[Congressional Record (Bound Edition), Volume 145 (1999), Part 11]
[House]
[Pages 15072-15106]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     FINANCIAL SERVICES ACT OF 1999

  The Committee resumed its sitting.
  The CHAIRMAN. It is now in order to consider amendment No. 5 printed 
in House Report 106-214.


                  Amendment No. 5 Offered by Mr. Foley

  Mr. FOLEY. Madam Chairman, I offer amendment No. 5.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:


[[Page 15073]]

       Amendment No. 5 offered by Mr. Foley:
       Page 244, after line 18, insert the following new section 
     (and amend the table of contents accordingly):

     SEC. 198A. INTERSTATE BRANCHES AND AGENCIES OF FOREIGN BANKS.

       Section 5(a)(7) of the International Banking Act of 1978 
     (12 U.S.C. 3103(a)(7)), is amended to read as follows:
       ``(7) Additional authority for interstate branches and 
     agencies of foreign banks, upgrades of certain foreign bank 
     agencies and branches.--Notwithstanding paragraphs (1) and 
     (2), a foreign bank may--
       ``(A) with the approval of the Board and the Comptroller of 
     the Currency, establish and operate a Federal branch or 
     Federal agency or, with the approval of the Board and the 
     appropriate State bank supervisor, a State branch or State 
     agency in any State outside the foreign bank's home State 
     if--
       ``(i) the establishment and operation of such branch or 
     agency is permitted by the State in which the branch or 
     agency is to be established, and
       ``(ii) in the case of a Federal or State branch, the branch 
     receives only such deposits as would be permitted for a 
     corporation organized under section 25A of the Federal 
     Reserve Act (12 U.S.C. 611 et seq.), or
       ``(B) with the approval of the Board and the relevant 
     licensing authority (the Comptroller in the case of a Federal 
     branch or the appropriate State supervisor in the case of a 
     State branch), upgrade an agency, or a branch of the type 
     referred to in subparagraph (A)(ii), located in a State 
     outside the foreign bank's home State, into a Federal or 
     State branch if--
       ``(i) the establishment and operation of such branch is 
     permitted by such State; and
       ``(ii) such agency or branch--

       ``(I) was in operation in such State on the day before 
     September 29, 1994; or
       ``(II) has been in operation in such State for a period of 
     time that meets the State's minimum age requirement permitted 
     under section 44(a)(5) of the Federal Deposit Insurance 
     Act.''.

  The CHAIRMAN. Pursuant to House Resolution 235, the gentleman from 
Florida (Mr. Foley) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Foley).
  Mr. FOLEY. Madam Chairman, I yield myself such time as I may consume.
  Madam Chairman, the amendment I am offering today is a States' rights 
issue. It is noncontroversial, we hope, an amendment that will fix an 
anomaly in Federal interstate banking laws. It will also help the flow 
of trade from the U.S. to countries all over the world.
  This amendment would allow foreign banks currently operating in the 
United States to expand their operations as was intended by the Riegle-
Neal Banking and Branching Act by allowing agencies to upgrade to 
branches.
  In 1994, when the Riegle-Neal Interstate Banking and Branching bill 
was passed. Congress sought to allow foreign banks to open additional 
branches just like domestic banks. This amendment would conform with 
the intent of the original act.
  Unfortunately, not one foreign bank has been able to open additional 
branches under the Riegle-Neal Federal law provision. While the 
intention of the act was to allow expansion of foreign banks, the 
provision in current law has proved to be unworkable.
  This amendment would allow foreign bank agencies to upgrade to a 
branch with the approval of the appropriate chartering agency, the OCC 
or the State bank supervisor, and the Federal Reserve Board.
  In order to accomplish this upgrade, the agency would have to meet 
the State's minimum age requirement for entry, just like domestic 
banks. In addition, the agency must meet the requirements for 
consolidated home country supervision.
  This change in Federal law that I am proposing today is a States' 
rights amendment. If passed, it would remove a Federal limitation that 
interferes with State law.
  The amendment is supported by the Florida Banking Department, the New 
York Banking Department, the Texas Banking Department and the 
California Banking Department, as well as the Florida International 
Bankers Association and Conference of State Bank Supervisors. This 
amendment has been fully vetted with the Federal Reserve Board, and 
they have indicated that they have no objection to it.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I rise in opposition to 
the amendment.
  The CHAIRMAN. The gentleman from Massachusetts (Mr. Frank) is 
recognized for 5 minutes.
  Mr. FRANK of Massachusetts. Madam Chairman, I yield myself such time 
as I may consume.
  Madam Chairman, I should note that under the rules someone is 
entitled to 5 minutes in opposition. I would describe myself for these 
purposes as leaning against but open to persuasion, I would reassure my 
friend, the gentleman from Florida (Mr. Foley). I am not firmly 
committed on the subject.
  I was interested in what the gentleman said and will listen some 
more, but I also wanted to use this occasion to address the general 
bill, Madam Chairman. It is a somewhat constricted debate situation.
  What I wanted to do was to explain why I would be voting against this 
bill, although I think on the subjects that it deals with it does a 
good job. That is, I think this is a bill which suffers from 
incompleteness.
  I think with regard to the regulation of the financial services 
industry, this is as good a product as we can expect from a broad 
representative body. I think the Committee on Banking and Financial 
Services on both sides worked seriously and well under the leadership 
of the chairman and the ranking member.
  The problem is, in my mind, it carries out a pattern that is too much 
present in America today and that I think threatens great harm even as 
it makes some specific progress, and that is a pattern in which we do a 
good job of fostering conditions in which the capitalist system can 
flourish. It is in our interest that the capitalist system flourish.
  Capitalism clearly has established itself as the superior way for a 
society to generate wealth, and the generation of wealth is very 
important. It is important in and of itself because it provides 
resources for individuals to enjoy themselves, and it is important as a 
way to provide the resources which help us deal with other problems.
  On the other hand, we have learned that capitalism, as great an 
engine as it is in generating wealth, can have some downsides. In 
particular, the era of capitalism in which we now are, a kind of 
globally competitive world, is one where increased wealth is 
unfortunately accompanied by increased inequality in many cases and by 
an undermining of society's capacity to deal with some of the social 
problems that the market does not take care of.
  This bill should have been an opportunity to deal with both aspects 
of that. It is a good piece of legislation for setting forth the 
conditions for the financial services industry, central to capitalism. 
It is a good situation in which the intermediation function of the 
financial services industry can go forward.
  We understand that, in and of itself, that is going to leave us some 
problems. In particular, I regret terribly the refusal of the majority 
to let us deal seriously with the amendment offered by the gentlewoman 
from California, which would have tried to deal with those geographic 
areas that are left behind.
  I do not think we adequately deal with privacy. In fact, in some ways 
we may be making it worse. That is, unfortunately, a kind of paradigm 
we are following too frequently. We go forward and we provide the 
conditions and improve the conditions for wealth to be generated, and I 
am for that. I would vote for this bill if we were talking simply about 
these conditions and no other were relevant, but to do that while at 
the same time we refuse to address the serious problems of poverty in 
inner cities, and obviously this is not a bill in and of itself to 
alleviate poverty, but it does seem reasonable to me to say to the 
large financial institutions they are getting a pretty good set of 
conditions here. We are responding to their needs. Can they not make a 
little extra effort in the course of this to help the people who are 
being left behind? Can they not help the consumers?
  I understand if we leave it entirely to the market they would not 
want to do

