology.
State Tech Act Projects provide vital technology related services to
individuals with disabilities. The initiatives of these important
programs ensure the availability of technology to people with
disabilities that make living independently a reality. The Assistive
Technology Act of 1998 strengthens and maintains a program that works
for a constituency that would otherwise be denied the exciting
opportunities that technology affords.
Mr. President I urge my colleagues in the Senate and the House to
pass this legislation expediently so that technological assistance can
continue to be available for our nation's disabled.
Let me conclude by thanking my distinguished colleagues Senator
Jeffords and Senator Harkin and their staff for their hard work on this
important piece of legislation. Mr. President, on behalf of Senators
Jeffords and Harkin and myself, I ask unanimous consent to print in the
Record, a letter of support for the Assistive Technology Act of 1998
from the United Cerebral Palsy Association.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
United Cerebral Palsy Associations,
Washington, DC, September 2, 1998.
Dear Senators Jeffords, bond, and Harkin: On behalf of
Untied Cerebral Palsy Association (UCPA) and our 151
affiliates, we strongly endorse the Assistive Technology Act
of 1998. We applaud your interest in overcoming barriers to,
funding for, and access to assistive technology devices and
services for individuals with disabilities of all ages. This
access provides the gateway to not only education and
employment but also other activities of daily living for the
approximately 54 million individuals with disabilities in
this country.
Through our national technical assistance efforts, UCPA has
been able to assist thousands of people by providing
information, training and technical assistance to individuals
with disabilities, family members, and those who work with
individuals with disabilities. However, a great number of
individuals do not have access to assistive technology that
would improve their quality of life. This legislation will
further the goal of universal access.
Thank you for the opportunity to comment on this
legislation.
Sincerely,
Peter Keiser,
Chair, Community Services Committee.
______
By Mr. D'AMATO:
S. 2433. A bill to protect consumers and financial institutions by
preventing personal financial information
[[Page S9880]]
from being obtained from financial institutions under false pretenses;
to the Committee on Banking, Housing, and Urban Affairs.
financial information privacy act
Mr. D'AMATO. Mr. President, I rise today to introduce important pro-
consumer legislation to protect the privacy of confidential financial
information for every American. The Financial Information Privacy Act
will make it a federal crime to obtain or attempt to obtain private
consumer information from our nation's financial institutions through
the use of false, fictitious or fraudulent statements.
Mr. President, the exploitation of personal information by
unscrupulous ``information brokers'' and individuals attempting to pry
into the private financial affairs of others is an issue of vital
concern to every American.
A flourishing industry of ``information brokers'' has emerged as
detailed in hearings held just last month by the House Banking
Committee. These individuals use deceptive practices, such as lying
about their identity on the phone, in order to obtain personal customer
information for resale. Armed with personal information such as bank
account balances, account numbers and transaction activity, this
information can be used to build a profile of a consumer which can be
bought and sold in the marketplace. Advances in technology have enabled
information brokers to inexpensively create enormous databases of
individual profiles and use the Internet to market their information
worldwide.
Mr. President, these same techniques are used by criminals to obtain
information to create fraudulent credit applications that can quickly
destroy a victims credit worthiness and require months of effort to
clear up. The problem is growing exponentially. One of the leading
credit reporting services reports that since 1992, the number of
financial fraud cases where individuals have pretended to be another
person has risen from 32,000 to more than 500,000 in 1997. I believe
the evidence is clear that inadequate financial privacy laws are a
significant factor in this rise. Americans demand and rightfully expect
the privacy of personal financial information.
While existing laws do provide protection against unfair and
deceptive practices, there is no federal law that expressly prohibits
acquiring personal customer account information under false pretenses.
Banking groups and federal regulatory agencies have all testified that
this legislation would be an important tool to protect consumers from
the invasive practices of information brokers. Passage of this measure
will make it clear that Congress will not tolerate this invasion of
privacy and will do whatever is necessary to insure that the private
financial information of our citizens remains private.
