[Congressional Record Volume 149, Number 124 (Wednesday, September 10, 2003)]
[House]
[Pages H8122-H8167]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF 2003
The Committee resumed its sitting.
Mr. OXLEY. Mr. Chairman, I am pleased to yield 2 minutes to the
gentleman from the First State of Delaware (Mr. Castle), a valuable
member of the Committee on Financial Services.
Mr. CASTLE. Mr. Chairman, I thank the distinguished chairman of the
committee and both the ranking member from Massachusetts for this good
piece of legislation. Obviously I support the bill before us.
This bipartisan legislation passed the House Committee on Financial
Services by a vote of 61 to 3 in July of this year. We do not have a
lot of votes with those kinds of numbers in it, an overwhelming
endorsement which should obviously be noted by all of us.
The legislation is a good, bipartisan bill. It is a result of six
hearings, nearly 100 witnesses and months of deliberations. Through
this very thorough process, the Committee on Financial Services has
produced a bill that will protect the financial privacy and access to
credit for all consumers, and it will help our economic recovery by
ensuring businesses have access to accurate information which provides
prompt credit to American consumers.
As my colleagues know, one of the forces that has helped sustain our
economy in recent years is consumer spending. A critical factor in
enabling American consumers to purchase products when they need them
and want them is our strong system of consumer credit. That system is
supported by the Fair Credit Reporting Act which ensures the factual
information is available on which to base the extension of credit.
Virtually every business in this Nation and every consumer that has
ever used credit depends on this system.
One of my constituents, Michael Uffner, president, chairman and CEO
of AutoTeam Delaware, testified before the committee this year. Mike
Uffner stressed the importance of access to accurate credit information
to serve customers in a timely and fair manner. Americans want to be
able to walk into an automobile showroom and purchase an automobile
that day based on a prompt approval of a loan based on their credit.
In December, the national uniform consumer protection standards in
the Fair Credit Reporting Act will expire. Without this legislation,
there would be no national standards for consumer protections and
credit availability. This will negatively affect consumer access to
credit and the economy as a whole. A failure to pass this legislation
would mean higher costs to consumers, who will be paying more for their
credit without this legislation. In today's economy, in which we rely
on instant credit available to us across the country, we need to have
this legislation. This is uniformity, not a state-by-sate issue; and as
Congress we must protect the consumers.
Mr. Chairman, again, I want to express my strong support for this
bill and urge my colleagues on both sides of the aisle to join the 63
bipartisan members of the House Committee on Financial Services who
worked together to craft the bill to protect consumers and give
confidence to businesses. This is a proper step to ensure that all of
our constituents have access to fair and reasonable credit information.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield 5 minutes to the
gentleman from Pennsylvania (Mr. Kanjorski), the second-ranking member
of the committee, the ranking member of our Subcommittee on Capital
Markets, Insurance and Government Sponsored Enterprises, and one of the
leaders in shaping this legislation.
(Mr. KANJORSKI asked and was given permission to revise and extend
his remarks.)
Mr. KANJORSKI. Mr. Chairman, I rise in strong support of H.R. 2622,
the Fair and Accurate Credit Transactions Act of 2003.
If we fail to extend the expiring provisions of the Fair Credit
Reporting Act before the end of this year, conflicting State laws could
place financial institutions in a difficult compliance position, and
the current efficiencies in obtaining credit could significantly
decrease. We would, moreover, create more difficulties for our already-
struggling economy. For example, according to a recent report
commissioned by the Financial Services Roundtable, the loss of national
uniform credit reporting standards would produce a 2 percent drop in
the gross domestic product of this Nation.
The Fair Credit Reporting Act in its 1996 amendments, in my view,
have created a nationwide consumer credit system that works
increasingly well. This law has expanded access to credit, lowered the
price of credit, and accelerated decisions to grant credit. One reason
that the law works so well is the establishment of the uniform system
that preempts States from enacting miscellaneous and potentially
conflicting requirements regarding credit reporting.
As my colleagues may recall, Mr. Chairman, I strongly supported
creating these preemptions in the 102nd, 103rd and 104th Congresses. I
also believe that we should extend them now. I do not, however, think
that they should be made permanent. Consequently, I will offer an
amendment later today to address this issue.
In addition to extending the expiring preemptions of State law, H.R.
2622 will make a number of important improvements in current law with
respect to consumer protection. These provisions, among other things,
will improve the accuracy of and correction process for credit reports
and establish strong privacy protections for consumers' sensitive
medical information.
Furthermore, identity theft is a growing problem in our country. A
recent report by the Federal Trade Commission found that 27.3 million
Americans have been victims of identity theft in the last 5 years. I
am, therefore, particularly pleased that H.R. 2622 includes several
provisions designed to combat these crimes and aid consumers.
Mr. Chairman, I think this legislation is a high mark for this
Congress, and I want to compliment the gentleman from Ohio (Mr. Oxley),
chairman of the committee; the gentleman from Massachusetts (Mr.
Frank), the ranking member of the committee; the gentleman from Alabama
(Mr. Bachus), the chairman of the Subcommittee of the Financial
Institutions and Consumer Credit; and the gentleman from Vermont (Mr.
Sanders), our ranking member on that subcommittee.
This legislation is a perfect example that good, spirited, bipartisan
activity can accomplish much for this Congress and for this Nation. We
have worked to try and work out all the efforts of so many individuals
who would like favoritism or special interest reports and, in fact,
have worked for the common good of both industry and the consumer; and
I think, Mr. Chairman, we have accomplished that.
So I congratulate my several Members that I mentioned and the full
committee and this Congress. This is an extraordinarily successful
piece of legislation that we should be proud of on a bipartisan basis.
Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Georgia (Mr. Isakson).
Mr. ISAKSON. Mr. Chairman, I thank the chairman for yielding me the
time, and I want to commend the gentleman from Ohio (Mr. Oxley), the
chairman, and the gentleman from Massachusetts (Mr. Frank), the ranking
member, for the outstanding work they have done on a bill that is
critical to American business and enterprise and American consumers.
I want to particularly thank the chairman for incorporating within
the
[[Page H8123]]
manager's amendment a provision that directs the FTC and the Treasury
to promulgate rules and regulations for an orderly implementation and
transition to the free credit reports called for in section 501.
Mr. Chairman, the Fair Credit Reporting Act is critical to business
in America. Identity theft and the protection of consumers from
identity theft is critical, but time is also critical.
By allowing the provision of free credit reports without an orderly
transition for their seeking and a safe way for them to be sought could
spike demand on the crediting reporting agencies and delay the reports
of credit on those consumers seeking credit. For example, 2 weeks ago
when home loans spiked in one day by a half a percent, a delay in the
receipt of a credit report by a prospective home buyer seeking a
mortgage could have cost them 10, 20, $50,000 over the life of the
loan.
I encourage the chairman to continue work with the Members and then
later as this is implemented with the FTC to ensure that we have a safe
way for the free credit report to be sought specifically either by the
Internet or in writing, and secondly, for us to manage the flow so that
the spikes in those requests do not damage the timeliness with which
paying customers seeking credit in this country can receive an orderly
report on their credit.
The committee is doing America's consumers and the consistency of
credit reporting in this country a great service by the bill. I commend
the chairman for the manager's amendment, and I intend to support the
bill fully.
Mr. KANJORSKI. Mr. Chairman, I yield 3 minutes to the gentlewoman
from Texas (Ms. Jackson-Lee).
Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the gentleman very
much for yielding me the time, and I rise to add my appreciation to the
chairman of this committee and the ranking member. The chairman and the
ranking member have truly evidenced the importance of the Committee on
Financial Services and its bipartisan effort. These are issues I
believe that really cross partisan lines and, more particularly, impact
the humanity of those who may be facing some of the disasters that may
come through the lack of fair credit reporting and as well the whole
issue of identity theft.
I thank both the ranking member and the chairman of the subcommittees
that were relevant to this particular legislation; and I rise to
support it and to highlight a particular aspect of the legislation that
I am very proud of, and I want to congratulate the committee for its
astuteness and wisdom on this very important issue.
Title VI, protecting employees' misconduct and investigation, tracks
the legislation that I cosponsored along with the gentleman from Texas
(Mr. Sessions), the gentleman from Massachusetts (Mr. Frank), and other
Members of this body that frankly deals with a question that is minute
maybe but is large in terms of the needs that it covers.
The legislation was called the Civil Rights and Employee
Investigation Clarification Act, and I am very delighted that title VI
in this legislation really responds to the concerns that are raised,
and that is, that the Fair Credit Reporting Act, as interpreted by the
Federal Trade Commission, sometimes impedes investigations of workplace
misconduct.
Mr. Chairman, in particular, it deals with or undermines or did
undermine the ability of employers to use experienced, outside
organizations or individuals to investigate allegations of drug use or
sales, violence, sexual harassment, other types of harassment,
employment discrimination, job safety and health violations, as well as
criminal activity, including theft, fraud, embezzlement, sabotage or
arson, patient or elder abuse, child abuse and other types of
misconduct related to employment. This was not the intention of the
Fair Credit Reporting Act, but by its interpretation this is what
occurred.
Employers have been advised by agencies and courts to utilize such
experienced outside organizations and individuals in many cases to
assure compliance with civil rights laws and other laws, as well as
written workplace policies. That was crafted in order to give privacy
to the employees and to the relationships that would help cure the
problem so that there was a bridge or a firewall between the employers
and the employees that might be caught up in the malfeasance or might
be caught up in providing some insight in how do we correct these
problems.
Employees and consumers are put at risk because the Fair Credit
Reporting Act frustrates or impedes employers in their efforts to
maintain a safe and productive workforce and to create that firewall in
order to protect those who would tell and those who would help remedy
versus those who were creating the problem.
This is an important piece of legislation, and title VI is
particularly important in creating that firewall to ensure that not
only do we have fair credit reporting, not only do we provide a
protection for those suffering from identity theft, but we also provide
the opportunity for truth and clarity in making sure that we have safe
workforces and using the right kind of talent to do so.
Mr. Chairman, I rise in support of the Fair and Accurate Credit
Transactions Act of 2003 (``FACT Act''), only insofar as its adoption
includes the full and unamended text of Title VI: ``Protecting Employee
Misconduct Investigations.''
overbroad provision
On April 5, 1999, the Federal Trade Commission (FTC) issued an
opinion letter (the Vail letter), which stated that if an employer used
experienced outside organizations to investigate employee misconduct,
the investigation must comply with the notice and disclosure
requirements of the Fair Credit Reporting Act (FCRA). Because it is
virtually impossible to conduct an investigation while complying with
these requirements, and because employers and investigators face
unlimited liability, including punitive damages, for failing to comply
with FCRA, the Vail letter effectively deters employers from using
experienced and objective outside organizations to investigate
workplace misconduct. Yet, in many cases, an employer must do so in
order to comply with obligations under other laws. Thus, the Vail
letter often places employers in the untenable position of having to
choose between two legal obligations.
fcra requirements
The pertinent FCRA requirements include:
(1) Notice to the consumer (in this case, the employee) of the
investigation;
(2) The employee's consent prior to the investigation;
(3) A description of the nature and scope of the proposed
investigation, if the employee requests it;
(4) A release of a full, un-redacted investigative report to the
employee; and
(5) Notice to the employee of his or her rights under FCRA prior to
taking any adverse employment action.
Any mistake in compliance with these or any of the FCRA's other
numerous technical requirements may expose employers and investigators
to unlimited liability for compensatory and punitive damages.
However, Title VI of H.R. 2622, remedies this problem without
tampering with FCRA's consumer credit protections. Title VI of H.R.
2622 is an incorporation of a bill that I co-sponsored, along with
Representatives Sessions, Baker, Paul, Moore, Shays, Frank, and Royce,
H.R. 1543, to amend the FCRA to exempt certain communications from the
definition of ``consumer report,'' and for other purposes.
The Vail letter places many businesses in an extremely difficult
position. While an employer may avoid running afoul of Vail by
performing the investigation itself, there are many instances where a
company has no choice but to use an outside investigator. For example,
the technical nature of the alleged misconduct may require an
expert investigator, such as where the misconduct involves securities
fraud. In other instances, such as corporate governance cases, the
investigation may involve misconduct by a high-level official and
outside objectivity is necessary. In other cases, the employer may
simply lack the resources to conduct an in-house investigation. Even
where outside investigators are not necessary, they may be preferred.
Indeed, both the courts and administrative agencies have strongly
encouraged employers to use experienced outside organizations to
investigate suspected workplace violence, employment discrimination and
harassment, securities violations. theft or other workplace misconduct.
As Assistant Attorney General James K. Robinson said in his May 4, 2000
Congressional Testimony, ``[t]he Department [of Justice] and other
agencies often strongly encourage companies, as part of their
compliance programs to retain outsider counsel to conduct certain
internal investigations, on the theory that an outsider is less subject
to retaliation or intimidation by supervisors or co-workers and is less
likely to be biased by concerns for the company's business with
existing or future customers.''
[[Page H8124]]
While the letter impacts all businesses, it is particularly damaging
to small and medium sized companies that do not have the in-house
resources to conduct their own investigations. Even the FTC has
recognized that ``there is considerable tension between [the FCRA
requirements] and certain public policy aims of statutes and
regulations that, directly or indirectly compel or encourage
investigations of various forms of workplace misconduct . . . [and the
situation is] particularly troubling for small employers.''
Although the FTC recognizes the problem it, nonetheless, has refused
to reverse its position and rescind the letter, claiming that a
legislative fix is necessary. Title VI of H.R. 2622 is that legislative
fix. It remedies the problems created by FTC's letter by excluding
employment investigations that are not for the purpose of investigating
the employee's credit worthiness from the FCRA requirements. The bill
is essentially a narrow technical correction that does not tamper with
FCRA protections for any investigations into credit-worthiness. In
addition, the bill does not leave those suspected of misconduct without
protection: it still requires that employers who take adverse action
against an employee based on information from an investigation provide
the employee with a summary of the nature and substance of any
investigative report.
benefits of h.r. 2622
This bill, along with an intact Title VI exclusion of workplace
investigations, will preserve the continuity of our credit system and
will include comprehensive identity theft, dispute resolution, and
credit report accuracy provisions. Additionally, this legislation
proposes to take the important step of providing all Americans with
access to a free credit report every year in order to empower consumers
to take control of their financial records.
This legislation will prove crucial to the protection of consumers
from the dangers of identity theft, the fastest growing white-collar
crime in America. The following important steps toward protecting our
consumers from identity theft are proposed within relevant provisions:
Creating a duty for furnishers to investigate change of addresses,
which can be indicators of identity theft;
Creating a multi-level fraud alert system for victims of identity
theft to protect their credit information;
Requiring all credit and debit card receipts to be truncated to
protect these valuable identifiers;
Providing a summary of rights for all potential victims of identity
theft;
Allowing consumers to block all credit information resulting from
identity theft;
Establishing ``Red Flag'' procedures so that government regulators
may help furnishers to eradicate identity theft before it occurs
(preventative); and
Requiring a study on how technology can help solve identity theft.
In addition, this legislation will take steps to improve dispute
resolution procedures and improve the accuracy of credit reports. The
legislation proposes to take the following steps towards these goals:
Require a reasonable reinvestigation of disputes and requires a
prompt reinvestigation;
Require CRA's and furnishers to reconcile differences in addresses on
requests;
Prevent repollution of data that is a result of identity theft; and
Require credit reports to disclose contact information of furnishers
to resolve disputes.
This legislation will also provide consumers with more access than
ever before to their credit information in order to empower these
consumers with the information to protect themselves. The legislation
proposes to create this access by:
Providing free credit reports annually to all consumers; and
Disclosing credit scores for a reasonable fee, as well as important
factors that make the score.
Finally, this legislation also contains important provisions to
protect medical information that is present in financial services'
systems and provide for confidentiality of medical data in all credit
reports.
Taken together, the above ``facts'' as to the FACT Act will protect
the privacy rights of Americans; however, in crafting this bill, the
Committee on Financial Services failed to put a limitation on the scope
of the notice and disclosure requirements with respect to
investigations into workplace misconduct. In 1999 and 2000, the Federal
Trade Commission (FTC) issued several staff opinion letters which
concluded that if an employer hires an experienced and objective
outside organization to investigate suspected workplace misconduct,
i.e., sexual or racial harassment, workplace violence, theft, fraud,
SEC violations, or other improprieties, the investigation would qualify
as a ``consumer report'' subject to the Fair Credit Reporting Act
(FCRA). As such, employers and the investigators hired by them to
handle alleged harassment cases would be subject to the cumbersome and
over-reaching notice and disclosure requirements of FCRA.
Mr. Chairman and Ranking Member, I therefore support this bill only
insofar as it is accepted with the inclusion of Title VI in its
entirety and as drafted.
{time} 1515
Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentlewoman from
New York (Mrs. Kelly), the chairwoman of the Subcommittee on Oversight
and Investigations of the Committee on Financial Services.
Mrs. KELLY. Mr. Chairman, I thank the gentleman for yielding me this
time, and I want to applaud both the chairman and the ranking member of
the Committee on Financial Services for acting on this important
legislation with the kind of thoroughness and deliberation that they
did take.
The legislation before us, the FACT Act, is the result of half a
dozen hearings, 75 witnesses, and months of deliberation by my
colleagues from both sides of the aisle. The construction of the
legislation is the permanent reauthorization of the Fair Credit
Reporting Act, or the FCRA. It has provided a national uniform
reporting system that has effectively lowered the cost of credit and
increased choices and convenience for consumers across the country.
In our hearings, we heard extensive testimony from many diverse
witnesses with different interests. But there was a common message that
the FCRA has lowered the cost of credit and helped fuel our economy.
And this extension of low-cost credit has created new opportunities for
populations who have never before had access to credit. That is why
this legislation has overwhelming bipartisan support.
The Fair Credit Reporting Act has also helped address other important
security provisions, such as combating identity theft and the blocking
of terrorist financing under the USA PATRIOT Act, both issues which I
have held a number of hearings on in my oversight subcommittee.
Combating identity theft and drying up terrorist financing requires the
collaborative effort of law enforcement and regulatory agencies,
consumers and financial institutions, all with access to appropriate
information.
FCRA improves our ability to combat identity theft and help law
enforcement officials track down illicit money under the PATRIOT Act.
The information sharing under this legislation is essential to
protecting the American people by detecting suspicious activity and
weeding out wrongdoers.
The national reform standards under FCRA have also facilitated the
financial institution's ability to utilize additional authentications
and identity verifications to protect consumer security. And the
increased protections incorporated in this legislation are critically
important in enabling victims to correct the damage to their credit
histories created by identity thefts. This legislation will further
help law enforcement combat financial fraud and track down criminals
and terrorists. It adds new protections that are important to achieving
these goals.
We have also made other important improvements to the FCRA in order
to protect the sanctity of privacy of the American people throughout
the credit-granting process. I believe that medical information of
consumers should be kept private and does not need to be shared or
distributed to others by creditors listed on credit reports.
Individuals should know their personal medical information belongs to
them and is not released for other purposes, whether it is for the
credit-granting process or employee background checks. And we have done
this with our legislation by coding this information.
Mr. Chairman, I would like to thank the gentleman from North Carolina
(Mr. Watt) and the gentleman from Arkansas (Mr. Ross) for working with
me on an amendment in full committee that will protect the medical
information of individuals without disrupting access to low-cost credit
and the security of information. By allowing consumers to benefit from
reporting the financial aspects of their transactions to credit bureaus
while maintaining the sanctity of their medical privacy, this
legislation is a real win for Americans.
Mr. Chairman, I strongly support this legislation. It is crucial to
the economy and the security of the American people. I thank the
chairman for addressing these important issues, and I urge my
colleagues to vote for this legislation.
[[Page H8125]]
Mr. FRANK of Massachusetts. Mr. Chairman, I yield 3 minutes to the
gentleman from Texas (Mr. Hinojosa), another diligent member of the
committee who made a great contribution to this bill.
Mr. HINOJOSA. Mr. Chairman, I am an original cosponsor of the Fair
and Accurate Credit Transactions Act, and I support it strongly. H.R.
2622, known as the FACT Act, provides for a strong national credit
system. It preserves consumers access to affordable credit, enhances
consumer protections, and will ensure that Hispanics will continue to
have access to credit.
From the beginning of this process, my new Democrat colleagues and I
have been deeply involved in crafting this bipartisan bill, which
passed the Committee on Financial Services by a 61 to 3 vote. The bill
preserves the continuity of our credit system and includes
comprehensive identity theft, dispute resolution, and credit report
accuracy provisions that will increase and strengthen people's control
over their own financial records.
Identity theft is one of the fastest growing white collar crimes in
the United States, especially in my State of Texas. This legislation,
H.R. 2622, will help reduce those crimes and help the victims of
identity theft regain their identity and restore their credit. The FACT
Act addresses all these important issues and more. It will benefit
consumers in our economy, and it will help improve financial literacy
in the United States.
I commend my Republican colleagues, especially the chairman, the
gentleman from Ohio (Mr. Oxley), and the subcommittee chairman, the
gentleman from Alabama (Mr. Bachus), for working with us in a
bipartisan manner to develop this legislation. I also applaud the
ranking member, the gentleman from Massachusetts (Mr. Frank), and
another ranking member, the gentleman from Vermont (Mr. Sanders), for
guiding us through this process.
Finally, Mr. Chairman, I want to give special thanks to the
gentlewoman from Oregon (Ms. Hooley), the gentleman from Kansas (Mr.
Moore), and the other 10 new Democrats who worked so diligently to
compromise and help us forge this bipartisan compromise. I strongly
encourage my colleagues to support this important legislation, H.R.
2622.
Mr. OXLEY. Mr. Chairman, I am pleased to yield 5 minutes to the
gentleman from Alabama (Mr. Bachus), the author of this important
legislation and the chairman of the Subcommittee on Financial
Institutions and Consumer Credit.
Mr. BACHUS. Mr. Chairman, I thank the chairman of the committee, the
gentleman from Ohio (Mr. Oxley), for yielding me this time and who was
certainly instrumental in making this a priority and in allowing the
committee to take as much time as it did to consider this issue,
because it was an important issue.
We have received a statement from the Executive Office of the
President, which arrived here today, concerning this legislation; and I
want to read from it. It says the administration strongly supports
House passage of H.R. 2622. The bill includes many of the
administration's proposed consumer protections, including new tools to
help fight identity theft. The national credit reporting system has
proven critical to the resilience of consumer spending and the overall
economy.
That is one thing we heard over and over, that the national credit
reporting system was essential to maintain the overall economy and
consumer spending. So I am pleased that Chairman Oxley has received
this important endorsement from the President.
It has been said that I was the author of this legislation, and, in
fact, I would sort of like to claim that, but it is truly a bipartisan
bill. We had a blueprint to start with, however, on our ID theft
provision, and I would like to recognize at this time and thank the
gentleman from Ohio (Mr. LaTourette) for all his work on identifying
the theft provision that needed to be in this legislation.
Actually, he introduced, with the gentlewoman from Oregon (Ms.
Hooley), the original number of provisions which were taken and put in
this bill verbatim. So we did not have to start from scratch. It was a
big help that we had a bipartisan bill that the gentleman from Ohio and
the gentlewoman from Oregon had worked on. What he brought to the table
from the start was a piece of legislation that has since evolved over
time, been updated, and I think improved with the help of consumers and
the industries and the administration and Members of this Congress to
serve as a valuable protection against identity theft, and I commend
him on that.
I want to run over some of those protections if time permits. Here
are some of the important consumer protection tools. It allows
consumers to place fraud alerts in their credit reports to prevent
identity thieves from opening accounts in their names, including a
special provision to protect active duty military personnel, who we
found, sadly, had been particularly susceptible to ID theft. It allows
consumers to block fraudulent information from being given to a credit
bureau and from being reported by a credit bureau if that information
results from identity theft. It provides ID theft victims with a
summary of their rights. It gives consumers the right to see not only
their credit reports but their credit scores.
Now, that is an important new right which will help people. And I
think there was unanimous agreement on this from industry, from
consumers, and Members of Congress. This will actually help people save
money with lower interest rates. One estimate I have read is $21
billion in savings in home mortgages alone.
It restricts access to consumer-sensitive health information. That is
something people said: we do not want our health information to be
shared without our permission. It empowers consumers by making it
easier to limit unsolicited marketing offers. And it ensures improved
accuracy of credit report procedures. It is very important that the
information that is shared between creditors and credit bureaus is
accurate. It provides consumers with a one-call-for-all protection by
requiring credit bureaus to share consumer calls on ID theft, including
reporting fraud alerts with other credit bureaus. One call does it all.
Important suggestion.
With that, Mr. Chairman, I would also like to commend Wayne
Abernathy, Assistant Secretary of the Treasury, and Secretary of
Treasury Snow. And once again, I wish to commend the chairman, the
gentleman from Ohio (Mr. LaTourette), the gentleman from Massachusetts
(Mr. Frank), and all of the 58 cosponsors of this original legislation.
Mr. HINOJOSA. Mr. Chairman, I reserve the balance of my time.
Mr. OXLEY. Mr. Chairman, I am pleased to yield 2 minutes to my good
friend, the gentleman from the great Buckeye State of Ohio (Mr.
LaTourette), a former prosecutor, and one of the real leaders in the
identity theft provisions, along with the gentlewoman from Oregon (Ms.
Hooley).
(Mr. LaTOURETTE asked and was given permission to revise and extend
his remarks.)
Mr. LaTOURETTE. Mr. Chairman, I thank both the gentleman from Ohio
(Mr. Oxley) and the gentleman from Alabama (Mr. Bachus) for their very
kind words.
Mr. Chairman, when I travel back to Ohio, I have to admit that folks
up there are not telling me how important it is that we reauthorize the
Fair Credit Reporting Act. They are not telling me how this legislation
helped them drive home the new minivan the same day they went to the
dealership, or how the convenience of the national credit granting
system allowed them to charge a trip with the kids to Disneyland on
their MasterCard. What is ironic, Mr. Chairman, is that this lack of
interest from the average American consumer demonstrates to me very
clearly that the amendments the Congress passed in 1996 to create the
national credit system that we all take for granted today is working
exceptionally well and it is a perfect illustration of why we need to
support this legislation.
The bill before us today not only makes that system of the national
standard for our country, but it also, as has been mentioned, tackles
the problem of identity theft. During the committee's extensive hearing
process on this legislation, we heard from a number of experts on the
issue. We also heard from a number of victims. One of them came from my
hometown, a woman by the name of Maureen Mitchell. And it was the
severity of Maureen's case that inspired me to
[[Page H8126]]
work with my friend, the gentlewoman from Oregon (Ms. Hooley), who has
really been dogged in the pursuit of this part of the legislation for
years, and my hat's off to the gentlewoman from Oregon.
It was the severity of that case, and, basically, she and her husband
had their identities stolen, and they racked up $100,000 in bills. In
Chicago, the thieves went and got $45,000 in loans in the span of 2
hours, and they were horrified to learn that they were the ``proud
owners'' of two sport utility vehicles that they, of course, did not
purchase.
Anytime the Congress debates the issue of preempting State law, we
have to question whether or not the Federal Government knows better
than the States on how to pass a law that affects our citizens. When
the question relates to access to credit and identity theft, I strongly
believe the answer is in this legislation. Creating a set of uniform
national standards will benefit people across the economic spectrum and
is the perfect vehicle to fight the crime of identity theft.
I would urge my colleagues on both sides of the aisle to think of all
the times we take for granted the ability to gain fast access to credit
in our day-to-day activities. As a parent, it was terrifying when my
daughter got her first credit card in the mail. But when that envelope
arrived and she proudly stuck that piece of plastic in her wallet, she
began building a credit history that will one day allow her to buy a
home or take that vacation to Disneyland.
{time} 1530
Mr. Chairman, I would like to thank very much the gentleman from Ohio
(Chairman Oxley), the gentleman from Massachusetts (Mr. Frank), and the
gentleman from Alabama (Chairman Bachus) for this nice piece of
legislation.
Mr. Chairman, when I travel back home to Madison, Ohio, I'll admit
it--the folks up there aren't telling me how important reauthorizing
the Fair Credit Reporting Act is to them. They're not telling me how
this legislation helped them drive a new minivan home the same day they
went to the dealership, or how the convenience of our national credit
granting system allowed them to charge a trip with the kids to
Disneyland on their Matercard. What's ironic, Mr. Chairman, is that
this lack of interest from average American consumers demonstrates to
me very clearly that the amendments Congress passed in 1996 to create
the national credit system that we all take for granted today is
working exceptionally well, and is a perfect illustration of why we
need to support this legislation.
The bill before us today not only makes that system the national
standard for our country, but also tackles the issue of identity theft.
During the Committee's extensive hearing process on this legislation,
we heard from a number of experts on this issue, and we also heard the
testimony of a number of victims, one of whom--Maureen Mitchell--is
from my hometown. The severity of Maureen's case is what inspired me in
the 106th Congress to work with my friend Congresswoman Darleen Hooley
to draft what have now become the critical ID theft provisions in the
bill before us today. To give you some idea of the enormity and extent
of the Mitchell family's identity theft saga, all told, Maureen and her
husband Ray have been victimized to the tune of well over $100,000.
Their identities have been used to apply in a two-hour period for
$45,000 worth of personal loans at three different banks in Chicago.
And they are the ``owners'' of two luxury Sport Utility Vehicles that
they never purchased.
Any time Congress debates the issue of pre-empting State law, we have
to question whether or not the Federal Government knows better than the
States how to pass a law that affects our citizens. When the question
relates to access to credit and identity theft, I strongly believe that
the answer is in this legislation: creating a set of uniform national
standards will benefit people across the economic spectrum, and is the
perfect vehicle to fight the crime of identity theft.
That said, it would be wrong of us to tie consumers and industry down
with very specific operating guidelines and regulations. It would be
foolish to believe that there is one cure-all that will completely
prevent cases of identity theft, but with the options and flexibility
provided by this legislation, consumers, creditors, and law enforcement
will be able to stay ahead of the identity thieves as they find new
technologies and methods of carrying out this crime.
Again, I urge my colleagues on both sides of the aisle to consider
all the times we take for granted the ability to get fast access to
credit in our day-to-day activities. As a parent, yes, it was a
terrifying thing when my oldest daughter got her first credit card. But
what that envelope arrived in the mail and she proudly stuck that piece
of plastic in her wallet, she began building a credit history that will
one day allow her to buy a home and take that vacation to Disneyland
with her family. With the Fair Credit Reporting Act set to expire at
the end of the year, this Congress is in a unique position to have a
tremendous impact on every American consumer. If we do not act today
and support this legislation, we will be denying future generations of
Americans the same financial luxuries we have all enjoyed for the last
eight years.
Finally, I would like to thank Chairman Oxley and Subcommittee
Chairman Bachus for their strong leadership on this legislation.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as
I may consume to engage in a colloquy with the chairmen of the full
committee and the subcommittee.
Mr. Chairman, as part of this colloquy, I would say to my friends the
chairmen of the full committee and subcommittee that many Members are
concerned about the scope of the preemption that was just referred to,
particularly with regards to identity theft.
So I want to clarify with the author of the bill, the committee
chairman, what we are intending and how we have underscored that
intention in the manager's amendment which will be coming forward.
Does this bill or this amendment allow the preemption of any State
law on identity theft, such as limits on Social Security number use,
criminal penalties for identity theft perpetrators, or other identity
theft protections that are not specific subject matters addressed by
this bill.
Mr. OXLEY. Mr. Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from Ohio.
Mr. OXLEY. Mr. Chairman, the answer is no. The Member from
Massachusetts is correct. The identity theft protections in this bill
amend section 605 of the Fair Credit Reporting Act. The uniform
standard for section 605 is contained in section 624(b)(1)(e) which
states that, ``No requirement or prohibition may be imposed under the
laws of any State with respect to any subject matter regulated under
section 605.''
The section goes on to describe section 605 saying that it relates to
information contained in consumer reports, and now to identity theft
prevention. That means that 605 is the section for identity theft
protections, but the uniform standard requirement is still limited to
the subject matters that our provisions actually address such as
investigating address changes, fraud alerts, truncating credit card
account numbers, blocking bad credit information, establishing red flag
guidelines for identity theft prevention, and reconciling address
changes.
State identity theft laws that address different issues such as
limiting Social Security number use or criminal penalties on identity
theft perpetrators are not preempted. We have agreed with the gentleman
from Massachusetts (Mr. Frank) to clarify this in the manager's
amendment to underscore in the uniform standards provision that
describes section 605 that it only relates to the specific identity
theft prevention subjects covered and not to other identity theft
issues outside of the subject matters covered in the uniform standard.
Mr. BACHUS. Mr. Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, I would like to affirm the understanding
between the gentleman from Ohio (Mr. Oxley) and the gentleman from
Massachusetts (Mr. Frank).
In this bill we built upon the amendments that the gentleman from
Ohio (Mr. LaTourette) and the gentlewoman from Oregon (Ms. Hooley) had
first offered along with the gentleman from New York (Mr. Ackerman) and
also the gentleman from Massachusetts (Mr. Frank) to flesh out existing
uniform standards.
The bill of the gentleman from Ohio (Mr. LaTourette) and the
gentlewoman from Oregon (Ms. Hooley) that we used as our base text
expanded on the uniform standards for identity theft. But in that bill,
as in ours, there is no intent to go beyond the specific subjects
identified in the bill.
[[Page H8127]]
So, for example, we do create uniform standards for opening new
credit accounts when there are allegations of potential identity theft
under our fraud alert and blocking provisions. Because you need a
consistent rule that consumers and businesses can rely on when there
has been a fraud alert, when there has been an allegation of identity
theft. We do not address other subject matters that are not covered
such as limits on Social Security number use or criminal penalties for
identifying theft perpetrators.
These are issues that we expect the States to continue to work out
solutions to. Hopefully we can return to work on those ourselves with
Members like the gentleman from Florida (Mr. Shaw) or the gentleman
from Arizona (Mr. Shadegg), the gentleman from California (Mr. Ose),
the gentleman from Illinois (Mr. Emanuel). And I think the gentlewoman
from Oregon (Ms. Hooley) also wants to address some of those issues.
Many of them will have to be addressed either in the Committee on Ways
and Means or in the Committee on the Judiciary. And they have valid
concerns, but it is just from a jurisdictional standpoint.
Mr. FRANK of Massachusetts. Reclaiming my time, I thank the gentleman
from Alabama (Mr. Bachus). Let me say I appreciate the affirmations
from both gentlemen.
Mr. Chairman, let me say now, I want to transition from the colloquy
where we were in agreement as to what it says to express my view that I
think even with these agreements the bill is, with regard to some
existing law in California and elsewhere, more preemptive than it needs
to be.
I recognize the value of this colloquy in making clear what those
limits are. The gentlewoman from California (Ms. Waters) who has been
very concerned about this and who, indeed, alerted me to it earlier,
and I unfortunately did not pay as much attention as I should have at
the time, she is concerned and I share her concerns, so she will be
pursuing this further.
So I just want to say while I am pleased to have this colloquy and to
have these understandings, my own personal view, which I realize is not
shared by the gentleman of Ohio (Mr. Oxley) and the gentleman from
Alabama (Mr. Bachus) is that even with these understandings, there is
more preemptive language here than need be. I intend to work with the
gentleman from California and other Californians in various ways to try
and further reduce that preemption.
Mr. BACHUS. Mr. Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, just to make a clarification, it has been
said that this bill will preempt the new California legislation.
Mr. FRANK of Massachusetts. Mr. Chairman, let me take back my time.
There were two different California issues here. Of course, one would
not expect California to settle for only one controversy. The gentleman
from Alabama (Mr. Bachus) is correctly alluding to the future issue of
so-called SB1. But what the gentleman from California had identified to
me before that had passed was preemption of existing California where
it predates the recent enactment. And that is the concern that I was
alluding to.
Mr. BACHUS. Mr. Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, as we have said, we need a national
standard just like we need a national interstate highway system or
other national uniform standards. California saw fit, when they passed
this law, to exempt local statutes.
Mr. FRANK. Mr. Chairman, I will have to take back my time. I have one
more speaker. The gentleman is again talking about the language going
forward in SB1. The gentlewoman from Los Angeles and I are now
addressing a different set of laws, laws that had already been on the
books prior to that, laws passed subsequent to 1996, some of which I
think are unnecessarily preempted, although this colloquy has helped.
Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentlewoman from
Pennsylvania (Ms. Hart), a valuable member of our committee from the
Keystone State.
Ms. HART. Mr. Speaker, I rise in support of the FACT Act, the Fair
and Accurate Credit Transactions Act. Fortunately, today we appear to
have bipartisan support of the Act, and it is for a clear reason, our
credit system in the United States is the envy of the world. Our
uniform national standards have helped to make the United States a
world leader, and have continued to spur on our economy, even in times
that have been difficult in the last year or so.
The bill makes these national standards that have been in effect
permanent. This is important to ensure continuity in our credit system,
and also to maintain continued access to the best credit markets in the
world. This is especially important because two-thirds of our economy
depends very heavily on consumer spending. Consumers will not spend
without access to credit, and to get access to credit, consumers and
lenders need consistent, uniform standards for credit reports. Broader
access is the result. National and worldwide access is also the result.
According to the Federal Reserve Board, in fact, since the Fair
Credit Reporting Act was enacted, the overall percentage of families
with general purpose credit cards increased from 16 to 73 percent and
the largest increase was among lower-income families.
Homeownership levels have also grown approximately 10 percent, again
with low income and minority families receiving the largest gains.
According to some estimates, these improvements have saved consumers
nearly $100 billion annually. Many of my colleagues have mentioned the
benefits also regarding fighting identity theft. This bill allows each
consumer to get a copy of their credit report annually, and that will
help to avoid a lot of the problems we have been having with ID theft
and use of credit by those not authorized. It helps the consumer to
identify charges that are not theirs, it helps to identify and clear
them from the credit report keeping the consumers' credit clear.
Every year a consumer would have access to a free copy of that credit
report, see their credit scores which help them understand whether they
are going to be able to get access to a mortgage or new credit.
Finally, I ask my colleagues to support this Act because it will
create continuity, it will continue the dynamic American system, and it
will help us keep access to safe credit and flexibility for the
American consumer.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield 3 minutes to the
gentleman from Vermont (Mr. Sanders), the ranking member of the
subcommittee who worked very hard to make the bill better, but still
obviously has some concerns with it. But from the consumer standpoint,
the gentleman worked as hard as anyone.
Mr. SANDERS. Mr. Chairman, I thank the gentleman for yielding me this
time.
Unfortunately, I rise in opposition to this legislation. While this
bill does include important consumer protection provisions, such as the
provision that I and other members of the committee fought for, which
would provide free annual credit reports to consumers who request them,
and would also allow consumers to receive more information about their
credit scores identical to a very good law in the State of California,
there are major flaws in this legislation.
For a start, even in terms of that pro-consumer provision, we are not
quite sure when that will go into effect, and I fear it will not go
into effect as soon as it should.