[[Page 15074]]

that. That is why we ought to be coupling market-enhancing legislation 
like this with some reasonable conditions that say they are going to 
make more money out of this, and that is a good thing because that is 
how our society will prosper. But can they not take a little bit of the 
extra money that they are making out of this and worry about the poor, 
worry about geographically underserved areas, worry about consumer 
protection? Can they not do a little more on privacy? Can they not 
maybe restrict a little bit the extra money they are going to make so 
people's legitimate privacy concerns can be addressed?
  That is the tragedy of this bill. It is a good bill in what it does, 
but it is a bad bill in what it does not do.
  While in other circumstances I might have felt, well, that is the 
best we can do, it has unfortunately become too common in our society.
  I will say I am affected on this by what is going on in my own State 
where two of the largest banks are merging and are not, in my judgment, 
willing to do enough to share the benefits of their merger with people 
who are not doing so well.
  So I congratulate the work that the leaders of the Committee on 
Banking and Financial Services and others have done on the banking 
provisions that deal specifically with the financial services, but I 
will not be part of a conditioned pattern of helping people make more 
money and not worry about those who might be left behind in that very 
process.
  With that, I would reassure again my friend, the gentleman from 
Florida (Mr. Foley), that I am open to persuasion
  Madam Chairman, I reserve the balance of my time.
  Mr. FOLEY. Madam Chairman, I yield myself such time as I may consume.
  Madam Chairman, I believe I have just been given a reprieve from the 
gentleman from Massachusetts (Mr. Frank). I did not hear an objection 
to my amendment. I feel it is a very good amendment.
  Mr. LEACH. Madam Chairman, will the gentleman yield?
  Mr. FOLEY. I yield to the gentleman from Iowa.
  Mr. LEACH. Madam Chairman, let me say, in hopes that the gentleman 
from Massachusetts (Mr. Frank) can still be persuaded to this 
amendment, I would inform the gentleman that the Federal Reserve has no 
objection to it.
  Mr. FRANK of Massachusetts. Madam Chairman, will the gentleman yield?
  Mr. FOLEY. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. When the gentleman tells me the Federal 
Reserve has no objection, is he trying to get me to be for it or 
against?
  Mr. LEACH. Madam Chairman, will the gentleman yield?
  Mr. FOLEY. I yield to the gentleman from Iowa.
  Mr. LEACH. Madam Chairman, fair enough.
  In addition, the New York Banking Department, the Texas Banking 
Department, the California Banking Department and the Conference of 
State Bank Supervisors are leaning in this direction. So I believe it 
is a very thoughtful, very professional amendment, and I certainly want 
to compliment the gentleman for bringing it forth, and I am just 
hopeful for getting unanimity.
  Mr. FRANK of Massachusetts. Madam Chairman, I yield myself such time 
as I may consume.
  Madam Chairman, let me say that I have been persuaded, and I will 
support this amendment. When the gentleman mentioned the Texas Banking 
Department, my colleague from Texas urged me on.
  I will say, as we improve this bill and its specific impact on the 
financial services industry, I regret even more our collective 
unwillingness to do more than we are doing and to do, in fact, what we 
could easily do to help those who are being left behind. It is an 
inappropriate continuation of a pattern of helping the wealthy and the 
powerful, and we all benefit to some extent from that, but ignoring the 
other end of the society.
  Mr. FOLEY. Madam Chairman, I move adoption of the amendment and I 
yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Florida (Mr. Foley).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 6 printed 
in House Report 106-214.


               Amendment No. 6 Offered by Ms. Slaughter.

  Ms. SLAUGHTER. Madam Chairman, I offer amendment No. 6.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Ms. Slaughter:
       Page 244, after line 18, insert the following new section:

     SEC. 198A. FAIR TREATMENT OF WOMEN BY FINANCIAL ADVISERS.