Mr. President, in closing I want to comment Chairman Leach for his
quick action in the House to move this measure forward. Working
together with our House colleagues, we have an opportunity to greatly
strengthen the privacy laws that safeguard the personal financial
information of every American. I urge my colleagues to vote in favor of
this vital legislation.
I ask unanimous consent that the full text of this bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2433
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. FINANCIAL INFORMATION PRIVACY.
(a) In General.--The Consumer Credit Protection Act (15
U.S.C. 1601 et seq.) is amended by adding at the end the
following:
``TITLE X--FINANCIAL INFORMATION PRIVACY PROTECTION
``Sec.
``1001. Short title.
``1002. Definitions.
``1003. Privacy protection for customer information of financial
institutions.
``1004. Administrative enforcement.
``1005. Civil liability.
``1006. Criminal penalty.
``1007. Relation to State laws.
``1008. Agency guidance.
``Sec. 1001. Short title
``This title may be cited as the `Financial Information
Privacy Act'.
``Sec. 1002. Definitions
``For purposes of this title, the following definitions
shall apply:
``(1) Customer.--The term `customer' means, with respect to
a financial institution, any person (or authorized
representative of a person) to whom the financial institution
provides a product or service, including that of acting as a
fiduciary.
``(2) Customer information of a financial institution.--The
term `customer information of a financial institution' means
any information maintained by a financial institution which
is derived from the relationship between the financial
institution and a customer of the financial institution and
is identified with the customer.
``(3) Document.--The term `document' means any information
in any form.
``(4) Financial institution.--
``(A) In general.--The term `financial institution' means
any institution engaged in the business of providing
financial services to customers who maintain a credit,
deposit, trust, or other financial account or relationship
with the institution.
``(B) Certain financial institutions specifically
included.--The term `financial institution' includes any
depository institution (as defined in section 19(b)(1)(A) of
the Federal Reserve Act), any loan or finance company, any
credit card issuer or operator of a credit card system, and
any consumer reporting agency that compiles and maintains
files on consumers on a nationwide basis (as defined in
section 603(p)).
``(C) Further definition by regulation.--The Board of
Governors of the Federal Reserve System may prescribe
regulations further defining the term `financial
institution', in accordance with subparagraph (A), for
purposes of this title.
``Sec. 1003. Privacy protection for customer information of
financial institutions
``(a) Prohibition on Obtaining Customer Information by
False Pretenses.--It shall be a violation of this title for
any person to obtain or attempt to obtain, or cause to be
disclosed or attempt to cause to be disclosed to any person,
customer information of a financial institution relating to
another person--
``(1) by knowingly making a false, fictitious, or
fraudulent statement or representation to an officer,
employee, or agent of a financial institution with the intent
to deceive the officer, employee, or agent into relying on
that statement or representation for purposes of releasing
the customer information;
``(2) by knowingly making a false, fictitious, or
fraudulent statement or representation to a customer of a
financial institution with the intent to deceive the customer
into relying on that statement or representation for purposes
of releasing the customer information or authorizing the
release of such information; or
``(3) by knowingly providing any document to an officer,
employee, or agent of a financial institution, knowing that
the document is forged, counterfeit, lost, or stolen, was
fraudulently obtained, or contains a false, fictitious, or
fraudulent statement or representation, if the document is
provided with the intent to deceive the officer, employee, or
agent into relying on that document for purposes of releasing
the customer information.
``(b) Prohibition on Solicitation of a Person to Obtain
Customer Information From Financial Institution Under False
Pretenses.--It shall be a violation of this title to request
a person to obtain customer information of a financial
institution, knowing or consciously avoiding knowing that the
person will obtain, or attempt to obtain, the information
from the institution in any manner described in subsection
(a).
``(c) Nonapplicability to Law Enforcement Agencies.--No
provision of this section shall be construed so as to prevent
any action by a law enforcement agency, or any officer,
employee, or agent of such agency, to obtain customer
information of a financial institution in connection with the
performance of the official duties of the agency.
