[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.

                          ____________________