       (a) Findings.--The Congress finds as follows:
       (1) Women's stature in society has risen considerably, as 
     they are now able to vote, own property, and pursue 
     independent careers, and are granted equal protection under 
     the law.
       (2) Women are at least as fiscally responsible as men, and 
     more than half of all women have sole responsibility for 
     balancing the family checkbook and paying the bills.
       (3) Estate planners, trust officers, investment advisers, 
     and other financial planners and advisers still encourage the 
     unjust and outdated practice of leaving assets in trust for 
     the category of wives and daughters, along with senile 
     parents, minors, and mentally incompetent children.
       (4) Estate planners, trust officers, investment advisers, 
     and other financial planners and advisers still use sales 
     themes and tactics detrimental to women by stereotyping women 
     as uncomfortable handling money and needing protection from 
     their own possible errors of judgment and ``fortune 
     hunters''.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that estate planners, trust officers, investment advisers, 
     and other financial planners and advisers should--
       (1) eliminate examples in their training materials which 
     portray women as incapable and foolish; and
       (2) develop fairer and more balanced presentations that 
     eliminate outmoded and stereotypical examples which lead 
     clients to take actions that are financially detrimental to 
     their wives and daughters.

  The CHAIRMAN. Pursuant to House Resolution 235, the gentlewoman from 
New York (Ms. Slaughter) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from New York (Ms. Slaughter).
  Ms. SLAUGHTER. Madam Chairman, I yield myself such time as I may 
consume.
  Madam Chairman, I am offering this noncontroversial amendment to 
express the sense of Congress that financial advisors should treat 
women fairly in drafting wills and trusts. Specifically, financial 
planners should be urged to modify their training materials to 
eliminate examples that portray women as incapable and foolish and 
should develop fairer and more balanced presentations to clients that 
eliminate outmoded and stereotypical examples. These stereotypical 
examples lead clients to place more financial restrictions on female 
heirs.
  In the past year, I have learned that estate planners and financial 
advisors still encourage the unjust practice of leaving assets in trust 
for senile parents, minors, mentally incompetent children and all wives 
and daughters.
  Women were ostensibly included to protect them from the perceived 
inability to manage money. However, in researching this issue, I found 
the real reason to include wives and daughters in this list has little 
to do with protection. The financial advisors are simply selling a 
product.
  By adding women to this list, financial advisors have substantially 
increased their sales base, which, of course, increases their own 
income and bottom line.
  Financial planners sell a trust on several arguments. First, they try 
to sell a trust based on protection; in other words, the inexperience 
of the woman. Or they try to sell a trust based on tax advantages which 
do not seem to be as important for sons.
  A sure sales pitch is suggesting to a husband that in the event of 
his wife's remarriage a trust would prevent some

[[Page 15075]]

other man from enjoying his hard-earned assets. These things which have 
worked so well in the past are alive and healthy today and always to 
the detriment of women.
  As I found out, this is not just a relic from the 1950s. An article 
in a monthly publication from August, 1998, includes an example of how 
clients should protect their financially irresponsible daughter and her 
equally financially irresponsible spouse without disinheriting them.

                              {time}  1930

  The article's author, a financial planner, advises the clients to 
devise a trust for the daughter to prevent creditors from accessing the 
principal. The financial planners sell the trust by saying it will 
serve as a deterrent to keep the daughter's inheritance out of the 
spendthrift son-in-law's hands. No such restrictions are proposed for 
any son who might have a spendthrift wife.
  A specific example from the financial planner further illustrates my 
point on the selling tactics currently used.
  The financial planners publication said, ``Mr. Smith loves his wife, 
but he does not love the way she handles money. He knows she is a big 
spender, and he realizes that he never had the time or patience to 
teach her how to deal with financial matters . . . Mr. Smith wants a 
wall built around the assets he leaves behind. The wall is designed to 
protect Mrs. Smith from herself. It is a wall that will keep con men 
and well-intended amateur financial advisers out, and if Mrs. Smith 
remarries, her new husband cannot touch the money in the trust, nor 
will he get any should he outlive her, unless she puts instructions to 
that effect in her will.''
  These unfair practices were brought to my attention by a woman from 
Florida who was herself negatively affected by these practices. Her 
mother's will directed that her estate be directed into five equal 
parts for her children, then set up an individual trust for each of her 
daughters, and directed that her sons be given their money outright.
  At the time the will was drawn up, she was 28 years old and her 
sisters were in their twenties. Her brothers, who were deemed 
apparently capable of handling their inheritance outright, were 21 and 
14.
  The trust set out for Kappie Spencer and her sisters for their 
``protection'' provided for them to receive the annual interest on the 
assets. Her mother's will contained provisions for withdrawing the 
principal only for the health, support, and proper care of her 
daughters and their children, and they could only touch the principal 
for these very limited reasons if they had exhausted every other source 
of income available to them.
  Surely we would all agree that these restrictions are deeply unfair 
and condescending to all women.
  This amendment is an important step forward to ensure a woman's 
financial well-being. Because women live longer than men, they need to 
support themselves longer, but they also earn less than men, wait 
longer to start saving for retirement, put aside less money, and take 
fewer of the risks that produce greater returns.
  Husbands, however well-intentioned, then aggravate the situation by 
trying to shield their wives from any decisions regarding money by 
setting up a trust arrangement, giving a banker, a lawyer, or an 
accountant control of the purse strings. This may be good business for 
the financial planner, but it is offensive to keep the spouse in the 
dark about finances.
  With more women handling the checkbook and finances in their 
families, these outdated selling tactics by financial planners have to 
be exposed for the patronizing practices which they clearly are. While 
we cannot mandate society's attitudes, we should encourage a rethinking 
of these financial practices.
  I ask my friends on both sides of the aisle to support this 
amendment, and I thank the gentleman for accepting this amendment.
  Mr. LEACH. Madam Chairman, will the gentlewoman yield?
  Ms. SLAUGHTER. I yield to the gentleman from Iowa.
  Mr. LEACH. Madam Chairman, we are very happy to accept this 
amendment. I would say it is brought to the Congress in a very 
thoughtful way by one of the most respected members of this body. I 
think that reflects on the amendment itself.
  Ms. SLAUGHTER. I thank the chairman very much.
  Mr. VENTO. Madam Chairman, will the gentlewoman yield?
  Ms. SLAUGHTER. I yield to the gentleman from Minnesota.
  Mr. VENTO. Madam Chairman, I would say that I certainly rise in 
support, and in the absence the gentleman from New York (Mr. LaFalce), 
we are pleased to receive the gentlewoman's amendment.
  Ms. SLAUGHTER. I thank the gentlemen very much.
  The CHAIRMAN. All time has expired.
  The question is on the amendment offered by the gentlewoman from New 
York (Ms. Slaughter).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 7 printed 
in House Report 106-214.