``(d) Nonapplicability to Financial Institutions in Certain
Cases.--No provision of this section shall be construed so as
to prevent any financial institution, or any officer,
employee, or agent of a financial institution, from obtaining
customer information of such financial institution in the
course of--
``(1) testing the security procedures or systems of such
institution for maintaining the confidentiality of customer
information;
``(2) investigating allegations of misconduct or negligence
on the part of any officer, employee, or agent of the
financial institution; or
``(3) recovering customer information of the financial
institution which was obtained or received by another person
in any manner described in subsection (a) or (b).
``(e) Nonapplicability to Certain Types of Customer
Information of Financial Institutions.--No provision of this
section shall be construed so as to prevent any person from
obtaining customer information of a financial institution
that otherwise is available as a public record filed pursuant
to the securities laws (as defined in section 3(a)(47) of the
Securities Exchange Act of 1934).
``Sec. 1004. Administrative enforcement
``(a) Enforcement by Federal Trade Commission.--Except as
provided in subsection (b), compliance with this title shall
be enforced by the Federal Trade Commission in the same
manner and with the same power and authority as the
Commission has under
[[Page S9881]]
the title VIII, the Fair Debt Collection Practices Act, to
enforce compliance with such title.
``(b) Enforcement by Other Agencies in Certain Cases.--
``(1) In general.--Compliance with this title shall be
enforced under--
``(A) section 8 of the Federal Deposit Insurance Act, in
the case of--
``(i) national banks, and Federal branches and Federal
agencies of foreign banks, by the Office of the Comptroller
of the Currency;
``(ii) member banks of the Federal Reserve System (other
than national banks), branches and agencies of foreign banks
(other than Federal branches, Federal agencies, and insured
State branches of foreign banks), commercial lending
companies owned or controlled by foreign banks, and
organizations operating under section 25 or 25A of the
Federal Reserve Act, by the Board;
``(iii) banks insured by the Federal Deposit Insurance
Corporation (other than members of the Federal Reserve System
and national nonmember banks) and insured State branches of
foreign banks, by the Board of Directors of the Federal
Deposit Insurance Corporation; and
``(iv) savings associations the deposits of which are
insured by the Federal Deposit Insurance Corporation, by the
Director of the Office of Thrift Supervision; and
``(B) the Federal Credit Union Act, by the Administrator of
the National Credit Union Administration with respect to any
Federal credit union.
``(2) Violations of this title treated as violations of
other laws.--For the purpose of the exercise by any agency
referred to in paragraph (1) of its powers under any Act
referred to in that paragraph, a violation of this title
shall be deemed to be a violation of a requirement imposed
under that Act. In addition to its powers under any provision
of law specifically referred to in paragraph (1), each of the
agencies referred to in that paragraph may exercise, for the
purpose of enforcing compliance with this title, any other
authority conferred on such agency by law.
``(c) State Action for Violations.--
``(1) Authority of states.--In addition to such other
remedies as are provided under State law, if the chief law
enforcement officer of a State, or an official or agency
designated by a State, has reason to believe that any person
has violated or is violating this title, the State--
``(A) may bring an action to enjoin such violation in any
appropriate United States district court or in any other
court of competent jurisdiction;
``(B) may bring an action on behalf of the residents of the
State to recover damages of not more than $1,000 for each
violation; and
``(C) in the case of any successful action under
subparagraph (A) or (B), shall be awarded the costs of the
action and reasonable attorney fees as determined by the
court.
``(2) Rights of federal regulators.--
``(A) Prior notice.--The State shall serve prior written
notice of any action under paragraph (1) upon the Federal
Trade Commission and, in the case of an action which involves
a financial institution described in section 1004(b)(1), the
agency referred to in such section with respect to such
institution and provide the Federal Trade Commission and any
such agency with a copy of its complaint, except in any case
in which such prior notice is not feasible, in which case the
State shall serve such notice immediately upon instituting
such action.
``(B) Right to intervene.--The Federal Trade Commission or
an agency described in subsection (b) shall have the right--
``(i) to intervene in an action under paragraph (1);
``(ii) upon so intervening, to be heard on all matters
arising therein;
``(iii) to remove the action to the appropriate United
States district court; and
``(iv) to file petitions for appeal.
