[Congressional Record Volume 155, Number 152 (Tuesday, October 20, 2009)]
[House]
[Pages H11467-H11469]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FAIR CREDIT REPORTING ACT AMENDMENT

  Mr. ADLER of New Jersey. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 3763) to amend the Fair Credit Reporting Act to 
provide for an exclusion from Red Flag Guidelines for certain 
businesses.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3763

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

     SECTION 1. EXCLUSION FOR CERTAIN SMALL BUSINESSES.

       (a) In General.--Section 615(e) of the Fair Credit 
     Reporting Act (15 U.S.C. 1681m(e)) is amended by adding at 
     the end the following new paragraphs:
       ``(4) Exclusion for certain businesses.--For purposes of 
     this subsection, the term `creditor' shall not include--
       ``(A) a health care practice with 20 or fewer employees;
       ``(B) an accounting practice with 20 or fewer employees;
       ``(C) a legal practice with 20 or fewer employees; or
       ``(D) any other business, if the Commission determines, 
     following an application for exclusion by such business, that 
     such business--
       ``(i) knows all of its customers or clients individually;
       ``(ii) only performs services in or around the residences 
     of its customers; or
       ``(iii) has not experienced incidents of identity theft and 
     identity theft is rare for businesses of that type.
       ``(5) Limitation on exclusion for businesses no-longer 
     eligible.--To the extent that a business can no longer 
     demonstrate that it meets the criteria under paragraph (4) 
     that permitted its exclusion from the term `creditor', such 
     exclusion shall no longer apply.
       ``(6) Definitions.--For purposes of this subsection:
       ``(A) Employee.--With respect to a business, the term 
     `employee' means any individual who works for such business 
     and is paid either wages or a salary.
       ``(B) Health care practice.--
       ``(i) In general.--The term `health care practice' means a 
     business that's primary service is providing health care via 
     health care professionals employed by the business.
       ``(ii) Health care professional.--For purposes of 
     subparagraph (A), the term `health care professional' means 
     an individual engaged in providing health care and licensed 
     under State law, including physicians, dentists, podiatrists, 
     chiropractors, physical therapists, occupational therapists, 
     marriage and family therapists, optometrists, speech 
     therapists, language therapists, hearing therapists, and 
     veterinarians.''.
       (b) Process for Exclusion Applications.--Not later than 180 
     days after the date of the enactment of this Act, the Federal 
     Trade Commission shall issue regulations, in accordance with 
     section 553 of title 5, United States Code, that set forth 
     the process by which a business may apply for an exclusion 
     under section 615(e)(4)(D) of the Fair Credit Reporting Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Adler) and the gentleman from New York (Mr. Lee) each will 
control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. ADLER of New Jersey. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks on this legislation and to insert extraneous 
material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. ADLER of New Jersey. Mr. Speaker, I yield myself as much time as 
I may consume.
  First, I want to thank Representatives Michael Simpson from Idaho,

[[Page H11468]]