                  Amendment No. 7 Offered by Mr. Cook

  Mr. COOK. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mr. Cook:
       Page 311, strike line 4 and all that follows through page 
     312, line 16 and insert the following new section (and amend 
     the table of contents accordingly):

     SEC. 241. STUDY OF LIMITING THROUGH REGULATION FEES 
                   ASSOCIATED WITH PROVIDING FINANCIAL PRODUCTS.

       Not later than 1 year after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     submit a report to the Congress regarding the consequences of 
     limiting, through regulation, commissions, fees, or other 
     costs incurred by customers in the acquisition of financial 
     products.

  The CHAIRMAN. Pursuant to House Resolution 235, the gentleman from 
Utah (Mr. Cook) and a Member opposed each will control 5 minutes.
  Madam Chairman, I rise in opposition to the amendment.
  The CHAIRMAN. The gentleman from Michigan (Mr. Dingell) will be 
recognized for 5 minutes.
  The Chair recognizes the gentleman from Utah (Mr. Cook).
  Mr. COOK. Madam Chairman, I yield myself such time as I may consume.
  Madam Chairman, I want to thank the Committee on Rules for allowing 
me to offer this amendment, which would replace the existing section 
241 with a provision requiring the General Accounting Office to study 
the consequences of limiting, through regulation, commissions, fees, or 
other costs incurred by customers in the acquisition of financial 
products.
  Through this study, Congress could determine the potential negative 
effects of the regulation of commissions and fees before directing 
regulators to impose such rules.
  Currently section 241 of H.R. 10 would mandate that financial 
regulators impose rules requiring the disclosure of commissions, fees, 
or other costs incurred by customers in the acquisition of financial 
products. In my view, this could be tantamount to price controls, and 
really has no place in financial modernization.
  The provision in the bill is currently a solution in search of a 
problem. The question of the effectiveness of disclosing fees and 
commissions in protecting customers is really untested. There is little 
indication that disclosing fees and commissions beyond the extensive 
disclosure that is currently required would significantly benefit 
customers.
  Such a requirement could even have unanticipated negative 
consequences. Disclosure of fees and commissions could stifle 
competition or threaten financial innovation or market liquidity.
  Furthermore, the fee disclosure provision is vaguely worded. The term 
``other costs incurred by customers'' could be expansively and 
inappropriately interpreted to include, for example, markups on 
securities transactions, which have been specifically excluded from the 
bill's language. Markups are of a very different nature than fees and 
commissions, but it could be wrongly swept into any rules resulting 
from the bill.

[[Page 15076]]

  The fee disclosure proposal contradicts a policy of regulatory 
reform. This proposal would impose significant new compliance burdens 
for those affected. This proposal runs counter to streamlining 
regulation, which is the purpose of this carefully crafted bipartisan 
legislation.
  The SEC and other financial regulators already have the full 
authority to require that fees and commissions be disclosed. Indeed, in 
many cases, such disclosure is already mandated. No regulator has 
suggested that they need additional authority in this area. Forcing 
regulators to broaden fee disclosure regulations represents 
congressional micro-management of the regulatory process.
  The financial services industry is arguably the most competitive in 
our economy, and is expected to become increasingly more competitive 
with passage of H.R. 10. Before we mandate additional government 
regulation, we should be sure it will not jeopardize this growing 
financial market.
  I urge all my colleagues to support this amendment.
  Madam Chairman, I reserve the balance of my time.
  Mr. DINGELL. Madam Chairman, I yield myself 3 minutes.
  Madam Chairman, with all respect to the author of this amendment, the 
amendment would keep consumers in the dark, and financial providers 
would enjoy it mightily.
  Section 241 of H.R. 10 includes a noncontroversial and commonsense 
provision that passed the House last year in similar legislation. It 
requires all financial services regulatory agencies to prescribe or 
revise rules to improve the disclosure of commissions, fees, and other 
costs incurred by consumers in the purchase of financial products.
  This section does not regulate or limit fees. That would be done by 
the market. Section 241 merely requires disclosure so consumers can 
comparison shop on the basis of understandable and accurate disclosure. 
This helps both competition and consumers.
  The amendment would delete this disclosure requirement and replace it 
with a GAO study, a red herring rate regulation that nobody wants or 
seeks. We do not seek to regulate rates.
  This bill is already a bust for consumers. We are functioning under a 
gag rule. But this amendment simply strips the consumers of banking and 
other financial services of one more right, and that is a right to know 
what the charges are being assessed against them by the banks and other 
financial institutions, and in a sense it significantly changes 
existing law.
  Madam Chairman, I reserve the balance of my time.
  Mr. COOK. Madam Chairman, I yield 30 seconds to my colleague, the 
gentleman from Texas (Mr. Bentsen).
  Mr. BENTSEN. Madam Chairman, I thank the gentleman for yielding time 
to me.
  I rise in support of the amendment. This is what the Committee on 
Banking and Financial Services adopted. As the gentleman mentioned, the 
regulatory authorities already have the authority to impose this. We 
are telling them to do this, rather than waiting to see what the 
complications would be.
  We are seeing increasing transparency in the financial services 
market. I think it would be a mistake for us to congressionally impose 
this without getting a study on it first. I commend the gentleman for 
his amendment, and I rise in support of it.
  Mr. DINGELL. Madam Chairman, I yield 30 seconds to my good friend, 
the gentleman from New York (Mr. LaFalce)
  Mr. LaFALCE. Madam Chairman, I realize there was a discrepancy on 
this issue between the approach taken by the gentleman from Michigan 
(Mr. Dingell) and the Committee on Banking and Financial Services, but 
my personal preference would be to obtain the language that is in the 
print before us right now.
  I believe in disclosure, and I do not favor the amendment offered by 
the gentleman from Utah (Mr. Cook). I associate myself with the remarks 
of the gentleman from Michigan (Mr. Dingell).
  Mr. COOK. Madam Chairman, I yield myself such time as I may consume.
  Madam Chairman, I would like to remind the gentleman from Michigan 
and the gentleman from New York that basically my amendment restores 
the Committee on Banking and Financial Services language that I think 
was brokered in a bipartisan agreement between myself and the gentleman 
from Vermont (Mr. Sanders).
  It was, of course, changed in the Committee on Commerce, and I very 
much respect their opinions, but felt that this was kind of agreed to 
back in the Committee on Banking and Financial Services. I just wanted 
to make that point.
  Madam Chairman, I reserve the balance of my time.
  Mr. DINGELL. Madam Chairman, I yield myself such time as I may 
consume.
  Madam Chairman, what we are talking about here is a banking system 
and a financial system that is going to be fair and open. The 
gentleman, I am sure, will recall that this amendment was adopted 
unanimously, unanimously by the House last year. This is not something 
that has been snuck up into the proceedings in some curious fashion, it 
was in the bill last year. It was adopted overwhelmingly in the 
Committee on Commerce.
  It simply says, disclose. Tell the truth. There is nothing wrong with 
that.
  Madam Chairman, I yield back the balance of my time, with an 
expression of respect and affection for my colleague on the other side.
  Mr. COOK. Madam Chairman, I yield myself the balance of my time.
  Madam Chairman, I thank the gentleman. I very much appreciate that. I 
just want to quickly say that the fee disclosure proposal does 
contradict, I think, a policy of regulatory reform, and this proposal 
would impose, I think, significant new compliance burdens for those 
affected. I think it does run counter to deregulation, which I think 
has been a hallmark of this Congress.
  I urge my colleagues' support.
  Madam Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Utah (Mr. Cook).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. COOK. Madam Chairman, I demand a recorded vote, and pending that, 
I make the point of order that a quorum is not present.
  The CHAIRMAN. Pursuant to House Resolution 235, further proceedings 
on the amendment offered by the gentleman from Utah (Mr. Cook) will be 
postponed.
  The point of no quorum is considered withdrawn.
  It is now in order to consider amendment No. 8 printed in House 
Report 106-214.