Secondly, I think the major concern that I and consumer organizations
all across this country have is that this legislation would permanently
preempt the States from passing stronger consumer protection laws in
order to aggressively punish identity thieves and to improve the
accuracy of consumers' credit reports.
I may be the conservative on the committee, but it has long been my
belief when we are dealing with an issue of protecting consumer rights,
we cannot take away the ability of the States to pass stronger consumer
protection laws. I find it very ironic from day one of this discussion
that conservatives who have told us over and over again how much they
dislike the big bad Federal Government stepping on States' rights, in
fact have brought that provision into this legislation.
[[Page H8128]]
So if the State of Vermont or the State of California or the State of
Ohio wants to go further in this area, well, my goodness, that big bad
Federal Government, which we have heard so much about, is able to say
sorry, you cannot do it. Attorneys general, governors, State
legislators, you cannot do that, and I think that is wrong.
During the course of the debate on the committee, there was a very
interesting discussion over an amendment that I and the gentleman from
Alabama (Mr. Bachus) brought forth which deals with the issue of what I
call credit card switch and bait, and I will be bringing forth an
amendment to win support of it. It is not included in this bill, and it
should be.
Mr. Chairman, what is going on in this country is that people who pay
off their credit card debts on time every single month nonetheless are
seeing huge increases in the interest rates that they are paying. How
does that happen? It happens because maybe 3 years ago they took out a
loan which is still outstanding, or maybe they had an emergency medical
bill and they had to borrow money, and arbitrarily the credit card
company has determined they are a greater financial risk and their
rates can double or triple. I think that is wrong.
This bill has some positive provisions, but we can do much better,
and I would urge a ``no'' vote on it.
{time} 1545
Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Arizona (Mr. Shadegg).
Mr. SHADEGG. Mr. Chairman, I thank the gentleman for yielding me this
time. I rise in strong support of this carefully balanced legislation.
I want to compliment the authors and the committee chairman for doing
what I think is a superb bill that will in fact help consumers across
America. Indeed, I think this is a key component in protecting our
credit structure and enabling Americans to get the credit that they
need. I am very pleased that the legislation does what it does.
Importantly, as the author of our Nation's first identity theft
legislation, I am very pleased with the provisions in this bill that
deal with identity theft. It makes some important strides in improving
our fight against identity theft. For example, the bill requires that
anytime a transaction is made and information is transmitted using a
credit card number, that number has to be truncated so that someone who
wants to steal your identity by grabbing ahold of your credit card
number will not have the full number. While some companies currently do
that, not all do. This will protect them very much.
There are a number of other key provisions dealing with the issue of
identity theft, and that is a critical issue because, for example, it
was just reported last week that in America last year, 10 million
people became the victims of identity theft. Those individuals
themselves, as individuals, suffered $5 billion in damages. But on top
of that, businesses in America sustained $47 billion of losses as a
result of identity theft. And so the ID theft provisions in this bill I
think are very, very important. But it could go further.
The General Accounting Office testified in July of this year that
Social Security numbers are often the identifier of choice among
individuals seeking false identities; and perhaps to the shock and
amazement of people in this room and across the country, just last
month, an organization engaged in consumer advocacy, to prove that
Social Security numbers are too available, purchased the Social
Security number of Attorney General John Ashcroft and CIA Director
George Tenet off the Internet for a mere $26. The problem is that
Social Security numbers are too available.
In 2002, the FBI testified that possession of someone else's Social
Security number is key to laying the groundwork to take over that
individual's identity and obtain a driver's license, loans, credit
cards, and merchandise. It is also key to taking over an individual's
existing account and wiring money from the account, charging expenses
to an existing credit line, writing checks on the account or simply
withdrawing money.
It is absolutely critical that this Congress this year enact
legislation to prohibit the purchase and sale of Social Security
numbers in a fashion that allows identity thieves to get ahold of those
numbers. This legislation does not yet do that. Hopefully, either in an
amendment yet offered this afternoon or in the conference committee, we
can do that. There is bipartisan support for this idea. I know the
gentleman from Illinois (Mr. Emanuel) on the other side supports doing
it as well as a number of others. I have been helped by many, including
the gentleman from Massachusetts. We can deal with this problem, but we
must do so in legislation that will pass this year. Anyone who blocks
that legislation or seeks to keep it from happening and happening very,
very quickly, I think, is doing a disservice to the victims of identity
theft across this country.
It is important to note that the second greatest concern of Americans
when it comes to privacy is that their identity might be stolen by an
identity thief and that they might be victimized by that and undergo
that pain. Again, I would reiterate that this is very important
legislation. It goes a long way toward stopping identity theft. It can
go a little further if we prohibit the purchase and sale of Social
Security numbers.
I urge my colleagues to vote for the legislation.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the
gentleman from New York (Mr. Crowley), one of those who had a major
input into this bill.
Mr. CROWLEY. Mr. Chairman, first I want to take this opportunity to
thank the gentleman from Ohio (Mr. Oxley) and the gentleman from
Massachusetts (Mr. Frank), as well as the gentleman from Alabama (Mr.
Bachus) and the gentleman from Vermont (Mr. Sanders), for their work
together in what I believe is truly a bipartisan effort and manner to
craft, in my opinion, a well-balanced bill, understanding that there is
a deadline looming in the not-too-distant future as pertains to many of
these issues.
This bill ensures the continued flow of credit for American consumers
by allowing for the permanent protection of credit availability. Our
economy and our credit-granting industry should not have to continually
look over its shoulder at potentially burdensome regulations,
regulations that could hinder the availability of credit for millions
of Americans. But this legislation is not just about protecting
consumer credit options. It is about protecting consumers' identity and
their health information. This bill strengthens the rules to protect
consumers from identity theft.
The Committee on Financial Services, which I am a member of, heard
from a woman who originally lived in my district, someone who I grew up
just seven doors away from. Her name was Maureen Sullivan. Now it is
Maureen Mitchell. She grew up in Woodside, Queens, New York, who was a
victim herself, and her husband, of identity theft. It cost her not
only money but it cost her an enormous amount of time, not to mention
mental anguish. This quite frankly happens all too often in this
country. This bill addresses many of these issues and works for
increased protections for honest Americans and honest people. Most
importantly, this bill ensures the strict prohibition of medical and
health information from being used in the credit-granting or denial
process. No longer can the information used in hospitals and in
doctors' offices be used to decide one's creditworthiness.
I want to urge my colleagues to vote in favor of this legislation.
Once again I want to thank the chairman and the ranking member for all
their good and honest work on what I think is a worthy piece of
legislation.
Mr. OXLEY. Mr. Chairman, I yield 1 minute to the gentleman from
Alabama (Mr. Bachus).
Mr. BACHUS. Mr. Chairman, let me say this. The body just heard from
the gentleman from Arizona. He actually introduced in the 104th
Congress the very first legislation dealing with identity theft. It was
the Identity Theft and Deterrence Act, which had criminal penalties in
it. Before most Americans, even most Members of Congress, knew of this
problem, he knew about it.
We do have a continuing concern about Social Security numbers. If we
are going to truncate them, this is a great example of why we need a
uniform standard. We cannot have one
[[Page H8129]]
State truncating them into six numbers, another State into five numbers
where we could not interchange them. I would encourage the gentleman
from Arizona to continue to work with the Committee on Ways and Means
in dealing with this problem, because it is something that we need to
address in identity theft. I applaud and commend him for his effort and
encourage him to continue with it.
The CHAIRMAN. Without objection, the gentleman from North Carolina
(Mr. Watt) will control the time of the gentleman from Massachusetts
(Mr. Frank).
There was no objection.
Mr. WATT. Mr. Chairman, I yield 2 minutes to the gentleman from
Kansas (Mr. Moore), a valued member of the committee who was chairman
of the Democratic task force on this bill.
Mr. MOORE. Mr. Chairman, I thank the gentleman from North Carolina
for yielding me this time. I also want to thank the gentleman from Ohio
(Mr. Oxley), the gentleman from Massachusetts (Mr. Frank), also the
gentleman from Vermont (Mr. Sanders), and the gentleman from Alabama
(Mr. Bachus) for the great work that they did on this bill. I rise in
strong support of this bill which passed out of committee 61 to 3. That
is almost unheard of in this body where there is so much
contentiousness, it seems, way too often. I think people out in the
country wonder what is going on here. I think this is a splendid
example of our ability to work together for something to benefit the
American people and for business in this country.
I ask my colleagues to vote in support of the bill that is going to
come up on the floor today because it does assure the availability of
reasonably priced consumer credit to consumers, which is going to
enhance their ability to purchase things that they want in the future
as well as to protect our economy and business in this country.
I think it is very, very important that we pass this legislation
intact. It increases consumer awareness of their rights. It protects
against identity theft. It expands consumer access to credit
information and gives a free credit report annually to consumers in
this country. There are a number of consumer protections that the
gentleman from Vermont and others worked for that are now built into
this bill and if this bill is adopted will become in fact permanent.
I urge my colleagues and all the Members of this body to vote in
support of this bill.
Mr. WATT. Mr. Chairman, I yield 2 minutes to the gentleman from
Illinois (Mr. Emanuel) who has had such a tremendous impact on this
bill, particularly the medical privacy portions of the bill. He has
been a stalwart.
Mr. EMANUEL. Mr. Chairman, I would like to thank my colleague from
North Carolina for his kind words. I would like to also congratulate
the gentleman from Ohio (Mr. Oxley), the gentleman from Massachusetts
(Mr. Frank), the gentleman from Alabama (Mr. Bachus), the gentleman
from Vermont (Mr. Sanders), and the gentleman from California (Mr. Ose)
for cosponsoring our amendment that deals with medical information and
blacking out that information. This is a landmark bill that will help
American consumers by giving them important new rights and protections.
Our economy benefits from a national credit reporting system like no
other in the world, and this legislation strikes the right balance by
safeguarding consumers while also ensuring continued access to our
instant credit system. Medical information should have no place in
employment decisions or credit determinations, and corporate affiliates
should not be able to share it. This information deserves the strongest
protection under the law, but beyond that it is important that we give
consumers back some control over who can and cannot use this
information. In fact, a recent Gallup poll showed 95 percent of
consumers are worried that their health providers or insurers may be
sharing their private medical information with others. Beyond this
concern, however, they fear losing more control every day over
sensitive medical information.
No longer will we ask whether you opt in or opt out. Your medical
information, medical information in your family from here forward is
blacked out. It protects you in the most sensitive area. It blacks out
the use of medical information in the credit-granting process. It
establishes strict limits on the use of medical information for
employment purposes. It blacks out the indiscriminate sharing of
medical information among corporate affiliates. It blacks out the use
of medical information to create individualized or aggregate lists
based on consumers' payment transactions for medical products; creates
a new and higher standard for reporting by credit reporting agencies to
others who have requested information; and establishes strict limits on
the reuse of medical information.
This is both good for consumers and good for business. In a typical
way when you have a win-win situation, it will also in my view garner
great bipartisan support. Again I want to close by thanking the
chairman and the ranking member for having a bill that brings together
business interests and consumer interests not only throughout the bill
but also in this particular area, by blacking out medical information
and giving consumers again control over their own lives.
Mr. WATT. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, in 1996, or when the original fair credit reporting
bill was passed, which I do think was 1996, there was quite a bit of
controversy about whether the Federal Government should be the
controlling entity with respect to these kinds of credit issues. You
had your classic States rights versus Federal Government debate. That
has been much less of a debate this time because over time we have come
to realize that commerce, both intrastate and interstate, is
substantially impacted by the availability of credit. Just about
everybody is using credit in commerce. Nobody is paying cash anymore,
or seldom are people paying cash. So the argument about whether the
Federal Government has a legitimate role in this fair credit process
kind of has gone by the board over the years and was less of an issue
in this debate and gave the committee in my estimation the opportunity
to focus on really creating a comprehensive kind of approach to dealing
with credit in this country, dealing with some of the problems that
people face when credit reporting agencies get the wrong information,
dealing with identity theft and medical privacy, and the whole range of
issues that can come into play when a credit transaction is about to
take place.
{time} 1600
I think the gentleman from Ohio (Chairman Oxley) and the gentleman
from Massachusetts (Mr. Frank) have done just a magnificent job of
hearing all of the input from all of the different sides and coming
together on a bill that came out of committee with not unanimous
support, but virtually unanimous support.
Now, there are some things that may be tweaked between the committee
process and the floor, and there might be some need to change one or
two things that have been agreed upon, but there are some amendments
that I think could have a negative effect on this kind of bipartisan
agreement that has characterized this bill.
So I hope that as we go forward into the amendment process, all of us
will remember how hard we worked to keep this a bipartisan bill, to
deliver a bill to the Senate that had just broad-based support so they
would not sit there and not do anything and let the authorization run
out. We need to maintain this bill in its current form as much as
possible, unless the Chair and ranking member have agreed to
amendments. I hope that my colleagues will keep that in mind.
Mr. Chairman, it is time for us to pass this bill, move it over to
the Senate, and hope that they will produce a product that will keep
credit available to people in this country on a set of fair and
equitable rules.
Mr. Chairman, I yield the balance of my time to the gentleman from
Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Chairman, I want to thank the
gentleman from North Carolina for taking over for me temporarily and
for his very effective leadership throughout the deliberations on this
bill.
The CHAIRMAN. The time of the gentleman from Massachusetts has
expired.
[[Page H8130]]
Mr. OXLEY. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, in only 1 minute it will be difficult to thank
everybody, but let me try. First, the chairman of the subcommittee, the
gentleman from Alabama (Mr. Bachus), who has shown enormous leadership,
the main sponsor of this bill. He held over eight hearings with over
100 witnesses. The gentleman from North Carolina is right, everybody
who wanted to be heard on this bill was heard, sometimes more than
once.
I would like to express thanks to the gentleman from Massachusetts
(Mr. Frank) for his leadership and direction and for helping us all
along the way; to the gentlewoman from Oregon (Ms. Hooley), and to the
gentleman from Ohio (Mr. LaTourette), particularly on their efforts on
identity theft; and to the gentlewoman from Illinois (Mrs. Biggert) for
her contributions as well. It is a real honor roll of members on our
committee.
Frankly, over the last 2\1/2\ years, our committee has established a
pretty solid record of bipartisan cooperation and production, whether
it was the Sarbanes-Oxley bill, or whether it was tourism risk
insurance, and the list goes on. This, I think, is one more addition to
that honor roll. For that I am extremely grateful to the members of the
committee on both sides of the aisle. We have been clearly blessed with
a cooperation, and I think it will be reflected in the final vote.
Mr. HOYER. Mr. Chairman, I urge all my colleagues to support this
legislation--the Fair and Accurate Credit Transactions of 2003--which
provides a national uniform standard on how consumer reporting agencies
and other financial services entities may access and use consumer
financial and medical data.
But before I discuss the substance of the underlying bill, I want to
compliment the Chairman and Ranking Member of the Financial Services
Committee (Mr. Oxley and Mr. Frank), who worked together in crafting
this bipartisan legislation, which I believe will be passed by an
overwhelming margin today.
This, Mr. Chairman, is how our legislative process should work. The
Chairman and Ranking Member identified a need. They held hearings. And
they crafted the bipartisan solution on the Floor today that is,
nonetheless, open to amendment.
Mr. Chairman, the advent of the Internet and the Information
Revolution has been a terrific boon for the American consumer. Millions
have received quick credit decisions on financing a new car, on
obtaining a credit card, and on taking out or refinancing a mortgage.
This has clearly facilitated many of the most important financial
decisions consumer make, and strengthened our economy.
However, it also illustrates the need for national uniform standards
for financial information. And that is what this bill addresses.
Under this legislation, consumers can receive a free annual credit
report that will disclose their credit score. In addition, the Act
gives consumers new options for disputing and correcting inaccuracies
in their credit reports, encourages prompt investigations of such
disputes, and establishes new requirements to prevent corrected errors
from being reintroduced into a credit report.
The Act also includes provisions to combat identify theft. A recent
Federal Trade Commission survey indicated that more than 27 million
Americans have been victims of identity theft in the last five years,
including nearly 10 million people in the last year alone.
H.R. 2622 permits consumers to more easily place ``fraud alerts'' on
their consumer reports; to require credit reporting agencies to block
(or omit) information that is confirmed to have resulted from an
identity theft, as long as the consumer has filed a police report
concerning the ID theft; and to prohibit retailers from printing the
expiration date and more than the last five digits of a consumer's
credit or debit card number on electronic receipts.
Finally, the Act greatly expands the protections in the Fair Credit
Reporting Act that govern the sharing and use of sensitive medical
records and information, as well as information pertaining to medical-
related payments and debts. These provisions will prohibit consumer
reporting agencies from including medical information in a consumer's
credit report unless the medical information is directly relevant to
the consumer's attempts to obtain employment or credit and the consumer
has explicitly consented to the release of the information.
Mr. Chairman, this legislation is not only substantively important,
it is timely. As my colleagues may know, Congress must reauthorize the
Fair Credit Reporting Act before the preemptions expire on December 31,
2003.
I urge my colleagues to vote for this legislation.
Mr. GILLMOR. Mr. Chairman, I rise today in strong support of H.R.
2622, the Fair and Accurate Credit Transactions Act of 2003. Passage of
this important legislation is essential to maintaining our current
national credit reporting system. As Federal Reserve Board Chairman
Alan Greenspan make clear to the Financial Services Committee in his
testimony, if we do not act to extend the uniform national standard for
consumer protections governing credit transactions first established in
the Fair Credit Reporting Act ``we will have great difficulty in
maintaining the level of consumer credit currently available.''
H.R. 2622 maintains the free flow of credit reporting information to
lenders and other financial services providers while also creating
powerful new consumer protections. Consumers will have the authority to
place fraud alerts in their credit reports, preventing identity thieves
from using their information and keeping negative information resulting
from fraudulent activity from being reported to a credit bureau.
The Fair and Accurate Credit Transactions Act will also allow
consumers to access annually a free copy of their credit score and
credit report identifying the key factors affecting their credit
worthiness with recommendations on ways to improve their score. A
provision I authored in H.R. 2622 will also improve the transparency of
credit scoring systems by mandating that if the number of credit
enquiries on a consumer's account negatively affects their score it
must be disclosed in their consumer report. This ensures the consumer
and their prospective lenders are fully informed. This important
requirement will allow conscientious consumers to shop around for the
best rates on loans or mortgages without unknowingly harming their
credit.
I would like to thank Financial Services Committee Chairman Oxley and
Subcommittee Chairman Bachus for their hard work on this issue and urge
my colleagues to join me in voting for this vital legislation. The
consumer benefits afforded by our national credit system are too
important to our nation's economy to be left at risk.
Mr. ACKERMAN. Mr. Chairman, I rise today in support of H.R. 2622, the
Fair and Accurate Credit Transactions Act. Over the past several
months, the Financial Services Committee has held numerous hearings, in
addition to the subcommittee and full committee markup of this
legislation. As a member of the committee, I am proud to have played a
role in crafting this important legislation which achieves a number of
goals important to consumers, as well as to the financial industry.
This legislation extends the expiring provisions of the Fair Credit
Reporting Act, allows consumers to receive free annual credit reports,
and protects consumers' sensitive medical information.
I am particularly pleased with the provisions that help consumers
prevent and correct inadequacies in their credit reports. The bill
provides that when a financial institution reports negative
information, such as a consumer's delinquencies, the institution must
notify the consumer of this in writing. This is a win-win for all
parties involved. Financial institutions will stand a greater chance of
collecting their money sooner if the consumer is warned that being
reported to the credit bureau is imminent. A notice in writing stating
you will be reported to the credit bureaus for this delinquency and
that this will affect your credit rating is strong motivation for most
consumers. For the consumer who wants to protect and improve his credit
rating, this is essential information. For the consumer whose identity
has been stolen, this may be a vital notification.
I have greatly appreciated the opportunity to collaborate with
Chairman Oxley, Ranking Member Frank and their excellent staffs, all my
colleagues on the Financial Services Committee, and representative of
both the financial services industry and consumer groups to develop
this historic bipartisan legislation. I ask my colleagues to join with
me in supporting H.R. 2622.
Mr. BEREUTER. Mr. Chairman, this Member rises today to express his
support for H.R. 2622, the Fair and Accurate Credit Transactions Act of
2003 (FACT Act). This important legislation permanently extends those
provisions in the Fair Credit Reporting Act (FCRA) which relate to the
preemption of State laws. These provisions in the FCRA are set to
expire on December 31, 2003. The FCRA is the Federal law which governs
the furnishing of reports on the credit worthiness of consumers.
This Member would like to thank the distinguished gentleman from
Alabama (Mr. Bachus), the Chairman of the House Financial Services
Subcommittee on Financial Institutions and Consumer Credit, for
introducing this important legislation. Furthermore, this Member would
like to thank both the distinguished gentleman from Ohio (Mr. Oxley),
the Chairman of the House Financial Services Committee, and the
distinguished gentleman from Massachusetts (Mr. Frank), the Ranking
Member of this Committee, for their support in bringing this measure to
the House floor.
[[Page H8131]]
This legislation, H.R. 2622, is essential since it ensures the
continuity of the nationwide credit system while providing important
consumer protections. This Member supports this legislation for many
reasons. However, he would like to focus on the following three
reasons.
First, this legislation provides for a free credit report annually
for consumers. Typically, credit reporting agencies charge consumers up
to $9 for the disclosure of the information in their credit files.
Under current law, a consumer may receive a free consumer report from a
reporting agency only under certain circumstances, such as when a
consumer receives a notice of an adverse action by a reporting agency.
The FACT Act would provide for a free credit report annually for
consumers for any reason. This Member believes that this provision will
promote consumer awareness of a person's credit history as well as
provide an opportunity for the consumer to correct any inaccurate
information on one's credit report.
Second, this legislation provides important provisions to curb
identity theft. To illustrate the need for these provisions, the
Federal Trade Commission (FTC) released a survey at the beginning of
September of this year which showed that a staggering 27.3 million
Americans had been victims of identity theft in the last 5 years,
including 9.9. million people in the last year alone. This bill
provides the following consumer protection tools against identity
theft: Allows consumers to place ``fraud alerts'' in their credit
reports to prevent identity thieves from opening accounts in their
names; allows consumers to block information from being given to a
credit reporting agency and from being reported by this agency if such
information results from identity theft; and prohibits furnishers of
credit information from forwarding to reporting agencies information on
a consumer if the furnisher has substantial doubts as to its accuracy.
Lastly, this bill continues the Federal preemption of State laws as
it relates to the corporate affiliate sharing of financial information.
During the consideration of the 1996 amendments to the FCRA, this
Member authored a provision, which was signed into law, that required a
consumer opt-out nontransactional is shared among corporate affiliates.
Examples of nontransaction information include data from a consumer
credit report and information on an application such as a consumer's
income or assets. This provision on consumer notice is very important
as it was the first consumer ``opt out'' on the sharing of financial
information that this Member is aware of that was signed into Federal
law.
In conclusion, for the reasons stated above and many others, this
Member encourages his colleagues to support H.R. 2622.
Mr. CASTLE. Mr. Chairman, I rise today to express my strong support
for the Fair and Accurate Credit Transactions Act of 2003. This
bipartisan legislation passed the House Financial Services Committee by
a vote of 61-3 in July 2003. An overwhelming endorsement which should
be noted today.
This legislation is a good bipartisan bill, it is the result of six
hearings, nearly 100 witnesses, and months of deliberations. Through
this very thorough process, the Financial Services Committee has
produced a bill that will protect the financial privacy and access to
credit for all consumers. Furthermore, it will help our economic
recovery by ensuring that businesses have access to accurate
information which provides prompt credit to American consumers.
As my colleagues know, one of the forces that has helped sustain our
economy in recent years is consumer spending. A critical factor in
enabling American consumers to purchase products when they need them
and want them, is our strong system of consumer credit. That system is
supported by the Fair Credit Reporting Act, which insures that factual
information is available on which to base the extension of credit.
Virtually every business in this Nation, and every consumer that has
ever used credit, depends on this system.
One of my constituents, Michael Uffner, President, Chairman and CEO,
of Auto Team Delaware, testified before the House Financial Services
Committee this year. Mike Uffner stressed importance of access to
accurate credit information to serve customers in a timely and fair
manner. Americans want to be able to walk into an automobile showroom
and purchase an automobile that day based on a prompt approval of a
loan based on their credit.
In December, the national uniform consumer protection standards in
the Fair Credit Reporting Act will expire. Without this legislation,
there would be no national standards for consumer protections and
credit availability. This will negatively affect consumer access to
credit and the economy as a whole. A failure to pass this legislation
means higher costs to consumers, who will be paying more for their
credit without this legislation. In today's economy, rely on instant
credit, available to us across the country. There is uniformity, this
is not a state by state issue, as Congress we must protect consumers.
This legislation has a number of consumer protections, it helps
protect consumer credit while providing access to greater opportunities
of credit nationwide. This legislation provides consumers with the
tools they need to fight identity theft and to ensure the accuracy of
their credit reports.
Mr. Chairman, again, I want to express my strong support for this
bill and urge my colleagues on both sides of the aisle to join the 61
bipartisan members of the House Financial Services Committee who worked
together to craft this bill to protect consumers and give confidence to
businesses. This is a proper step to ensure that all of our
constituents have access to fair and reasonable credit and information.
Mr. SCHIFF. Mr. Chairman, I rise today to support the two amendments
offered by my colleagues from California, Representatives Sherman, Lee,
and Waters which would protect California's consumer protection laws
from being preempted by the base bill being debated today. First, let
me express my appreciation to my colleagues who serve on the Financial
Services Committee for bringing to this Floor such a strong bipartisan
bill. H.R. 2622 is important legislation which is necessary to ensure
the effectiveness of our nation's credit reporting system.
It is true, this legislation will extend consumer protections
currently not afforded to millions of Americans. This is not true,
however, for Californians. The California Legislature, with
overwhelming bipartisan and consumer support, has adopted progressive
and effective financial privacy laws which afford California residents
the most far reaching consumer protections in the nation.
Under California law, Californians can correct erroneous credit
reporting through the filing of police reports, can request a fraud
alert to be posted on their personal credit reports, have access to
contact information for those who placed information on their credit
report, and have the right to remove their names from credit card
solicitation lists furnished by credit bureaus.
Most recently, California adopted legislation which requires
financial institutions to obtain a consumer's affirmative consent
before sharing information with most third parties and prevents, except
under certain circumstances, the affiliate sharing of a consumer's
nonpublic personal information.
Should this legislation be adopted in its current form and without
these amendments, perhaps fifteen consumer protections, including those
which I have just listed, will be preempted. As I said, while many
Americans will enjoy additional consumer protections through the
adoption of H.R. 2622, Californian's will lose many of the consumer
protections which they have come to depend on.
We should not punish Californians for adopting far reaching consumer
protections. In fact we should learn form California's example and
extend these protections to the rest of the nation. And while this
legislation will help millions of Americans it will be detrimental to
all Californians.
All Members should support the amendments offered by Representatives
Sherman, Lee and Waters to ensure the protection of California law and
protect a state's right to enact and enforce effective consumer
protection laws. However, should these amendments not be agreed to
today, I urge my colleagues to ensure that this issue is corrected in
the House--Senate Conference Committee on this legislation.
Finally, H.R. 2622 is necessary and important legislation which would
only be made better with the adoption of these amendments.
Mr. RUPPERSBERGER. Mr. Chairman, I have interest in a company that
does business with a financial institution that one way or another
might be impacted by this legislation, so I have decided to vote
present on H.R. 2622, the Fair & Accurate Credit Transactions Act and
the accompanying amendments on September 10, 2003. This includes all
roll call votes starting at #495 until the end of the consideration of
this measure. It also includes any motion to recommit and final passage
on H.R. 2622, the Fair & Accurate Credit Transaction Act.
I do support the efforts of this legislation in combating identity
theft and applaud authors of this measure.
Mr. OXLEY. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the amendment in the nature of a substitute
printed in the bill is considered as an original bill for the purpose
of amendment and is considered read.
The text is the amendment in the nature of a substitute is as
follows:
H.R. 2622
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fair and
Accurate Credit Transactions Act of 2003''.
[[Page H8132]]
(b) Table of Contents.--The table of contents for this Act
are as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Effective dates.
TITLE I--UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS
Sec. 101. Uniform national consumer protection standards made
permanent.
TITLE II--IDENTITY THEFT PREVENTION
Sec. 201. Investigating changes of address and inactive accounts.
Sec. 202. Fraud alerts.
Sec. 203. Truncation of credit card and debit card account numbers.
Sec. 204. Summary of rights of identity theft victims.
Sec. 205. Blocking of information resulting from identity theft.
Sec. 206. Establishment of procedures for depository institutions to
identify possible instances of identity theft.
Sec. 207. Study on the use of technology to combat identity theft.
TITLE III--IMPROVING RESOLUTION OF CONSUMER DISPUTES
Sec. 301. Coordination of consumer complaint investigations.
Sec. 302. Notice of dispute through reseller.
Sec. 303. Reasonable investigation required.
Sec. 304. Duties of furnishers of information.
Sec. 305. Prompt investigation of disputed consumer information.
TITLE IV--IMPROVING ACCURACY OF CONSUMER RECORDS
Sec. 401. Reconciling addresses.
Sec. 402. Prevention of repollution of consumer reports.
Sec. 403. Notice by users with respect to fraudulent information.
Sec. 404. Disclosure to consumers of contact information for users and
furnishers of information in consumer reports.
Sec. 405. FTC study of the accuracy of consumer reports.
TITLE V--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
Sec. 501. Free reports annually.
Sec. 502. Disclosure of credit scores.
Sec. 503. Simpler and easier method for consumers to use notification
system.
Sec. 504. Requirement to disclose communications to a consumer
reporting agency.
Sec. 505. Study of effects of credit scores and credit-based insurance
scores on availability and affordability of financial
products.
Sec. 506. GAO study on disparate impact of credit system.
Sec. 507. Analysis of further restrictions on offers of credit or
insurance.
Sec. 508. Study on the need and the means for improving financial
literacy among consumers.
Sec. 509. Disclosure of increase in APR under certain circumstances.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
Sec. 601. Certain employee investigation communications excluded from
definition of consumer report.
TITLE VII--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE
FINANCIAL SYSTEM
Sec. 701. Protection of medical information in the financial system.
Sec. 702. Confidentiality of medical information in credit reports.
SEC. 2. DEFINITIONS.
Section 603 of the Fair Credit Reporting Act (15 U.S.C.
1681a) is amended by adding at the end the following new
subsections:
``(r) Reseller.--The term `reseller' means a consumer
reporting agency that--
``(1) assembles and merges information contained in the
database of another consumer reporting agency or multiple
consumer reporting agencies concerning any consumer for
purposes of furnishing such information to any third party,
to the extent of such activities; and
``(2) does not maintain a database of the assembled or
merged information from which new consumer reports are
produced.
``(s) Other Definitions.--
``(1) Board; credit; creditor; credit card.--The terms
`Board', `credit', `creditor', and `credit card' have the
same meanings as in section 103 of the Truth in Lending Act.
``(2) Commission.--The term `Commission' means the Federal
Trade Commission.
``(3) Debit card.--The term `debit card' means any card
issued by a financial institution to a consumer for use in
initiating electronic fund transfers (as defined in section
903(6) of the Electronic Fund Transfer Act) from the account
(as defined in such Act) of the consumer at such financial
institution for the purpose of transferring money between
accounts or obtaining money, property, labor, or services.
``(4) Electronic fund transfer.--The term `electronic fund
transfer' has the same meaning as in section 903 of the
Electronic Fund Transfer Act.
``(5) Federal banking agency.--The term `Federal banking
agency' has the same meaning as in section 3 of the Federal
Deposit Insurance Act.
``(6) Identity theft.--The term `identity theft' means a
fraud committed using another person's identifying
information, subject to such further definition as the
Commission and the Board may prescribe, jointly, by
regulation.
``(7) Police report.--The term `police report' means a copy
of any official valid report filed by a consumer with any
appropriate Federal, State, or local government law
enforcement agency, or any comparable official government
document that the Board and the Commission shall jointly
prescribe in regulations, that is subject to a criminal
penalty for false statements.''.
SEC. 3. EFFECTIVE DATES.
(a) In General.--Except as provided in subsections (b) and
(c)--
(1) before the end of the 2-month period beginning on the
date of the enactment of this Act, the Board of Governors of
the Federal Reserve System and the Federal Trade Commission
shall jointly prescribe regulations in final form
establishing effective dates for each provision of this Act
(except as otherwise specified); and
(2) the regulations prescribed under paragraph (1) shall
establish effective dates that are as early as possible while
allowing a reasonable time for the implementation of the
provisions of this Act, but in no case shall the effective
date be later than 10 months after the date of issuance of
such regulations in final form.
(b) Immediate Effective Date.--The following provisions
shall take effect on the date of the enactment of this Act:
(1) Title I.
(2) Section 201.
(3) Section 609(d)(1) of the Fair Credit Reporting Act (as
added by the amendment in section 204(a)).
(4) Section 305.
(5) Section 505.
(6) Section 506.
(7) Title VI.
(c) Effective Date for Protection of Medical Information in
the Financial System.--Section 701 shall take effect at the
end of the 180-day period beginning on the date of the
enactment of this Act, except that paragraph (2) of section
604(g) of the Fair Credit Reporting Act (as added by section
701) shall take effect on the later of--
(1) the end of the 90-day period beginning on the date the
regulations required under paragraph (5)(B) of such section
604(g) (as added by section 701) are prescribed in final
form; or
(2) the date specified in the regulations referred to in
paragraph (1).
TITLE I--UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS
SEC. 101. UNIFORM NATIONAL CONSUMER PROTECTION STANDARDS MADE
PERMANENT.
Section 624(d) of the Fair Credit Reporting Act (15 U.S.C.
1681t(d)) is amended--
(1) by striking ``Subsections (b) and (c)'' and all that
follows through ``do not affect any settlement,'' and
inserting ``Subsections (b) and (c) do not affect any
settlement,''; and
(2) by striking ``Consumer Credit Reporting Reform Act of
1996'' and all that follows through the period at the end of
paragraph (2) and inserting ``Consumer Credit Reporting
Reform Act of 1996.''.
TITLE II--IDENTITY THEFT PREVENTION
SEC. 201. INVESTIGATING CHANGES OF ADDRESS AND INACTIVE
ACCOUNTS.
(a) In General.--Section 605 of the Fair Credit Reporting
Act (15 U.S.C. 1681c) is amended by inserting after
subsection (f), the following new subsection:
``(g) `Red Flag' Patterns of Possible Identity Theft.--
``(1) Investigation of changes of address.--The Federal
banking agencies and the National Credit Union
Administration, in carrying out the responsibilities of such
agencies and Administration under subsection (k), shall
jointly prescribe regulations for credit card and debit card
issuers to ensure that, if any such issuer receives a request
for an additional or replacement card for an existing account
within a short period of time after the issuer has received
notification of a change of address for the same account, the
issuer will follow reasonable policies and procedures that
require, as appropriate, that the issuer not issue the
additional or replacement card unless the issuer--
``(A) notifies the cardholder of the request at the former
address of the cardholder and provides to the cardholder a
means of promptly reporting incorrect address changes;
``(B) notifies the cardholder of the request by such other
means of communication as the cardholder and the card issuer
previously agreed to; or
``(C) uses other means of assessing the validity of the
change of address, in accordance with reasonable policies and
procedures established by the card issuer in accordance with
the regulations prescribed under subsection (k).
``(2) Inactive accounts.--The Federal banking agencies and
the National Credit Union Administration, in carrying out the
responsibilities of such agencies and Administration under
subsection (k), shall consider including, as a possible `red
flag' pattern, reasonable guidelines providing that when a
transaction occurs with respect to a credit or deposit
account that has been inactive for more than 2 years, the
creditor or depository institution shall follow reasonable
policies and procedures that provide for notice to be given
to a consumer in a manner reasonably designed to reduce the
likelihood of identity theft with respect to such account.''.
(b) Clerical Amendments.--
(1) The heading for section 605 of the Fair Credit
Reporting Act is amended to read as follows:
``Sec. 605. Requirements relating to information contained in
consumer reports and to identity theft prevention.''.
(2) The table of sections for title VI of the Consumer
Credit Protection Act is amended by striking the item
relating to section 605 and inserting the following new item:
``605. Requirements relating to information contained in consumer
reports and to identity theft prevention.''.
(3) Section 624(b)(1)(E) of the Fair Credit Reporting Act
(15 U.S.C. 1681t(b)(1)(E)) is amended
[[Page H8133]]
by inserting ``and to identity theft prevention'' after
``consumer reports''.
SEC. 202. FRAUD ALERTS.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended by adding at the end the following new
subsection:
``(i) One-Call Fraud Alerts.--
``(1) Initial alerts.--Upon the direct request of a
consumer, or an individual acting on behalf of or as a
personal representative of a consumer, who asserts, in good
faith, a suspicion that the consumer has been or is about to
become a victim of fraud or related crime, including identity
theft, a consumer reporting agency described in section
603(p) shall, if the agency maintains a file on the consumer
who is making the request and has a reasonable belief that
the agency knows the identity of the consumer--
``(A) include a fraud alert in the file of that consumer
for a period of not less than 90 days beginning on the date
of such request, unless the consumer specifically requests
that such fraud alert be removed before the end of such
period;
``(B) disclose to the consumer that the consumer may
request a free copy of the file of the consumer and provide
the consumer, upon request, a free disclosure of the
consumer's file (as described in section 609(a)) within 3
business days after such request;
``(C) for 2 years after the date of such request, exclude
the consumer from any list of consumers prepared by the
agency and provided to any third party to offer credit or
insurance to the consumer as part of a transaction that was
not initiated by the consumer, unless the consumer
subsequently requests that such exclusion be rescinded before
the end of such period; and
``(D) refer the information regarding the fraud alert to
each of the other consumer reporting agencies described in
section 603(p), as required under section 621(f)(1).
``(2) Extended alerts.--Upon the direct request of a
consumer, or an individual acting on behalf of or as a
personal representative of a consumer, who contacts a
consumer reporting agency described in section 603(p) to
report details of an identity theft and submits evidence that
provides the agency with reasonable cause to believe that
such identity theft has occurred, the agency shall, if the
agency maintains a file on the consumer who is making the
request and has a reasonable belief that the agency knows the
identity of the consumer--
``(A) include a fraud alert in the file of that consumer
and provide an opportunity for the consumer to extend the
alert for a period of up to 7 years from the date of such
request, unless the consumer subsequently requests that such
fraud alert be removed before the end of such period;
``(B) provide the consumer with the option of including
more complete information in the consumer's file, including a
telephone number or some other reasonable means of
communication that any person who requests the consumer's
report may utilize for authorization before establishing a
new credit plan in the name of the consumer; and
``(C) provide the consumer with at least 2 free disclosures
of the information described in section 609(a) during the 12-
month period beginning on the date of such request.