Paul Broun from Georgia, particularly Chris Lee from New York, as well 
as Dan Maffei from New York for helping me draft this bipartisan bill 
to help protect small businesses from overreaching Federal regulations 
during these tough economic times. In addition, I would like to thank 
Jon Leibowitz, chairman of the FTC, for delaying enforcement of the Red 
Flag Guidelines until Congress passes this commonsense fix.
  American small businesses are struggling. They are often forced to 
comply with burdensome regulations that significantly increase their 
expenses. I am committed to helping small businesses, because the key 
to our economic recovery is tied to their ability to thrive. Today, my 
bill will clarify the intention of past legislation so that it isn't 
blindly enforced against America's small businesses.
  The Federal Trade Commission went too far and went beyond the intent 
of Congress by considering non-financial, service-related industries to 
be ``creditors'' under the Fair and Accurate Credit Transactions Act of 
2003. Its ruling would force thousands of small businesses to comply 
with burdensome, expensive regulations by forcing them to develop and 
implement an identity theft program.
  My commonsense bill would exempt health care practices, law and 
accounting firms from the FTC's Red Flag Guidelines. In addition, it 
would create a system where the FTC has some flexibility to waive 
implementation of the regulations for other industries.
  During these tough economic times, the Federal Government should not 
be placing burdensome regulations on small businesses. Small businesses 
are the backbone of New Jersey's economy, and they shouldn't be 
included under a random definition interpreted by a Federal 
bureaucracy. Failure to pass this bill today will hurt America and the 
hardworking, innovative entrepreneurs that manage and operate small 
businesses across this great country.
  Again, I applaud the bipartisan way we crafted this legislation and 
urge the rest of my colleagues to vote in favor of this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LEE of New York. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise today in strong support of H.R. 3763, which will 
exempt small businesses from cumbersome government regulations 
regarding identity theft, and I appreciate the leadership of my friend 
from New Jersey.
  There is no question that identity theft is a serious problem in this 
country. Millions of Americans every year have their credit affected by 
identity thieves, prompting previous Congresses to enact measures to 
increase awareness and education about the issue. These actions have 
played a significant role in decreasing the number of Americans 
impacted by identity theft each and every year. Additionally, a policy 
change enacted in 2003 required large financial institutions and 
creditors to develop and implement identity theft programs to increase 
consumer protections.
  Unfortunately, however, the Federal Trade Commission, the government 
body responsible for enforcing these guidelines, has gone too far in 
defining the intent of the law and has chosen to apply the guidelines 
to all businesses, large and small. While these reporting requirements 
are no doubt necessary for large businesses and corporations with 
thousands of customers, FTC has issued rules that it will soon begin to 
impose, forcing the same regulation requirements for small businesses 
as well.
  Small businesses know their customers, and they have a more personal 
relationship with those they do business with. If not addressed by this 
Congress, small businesses will soon be mandated to follow these 
excessive requirements that will place an undue burden on them while 
not providing any real increase to consumer protections.
  Specifically, the bill before us today will exempt accounting, legal 
and the health care practices with 20 or fewer employees from the 
reporting requirement. Importantly, it also provides FTC with the 
option of excluding other small businesses that know all its customers 
individually and perform services near where its customers live. By 
passing this fix today, Congress can provide the FTC a clear definition 
of how Congress intended the policy to be enacted and protect small 
businesses and their customers from unnecessary government 
intervention.
  As a cosponsor of this important legislation, I urge its immediate 
adoption.
  I reserve the balance of my time.
  Mr. ADLER of New Jersey. I continue to reserve the balance of my 
time.
  Mr. LEE of New York. With that, I would like to yield 3 minutes to my 
good friend from Georgia (Mr. Broun).
  Mr. BROUN of Georgia. Mr. Speaker, I thank my colleague, Chris Lee 
from New York, for yielding me some time.
  Mr. Speaker, it is a pleasure for me to come before you today to 
speak in favor of this bipartisan, commonsense bill which will help so 
many of our small businesses in our country. In my opinion, the manner 
in which this legislation was crafted, with input from both sides of 
the aisle, with the FTC and with the various sectors that would be 
adversely affected if we had not acted, is the model for how this House 
can work to actually solve the problems facing our country.
  I wish very ardently that we could get together, Republicans and 
Democrats alike, and find some commonsense solutions to the health care 
financing in this country the same way that my friend, Mr. Adler, and 
the rest of the Democratic colleagues and those of us on our side came 
together on this. And I think that's the way that this House ought to 
operate.
  I congratulate Mr. Adler for what he has done and other colleagues on 
both sides for bringing forth this commonsense legislation. I would 
personally like to thank my colleagues, Mr. Adler and Dr. Simpson, for 
their tireless efforts as we worked to put this very effective, 
commonsense legislation together. I also want to thank the committee 
staff that helped in this process.
  This legislation is a very specific exemption without which it would 
cost so many small businesses thousands of dollars to unnecessarily 
implement. But it also allows the FTC the ability to exempt other 
businesses that aren't one of the three industries outlined in this 
bill. And that just makes sense, also.
  When enacted, H.R. 3763 will truly reflect the original intent of the 
FACT Act and codify an exemption for health care providers, accounting 
firms and law firms that were never meant to be wrapped in this 
overarching Red Flag legislation.
  So, again, I would like to thank Mr. Adler, Mr. Lee and Dr. Simpson 
and each and every person who helped bring this legislation to 
fruition. This is the way we ought to operate. And I think it is just a 
great day for this Congress as we, as Democrats and Republicans, came 
together on this commonsense legislation.
  Mr. ADLER of New Jersey. Mr. Speaker, I continue to reserve the 
balance of my time.
  Mr. LEE of New York. Mr. Speaker, I have no further requests for 
time, so I will close by encouraging my colleagues on both sides of the 
aisle to support this much-needed legislation that will ensure that 
small businesses are not encumbered with more burdensome Federal 
regulation and ensure that we can get this economy back and moving 
forward.
  With that, I yield back the balance of my time.
  Mr. ADLER of New Jersey. Mr. Speaker, I have no further requests for 
time. I yield myself as much time as I may consume.
  Before I close, I would like to reiterate the importance of this 
bill. Many of America's economic problems are not the fault of small 
businesses, but they have borne the brunt of the economic downturn. My 
legislation, Mr. Lee's legislation, Mr. Broun's legislation, Mr. 
Simpson's and Mr. Maffei's, a bipartisan piece of legislation, will 
prevent one more layer of Federal regulations that would add another 
cost on the backs of small businesses across America.
  Again, I urge all Members of Congress to support this bill. I thank 
Mr. Broun for his comments about the bipartisan nature of this bill. 
This is my and Mr. Lee's second bill together. I hope it's the second 
of many to try to serve the process of this House and to serve the 
people of our great country.