                Amendment No. 8 Offered by Mrs. Roukema

  Mrs. ROUKEMA. Madam 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 Mrs. Roukema:
       Page 312, after line 16, insert the following new subtitle 
     (and amend the table of contents accordingly):

              Subtitle E--Banks and Bank Holding Companies

     SEC. 251. CONSULTATION.

       (a) In General.--The Securities and Exchange Commission 
     shall consult and coordinate comments with the appropriate 
     Federal banking agency before taking any action or rendering 
     any opinion with respect to the manner in which any insured 
     depository institution or depository institution holding 
     company reports loan loss reserves in its financial 
     statement, including the amount of any such loan loss 
     reserve.
       (b) Definitions.--For purposes of subsection (a), the terms 
     ``insured depository institution'', ``depository institution 
     holding company'', and ``appropriate Federal banking agency'' 
     have the same meaning as in section 3 of the Federal Deposit 
     Insurance Act.

  The CHAIRMAN. Pursuant to House Resolution 235, the gentlewoman from 
New Jersey (Mrs. Roukema) and a Member opposed each will control 5 
minutes.
  Mr. DINGELL. I rise in opposition to the amendment, Madam Chairman.
  The CHAIRMAN. The gentleman from Michigan (Mr. Dingell) will be

[[Page 15077]]

recognized for 5 minutes in opposition to the amendment.
  The Chair recognizes the gentlewoman from New Jersey (Mrs. Roukema).
  Mrs. ROUKEMA. Madam Chairman, I yield myself 2 minutes and 40 
seconds.
  Madam Chairman, this issue is very straightforward and it is very 
clear. Members do not have to know anything about loan loss reserves or 
about accounting to understand this amendment.
  Quite simply, the amendment requires the regulators, that is, the SEC 
and the Federal banking agencies, to communicate and coordinate before 
taking any action.
  I must stress, there is misinformation out there. I must stress, it 
does not establish a different accounting system or anything that is 
bank-friendly in this rule. It does not lower accounting standards. It 
keeps the same accounting gap standards.
  It does not eliminate, and this is the most important thing, it does 
not eliminate the SEC's statutory authority under the law to set 
accounting standards for these publicly-held companies, but it does 
require regulators, including the SEC, to communicate and coordinate.
  This is extremely important because it has meant that over time, and 
particularly within this last year in the Sun Trust case, which I will 
not go into the details of, there was quite a bit of disagreement here, 
but it turned out that the SEC, when it took its action against Sun 
Trust, had had no consultation with the Fed, who is the functional 
regulator.
  It seems very clear that, unfortunately, because of lack of 
clarification in the law about the requirements for coordination, the 
banks are being subjected to a kind of regulatory whipsaw. That is what 
this amendment is designed to deal with. Bank regulators are required 
by Federal law to apply gap or stricter standards to the banks.