``(3) Active duty alerts.--Upon the direct request of an
active duty military consumer, or an individual acting on
behalf of or as a personal representative of an active duty
military consumer, who contacts a consumer reporting agency
described in section 603(p), the agency shall, if the agency
maintains a file on the consumer who is making the request
and has a reasonable belief that the agency knows the
identity of the consumer--
``(A) include an active duty alert in the file of that
consumer during a period of not less than 12 months beginning
on the date of the request, unless the consumer requests that
such active duty alert be removed before the end of such
period;
``(B) for 2 years after the date of such request, exclude
the consumer from any list of consumers prepared by the
agency and provided to any third party to offer credit or
insurance to the consumer as part of a transaction that was
not initiated by the consumer, unless the consumer
subsequently requests that such exclusion be rescinded before
the end of such period; and
``(C) refer the information regarding the active duty alert
to each of the other consumer reporting agencies described in
section 603(p), as required under section 621(f)(1).
``(4) Procedures.--Each consumer reporting agency described
in section 603(p) shall establish policies and procedures to
comply with the obligations of paragraphs (1), (2), and (3),
including procedures that allow consumers to request initial,
extended, or active duty alerts in a simple and easy manner,
including by telephone.
``(5) Notice to users.--No person who obtains any
information that includes a fraud alert under this section
from a file of any consumer from a consumer reporting agency
may establish a new credit plan in the name of the consumer
for a person other than the consumer without utilizing
reasonable policies and procedures described in paragraph
(9).
``(6) Referrals of fraud alerts.--Each consumer reporting
agency described in section 603(p) that receives a referral
of a fraud alert from another such agency pursuant to
paragraph (1)(D) or (3)(C) shall follow the procedures
required under subparagraphs (A), (B), and (C) of
paragraph (1), in the case of a referral under paragraph
(1)(D), and subparagraphs (A) and (B), in the case of a
referral under paragraph (3)(C), as if the agency received
the request from the consumer directly.
``(7) Duty of reseller to reconvey alert.--A reseller that
is notified of the existence of a fraud alert in a consumer's
consumer report shall communicate to each person procuring a
consumer report with respect to such consumer the existence
of a fraud alert in effect for such consumer.
``(8) Duty of other consumer reporting agencies to provide
contact information.--If a consumer contacts any consumer
reporting agency that is not a consumer reporting agency
described in section 603(p) to communicate a suspicion that
the consumer has been or is about to become a victim of fraud
or related crime, including identity theft, the agency shall
provide the consumer with information on how to contact the
Commission and the consumer reporting agencies described in
section 603(p) to obtain more detailed information and
request alerts under this subsection.
``(9) Fraud alert.--
``(A) Definition.--For purposes of this subsection, the
term `fraud alert' means, at a minimum, a statement--
``(i) in the file of a consumer that the consumer may be a
victim of fraud, including identity theft, or is a consumer
described in paragraph (3); and
``(ii) that is transmitted in a manner that facilitates a
clear and conspicuous view of the statement by any person
requesting such file.
``(B) Other information.--A fraud alert shall include
information that notifies all prospective users of a consumer
report on the consumer to which the alert relates that the
consumer does not authorize establishing any new credit plan
in the name of the consumer, unless the user utilizes
reasonable policies and procedures to form a reasonable
belief that the user knows the identity of the person for
whom such new plan is established, which may include
obtaining authorization or preauthorization of the consumer
at a telephone number designated by the consumer or by such
other reasonable means agreed to.
``(10) Other definitions.--For purposes of this subsection,
the following definitions shall apply:
``(A) Active duty military consumer.--The term `active duty
military consumer' means a consumer in military service who--
``(i) is on active duty (as defined in section 101(d)(1) of
title 10, United States Code) or is a reservist performing
duty under a call or order to active duty under a provision
of law referred to in section 101(a)(13) of title 10, United
States Code; and
``(ii) is assigned to service away from the consumer's
usual duty station.
``(B) New credit plan.--The term `new credit plan' means a
new account under an open end credit plan (as defined in
section 103(i) of this Act) or a new credit transaction not
under an open end credit plan.''.
SEC. 203. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT
NUMBERS.
(a) In General.--Section 605 of the Fair Credit Reporting
Act (15 U.S.C. 1681c) is amended by inserting after
subsection (k) (as added by section 206 of this title) the
following new subsection:
``(l) Truncation of Credit Card and Debit Card Account
Numbers.--
``(1) In general.--Except as provided in this subsection,
no person that accepts credit cards or debit cards for the
transaction of business shall print the expiration date or
more than the last 5 digits of the card number upon any
receipt provided to the cardholder at the point of the sale
or transaction.
``(2) Limitation.--This section shall apply only to
receipts that are electronically printed, and shall not apply
to transactions in which the sole means of recording the
person's credit card or debit card number is by handwriting
or by an imprint or copy of the card.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply after the end of--
(1) the 3-year period beginning on the date of the
enactment of this Act, with respect to any cash register or
other machine or device that electronically prints receipts
for credit card or debit card transactions that is in use
before January 1, 2005; and
(2) the 1-year period beginning on the date of the
enactment of this Act, with respect to any cash register or
other machine or device that electronically prints receipts
for credit card or debit card transactions that is first put
into use on or after January 1, 2005.
SEC. 204. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.
(a) In General.--Section 609 of the Fair Credit Reporting
Act (15 U.S.C. 1681g) is amended by adding at the end the
following new subsection:
``(d) Summary of Rights of Identity Theft Victims.--
``(1) In general.--The Commission, in consultation with the
Federal banking agencies and the National Credit Union
Administration, shall prepare a model summary of the rights
of consumers under this title with respect to the procedures
for remedying the effects of fraud or identity theft
involving credit, electronic fund transfers, or accounts or
transactions at or with a financial institution.
``(2) Summary of rights and contact information.--If any
consumer contacts a consumer reporting agency and expresses a
belief that the consumer is a victim of fraud or identity
theft involving credit, electronic fund transfers, or
accounts or transactions at or with a financial institution,
the consumer reporting agency shall, in addition to any other
action the agency may take, provide the consumer with the
model summary of rights prepared by the Commission under
paragraph (1) and information on how to contact the
Commission to obtain more detailed information.''.
(b) Technical and Conforming Amendment.--Section 624(b)(3)
of the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(3)) is
amended by striking ``section 609(c)'' and inserting
``subsection (c) or (d) of section 609''.
[[Page H8134]]
SEC. 205. BLOCKING OF INFORMATION RESULTING FROM IDENTITY
THEFT.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended by inserting after subsection (i) (as added
by section 202 of this title) the following new subsection:
``(j) Block of Information Resulting From Identity Theft.--
``(1) Block.--Except as provided in paragraph (3), a
consumer reporting agency shall block the reporting of any
information in the file of a consumer that the consumer
identifies as information that resulted from an alleged
identity theft and confirms is not information relating to
any transaction by the consumer not later than 5 business
days after the date of receipt by such agency of--
``(A) appropriate proof of the identity of a consumer;
``(B) a police report evidencing the claim of the consumer
of identity theft;
``(C) the identification of the information by the
consumer; and
``(D) confirmation by the consumer that the information is
not information relating to any transaction by the consumer.
``(2) Notification.--A consumer reporting agency shall
promptly notify the furnisher of information identified by
the consumer under paragraph (1)--
``(A) that the information may be a result of identity
theft;
``(B) that a police report has been filed;
``(C) that a block has been requested under this
subsection; and
``(D) of the effective date of the block.
``(3) Authority to decline or rescind.--
``(A) In general.--A consumer reporting agency may decline
to block, or may rescind any block, of consumer information
under this subsection if the consumer reporting agency
reasonably determines that--
``(i) the information was blocked in error or a block was
requested by the consumer in error;
``(ii) the information was blocked, or a block was
requested by the consumer, on the basis of a
misrepresentation of fact by the consumer relevant to the
request to block; or
``(iii) the consumer knowingly obtained possession of
goods, services, or moneys as a result of the blocked
transaction or transactions, or the consumer should have
known that the consumer obtained possession of goods,
services, or moneys as a result of the blocked transaction or
transactions.
``(B) Notification to consumer.--If the block of
information is declined or rescinded under this paragraph,
the affected consumer shall be notified promptly, in the same
manner as consumers are notified of the reinsertion of
information under section 611(a)(5)(B).
``(C) Significance of block.--For purposes of this
paragraph, if a consumer reporting agency rescinds a block,
the presence of information in the file of a consumer prior
to the blocking of such information is not evidence of
whether the consumer knew or should have known that the
consumer obtained possession of any goods, services, or
monies as a result of the block.
``(4) Exceptions.--
``(A) Verification companies.--This subsection shall not
apply to--
``(i) a check services company, which issues authorizations
for the purpose of approving or processing negotiable
instruments, electronic funds transfers, or similar methods
of payments; or
``(ii) a deposit account information service company, which
issues reports regarding account closures due to fraud,
substantial overdrafts, automated teller machine abuse, or
similar negative information regarding a consumer, to
inquiring banks or other financial institutions for use only
in reviewing a consumer request for a deposit account at the
inquiring bank or financial institution.
``(B) Resellers.--
``(i) No reseller file.--This subsection shall not apply to
a consumer reporting agency if the consumer reporting
agency--
``(I) is a reseller;
``(II) is not, at the time of the request of the consumer
under paragraph (1), otherwise furnishing or reselling a
consumer report concerning the information identified by the
consumer; and
``(III) informs the consumer, by any means, that the
consumer may report the identity theft to the Commission to
obtain consumer information regarding identity theft.
``(ii) Reseller with file.--The sole obligation of the
consumer reporting agency under this subsection, with regard
to any request of a consumer under this subsection, shall be
to block the consumer report maintained by the consumer
reporting agency from any subsequent use if--
``(I) the consumer, in accordance with the provisions of
paragraph (1), identifies, to a consumer reporting agency,
information in the file of the consumer that resulted from
identity theft; and
``(II) the consumer reporting agency is a reseller of the
identified information.
``(iii) Notice.--In carrying out its obligation under
clause (ii), the reseller shall promptly provide a notice to
the consumer of the decision to block the file. Such notice
shall contain the name, address, and telephone number of each
consumer reporting agency from which the consumer information
was obtained for resale.
``(5) Access to blocked information by law enforcement
agencies.--No provision of this subsection shall be construed
as requiring a consumer reporting agency to prevent a
Federal, State, or local law enforcement agency from
accessing blocked information in a consumer file to which the
agency could otherwise obtain access under this title.''.
SEC. 206. ESTABLISHMENT OF PROCEDURES FOR DEPOSITORY
INSTITUTIONS TO IDENTIFY POSSIBLE INSTANCES OF
IDENTITY THEFT.
(a) In General.--Section 605 of the Fair Credit Reporting
Act (15 U.S.C. 1681c) is amended by inserting after
subsection (j) (as added by section 205 of this title) the
following new subsection:
``(k) `Red Flag' Guidelines Required.--
``(1) In general.--The Federal banking agencies and the
National Credit Union Administration, in consultation with
the Commission, shall jointly establish and maintain
guidelines for use by insured depository institutions in
identifying patterns, practices, and specific forms of
activity that indicate the possible existence of identity
theft with respect to accounts, and update such guidelines as
often as necessary.
``(2) Regulations.--The Federal banking agencies and the
National Credit Union Administration, in consultation with
the Commission, shall jointly prescribe regulations requiring
insured depository institutions to establish and adhere to
reasonable policies and procedures for implementing the
guidelines established pursuant to paragraph (1) to identify
possible risks to customer accounts or to the safety and
soundness of the institutions.
``(3) Consistency with verification requirements.--Policies
and procedures established pursuant to paragraph (2) shall
not be inconsistent with, or duplicative of, the policies and
procedures required under section 5318(l) of title 31, United
States Code.
``(4) Insured depository institution defined.--For purposes
of this subsection, the term `insured depository
institution'--
``(A) has the meaning given to such term in section 3 of
the Federal Deposit Insurance Act; and
``(B) includes an insured credit union (as defined in
section 101 of the Federal Credit Union Act).''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect at the end of the 1-year period beginning
on the date of the enactment of this Act.
SEC. 207. STUDY ON THE USE OF TECHNOLOGY TO COMBAT IDENTITY
THEFT.
(a) Study Required.--The Secretary of the Treasury shall
conduct a study of the use of biometrics and other similar
technologies to reduce the incidence and costs of identity
theft by providing convincing evidence of who actually
performed a given financial transaction.
(b) Consultation.--The Secretary of the Treasury shall
consult with Federal banking agencies, the Federal Trade
Commission, and representatives of financial institutions,
credit reporting agencies, Federal, State, and local
government agencies that issue official forms or means of
identification, State prosecutors, law enforcement agencies,
and the biometric industry and other representatives of the
general public, in formulating and conducting the study
required by subsection (a).
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of the Treasury for
fiscal year 2004 such sums as may be necessary to carry out
the provisions of this section.
(d) Report Required.--Before the end of the 180-day period
beginning on the date of the enactment of this Act, the
Secretary shall submit a report to Congress containing the
findings and conclusions of the study required under
subsection (a), together with such recommendations for
legislative or administrative actions as may be appropriate.
TITLE III--IMPROVING RESOLUTION OF CONSUMER DISPUTES
SEC. 301. COORDINATION OF CONSUMER COMPLAINT INVESTIGATIONS.
Section 621 of the Fair Credit Reporting Act (15 U.S.C.
1681s) is amended by adding at the end the following new
subsection:
``(f) Coordination of Consumer Complaint Investigations.--
``(1) In general.--The consumer reporting agencies
described in section 603(p) shall develop and maintain
procedures for the referral, to each such agency, of any
consumer complaint received by any such agency alleging any
identity theft or requesting a block or a fraud alert.
``(2) Model form and procedure for reporting identity
theft.--The Commission, in consultation with the Federal
banking agencies and the National Credit Union
Administration, shall develop a model form and model
procedures to be used by consumers who are victims of
identity theft for contacting and informing creditors and
consumer reporting agencies of the fraud.
``(3) Annual summary reports.--Each consumer reporting
agency described in section 603(p) shall submit an annual
summary report to the Commission on consumer complaints
received by the agency on identity theft or fraud alerts.''.
SEC. 302. NOTICE OF DISPUTE THROUGH RESELLER.
(a) Requirement for Reinvestigation of Disputed Information
Upon Notice From a Reseller.--Section 611(a) of the Fair
Credit Reporting Act (15 U.S.C. 1681i(a)(1)(A)) is amended--
(1) in subparagraph (A) of paragraph (1)--
(A) by striking ``If the completeness'' and inserting
``Subject to subsection (e), if the completeness'';
(B) by inserting ``, or indirectly through a reseller,''
after ``notifies the agency directly''; and
(C) by inserting ``or reseller'' before the period at the
end of such subparagraph;
(2) in subparagraph (A) of paragraph (2)--
(A) by inserting ``or a reseller'' after ``dispute from any
consumer''; and
(B) by inserting ``or reseller'' before the period at the
end of such subparagraph; and
(3) in subparagraph (B) of paragraph (2), by inserting ``or
the reseller'' after ``from the consumer''.
(b) Reinvestigation Requirement Applicable to Resellers.--
Section 611 of the Fair
[[Page H8135]]
Credit Reporting Act (15 U.S.C. 1681i) is amended by adding
at the end the following new subsection:
``(e) Reinvestigation Requirement Applicable to
Resellers.--
``(1) Exemption from general reinvestigation requirement.--
Except as provided in paragraph (2), a reseller shall be
exempt from the requirements of this section.
``(2) Action required upon receiving notice of a dispute.--
If a reseller receives a notice from a consumer of a dispute
concerning the completeness or accuracy of any item of
information contained in a consumer report on such consumer
produced by the reseller, the reseller shall, within 5
business days of receiving the notice and free of charge--
``(A) determine whether the item of information is
incomplete or inaccurate as a result of an act or omission of
the reseller; and
``(B) if--
``(i) the reseller determines that the item of information
is incomplete or inaccurate as a result of an act or omission
of the reseller, correct the information in the consumer
report or delete it; or
``(ii) if the reseller determines that the item of
information is not incomplete or inaccurate as a result of an
act or omission of the reseller, convey the notice of the
dispute, together with all relevant information provided by
the consumer, to each consumer reporting agency that provided
the reseller with the information that is the subject of the
dispute.
``(3) Reseller reinvestigations.--No provision of this
subsection shall be construed as prohibiting a reseller from
conducting a reinvestigation of a consumer dispute
directly.''.
(c) Technical and Conforming Amendment.--The heading for
paragraph (2)(B) of section 611(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681i(a)(2)(B)) is amended by
striking ``from consumer''.
SEC. 303. REASONABLE REINVESTIGATION REQUIRED.
Section 611(a)(1)(A) of the Fair Credit Reporting Act (15
U.S.C. 1681i(a)(1)(A)) is amended by striking ``shall
reinvestigate free of charge'' and inserting ``shall, free of
charge, conduct a reasonable reinvestigation to determine
whether the disputed information is inaccurate''.
SEC. 304. DUTIES OF FURNISHERS OF INFORMATION.
(a) In General.--Section 623(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681s-2(a)) is amended--
(1) in paragraph (1)(A), by striking ``knows or consciously
avoids knowing that the information is inaccurate'' and
inserting ``knows or has reasonable cause to believe that the
information is inaccurate'';
(2) in paragraph (1)--
(A) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively;
(B) by inserting after subparagraph (A), the following new
subparagraph:
``(B) Reasonable procedures to ensure accuracy.--A person
that regularly furnishes information relating to consumers to
a consumer reporting agency described in section 603(p) shall
maintain reasonable procedures designed to ensure that the
information furnished is accurate.''; and
(C) by adding at the end the following new subparagraph:
``(F) Definition.--For purposes of subparagraph (A), the
term `reasonable cause to believe that the information is
inaccurate' means, based on the procedures described in
subparagraph (B), has knowledge, other than solely
allegations by the consumer, that would cause a reasonable
person to have substantial doubts about the accuracy of the
information.''; and
(3) by adding at the end the following new paragraph:
``(6) Ability of consumer to dispute information directly
with furnisher.--
``(A) In general.--A consumer may dispute directly with a
person the accuracy of information that--
``(i) is contained in a consumer report on the consumer
prepared by a consumer reporting agency described in section
603(p); and
``(ii) was provided by the person to that consumer
reporting agency in accordance with paragraph (1)(B).
``(B) Submitting a notice of dispute.--A consumer who seeks
to dispute the accuracy of information with a person under
subparagraph (A) shall provide a dispute notice directly to
such person at the address specified by the person for such
notices that--
``(i) identifies the specific information that is being
disputed; and
``(ii) explains the basis for the dispute.
``(C) Duty of person after receiving notice of dispute.--
After receiving a notice of dispute from a consumer pursuant
to subparagraph (B), the person that provided the information
in dispute to a consumer reporting agency referred to in
subparagraph (A) shall--
``(i) conduct an investigation with respect to the disputed
information;
``(ii) review all relevant information provided by the
consumer with the notice;
``(iii) complete such person's investigation of the dispute
and report the results of the investigation to the consumer
before the expiration of the period under section 611(a)(1)
within which a consumer reporting agency would be required to
complete its action if the consumer had elected to dispute
the information under that section; and
``(iv) if the investigation finds that the information
reported was inaccurate, promptly thereafter report correct
information to each consumer reporting agency described in
section 603(p) to which the person furnished the inaccurate
information.''.
(b) Technical and Conforming Amendments.--
(1) Section 621(c)(5)(A) of the Fair Credit Reporting Act
(15 U.S.C. 1681s(c)(5)(A)) is amended by striking ``section
623(a)(1)'' and inserting ``paragraph (1) or (6) of section
623(a)''.
(2) The heading for section 621(c)(5) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(c)(5)) is amended by striking
``violation of section 623(a)(1)'' and inserting ``certain
violations of section 623(a)''.
SEC. 305. PROMPT INVESTIGATION OF DISPUTED CONSUMER
INFORMATION.
(a) Study Required.--The Board of Governors of the Federal
Reserve System and the Federal Trade Commission shall jointly
study the extent to which, and the manner in which, consumer
reporting agencies and furnishers of consumer information to
consumer reporting agencies are complying with the
procedures, time lines, and requirements under the Fair
Credit Reporting Act for the prompt investigation of the
disputed accuracy of any consumer information, the
completeness of the information provided to consumer
reporting agencies, and the prompt correction or deletion, in
accordance with such Act, of any inaccurate or incomplete
information or information that cannot be verified.
(b) Report Required.--Before the end of the 6-month period
beginning on the date of the enactment of this Act, the Board
of Governors of the Federal Reserve System and the Federal
Trade Commission shall jointly submit a progress report to
the Congress on the results of the study required under
subsection (a).
(c) Recommendations.--The report under subsection (b) shall
include such recommendations as the Board and the Commission
jointly determine to be appropriate for legislative or
administrative action to ensure that--
(1) consumer disputes with consumer reporting agencies over
the accuracy or completeness of information in a consumer's
file are promptly and fully investigated and any incorrect,
incomplete, or unverifiable information is corrected or
deleted immediately thereafter;
(2) furnishers of information to consumer reporting
agencies maintain full and prompt compliance with the duties
and responsibilities established under section 623 of the
Fair Credit Reporting Act; and
(3) consumer reporting agencies establish and maintain
appropriate internal controls and management review
procedures for maintaining full and continuous compliance
with the procedures, time lines, and requirements under the
Fair Credit Reporting Act for the prompt investigation of the
disputed accuracy of any consumer information and the prompt
correction or deletion, in accordance with such Act, of any
inaccurate or incomplete information or information that
cannot be verified.
(d) Definitions.--For purposes of this section, the terms
``consumer'', ``consumer report'', and ``consumer reporting
agency'' have the same meaning as in the Fair Credit
Reporting Act.
TITLE IV--IMPROVING ACCURACY OF CONSUMER RECORDS
SEC. 401. RECONCILING ADDRESSES.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended by inserting after subsection (g) (as added
by section 201 of this Act) the following new subsection.
``(h) Notice of Discrepancy.--
``(1) In general.--If a person has requested a consumer
report relating to a consumer from a consumer reporting
agency described in section 603(p), the request includes an
address for the consumer that substantially differs from the
addresses in the file of the consumer, and the agency
provides a consumer report in response to the request, the
consumer reporting agency shall notify the requester of
the existence of the discrepancy.
``(2) Regulations.--
``(A) Regulations required.--The Federal banking agencies
and the National Credit Union Administration shall jointly
prescribe regulations providing guidance regarding reasonable
policies and procedures a user of a consumer report should
employ when such user has received a notice of discrepancy
under paragraph (1).
``(B) Policies and procedures to be included.--The
regulations prescribed under subparagraph (A) shall describe
reasonable policies and procedures for use by a user of a
consumer report--
``(i) to form a reasonable belief that the user knows the
identity of the person to whom the consumer report pertains;
and
``(ii) if the user establishes a continuing relationship
with the consumer, and the user regularly and in the ordinary
course of business furnishes information to the consumer
reporting agency from which the notice of discrepancy
pertaining to the consumer was obtained, to reconcile the
consumer's address with the consumer reporting agency by
furnishing such address to such consumer reporting agency as
part of information regularly furnished by the user for the
period in which the relationship is established.''.
SEC. 402. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.
Section 623(a)(1) of the Fair Credit Reporting Act (15
U.S.C. 1681s-2(a)(1)) is amended by inserting after
subparagraph (D) (as so redesignated by section 304(2)(A))
the following new subparagraph:
``(E) Information alleged to result from identity theft.--
If a consumer submits a police report to a person who
furnishes information to a consumer reporting agency that
states that information maintained by such person that
purports to relate to the consumer resulted from identity
theft, the person may not furnish such information that
purports to relate to the consumer to any consumer reporting
agency, unless the person subsequently knows or is informed
by the consumer that the information is correct.''.
[[Page H8136]]
SEC. 403. NOTICE BY USERS WITH RESPECT TO FRAUDULENT
INFORMATION.
Section 615 of the Fair Credit Reporting Act (15 U.S.C.
1681m) is amended by adding at the end the following new
subsection:
``(e) Notice of Fraudulent Information Relating to Identity
Theft.--If an agent acting as a debt collector (as defined in
title VIII) of a person who furnishes information to any
consumer reporting agency uses information contained in a
consumer report on any consumer and learns that any such
information so used is the result of identity theft or
otherwise is fraudulent, the agent shall--
``(1) if such information--
``(A) originated from the person for whom the debt
collector is acting as agent, notify the person of the
fraudulent information; or
``(B) originated from a person other than the person for
whom the debt collector is acting as agent, notify the
consumer reporting agency (that provided the consumer report)
of the fraudulent information, either directly or through the
person for whom the debt collector is acting as agent; and
``(2) upon the request of the consumer, provide the
consumer with all information which the consumer would be
entitled to receive if the information related to the
consumer other than by reason of identity theft.''.
SEC. 404. DISCLOSURE TO CONSUMERS OF CONTACT INFORMATION FOR
USERS AND FURNISHERS OF INFORMATION IN CONSUMER
REPORTS.
Section 609(a) of the Fair Credit Reporting Act (15 U.S.C.
1681g(a)) is amended--
(1) in paragraph (2), by inserting ``, including addresses
of the sources, and (if provided by the sources of
information) the telephone numbers identified for customer
service for the sources of information'' after ``sources of
information'' the 1st place such term appears in such
paragraph; and
(2) in paragraph (3)(B) by striking clause (ii) and
inserting the following new clause:
``(ii) the address and (if provided) the telephone numbers
identified for customer service of the person.''.
SEC. 405. FTC STUDY OF THE ACCURACY OF CONSUMER REPORTS.
(a) Study Required.--Until the final report is submitted
under subsection (b)(2), the Federal Trade Commission shall
conduct an ongoing study of the accuracy and completeness of
information contained in consumer reports prepared or
maintained by consumer reporting agencies and methods for
improving the accuracy and completeness of such information.
(b) Biennial Reports Required.--
(1) Interim reports.--The Federal Trade Commission shall
submit an interim report to the Congress on the study
conducted under subsection (a) at the end of the 6-month
period beginning on the date of the enactment of this Act and
biennially thereafter for 8 years.
(2) Final report.--The Federal Trade Commission shall
submit a final report to the Congress on the study conducted
under subsection (a) at the end of the 2-year period
beginning on the date the final interim report is submitted
to the Congress under paragraph (1).
(3) Contents.--Each report submitted under this subsection
shall contain a detailed summary of the findings and
conclusions of the Commission with respect to the study
required under subsection (a) and such recommendations for
legislative and administrative action as the Commission may
determine to be appropriate.
TITLE V--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
SEC. 501. FREE REPORTS ANNUALLY.
(a) Free Reports Annually From Nationwide Consumer
Reporting Agencies.--Section 612 of the Fair Credit Reporting
Act (15 U.S.C. 1681j) is amended by adding at the end the
following new subsection:
``(e) Free Annual Disclosure.--Upon the direct request of
the consumer, a consumer reporting agency described in
section 603(p) shall make all disclosures pursuant to section
609 once during any 12-month period without charge to the
consumer.''.
(b) Technical and Conforming Amendment.--Section 612(c) of
the Fair Credit Reporting Act (15 U.S.C. 1681j(c)) is amended
by inserting ``that is not a consumer reporting agency
described in section 603(p)'' after ``consumer reporting
agency''.
SEC. 502. DISCLOSURE OF CREDIT SCORES.
(a) Statement on Availability of Credit Scores.--Section
609(a) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a))
is amended by adding at the end the following new paragraph:
``(6) If the consumer requests the credit file and not the
credit score, a statement that the consumer may request and
obtain a credit score.''.
(b) Disclosure of Credit Scores.--Section 609 of the Fair
Credit Reporting Act (15 U.S.C. 1681g) is amended by
inserting after subsection (d) (as added by section 204 of
this Act) the following new subsection:
``(e) Disclosure of Credit Scores.--
``(1) In general.--Upon the consumer's request for a credit
score, a consumer reporting agency shall supply to a consumer
a statement indicating that the information and credit
scoring model may be different than the credit score that may
be used by the lender, and a notice which shall include the
following information:
``(A) The consumer's current credit score or the consumer's
most recent credit score that was previously calculated by
the credit reporting agency for a purpose related to the
extension of credit.
``(B) The range of possible credit scores under the model
used.
``(C) All the key factors that adversely affected the
consumer's credit score in the model used, the total number
of which shall not exceed four, subject to paragraph (9).
``(D) The date the credit score was created.
``(E) The name of the person or entity that provided the
credit score or credit file upon which the credit score was
created.
``(2) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Credit score.--The term `credit score'--
``(i) means a numerical value or a categorization derived
from a statistical tool or modeling system used by a person
who makes or arranges a loan to predict the likelihood of
certain credit behaviors, including default (and the
numerical value or the categorization derived from this
analysis may also be referred to as a `risk predictor' or
`risk score'); and
``(ii) does not include--
``(I) any mortgage score or rating of an automated
underwriting system that considers one or more factors
in addition to credit information, including the loan to
value ratio, the amount of down payment, or a consumer's
financial assets; or
``(II) any other elements of the underwriting process or
underwriting decision.
``(B) Key factors.--The term `key factors' means all
relevant elements or reasons adversely affecting the credit
score for the particular individual listed in the order of
their importance based on their effect on the credit score.
``(3) Timeframe and manner of disclosure.--The information
required by this subsection shall be provided in the same
timeframe and manner as the information described in
subsection (a).
``(4) Applicability to certain uses.--This subsection shall
not be construed so as to compel a consumer reporting agency
to develop or disclose a score if the agency does not--
``(A) distribute scores that are used in connection with
residential real property loans; or
``(B) develop scores that assist credit providers in
understanding a consumer's general credit behavior and
predicting the future credit behavior of the consumer.
``(5) Applicability to credit scores developed by another
person.--
``(A) In general.--This subsection shall not be construed
to require a consumer reporting agency that distributes
credit scores developed by another person or entity to
provide a further explanation of them, or to process a
dispute arising pursuant to section 611, except that the
consumer reporting agency shall provide the consumer with the
name and address and website for contacting the person or
entity who developed the score or developed the methodology
of the score.
``(B) Exception.--This paragraph shall not apply to a
consumer reporting agency that develops or modifies scores
that are developed by another person or entity.
``(6) Maintenance of credit scores not required.--This
subsection shall not be construed to require a consumer
reporting agency to maintain credit scores in its files.
``(7) Compliance in certain cases.--In complying with this
subsection, a consumer reporting agency shall--
``(A) supply the consumer with a credit score that is
derived from a credit scoring model that is widely
distributed to users by that consumer reporting agency in
connection with residential real property loans or with a
credit score that assists the consumer in understanding the
credit scoring assessment of the credit behavior of the
consumer and predictions about the future credit behavior of
the consumer; and
``(B) a statement indicating that the information and
credit scoring model may be different than that used by the
lender.
``(8) Reasonable fee.--A consumer reporting agency may
charge a reasonable fee for providing the information
required under this subsection.
``(9) Use of enquiries as a key factor.--If a key factor
that adversely affects a consumer's credit score consists of
the number of enquiries made with respect to a consumer
report, that factor shall be included in the disclosure
pursuant to paragraph (1)(C) without regard to the numerical
limitation in such paragraph.''.
(c) Disclosure of Credit Scores by Certain Mortgage
Lenders.--Section 609 of the Fair Credit Reporting Act (15
U.S.C. 1681g) is amended by inserting after subsection (e)
(as added by subsection (b) of this section) the following
new subsection:
``(f) Disclosure of Credit Scores by Certain Mortgage
Lenders.--
``(1) In general.--Any person who makes or arranges loans
and who uses a consumer credit score as defined in subsection
(e) in connection with an application initiated or sought by
a consumer for a closed end loan or establishment of an open
end loan for a consumer purpose that is secured by 1 to 4
units of residential real property (hereafter in this
subsection referred to as the `lender') shall provide the
following to the consumer as soon as reasonably practicable:
``(A) Information required under subsection(e).--
``(i) In general.--A copy of the information identified in
subsection (e) that was obtained from a consumer reporting
agency or was developed and used by the user of the
information.
``(ii) Notice under subparagraph (D).--In addition to the
information provided to it by a third party that provided the
credit score or scores, a lender is only required to provide
the notice contained in subparagraph (D).
``(B) Disclosures in case of automated underwriting
system.--
``(i) In general.--If a person who is subject to this
section uses an automated underwriting system to underwrite a
loan, that person may satisfy the obligation to provide a
credit score by disclosing a credit score and associated key
factors supplied by a consumer reporting agency.
[[Page H8137]]
``(ii) Numerical credit score.--However, if a numerical
credit score is generated by an automated underwriting system
used by an enterprise, and that score is disclosed to the
person, the score shall be disclosed to the consumer
consistent with subparagraph (C).
``(iii) Enterprise defined.--For purposes of this
subparagraph, the term `enterprise' shall have the same
meaning as in paragraph (6) of section 1303 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992.
``(C) Disclosures of credit scores not obtained from a
consumer reporting agency.--A person subject to the
provisions of this subsection who uses a credit score other
than a credit score provided by a consumer reporting agency
may satisfy the obligation to provide a credit score by
disclosing a credit score and associated key factors supplied
by a consumer reporting agency.
``(D) Notice to home loan applicants.--A copy of the
following notice, which shall include the name, address, and
telephone number of each consumer reporting agency providing
a credit score that was used:
`` `notice to the home loan applicant
`` `In connection with your application for a home loan,
the lender must disclose to you the score that a consumer
reporting agency distributed to users and the lender used in
connection with your home loan, and the key factors affecting
your credit scores.
`` `The credit score is a computer generated summary
calculated at the time of the request and based on
information a consumer reporting agency or lender has on
file. The scores are based on data about your credit history
and payment patterns. Credit scores are important because
they are used to assist the lender in determining whether you
will obtain a loan. They may also be used to determine what
interest rate you may be offered on the mortgage. Credit
scores can change over time, depending on your conduct, how
your credit history and payment patterns change, and how
credit scoring technologies change.
`` `Because the score is based on information in your
credit history, it is very important that you review the
credit-related information that is being furnished to make
sure it is accurate. Credit records may vary from one company
to another.
`` `If you have questions about your credit score or the
credit information that is furnished to you, contact the
consumer reporting agency at the address and telephone number
provided with this notice, or contact the lender, if the
lender developed or generated the credit score. The consumer
reporting agency plays no part in the decision to take any
action on the loan application and is unable to provide you
with specific reasons for the decision on a loan application.
`` `If you have questions concerning the terms of the loan,
contact the lender.'.
``(E) Actions not required under this subsection.--This
subsection shall not require any person to do any of the
following:
``(i) Explain the information provided pursuant to
subsection (e).
``(ii) Disclose any information other than a credit score
or key factor, as defined in subsection (e).
``(iii) Disclose any credit score or related information
obtained by the user after a loan has closed.
``(iv) Provide more than 1 disclosure per loan transaction.
``(v) Provide the disclosure required by this subsection
when another person has made the disclosure to the consumer
for that loan transaction.
``(F) No obligation for content.--
``(i) In general.--Any person's obligation pursuant to this
subsection shall be limited solely to providing a copy of the
information that was received from the consumer reporting
agency.
``(ii) Limit on liability.--No person has liability under
this subsection for the content of that information or for
the omission of any information within the report provided
by the consumer reporting agency.
``(G) Person defined as excluding enterprise.--As used in
this subsection, the term `person' does not include an
enterprise (as defined in paragraph (6) of section 1303 of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992).
``(2) Prohibition on disclosure clauses null and void.--
``(A) In general.--Any provision in a contract that
prohibits the disclosure of a credit score by a person who
makes or arranges loans or a consumer reporting agency is
void.
``(B) No liability for disclosure under this subsection.--A
lender shall not have liability under any contractual
provision for disclosure of a credit score pursuant to this
subsection.''.
(d) Inclusion of Key Factor in Credit Score Information in
Consumer Report.--Section 605(d) of the Fair Credit Reporting
Act (15 U.S.C. 1681c(d)) is amended--
(1) by striking ``Disclosed.--Any consumer reporting
agency'' and inserting ``Disclosed.--
``(1) Title 11 information.--Any consumer reporting
agency''; and
(2) by adding at the end the following new paragraph:
``(2) Key factor in credit score information.--Any consumer
reporting agency that furnishes a consumer report that
contains any credit score or any other risk score or
predictor on any consumer shall include in the report a clear
and conspicuous statement that a key factor (as defined in
section 609(e)(2)(B)) that adversely affected such score or
predictor was the number of enquiries, if such a predictor
was in fact a key factor that adversely affected such
score.''.
SEC. 503. SIMPLER AND EASIER METHOD FOR CONSUMERS TO USE
NOTIFICATION SYSTEM.
(a) In General.--Section 604(e)(5)(A)(i) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(e)(5)(A)(i)) is amended by
inserting ``in a simple and easy manner and'' after ``notify
the agency,''.
(b) Simplified Notice and Response Format for Users.--
Section 615(d) of the Fair Credit Reporting Act (15 U.S.C.
1681m(d)) is amended--
(1) by redesignating paragraphs (2), (3), and (4), as
paragraphs (3), (4) and (5); and
(2) by inserting after paragraph (1) the following new
paragraph:
``(2) Simple and easy notification.--Any statement given
the consumer under paragraph (1)(E) shall be in a simple and
easy to understand format and shall describe the simple and
easy method established under section 604(e)(5)(A)(i) for the
consumer to respond.''.
SEC. 504. REQUIREMENT TO DISCLOSE COMMUNICATIONS TO A
CONSUMER REPORTING AGENCY.
(a) In General.--Section 623(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681s-2(a)) is amended by inserting
after paragraph (6) (as added by section 304(3)) the
following new paragraph:
``(7) Negative information.--
``(A) Notice to consumer required.--
``(i) In general.--If any financial institution that
extends credit and regularly and in the ordinary course of
business furnishes information to a consumer reporting agency
described in section 603(p) furnishes negative information to
such an agency regarding credit extended to a customer, the
financial institution shall provide a notice of such
furnishing of negative information, in writing, to the
customer.
``(ii) Notice effective for subsequent submissions.--After
providing such notice, the financial institution may submit
additional negative information to a consumer reporting
agency described in section 603(p) with respect to the same
transaction, extension of credit, account, or customer
without providing additional notice to the customer.
``(B) Time of notice.--
``(i) In general.--The notice required under subparagraph
(A) shall be provided to the customer prior to, or no later
than 30 days after, furnishing the negative information to a
consumer reporting agency described in section 603(p).
``(ii) Coordination with new account disclosures.--If the
notice is provided to the customer prior to furnishing the
negative information to a consumer reporting agency, the
notice may not be included in the initial disclosures
provided under section 127(a) of the Truth in Lending Act.
``(C) Coordination with other disclosures.--The notice
required under subparagraph (A)--
``(i) may be included on or with any notice of default, any
billing statement, or any other materials provided to the
customer; and
``(ii) must be clear and conspicuous.