``(3) Investigatory powers.--For purposes of bringing any
action under this subsection, no provision of this subsection
shall be construed as preventing the chief law enforcement
officer, or an official or agency designated by a State, from
exercising the powers conferred on the chief law enforcement
officer or such official by the laws of such State to conduct
investigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production of
documentary and other evidence.
``(4) Limitation on state action while federal action
pending.--If the Federal Trade Commission or any agency
described in subsection (b) has instituted a civil action for
a violation of this title, no State may, during the pendency
of such action, bring an action under this section against
any defendant named in the complaint of the Federal Trade
Commission or such agency for any violation of this title
that is alleged in that complaint.
``Sec. 1005. Civil liability
``Any person, other than a financial institution, who fails
to comply with any provision of this title with respect to
any financial institution or any customer information of a
financial institution shall be liable to such financial
institution or the customer to whom such information relates
in an amount equal to the sum of the amounts determined under
each of the following paragraphs:
``(1) Actual damages.--The greater of--
``(A) the amount of any actual damage sustained by the
financial institution or customer as a result of such
failure; or
``(B) any amount received by the person who failed to
comply with this title, including an amount equal to the
value of any nonmonetary consideration, as a result of the
action which constitutes such failure.
``(2) Additional damages.--Such additional amount as the
court may allow.
``(3) Attorneys' fees.--In the case of any successful
action to enforce any liability under paragraph (1) or (2),
the costs of the action, together with reasonable attorneys'
fees.
``Sec. 1006. Criminal penalty
``(a) In General.--Whoever violates, or attempts to
violate, section 1003 shall be fined in accordance with title
18, United States Code, or imprisoned for not more than 5
years, or both.
``(b) Enhanced Penalty for Aggravated Cases.--Whoever
violates, or attempts to violate, section 1003 while
violating another law of the United States or as part of a
pattern of any illegal activity involving more than $100,000
in a 12-month period shall be fined twice the amount provided
in subsection (b)(3) or (c)(3) (as the case may be) of
section 3571 of title 18, United States Code, imprisoned for
not more than 10 years, or both.
``Sec. 1007. Relation to State laws
``(a) In General.--This title shall not be construed as
superseding, altering, or affecting the statutes,
regulations, orders, or interpretations in effect in any
State, except to the extent that such statutes, regulations,
orders, or interpretations are inconsistent with the
provisions of this title, and then only to the extent of the
inconsistency.
``(b) Greater Protection Under State Law.--For purposes of
this section, a State statute, regulation, order, or
interpretation is not inconsistent with the provisions of
this title if the protection such statute, regulation, order,
or interpretation affords any person is greater than the
protection provided under this title.
``Sec. 1008. Agency guidance
``In furtherance of the objectives of this title, each
Federal banking agency (as defined in section 3(z) of the
Federal Deposit Insurance Act) shall issue advisories to
depository institutions under the jurisdiction of the agency,
in order to assist such depository institutions in deterring
and detecting activities proscribed under section 1003.''.
(b) Report to the Congress.--Before the end of the 18-month
period beginning on the date of the enactment of this Act,
the Comptroller General, in consultation with the Federal
Trade Commission, Federal banking agencies, and appropriate
Federal law enforcement agencies, shall submit to the
Congress a report on the following:
(1) The efficacy and adequacy of the remedies provided in
the amendments made by subsection (a) in addressing attempts
to obtain financial information by fraudulent means or by
false pretenses.
(2) Any recommendations for additional legislative or
regulatory action to address threats to the privacy of
financial information created by attempts to obtain
information by fraudulent means or false pretenses.
______
By Mr. GRASSLEY (for himself and Mr. Feingold):
S. 2434. A bill to amend chapter 1 of title 9, United States Code, to
provide for greater fairness in the arbitration process relating to a
motor vehicle franchise contracts; to the Committee on the Judiciary.
motor vehicle franchise contract arbitration fairness act of 1998
Mr. GRASSLEY. Mr. President, today, I am joined by my colleague from
Wisconsin, Senator Feingold, in introducing the Motor Vehicle Franchise
Contract Arbitration Fairness Act of 1998.