                              {time}  1945

  We are not loosening that in any way. We are applying those same 
statutory requirements.
  I had a hearing on June 16 on this subject, and we have received a 
multiple number of assurances from the SEC that they will work with the 
banking agencies. Yet that guidance that we have given them has never 
been followed. The type of prior consultation coordination with the 
banking agencies that are absolutely essential here have not been done.
  I think we have to make it clear that we are not going to stand for 
this whipsawing back and forth and we will have a clear definition of 
responsibility.
  Madam Chairman, I reserve the balance of my time.
  Mr. DINGELL. Madam Chairman, I yield myself 3 minutes.
  Madam Chairman, I begin by expressing great respect and affection to 
the gentlewoman from New Jersey (Mrs. Roukema). I would like to read 
the essential part of the language of the amendment. It says ``The 
Securities and Exchange Commission shall consult and coordinate 
comments with the appropriate Federal banking agency before taking any 
action or rendering any opinion''.
  Now, that is pretty broad authority. It makes essentially the SEC, by 
the requirement for coordinating, subservient with regard to all of the 
matters under its jurisdiction in dealing with the banking regulators. 
For example, they could be compelled to address questions of behaviors 
of bank on accounting and accounting principles.
  What the amendment really has in practical effect is the ability for 
the SEC to be prevented from imposing the same honest financial 
reporting it requires from other companies. I think we should ask the 
question why should the banks not play by the same rules that everybody 
else plays by?
  We have got a lot of troubles with accounting and with misapplication 
of sound accounting principles. I think we ought to take a look at the 
requirements now, which are generally accepted accounting principles, 
GAP, as opposed to RAP.
  Accounting trickery can afford enormous savings to wrongdoers. It can 
be sanctified by banking regulators as it has been in the past. It can 
cost taxpayers billions of dollars again, as it did in the 1980s when 
banking regulators permitted the use of regulatory accounting, which 
enabled the banks to then phony up their goodwill and to look solid and 
solvent where, in fact, they were not.
  Bank regulators have said in the hearings before the Committee on 
Banking and Financial Services, they do not need this authority. The 
amendment is unnecessary.
  The question then is, why would we treat banks differently than 
others in terms of the reporting which they must make to the regulatory 
agencies and to the shareholders and stockholders in their periodic 
reports? Who then but the banks would want to evade the responsibility 
of telling the truth? How would honest reporting and accounting under 
the jurisdiction of regulators who treat everybody the same way be 
bettered by permitting the banks to achieve separate different special 
and probably more favorable treatment?
  Madam Chairman, I reserve the balance of my time.
  Mrs. ROUKEMA. Madam Chairman, I yield 15 seconds to the gentleman 
from Iowa (Mr. Leach), the chairman of the Committee on Banking and 
Financial Services.
  Mr. LEACH. Madam Chairman, I would just like to say that I think the 
amendment that the gentlewoman from New Jersey (Mrs. Roukema) has 
brought is a very thoughtful and reasonable amendment and that it 
deserves to be added to this bill.
  I recognize that what the gentleman from Michigan (Mr. Dingell) says 
has a basis in good thought, but I think this is a true improvement.
  Mrs. ROUKEMA. Madam Chairman, I yield 1 minute to the gentleman from 
Florida (Mr. McCollum), a senior member from the committee.
  Mr. McCOLLUM. Madam Chairman, I want to strongly support this 
amendment of the gentlewoman from New Jersey (Mrs. Roukema). I think 
that, with all due respect to the gentleman from Michigan (Mr. 
Dingell), banks are different from other corporations for good reason. 
Banks involve safety and soundness issues. We do not want a bank to 
fail.
  Banks make loans. That is their business. When they make loans, they 
need loan loss reserves in order to have the padding to assure that 
they do not fail. That is a business that is best understood by banking 
regulators.
  Yes, the Securities and Exchange Commission should regulate the 
corporate functions of a bank like it does any other corporation, 
except that it needs to be aware more than apparently it has been 
lately of the concerns we all have if we have failures, bankruptcies, 
defaults that could occur in a down and weak economy.
  We have been blessed by a strong one right now. We do not want to see 
banks put in jeopardy. We do not want to see our deposits in banks put 
in jeopardy by the potential of their failure if their loans go south 
and they do not have enough loan loss reserves.
  Let us do what the gentlewoman is asking. The gentlewoman from New 
Jersey (Mrs. Roukema) is simply asking that bank regulators coordinate 
with the SEC anytime loan loss reserves are involved. That is what 
should be passed. That is this amendment. Vote yes.
  Mr. DINGELL. Madam Chairman, I reserve the balance of my time.
  Mrs. ROUKEMA. Madam Chairman, I yield 30 seconds to the gentleman 
from Minnesota (Mr. Vento), the ranking member of the Subcommittee on 
Financial Institutions and Consumer Credit.
  Mr. VENTO. Madam Chairman, I rise in support of the amendment. This 
does not change the Federal accounting standard board or the 
principles. It does not change the accounting rules or the standards. 
It simply says that, when one is going to apply them, that one has to 
have coordination.
  The primary regulators here, after all, of banks are the Federal 
Deposit Insurance Corporation, the Comptroller of the Currency, the 
State Regulatory Authorities. The fact is the bank should not be pulled 
in two directions at once.

[[Page 15078]]