``(D) Model disclosure.--
``(i) Duty of board to prepare.--The Board shall prescribe
a brief model disclosure a financial institution may use to
comply with subparagraph (A), which shall not exceed 30
words.
``(ii) Use of model not required.--No provision of this
paragraph shall be construed as requiring a financial
institution to use any such model form prescribed by the
Board.
``(iii) Compliance using model.--A financial institution
shall be deemed to be in compliance with subparagraph (A) if
the financial institution uses any such model form prescribed
by the Board, or the financial institution uses any such
model form and rearranges its format.
``(E) Use of notice without submitting negative
information.--No provision of this paragraph shall be
construed as requiring a financial institution that has
provided a customer with a notice described in subparagraph
(A) to furnish negative information about the customer to a
consumer reporting agency.
``(F) Safe harbor.--A financial institution shall not be
liable for failure to perform the duties required by this
paragraph if, at the time of the failure, the financial
institution maintained reasonable policies and procedures to
comply with this paragraph.
``(G) Definitions.--For purposes of this paragraph, the
following definitions shall apply:
``(i) Negative information.--The term `negative
information' means information concerning a customer's
delinquencies, late payments, insolvency, or any form of
default.
``(ii) Customer; financial institution.--The terms
`customer' and `financial institution' have the same meaning
as in section 509 of the Gramm-Leach-Bliley Act.''.
(b) Model Disclosure Form.--Before the end of the 6-month
period beginning on the date of the enactment of this Act,
the Board of Governors of the Federal Reserve System shall
adopt the model disclosure required under the amendment made
by subsection (a) after notice duly given in the Federal
Register and an opportunity for public comment in accordance
with section 553 of title 5, United States Code.
SEC. 505. STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED
INSURANCE SCORES ON AVAILABILITY AND
AFFORDABILITY OF FINANCIAL PRODUCTS.
(a) Study Required.--The Federal Trade Commission, in
consultation with the Office of Fair Housing and Equal
Opportunity of the Department of Housing and Urban
Development, shall conduct a study of--
(1) the effects of the use of credit scores and credit-
based insurance scores on the availability and affordability
of financial products and services, including credit cards,
mortgages, auto loans, and property and casualty insurance;
(2) the degree of causality between the factors considered
by credit score systems and the quantifiable risks and actual
losses experienced by
[[Page H8138]]
businesses, including the extent to which, if any, each of
the factors considered or otherwise taken into account by
such systems are accurate predictors of risk or loss, and
where the means square error of a scoring model's predictions
are considered in the evaluation of accuracy;
(3) the extent to which, if any, the use of credit scoring
models, credit scores and credit-based insurance scores
result in disparate impact by geography, income, ethnicity,
race, color, religion, national origin, age, sex or marital
status, and creed, including the extent to which the
consideration or lack of consideration of certain factors by
credit scoring systems could result in disparate effects and
the extent to which, if any, the use of underwriting systems
relying on these models could achieve comparable results
through the use of factors with less disparate impact; and
(4) the extent to which credit scoring systems are used by
businesses, the factors considered by such systems, and the
effects of variables which are not considered by such
systems.
(b) Public Participation.--The Commission shall seek public
input about the prescribed methodology and research design of
the study required in subsection (a).
(c) Report Required.--
(1) In general.--Before the end of the 18-month period
beginning on the date of the enactment of this Act, the
Federal Trade Commission shall submit a detailed report on
the study conducted pursuant to subsection (a) to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate.
(2) Contents of report.--The report submitted under
paragraph (1) shall include the findings and conclusions of
the Commission, together with such recommendations for
legislative or administrative action as the Commission may
determine to be necessary to ensure that credit and credit-
based insurances score are used appropriately and fairly to
avoid disparate effects.
(d) Credit Score Defined.--For purposes of this section,
the term ``credit score'' means a numerical value or a
categorization derived from a statistical tool or modeling
system used to predict the likelihood of certain credit or
insurance behaviors, including default.
SEC. 506. GAO STUDY ON DISPARATE IMPACT OF CREDIT SYSTEM.
(a) Study Required.--The Comptroller General shall conduct
a study of the credit system to determine the extent to
which, if any, discrimination exists with regard to the
availability and the terms of credit which has a disparate
impact on the basis of race, color, income and education
level, geographic location, age, sex, sexual orientation,
national origin, or marital status and the nature of any such
discriminatory effect.
(b) Report Required.--Before the end of the 2-year period
beginning on the date of the enactment of this Act, the
Comptroller General shall submit a report to the Congress on
the findings and conclusions of the Comptroller General
pursuant to the study conducted under subsection (a),
together with such recommendations for legislative or
administrative action as the Comptroller General may
determine to be appropriate.
SEC. 507. ANALYSIS OF FURTHER RESTRICTIONS ON OFFERS OF
CREDIT OR INSURANCE.
(a) In General.--The Board of Governors of the Federal
Reserve System shall conduct a study of--
(1) the ability of consumers to avoid receiving written
offers of credit or insurance in connection with transactions
not initiated by the consumer; and
(2) the potential impact any further restrictions on
providing consumers with such written offers of credit or
insurance would have on consumers.
(b) Report.--The Board of Governors of the Federal Reserve
System shall submit a report summarizing the results of the
study required under subsection (a) to the Congress no later
than 12 months after the date of the enactment of this Act,
together with such recommendatioons for legislative or
administrative action as the Board may determine to be
appropriate.
(c) Content of Report.--The report described in subsection
(b) shall address the following issues:
(1) The current statutory or voluntary mechanisms that are
available to a consumer to notify lenders and insurance
providers that the consumer does not wish to receive written
offers of credit or insurance.
(2) The extent to which consumers are currently utilizing
existing statutory and voluntary mechanisms to avoid
receiving offers of credit or insurance.
(3) The benefits provided to consumers as a result of
receiving written offers of credit or insurance.
(4) Whether consumers incur significant costs or are
otherwise adversely affected by the receipt of written offers
of credit or insurance.
(5) Whether further restricting the ability of lenders and
insurers to provide written offers of credit or insurance to
consumers would affect--
(A) the cost consumers pay to obtain credit or insurance;
(B) the availability of credit or insurance;
(C) consumers' knowledge about new or alternative products
and services;
(D) the ability of lenders or insurers to compete with one
another; and
(E) the ability to offer credit or insurance products to
consumers who have been traditionally underserved.
SEC. 508. STUDY ON THE NEED AND THE MEANS FOR IMPROVING
FINANCIAL LITERACY AMONG CONSUMERS.
(a) Study Required.--The Comptroller General shall conduct
a study to assess the extent of consumers' knowledge and
awareness of credit reports, credit scores, and the dispute
resolution process, and on methods for improving financial
literacy among consumers.
(b) Factors To Be Included.--The study required under
subsection (a) shall include the following issues:
(1) The number of consumers who view their credit reports.
(2) Under what conditions and for what purposes do
consumers primarily obtain a copy of their consumer report
(such as for the purpose of ensuring the completeness and
accuracy of the contents, to protect against fraud, in
response to an adverse action based on the report, or in
response to suspected identity theft) and approximately what
percentage of the total number of consumers who obtain a copy
of their consumer report do so for each such primary purpose.
(3) The extent of consumers' knowledge of the data
collection process.
(4) The extent to which consumers know how to get a copy of
a consumer report.
(5) The extent to which consumers know and understand the
factors that positively or negatively impact credit scores.
(c) Report Required.--Before the end of the 9-month period
beginning on the date of the enactment of this Act, the
Comptroller General shall submit a report to the Congress on
the findings and conclusions of the Comptroller General
pursuant to the study conducted under subsection (a),
together with such recommendations for legislative or
administrative action as the Comptroller General may
determine to be appropriate, including recommendations on
methods for improving financial literacy among consumers.
SEC. 509. DISCLOSURE OF INCREASE IN APR UNDER CERTAIN
CIRCUMSTANCES.
Section 609 of the Fair Credit Reporting Act (15 U.S.C.
1681m) is amended by inserting after subsection (f) (as added
by section 502(c) of this title) the following new
subsection:
``(g) Disclosure to Consumer.--
``(1) In general.--The ability of a credit card issuer to
increase any annual percentage rate applicable to a credit
card account, or to remove or increase any introductory
annual percentage rate of interest applicable to such
account, for reasons other than actions or omissions of the
card holder that are directly related to such account shall
be clearly and conspicuously disclosed to the consumer by the
credit card issuer in any disclosure or statement required to
be made to the consumer under this title in connection with a
credit card solicitation that is not initiated by the
consumer.
``(2) Regulations and model statements.--The Board, in
consultation with the Federal banking agencies and the
National Credit Union Administration, shall develop such
guidelines in regulations as necessary to assure that the
information to be disclosed to consumers pursuant to
paragraph (1) is clearly and conspicuously provided in a
prominent location in any credit card solicitation that is
not initiated by the consumer, and shall include model
disclosure statements to be used by credit card issuers in
making the disclosures required to be provided to the
consumer by paragraph (1).''.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
SEC. 601. CERTAIN EMPLOYEE INVESTIGATION COMMUNICATIONS
EXCLUDED FROM DEFINITION OF CONSUMER REPORT.
(a) In General.--Section 603 of the Fair Credit Reporting
Act (15 U.S.C. 1681a) is amended by inserting after
subsection (p) the following new subsection:
``(q) Exclusion of Certain Communications for Employee
Investigations.--
``(1) Communications described in this subsection.--A
communication is described in this subsection if--
``(A) but for subsection (d)(2)(D), the communication would
be a consumer report;
``(B) the communication is made to an employer in
connection with an investigation of--
``(i) suspected misconduct relating to employment; or
``(ii) compliance with Federal, State, or local laws and
regulations, the rules of a self-regulatory organization, or
any preexisting written policies of the employer;
``(C) the communication is not made for the purpose of
investigating a consumer's credit worthiness, credit
standing, or credit capacity; and
``(D) the communication is not provided to any person
except--
``(i) to the employer or an agent of the employer;
``(ii) to any Federal or State officer, agency, or
department, or any officer, agency, or department of a unit
of general local government;
``(iii) to any self-regulatory organization with regulatory
authority over the activities of the employer or employee;
``(iv) as otherwise required by law; or
``(v) pursuant to section 608.
``(2) Subsequent disclosure.--After taking any adverse
action based in whole or in part on a communication described
in paragraph (1), the employer shall disclose to the consumer
a summary containing the nature and substance of the
communication upon which the adverse action is based, except
that the sources of information acquired solely for use in
preparing what would be but for subsection (d)(2)(D) an
investigative consumer report need not be disclosed.
``(3) Self-regulatory organization defined.--For purposes
of this subsection, the term `self-regulatory organization'
includes any self-regulatory organization (as defined in
section 3(a)(26) of the Securities Exchange Act of 1934), any
entity established under title I of the Sarbanes-Oxley Act of
2002, any board of trade designated by the Commodity Futures
Trading Commission, and any futures association registered
with such Commission.''.
[[Page H8139]]
(b) Technical and Conforming Amendment.--Section
603(d)(2)(D) of the Fair Credit Reporting Act (15 U.S.C.
1681a(d)(2)(D)) is amended by inserting ``or (q)'' after
``subsection (o)''.
TITLE VII--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE
FINANCIAL SYSTEM
SEC. 701. PROTECTION OF MEDICAL INFORMATION IN THE FINANCIAL
SYSTEM
(a) In General.--Section 604(g) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(g)) is amended to read as
follows:
``(g) Protection of Medical Information.--
``(1) Limitation on consumer reporting agencies.--A
consumer reporting agency shall not furnish for employment
purposes, or in connection with a credit or insurance
transaction, a consumer report that contains medical
information about a consumer, unless--
``(A) if furnished in connection with an insurance
transaction, the consumer affirmatively consents to the
furnishing of the report;
``(B) if furnished for employment purposes or in connection
with a credit transaction--
``(i) the information to be furnished is relevant to
process or effect the employment or credit transaction; and
``(ii) the consumer provides specific written consent for
the furnishing of the report that describes in clear and
conspicuous language the use for which the information will
be furnished; or
``(C) such information is restricted or reported using
codes that do not identify, or provide information sufficient
to infer, the specific provider or the nature of such
services, products, or devices to a person other than the
consumer, unless the report is being provided to an insurance
company for a purpose relating to engaging in the business of
insurance other than property and casualty insurance.
``(2) Limitation on creditors.--Except as permitted
pursuant to paragraph (3)(C) or regulations prescribed under
paragraph (5)(A), a creditor shall not obtain or use medical
information pertaining to a consumer in connection with any
determination of the consumer's eligibility, or continued
eligibility, for credit.
``(3) Actions authorized by federal law, insurance
activities and regulatory determinations.--Section 603(d)(3)
shall not be construed so as to treat information or any
communication of information as a consumer report if the
information or communication is disclosed--
``(A) in connection with the business of insurance or
annuities, including the activities described in section 18B
of the model Privacy of Consumer Financial and Health
Information Regulation issued by the National Association of
Insurance Commissioners (as in effect on January 1, 2003);
``(B) for any purpose permitted without authorization under
the Standards for Individually Identifiable Health
Information promulgated by the Department of Health and Human
Services pursuant to the Health Insurance Portability and
Accountability Act of 1996, or referred to under section 1179
of such Act, or described in section 502(e) of Public Law
106-102; or
``(C) as otherwise determined to be necessary and
appropriate, by regulation or order and subject to paragraph
(6), by the Commission, any Federal banking agency or the
National Credit Union Administration (with respect to any
financial institution subject to the jurisdiction of such
agency or Administration under paragraph (1), (2), or (3) of
section 621(b), or the applicable State insurance authority
(with respect to any person engaged in providing insurance or
annuities).
``(4) Limitation on redisclosure of medical information.--
Any person that receives medical information pursuant to
paragraphs (1) or (3) shall not disclose such information to
any other person except as necessary to carry out the purpose
for which the information was initially disclosed, or as
otherwise permitted by statute, regulation, or order.
``(5) Regulations and effective date for paragraph (2).--
``(A) Regulations required.--Each Federal banking agency
and the National Credit Union Administration shall, subject
to paragraph (6) and after notice and opportunity for
comment, prescribe regulations that permit transactions under
paragraph (2) that are determined to be necessary and
appropriate to protect legitimate operational, transactional,
risk, consumer, and other needs, consistent with the intent
of paragraph (2) to restrict the use of medical information
for inappropriate purposes.
``(B) Final regulations required.--The Federal banking
agencies and the National Credit Union Administration shall
prescribe the regulations required under subparagraph (A) in
final form before the end of the 6-month period beginning on
the date of the enactment of the Fair and Accurate Credit
Transactions Act of 2003.
``(6) Coordination with other laws.--No provision of this
subsection shall be construed as altering, affecting, or
superseding the applicability of any other provision of
Federal law relating to medical confidentiality.''.
(b) Restriction on Sharing of Medical Information.--Section
603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d))
is amended--
(1) in paragraph (2), by striking ``The term'' and
inserting ``Except as provided in paragraph (3), the term'';
and
(2) by adding at the end the following new paragraph:
``(3) Restriction on sharing of medical information.--
Except for information or any communication of information
disclosed as provided in section 604(g)(3), the exclusions in
paragraph (2) shall not apply with respect to information
disclosed to any person related by common ownership or
affiliated by corporate control if--
``(A) the information is medical information; or
``(B) the information is an individualized list or
description based on a consumer's payment transactions for
medical products or services, or an aggregate list of
identified consumers based on payment transactions for
medical products or services.''.
SEC. 702. CONFIDENTIALITY OF MEDICAL CONTACT INFORMATION IN
CREDIT REPORTS.
(a) Duties of Medical Information Furnishers.--Section
623(a) of the Fair Credit Reporting Act (15 U.S.C. 1681s-
2(a)) is amended by inserting after paragraph (7) (as added
by section 504(a)) the following new paragraph:
``(8) Duty to provide notice of status as medical
information furnisher.--A person whose primary business is
providing medical services, products, or devices, or the
person's agent or assignee, who furnishes information to a
consumer reporting agency on a consumer shall be considered a
medical information furnisher for the purposes of this title
and shall notify the agency of such status.''.
(b) Restriction of Dissemination of Medical Contact
Information.--Section 605(a) of the Fair Credit Reporting Act
(15 U.S.C. 1681c(a)) is amended by adding the following new
paragraph:
``(6) The name, address, and telephone number of any
medical information furnisher that has notified the agency of
its status, unless--
``(A) such name, address, and telephone number are
restricted or reported using codes that do not identify, or
provide information sufficient to infer, the specific
provider or the nature of such services, products, or devices
to a person other than the consumer; or
``(B) the report is being provided to an insurance company
for a purpose relating to engaging in the business of
insurance other than property and casualty insurance.''.
(c) No Exceptions Allowed for Dollar Amounts.--Section
605(b) of the Fair Credit Reporting Act (15 U.S.C. 1681c(b))
is amended by striking ``The provisions of subsection (a)''
and inserting ``The provisions of paragraphs (1) through (5)
of subsection (a)''.
(d) Coordination With Other Laws.--No provision of any
amendment made by this section shall be construed as
altering, affecting, or superseding the applicability of any
other provision of Federal law relating to medical
confidentiality.
(e) FTC Regulation of Coding of Trade Names.--Section 621
of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended
by inserting after subsection (f) (as added by section 301 of
this Act) the following new subsection:
``(g) FTC Regulation of Coding of Trade Names.--If the
Commission determines that a person described in paragraph
(8) of section 623(a) has not met the requirements of such
paragraph, the Commission shall take action to ensure the
person's compliance with such paragraph, which may include
issuing model guidance or prescribing reasonable policies and
procedures as necessary to ensure that such person complies
with such paragraph.''.
(f) Technical and Conforming Amendments.--Section 604(g) of
the Fair Credit Reporting Act (15 U.S.C. 1681b(g)) (as
amended by section 701) is amended--
(1) in paragraph (1) by inserting ``(other than medical
contact information treated in the manner required under
section 605(a)(6))'' after ``a consumer report that contains
medical information''; and
(2) in paragraph (2) by inserting ``(other than medical
information treated in the manner required under section
605(a)(6))'' after ``a creditor shall not obtain or use
medical information''.
(g) Effective Date.--The amendments made by this section
shall take effect at the end of the 15-month period beginning
on the date of the enactment of this Act.
The CHAIRMAN. No amendment to that amendment shall be in order except
those printed in the designated place in the Congressional Record and
pro forma amendments for the purposes of debate. Amendments printed in
the Record may be offered only by the Member who caused it to be
printed or his designee and shall be considered read.
Are there amendments to the bill?
Amendment No. 17 Offered by Mr. Oxley
Mr. OXLEY. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 17 offered by Mr. Oxley:
Page 7, after line 9, insert the following new subsection:
(d) Criteria for Orderly Implementation of Free Annual
Credit Report Provision.--
(1) In general.--In developing the regulations and
effective dates under subsection (a) (and subject to the time
limits in paragraph (2) and subsection (a)), the Federal
Trade Commission and the Board of Governors of the Federal
Reserve System shall provide a systematic approach for
implementing the amendment made by section 501 that allows
for an orderly transition to the consumer report distribution
system required by the amendment in a manner that--
(A) does not temporarily overwhelm consumer reporting
agencies with requests for disclosures of consumer reports
beyond their capacity to deliver; and
[[Page H8140]]
(B) does not deny creditors, other users, and consumers
access to consumer credit reports on a time-sensitive basis
for specific purposes, such as home purchases or suspicions
of identity theft, during the transition period.
(2) Prohibition on extension of effective date.--
(A) One-time authorization.--The Federal Trade Commission
and the Board of Governors of the Federal Reserve System may
exercise the authority provided under paragraph (1) only once
during the 2-month period referred to in subsection (a)(1).
(B) Extension of effective date prohibited.--No provision
of this subsection shall be construed as extending, or
authorizing the Federal Trade Commission or the Board of
Governors of the Federal Reserve System to extend, the 2-
month period referred to in subsection (a)(1) or the 10-month
period referred to in subsection (a)(2) relating to the
requirements imposed on consumer reporting agencies by the
amendment made by section 501.
Page 10, strike line 12 and insert ``inserting `(and to
specific identity theft prevention subjects covered)'
after''.
Page 20, line 7, insert ``a summary of rights, or other
disclosure, that is the same as or substantially similar to''
after ``with''.
Page 20, after line 14, insert the following new
subsection:
(c) Effective Date.--Paragraph (2) of section 609(d) of the
Fair Credit Reporting Act (as added by subsection (a) of this
section) shall apply after the end of the 60-day period
beginning on the date the model summary of rights is
prescribed in final form by the Federal Trade Commission
pursuant to paragraph (1) of such section and in accordance
with section 3(a) of this Act.
Page 27, line 4, strike ``, or duplicative of,''.
Page 28, line 4, strike ``credit'' and insert ``consumer''.
Page 28, strike line 7 and insert ``the biometric industry,
and the''.
Page 28, line 8, strike the comma after ``public''.
Page 32, line 11, insert ``, using an address or a
notification mechanism specified by the consumer reporting
agency for such notices'' before the period.
Page 35, beginning on line 25, strike ``thereafter report
correct information to'' and insert ``notify''.
Page 36, line 3, strike the period, the closing quotation
marks, and the second period and insert ``of that
determination and provide to the agency any correction to
that information that is necessary to make the information
provided by the person accurate.''.
Page 36, after line 3, insert the following new
subparagraph:
``(D) Frivolous or irrelevant dispute.--
``(i) In general.--The requirements of this paragraph shall
not apply if the person receiving a notice of a dispute from
a consumer reasonably determines that the dispute is
frivolous or irrelevant, including--
``(I) by reason of the failure of a consumer to provide
sufficient information to investigate the disputed
information; or
``(II) the submission by a consumer of a dispute that is
substantially the same as a dispute previously submitted by
or for the consumer, either directly to the person under this
paragraph or through a consumer reporting agency under
subsection (b), with respect to which the person has already
performed the person's duties under this paragraph or
subsection (b), as applicable.
``(ii) Notice of determination.--Upon making any
determination under clause (i) that a dispute is frivolous or
irrelevant, the person shall notify the consumer of such
determination not later than 5 business days after making
such determination, by mail or, if authorized by the consumer
for that purpose, by any other means available to the person.
``(iii) Contents of notice.--A notice under clause (ii)
shall include--
``(I) the reasons for the determination under clause (i);
and
``(II) identification of any information required to
investigate the disputed information, which may consist of a
standardized form describing the general nature of such
information.''.
Page 56, line 16, insert before the closing quotation marks
the following new sentence: ``This paragraph shall not apply
to a person described in subsection (j)(4)(A)(i), but only to
the extent that such person is engaged in activities
described in such subsection.''.
Page 60, line 16, insert ``or the financial institution
reasonably believed that the institution is prohibited, by
law, from contacting the consumer'' before the period.
Page 73, strike line 6 and all that follows through line
14, and insert the following new subparagraph:
``(C) the information to be furnished pertains solely to
transactions, accounts, or balances relating to debts arising
from the receipt of medical services, products, or devices,
where such information, other than account status or amounts,
is restricted or reported using codes that do not identify,
or do not provide information sufficient to infer, the
specific provider or the nature of such services, products,
or devices, as provided in section 605(a)(6)).
Page 75, line 8, strike ``purpose'' and insert
``purposes''.
Page 75, line 21, insert ``(and which shall include
permitting actions necessary for administrative verification
purposes)'' after ``needs''.
Mr. OXLEY. Mr. Chairman, I am pleased to offer this manager's
amendment, which reflects extensive negotiations with the committee's
ranking minority member, the gentleman from Massachusetts (Mr. Frank),
to resolve issues that arose when the committee marked up this
legislation in July. The amendment makes largely technical and
conforming changes to legislation that the committee overwhelmingly
approved by a vote of 61 to 3.
First, the amendment clarifies that while the new consumer
protections against identity theft create uniform standards preempting
State laws on the same specific subjects, the bill does not preempt
subject matters that are outside the scope of those new provisions,
such as limits on Social Security number use or criminal penalties for
identity theft perpetrators. This approach assures that the strong new
identity theft protections we establish in this legislation are applied
uniformly across the country, while leaving undisturbed those State
statutes that address subjects not covered by the bill's identity theft
provisions.
Second, the amendment includes language responsive to concerns raised
by several members at the Committee on Financial Services's markup of
the FACT Act relating to the new furnisher reinvestigation duties
imposed by section 304 of the bill.
Specifically, the manager's amendment gives furnishers the same right
to reject frivolous or irrelevant disputes brought by consumers that
credit bureaus have under existing law, including disputes already
submitted to and resolved by the furnisher or a credit bureau. The
furnisher is required to provide the consumer whose dispute it rejects
as frivolous or irrelevant with a notice stating the reasons for that
determination and identifying any information required to investigate
the disputed information.
Third, the manager's amendment gives direction to the Federal
regulators who are required to promulgate regulations establishing
effective dates for various provisions of the bill to take into account
the need for an orderly transition to a system in which consumers will
be able to request a free credit report annually, to avoid overwhelming
the credit bureaus and impeding their ability to satisfy time-sensitive
requests for reports within the 2- to 12-month effective date provided
in the legislation.
Let me again thank the ranking member, the gentleman from
Massachusetts (Mr. Frank), for the cooperative spirit in which he and
his staff have worked with us since the committee's markup to make
these important improvements to what was an already outstanding piece
of legislation. I urge all of my colleagues to support the amendment.
Mr. FRANK of Massachusetts. Mr. Chairman, I rise in support of the
amendment.
Mr. Chairman, I support this amendment. It is better than we got. It
is not all I want, but it improves the bill, as is appropriate for this
particular form of a non-controversial amendment in a technical way. It
embodies some improvement in the situation vis-a-vis the retroactive
California preemption that was embodied in the colloquy.
The colloquy that the gentleman from Alabama and the gentleman from
Ohio and I had is really an explanation of what is in this particular
manager's amendment, I think it will improve the bill, and I urge it be
adopted.
The CHAIRMAN. The question occurs on the amendment offered by the
gentleman from Ohio (Mr. Oxley).
The amendment was agreed to.
The CHAIRMAN. Are there further amendments?
Amendment No. 8 Offered by Ms. Waters
Ms. WATERS. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 8 offered by Ms. Waters:
Page 7, line 15, insert ``(a) In General.--'' before
``Section''.
Page 7, after line 24, insert the following new subsection:
(b) Specific Exceptions.--Section 624 of the Fair Credit
Reporting Act (15 U.S.C. 1681t) is amended by adding at the
end the following new subsection:
``(e) Specific Exceptions.--Subsections (b) and (c) shall
not apply to--
``(1) the California Financial Information Privacy Act
(division 1.2 of the California Financial Code, as in effect
after June 30, 2004); or
[[Page H8141]]
``(2) the Consumer Credit Reporting Agencies Act of
California (sections 1785.1 through 1785.36 of the California
Civil Code).''.
Ms. WATERS. Mr. Chairman, first let me say that the gentleman from
Ohio (Chairman Oxley) and the ranking member, the gentleman from
Massachusetts (Mr. Frank), worked very, very hard to get a bipartisan
bill to bring everybody together, along with the gentleman from Alabama
(Mr. Bachus). I think everybody put their best foot forward on this
legislation, and I am just sorry that I am not able to support the bill
simply because I have to protect California.
I think there was a misunderstanding somewhere along the way. I made
lot of inquiries about whether or not post-1996 legislation or laws
were protected in this bill. I was led to believe that they were
protected, but now I find that they were not protected, and what we
stand to do is literally undo or preempt much of the good consumer
legislation that has been produced in my State. So I must object to the
permanent preemption provisions that are proposed in this bill, the
Fair and Accurate Credit Transaction Act.
I believe that the States should be free to adopt more extensive
consumer protections than those that are provided in this Fair Credit
Reporting Act. I believe that the national standards contained in the
Fair Credit Reporting Act should be the floor, not a ceiling, on the
protections available to consumers. States should have the right to
provide additional protections.
I will ask my colleagues on both sides of the aisle, do any of you
know what the next major consumer problem will be in the year 2010? In
1996, when the amendment to the Fair Credit Reporting Act was
established, identity theft was not even on the radar. We had never
even heard of identity theft. The idea that someone would violate a
person by stealing their identity and accessing their financial records
was not an issue we were familiar with. Now it is the fastest growing
consumer complaint to the FTC, with over 200,000 complaints in 2002
alone.
As Californians, our laws on such emerging consumer issues as
identify theft represent the gold standard in consumer protection, and
that is why I am asking for support on an amendment to carve out all of
California laws enacted since the passage of 1996 amendments to the
Fair Credit Reporting Act from preemption provisions contained in the
bill.
There has been an attempt, well, I do not know what happened, but,
again, there was a misunderstanding, and I was misled. All of the
consumer protections that were enacted after 1996, with the exception
of California Civil Code 1785.25(a) regarding furnishers, are
preemptable. So, I have a long list.
For example, let me tell you what is preempted. Consumer reporting
agencies must disclose the names and addresses of all sources of
information used in Consumer Reports. That is California law, now
preempted if this passes.
California also requires consumer reporting agencies to, with a
reasonable degree of certainty, match at least three categories of
identifying information within the consumer's file with the information
provided by a retailer. The categories of identifying information may
include the consumer's first and last name, month and date of birth,
driver's license number, place of employment, current residence,
previous residence, or Social Security number. This effectively reduces
a successful attempt at identity theft and reduces the chances for
mistaken identity.
Another preemption, a consumer has the right to receive his or her
credit score, the key factors in any related information. Another
preemption.
A consumer would be able to have a security freeze placed on his or
her credit report by making a request in writing by certified mail with
a consumer credit reporting agency. A security freeze prohibits the
consumer reporting agency from releasing the consumer's credit report
or any information from it without the expressed authorization of the
consumer. It would preempt it.
Upon receipt from a victim of identity theft of a police report or
valid investigative report, a consumer reporting agency must provide a
victim of identity theft with up to 12 copies of their credit report
during a consecutive 12-month period free of charge. It is very hard to
straighten up this identity theft. Sometimes it takes 3 to 4 years. But
if you are getting that credit report every month and you can compare
what has been taken off, what has been left on, where the mistakes are,
you can wind out of this thing.
With strong consumer protections, Federal preemption of States would
not be necessary because Federal law would be the floor, rather than
the ceiling.
Then, again, as all of you are aware, this past August, California
signed into law SB1, which provides strong consumer protections that
should be the law of the land. You are going to hear more about this in
an amendment additional to mine that will be presented.
But, again, let me just say that whatever the mistakes were, I should
have been involved in the manager's amendment to correct these
problems. I have not been placed in there. So I do not know what we are
going to do, but I ask my colleagues to please consider what has been
done here.
Mr. OXLEY. Mr. Chairman, I ask unanimous consent that debate on this
amendment and any amendments thereto be limited to 20 minutes, equally
divided and controlled by the proponent and opponent.
The CHAIRMAN. Is there objection to the request of the gentleman from
Ohio?
Mr. SHERMAN. Reserving the right to object, the gentleman's unanimous
consent applies to this one amendment?
Mr. OXLEY. Mr. Chairman, if the gentleman will yield, yes.
Mr. SHERMAN. Mr. Chairman, I withdraw my reservation of objection.
Mr. FRANK of Massachusetts. Mr. Chairman, reserving the right to
object, because this came afterwards, what happens to the 5 minutes
just used? Is it subsequent to the 5 minutes the gentlewoman just used?
Mr. OXLEY. Mr. Chairman, if the gentleman will yield, that is fine
with me.
Mr. FRANK of Massachusetts. Mr. Chairman, I withdraw my reservation
of objection.
The CHAIRMAN. The unanimous consent request is that further debate on
this amendment be limited to 20 minutes.
Is there objection to the request of the gentleman from Ohio?
There was no objection.
The CHAIRMAN. The gentlewoman from California (Ms. Waters) will
control 10 minutes and a Member in opposition will control 10 minutes.
Mr. OXLEY. Mr. Chairman, I designate the gentleman from Alabama (Mr.
Bachus) to control the 10 minutes on this side.
The CHAIRMAN. The gentleman from Alabama will control the time in
opposition.
Ms. WATERS. Mr. Chairman, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Chairman, I want to acknowledge that
the gentlewoman from California is absolutely correct. She did call to
my attention during this discussion on this bill the potential problem
that she learned about of a retroactive preemption. I missed it. I made
a mistake in this case. She was correct and we should have spotted it.
I think it is incorrect.
I want to make clear we are talking about two separate issues here on
the preemption. There is the preemption prospectively of what is known
as SB1. That is not what is at issue here. There will be a second
amendment on that.
This has to do with laws that were passed by California subsequent to
1996 that were not subject to preemption at the time that would now be
retroactively preempted. I think that is a mistake.
I should note that the gentlewoman read a list of preemptions. In
many of the cases I acknowledge what is preemptive does provide some
protection. In other words, it is not a case where there is a
preemption, all protections are wiped out. In some cases, the
protections are functionally equal. In other cases, they may be
somewhat different. But these are laws that had been on the books in
California. My view was that this bill ought to go forward with the
existing preemptions, with some new consumer protections. It was not my
intention to extend the preemptions. Through failure to spot
[[Page H8142]]
the meaning of some particular words, I must concede that this
happened.
{time} 1615
I regret that. We have tried in conversations to undo it. We have in
the manager's amendment undone some of it, but not enough of it. But as
I said, there are still some of the sections preempted and are replaced
by other protections, so it is not a case where there will be no
protections at all; but it does seem to me still that there are some
rollbacks of California law that were unnecessary.
So as a matter of fairness to California, I do not think we should
have been preempting without full knowledge.
Now, I do not mean to say that anybody did anything inappropriate. I
should have been clearer about what was happening and we simply failed
to spot the meaning of four words; that sometimes happens. I support
the gentlewoman's amendment. I think the California laws are
substantively wise, but that is not the primary point. My primary point
is that we should not be here retroactively preempting what a State has
done. That is very different than the future of SB1. We will talk about
that later.
So I strongly support the gentlewoman's amendment; and throughout
this process, because this bill is a long way from being sent to the
President, I will continue to do what I can. She is correct, she and
the other gentlewoman from California who serves on the committee
called this to our attention, they deserved a better response than they
got; and I will do everything I can now to correct the error that we
made.
Mr. BACHUS. Mr. Chairman, I rise in opposition to the amendment, and
I yield myself such time as I may consume.
Mr. Chairman, let me first stress that the legislation before us on
which we are having an amendment by the gentlewoman from California
now, and we will have one from the gentleman from Vermont which will
follow that, I first want to say to them that there are many important
consumer protections in this bill: free credit report, fraud alerts,
the one-call-does-it-all, protecting of health information. And I want
to commend both of the gentlewomen for their participation in that. So
I do want to say that several of their suggestions, several of the
things that they advocated are in this legislation.
To the gentlewoman from California, I rise in opposition to
disregarding a national uniform standard in the case of, and this
amendment covers two different acts; one of them because the act before
us simply does not address a lot of the Gramm-Leach-Bliley things that
this legislation did not address. I think this Congress will, at some
point, take up a review of those things. The second one does deal with
ID theft; it is the California legislation that was just passed.
This legislation before us today, if it passes, Californians will
have important new protections in ID theft cases. And I think we all,
no matter how we feel about the gentlewoman's amendment, I hope we can
all agree on that. We do think that this amendment really strikes at
the essence of this bill; and that is a broad, uniform standard where
what is done in California meets the test of what is done in Alabama,
and what is done in Alabama meets the test of what is done in Ohio. If
we apply different standards to fraud alerts, if we require different
standards of credit reporting agencies or reports, there is so much
interaction here between States. It simply drives up the expense, when
California, representing a fourth of this Nation, can impose its own
standards on a national issue in which, on a daily basis, millions of
transactions are crossing State lines.
Mr. Chairman, I reserve the balance of my time.
Ms. WATERS. Mr. Chairman, I yield myself 1 minute to explain to the
gentleman that this is not an imposition on the rest of the country;
this is a carve-out for California. This is a protection for what we
have already done. We have protections in the law from 1996; and what
we are saying is, you should not have national standards that are less
than what we have produced in California. I have tried to protect that.
I thought that I had. And as our ranking member said, a mistake was
made. We thought, based on the representations of everybody, that it
had been protected. And now I am here with an amendment that simply
says, leave California alone and allow the better consumer laws to
stand in California. Do not preempt these laws with standards that are
less than what we have in California.
Mr. BACHUS. Mr. Chairman, will the gentlewoman yield?
Ms. WATERS. I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, is the gentlewoman talking about cases in
identity theft? Is that what we are talking about?
Ms. WATERS. No. As the ranking member tried to explain, there are two
different issues here today.
The CHAIRMAN. The time of the gentlewoman has expired.
Mr. BACHUS. Mr. Chairman, I yield the gentlewoman 1 minute of my
remaining time.
Ms. WATERS. Mr. Chairman, there are two different issues here. When
we did this work in committee, we thought that we had protected the
consumer laws that were made in California after 1996; and everybody,
all of our staff people, everybody thought so, on both sides of the
aisle.
Mr. BACHUS. As to identity theft?
Ms. WATERS. No. I just read a number of them a few minutes ago in my
presentation that had to do with some other laws, with credit reports
and some other kinds of things.
Mr. BACHUS. Well, the amendment deals with two specific acts.
Ms. WATERS. Yes.
Mr. BACHUS. One of those acts was just passed by the California
legislature in the past few days.
Ms. WATERS. Yes. That is the latter part. That is the latter part of
this amendment. But the amendment that I am speaking to now is the one
where I said consumer reporting agencies must disclose the names and
addresses of all sources of information. California requires consumer
reporting agencies to, with a reasonable degree of certainty, match at
least three categories identifying information. I read a list of items
that had been preempted that none of us thought had been preempted, and
I am trying to carve out for California and put them back in.
Mr. BACHUS. Mr. Chairman, how much time remains?
The CHAIRMAN. The gentleman from Alabama (Mr. Bachus) has 6 minutes
remaining; the gentlewoman from California (Ms. Waters) has 6 minutes
remaining.
Ms. WATERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
California (Ms. Lee).
Ms. LEE. Mr. Chairman, first let me just say I do rise in strong
support of the Waters amendment to protect Californians', Californians'
mind you, financial privacy laws and identity theft provisions. I
applaud my colleague from California for her leadership on this issue,
for identifying a mistake that was made, and really for just trying to
correct it in a very rational way. That is what this amendment does. It
corrects a mistake that was made. This bill is a bipartisan bill. We
all wanted to support it; but coming from California, the gentlewoman
has figured out a way that we should support this, and it would be a
win-win for all of us.
The FTC, Mr. Chairman, reported on September 3 that 27.3 million
Americans have been victims of identity theft in the last 5 years,
including 9.91 million people, or 4.6 percent of the population in the
last year alone. Now, these are epidemic levels, and we must do
everything we can do to prevent identity theft and to help the victims
of this horrendous crime. That is why this amendment is so important.
It would preserve very important California laws on identity theft.
These are California laws.