As the Senate's leading advocate of ADR or alternative dispute
resolution, I have attempted to facilitate the use of ADR in a number
of ways. In the last Congress, we enacted my legislation to make
permanent the use of ADR with and among our federal agencies. This
year, we are attempting to enact legislation authorizing federal court-
annexed ADR.
A small percentage of ADR cases involves the use of binding
arbitration. In dealing with arbitration, I have tried to emphasize the
use of voluntary, rather than mandatory arbitration. Both parties must
agree to voluntary arbitration, whereas mandatory arbitration can be
forced upon a party, as in the case of some contractual arrangements.
The authorization and use of mandatory arbitration has to be carefully
considered since the right to trial may be limited or even forfeited.
One such arrangement can be found in some contracts between
automobile or truck dealers and manufacturers. In these contracts,
dealers are given a ``take it or leave it'' clause that forces them to
agree to binding arbitration. There is no real bargaining. If the
dealer wants the contract, he or she has to agree to the mandatory
arbitration clause.
[[Page S9882]]
A number of states have enacted laws to prevent these types of unfair
contracts. But, even though these clauses may violate a number of state
laws, the Fourth Circuit overturned a lower court and ruled that these
state laws conflict with the Federal Arbitration Act of 1925, and are
therefore preempted by the Supremacy Clause of the U.S. Constitution.
So much for states' rights.
Historically, Congress has questioned whether arbitration agreements
should allow a stronger party to a contract to force a weaker party to
forfeit rights to a court as a condition of entering a contract. But,
it's been unclear as to what exactly the federal law allows. I believe
it's now time to do more than just question these unfair
``agreements''.
The legislation Senator Feingold and I are introducing today would
help remedy this current unfortunate situation by allowing only
voluntary arbitration clauses between dealers and manufacturers. The
bill would continue to recognize arbitration as a valuable alternative
to litigation as long as both parties voluntarily agree to it. We want
to preserve arbitration as an effective alternative to litigation, but
we want to ensure that it's a fair alternative.
I urge my colleagues to join Senator Feingold and myself in trying to
address these unfair franchise contracts.
Mr. FEINGOLD. Mr. President, I rise today to introduce, with my
distinguished colleague from Iowa, Senator Grassley, the Motor Vehicle
Franchise Contract Arbitration Fairness Act of 1998.
While alternative dispute resolution such as arbitration can serve a
useful purpose in resolving disputes between parties, I am extremely
concerned with the increasing trend of stronger parties to a contract
forcing weaker parties to waive their rights and to arbitrate disputes.
Earlier this Congress, I introduced S. 63, the Civil Rights Procedures
Act, to amend certain civil rights statutes to prevent the involuntary
application of arbitration to claims that arise from unlawful
employment discrimination and sexual harassment.
It has come to my attention that the automobile and truck
manufacturers, which present dealers with ``take it or leave it''
contracts, are increasingly including mandatory, binding arbitration
clauses as a condition of entering into or keeping an auto or truck
franchise. This practice forces dealers to submit their disputes with
manufacturers to involuntary arbitration. As a result, dealers are
required to waive access to judicial or administrative forums,
substantive contract rights, and statutorily provided protection. In
short, this practice clearly violates the dealers fundamental due
process rights and runs directly counter to basic principles of
fairness.
Historically and currently, franchise agreements for auto and truck
dealerships are nonnegotiable with the manufacturer; the dealer accepts
the terms offered by the manufacturer or they lose the dealership;
plain and simple. Dealers, therefore, have been forced to rely on the
states to pass laws designed to minimize the manufacturers' greater
bargaining power and to safeguard their rights. The first such state
automobile statute was enacted in my home state of Wisconsin in 1937.
Since then all states, except Alaska, have enacted substantive law to
balance the enormous bargaining power enjoyed by manufacturers over
dealers and to safeguard small business dealers from unfair automobile
and truck manufacturer practices.