  The fact is most of these are guidelines. They claim that they are 
cooperating with the regulators. In fact, of course, they keep going 
and circumventing them around. The fact is that the instance that is 
brought up here actually reduced the amount of loan loss reserves. It 
took money out of the bank. We need those loan loss reserves. We need 
safety and soundness. We need this amendment.
  I want to rise in support of Mrs. Roukema's amendment which will 
require the Securities and Exchange Commission to consult and 
coordinate with the appropriate Federal banking agency on the issue of 
loan loss reserves before issuing any comments, taking any action, or 
rendering any opinion on the level of an institution's loan loss 
reserves.
  This amendment will ensure that the SEC cannot take significant 
actions that could have a critical or negative impact upon the adequacy 
of capital that a bank has without communicating with the proper 
banking regulator. This amendment should help ensure that FDIC insured 
institutions will not be caught flat footed when the inevitable 
downward tick of the business cycle hits.
  Bank regulators have been strongly stressing that better attention be 
paid to credit quality in their portfolios. The regulators have been 
asking banks to have proper reserves. The amendment will have the 
positive impact of assuring that the SEC cannot act unilaterally to 
lower important loan loss reserves without consulting with those 
responsible to assure that the banks are operating in a safe and sound 
manner.
  The amendment does not change accounting standards. It does not alter 
FASB interpretations. It does not eliminate SEC authority. It is a 
simple and fair amendment that requires regulatory discourse.
  When I asked the SEC witness at our Financial Institutions and 
Consumer Credit Subcommittee what the SEC's relationship would be with 
the banking regulators in the instance of a challenge or an issue with 
regards to an institution's loan loss reserves, the response was there 
was a hope to continue conferring with the bank regulators. This 
amendment should do the trick.
  I thank the gentlewoman, Chairwoman Roukema, for bringing this 
amendment for the consideration of the House and ask my colleagues to 
support it.
  The CHAIRMAN. As a member of the reporting committee controlling time 
in opposition to the amendment, the gentleman from Michigan (Mr. 
Dingell) will have the right to close.
  Mrs. ROUKEMA. Madam Chairman, I yield 30 seconds to the gentleman 
from Alabama (Mr. Bachus), a member of the committee.
  Mr. BACHUS. Madam Chairman, we have five agencies that regulate the 
banks, including the OTS, the FDIC, the Federal Reserve, the 
Comptroller of the Currency, and the SEC. They all got together said we 
have overlapping jurisdiction. That is causing concerns. Some warned we 
need to coordinate our efforts.
  The SEC simply does not, has not done that. They have questioned the 
other organizations, their interpretations on what are the loan loss 
reserve requirements. They do not have the experience these other 
regulators have with the banks. Someone has to take the lead.
  The bottom line, the SEC cannot come in here like a bull in a China 
shop and overrule these other banks on their auditing practices and on 
their reserve practices. This is a great amendment.
  Madam Chairman, I would like to thank the gentlewoman from New Jersey 
for all of her hard work on this legislation and her efforts on this 
amendment. I would also like to discuss a related accounting matter.
  I have been informed by a constituent that the Federal Accounting 
Standards Board (FASB) may propose a rule eliminating an accounting 
practice known as ``pooling''.
  Pooling is an accounting method used when two companies merge to 
become one.
  In a pooling, the acquiring and acquired companies simply combine 
their financial statements.
  I believe it is important that this issue be discussed publicly 
before any final rule is implemented.
  In addition, it is my understanding that in the past the Federal 
Accounting Standards Board has not always sought adequate input from 
the accounting or banking communities on proposed changes in 
regulations.
  I appreciate the Chairwoman's efforts on the pending amendment. I 
would appreciate it if she would keep this in mind when the conference 
committee meets so that we include language either in this bill or 
future legislation to ensure that this process is an open and fair one.
  I thank the gentlewoman for her time and attention to this matter.
  Mrs. ROUKEMA. Madam Chairman, I yield such time as he may consume to 
the gentleman from Georgia (Mr. Barr).
  Mr. BARR of Georgia. Madam Chairman, I rise in support of the 
amendment offered by the gentlewoman from New Jersey.
  Madam Chairman, I appreciate the chairwoman of the Subcommittee of 
the Financial Institutions and Consumer Credit, Marge Roukema, for 
following my lead and bringing this issue to the attention of the House 
of Representatives today. This amendment comes about from my initial 
letter to the Securities and Exchange Commission (SEC) in November 
1998. Last fall, I wrote the Chairman of the Securities and Exchange 
Commission (SEC) the following letter detailing my concerns with the 
loan loss reserve issue:

                                                 November 9, 1998.
     In re inquiry by the SEC into Sun Trust's accounting 
         practices.

     Hon. Arthur Levitt, Jr.,
     Chairman, Securities and Exchange Commission, Washington, DC.
       Dear Chairman Levitt: It has come to my attention that the 
     Securities and Exchange Commission (SEC) has begun an inquiry 
     into the accounting practices of Sun Trust Bank. The $60.7 
     billion-asset Sun Trust Bank, based in Atlanta, announced the 
     SEC has opened an inquiry examining its policies for loan-
     loss reserves as part of a review of the pending acquisition 
     of Crestar Financial Corporation.
       It is my understanding that a bank's loan loss reserve is 
     arrived at by evaluating prior loan loss expectations and 
     future loan loss expectations. In addition, a loan loss 
     reserve is a subjective matter which is determined every 
     quarter by a bank's management, its board of Directors, and 
     the banks principal regulator as to the adequacy of the level 
     at any given time. Banking experts believe the SEC's actions 
     are the first time the Commission has judged a bank's reserve 
     to be too large. With a fluctuating economy it would be 
     imprudent to expect institutions to operate in a manner in 
     which they maintain only marginal reserves.
       As a member of the House of Representatives Banking and 
     Financial Institutions Committee, I am concerned about the 
     SEC's review of SunTrust's accounting practices.
       I would like to review the SEC's decision with someone from 
     your staff. I would therefore appreciate someone contacting 
     my Banking Legislative Assistant, Sarah Dumont, at (202) 225-
     2944, to schedule a meeting to discuss this issue further.
       With warm regards, I am,
           Very truly yours,
                                                         Bob Barr,
                                               Member of Congress.

  In addition, my staff met with the SEC, and it was determined a 
hearing should be held to discuss this very important issue. Therefore, 
I contacted the Chairman of the Banking Committee at the start of the 
106th Congress to request a hearing.

                                                 January 20, 1999.
     In Re loan loss reserve hearing.