Let us be clear. If we do not adopt the Waters amendment today,
Californians will lose vital identity theft provisions currently
provided in California law. Victims of identity theft will lose the
right to a free monthly credit report. Victims of identity theft will
lose the protection of California's law providing the right to correct
a credit report with a police report. Victims of identity theft will
lose the protections of California's law requiring credit bureaus to
place a fraud alert within 5 business days of receipt of a request from
the consumer. And the list continues. In total, seven existing
California laws would be wiped out by this bill and another four will
probably be
[[Page H8143]]
eliminated. It really simply defies logic to kill these existing
California protections for the victims of identity theft when we are
facing a growing identity theft crisis in our State.
Again, I thank the gentlewoman for her leadership. I thank her for
offering this fix to this very important bill, and I hope that we all
can support this correction of a major error that was made.
Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume.
What this amendment does, first of all, it addresses two things; one
is SB1 that was just passed in California. And as to affiliate-sharing,
that is what is preempted by this legislation. But the present
preemption, what we are doing is, we are taking a preemption that
presently exists in the law and we are extending it as of January 1. So
SB1 as to affiliate-sharing, you cannot do that today in California.
You would be, if FCRA was not renewed.
Now, the second component that you have here is California's version
of FCRA. And what that would do, the Waters amendment would not only
allow California to change its law on an ongoing basis, but beyond what
we grandfathered today, and we are grandfathering some of those
protections, but it would also resurrect certain laws that are
preempted today.
Now, as to a uniform standard, and I want to go back to what we posed
to Treasury and what their response was in testimony before our
committee, why should uniform national standards be extended to include
matters that are designed to help fight identity theft? Why should not
States be able to adopt stricter anti-ID theft measures?
Now, since that time, in the manager's amendment, we have allowed a
lot of those as long as they do not affect the operation of the FCRA,
and the answer that we got from the Federal Reserve, from the Treasury,
from the FTC was that it would literally cost millions of dollars; that
it is important to have national uniform standards for identity theft
prevention measures.
For example, section 202 of the act calls for the development of a
national fraud alert system. This requires the credit reporting
agencies that operate on a nationwide basis to allow consumers to place
various types of alerts in their credit reports when they are victims
of identity theft. Now, we require certain things to go into those
alerts. If California requires other things, then a company doing
business in Ohio or Alabama or New York would not only have to comply
with that law, they would have to comply with the California law if
they had customers or consumers in California. Merchants dealing with
California consumers would not only have to comply with the national
law, they would have to worry about the law in all 50 other States with
credit reports.
{time} 1630
We would have a gradual erosion and chipping away of our national
system. And we took volumes and volumes of testimony how the person
most penalized by this would be the consumers in paying higher interest
rates, also in being a less effective national standard. We would also
discourage people from using the National Uniform Credit System to
report and to furnish information if they thought they not only had to
comply with a national law but a California law.
Finally, philosophically, when California is able to basically define
what FCRA will be, then California imposes its will on the national
policy. And we have to have a national policy. We have representatives
of California here. In fact, probably one-fifth of this body is made up
of California representatives, or one-sixth. They participated in this.
I anticipate that when this final vote is taken, the vast majority,
as in committee, of Californians will vote for this legislation. But we
simply cannot allow any State to dictate how this system will operate
in Alabama, Ohio, New York or to impose additional requirements and
costs on consumers in California or Massachusetts or other States.
Simply put, this amendment, it sounds good but it strikes at the very
efficiency, the cost efficiency, of our national credit reporting
system. It bogs it down.
I will conclude with this: California recognized this when they
preempted the law of several large cities in California who had
attempted to impose their own standards simply by saying we cannot. The
cost of cities and counties imposing their own standard would be
prohibited. California ought to see that that logic also applies on a
national level.
Governor Davis, I believe, initially bought into this. Initially when
this legislation, some of this legislation was proposed, he did not
sign it. He did not support it. He is now facing a recall in a few
weeks, but I am not sure that is the time to judge what ought to be
done in the middle of a politically expedient campaign.
Mr. Chairman, I reserve the balance of my time.
Ms. WATERS. Mr. Chairman, how much time is remaining?
The CHAIRMAN. The gentlewoman from California (Ms. Waters) has 4
minutes remaining. The gentleman from Alabama's (Mr. Bachus) time has
expired.
Ms. WATERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Vermont (Mr. Sanders).
(Mr. SANDERS asked and was given permission to revise and extend his
remarks.)
Mr. SANDERS. Mr. Chairman, I thank the gentlewoman for yielding me
time.
California may have one-sixth of the Members in this body, Vermont
does not. I am it and I rise in strong support of the Waters amendment.
The issue of preemption was hotly debated in the Committee on
Financial Services, and on one side of that issue was virtually every
consumer organization in America. Groups like the Consumer Federation
of America, the U.S. Public Interest Research Group, Consumers Union,
and many others. And some of us in the committee supported these
consumer organizations, making the point that the gentlewoman from
California (Ms. Waters) just made. That in the nature of our
government, we are the United States of America, there are 50 States in
our country. And sometimes one State does something really good and a
whole lot of other States learn from that State. And that is one of the
reasons that we have a creative form of government with a lot of ideas
that are flowing.
On the other side of that debate, of course, were the credit card
companies and the banks. And let us be clear, they do not want strong
consumer protection. They are the people who are charging individuals
in this country 25 percent interest rates on their credit cards. They
do not want to see governors and legislatures and attorneys general
stand up strongly and protect consumers. So what ends up happening is
that we have a national bill which has admittedly some good provisions
in it, but at the same time, it takes away the ability of 50 States to
go further.
So the gentlewoman from California (Ms. Waters), the gentlewoman from
California (Ms. Lee), and I and many others were fighting for higher
Federal standards, more consumer protection, but at the same time, give
California the right to go forward.
It is inconvenient. Well, democracy is inconvenient. Alabama does
some things. Vermont does some things. We live together. We learn from
each other. We argue with each other, but we do not take away, we
should not take away the rights of the States to go further. I support
this amendment.
Mr. Chairman, I support the amendment offered by Congresswoman
Waters. This amendment would simply allow the 7 Fair Credit Reporting
Act preemptions to expire, as Congress intended, on January 1, 2004 in
order to allow the 50 states of this country to pass stronger consumer
protection laws to improve the accuracy of credit reports and to
aggressively fight identity theft.
I should note right off the bat that every major national consumer
group in this country including the Consumer Federation of America, the
U.S. Public Interest Research Group, Consumers Union, and the National
Consumer Law Center all vigorously oppose state pre-emption. I would
also like to tell you that the National Association of Attorneys
General, representing all 50 States of this country, unanimously passed
a resolution opposing the 7 FCRA state preemptions.
Mr. Chairman, you know my views on this subject. If my State of
Vermont or your State of Ohio wants to pass laws that are stronger than
the Federal Government's, we should give States that right. The States
are the laboratories of Democracy. You know what happens here. If there
is a particular identity theft crisis in Colorado and the Colorado
State Legislature passes a law to correct this problem,
[[Page H8144]]
and it works, what happens? Pretty soon, California may pass the same
law. Then Nebraska. Then Maryland. And, eventually it filters up to the
federal government and we have a good national law on the books. But,
if this legislation is signed into law, we would permanently prevent
the States from taking this action. We hear a lot of talk from
conservatives about protecting the States and the American people
against the big, bad and instrusive Federal Government. Well, call me a
conservative on this issue because I believe that the 50 States in this
country should be able to pass their own laws and should not be pre-
empted by the Federal Government from passing stronger laws that
protect consumers. So, I would say to my conservative friends on the
other side of the aisle, vote for my amendment. It is consistent with
your philosophy on the role of the government.
And to my Democratic friends on this side of the aisle, I ask all of
you to vote for this amendment as well. Let us not forget that just
last week, during a recent mark-up of the Securities Fraud Deterrence
and Investor Restitution Act (H.R. 2179) in the Capital Markets
Subcommittee, virtually every Democrat voted against preempting the
states from taking strong enforcement actions against Wall Street firms
that defraud investors. I agree. The 50 States of this country should
not be prohibited from aggressively punishing corporate wrongdoing.
Today, we are dealing with the exact same issue: state preemption.
But, this time it deals with consumer protection. Just like we should
not prohibit States from aggressively punishing corporate wrongdoers,
to my mind, we should also not permanently bar the states from
aggressively punishing identity thieves and improving the accuracy of
consumers' credit reports. Therefore, I hope my Democratic friends will
vote for this amendment as well.
Mr. Chairman, as we all know, the newspapers are filled with horror
stories about the harm being done to consumers by identity thieves.
This problem is compounded by the shabby job done by the credit
reporting system in ensuring that consumers' credit reports are
accurate and up-to-date. States have been at the forefront of the
effort to stop identity thieves and to clean up the credit reporting
industry. The federal government should be a partner in that effort but
should not pull the rug out from under the states. There is no greater
impediment to consumer credit than a credit report full of errors.
There is no reason to tie the states' hands.
We have heard from the financial services industry and the major
credit bureaus that if we don't extend these state preemptions, the
entire credit system will collapse. But, let us not forget, we had a
national credit system before the 1996 state preemptions were inserted,
and it worked well. For example, one of the witnesses that we heard
from on this issue from Juniper Bank who supports preemption cited a
study that showed ``in 1990, more than 70 percent of credit card
balances were being charged more than an 18 percent annual interest
rate. By 1993, only 34 percent of credit card balances were being
charged more than 18 percent interest.''
Great study. All of the benefits to consumers just happened to be 3
years before the 1996 preemptions were enacted.
Another supporter of state preemption who testified at our first
hearing from the Information Policy Institute pointed to another study
that showed that credit card prices ``declined by almost 35 percent
between the first quarter of 1984, and the fourth quarter of 1996,''
saving consumers ``about $30 billion per year.''
Again, great study. All of the benefits to consumers happended to
occur before the 1996 state preemptions were enacted.
In addition, the 1996 FCRA amendments specifically grandfathered
stronger consumer protection statutes in California, Massachusetts and
Vermont from pre-emption. What have we seen in these 3 states that have
stronger consumer protection laws in regards to credit reporting? We
have seen that my State of Vermont now has the lowest rate of consumer
bankruptcies in this country; the State of Massachusetts has the second
lowest consumer bankruptcies in the United States; and California comes
in ahead of the median. At a time when the United States as a whole
experienced the highest rate of bankruptcy cases in history, increasing
by 23 percent since 2000, I would say that these three examples gives
us proof that stronger State consumer protection laws work.
What about mortgage rates? Well, the most recent data indicate that
the State of California has the lowest effective rate for a
conventional mortgage in the nation, and Vermont and Massachusetts were
well below the median. Sounds pretty good to me.
In addition, let us not forget why the 1996 FCRA amendments were
enacted. While identity theft complaints have been the number one
complaint to the FTC each year since 2000, and in fact doubled from
2001 to 2002, it was credit bureau mistakes which were the number one
complaint to the FTC 10 years earlier. And it was credit bureau
mistakes, and complaints about them, that led Congress to the 1996 FCRA
amendments. From 1990-92, according to a study by U.S. PIRG, mistakes
in credit reports were the number one complaint to the FTC. What will
the new crisis be? We don't know for sure. But, if we permanently
preempt the States from acting on future problems, we will do this
country a great disservice.
Moreover, if some of the new members don't believe Congress intended
these preemptions to sunset, I would refer them to the floor statement
of the former Ranking Member of the Banking Committee and former
Republican Congressman from California Al McCandless who had this to
say during the floor debate on this bill:
``The issue over whether the Fair Credit Reporting Act should preempt
more stringent State laws or whether it should permit States to enact
tougher credit reporting statutes has been one of the single toughest
issues for the Banking Committee to tackle. On the one hand, many of
our Members like the idea of a national uniform standard. On the other,
we do not want to tie the hands of State legislatures. I think that
this compromise bill resolves the issue of preemption to most
everyone's satisfaction. The Fair Credit Reporting Act as amended by
this compromise bill, will be the law of the land for the next 8 years.
It will provide consumers across the country with greater protection
than is currently offered by any existing State statute. A uniform
national standard will make compliance more straightforward and will
facilitate the extension of credit to consumers. States will be able to
enact more stringent legislation if necessary after 8 years.''
Let me repeat, ``States will be able to enact more stringent
legislation if necessary after 8 years.''
That's what was said by the top Republican on the Banking Committee
on the floor of the House when a compromise was reached on this bill.
Let's stick to that compromise and support this amendment.
Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I think I made the case as clearly as it can be made. I
was told by everybody that certain California laws after 1996 were
protected. Now I find that they have been preempted. And I really do
not think it is fair that I find myself here on the floor today having
the laws of my State preempted and a manager's amendment that does not
attempt to correct it.
I suppose I believe that my ranking member is going to do everything
he can, I guess working in conference somewhere, to try and give back
the protections that we have in California. I have always maintained
that the Federal standard should be the floor. If any State would like
to protect its consumers more, who is the Federal Government to tell
them they cannot do it? That is wrong.
I do not buy the argument that it is inconvenient for some bank or
financial institution to have to deal with California, because
California has better consumer laws, and they would just rather be able
to deal with them the same way that they deal with everybody else.
I do not think it is fair, and I do not think we should use the
powers of our government to do that.
Let me just say this, that knowing that I was today that we were not
preempted, and this does not have anything to do with SB1, I am talking
about those laws that I referred to. Knowing that I was told that, I
would expect my colleagues, who have worked pretty well on both sides
of the aisle, to try and get a bill that everybody could support, that
you would at least represent to me that you are going to try and undo
the mistake. That you are going to try.
Mr. BACHUS. Mr. Chairman, will the gentlewoman yield?
Ms. WATERS. I yield to the gentleman from Alabama.
Mr. BACHUS. I will say this: Yes, there are provisions of California
law that were preempted, but they are provision where we established a
consumer protection on a national basis. And in almost every one of
these cases, we went beyond what most States do.
Ms. WATERS. Reclaiming my time, we have to compare it issue-by-issue
and then determine whether or not, in fact, you have done better or you
have done worse.
The CHAIRMAN. All time for debate on the amendment offered by the
gentlewoman from California (Ms. Waters) has expired.
The question is on the amendment offered by the gentlewoman from
California (Ms. Waters).
[[Page H8145]]
The amendment was rejected.
The CHAIRMAN. Are there any further amendments?
Mr. OXLEY. Mr. Chairman, I ask unanimous consent that debate on the
following amendments, and any amendments thereto, be limited to the
time specified equally divided and controlled by the proponent and
opponent as follows:
The amendments numbered 2, 5, 7, 9, and 10 in the Congressional
Record shall be debatable for 10 minutes;
The amendments numbered 1, 6, 11, 12, and 16 in the Congressional
Record shall be debatable for 20 minutes;
And the amendments numbered 15 and 4 in the Congressional Record
shall be debatable for 30 minutes.
The CHAIRMAN. Is there objection to the request of the gentleman from
Ohio?
Mr. SHERMAN. Reserving the right to object, Mr. Chairman, I thought
that the Lee-Sherman amendment was getting 40 minutes equally divided.
I could be wrong on that. What was the agreement?
Mr. OXLEY. Thirty minutes, Mr. Chairman.
Mr. SHERMAN. Mr. Chairman, would the gentleman mind having the Lee-
Sherman amendment given 40 minutes?
Mr. OXLEY. What number is that?
Mr. SHERMAN. Number 15.
Mr. OXLEY. Number 15? I would give it 35 minutes. How is that for a
compromise?
Mr. SHERMAN. That is a wonderful idea, Mr. Chairman.
Mr. OXLEY. Mr. Chairman, I amend my unanimous consent request to make
the amendment number 15 debatable for 35 minutes.
The CHAIRMAN. Is there objection to the request with the addition
that amendment number 15 be debatable for 35 minutes equally divided?
There was no objection.
The CHAIRMAN. Are there further amendments?
Amendment No. 15 Offered by Ms. Lee
Ms. LEE. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 15 offered by Ms. Lee:
Page 7, after line 24, insert the following new section:
SEC. 102. FINANCIAL PRIVACY EXCEPTIONS.
Section 624 of the Fair Credit Reporting Act (15 U.S.C.
1681t) is amended by adding at the end the following new
subsection:
``(e) Financial Privacy Exceptions.--Subsections (b) and
(c) shall not apply to the California Financial Information
Privacy Act (division 1.2 of the California Financial Code,
as in effect after June 30, 2004) or the law of any other
State that is similar to the California Financial Information
Privacy Act.''.
The CHAIRMAN. The gentlewoman from California (Ms. Lee) will be
recognized for 17\1/2\ minutes and a Member opposed will be recognized
for 17\1/2\ minutes.
The Chair recognizes the gentlwoman from California (Ms. Lee).
Ms. LEE. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, first, let me thank the gentleman from Ohio (Mr. Oxley)
and the ranking member, the gentleman from Massachusetts (Mr. Frank)
for their diligent work to really make this a bipartisan bill. Of
course, I cannot support it as long as it preempts California and that
is what it does.
I offer this amendment today on behalf of all Californians and all
Americans, really, who deserve and want to take back control of their
private financial information. And I want to thank my California
colleague, the gentleman from California (Mr. Sherman), the gentleman
from California (Mr. Farr), the gentlewoman from California (Ms.
Waters), the gentlewoman from Illinois (Ms. Schakowsky), the gentleman
from Massachusetts (Mr. Markey), and all of those who have been working
on this very, very important issue and this important amendment.
Mr. Chairman, our amendment would make a major step towards
reclaiming consumers' financial privacy by doing the following: First,
it protects California's recently enacted landmark Privacy Act; and,
secondly, it allows every State to enact financial privacy laws giving
consumers in those States similar protections to Californians, which,
of course, is the strongest in the Nation, if they so choose, only if
they so choose. For those of you who are not fortunate enough to hail
from the great State of California and may not be familiar with
California's new law, let me just provide a little bit of background.
What does the new privacy law do? It gives consumers the right to
stop the sharing of information by financial institutions, unless they
meet very stringent criteria. The law requires financial institutions
to obtain a consumer's affirmative consent before sharing information
with most third parties. It also provides standards for consumers to
receive clear notice of their rights.
Now, how did this groundbreaking law come about? Well, it was the
result of a long hard fight and it is a major effort by California
State Senators, Jackie Speier and John Burton. And I really want to
thank them for their tireless effort in working with the financial
institutions in California to come up with this arrangement, this
compromise, this law which really did result in resounding bipartisan
support for the bill SB1, which passed the California Senate by a vote
of 31 to 6 and passed the assembly by a vote of 76 to 1.
Yes, I also want to thank Governor Davis for really standing up for
California consumers by signing this bill. But it is very important, I
believe, to recognize the critical role California consumers played in
the fight for new and strong financial protections because in the end
it was this broad support and the very hard work of California
consumers that pushed the bill forward.
In fact, I want to cite a January California opinion poll to
demonstrate the overwhelming popularity for a strong financial
protection. Now, the poll found that 91 percent of individuals
supported a ballot initiative that will require a bank, credit card
company, insurance company or other financial institutions to notify a
consumer and to receive a customer's permission before selling any
financial information to any separate financial or nonfinancial
company. The support was strong regardless of party affiliation: 96
percent of Democrats, 88 percent of Republicans, 90 percent of
Independents. Clearly, financial privacy is not a partisan issue.
Now these groundbreaking, popular, hard-won protections which were
negotiated with our financial institutions in California are threatened
because of this bill before us today. Let us be clear, this bill does
preempt California law. And what does that mean? That means that
important California protections will just basically be wiped out. In
fact, it means that Californians will never see parts of the law that
was signed by the governor. And it means that the will of an
overwhelming majority of Californians will be overturned by what we are
doing today.
We cannot allow that to happen. We have an obligation to stop that
and this amendment would do exactly that. And just like we have an
obligation to stand up for all of our consumers today, we are standing
up for our California consumers. We have an obligation to stand up for
consumers, as I said, all across the country so that they have the
opportunity to protect and to control their intimate financial details.
{time} 1645
Consumers in California are no different than consumers everywhere
when it comes to their financial privacy. Strong protections are what
they seek and what they deserve.
I want to take a moment to address some of the inflated and really
irrational concerns that have been raised about our amendment. It will
not bring commerce to a grinding halt. It will not mean an end to
affordable mortgages, and it will not leave more minorities without
access to credit. It will not put an end to ATM machines, and it will
not ruin the credit system as we know it.
It will merely require banks and insurance companies and other
financial institutions to ask California consumers before they share
and sell their private information. It will merely allow consumers and
other States to benefit from similar protections in the future if they
determine that it makes sense for them.
Mr. Chairman, I reserve the balance of my time.
The CHAIRMAN. Does the gentleman from Ohio (Mr. Oxley) claim the time
in opposition?
[[Page H8146]]
Mr. OXLEY. Yes, Mr. Chairman.
The CHAIRMAN. The gentleman from Ohio (Mr. Oxley) is recognized.
Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I rise in opposition to the amendment and this really
strikes at the heart of what we are trying to do in this legislation to
provide national uniformity of our credit system. The Lee amendment
would destroy the national uniformity with respect of the ability of
the financial institutions and others to share information among
affiliated entities.
The Lee amendment does not affect only Californians. Would that be
the case, I would not be as particularly concerned, but by
grandfathering the California law with respect to affiliate sharing,
the Congress would actually abdicate its obligations by allowing
California to set the national standard with respect to affiliate
sharing. I suggest to my colleagues that that is the responsibility of
the national legislature, indeed the Congress.
In essence, many financial institutions will not be able to adhere to
multiple sets of rules with respect to affiliate sharing. Then what
happens? Some or many will simply adopt the California requirements as
the national standard, and ultimately, it becomes California setting
national standards, and while I have a great deal of respect for my
colleagues from California and the Golden State, I do not think it is a
responsible position for the Congress to abdicate that responsibility
to the Golden State.
So the question is not necessarily whether there will be a national
standard but, in fact, who will set it, and ultimately, the
Constitution provides the ability of the Congress to set those national
standards.
The Lee amendment also would allow any other State to adopt its own
laws with respect to affiliate sharing. Therefore, financial
institutions and consumers could find themselves attempting to
understand dozens of State laws pertaining to affiliate sharing. The
actions dealing with privacy in California should not impact the
Federal debate on FCRA, and this is important to understand. The
affiliate sharing provisions in the California law are preempted by the
existing provisions of FCRA today. So they will be essentially null and
void whether Congress reauthorizes the FCRA or whether it does not.
The understanding among all parties in California was that the
affiliate sharing provisions would be invalidated under the existing
FCRA national standard. The negotiations on the California law and the
shift of several companies positions in opposition to neutral was based
on opposition to a State-wide referendum and was part of the
negotiations that went on in the California legislature. That is not
unusual in today's making of laws in any particular State.
In short, grandfathering California law and future laws in other
States guts our national uniform standards and harms consumers across
the country, could cause an increase in interest rates, inability to
get credit, precisely the opposite of what we are trying to do in this
legislation. That is why this legislation passed 61 to 3 in the
Committee on Financial Services. That is why we have a broad base of
support for this legislation across the aisle, among all sections of
the country, why we have had strong leadership from both sides of the
aisle on this important legislation.
We do not need at this point to get in a situation where we have a
rush by other States to simply gut our national standards. That is not
what we are about in this body, and all of us who have supported this
legislation, who probably cosponsored and voted for it in committee and
sent letters, Dear Colleagues, out supporting this legislation need to
understand that this is a killer amendment to what we are trying to do
in the underlying legislation, and that is why this amendment should be
defeated.
Mr. Chairman, I reserve the balance of my time.
Ms. LEE. Mr. Chairman, I yield 5 minutes to the gentleman from
southern California (Mr. Sherman), cosponsor of this amendment.
Mr. SHERMAN. Mr. Chairman, I thank the chairman for arranging an
extra 5 minutes to debate this important amendment. It is our intention
to offer it, and then withdraw it at the end of this discussion, in the
hopes that these issues can be dealt with effectively in conference. By
withdrawing the amendment at the end of this discussion, we will save
the House at least 30 minutes as compared to a recorded vote, thus
giving my colleague a six-time return on his investment.
This is a good and necessary bill. We have an amazing credit system
in this country where a bank on the east coast will compete for the
opportunity to lend money to somebody on the west coast who they have
never met; even when none of the banks' employees knows anyone who
knows the borrower. Imagine that compared to where we were in this
country 100 years ago, when it took a personal relationship with a
banker to get a loan. This is an amazing system, and it can exist only
with national credit reporting that borrowers and lenders can rely upon
and only with a national system that regulates that national credit
reporting.
But in our effort to have national standards, which our friends on
the other side of the aisle have explained the importance of, we should
not reach the lowest common denominator. Instead, we need to look at
what the States have done to protect their consumers and try to have a
national standard that is at least as high, or at least addresses each
of the different consumer protection issues. So, this bill needs to be
compared to California law to see whether it achieves that, or whether
it might achieve it at the end of the conference.
There are two sets of consumer protections in California law. The
first is known as the pre-SB1, pre-Speier's bill protections. In this
area, we from California had been told that none of the California pre-
SB1 protections would be preempted. But in fact, they were. However,
the violence done by that preemption is perhaps not as great as some of
my colleagues have pointed out because in many of the cases where
California law was preempted, it was replaced by a national standard
that was just as good for consumers, even if slightly different in
form.
For example, there is the California requirement that consumer
reporting agencies must disclose the names and addresses of all sources
of information in the consumer report. That California law is preempted
but replaced with an even stronger Federal law that not only requires
that, but, (I thank the chairman for accepting my amendment in
committee), also requires that the phone numbers, as well as the
addresses, of those who provide that consumer information be provided
in the consumer report.
So it is important that in conference, we take a look at all the pre-
SB1 California provisions, make sure that whatever protections a
Federal law preempts, are replaced by equally strong consumer
protections.
In a few areas that is not the case, and I am confident that in
conference, with the advocacy of our ranking member, the gentleman from
Massachusetts (Mr. Frank) and with the chairman of the committee, we
will achieve that.
The second set of California Consuming Protections were given to us
by SB1, the Speier's bill, which was passed while this Congress was in
recess last month. There are several provisions of that bill that are
not preempted by Federal law and that will do an outstanding job of
protecting Californians, and I commend them to our committee and to the
State legislatures around the country. One of those (SBI) provisions,
however, would be preempted. That is what is called the opt-out
provision dealing with affiliate information sharing.
We are talking about a situation where a person goes to a bank,
provides the bank with their financial information, are the bank shares
it with their affiliated insurance company or their affiliated stock
brokerage company? Good business practice, as well as California law,
allows a consumer to instruct their financial institution not to share
their information with an affiliated company. I think that is smart
business. I commend Jackie Speier of California for writing it into
California law.
As we go to conference, hopefully this issue will be addressed. One
way to address it is the way Bank of America already addresses it
voluntarily, and this would be a compromise. That is to
[[Page H8147]]
say, that a consumer should be able to opt-out for purposes of
marketing. The consumer would be able to say, Bank, do not have your
insurance company call me. If we were able to get that, yes, California
consumers might lose a tiny bit, but 280 million Americans would gain
substantially.
I look forward to a conference that will assure consumers around this
country, and those of California, with enhaused protections.
Mr. OXLEY. Mr. Chairman, may I inquire as to the time left?
The CHAIRMAN. The gentleman from Ohio (Mr. Oxley) has 13 minutes
remaining. The gentlewoman from California (Ms. Lee) has 7 minutes
remaining.
Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Alabama (Mr. Bachus).
Mr. BACHUS. Mr. Chairman, Members are back in their office and they
are listening to this debate, and one of the things that they may or
may not have heard, but if they did, is that both gentlewomen from
California may have been misled on this legislation into thinking that
nothing in this law preempted California.
I, in fact, went back to the debate at the time that the gentlewoman
from California (Ms. Waters) offered a similar amendment to what is
being offered on the floor today, and I want to read to her just by way
of refreshing our memory, not to dispute what she says, and quote what
she said.
She said, ``I, in good faith, would not like to preempt the work of
the State of California, the legislators who have spent so much time.
Nor would I like to be on record preempting them with supporting this
legislation, when I know that we are going to have a ballot measure
that is going to be passed. The people of the State of California are
going to pass this ballot measure that will give them further
protections. I do not believe that a ballot measure should be preempted
here at the national level.''
She offered this amendment. It was defeated 56 to 6, and then as the
legislation passed out of the full committee, the gentlewoman from
California (Ms. Lee) and the gentlewoman from California (Ms. Waters)
joined the gentleman from Vermont (Mr. Sanders) and voted against the
whole thing because, in fact, it did preempt something in California.
What is it that it preempts?
The legislation that California just passed did three things. Number
one, it required opt-in for third party nonaffiliate sharing. Nothing
in this legislation changes that. It had new Gramm-Leach-Bliley privacy
notices. Nothing in this legislation affects that. There is only one
thing and one thing alone that this legislation ``preempts''
California, and that is the required opt-out for affiliate sharing, and
that is also the present law. So what was passed in California, as far
as the required opt-out for affiliate sharing, the citizens of
California did not get anything because the national law today preempts
that. It had no effect.
If our national standards expire January 1, yes, they would, but as
the gentleman from Ohio (Mr. Oxley) said, Gramm-Leach-Bliley, we are
going to address that next year and look at those affiliate sharing
things. In fact, the chairman of the committee in the Senate says he is
going to look at them, and I think that he probably will. We may
address them in conference, but we did not open up that debate. We did
not address it with our hearing.
Ms. LEE. Mr. Chairman, I yield 2 minutes to the gentleman from
Monterey, California (Mr. Farr), a real advocate for consumers, a great
leader.
Mr. FARR. Mr. Chairman, I thank the gentlewoman for yielding me the
time.
I rise in strong support of the Lee-Sherman amendment No. 15, which
protects the right of States to defend the privacy of their citizens.
As written, this bill would preemptively cancel out the effects of
California's SB1. I know it has been mentioned but remember,
California, one, is the leading financial State in the United States
and has the most number of consumers in the United States, and that
bill passed after an incredibly long debate in the legislature, and it
was supported by or went neutral by financial institutions who were
affected by it, had overwhelming consumer support and was voted out of
both Houses on a bipartisan fashion.
{time} 1700
So do not take the actions of California lightly. It is a Big
Business State, and it did a very remarkable thing by passing this
bill. What Members should do now is preempt it. It preempts SB1 but
also will nullify a number of existing identity theft laws.
The Credit Reporting Act states that it is a ceiling rather than a
floor. I think if you look at what we have done in other legislation in
this country where we set the floor in the areas of medical privacy,
wire tapping, cable records, video rental record, telemarketing,
financial records, and drivers records, Federal law allows the States
to provide stronger protections. Why not here?
The Gramm-Leach-Bliley Act explicitly provides for States to enact
laws for greater protection for the privacy of personal financial
information. If you believe in States' rights and the ability of States
to set standards to protect consumers, to protect Americans and their
families, then I urge my colleagues to vote ``yes'' on this very
important amendment.
Do not take the actions of California so lightly. It is a very
important, remarkable historical act that has been created there; and
we ought to allow California to proceed with it.
Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Delaware (Mr. Castle).
Mr. CASTLE. Mr. Chairman, I just think we really need to go back
historically in this discussion and take a look at what we were dealing
with. I actually hate to say it, but I remember what it was like back
before we dealt with uniform standards on credit back when we first
started this in 1970. Then in 1996 we went to pure uniformity.
I remember trying to get credit and being told you are going to have
to wait for a while before we can do that. I was not the only consumer.
Probably 100 percent of Americans or probably 98 or 99 percent were
being told they had to wait in order to establish whatever the credit
was. Every place you went it was handled separately or differently or
whatever.
Congress did something right. Congress did something extraordinarily
right when they passed the act initially and then went to the uniform
standards with the usurpation of some of the State laws in 1996. I
think that is one thing we simply do not want to back off of.
Regardless of what is in the California statute, California is the most
significant State we have in terms of people and in terms of financial
interests, but the bottom line is that to impose the California
standards basically on this country could be a problem.
I might also note another reason to vote against this amendment to
this legislation is that it states at the end of it: ``or the law of
any other State that is similar to the California Financial Information
Privacy Act.'' That is a damaging statement because I don't know how
you measure ``similar to.''
Other States could come in and try to do something that would upset
the uniformity of what we are doing at the Federal Government level.
What we have done now here in Washington is given every single
consumer in this country the opportunity to have a uniform plan so that
we know how to get information right away. And with the use of
technology that can be done. You can buy a car instantaneously, much
less establish credit of a lesser nature some place else.
I think California's attempt to impose restrictions in an area that
is completely, totally governed by the FCRA's uniform national
standards would be a tremendous error.
We had extensive hearings. I think we need to remember that, too, as
we make our decision on how to vote on this amendment. We had over 100
witnesses in very expensive hearings. The chairman and the subcommittee
chairman did a wonderful job working with the majority party and our
own majority party in terms of developing this legislation.
It did pass overwhelmingly in our committee as everybody understood
exactly what we are dealing with. In fact, at that committee another
member from California offered an amendment to sunset FCRA's uniform
national standards at the end of this
[[Page H8148]]
year. And during that debate, a specific appeal to give California the
ability to establish its own standards either through action by the
State legislature or statewide ballot initiative came up. That
amendment was defeated 56 to 6.
So, clearly, the individuals in this body who have looked at this
issue carefully understand that to undermine it by allowing States to
start to opt out and to have different provisions with respect to the
fair credit reporting that we have in the country would be an error.
I would encourage everybody in this body to look at this carefully
and to vote ``no'' on this amendment to make sure that we protect a
very good piece of legislation.
Ms. LEE. Mr. Chairman, I yield 2 minutes to the gentleman from
Massachusetts (Mr. Markey), a real leader in this Congress in the fight
for privacy rights.
Mr. MARKEY. Mr. Chairman, if the line of juris prudence that we are
now operating under is allowed to stand, then we are in a situation in
which there is no effective regulation of a bank, an insurance company,
or a securities firm sharing of a consumer's personal financial
information and no State regulation of such transactions.
In other words, we are left with a regulatory black hole in which
neither the Federal Government nor the States are regulating what is
going on within this affiliate structure where one part of a firm gets
it and then shares it with all of its affiliates, stockbrokers,
insurance, you name it. All of the family's secrets are then spread
throughout the country and to anyone that is affiliated with them as an
independent operator as well.
This is unacceptable. And it means we have no Federal standard for
consumer consent regarding affiliate sharing and preemption of any
State law dealing with the subject.
What the Lee amendment says is that we should close this black hole
so that if the Federal Government is unwilling or unable to effectively
address affiliate sharing, sharing it with all the companies which this
bank or insurance company or stock brokerage has, taking all their
secrets and starting to share it with all these other companies, then
the States can do so.
This amendment preserves not only California's privacy statute but
the laws of any other State that might want to give their people
protection so that their family's secrets are not made a product sold
to anyone with enough money to buy what it is that you are doing with
your financial life, your stock brokerage, your insurance information.
This is an important issue that our country faces: the privacy of
every American. It is why we fought the American Revolution.
Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume,
as I feel compelled to respond to my good friend from Massachusetts in
his somewhat overheated rhetoric regarding the revolution, which I know
started in his district. And I am also sorry that we did not hear the
famous story about his local banker, Mr. Wentworth. I am sure the other
Members, who were not on the committee, have not had an opportunity to
hear about it. I also am concerned that the gentleman was unable to
hear 100 witnesses in eight separate hearings chaired by our good
friend, the gentleman from Alabama.
Regulatory black hole? I would invite my good friend from
Massachusetts to read this piece of legislation. This is the strongest
piece of privacy legislation I would say ever passed, certainly in
recent Congresses. That is why we had 61 members of our committee vote
for the final product when it came to the final vote.
So I would say to my good friend, this really is crunch time as far
as whether we are going to have a uniform standard that can protect
consumers, can set out the rights that they have to protect their
privacy, to protect their ability to fight off the horrible crime of
identity theft, which affects 10 million Americans. That is what this
bill is all about.
And we are dedicated to this national standard that has had so much
success since the 1996 act. My friend from Delaware points it out so
well, of the progress that we have made. We simply cannot allow
ourselves to slip back and allow for States to start to move the goal
post and to essentially lower those standards so that we end up with
the system that we had before 1996, which would result in higher
interest rates, less access to credit, and longer waits for credit. We
do not want to go back to the bad old days; we want to move forward.
And so I would suggest to the Members that that is what this bill is
all about.
So, Mr. Chairman, I have great respect for my friend from
Massachusetts, and am actually going to yield some of my time to him,
since I miss him so much.
Mr. BACHUS. Mr. Chairman, will the gentleman yield for just a moment,
before he yields to the gentleman from Massachusetts, because I think
it probably has something to do with it.
Mr. OXLEY. I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, the original FCRA that the gentleman from
Ohio pointed out was passed in 1996. Right? Not 1776. Is that right?
I will admit to the gentleman from Massachusetts we took absolutely
no testimony on the American Revolution and none of our witnesses
actually tied that in. But I appreciate his input.
Mr. MARKEY. Mr. Chairman, will the gentleman yield?
Mr. OXLEY. I would be pleased to yield to my good friend, the
gentleman from Massachusetts.
Mr. MARKEY. Mr. Chairman, I think the gentleman from Alabama missed
the point in the discussion of the gentleman from Ohio where he changed
the metaphor from the American Revolution to moving the goal post,
which makes sense. As a graduate of Ohio State, you would try to switch
the form of the debate.
But, nonetheless, we have California moving the goal post further
away from the consumer, where in the minds of Californians, and most of
us who have dedicated our lives to privacy, the California section
moves it closer to the privacy objectives that ordinary families have
for their personal financial information. And what we are doing here is
essentially giving to the big financial institutions the ability to be
able to circumvent this increasing interest at the State level of
enhancing the rights of families to be able to protect their privacy.
I hope when we get to the conference committee that my cochairman of
the privacy caucus, Senator Shelby, who shares the passion on this
issue, will be in disagreement with my colleagues as to whether or not
we have reached in this bill the historic high point of where we should
be in 2003 in terms of the protection of the privacy of American
families.
Ms. LEE. Mr. Chairman, I yield 2 minutes to the gentlewoman from
California (Ms. Waters), whose diligence on this bill has identified
many errors we are trying to correct today.
Ms. WATERS. Mr. Chairman, I would like to thank the gentlewoman from
California (Ms. Lee) for all the work she has done on this most
important issue.
Mr. Chairman, if anybody had told me that I would be on the floor of
Congress arguing States' rights, facing off with a conservative from
Alabama, I would have told them they are crazy. But I am here today
arguing States' rights on one of the most important issues confronting
Americans today, and that is privacy.
Americans do not want people peeping into their bedrooms. They do not
want folks eavesdropping on their calls. And they sure do not want
financial institutions selling their personal and financial
information. And that is what this is all about. This bill would
require financial institutions to first obtain a consumer's explicit
consent before selling or sharing their personal or financial
information with affiliates or third-party companies for any purpose
other than to complete a transaction initiated by the consumer.