In addition, the majority of states have created their own
alternative dispute resolution mechanisms and forums which specialize
in auto and truck industry disputes. These administrative forums are
inexpensive, efficient, and unbiased. For example, in Wisconsin
mandatory mediation is required before the start of an administrative
hearing or court action. Arbitration is also optional if both parties
agree. These state dispute resolution forums, with years of experience
and precedent, are greatly responsible for the small number of
manufacturer/dealer lawsuits.
Unfortunately, when mandatory binding arbitration is included in
dealer agreements, state laws and forums established to resolve auto
dealer and manufacturer disputes are essentially null and void. Under
the Federal Arbitration Act (FAA) arbitrators are not required to apply
federal or state law. The stronger party--in this case the auto or
truck manufacturer--can, therefore, use mandatory arbitration to
circumvent the state laws which were specifically enacted to regulate
the dealer/manufacturer relationship. Not only is the circumvention of
these laws inequitable, it also eliminates the deterrent to prohibited
acts that these state laws provide.
Besides losing the protection of state law and the ability to use
state forums, there are other numerous reasons why a dealer may not
want to agree to binding arbitration. Arbitration lacks some of the
important safeguards and due process offered by administrative
procedures and the judicial system. For example: (1) arbitration lacks
the formal court supervised discovery process oftentimes necessary to
learn facts and gain documents; (2) an arbitrator need not follow the
rules of evidence; (3) arbitrators generally have no obligation to
provide factual or legal discussion of their decision in a written
opinion; and (4) arbitration often does not allow for judicial review.
The most troubling problem with this sort of mandatory, binding
arbitration may be the absence of judicial review. Take for instance a
dispute over a dealership termination. To that dealer--that small
business person--this decision is of paramount importance. Even under
this scenario, the dealer would not have recourse to substantive
judicial review of the arbitrators' ruling. Let me be very clear on
this point; in most circumstances a dealer cannot appeal an arbitration
award even if the arbitration panel disregarded state law which likely
would have produced a different result.
This problem is growing. The use of mandatory binding arbitration is
increasing in many industries, but nowhere is it growing more steadily
than the auto/truck industry. Currently 11 auto and truck manufacturers
require some form of such arbitration in their dealer franchise
contracts.
In recognition of this problem, many states enacted laws to prohibit
the inclusion of mandatory, binding arbitration clauses in certain
agreements. The Supreme Court, however, held in Southland Corp. v.
Keating, 104 S. Ct. 852 (1984), that the FAA by implication preempts
these state laws. The Southland Corp. decision has, in effect,
nullified many state arbitration laws that were designed to protect
weaker parties in unequal bargaining positions from involuntarily
acquiescing--often without other meaningful options--to these
mandatory, binding arbitration clauses.
The legislative history indicates that Congress never intended that
the FAA be a tool that the stronger party to a contract could use to
force the weaker party into binding arbitration. Congress certainly did
not intend the FAA to be a weapon used to coerce parties into
relinquishing important protections and rights that would have been
afforded them by the judicial system. Unfortunately, this is precisely
the current situation.
Although contract law is generally the province of the states, the
Supreme Court's decision in Southland Corp. has in effect made any
state action on this issue moot. I, therefore, along with Senator
Grassley, am introducing this bill today to ensure that auto and truck
dealers are not coerced into waiving their rights. Our bill, the Motor
Vehicle Franchise Contract Arbitration Fairness Act of 1998 would
simply allow each party to an auto or truck franchise contract to
voluntarily agree to arbitration; mandatory, binding arbitration would
be prohibited. The bill would not proscribe arbitration, however. On
the contrary, our measure would encourage arbitration by making it a
fair choice that both parties to such a franchise contract willing and
knowingly select. In short, this bill would ensure that the decision to
arbitrate is voluntary and that the rights and remedies provided for by
our judicial system are not mandatorily waived.
Today if a small business person wants to obtain or keep her or his
auto or truck franchise, she or he may only be able to do so by
relinquishing her or his statutory rights and foreclosing the
opportunity to use the courts or administrative forums. Mr. President,
I cannot not say this more strongly--this is unacceptable; this is
wrong. I,
[[Page S9883]]
therefore, urge my colleagues to join with Senator Grassley and me to
put an end to the invidious practice.