[[Page H11469]]

  Mr. SIMPSON. Mr. Speaker, I rise today to speak in support to H.R. 
3763, to amend the Fair Credit Reporting Act to provide for an 
exclusion from Red Flag Guidelines for certain businesses. This bill is 
a bipartisan, common-sense approach to protecting our nation's small 
businesses from needless, burdensome government regulation. This 
legislation would exempt certain businesses, including health 
providers, from complying with the Red Flags Rule, which requires 
financial institutions and creditors to develop and implement a written 
identity theft program.
  The bill recognizes that many of our nation's small businesses, 
particularly health providers, are not financial institutions and 
therefore do not present the same level of risk as financial 
institutions in cases of identity theft. In fact, many of these medical 
and dental offices were considered creditors under the rule simply 
because of the fact that they are willing to work with patients on 
developing flexible payment plans for those patients that can't afford 
to pay at the time of service. Thus, this rule actually appeared to 
discourage efforts to improve access to care for people who can't 
afford to pay, which runs contrary to all of Congress's efforts, on 
both sides of the aisle, to improve our health system.
  When Congress expressed those concerns to the Federal Trade 
Commission (FTC), they delayed the implementation of the rule twice, in 
April and again in August, as they worked with providers and other 
small businesses in an effort to minimize the burdens of compliance and 
address their concerns with the program. I would like to recognize and 
thank the FTC for their efforts. However, as this bill demonstrates, 
Congress believes that entities such as health providers, accountants 
and others were never meant to be included in the definition of 
creditor. This legislation is an appropriate next step to better 
defining who is a creditor and protecting our small businesses from 
needless costs and regulations.
  I would like to thank Chairman Frank and Ranking Member Bacchus for 
working with us to craft a balanced bill to address all parties' 
concerns. In addition, I would like to thank Congressman Adler and 
Congressman Broun--I have greatly enjoyed working with you on this 
legislation. In addition, 1 would like to thank tile FTC for their 
willingness to work with us to address the concerns of medical 
providers and small businesses alike. They have been a true partner in 
this process, and I would like to recognize their efforts to address 
our concerns with this rule.
  Mr. Speaker, during these difficult economic times, it is more 
important than ever that government push forward legislation to promote 
small businesses in America. In addition, we should be working with 
America's dentists and doctors to promote policies that improve access 
to care instead of burdening them with unnecessary rules and compliance 
measures. This legislation does exactly that.
  Mr. ADLER of New Jersey. I yield back the remainder of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Adler) that the House suspend the rules 
and pass the bill, H.R. 3763.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. ADLER of New Jersey. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________