What right do we have as Federal lawmakers saying to the American
citizens that we do not care that they want their privacy protected;
that we are the Federal Government; that we do not care what the States
want because we have decided we want national standards for the
convenience of the financial institutions. We do not want the financial
institutions to have to be inconvenienced by having a State like
California have better consumer laws than they have in these national
standards.
I just do not believe the way this argument is going. I cannot
believe that
[[Page H8149]]
I am standing here defending the privacy rights and the States' rights
of Americans against the conservatives on the other side of the aisle.
{time} 1715
Mr. Chairman, it is just too much for me to absorb at this moment.
Let me say we have worked hard in California to have better consumer
laws, and I dare say if we do not get it on this side, we are going to
have to fight in the other body. But in the final analysis, we also
have the ballot in California. We will go to the ballot to deal with
this issue.
Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Alabama (Mr. Bachus).
Mr. BACHUS. Mr. Chairman, let me reiterate again, because I think it
is important that the gentlewoman from California (Ms. Waters) know
this, nothing in this legislation will, in any way, stop SB1, the
California bill, from requiring opt-in for third-party nonaffiliate
sharing, nothing. The gentlewoman mentioned third parties, this was all
about allowing institutions to share their privacy or their records
with third parties. That is not what this bill is about. This bill does
not authorize that. This bill does not permit that. There is nothing
that does that. There is nothing in this bill that stops the second
component of that new California law, and that is the privacy notices.
Nothing in this legislation stops that.
What this legislation does is it continues the present law. Gramm-
Leach-Bliley addressed the privacy issues, not fair credit reporting,
and we are going to address those issues in hearings next year. As the
gentleman from Massachusetts said, the chairman of the Senate has said
he may address affiliate sharing in the Senate. That is fine. We may
address it in conference. We did not address it in this bill.
We did not do anything not allowed by present law. Currently, the
present law does not preempt that.
Finally, we established a high bar wherever we established a bar. The
gentleman from California (Mr. Sherman) talked about one of the most
important things that they did in California, and that is the telephone
numbers, giving the telephone numbers. We put that in this bill over
strong industry opposition. It is in there. It is an important new
right that everyone in 50 States will have, and it is part of a
national standard.
Ms. LEE. Mr. Chairman, I yield myself the balance of my time.
When the Committee rises and we are in the full House, I intend to
submit for the Record a letter signed by 55 Democrats and Republicans
from California discussing the fact that this law, if passed, would
preempt California law, SB1.
Finally, let me just say I want to support this bill, but why would
any Representative from California support a bill that wipes out the
protections for California consumers that they have worked so hard for,
for so many years?
Mr. Chairman, I will include for the Record the list of financial
institutions in California that negotiated with our consumers and
remained neutral as this bill was signed into law by Governor Gray
Davis. I think it is very important that we protect California law, and
if other States want to support stronger measures, allow States to do
that. As the gentlewoman from California (Ms. Waters) said, this is a
States' rights issue. I think this amendment would allow States to
enact consumer protections that they deem necessary for their
consumers.
American Electronics Association
California Bankers Association
California Chamber of Commerce
California Financial Services Association
California Mortgage Bankers Association
Capital One
Citigroup
Countrywide Financial
Farmers Insurance
Fidelity Investments
Financial Services Privacy Coalition
Household International, Inc.
JP Morgan Chase
MBNA
Merrill Lynch
Personal Insurance Federation of California
Providian Financial
Securities Industry Association
State Farm Insurance
Toyota Motor Sales USA
Washington Mutual
Wells Fargo
Ms. ESHOO. Mr. Chairman, I rise today to urge my colleagues to vote
in favor of the Sherman-Lee Amendment to give consumers control over
their financial information.
Seven million Americans were victims last year of ID theft. Overall,
more than 33 million Americans have had their identities used by
someone else sometime since 1990.
The Department of Justice says ID theft is the nation's fastest
growing financial crime and the damages to consumers are becoming even
more significant.
Despite the fact that millions of Americans are victimized by
identity theft each year, Congress is getting ready to pass a bill that
blocks states from enacting tougher reforms.
The strongest financial privacy law in the nation passed in
California last month with overwhelming bipartisan support. This new
law, sponsored by State Senator Jackie Speier, allows consumers to stop
banks and other financial institutions from sharing confidential
account and transaction histories with most of their affiliated
companies.
As we consider this matter, I urge my colleagues to vote to bring
these protections to all Americans and make sure that any changes to
the Fair Credit Reporting Act truly benefit consumers.
Vote in favor of the Sherman-Lee Amendment which protects
California's financial privacy law and allow other states to enact
similar laws.
Ms. LEE. Mr. Chairman, I ask unanimous consent to withdraw this
amendment.
The CHAIRMAN. Is there objection to the request of the gentlewoman
from California?
There was no objection.
Amendment No. 12 Offered by Mr. Ney
Mr. NEY. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 12 offered by Mr. Ney:
Page 56, after line 16, insert the following new
subsection:
(e) Technical and Conforming Amendment.--Section 624(b) of
the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(3)) (as
amended by section 204(b) of this Act) is amended--
(1) by striking ``or'' at the end of paragraph (2); and
(2) by striking paragraph (3) and inserting the following
new paragraphs:
``(3) with respect to the form and content of any
disclosure required to be made under subsection (c), (d),
(e), or (f) of section 609, except that this paragraph shall
not apply--
``(A) with respect to sections 1785.10, 1785.16 and
1785.20.2 of the California Civil Code (as in effect on the
date of enactment of the Fair and Accurate Credit
Transactions Act of 2003) and section 1785.15 through section
1785.15.2 of such Code (as in effect on such date) and
``(B) with respect to section 12-14.3-104.3 of the Colorado
Revised Statutes (as in effect on the date of enactment of
the Fair and Accurate Credit Transactions Act of 2003); and
``(4) with respect to the frequency of any disclosure under
section 612(e), except that this paragraph shall not apply--
``(A) with respect to section 12-14.3-105(1)(d) of the
Colorado Revised Statutes (as in effect on the date of
enactment of the Fair and Accurate Credit Transactions Act of
2003);
``(B) with respect to section 10-1-393(29)(C) of the
Georgia Code (as in effect on the date of enactment of the
Fair and Accurate Credit Transactions Act of 2003);
``(C) with respect to section 1316.2-B of title 10 of the
Maine Revised Statutes (as in effect on the date of enactment
of the Fair and Accurate Credit Transactions Act of 2003);
``(D) with respect to sections 14-1209(a)(1) and 14-
1209(b)(1)(i) of the Commercial Law Article of the Code of
Maryland (as in effect on the date of enactment of the Fair
and Accurate Credit Transactions Act of 2003);
``(E) with respect to section 59(d) and section 59(e) of
chapter 93 of the General Laws of Massachusetts (as in effect
on the date of enactment of the Fair and Accurate Credit
Transactions Act of 2003);
``(F) with respect to section 56:11-37.10(a)(1) of the New
Jersey Revised Statutes (as in effect on the date of
enactment of the Fair and Accurate Credit Transactions Act of
2003); and
``(G) with respect to section 2480c(a)(1) of the Vermont
Statutes Annotated (as in effect on the date of enactment of
the Fair and Accurate Credit Transactions Act of 2003).''.
The CHAIRMAN. Pursuant to the order of the Committee of today, the
gentleman from Ohio (Mr. Ney) and the gentleman from Massachusetts (Mr.
Frank) each will control 10 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Ney).
Mr. NEY. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I commend the leadership shown by the gentleman from
Ohio (Mr. Oxley), the ranking member, the gentleman from Massachusetts
(Mr. Frank), and the subcommittee chairman, the gentleman from Alabama
(Mr. Bachus), and their staff who put this important bill together.
[[Page H8150]]
Reauthorizing the expiring provisions in the Fair Credit Reporting
Act had the potential to be extremely divisive, partisan and
contentious. However, their diligent efforts have created a solid piece
of legislation that was reported from the Committee on Financial
Services by an overwhelming bipartisan vote. I believe this legislation
is a testament to their hard work, and I give them credit for it.
Mr. Chairman, the Ney-Royce-Scott amendment is straightforward. It
will amend sections 501 and 502 of H.R. 2622 so they will be able to
set a national standard for consumer access to credit scores and credit
reports. As Members know, section 501 requires that all consumers have
the right to request a free copy of their credit report every year.
This is a common sense way to help combat identity theft and fraud
while helping Americans maintain a good credit rating.
Section 502 requires that consumers be able to request their credit
scores for a reasonable fee, and that when they apply for a mortgage,
the credit score their mortgage was based on be provided for a
reasonable fee also. I think this is not only good for home buyers, but
also a common sense way for consumers to be able to protect themselves
from fraud and protect their credit history.
These are just two of the many new consumer protections in the FACT
Act. However, neither sections 501 nor 502 is a national standard. As
it is currently drafted, H.R. 2622 is silent on whether States can add
requirements on top of those already in sections 501 and 502 of the
bill.
This could mean that consumers could be faced with new, confusing
duplicative and potentially burdensome disclosure requirements. I want
to make it clear I do not want to prevent States from being able to
protect their citizens. It has been proven time and again that the
States often provide the best laboratory for testing new ways to
protect consumers from fraud. The ability of States to be more nimble
and to be more responsive than the Federal Government has allowed them
to experiment with new ways to offer important consumer protections. In
fact, both sections 501 and 502 can find their roots in State law. For
example, section 502 is nearly word-for-word identical to law in
California. Likewise, seven States currently have different
requirements for making free credit reports available to consumers.
In recognition of the leadership States have shown, this amendment
allows those States that already have laws in place and which lenders
and credit bureaus already comply with to remain on the books, much
like in 1996 when we put in place national standards, but grandfathered
in laws that were already on the books.
However, much like in 1996, now that we are taking the lessons of
those laws and forming them into a national standard, we must take the
next step and make this standard truly national by preventing States
from enacting new and duplicative laws that could harm consumers in the
future. If we are not careful, consumers could end up getting multiple
disclosures with different numbers, explanations, and forms that are
highly confusing and even contradictory. Even worse, if sections 501
and 502 are not made a national standard, a patchwork of State laws
could end up raising costs for consumers, something none of us want to
see happen. That does not benefit consumers, which is why we need a
single national standard that provides consumers with one clear and
comprehensive disclosure. I believe sections 501 and 502 achieve that
goal.
I do not doubt that the new requirements in sections 501 and 502 will
be costly to industry. However, I think that most of us would agree
that those costs are worthwhile because of the protections they afford
consumers. That is one of the many trade-offs we have been forced to
consider when drafting this bill.
Mr. Chairman, as I mentioned a moment ago, if we allow States to add
more and more regulations on top of those already in H.R. 2622, then we
create the risk of adding so many burdens that ultimately the consumer
will see increased costs. That is why I urge my colleagues to support
uniform national standards for consumers by supporting this amendment.
We have an opportunity to make a strong statement about the need to
pass strong consumer protections while also making the statement that
those consumer protections must be uniform. I urge Members to vote on
the bipartisan Ney-Royce-Scott amendment, and I thank the cosponsors of
the amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as
I may consume.
Mr. Chairman, the crux of this is that by this amendment, the
gentleman from Ohio (Mr. Ney) seeks to extend preemption beyond where
it is under current law. I believe what we attempted to do, with a
great deal of success, we made a mistake with regard to California, was
to go forward with existing preemptions, to bring them forward, while
we added some consumer protections. It is not contested. This amendment
would preempt State activity that is not now preempted.
If we simply extended the Fair Credit Reporting Act without this
amendment, there are things that the States could do that this
amendment will prevent them from doing. Yes, the bill does make some
improvements with regard to credit scores and with regard to credit
reports. But as an example, and I recognize that the gentleman's
amendment does grandfather current State law that goes beyond what the
Federal law does, but I cite these two States not because they are
going to be preempted, but because they are an example of the kind of
actions that States have taken in the past that would be preempted in
the future.
Two of our more radical States have taken actions in the past that
would be preempted in the future, Colorado and Georgia. What this
amendment says is no other State should be as radical and as anti free
market and as populist as those two places, Colorado and Georgia.
Colorado and Georgia have both seen fit in their legislative processes
to extend to their citizens rights with regard to credit scores and
credit reports that no other State will be allowed to do if this
amendment is adopted.
Now credit scores, in particular, are very important. Members should
check with their own constituents and their own State governments.
Credit scoring is spreading. People are now finding that credit scoring
is being used not simply to give them a loan, but to give them
insurance. It has become a very controversial subject. Indeed, one of
the things that is in this bill, and I appreciate the chairman having
agreed with us that it should be there, is a study that we have
commissioned about the legitimacy of using credit scoring as a standard
in areas outside the granting of credit.
Should consumers be denied insurance because there was a past credit
problem if those consumers are being given insurance that does not
involve credit, insurance which needs to be paid for currently?
The gentleman's amendment would prevent States in the future from
going beyond where we are with regard to credit scoring. I agree there
is need for uniformity in some things, but insurance has always been a
State matter. I do not believe we need a national policy with regard to
the regulation of insurance. If we do, then we have to change a lot
more than simply preempt this because we have left insurance there.
I want to emphasize at this point, I understand this does not preempt
what is currently around in some States, but it says in an area that is
of growing concern to the States, credit scoring and that has
particular concern for members of ethnic minority communities, you may
not do anything in credit scoring that we have not done.
We do good things in this bill, but I do not think that it is
perfect. I do not think it explores and occupies the entire universe of
consumer protections. I believe there are things that the States could
do that would be relative to that State that would not impinge on
others.
I do not think the Colorado and Georgia rules interfere elsewhere.
For instance, in Colorado it says as I said it, that if you are going
to be treated negatively because there have been too many inquiries on
your credit report, the credit agency has to tell you that so you can
take some action to protect yourself. I think that is a reasonable
[[Page H8151]]
thing for a State to be able to do. I am glad Colorado has done it. I
do not think Colorado ought to be, as it would be under this amendment,
the last State to be able to make that protection. I hope that we will
stick with what I thought was the outlines of what we were agreeing to
here which was to preserve the existing preemptions, but not to extend
them.
Mr. Chairman, I reserve the balance of my time.
Mr. NEY. Mr. Chairman, I have no additional requests for time, and I
yield back the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself the balance
of my time.
Mr. Chairman, I want to just stress again, and I was reminded by one
of our able staff members, in the case of credit scoring, we have in
our legislation emulated what California did to some extent.
{time} 1730
I will be prepared to agree to a unanimous consent request that
subsequently no one will be allowed to mention California in this
debate. I would be ready to agree to that. But I will take my one last
reference to it and say we have benefited from what the States do. Even
if you believe in preemption, this is the wrong time in the evolution
of national policy to lock in a preemption with regard to credit
scoring. I warn Members, credit scoring is an explosive issue in some
areas. It is one which is being expanded beyond the granting of credit.
Do not vote for an amendment that will limit your State's ability to
respond to what consumers will feel is very important in the area of
credit scoring, and that is what this amendment would do. Even if you
believe in an ultimate preemption, it is at a very premature stage.
Credit scoring is a relatively new issue in terms of its being extended
to other areas. I do not see any reason why we should go beyond the
existing preemptions. Everyone has said they work very well. All the
studies have been of the existing preemptions.
I want to be very clear once again, this is a new preemption. This
would have the States lose the right that they now have, and have under
the Fair Credit Reporting Act, to protect their citizens, particularly
with regard to the area of credit scoring. I think it would be very
unwise. I urge the Members to stay with the committee position here and
defeat this amendment.
Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Ohio (Mr. Ney).
The question was taken; and the Chairman announced that the noes
appeared to have it.
Mr. NEY. Mr. Chairman, I demand a recorded vote.
The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings
on the amendment offered by the gentleman from Ohio (Mr. Ney) will be
postponed.
Amendment No. 11 Offered by Mr. Royce
Mr. ROYCE. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 11 offered by Mr. Royce:
Page 34, strike line 9 and all that follows through line
18, and insert the following new subparagraph:
``(A) In general.--A consumer may dispute directly with a
person the accuracy of information that is contained in a
consumer report on the consumer prepared by a consumer
reporting agency described in section 603(p), if--
``(i) the information was provided by the person to that
consumer reporting agency in accordance with paragraph
(1)(B);
``(ii) the consumer has disputed the accuracy of such
information with the consumer reporting agency that prepared
the consumer report pursuant to section 611;
``(iii) the consumer has received the results of the
investigation from the consumer reporting agency and has
requested that the consumer reporting agency reinvestigate
the results in accordance with section 611; and
``(iv) the results of the consumer reporting agency's
reinvestigation requested pursuant to (iii), as reported to
the consumer, do not resolve the dispute.''
Page 35, beginning on line 25, strike ``thereafter report
correct information to'' and insert ``notify''.
The CHAIRMAN. Pursuant to the order of the Committee of today, the
gentleman from California (Mr. Royce) and the gentleman from
Massachusetts (Mr. Frank) each will control 10 minutes.
The Chair recognizes the gentleman from California (Mr. Royce).
Mr. ROYCE. Mr. Chairman, I yield myself such time as I may consume. I
am offering this amendment today on behalf of myself and on behalf of
the gentleman from Pennsylvania (Mr. Toomey) and the gentleman from
Ohio (Mr. Tiberi). We are doing this to correct some of the serious
problems with the furnisher liability provision that was offered by the
committee's ranking member during the full committee markup. That
particular provision penalizes businesses who voluntarily provide the
information that makes our credit system work. The provision also turns
the existing system for correcting errors on its head with little
evidence that it will do anything to increase the accuracy of that
system. As the director of the FTC's Bureau of Consumer Protection
recently said, and I will quote these remarks, ``We don't want to
discourage voluntary reporting. Imposing too many obligations on the
furnishers could have that effect.''
As our chairman will recall, I believe, I along with several other
members of the committee raised these concerns about what we perceived
as these serious flaws. We were told by the other side of the aisle
that each of these problems we raised would be addressed before
consideration on the House floor. Unfortunately, we have not yet found
common ground. I am hopeful that we yet will; but the amendment that I
have filed here seeks to resolve the following key problems, and I want
to state these problems again so that we can focus on them.
First, the furnisher liability provision would allow the current
system to be circumvented, thereby flooding small- and medium-sized
credit grantors with unnecessary investigations; second, that provision
in the bill opens the door for credit repair clinics to subvert the
existing system by overwhelming furnishers who are ill prepared to
address these tactics. By overwhelming, we mean sending in tens of
thousands at one time. Last, that provision effectively doubles the
number of reinvestigations businesses would have to handle by
encouraging consumers to file in two different places at the same time,
because they would file both with the furnisher and they would file
with the credit bureau. In short, the provision would drive many
furnishers out of the voluntary system. That would reduce the integrity
and accuracy of our system.
The current dispute resolution system resolves the overwhelming
majority of disputes. It is only the very small number of unusual
problems that need specialized attention. Our amendment that we are
offering here preserves the existing system that works for so many
consumers today, but provides a new right for those infrequent
instances where the current system may not be sufficient. In short, our
amendment requires individuals to use the current investigation and
reinvestigation process through the bureaus. If the dispute is not
resolved, it would then allow individuals to take their credit bureau
dispute directly to the furnisher, and it compels the furnisher to
address it within 30 days under a threat of liability. I think this
approach addresses each of the concerns raised in the markup while
providing a new dispute resolution process for those individuals who
are not served through the current system.
Mr. Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as
I may consume.
This is a difficult issue. Let me say first, I very much agree with
the gentleman, and this is something that I want us to return to; and I
hope the chairman will do this. The credit repair agencies, I agree,
are a problem. Whatever system we have, I think there is an abusive
practice there. I think the gentleman is right to point to it. I myself
check my voice mail when I am down here. I called my Massachusetts
voice mail where my phone is listed, and I have a man telling me that
he has got my credit records in front of him and he can help me with my
debts. Since I pay up pretty regularly, I thought maybe this was
identity theft. I called him up, and it was one of these phoney credit
repair agencies. I called just to do that.
[[Page H8152]]
Let me say to the gentleman, I would be glad to work with him to do
legislation, because whatever we do, whatever remedy we give, we are
going to have the problem of credit repair. I think he has pointed to a
very good problem. I would just say to the gentleman that I look
forward to working with him. I cannot support this particular
amendment, but I would be glad to work with our chairman on dealing
with the credit repair issue.
Mr. ROYCE. Mr. Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from California.
Mr. ROYCE. I thank the gentleman for yielding. I look forward to
trying to work out a satisfactory compromise on this.
Mr. FRANK of Massachusetts. Mr. Chairman, I reserve the balance of my
time.
Mr. ROYCE. Mr. Chairman, I yield 3 minutes to the gentleman from
Alabama (Mr. Bachus).
Mr. BACHUS. Mr. Chairman, the problem that the gentleman from
California has identified is a real problem, and it does need a
solution. I want to reiterate what the gentleman from Massachusetts
said, because I think there is genuine support for finding a solution
to this. The last thing we want is for small- and middle-sized
businesses to be burdened down and not to report information to the
national credit reporting system because this could actually encourage
a situation in which people, knowing that they do not participate
because of a liability, target them, do business with them and knowing
that they are not part of the national credit reporting system. The
more information that goes into that system, the more valuable it is.
It is often these small- and middle-sized businesses that in fact do
not have the sophistication to collect bad debts or to write off bad
debts; and when they take a loss, it is more severe because it reflects
a greater percentage. So the very businesses that need to be not only
furnishing information but drawing information, we need to do
everything we can to encourage those retailers and others to
participate in the system.
I fear that unless somewhere in conference or in the Senate, and I
would say to the gentleman from California, we just simply have not
come up with the right language yet, but I know the gentleman from Ohio
is very committed to working on this issue. I want to commend the
gentleman from California for working on this issue and identifying it
and bringing it to our attention, along with the National Retail
Association that has made us very aware that this is a weakness of the
bill as it now exists.
Mr. ROYCE. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from
Virginia (Mr. Cantor).
Mr. CANTOR. Mr. Chairman, I thank the gentleman from California for
yielding me this time. First of all I would like to congratulate the
gentleman from Ohio (Mr. Oxley), the gentleman from Alabama (Mr.
Bachus), and the gentleman from Massachusetts (Mr. Frank) for producing
a bill that addresses an extremely important issue. I know that the
gentleman from Alabama has been quoted as saying that this is probably
one of the most important economic initiatives that we have got to
accomplish this session because it means so much to so many people.
I was reading some figures that say that if we are not going to go
forward, if we did not or had not gone forward with reauthorizing the
Fair Credit Reporting Act, it would result in a $20 billion loss in the
consumer spending area. Actually, as some of the dialogue here has
indicated, it would fall really on those that need help, who need
access to credit most. I am glad that we are here, and I congratulate
the chairman on his work.
I also am here to support the gentleman from California in trying to
search for a solution to a provision that is in the bill that would, as
has been said earlier, provide a disincentive for retailers to be a
part of this nationwide system that we have that affords individuals
access to credit. For the reasons stated before, the provision as it
stands now, which would force an individual seeking to correct
information on a credit report to go to the furnisher rather than the
parties currently doing it now in the credit bureaus, would provide
inefficiencies on the part of the furnishers; would, as I said earlier,
provide a disincentive for those furnishers to even offer the
information to the credit bureau; and ultimately, I think, would drive
up costs for everybody. As we know, the individuals who end up
suffering most are those who we are trying to help by affording the
least expensive access to credit.
Again, I congratulate the gentleman from California on his efforts
and want to offer help in any way that I can to hopefully resolve this
issue.
Mr. ROYCE. Mr. Chairman, I yield myself such time as I may consume.
I very much appreciate the support from the gentleman from Virginia.
I appreciate the offer from the ranking member to work toward a
resolution of this. In the spirit of cooperation, I am going to
withdraw this amendment. However, Mr. Chairman, I am going to ask for
your commitment that you will continue to work with me to ensure that
these problems are resolved before a final conference report comes back
to the House.
Mr. OXLEY. Mr. Chairman, will the gentleman yield?
Mr. ROYCE. I yield to the gentleman from Ohio.
Mr. OXLEY. Mr. Chairman, let me indicate my support for the
gentleman's purposes here. I think he makes an excellent point. We had
some good debate in the committee as well as here on the floor. As we
work toward, hopefully, the conference committee, I pledge my support
for trying to find an answer to this difficult problem.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. ROYCE. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Mr. Chairman, I would say, particularly
with regard to protecting legitimate merchants against abusive credit
repair companies, I would be glad to work with the gentleman.
Mr. ROYCE. Mr. Chairman, I ask unanimous consent to withdraw the
amendment.
The CHAIRMAN. Is there objection to the request of the gentleman from
California?
There was no objection.
{time} 1745
Amendment No. 4 Offered by Mr. Sanders
Mr. SANDERS. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 4 offered by Mr. Sanders:
Page 69, after line 5, insert the following new section
(and conform the table of contents accordingly):
SEC. 507. LIMITATION ON USE OF CONSUMER REPORTS.
(a) In General.--Section 604(d) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(d)) is amended to read as
follows:
``(d) Limitation on Use of Consumer Report.--No credit card
issuer may use any negative information contained in a
consumer report to increase any annual percentage rate
applicable to a credit card account, or to remove or increase
any introductory annual percentage rate of interest
applicable to such account, for reasons other than actions or
omissions of the card holder that are directly related to
such account or a late payment of 60 days or more on any
another credit card or debt.''.
(b) Technical and Conforming Amendment.--Section
604(a)(3)(F)(ii) of the Fair Credit Reporting Act (15 U.S.C.
1681b(a)(3)(F)(ii)) is amended by inserting ``subject to
subsection (d),'' before ``to review''.
The CHAIRMAN. Pursuant to the order of the committee of today, the
gentleman from Vermont (Mr. Sanders) and a Member opposed each will
control 15 minutes.
The Chair recognizes the gentleman from Vermont (Mr. Sanders).
Mr. SANDERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, this amendment is cosponsored by the gentlewoman from
California (Ms. Waters) and the gentlewoman from California (Ms. Lee).
It is also strongly supported by the Consumer Federation of America,
the Consumers Union, the Electronic Privacy Information Center, the
National Association of Consumer Advocates, the National Consumer Law
Center, the New York Public Interest Research Group, the Privacy Rights
Clearinghouse, the Privacy Times, and the U.S. Public Interest Research
Group. In other words, almost every major consumer organization in
America is supporting this amendment.
[[Page H8153]]
Mr. Chairman, this amendment deals with an issue which is of growing
concern to millions of credit card holders, and that is that,
increasingly, credit card companies are engaging in an outrageous bait
and switch practice which is costing consumers hundreds of millions of
dollars.
This, Mr. Chairman, is how the scam works: In our country today,
credit card companies are sending out over 5 billion solicitations a
year. Yes, that is right, 5 billion pieces of mail are being sent to
Americans every year in order to purchase this or that credit card.
Sometimes I think about half of those solicitations come to my kids.
Nonetheless, we are all receiving them. As we all know, these mailings
very often have bold headlines stating zero percent interests rates for
6 months, or 2.5 percent interest rates for a year, or whatever. We all
receive them.
Now, here, Mr. Chairman, is the scam and the bait and the switch. An
individual fills out the form and purchases the credit card, and month
after month after month, he or she pays the amount owed to the credit
card company faithfully and on time. In other words, the individual
consumer has fulfilled his or her end of the contract. But in the midst
of this, something strange happens. People are paying up on time, but
suddenly the interest rate skyrockets, despite the individual making
their payment on time.
Now, how can this happen? How can interest rates double or triple
when the individual has fulfilled the obligations of the credit card
company and made payments on time and never has gone over the credit
card limit?
Well, it happens because the credit card issuers, companies like
Chase Manhattan, Citigroup or Bank One, have decided all on their own
that the consumer has become a greater financial risk, even when that
consumer has in every instance paid their credit card bill on time.
What happens is the company obtains information from their customer's
credit report which indicates a late payment on another financial
transaction, another transaction. Perhaps the consumer might have been
late in paying a student loan or a mortgage payment or a medical bill,
and because the individual was late paying off another financial
transaction, having nothing to do with the credit card they have from
this company, the credit card company raises interest rates on their
transaction with that individual.
Even more outrageous, credit card companies are raising interest
rates when the consumer has never been late on any payment, and here is
the crime there: There is an illness in the family. Somebody borrows
money to pay off a medical bill; and, because they have committed that
terrible crime of borrowing money for a medical reason, interest rates
will go on the credit card, although they have never been late on any
payment.
That is absurd, that is unfair, and that is a rip-off of the American
people. At a time when the Federal Reserve has lowered short-term
interest rates 13 times, why do we have consumers in this country
paying 16 percent, 26 percent, even 29 percent APR on their credit
cards?
Furthermore, Mr. Chairman, the Committee on Financial Services and my
Subcommittee of Financial Institutions, of which I am the ranking
member on, have heard from a number of witnesses about the inaccuracies
of credit reports. According to freecreditinsight.com, over 70 percent
of credit reports contain errors, so the credit reporting agency makes
a mistake and your interest rates go zooming up.
By charging higher interest rates, the profits of credit card
companies skyrocket and consumers grow deeper and deeper into debt. Is
it any wonder why bankruptcies in the U.S. are now at an all time high,
increasing by 23 percent since 2000?
Mr. Chairman, this is the issue. This is a very simple issue. It is
an issue of fairness. If I take out a credit card and the credit card
company says to me you have to pay up at a certain time and your
interest rates are such-and-such, and I do that every single month,
that is what the deal should be. And, if I am late, if I go above the
amount of credit that I agreed to, well, I agree, they have a right to
penalize me. They do not have a right to double or triple my interest
rates when I pay my bills on time and because I took out a loan because
my wife might have been ill.
Mr. Chairman, Congress has a responsibility to stop the credit card
industry from ripping off consumers by this deceptive and unfair
practice. I urge my colleagues to vote for this amendment to restrict
the credit card interest rate bait and switch.
Specifically, this amendment would prohibit credit card issuers from
using negative information contained in their customers' credit
reports, such as a late payment on a student loan, a lower credit
score, a new mortgage or new loan to pay for medical emergency or an
error in a credit report, as a reason to double or triple credit card
interests rates.
Importantly, as part of a compromise worked out at the committee
level, this amendment has been crafted so that if a consumer is at
least 60 days delinquent on any other credit card or debt, the credit
card company could still use that information to increase the interest
rates of their customers.
Mr. Chairman, I reserve the balance of my time.
The CHAIRMAN. Who seeks to control time in opposition?
Mr. OXLEY. Mr. Chairman, I claim the time in opposition to the
Sanders amendment.
The CHAIRMAN. The gentleman from Ohio is recognized for 15 minutes.
Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, this amendment, first of all, was defeated on a
bipartisan vote of 44 to 22 in the Committee on Financial Services.
Chairman Greenspan has raised serious concerns about this amendment.
Let me quote, if I may, from a letter from Chairman Greenspan to the
gentleman from Delaware (Mr. Castle) who had requested the response
from the Fed, and specifically Chairman Greenspan, regarding the
amendment offered by the gentleman from Vermont.
He says in part, ``The information gathered by credit reporting
companies on the borrowing and payment experiences of consumers is a
cornerstone of the consumer credit system in this country. Experience
indicates that access to the information assembled by these companies
and credit evaluation systems based on that information have improved
the overall quality and reduced the cost of credit decisions while
expanding the availability of credit.''
He goes on to end in this way: ``In sum, in deciding whether to
restrict the use of certain information in credit evaluations, the
Congress should be aware that such restrictions are likely to diminish
the effectiveness of statistical systems that have played a significant
role in reducing the overall cost of credit and widening its
availability.''
So what we have here is the chairman of the Fed saying that the
Sanders amendment is going to have a chilling effect on the
availability of credit, and could drive up the cost of credit at the
same time, basically saying to those of us who are good credit risks,
we will be asked to pay for those who are less responsible in paying
back those credit card debts.
Now, the committee did adopt an amendment offered by the gentlewoman
from New York (Mrs. Maloney) that specifically addresses the issue
raised by the gentleman from Vermont. It requires any preapproved
credit card solicitation to disclose the credit card issuer's ability
to adjust the interest rate for reasons other than delinquencies on the
credit card account. The notice will educate the consumer and allow him
or her to act accordingly.
So in place of this rather draconian approach by the gentleman from
Vermont, we have the gentlewoman from New York's amendment, which is
part of this bill that we are debating now, adopted in the committee
unanimously, that would provide more information, more notice to the
consumer, to make certain that they are aware that, should a
delinquency occur, it is a possibility that the interest rate could go
up.
Essentially, this is an overkill amendment, and the committee found
by a two-to-one margin that indeed that was the case. Nothing has
changed from the time that the committee adopted the bill to today on
the floor.
So the amendment would clearly increase the cost, and probably
decrease
[[Page H8154]]
the availability of credit for credit card borrowers. Lenders must have
the ability to adjust the interest rate on a loan in order to
adequately price for that borrower's risk.
It seems obvious that those who are good credit risks are able to
obtain credit at lower costs. That is how our system works. If someone
who is a good credit risk suddenly imposes additional risk to the
lender, the lender should be able to adjust for this increased risk.
The amendment would prohibit a credit card issuer from doing this in
many circumstances, and what the likely impact of this Sanders
amendment would be lenders would be forced to offer credit card
accounts at higher interest rates in order to buffer against any
potential future risk that any borrower may present.
Frankly, for those of us, the vast majority of us, those who pay
their credit card bills monthly and are responsible, why should we be
faced with a potential for higher interest rates and less available on
that score? Adjusting the price of credit to match the level of risk
imposed by the customer is not a bait-and-switch tactic, it is simply
good, common sense, and such adjustments are already adequately
addressed by existing law, particularly in regard to the Maloney
amendment.
To that extent, I oppose the Sanders amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. SANDERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, my friend from Ohio just said why should people who pay
their bill on time every month be penalized? I agree with him. But as
the gentleman knows, right now people pay their bills on time every
single month and, despite that, they can see a doubling or tripling of
their interest rates, and that is precisely what we are trying to
prevent.
Mr. Chairman, I yield 2 minutes to the gentlewoman from California
(Ms. Lee).
Ms. LEE. Mr. Chairman, let me just thank the gentleman from Vermont
for his leadership on the committee and for bringing this amendment
today to the floor. But I must say that this is a very moderate
amendment, it is a very conservative amendment, and I was, quite
frankly, surprised he would go for it. But in the spirit of compromise,
he did. So, very seldom do I believe that something is better than
nothing, but I believe that this is such a fundamental injustice as it
relates to our consumers that I had to support this very modest
measure.
Quite frankly, a creditor should not be allowed to increase interest
rates if consumers are paying the debt according to the agreed upon
terms. They should not be allowed to raise interest rates based on
payment histories of another debt. That is just fundamentally wrong.
When individuals agree to a contract, when a consumer believes that
they are doing the right thing and paying their monthly payments, how
in the world can they get set up to fail? That is what this does.
{time} 1800
An interest rate that jumps from 7 percent to 29 percent, bankruptcy,
certainly, will follow if, in fact, this does not fit within the
consumer's financial scheme. And generally, the consumer has a
financial plan that they have to stick to in terms of payment schedules
of debts. And so a huge payment like this is wrong. It would make more
sense if the gentleman from Vermont (Mr. Sanders) had offered an
amendment to say what I just said earlier, that a creditor should never
be allowed to increase an interest rate on a debt if, in fact, the
consumer is paying that debt based upon the agreed-upon agreement. But
I understand how this place works, and I really thought that he had
enough support on the other side to at least get this very basic kind
of amendment passed, I would say to the gentleman. So I want him to
know that I support it. I thank him for bringing it to the floor. But
just know I think that sooner or later, we have to correct this
injustice.
Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Virginia (Mr. Cantor).
Mr. CANTOR. Mr. Chairman, I thank the chairman for yielding me this
time.
I rise in opposition to the Sanders amendment. I am listening to the
gentlewoman from California's remarks that we should not allow a credit
card company or a bank to alter one's interest rate on an extension of
credit based on that consumer's performance in the marketplace, but if
we look back to the beginning of the transaction to see how the credit
was extended to begin with, it was based on the overall credit picture.
And we have a nationwide credit access, information access system that
affords lenders the ability to know more about their risk. And by tying
the hands and essentially asking the credit card issuer and the lender
to ignore information that will impact their risk will end up
ultimately denying more credit to more people.
Mr. Chairman, we ought to let the marketplace work. We ought not go
in and try and micromanage someone's business. We have the laws in
place which require disclosure. There is the Maloney amendment that was
attached in committee which will ensure adequate notice if there is,
for some reason, the increase in the rate. Again, the end of the day is
we want to make sure as many people as possible have access to credit.
What this amendment will do, as the chairman has said, will raise
rates for everyone and will deny those who really need the credit
access to those funds.
Mr. SANDERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
California (Ms. Waters).
Ms. WATERS. Mr. Chairman, I rise in support of this amendment. Mr.
Chairman, I was hopeful that my friends on the opposite side of the
aisle would have the good sense not to oppose something like this. This
is so ridiculous. This is so ridiculous that they could absolutely
defend a credit card company increasing your interest rates, even
though you are paying your bills on time every month. You are paying
your bills on time, you have not missed a payment, but because you did
not pay Nordstrom's or Gap, and you may have a dispute with them, they
are going to raise your interest rates. Then, my friends on the
opposite side of the aisle will say, they have to do that; and if we do
not allow them to do that, that will have a chilling effect on credit.
Well, I think what one of my friends on this side of the aisle just
said to me makes a lot of sense. She said, you know, this is nothing
but a racket. You are defending a racket. You are defending a racket
that is exploiting the people for no good reason. They simply want to
make more money, and they can come up with any excuse, any way possible
to get more money, to gouge your constituents; and you would stand here
and argue that unless we allow them to gouge your constituents, you
will have a chilling effect on them being able to get some credit. Give
me a break. This is the greatest ripoff I have ever seen. And to add to
it that if you are paying your bills on time, you are not missing a
payment, and you go out and borrow some money because you may have a
situation where you need more money, they look at that and say, oh,
they went out and they borrowed some more money; I can use this, and I
can describe it as a credit risk. Up with the interest rates.
Oh, you are better legislators than that. You do not want to do that
to your consumers. You do not want to undermine them that way. You do
not want to have the dollars that they are working hard to earn pulled
out of their pockets in this racket.
Support the amendment. That is the decent thing to do.
Mr. OXLEY. Mr. Chairman, I am pleased to yield 3 minutes to the
gentleman from Delaware (Mr. Castle).
Mr. CASTLE. Mr. Chairman, I thank the chairman for yielding me this
time.
We had this discussion on this amendment before the Committee on
Financial Services, and it did not make a lot of sense then; and,
frankly, it does not make a lot of sense now, that we would even
consider this amendment.
Essentially, those who are issuing credit, particularly credit cards,
that is their business, that is their product, that is what they do.
And what they have to look to is the creditworthiness of any of us. We
probably all in this room and most people in this country today are
carrying some sort of credit card, and probably multiple credit cards
in the cases of most individuals. And that is based on one's ability to
be
[[Page H8155]]
able to pay their debts and be able to manage their accounts.