______
By Mr. ALLARD:
S. 2435. A bill to permit the denial of airport access to certain air
carriers; to the Committee on Commerce, Science, and Transportation.
airport protection from forced scheduled service
Mr. ALLARD. Mr. President, today I am introducing legislation
to address a problem facing small reliever airports that do not accept
scheduled service operations. Centennial Airport is a small reliever
airport near Denver, Colorado, where operations consist primarily of
small private chartered and business planes. A unique situation exists
at Centennial Airport involving certain charter services and a loophole
in the Federal regulations governing scheduled flights.
Centennial Airport is not certificated for scheduled flight service.
In fact, the Airport Authority, with strong local backing, has banned
scheduled service at Centennial. According to Federal law, the Federal
Aviation Administration cannot force any airport to become
certificated. The airport is not equipped with a terminal, baggage
system, or passenger security. Furthermore, Denver International
Airport is less than 25 miles from Centennial, and has the capacity to
handle additional scheduled service operations.
A situation arose more than three years ago when a company called
Centennial Express Airlines, Inc., began charter service at Centennial,
but immediately announced that the airline's service would continue as
scheduled service. The Airport Authority sued and the County District
Court ordered the flights stopped. In April of this year the Colorado
Supreme Court ruled in favor of Centennial Airport Authority's ban. The
Court cited the safe operation of the airport as a priority, and upheld
the airport's discretion to prohibit scheduled passenger service.
While this decision protected the airport's right to refuse scheduled
service, a similar situation recently arose with another company,
Colorado Connection Executive Air Services, and the result has been
detrimental for Centennial airport.
In 1997, Colorado Connection proposed to start public charter
passenger service pursuant to a regular and public schedule. Colorado
Connection, which is entirely owned by Air One Charter, tried using a
combination of Department of Transportation and Federal Aviation
Administration exemptions to offer scheduled service under Federal
regulations, because the company that books the flights does not own
the aircraft and the schedule is not officially published in the
airline guide. The use of two different corporate names allowed Air One
Charter to fly the scheduled passenger service under Colorado
Connection without subjecting the airline to FAA scheduled service
regulations. Air One Charter indicated intent to market 6-12 daily
flights to various Colorado cities and to contract baggage services for
their flights.
The Centennial Airport Authority unanimously voted to deny airport
access to Colorado Connection's scheduled service. The vote took place
in April 1998 and a month later the FAA initiated a part 16
investigation. The FAA claims that the Airport Authority's move to deny
service is unjustly discriminatory. Last week the FAA issued a decision
to pull Federal funding for Centennial Airport if the ban on scheduled
service is not lifted. This decision is in direct conflict with the
Colorado Supreme Court's ruling on the issue. It is the result of a
loophole in a law that was not intended to force small airports to take
on the responsibility and burden of supporting scheduled service.
Immediately following the announcement of the FAA's decision, the
owner of Centennial Express was reported by the Denver Post to have
plans to begin scheduled flights from Centennial Airport.
I am proposing legislation to rectify this situation and uphold the
authority of airports like Centennial to ban all scheduled service if
they choose to do so. This bill would allow a general aviation airport
to deny access to a part 380 public charter operator that operates as a
scheduled service, and clarifies that such action would not be in
violation of requirements for federal airport aid. This will not
require any airport to do anything, and it will not allow an airport to
discriminate against one scheduled service operator and not another.
This amendment is nearly identical to language that the House
Commerce Committee has included in its FAA Reauthorization Act. It
would prohibit the FAA from charging discrimination if an airport
chooses to deny access to scheduled service operators. It will only
apply to reliever airports that are not certificated under Part 139 to
handle scheduled service and airports within 35 miles of a large hub
airport.
I am not aware specifically of any other reliever airports existing
outside of Colorado that have an interest in this legislation, however,
I hope that my colleagues see the importance of protecting the right of
small airports and surrounding communities to refuse all scheduled
service operations.
____________________