Obviously, the one account is not necessarily the whole answer. The
whole answer is exactly where you are financially. They make a decision
with respect to where you are in a circumstance, and they issue the
credit based on that. With the Maloney amendment, we have a
circumstance in which people will be informed that if, indeed, their
creditworthiness is challenged, they may have to pay higher interest
rates.
The chairman cited a letter which I received on July 22, 2003, from
Chairman Greenspan with respect to this issue, and I would just like to
read a little further from that beyond what he had read. He said,
``Consumers' performance on credit accounts as well as the number and
recency of certain types of inquiries to credit reporting companies are
credit criteria that are statistically associated with creditworthiness
in evaluative systems that are used for credit granting and pricing.
Records of consumers' usage of, and payment performance on, credit
accounts with other creditors are fundamental building blocks for
evaluations of creditworthiness. For example, where a creditor commits
to allow a consumer to make purchases or obtain cash advances from time
to time on a revolving line of credit, the consumer's performance on
other credit accounts can well presage the credit risk outlook for the
creditor's own account,'' and it goes on from there.
It is relatively simple. You are in a situation in which an
individual has taken credit based on the circumstances of their own
creditworthiness and then has gone out and established their
creditworthiness as not what it should be. There are problems or
circumstances. Frankly, the credit card companies and others dealing
with this do not want to have to do this if they can avoid it because
it is easier for them to deal with it on the levels on which it is
issued; but there are circumstances in which this happens, or perhaps
this discourages it from happening, that is your interest rates might
be increased.
So I think for all of these reasons, while this amendment sounds to
be well-intended, ultimately would be extremely counterproductive in
that I think a lot of the credit which is issued now, because people
realize that this may be an outlet in order to make sure that people do
not extend their credit otherwise, might in the future not be able to
be granted, simply because the credit issuers are going to say this
person has sort of a spotty history and yes, we would have done it if
we had known we could have increased the interest rate if necessary,
but in this circumstance we are not going to issue it. I think you are
going to find a lot of people who marginally might have been able to
receive credit before are not going to be able to receive it if this
amendment were to be adopted. So I encourage the defeat of the
amendment.
Board of Governors of the Federal Reserve System,
Washington, DC, July 22, 2003.
Hon. Michael N. Castle,
House of Representatives, Washington, DC.
Dear Congressman: This letter responds to your request of
July 18, 2003, seeking my views as to whether proposed
changes to the Fair Credit Reporting Act might affect the
pricing of credit based upon risk or might potentially bear
upon the safety and soundness of creditors. The proposed
amendments referred to in your letter would limit use in
credit evaluation systems of certain types of information,
such as information regarding the number of inquiries about
the consumer made to a credit reporting company, and would
also restrict consideration of other types of information,
such as information about the consumer's personal credit
experiences with other creditors in credit decisions that
involve the interest rate on an account.
The information gathered by credit reporting companies on
the borrowing and payment experiences of consumers is a
cornerstone of the consumer credit system in this country.
Experience indicates that access to the information assembled
by these companies and credit evaluation systems based on
that information have improved the overall quality and
reduced the cost of credit decisions while expanding the
availability of credit.
Credit evaluation systems rely on information to measure
the credit risk posed by current and prospective borrowers.
In the process of credit evaluation, creditors seek to use
information that helps them better distinguish between good
and bad credit risks. The information items that receive
positive and negative weights in credit evaluation systems
are those that have demonstrated statistical usefulness in
this process.
Consumers' performance on credit accounts as well as the
number and recency of certain types of inquiries to credit
reporting companies are credit criteria that are
statistically associated with creditworthiness in evaluative
systems that are used for credit granting and pricing.
Records of consumers' usage of, and payment performance on,
credit accounts with other creditors are fundamental building
blocks for evaluations of creditworthiness. For example,
where a creditor commits to allow a consumer to make
purchases or obtain cash advances from time to time on a
revolving line of credit, the consumer's performance on other
credit accounts can well presage the credit risk outlook for
the creditor's own account. Similarly, an upsurge in recent
inquiries could indicate that a borrow in financial distress
is seeking to gain access to more credit. Thus, restrictions
on the use of information about certain inquiries or
restrictions on considering the experience of consumers in
using their credit accounts will likely increase overall risk
in the credit system, potentially leading to higher levels of
default and higher prices for consumers. Even with higher
prices for credit, elevated levels of default may raise risk
levels for credit-granting institutions.
In sum, in deciding whether to restrict the use of certain
information in credit evaluations, the Congress should be
aware that such restrictions are likely to diminish the
effectiveness of statistical systems that have played a
significant role in reducing the overall costs of credit and
widening its availability.
I hope these comments are useful.
Sincerely,
Alan Greenspan.
Mr. SANDERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
New York (Mrs. Maloney), the famous author of the Maloney amendment.
Mrs. MALONEY. Mr. Chairman, I thank the gentleman for yielding me
this time, and I thank the gentleman from Alabama (Mr. Bachus) and the
gentleman from Ohio (Mr. Oxley) and the gentleman from Massachusetts
(Mr. Frank) for their extraordinary leadership on this important bill.
And I thank them for supporting my disclosure amendment which will
require conspicuous disclosure on credit reports and all credit papers
of pricing items and techniques and strategies.
But at the same time, I continue to be very, very troubled by some
pricing strategies used by certain companies, and I believe that the
Sanders amendment provides a needed reform.
The amendment affects how credit card companies use information from
credit reports to increase interest rates on their customers. This
devious practice is known as ``bait and switch,'' where a consumer's
low interest rate may be increased to 20 percent or higher simply
because they may have taken out a new mortgage or some other liability.
A recent New York Times article documented just such a case where an
Illinois doctor had his rate go from 6.2 percent to over 16 percent
when he took out a mortgage.
The amendment merely allows the consumer a window of 60 days before
their rates are increased, in the event they were on a vacation or got
sick or missed a payment or were experiencing some type of short-term
financial difficulty.
I have met with a large number of industry representatives on this
issue. Some company practices are already close to the standard of this
bill and some are not. Congress has established some minimum consumer
protections in other instances where necessary for the credit card
industry such as the $50 maximum liability for lost cards. I believe
this amendment sets a modest floor for the industry's practices above
which there is an abundance of room for different companies to take
different approaches and compete in the free market.
Mr. Chairman, I support this amendment.
Mr. OXLEY. Mr. Chairman, I am pleased to yield 2 minutes to the
gentlewoman from Florida (Ms. Ginny Brown-Waite).
Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, I am opposed to this
amendment for a couple of reasons. I too serve on the Committee on
Financial Services where this amendment was defeated by a two to one
margin. The Maloney compromise amendment which came up seemed
reasonable. It does give disclosure, and I think that that certainly is
a good warning to the consumer.
Mr. Chairman, one of the previous speakers mentioned a dispute, if
you are disputing an item on your credit card statement, that is
something that is put into abeyance, so that would not affect your
credit rating. If we were to pass this amendment, I believe that all
[[Page H8156]]
consumers would be harmed, because there would be higher costs of
credit nationwide.
When a credit card is issued, it is based upon a snapshot in time. As
the picture changes, obviously, we need to have the companies remain to
have that kind of flexibility that they have right now. This is really
an issue of credit risk and creditworthiness; and as various occasions
arise in one's life that they may be overextending themselves, then
certainly the credit card company deserves to have the right to make
those appropriate changes.
Mr. SANDERS. Mr. Chairman, I yield myself such time as I may consume.
The sides on this debate are very clear. One side are the credit card
companies and the very large banks who are making huge profits from
their consumers and, in some cases in our low-interest moment, right
now, who are charging 25 or 29 percent a year interest rates. In other
words, they are ripping off the American people.
On the other side of this debate and supporting this amendment, are
virtually every major consumer organization in America that is saying
enough is enough. If people pay their bills on time every month, they
should not see their interest rates double or triple. The chairman
mentioned that there was bipartisan opposition to my amendment. He was
right. But as he knows, there was bipartisan support for this
amendment, including the gentleman from Alabama (Mr. Bachus), who was
very articulate and supportive of this amendment as chairman of the
relevant subcommittee.
Let me simply conclude by saying this: the American people are sick
and tired of being ripped off by credit card companies. When they pay
their bills every month on time, they should not see their interest
rates soar. I would urge the Members of this body, in a bipartisan way,
to support the American consumer and pass the Sanders amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. OXLEY. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN pro tempore (Mr. Ryan of Wisconsin). The question is on
the amendment offered by the gentleman from Vermont (Mr. Sanders).
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Mr. SANDERS. Mr. Chairman, I demand a recorded vote.
The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Vermont (Mr.
Sanders) will be postponed.
Amendment No. 16 Offered by Mrs. Kelly
Mrs. KELLY. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 16 offered by Mrs. Kelly:
Page 44, after line 22, insert the following new
subsection:
(c) Regulatory Authority to Adjust Report Distribution
Schedules in Times of Request Spikes.--Section 621 of the
Fair Credit Reporting Act (15 U.S.C. 1681s) is amended by
inserting after subsection (g) (as added by section 702(e) of
this Act) the following new subsection:
``(h) Regulatory Authority to Adjust Report Distribution
Schedules in Times of Request Spikes.--
``(1) In general.--If the Federal Trade Commission and the
Board of Governors of the Federal Reserve System determine
that consumer reporting agencies have been temporarily
overwhelmed with requests for disclosures of consumer reports
under section 612(e) beyond their capacity to deliver such
reports in a timely fashion, the Commission and the Board, by
order, may implement such measures as the Commission and the
Board determine to be necessary for a limited time to regain
equilibrium between the ability of the agencies to disclose
consumer reports and consumers demands for such reports.
``(2) Protection for emergency and time-sensitive
requests.--In issuing any order under paragraph (1), the
Federal Trade Commission and the Board of Governors of the
Federal Reserve System shall ensure that, during the
effective period of any such order, creditors, other users,
and consumers continue to have access to consumer credit
reports on a time-sensitive basis for specific purposes, such
as home purchases or suspicions of identity theft.''.
The CHAIRMAN pro tempore. Pursuant to the order of the Committee of
today, the gentlewoman from New York (Mrs. Kelly) and a Member opposed
each will control 10 minutes.
The Chair recognizes the gentlewoman from New York (Mrs. Kelly).
Mrs. KELLY. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, while this bill contains good consumer protections, my
concern is that if free credit reports are extended to consumers, then
there will be an unquestionable strain on the system. Unfortunately,
the current system is not yet equipped to deal with overwhelming
requests for credit reports that may result from offering free credit
reports or any other extraordinary events. Consumers who have an
identified need to access their file could find their request lost in
an overburdened system. This will undoubtedly reduce service levels
that could otherwise be dedicated to helping consumers who do have a
concern about their files and need to have information quickly.
After holding several hearings on the issue of identity theft, my
concern is that large numbers of people simply looking for information
could result in a chaotic shock to the system that would be ripe then
for fraud and difficult to detect criminal behavior.
{time} 1815
In the full committee I offered an amendment to ensure consumers'
requests are accommodated by alleviating burdens on credit bureaus as
the new law is implemented. I am pleased we have included a lot of this
language in the manager's amendment, and as a result, the underlying
bill now directs regulators as they construct a system for
implementation to take into consideration potential spikes in the
volume of requests for first year of the legislation. It is a
tremendous first step, but I do not feel it is enough.
The amendment I am offering now builds on the manager's amendment and
simply gives regulators the authority to respond on a temporary basis
to the needs of consumers when credit bureaus are overwhelmed with
requests after the 1-year implementation.
If the regulators determine it is necessary to exercise this
authority, the amendment also explicitly states that their temporary
approach must maintain consumer access to credit reports for emergency
or time-sensitive requests. Including incidents of home purchases and
suspected identity theft. Without the flexibility that this amendment
provides, customer service may decline as credit bureaus become
overwhelmed with requests under extenuating circumstances. By giving
regulators the authority to mitigate in these instances, credit bureaus
would be able to devote time and attention that each request deserves.
I want to thank both the chairman and ranking member for including
some language in the manager's amendment on the first year of
implementation, but this amendment would complete that work. It is a
straightforward approach to a significant problem and I urge colleagues
to support the amendment that will benefit millions of Americans who
need prompt access to their credit reports.
Mr. Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I claim the time in
opposition to the amendment.
The gentlewoman correctly described what happened when the
gentlewoman raised this issue in committee and we had a discussion of
it and I agreed to the substance in the first year. And yes, in the
manager's amendment we have, I think, a very good version of the
amendment that she had introduced in committee because when you are
doing something like this, there is often a problem in the transition.
And the gentlewoman is correct that her initiative, we have managed the
problem of the transition, namely, we have given to the regulators, in
this case, primarily the Federal Trade Commission, with some
participation from the Federal Reserve, the ability to do it within the
first year.
But I could not agree to making that a permanent feature in the way
in which we now have because, for instance, some of the credit
reporting agencies might be responsible and gear up for this. I do not
want to reward those that might not do it. I think it is very
reasonable to say in the first year, and it is also the case when you
go from not having this right to having the right, yes, you can expect
there to be a slew of first-time requests. But
[[Page H8157]]
after the first year there is no reason to think that there is going to
be this kind of backlog and a reasonable company ought to be able to
manage that.
If something should turn out later down the road to be an
unanticipated problem, we have the capacity to deal with it, but I
think it would weaken this if we were now to say to the regulators, in
effect, on an ongoing basis, they could suspend this indefinitely,
suspend this right for a lot of people. So while I supported and was
glad to the 1-year transition issue, it does seem to me to go much
further and we had and this was a process of give and take, we had
agreed I thought on free credit reports as a basic rule. I must say
that on our side and in many other places, giving the regulators an
ongoing right to suspend what we have advertised as a new right beyond
the transition year is very troubling and I would find it very
difficult if this were to be included.
Mr. Chairman, I reserve the balance of my time.
Mrs. KELLY. Mr. Chairman, I yield 2 minutes to the gentlewoman from
Florida (Ms. Ginny Brown-Waite).
Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, serving on the
Committee on Financial Services has been a challenge at times and
certainly a great pleasure. And I want to thank the gentleman from Ohio
(Mr. Oxley) for his leadership in championing the bill that we have
before us.
The Kelly amendment, I believe, is a very worthwhile amendment. As
free credit reports are extended to consumers, there will be an
unquestionable strain on the system. Unfortunately, the system is not
yet equipped to deal with the overwhelming requests for credit reports.
It may result from offering free credit reports or other extraordinary
events that may occur as people begin to request these free credit
reports and overload the system.
Consumers who have identified the need to access their file will find
their requests lost in an overburdened system. That will reduce service
levels that could be dedicated to truly helping consumers who do have a
concern about their files.
Yes, there is language in the manager's amendment that directs
regulators as they construct a system for implementation to consider
potential spikes in the volume of requests for their first year of
implementation. The Kelly amendment, I believe, builds on this language
and simply gives regulators the authority to respond on a temporary
basis to the needs of consumers when credit bureaus are overwhelmed
with requests.
If the regulators determine it is necessary to exercise this
authority, the amendment also explicitly states that their temporary
approach must maintain consumer access to credit reports for emergency
or very time-sensitive requests, including instances of home purchases
and suspected identity theft. Without this flexibility that this
amendment offers, customer services will undoubtedly decline as credit
bureaus become overwhelmed with these requests. By giving regulators
the authority to mitigate in these instances, credit bureaus will be
able to devote better time and attention to those needing the requests.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 1 minute.
One point, I recognize there could be a spike problem in the
beginning. We should underline with regard to these requests, we are
talking here about the problem of sending it out. Nobody has to send
out a report that does not exist.
In other words, we are not imposing on the credit reporting agencies
the duty of compiling the report anew. And I think that is something we
ought to take into account. The question is simply whether after that
first year they will be flooded, and the request is to simply send a
report that exists. If no report exists, no obligation exists. And I do
not think that the problem after the first year at this point is going
to be so clearly a problem that we ought to write in this suspension. I
am prepared to look at it later, but I think it would be a serious
error at this point.
Mr. Chairman, I reserve the balance of my time.
Mrs. KELLY. Mr. Chairman, does the gentleman have any further
speakers on this issue?
Mr. FRANK of Massachusetts. Just myself to close, as we have the
right to do.
Mrs. KELLY. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I believe this is an important work that I think we
need to address before any conference report is finished. I think with
an agreement with our chairman and with an agreement, hopefully, that
was just stated by our ranking member, I think that I am willing to
hopefully work with him in the spirit of cooperativeness here on the
floor today.
Mrs. KELLY. Mr. Chairman, I ask unanimous consent to withdraw my
amendment.
Mr. FRANK of Massachusetts. Reserving the right to object, I would
point out to the gentlewoman, the last time she and I had this
conversation the result was a pretty good amendment to the manager's. I
think we have a pretty good track record of working together.
Mr. Chairman, I withdraw my reservation of objection.
The CHAIRMAN pro tempore (Mr. Ryan of Wisconsin). The amendment is
withdrawn.
Mr. EHLERS. Mr. Chairman, I move to strike the last word.
Mr. Chairman, I rise in order to enter into a colloquy with the
distinguished chairman of the Committee on Financial Service.
Mr. Chairman, constituents in my district have brought to my
attention a problem regarding the inability of certain people to obtain
a credit rating from a credit bureau, even when they are very
creditworthy. This is an extremely troublesome issue given the
importance of a credit rating in our society today. It is very
difficult to function without credit. From placing a deposit when
renting a car, to staying in a hotel to getting a mortgage for a home,
people rely on credit every day. Indeed, credit bureaus wield a great
deal of influence in this respect.
Unfortunately, the rules and formulas they apply can yield unjust and
nonsensical results. For example, visiting scholars at our colleges and
universities or other temporary workers from overseas who have good
credit in their home countries, often industrialized countries with
advanced credit and accounting systems, often cannot obtain credit when
coming to America. This prevents them from obtaining a credit card
which is so vital for proper functioning in this society.
As another example, one woman in my district worked overseas for
about 10 years during which time her credit cards expired and she
stopped transacting business with credit cards from America. Upon
returning she had a nearly $20,000 cash balance in a bank account but
she was unable to get a credit bureau to rate her. She could not get a
mortgage for a house, a credit card or even a retail store charge
account. Despite her many years of good credit rating, this lull in
credit usage eliminated her creditworthiness in the eyes of the number
crunchers at the credit bureaus.
At the same time, credit card companies turn around and grant credit
cards almost willy nilly to high school or college students with no
credit history at all. These kinds of situations are unfair given the
importance of a credit rating, good or bad, for so many financial
transactions. It just does not make sense in many situations that some
creditworthy people cannot get a credit rating at all despite having
adequate cash resources or a positive history in another country.
Mr. Chairman, I would appreciate the time and effort of you and the
committee to investigate whether a solution to these problems can be
found.
Mr. OXLEY. Mr. Chairman, will the gentleman yield?
Mr. EHLERS. I yield to the gentleman from Ohio.
Mr. OXLEY. Mr. Chairman, I understand the gentleman's concern and we
have had some discussion about it. I would be pleased to work with him
to explore what might be done to remedy these situations. It is
certainly unfortunate that under our current system some situations
like the ones you mentioned do arise preventing consumers, who are low
credit risks, from obtaining credit quickly.
I look forward to working with the gentleman from Michigan (Mr.
Ehlers) to see if we can address the legitimate concerns he raises.
Mr. EHLERS. Reclaiming my time, I thank the chairman for his
assistance
[[Page H8158]]
and I look forward to working with him and the Committee on Financial
Services on this important issue.
Amendment No. 1 Offered by Mr. Kanjorski
Mr. KANJORSKI. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Mr. Kanjorski:
Page 7, strike line 13 and all that follows through line 24
and insert the following (and conform the table of contents
accordingly):
SEC. 101. 9-YEAR EXTENSION OF UNIFORM NATIONAL CONSUMER
PROTECTION STANDARDS.
Paragraph (2) of section 624(d) of the Fair Credit
Reporting Act (15 U.S.C. 1681t(d)(2)) is amended to read as
follows:
``(2) shall not apply after December 31, 2012.''.
The CHAIRMAN pro tempore. Pursuant to the order of the Committee of
today, the gentleman from Pennsylvania (Mr. Kanjorski) and the
gentleman from Ohio (Mr. Oxley) each will control 10 minutes.
The Chair recognizes the gentleman from Pennsylvania (Mr. Kanjorski).
Mr. KANJORSKI. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, I strongly support the Fair and Accurate Credit
Transactions Act. Nevertheless, I believe that we should alter the
legislation to sunset the key elements of the bill at the end of 2012.
The gentlewoman from New York (Mrs. Maloney) also joins me in
sponsoring this pragmatic and reasonable amendment.
In June, I helped to introduce H.R. 2622 to extend the expiring
provisions of the Fair Credit Reporting Act and to improve consumer
protections. In my view, the 1996 amendments to create a national
credit reporting system have expanded access to credit, lowered the
price of credit, and accelerated decisions about getting credit. To
continue this record of achievement, we need to extend the expiring
provisions of this law before the end of the year.
While I support the FACT Act, I also continue to believe that we
should amend the bill to include a 9-year sunset. As currently drafted,
the legislation would permanently extend the seven expiring preemptions
of State law within the Fair Credit Reporting Act. In my view, we
should sunset the Uniformed National Consumer Protections Standards
contained in H.R. 2622 at the end of 2012, and the Kanjorski-Maloney
amendment accomplishes this narrow objective. Unlike current law, our
amendment would not specifically allow States to enact additional
credit reporting standards in the preempted areas after the 9-year
sunset.
In referring to the U.S. relationship with the Soviet Union, Ronald
Reagan once said that we should ``trust but verify.'' We have adopted a
similar approach with H.R. 2622. We should trust that the participants
in the credit reporting industry will continue to work to comply with
the law but verify that the consumers continue to have appropriate
protections with respect to their credit in years ahead.
Mr. Chairman, a sunset provision provides industry with incentive to
continue to work to advance the interest of consumers. Moreover,
without a sunset, we may well have trust until some major problem
causes chaos in the credit reporting industry and forces Congress to
revisit the issue in a haphazard way.
{time} 1830
Furthermore, a sunset provision will allow us to evaluate the
effectiveness of our credit-reporting programs and policies within a
predetermined time frame and force us to decide whether to alter them.
In fact, the sunset imposed by Congress in 1996 has allowed us today to
review in a methodical and systematic manner the success of the current
law and make necessary improvements to it to reflect changes in the
financial system.
Identity theft, for example, has dramatically increased in recent
years. Technology has also changed greatly in the last 7 years. Mr.
Chairman, the FACT Act before us today addresses both of these
developments. It, therefore, makes sense to ask the 112th Congress to
review and reconsider our work in the 108th Congress and make further
improvements to our credit reporting laws. A sunset at the end of 2012
provides sufficient time for industry to implement the reforms called
for in this bill, establishes sufficient surety for our financial
marketplace, and allows for new issues to arise on the public policy
landscape.
In closing, Mr. Chairman, I encourage my colleagues to make a good
bill even better by supporting the sensible and practical Kanjorski-
Maloney amendment to sunset H.R. 2622 at the end of 2012.
Mr. Chairman, I reserve the balance of my time.
Mr. OXLEY. Mr. Chairman, I yield 4 minutes to the gentleman from Ohio
(Mr. Tiberi).
Mr. TIBERI. Mr. Chairman, it is a pleasure to speak to this amendment
as well as to the legislation at hand. I am opposing the amendment. The
amendment obviously would eliminate the uniform standards established
by the FCRA in the future in 9 years.
Congress did something very good in 1996, and it did so voluntarily.
There was not anything about to expire with FCRA in 1996, and Congress
established a national uniform standard for FCRA in 1996 that
recognized, quite competently, that this was an experiment, an
experiment that should last and be tested over a 7-year period. That 7-
year period is coming to an end on January 1 of 2004.
Over 100 witnesses through eight hearings loudly, clearly told our
committee, Democrats and Republicans, that what we have had over the
last 7 years and what Congress did in 1996 was quite successful. It has
been successful for our economy, but, most importantly, successful for
American consumers.
We are now, as American consumers, leaders of the world as far as
credit goes, mortgage credit, consumer credit. And FCRA and the
exemptions, the eight exemptions did that.
What we do not want to do is do this again in 9 years because what we
have seen in the last 7 years and what was done in 1996 was done
correctly.
Now, ladies and gentlemen, the committee rejected this amendment. We
heard from, as I said, over 100 witnesses. Three of those witnesses
included the Federal Trade Commission chairman, Chairman Greenspan, and
Treasury Secretary Snow. They, too, believe this is the right way to go
and support this legislation in its current form.
Now, there has been discussion on the floor today about what has been
happening on the left coast and what has been happening in their
legislature and what has been happening with their Governor who is in
the process of being recalled. Well, this legislation is a great piece
of legislation. I am afraid that because of their action, this Congress
will be dealing with issues because of the California legislature in
years to come.
This legislation today and what has happened in the last month out
West demonstrate why this piece of legislation in its current form
without the current amendment being offered is the right way to go.
The arguments that Congress will not address or will not be able to
address, the problems or potential problems in the future without this
amendment are unfortunately baseless because Congress can address
issues pertaining to FCRA or issues pertaining to identity theft in 2
years, 3 years, 4 years, or 5 years.
Members of the House, the amendment is supported by some because they
hope that the national uniform provisions will expire.
The national standard is good for consumers. It is good for America.
This is a good bill drafted by the gentleman from Ohio (Chairman Oxley)
and the gentleman from Alabama (Mr. Bachus). I support the bill. I urge
my Members of the House and the Republican and Democrat side to reject
the amendment from my learned colleague.
I thank the Members of the House for supporting this bill.
Mr. KANJORSKI. Mr. Chairman, I yield such time as she may consume to
the gentlewoman from New York (Mrs. Maloney).
Mrs. MALONEY. Mr. Chairman, I thank the gentleman for yielding me
this time.
Mr. Chairman, I am very pleased to be an original cosponsor of the
Fair Credit and Reporting Act. Over the course of several months the
committee conducted comprehensive hearings and produced a balanced bill
that
[[Page H8159]]
preserves the national credit market and enhances consumer protections.
I do not think any reasonable person would question the fact that the
engine driving these improvements is the sunset provision put in the
original Fair Credit and Reporting Act in 1996 that expires at the end
of this year. Without the present sunset, consumers would not be
getting free credit reports or access to their scores as they will be
in this underlying bill.
Without the sunset, the Congress would not be forced to conduct
months of hearings on the fundamental questions of credit report
accuracy, identity theft, the privacy of medical records, and access to
credit reports. These are major, all-important new rights that the
underlying legislation grants to consumers that result directly from
the current sunset.
In offering this amendment today, the gentleman from Pennsylvania
(Mr. Kanjorski) and I seek to strike a balance. Nine years ensures that
the legislation will be revisited, but it grants the financial services
industry a prolonged period of time during which it will not have to be
concerned about major changes of law that will affect company
operations.
I applaud my colleague, the gentleman from Pennsylvania (Mr.
Kanjorski), for being consistent in his desire to sunset the programs
Congress creates. I think this approach is particularly important on
this issue and on the legislation before us tonight.
Nine years ago, the world was a very different place. Technology has
completely changed the manner our constituents access financial
services in that time, and things are likely to be just as different 9
years from now; and it is appropriate that Congress revisit this law at
that point.
For that reason and the others illustrated by my colleague, I deeply
and truly do believe that this amendment is a very important one, and I
strongly support it.
Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Alabama (Mr. Bachus).
Mr. BACHUS. Mr. Chairman, the gentleman from Ohio (Mr. Tiberi) spoke
in opposition to this amendment and I think basically said everything
that needed to be said on this particular amendment; and I think the
most important thing he said is that Congress has demonstrated, because
they have done it in the past, they are free to revisit and fine-tune
FCRA anytime they wish; and they did that in 1996, even though there
was not an impending deadline.
Far more important is what we learned in our hearing and how good the
national credit reporting system is to our Nation. I am not sure that
anybody disagrees with that, that anybody thinks that it ought to be
experimented with, that it ought to expire in 9 years. It is very good
for consumers. It has been particularly good in democratizing credit
and extending credit to middle- and low-income Americans; and to limit
that to 9 years, we do not do that with the Community Reinvestment Act.
We do not do that to the Equal Credit Opportunity Act. We do not do
that to our other acts which protect consumers, and this act is for the
benefit of consumers and it protects consumers.
Let me conclude by saying the gentleman from Ohio (Mr. Tiberi) is one
of our younger members of our committee, an outstanding member. It is
just one example of the many young members that we have on our
committee that have really had real input in this bill. I want to
commend all of them.
I will close by commending the gentleman from Ohio (Mr. Oxley) giving
me the opportunity to work on this bill, for making it a priority, for
realizing early that we needed multiple hearings. I would also like to
commend these people: the gentleman from Massachusetts (Mr. Frank), the
gentlewoman from Oregon (Ms. Hooley), the gentleman from Kansas (Mr.
Moore), the gentleman from Ohio (Mr. LaTourette), the gentlewoman from
Illinois (Mrs. Biggert), and other members of the committee.
Mr. KANJORSKI. Mr. Chairman, can I inquire as to the time remaining.
The CHAIRMAN pro tempore (Mr. Ryan of Wisconsin). The gentleman from
Pennsylvania has 3\1/2\ minutes remaining. The gentleman from Ohio (Mr.
Oxley) has 4\1/2\ minutes remaining.
Mr. KANJORSKI. Mr. Chairman, I yield myself such time as I may
consume. I do not think we need our 3\1/2\ minutes. I have no other
speakers, Mr. Chairman.
Mr. Chairman, I guess I want to first say one of the privileges of
serving in the House of Representatives is the opportunity to meet the
Members of Congress on the other side of the aisle, and one of the
Members of Congress that has been very instrumental in this bill is my
good friend, the gentleman from Alabama (Mr. Bachus); and he and I do
not agree on a lot of things philosophically, but he represents the
type of qualities that this House needs more of. So it has been such a
pleasure to see him cochair this subcommittee and accomplish the almost
unanimous consent of this committee on this piece of legislation, and
it goes a great deal to his innate abilities and his just Southern
gentlemanliness of how to accomplish a good piece of legislation. So I
want to compliment him.
I disagree on the proposition that it hurts to sunset things. I think
my colleague and I probably agree and have voted for sunset provisions.
I am probably on most of the committees I serve on known as the sunset
person. I like to sunset everything. The reason I like to sunset
everything is it forces the Congress of the United States to come back,
reevaluate, restudy and bring up to date needs that otherwise are not
driven by public recognition or by commonality in the public force to
cause legislation to be addressed.
In my opening remarks, I said that it is important that we trust
industry, and I think as a Member of my side of the aisle what I want
to say is that I have met with all of the interested parties in the
reporting industry and the financial industry, and I have found them
all working toward a common effort to increase credit, to increase
accessibility to credit, and increase efficiencies to benefit
consumers. So we have no disagreements on that.
Between now and 2012 there will be changes in technologies and
changes for needs, and in my opening remarks I also said I like the
idea of trust but verify. There will be some elements of the society
that want to take advantage or not comply with the act. It will give us
an opportunity to evaluate that and find out methods that we can reward
good practitioners of fair credit and at least bring into the limelight
bad practitioners of good credit.
I just do also want to take one moment to respond to my gentleman
friend from Ohio. He referred to the left coast, and I am not sure, was
he looking north or looking south because he may have been attacking my
hometown. I could be on the left coast if one is looking south.
The comment I want to make to my colleague is there is a fundamental
illogic in his argument. He said that the left coast is having this
recall and they are, and he seems to favor the recall. The recall
probably is an element of sunset provisions, that is, the opportunity
to require a revesting out there of an election of a Governor.
{time} 1845
So if my colleague is in favor of not having sunsetting and not
having recalling, then I suggest he talk to one of his fellow
colleagues on his side, because I think he brought this about with the
argument that the people should be protected with the right to recall.
I do not favor recall, but in the Congress I do favor a sunsetting
provision because it will give us the opportunity to reevaluate,
rejudge, and have oversight and correct some mistakes made in the
initial legislation. So I urge all my colleagues on the Republican
side, the Democratic side, and those that are Independent, in the
middle, to support this amendment.
Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume,
and in conclusion I would say to my good friend from Pennsylvania that
this is a philosophical difference. Clearly, he makes some interesting
arguments. The amendment was, in fact, rejected in the committee.
In fact, FCRA, as other Members have said on both sides of the aisle
today, has been a very successful piece of legislation. It has provided
consistency, reliability, certainty, and uniformity in our credit laws.
And that has had enormous consequences for our economy and for
consumers, as has been chronicled time and time again during the period
of this debate.
[[Page H8160]]
I would suggest that this act that we are now seeking to make
permanent has stood the test of time for 7 years, and it is now time
that we make this permanent so that credit agencies, people who get
credit, issuers, furnishers, everybody concerned knows what the rules
are, knows that those rules are effective and work well, and that they
will be permanent.
So I respectfully oppose the Kanjorski amendment.
Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN pro tempore (Mr. Ryan of Wisconsin). All time for debate
has expired. The question is on the amendment offered by the gentleman
from Pennsylvania (Mr. Kanjorski).
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Mr. KANJORSKI. Mr. Chairman, I demand a recorded vote.
The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Pennsylvania
(Mr. Kanjorski) will be postponed.
Amendment No. 3 Offered by Mr. Inslee
Mr. INSLEE. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Mr. Inslee:
Page 80, after line 5, add the following new title (and
conform the table of contents accordingly):
TITLE VIII--TECHNICAL CORRECTIONS
SEC. 801. AMENDMENTS RELATING TO SECTIONS 625 AND 626 OF THE
FAIR CREDIT REPORTING ACT.
(a) Section 625.--Section 625(h) of the Fair Credit
Reporting Act (15 U.S.C. 1681u(h)) is amended by striking
``Committee on Banking, Finance and Urban Affairs'' and
inserting ``Committee on Financial Services''.
(b) Section 626.--Section 626 of the Fair Credit Reporting
Act (15 U.S.C. 1681v) is amended--
(1) in subsection (b), by striking ``a supervisory official
designated by''; and
(2) by adding at the end the following new subsections:
``(f) Reports to the Congress.--On a semiannual basis, the
head of a Federal agency authorized to conduct investigations
of, or intelligence or counterintelligence activities or
analysis related to, international terrorism shall fully
inform the Permanent Select Committee on Intelligence and the
Committee on Financial Services of the House of
Representatives, and the Select Committee on Intelligence and
the Committee on Banking, Housing, and Urban Affairs of the
Senate concerning all requests made pursuant to subsections
(a).
``(g) Payment of fees.--A Federal agency authorized to
conduct investigations of, or intelligence or
counterintelligence activities or analysis related to,
international terrorism shall, subject to the availability of
appropriations, pay to the consumer reporting agency
assembling or providing report or information in accordance
with procedures established under this section a fee for
reimbursement for such costs as are reasonably necessary and
which have been directly incurred in searching, reproducing,
or transporting books, papers, records, or other data
required or requested to be produced under this section.''.
Mr. OXLEY. Mr. Chairman, I reserve a point of order.
Mr. INSLEE. Mr. Chairman, we have an amendment that will cure a
modest imperfection that occurred essentially due to the PATRIOT Act.
It is something that I think actually may have been an oversight, but
it is something we would like to take a shot at solving today.
Mr. Chairman, while the FBI for years has been allowed to have access
to our credit reports, we have wisely included certain conditions in
the law about the FBI being able to dial up and get access to citizens'
credit reports. There is a requirement that there be a sign-off by the
Director or someone appointed by the Director, and that there be a
report to Congress and that there be payment to the credit reporting
agency for the costs associated with sharing the information. These are
reasonable conditions and requirements for privacy concerns.
Unfortunately, when we adopted the PATRIOT Act, we did not include
those conditions, those privacy protections, when it applied to the
ability now for the Treasury Department and a host of other
investigatory agencies who can now essentially call up and get
citizens' reports. So our amendment would simply require the same
privacy protections that apply to the FBI's getting access to our
credit reports to other investigatory agencies.
We understand that there is a point of order raised on this, but we
have brought this to the Chair's attention; and we hope as this matter
moves along, the chairman will look for a way to solve this problem at
a later date as this legislation matures. It is very solvable, it needs
to be resolved, and it should not be controversial. So we hope that
that will occur.
Mr. Chairman, I ask unanimous consent to withdraw the amendment.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from Washington?
There was no objection.
The CHAIRMAN pro tempore. The amendment is withdrawn.
Amendment No. 6 Offered by Mr. Frank of Massachusetts
Mr. FRANK of Massachusetts. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 6 offered by Mr. Frank:
Page 44, strike lines 9 and 10 and insert ``Section 612 of
the''.
Page 44, beginning on line 14, strike ``described in
section 603(p)'' and insert ``that compiles and maintains
files on consumers on a nationwide or regional basis''.
Page 44, strike line 18 and all that follows through line
22.
The CHAIRMAN pro tempore. Pursuant to the order of the Committee of
today, the gentleman from Massachusetts (Mr. Frank) and a Member
opposed each will control 10 minutes.
The Chair recognizes the gentleman from Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 2 minutes.
Mr. Chairman, there has been a good deal of self-congratulation on
this bill, but some of it is not yet deserved. I hope after the
adoption of this amendment it will be.
We have congratulated ourselves on, among other things, providing
under this amendment for free copies once a year of credit reports to
consumers. Indeed, we had a colloquy with the gentleman from New York
about the flood that was going to happen; and at one point in
committee. Language was adopted which did provide all consumers with
free copies of all credit reports that might have been done on them.
Then an amendment was adopted in committee, and I wish it had not
been adopted, it was not by vote, it just happened, which substantially
limited it. So as of now, as the bill stands, if this amendment is not
adopted, consumers can get free copies of their credit reports,
consumers in general, from only one of the three major national credit
agencies. And that is a good thing, but there are an awful lot of
specialized credit agencies. There are regional credit agencies. Not as
many. Some that remain from previously. There are local credit
agencies. My amendment does not cover them; I leave them out. They had
been in the original bill, but I had agreed to a cutback. The cutback
went much further than I thought we had agreed to.
So what this amendment says is an individual should be able to get a
free copy of their credit report from the national specialized credit
agencies, and there are large numbers of national agencies. One of the
most important is the Medical Information Bureau, and I have spoken to
them. They have no objection to being in this requirement. They give
medical information, which would be relevant. There is also
ChoicePoint, CheckSystems, CLUE, and Landlords United. A lot of these
national specialized agencies have to do with landlord-tenant agencies.
So if this amendment does not pass, please do not try to take credit
for passing a bill that generally gives consumers a right to a free
credit report. It gives consumers a right to a limited pool of free
credit reports, those from the major national credit agencies. But a
large number of the agencies which compile credit on people will be
excluded from the bill, and I think that would be a severe error and a
misrepresentation.
Mr. Chairman, I reserve the balance of my time.
Mr. BAKER. Mr. Chairman, I claim the time in opposition.
The CHAIRMAN pro tempore. The gentleman from Louisiana (Mr. Baker) is
recognized for 10 minutes.
Mr. BAKER. Mr. Chairman, I yield myself such time as I may consume,
and I rise in opposition to the gentleman's amendment.
[[Page H8161]]
During the course of the committee deliberations, I was concerned
about the consequences of the mandatory credit report obligation on
those entities within communities which are basically small businesses.
The three principal national credit reporting entities are responsible
for in excess of 95 percent of all credit reporting activities,
financial in nature, within the country.
I offered an amendment in committee which I represented to the
gentleman that would affect what we deemed to be small reporting
agencies in nature, to which there was agreement in that principle. The
effect of the amendment, subject to further review, though it was not
the intent, was clearly to go beyond just the very small credit bureaus
in the way in which the amendment was constructed. I then understood,
by error, the intent of the amendment was better than I originally
thought.
Although I was aiming only at the very small credit bureaus, for
which it would be an economic disadvantage of some significance for
them to provide this level of free report and, furthermore, who are not
now required under law to provide a free credit report for this reason,
it also went to other entities, for example, MIB or other health-
related reporting entities under the broad definition of consumer
reporting enterprises that also required them to provide the free
credit report. By inadvertence, my amendment was a little broader in
scope than I thought, but in principle and effect I agree with the
consequences of my amendment.
I support the gentleman's view that the three large credit-reporting
entities, which conduct over 95 percent of the disclosure of financial
matters of consumers, should be subject to this now new one additional
reason for a provision of a free credit report. The adoption of this
amendment, however, if the House were to accept the gentleman's
position, would be to require all consumer-related reporting agencies,
even the smallest, to provide this free credit reporting information
even to their financial detriment.
Although there was some disagreement in the construct of the
amendment in the committee, I would still reserve my objection to the
gentleman's amendment; and I think it is a policy matter for the House
to determine whether we would accept any relief from the requirement
for the free credit report or would we accept the gentleman's position
to require all entities regardless of economic consequence to provide
the mandated credit report.
Mr. Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 1 minute and
would say first that the gentleman has correctly stated it. And,
frankly, I relied when that amendment was offered on what he now
concedes was a misinterpretation. That is not a good way to legislate.
And I am disappointed that the gentleman is going to try to keep the
advantage of that misunderstanding.
Secondly, it is inaccurate to say that this amendment that I am now
offering would cover everybody. I have agreed to exempt in this
amendment the local credit agencies. I am talking about the national
specialized ones. They are the primary difference between us.
The gentleman acknowledges and he explained an amendment that I did
not think and I guess he did not think covered people like MIB. We did
not object to it. It was not carefully read. We accepted the
description. He says through inadvertence it went too far. That
happens. But I think it is frankly inappropriate in terms of our
legislatively working together to insist on that, particularly since I
am not trying to restore the original language. I am excluding the
small ones.
Mr. Chairman, what this does is this covers the few regional ones,
but mostly it covers national specialized agencies which do not merit
the description of those who are too poor.
So I think, once again, if we reject this amendment, we have what the
gentleman concedes is an inadvertent amendment that was adopted that
excludes a number of agencies and we cannot say that it gives everybody
free credit reports.
Mr. Chairman, I reserve the balance of my time.
Mr. BAKER. Mr. Chairman, I yield myself 2 minutes.
I simply point out in fairness to the gentleman that the discussion
of regional reporting entities was not really a discussion point within
the committee discourse. My concern was the economic consequences on
the very small. And upon reflection of the impact of the amendment
addressing the question of regionals and economic concerns, the
arguments are the same.
I still feel that the exemption that I am attempting to preserve in
the bill is appropriate and understand the gentleman's philosophic view
that all of these enterprises at the regional level should be required
to provide the free report.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. BAKER. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Put aside the regionals. What about the
national specialized agencies, like MIB? This amendment could be
amended under the rules. An amendment could be offered to amend this, a
second degree amendment. Would the gentleman agree to exclude the
regionals and cover the specialized national ones?
Mr. BAKER. Mr. Chairman, reclaiming my time, let me suggest this to
the gentleman, in light of everyone here present and observing this. I
will be most happy not to repeat the same mistake I made at the
committee and agree with the gentleman that in fact a description and
analysis of the specialties does result in the view that they are large
enough and sufficient in scope; I will commit to work with the
gentleman going forward.
Mr. FRANK of Massachusetts. Where? This is the end of the bill.
Mr. BAKER. Well, it will likely be in conference, I would suggest,
because there will be no assurance that the bill we pass here will seek
Senate approval or uniformity with the Senate.
I would suggest to the gentleman that adopting here at the moment,
without having a full listing of those specialty organizations, would
be difficult for me to assess the effect. But I am not trying to
obstruct the gentleman's interest and believe that the bill as
constructed in its current form is appropriate.
Mr. Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 1 minute to
express my extreme disappointment.
I relied on an explanation the gentleman now acknowledges was
erroneous when this amendment was adopted. The gentleman says it goes
too far. I have offered to try to compromise. He now tells me that
after the bill has passed, he will work with me. That offer is worth
about as much as the explanation I got, apparently. And it may or may
not be a conferencable item. I do not know whether the Senate will have
any language in this.
So I must express my extreme disappointment. This is not conducive to
a cooperative working relationship, I must say to the gentleman from
Louisiana. We tried to do this through negotiations in the manager's
amendment; we have tried to repair this. And the gentleman has at every
point said, no, I won because there was a misunderstanding, and that is
it.
{time} 1900
Mr. Chairman, I cannot consider that to be a reasonable offer to work
together.
Mr. Chairman, I yield 3 minutes to the gentleman from New York (Mr.
Crowley).
Mr. CROWLEY. Mr. Chairman, I thank the gentleman from Massachusetts
(Mr. Frank) for yielding me this time.
Mr. Chairman, I rise in strong support of the Frank amendment. As we
have heard, the base bill would allow every American access to a free
annual consumer report upon request from the three national credit
reporting agencies, and I salute the provision, as does the ranking
member.
But as we all know, while the Fair Credit Reporting Act deals
primarily with credit-reporting agencies, the underlying statute we are
amending today through the FAIR Act deals with all consumer reporting
agencies. These include credit investigative medical tenant reporting
agencies, among many others.
Unfortunately, this bill inadvertently limits consumers to requesting
[[Page H8162]]
and reviewing only one free credit report annually from the three
national reporting agencies, meaning this bill does not permit
consumers to obtain free reports from hundreds of specialized national
consumer reporting agencies that compile information on consumers for
noncredit purposes.
This provision is necessary in order to correct this oversight and
ensure free annual consumer reports from all entities covered by the
Fair Credit Reporting Act, whether they be credit agencies or other
information-gathering agencies.
We need to ensure that this legislation lives up to the spirit of
what all of its supporters intended, including myself, that of allowing
Americans access to all consumer reports compiled on them by
information-reporting bureaus, not just credit reports, but medical
reports and other reports about people's personal information.
I do recognize that the Medical Information Bureau, which I have
worked closely with, for their agreement to provide these free annual
reports upon request, but even with this agreement, there are too many
information-gathering agencies which are exempt and will remain
unresponsive from these provisions without passage of this amendment.
These consumer-reporting agencies include but are not limited to
companies that compile consumer information relating to medical
records, employment background checks, tenant screening, driving
records, insurance claims, criminal records and check-writing history.
In fact, in recent years, it has become evident that two companies,
only two companies almost dictate which consumers can open checking
accounts based upon the reports and scores they provide to financial
institutions.
These information gatherers must be included under the obligation to
ensure free annual reports to individuals upon the consumer's request.
This will ensure greater accuracy and transparency, what I believe is
the basic goal of the underlying bill today.
Everyone should support this amendment. It does not change the bill,
but rather clarifies the intent of all of its supporters, of which I am
one. I urge my colleagues to support this amendment.
Mr. BAKER. Mr. Chairman, I yield myself 1 minute.
Mr. Chairman, I wish to address the view of the gentleman with regard
to the consequences of these determinations. The focus of the bill was
to provide those individuals without financial resources or for just
cause access to a credit report without having to pay for it.
In our negotiations or discussions about resolution of the matter, I
am willing and would support an amendment that would preserve that
right for those protected classes under the bill to have access to a
free credit report, regardless of the nature of that credit-reporting
entity.
What I did not want to require was a broad-based requirement for
either the specialty or the small business credit reporting agency to
be under a monetary obligation to provide all requesters a free credit
report. I think that is a fair position, given my concerns about the
economic impact on these business enterprises, and would be reluctant
not to provide that measure of equity to the regional reporting
agencies without understanding better the economic consequences.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the
gentlewoman from Oregon (Ms. Hooley).
Ms. HOOLEY of Oregon. Mr. Chairman, I rise in support of the Frank
amendment to the Fair Credit Reporting Act. One of the things that
happened in committee, and it is unfortunate because of a
misunderstanding, all of a sudden we are restricting these free credit
reports.
One of the big deals about passing this bill was that everyone got a
free credit report. The Frank amendment allows all consumers to obtain
a free annual credit report from any nationwide consumer reporting
agency. It eliminates the provision in the bill that restricts
consumers to getting their free annual credit report from just three
national consumer reporting agencies. The amendment also restores the
right of consumers who are unemployed or on public assistance or
believe they have been a victim of fraud to obtain a free credit report
from any consumer reporting agency. Right now they can get that from
all of the major credit reporting agencies. Under this bill, as it is
currently written without this amendment, they will be restricted. They
will only be able to get these free reports from local or regional
consumer reporting agencies.
I believe I speak for both sides of the aisle when I say it was never
the intention of the Committee on Financial Services to strip away
these rights that these disadvantaged groups have under current law,
and these groups are already entitled to a free credit report from the
national agencies. We should not be restricting access to credit
reports for the disadvantaged, while at the same time, giving the rest
of the Nation's consumers even more access to their credit information.
This amendment will restore the additional access to credit information
that these disadvantaged groups currently enjoy, and this amendment
should have been part of Fair Credit Transaction Act from day one.
Again, one of the primary intentions of this legislation was to
increase access to information for all Americans, and by supporting the
Frank amendment, we will be doing just that. I urge Members to vote yes
on the Frank amendment.
Mr. BAKER. Mr. Chairman, I yield 1 minute to the gentleman from Ohio
(Mr. Oxley).
Mr. OXLEY. Mr. Chairman, let me just say, having participated
obviously in the markup and listening to the debate on the floor, I
think all Members want to preserve the protected class. I do not think
that is really an issue. Also, I think there is some concern that very
small agencies ought to have some exemption from the free credit
report.
I would indicate to the gentleman from Massachusetts (Mr. Frank) my
efforts to try to solve that problem. I think it is going to be
impossible at this point in the process, but going forward,
particularly in conference, I have every reason to think that we can
come to a good conclusion. We all, I think, recognize that the
protected class should continue to have access to free credit reports,
as they always have had, as the gentlewoman from Oregon (Ms. Hooley) so
carefully pointed out.
The real issue is the exemptions of the small agencies that represent
approximately 10 percent of those credit reports. I do not think at the
end of the day the position of the gentleman from Massachusetts (Mr.
Frank) and the gentleman from Louisiana (Mr. Baker) are all that
different, and I would simply say that I would pledge my efforts
towards reaching a good conclusion towards both gentlemen's aims.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as
I may consume.
Mr. Chairman, I guess I must look pretty stupid to be told that
people are going to work with me at the end of the bill.
This process has been going on since we finished the markup. My staff
was negotiating with the staff of the majority. We offered all kinds of
things. We had the manager's amendment opportunity. This amendment was
filed last night. It was subject to secondary degree amendment. It
could have been changed.
The gentleman from Ohio (Mr. Oxley) said there is no real difference
between my position and the position of the gentleman from Louisiana.
Let me correct the gentleman, there is no difference between my
position and the position the gentleman from Louisiana explained when
the amendment was offered; but there is a big difference between my
position and what the law says if we pass this bill this way.
We talk about the protected classes, people who have been the victims
of fraud, people who are unemployed, if you pass this bill and defeat
this amendment, they will have less rights thanks to your work than
they have today. The amendment of the gentleman from Louisiana (Mr.
Baker), he said through inadvertence, took away their rights. Whatever
they use to take away their rights, whether it was inadvertence,
advertence, or anything else, they have lost their rights.
Now after saying no to a negotiation before, no to the manager's
amendment, and no to an amendment here, now the other side says we will
see you in conference. Let me make a commitment to the gentleman. If
you want to
[[Page H8163]]
use your majority to defeat this amendment, I probably cannot stop you;
but if this is not substantially repaired in conference, this
bipartisan consensus is coming to an end.
Mr. BAKER. Mr. Chairman, I yield myself such time as I may consume.
Let me return to the basis of the current law and what the effect of
the amendment would be if adopted. Today, any person who is the subject
of an adverse action, you get turned down, you have an absolute right
to a free credit report regardless of your economic status.
If you are a consumer who suspects fraudulent conduct regardless of
your economic status, you get a free credit report. If you are
unemployed, you get a free credit report. If you are subject to public
welfare, you get a free credit report. The amendment adopted I proposed
in committee does not, in any way, limit or affect those rights that
exist under current law. The bill as proposed without the amendment I
offered would have established one more level for a free credit report.
I was and am willing, as is the current law with regard to these
categories, to say that with regard to the one additional credit
report, that the protected classes may have access to that information
without charge. But it is not a correct view of the effect of the Baker
amendment as adopted to suggest that it rolls back current protections
and authorities of those desiring to get a free credit report. It would
with regard to the new right being adopted by passage of the Act. That
is the state of affairs if we defeat the Frank amendment, which I hope
the House will engage in; and again, renew the pledge to the gentleman,
despite his difficulties with the manner under which this has
proceeded, if we are fortunate enough to be on such a conference, to
work with the gentleman toward appropriate resolution, and would hope
the House would reject the Frank amendment.
Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN pro tempore (Mr. Culberson). The question is on the
amendment offered by the gentleman from Massachusetts (Mr. Frank).
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Mr. FRANK of Massachusetts. Mr. Chairman, I demand a recorded vote.
The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from
Massachusetts (Mr. Frank) will be postponed.
Amendment No. 9 Offered by Mrs. Tauscher
Mrs. TAUSCHER. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 9 offered by Mrs. Tauscher:
Page 69, after line 5, insert the following new section
(and conform the table of contents accordingly):
SEC. 510. REQUESTS BY CONSUMERS FOR REASONABLE PROCEDURES FOR
ESTABLISHING NEW CREDIT.
Section 615 of the Fair Credit Reporting Act (15 U.S.C.
1681m) is amended by inserting after subsection (e) (as added
by section 403 of this Act) the following new subsection:
``(f) Requests by Consumers for Reasonable Procedures for
Establishing New Credit.--
``(1) In general.--Any consumer may submit a request to a
consumer reporting agency that any person who uses a consumer
report of such consumer to establish a new credit plan in the
name of the consumer utilize reasonable policies and
procedures described in paragraph (4).
``(2) Placement in file.--Any consumer reporting agency
that receives a request from a consumer shall include the
request in the file of the consumer.
``(3) Notice to users.--No person who obtains any
information from a file of any consumer from a consumer
reporting agency that includes a request from the consumer
under this subsection may establish a new credit plan in the
name of the consumer for a person other than the consumer
without utilizing reasonable policies and procedures
described in paragraph (4).
``(4) Reasonable policies and procedures.--The notice
included by the consumer reporting agency pursuant to the
request of the consumer shall state that the consumer does
not authorize establishing any new credit plan in the name of
the consumer, unless the user utilizes reasonable policies
and procedures to form a reasonable belief that the user
knows the identity of the person for whom such new plan is
established, which may include obtaining authorization or
preauthorization of the consumer at a telephone number
designated by the consumer or by such other reasonable means
agreed to.''.
The CHAIRMAN pro tempore. Pursuant to the order of Committee of
today, the gentlewoman from California (Mrs. Tauscher) and a Member
opposed to the amendment each will control 5 minutes.
The Chair recognizes the gentlewoman from California (Mrs. Tauscher).
Mrs. TAUSCHER. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, I rise today to ask my colleagues to support a simple
amendment. Currently only consumers who can prove that they already
have been victims of identity theft can ask the credit industry to
confirm the identity of a person before issuing new credit accounts
under the consumer's name. My amendment would simply allow any consumer
the option to require the credit industry to use the reasonable
policies and procedures identification standards established in the
fraud alert provision. This amendment would give all consumers,
students, military, the elderly and families, a meaningful way to
protect their own personal credit records.
Proponents of this bill claim that the fraud alert provision creates
powerful consumer protection tools to prevent identity thieves from
opening accounts in their names. They fail to mention that the tools
are available only after one becomes a victim. Talk about closing the
barn door after the horse is out.
{time} 1915
The credit industry argues that the public needs education to learn
how to protect their data. While there are some precautions individuals
can take, individual consumers have little or no means to protect
themselves from the fastest-growing type of identification theft, theft
from poorly protected databases. Since 1990, 33 million Americans, or
one in six adults, have been victims of identity theft. This year
businesses will lose $4.2 billion to this crime, losses that will
ultimately be passed on to other customers. Earlier this year, the
major credit card companies confirmed that a hacker broke into their
systems and accessed 8 million credit card records. My amendment would
provide all consumers an option to proactively protect their personal
information against fraudulent use by identity thieves, organized crime
and terrorist organizations.
Mr. Chairman, I would like to ask the distinguished ranking member
from Massachusetts to work with me and the members of the committee
during conference to implement the spirit of my amendment in the final
report.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentlewoman yield?
Mrs. TAUSCHER. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Mr. Chairman, I thank the gentlewoman for
her spirit of cooperation. I think she is very much right on the
substance. We did have to try to work out a balance out of committee.
Some of us, as you recently saw, were more willing to stick to our
commitments than others; but I would say to the gentlewoman, I think
that in substance she has a very good idea and, yes, I would welcome
the chance to try to work with her in conference assuming that there is
something conferencable about this, as there may well be.
Mrs. TAUSCHER. I thank the gentleman.
Mr. Chairman, I ask unanimous consent to withdraw my amendment.
The CHAIRMAN pro tempore (Mr. Culberson). Is there objection to the
request of the gentlewoman from California?
There was no objection.
Sequential Votes Postponed in Committee of the Whole
The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII,
proceedings will now resume on those amendments on which further
proceedings were postponed in the following order: amendment No. 4
offered by the gentleman from Vermont (Mr. Sanders), amendment No. 1
offered by the gentleman from Pennsylvania (Mr. Kanjorski), amendment
No. 6 offered by the gentleman from Massachusetts (Mr. Frank), and
amendment No. 12 offered by the gentleman from Ohio (Mr. Ney).
The first electronic vote will be conducted as a 15-minute vote. The
remaining electronic votes in this series will be conducted as 5-minute
votes.
[[Page H8164]]
Amendment No. 4 Offered by Mr. Sanders
The CHAIRMAN pro tempore. The pending business is the demand for a
recorded vote on the amendment offered by the gentleman from Vermont
(Mr. Sanders) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The CHAIRMAN pro tempore. A recorded vote has been demanded.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 142,
noes 272, answered ``present'' 1, not voting 19, as follows:
[Roll No. 495]
AYES--142
Abercrombie
Ackerman
Aderholt
Bachus
Baldwin
Ballance
Barton (TX)
Becerra
Bereuter
Berman
Bishop (NY)
Blumenauer
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Carson (IN)
Clay
Conyers
Cooper
Costello
Cubin
Cummings
Davis (AL)
Davis (CA)
DeFazio
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Doyle
Duncan
Edwards
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Frost
Gonzalez
Green (TX)
Grijalva
Gutierrez
Harman
Hastings (FL)
Hinchey
Hoeffel
Honda
Hyde
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
Johnson, E. B.
Jones (NC)
Jones (OH)
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kleczka
Kucinich
LaHood
Lampson
Langevin
Lantos
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Lynch
Maloney
Matsui
McCarthy (MO)
McGovern
McNulty
Meehan
Meek (FL)
Menendez
Millender-McDonald
Miller, George
Mollohan
Moran (KS)
Moran (VA)
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Otter
Owens
Pallone
Pascrell
Pastor
Payne
Pomeroy
Rahall
Reyes
Rodriguez
Rogers (AL)
Rothman
Roybal-Allard
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanders
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Serrano
Shays
Sherman
Slaughter
Solis
Stark
Strickland
Taylor (MS)
Tierney
Udall (NM)
Van Hollen
Visclosky
Wamp
Waters
Watson
Watt
Waxman
Weiner
Weldon (PA)
Wexler
Whitfield
Wu
NOES--272
Akin
Alexander
Allen
Andrews
Baca
Baird
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Bass
Beauprez
Bell
Berkley
Berry
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boucher
Boyd
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardin
Cardoza
Carson (OK)
Carter
Case
Castle
Chabot
Chocola
Clyburn
Coble
Cole
Collins
Cox
Cramer
Crane
Crenshaw
Crowley
Culberson
Cunningham
Davis (FL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeGette
DeLay
DeMint
Diaz-Balart, L.
Diaz-Balart, M.
Dooley (CA)
Doolittle
Dreier
Dunn
Ehlers
Emanuel
Engel
English
Everett
Feeney
Ferguson
Flake
Fletcher
Foley
Forbes
Ford
Fossella
Frank (MA)
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Goode
Goodlatte
Gordon
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hefley
Hensarling
Herger
Hill
Hinojosa
Hobson
Holden
Hooley (OR)
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Inslee
Isakson
Israel
Issa
Istook
John
Johnson (CT)
Johnson (IL)
Johnson, Sam
Kanjorski
Keller
Kelly
Kennedy (MN)
Kind
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
Larsen (WA)
Latham
Leach
Lewis (CA)
Lewis (KY)
LoBiondo
Lucas (KY)
Lucas (OK)
Majette
Manzullo
Marshall
Matheson
McCarthy (NY)
McCollum
McCotter
McCrery
McHugh
McInnis
McIntyre
Meeks (NY)
Mica
Michaud
Miller (FL)
Miller (MI)
Miller (NC)
Miller, Gary
Moore
Murphy
Murtha
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Oxley
Paul
Pearce
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Price (NC)
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Royce
Ryan (WI)
Ryun (KS)
Sanchez, Loretta
Sandlin
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spratt
Stearns
Stenholm
Stupak
Sullivan
Sweeney
Tancredo
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thornberry
Tiahrt
Tiberi
Toomey
Towns
Turner (OH)
Turner (TX)
Upton
Velazquez
Vitter
Walden (OR)
Walsh
Weldon (FL)
Weller
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wynn
Young (AK)
Young (FL)
ANSWERED ``PRESENT''--1
Ruppersberger
NOT VOTING--19
Burton (IN)
Davis (IL)
Emerson
Gephardt
Hayworth
Hoekstra
Holt
Janklow
Linder
Lipinski
Markey
McDermott
McKeon
Pelosi
Pence
Rangel
Thompson (MS)
Udall (CO)
Woolsey
Announcement by the Chairman Pro Tempore
The CHAIRMAN pro tempore (Mr. Culberson) (during the vote). Members
are advised they have 2 minutes within which to record their vote.
{time} 1937
Messrs. CARDOZA, BARTLETT of Maryland, SANDLIN, CLYBURN, MICHAUD,
ENGEL and INSLEE changed their vote from ``aye'' to ``no.''
Mr. ADERHOLT and Mr. BECERRA changed their vote from ``no'' to
``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. HOLT. Mr. Chairman, I was unavoidably detained and failed to vote
on rollcall No. 495 (the Sanders amendment to the Fair and Accurate
Credit Transactions Act). Had I been present I would have voted
``aye.''
Amendment No. 1 Offered by Mr. Kanjorski
The CHAIRMAN pro tempore. The pending business is the demand for a
recorded vote on the amendment offered by the gentleman from
Pennsylvania (Mr. Kanjorski) on which further proceedings were
postponed and on which the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The CHAIRMAN pro tempore. A recorded vote has been demanded.
A recorded vote was ordered.
The CHAIRMAN pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 112,
noes 310, answered ``present'' 1, not voting 11, as follows:
[Roll No. 496]
AYES--112
Abercrombie
Ackerman
Baca
Baldwin
Barton (TX)
Becerra
Berkley
Berman
Bishop (NY)
Blumenauer
Brady (PA)
Capps
Capuano
Cardin
Conyers
Cummings
DeFazio
DeGette
Delahunt
DeLauro
Doggett
Doyle
Emanuel
Eshoo
Etheridge
Farr
Fattah
Filner
Flake
Frank (MA)
Grijalva
Harman
Hastings (FL)
Hefley
Hinojosa
Hoeffel
Holden
Holt
Honda
Inslee
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (CT)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larson (CT)
Lee
Lewis (GA)
Lofgren
Lowey
Lynch
Majette
Maloney
Markey
McCarthy (MO)
McDermott
McGovern
McNulty
Meehan
Millender-McDonald
Miller, George
Murtha
Nadler
Napolitano
Neal (MA)
Obey
Olver
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Price (NC)
Radanovich
Rahall
Rodriguez
Rothman
Roybal-Allard
Rush
Ryan (OH)
Sanchez, Linda T.
Sanders
Schakowsky
Scott (VA)
Sherman
Slaughter
Solis
Stark
Stupak
Taylor (MS)
Thompson (CA)
Tierney
Udall (NM)
Van Hollen
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Weiner
NOES--310
Aderholt
Akin
Alexander
Allen
Andrews
Bachus
Baird
Baker
Ballance
Ballenger
Barrett (SC)
Bartlett (MD)
Bass
Beauprez
Bell
Bereuter
Berry
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boucher
Boyd
Bradley (NH)
Brady (TX)
Brown (OH)
Brown (SC)
[[Page H8165]]
Brown, Corrine
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardoza
Carson (IN)
Carson (OK)
Carter
Case
Castle
Chabot
Chocola
Clay
Clyburn
Coble
Cole
Collins
Cooper
Costello
Cox
Cramer
Crane
Crenshaw
Crowley
Cubin
Culberson
Cunningham
Davis (AL)
Davis (CA)
Davis (FL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
DeMint
Deutsch
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Edwards
Ehlers
Engel
English
Evans
Everett
Feeney
Ferguson
Fletcher
Foley
Forbes
Ford
Fossella
Franks (AZ)
Frelinghuysen
Frost
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Gordon
Goss
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hensarling
Herger
Hill
Hinchey
Hobson
Hooley (OR)
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hyde
Isakson
Israel
Issa
Istook
Jenkins
John
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
Kilpatrick
Kind
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Larsen (WA)
Latham
LaTourette
Leach
Levin
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum
McCotter
McCrery
McHugh
McInnis
McIntyre
McKeon
Meek (FL)
Meeks (NY)
Menendez
Mica
Michaud
Miller (FL)
Miller (MI)
Miller (NC)
Miller, Gary
Mollohan
Moore
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Oberstar
Ortiz
Osborne
Ose
Otter
Oxley
Pearce
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Pryce (OH)
Putnam
Quinn
Ramstad
Regula
Rehberg
Renzi
Reyes
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Royce
Ryan (WI)
Ryun (KS)
Sabo
Sanchez, Loretta
Sandlin
Saxton
Schiff
Schrock
Scott (GA)
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spratt
Stearns
Stenholm
Strickland
Sullivan
Sweeney
Tancredo
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (MS)
Thornberry
Tiahrt
Tiberi
Toomey
Towns
Turner (OH)
Turner (TX)
Upton
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Wexler
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wu
Wynn
Young (AK)
Young (FL)
ANSWERED ``PRESENT''--1
Ruppersberger
NOT VOTING--11
Davis (IL)
Emerson
Gephardt
Hoekstra
Janklow
Lipinski
Pelosi
Pence
Rangel
Udall (CO)
Woolsey
Announcement by the Chairman Pro Tempore
The CHAIRMAN pro tempore (during the vote). Members are advised 2
minutes remain in this vote.
{time} 1944
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 6 Offered by Mr. Frank of Massachusetts
The CHAIRMAN pro tempore (Mr. Culberson). The pending business is the
demand for a recorded vote on the amendment offered by the gentleman
from Massachusetts (Mr. Frank) on which further proceedings were
postponed and on which the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The CHAIRMAN pro tempore. A recorded vote has been demanded.
A recorded vote was ordered.
The CHAIRMAN pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 235,
noes 186, answered ``present'' 1, not voting 12, as follows:
[Roll No. 497]
AYES--235
Abercrombie
Ackerman
Alexander
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Barton (TX)
Becerra
Bell
Berkley
Berman
Berry
Biggert
Bishop (GA)
Bishop (NY)
Blumenauer
Boehlert
Bono
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Burton (IN)
Buyer
Capps
Capuano
Cardin
Cardoza
Carson (IN)
Carson (OK)
Case
Clay
Clyburn
Coble
Conyers
Cooper
Costello
Cramer
Crowley
Culberson
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (TN)
Davis, Tom
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley (CA)
Doyle
Dreier
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gerlach
Gilchrest
Gonzalez
Gordon
Green (TX)
Grijalva
Gutierrez
Gutknecht
Hall
Harman
Hastings (FL)
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Isakson
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson (CT)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kirk
Kleczka
Kucinich
LaHood
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Leach
Lee
Levin
Lewis (GA)
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lynch
Majette
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McHugh
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Petri
Platts
Pomeroy
Price (NC)
Putnam
Quinn
Rahall
Reyes
Rodriguez
Ross
Rothman
Roybal-Allard
Royce
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Sensenbrenner
Serrano
Shaw
Sherman
Shimkus
Simmons
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stearns
Stenholm
Strickland
Stupak
Sweeney
Tanner
Tauscher
Taylor (MS)
Taylor (NC)
Terry
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Weldon (PA)
Wexler
Wicker
Wu
Wynn
NOES--186
Aderholt
Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Bass
Beauprez
Bereuter
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonilla
Bonner
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Calvert
Camp
Cannon
Cantor
Capito
Carter
Castle
Chabot
Chocola
Cole
Collins
Crane
Crenshaw
Cubin
Cunningham
Davis, Jo Ann
Deal (GA)
DeLay
DeMint
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Duncan
Dunn
Ehlers
English
Everett
Feeney
Ferguson
Flake
Fletcher
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gibbons
Gillmor
Gingrey
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hostettler
Houghton
Hulshof
Hunter
Hyde
Issa
Istook
Jenkins
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kline
Knollenberg
Kolbe
Latham
Lewis (CA)
Lewis (KY)
Linder
Lucas (OK)
Manzullo
McCotter
McCrery
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Peterson (PA)
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sessions
Shadegg
Shays
Sherwood
Shuster
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Sullivan
Tancredo
Tauzin
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weller
Whitfield
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
[[Page H8166]]
ANSWERED ``PRESENT''--1
Ruppersberger
NOT VOTING--12
Cox
Davis (IL)
Emerson
Gephardt
Hoekstra
Janklow
Lipinski
Pelosi
Pence
Rangel
Udall (CO)
Woolsey
Announcement by the Chairman Pro Tempore
The CHAIRMAN pro tempore (during the vote). Members are advised there
are 2 minutes remaining on this vote.
{time} 1953
Messrs. DREIER, PETRI, TERRY, BURTON of Indiana, KIRK, SHIMKUS,
LoBIONDO, and Mrs. BONO changed their vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Amendment No. 12 Offered by Mr. Ney
The CHAIRMAN pro tempore. The pending business is the demand for a
recorded vote on the amendment offered by the gentleman from Ohio (Mr.
Ney) on which further proceedings were postponed and on which the noes
prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The CHAIRMAN pro tempore. A recorded vote has been demanded.
A recorded vote was ordered.
The CHAIRMAN pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 233,
noes 189, answered ``present'' 1, not voting 11, as follows:
[Roll No. 498]
AYES--233
Abercrombie
Aderholt
Akin
Allen
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boucher
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Cannon
Cantor
Capito
Carter
Case
Castle
Chabot
Chocola
Coble
Cole
Collins
Cooper
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis (AL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
DeMint
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Doolittle
Dreier
Dunn
Edwards
Ehlers
English
Etheridge
Everett
Feeney
Ferguson
Fletcher
Foley
Forbes
Ford
Fossella
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gordon
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Harman
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hensarling
Herger
Hobson
Holden
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
Marshall
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Michaud
Miller (MI)
Miller, Gary
Mollohan
Moran (KS)
Moran (VA)
Murphy
Nethercutt
Neugebauer
Ney
Northup
Nunes
Nussle
Osborne
Ose
Oxley
Pearce
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Rahall
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Sandlin
Saxton
Schrock
Scott (GA)
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Stenholm
Strickland
Sullivan
Sweeney
Tanner
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Upton
Vitter
Walden (OR)
Walsh
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NOES--189
Ackerman
Alexander
Andrews
Baca
Baird
Baldwin
Ballance
Barton (TX)
Becerra
Bell
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Camp
Capps
Capuano
Cardin
Cardoza
Carson (IN)
Carson (OK)
Clay
Clyburn
Conyers
Costello
Crowley
Cummings
Davis (CA)
Davis (FL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dingell
Doggett
Dooley (CA)
Doyle
Duncan
Emanuel
Engel
Eshoo
Evans
Farr
Fattah
Filner
Flake
Frank (MA)
Franks (AZ)
Frelinghuysen
Frost
Gonzalez
Goode
Goodlatte
Green (TX)
Grijalva
Gutierrez
Hall
Hastings (FL)
Hefley
Hill
Hinchey
Hinojosa
Hoeffel
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kingston
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lofgren
Lowey
Lynch
Majette
Maloney
Markey
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller (FL)
Miller (NC)
Miller, George
Moore
Murtha
Musgrave
Myrick
Nadler
Napolitano
Neal (MA)
Norwood
Oberstar
Obey
Olver
Ortiz
Otter
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Peterson (MN)
Price (NC)
Reyes
Rodriguez
Ross
Rothman
Roybal-Allard
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Schakowsky
Schiff
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stupak
Tancredo
Tauscher
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wamp
Waters
Watson
Watt
Waxman
Weiner
Weldon (FL)
Wexler
Wu
Wynn
ANSWERED ``PRESENT''--1
Ruppersberger
NOT VOTING--11
Davis (IL)
Emerson
Gephardt
Hoekstra
Janklow
Lipinski
Pelosi
Pence
Rangel
Udall (CO)
Woolsey
Announcement by the Chairman Pro Tempore
The CHAIRMAN pro tempore (Mr. Culberson) (during the vote). Members
are advised there are 2 minutes in which to record their votes.
{time} 2001
Mr. ROHRABACHER changed his vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
The CHAIRMAN pro tempore. Are there any other amendments?
If not, the question is on the committee amendment in the nature of a
substitute, as amended.
The committee amendment in the nature of a substitute, as amended,
was agreed to.
The CHAIRMAN pro tempore. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Hastings of Washington) having assumed the chair, Mr. Culberson,
Chairman pro tempore of the Committee of the Whole House on the State
of the Union, reported that that Committee, having had under
consideration the bill (H.R. 2622) to amend the Fair Credit Reporting
Act, to prevent identity theft, improve resolution of consumer
disputes, improve the accuracy of consumer records, make improvements
in the use of, and consumer access to, credit information, and for
other purposes, pursuant to House Resolution 360, he reported the bill
back to the House with an amendment adopted by the Committee of the
Whole.
Mr. SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment to the Committee
amendment in the nature of a substitute adopted by the Committee of the
Whole? If not, the question is on the amendment.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Mr. SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. OXLEY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 392,
nays 30,
[[Page H8167]]
answered ``present'' 1, not voting 11, as follows:
[Roll No. 499]
YEAS--392
Abercrombie
Ackerman
Akin
Alexander
Allen
Andrews
Baca
Bachus
Baird
Baker
Baldwin
Ballance
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Becerra
Bell
Bereuter
Berkley
Berry
Biggert
Bilirakis
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blackburn
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boucher
Boyd
Bradley (NH)
Brady (PA)
Brady (TX)
Brown (OH)
Brown (SC)
Brown, Corrine
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Capps
Capuano
Cardin
Cardoza
Carson (IN)
Carson (OK)
Carter
Case
Castle
Chabot
Chocola
Clay
Clyburn
Coble
Cole
Collins
Cooper
Costello
Cox
Cramer
Crane
Crenshaw
Crowley
Cubin
Culberson
Cummings
Cunningham
Davis (AL)
Davis (FL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeGette
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Dooley (CA)
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Emanuel
Engel
English
Etheridge
Evans
Everett
Fattah
Feeney
Ferguson
Fletcher
Foley
Forbes
Ford
Fossella
Frank (MA)
Franks (AZ)
Frelinghuysen
Frost
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Gordon
Goss
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Grijalva
Gutierrez
Gutknecht
Hall
Harris
Hart
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hill
Hinchey
Hinojosa
Hobson
Hoeffel
Holden
Holt
Hooley (OR)
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hyde
Inslee
Isakson
Israel
Issa
Istook
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kildee
Kilpatrick
Kind
King (IA)
King (NY)
Kingston
Kirk
Kleczka
Kline
Knollenberg
Kolbe
LaHood
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Latham
LaTourette
Leach
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
LoBiondo
Lowey
Lucas (KY)
Lucas (OK)
Lynch
Majette
Maloney
Manzullo
Marshall
Matheson
McCarthy (MO)
McCarthy (NY)
McCollum
McCotter
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Mica
Michaud
Miller (FL)
Miller (MI)
Miller (NC)
Miller, Gary
Mollohan
Moore
Moran (KS)
Moran (VA)
Murphy
Murtha
Musgrave
Myrick
Napolitano
Neal (MA)
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Ose
Otter
Owens
Oxley
Pallone
Pascrell
Pastor
Payne
Pearce
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Putnam
Quinn
Radanovich
Rahall
Ramstad
Regula
Rehberg
Renzi
Reyes
Reynolds
Rodriguez
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Royce
Rush
Ryan (OH)
Ryan (WI)
Ryun (KS)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sandlin
Saxton
Schrock
Scott (GA)
Scott (VA)
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Spratt
Stearns
Stenholm
Strickland
Stupak
Sullivan
Sweeney
Tancredo
Tanner
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (MS)
Thornberry
Tiahrt
Tiberi
Tierney
Toomey
Towns
Turner (OH)
Turner (TX)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Vitter
Walden (OR)
Walsh
Wamp
Watt
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wu
Wynn
Young (AK)
Young (FL)
NAYS--30
Berman
Conyers
Davis (CA)
DeFazio
Delahunt
Eshoo
Farr
Filner
Flake
Harman
Honda
Jackson (IL)
Kucinich
Lee
Lofgren
Markey
Matsui
Millender-McDonald
Miller, George
Nadler
Paul
Sanders
Schakowsky
Schiff
Stark
Tauscher
Thompson (CA)
Waters
Watson
Waxman
ANSWERED ``PRESENT''--1
Ruppersberger
NOT VOTING--11
Aderholt
Davis (IL)
Emerson
Gephardt
Hoekstra
Janklow
Lipinski
Pence
Rangel
Udall (CO)
Woolsey
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Hastings of Washington) (during the
vote). Members are advised there are 2 minutes remaining in this vote.
{time} 2019
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________