     Hon. James A. Leach,
     Chairman, Committee on Banking and Financial Services, House 
         of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Mr. Chairman: As the 106th Congress begins, and the 
     Banking and Financial Services Committee begins to formulate 
     its agenda for the upcoming session, I wanted to take this 
     opportunity to outline a proposed hearing for the Banking 
     Committee to consider.
       In September 1998, the Securities and Exchange Commission 
     (SEC) found that some banks been aggressively reserving for 
     future loan losses which the Commission argued made it 
     difficult for investors to understand the real profit picture 
     of these banks. In the past, bank regulators often 
     scrutinized banks for under-reserving.
       With a fluctuating economy, many experts agree it is 
     inadvisable to expect institutions to operate in a manner in 
     which they maintain only marginal reserves. However, the 
     SEC's recent inquiry into the ``excess'' reserves at some 
     banks is the first time the Commission has judged a bank's 
     reserve to be too large. The SEC puts forth the novel 
     arguments that banks which over-reserve for future loan-
     losses make it difficult for investors to understand the true 
     profit picture.
       This increased scrutiny of banks' earnings management has 
     sent mixed signals to the banking community. It is my 
     understanding a loan loss reserve is a subjective matter 
     which is determined every quarter by a bank's management, its 
     Board of Directors, and the banks principal regulator as to 
     the adequacy of the level at any given time. Under the 
     scenario not advocated by the SEC, banks are now faced with a 
     highly uncertain and arbitrary regulatory environment.
       A hearing to clarify the past and approaching loan-loss 
     reserve levels would serve a

[[Page 15079]]

     beneficial purpose to clarify regulatory efforts of the SEC 
     and its effects on current banking regulatory procedures.
       I will look forward to hearing from you with regard to this 
     proposed hearing.
       With warm regards, I am,
           Very truly yours,
                                                         Bob Barr,
                                               Member of Congress.

  In addition, on February 11, 1999, I sent a followup letter to 
Chairman Leach, expressing the urgency of this issue and the concern 
this uncertainty would have on the banking community. I emphasized a 
hearing would bring clarity to an issue that is confusing and dangerous 
to the health of the banking industry.

                                                February 11, 1999.
     In re loan loss reserve hearing.

     Hon. James A. Leach,
     Chairman, Committee on Banking and Financial Services, House 
         of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Mr. Chairman: I wanted to express my appreciation to 
     both you and Chairwoman Roukema for your commitment to pursue 
     the issue of loan loss reserve limits, and the Security and 
     Exchange Commission's regulation of these limits in the 
     Committee this session.
       As you know, in September 1998, the Securities and Exchange 
     Commission (SEC) found that some banks had been aggressively 
     reserving for future loan losses, which the Commission argued 
     made it difficult for investors to understand the real profit 
     picture of these banks. In the past, bank regulators were 
     often scrutinized banks for under-reserving.
       Banks are highly regulated and closely supervised by 
     regulatory agencies familiar with the individual banks they 
     regulate and the credit quality of their loan portfolios. It 
     is inefficient, unreasonable, and inappropriate for the SEC 
     to exert discretion over a bank's credit philosophy, which 
     could result in banks lowering the level of reserves they put 
     aside to protect against credit losses. With a fluctuating 
     economy, to undertake such actions or implement policies 
     discourages banks from conservatively reserving for loan 
     losses. Such a policy by the SEC could in fact be detrimental 
     to the health of our financial industry.
       This action taken by the SEC now places our banks in a 
     highly uncertain and arbitrary regulatory environment. A 
     hearing to clarify the past and approaching loan-loss reserve 
     levels would clarify regulatory efforts of the SEC, and its 
     effects on current banking regulatory procedures.
       With warm regards, I am,
           Very truly yours,
                                                         Bob Barr,
                                               Member of Congress.

  On June 16, 1999, Chairwoman Roukema held a hearing per my request. 
Again, I thank you, the Chairwoman, for promptly responding to my 
request for a hearing to determine the process and controversies on 
setting the adequate loan loss reserve amounts.
  As I made you aware of my concerns when the SEC's conducted a 2-month 
review process of a bank in my congressional district, this bank was 
penalized and required to restate its earnings by $100 million. During 
the investigation, the SEC began to question the ``excessive'' reserves 
at predominately conservative banks. This finding sent a ripple effect 
across the financial services community. In my opinion, the SEC has 
over-stepped its authority by attempting to coerce banks into adopting 
less conservative lending practices.
  What the SEC may discourage as ``aggressively'' reserving, the bank 
regulators and others may support as ``conservatively reserving. There 
is broad agreement among the industry that an accurate earnings picture 
is vital for out financial institutions to operate successfully. I am 
not aware of any complaints filed by bank analysts alleging dishonest 
or misleading financial reports. Moreover, the bank regulators reviewed 
banks records and found they complied with all current laws and 
regulations. When it became clear to me the SEC was acting without the 
support of the appropriate banking regulators, I wrote to Chairman 
Leach, asking hearings be held to look into the SEC's finding that some 
banks had been improperly reserving for future loan losses.
  It seems clear the SEC has engaged in heavy-handed tactics, resulting 
in at least one bank (SunTrust) restating its earnings from 1994 to 
1996; thereby cutting its reserves by $100 million. The SEC's inquiry 
into the ``excess'' reserves at some banks is the first time in recent 
history the Commission has judged a bank's reserve to be too large, and 
argued that over-reserving for future loan losses makes it difficult 
for investors to understand the true profit picture.
  Madam Chairman, as you and I were told back in March during the mark-
up of H.R. 10, the SEC and bank regulators have been working together 
to publish a joint clarification on banks' loan loss reserves. This 
clarification was to include the methodology and accounting rules as 
well as documentation and disclosure requirements to help guide banks. 
However, that clarification never reached a consensus.
  On its own initiative, the SEC pushed for the recent issuance of the 
Financial Accounting Standards Board (FASB) clarifying rule on 
Statements No. 5, Accounting for Contingencies, and No. 114, Accounting 
by Creditors for Impairment of a Loan, published on April 12, 1999. The 
FASB clarification was meant to help guide the Generally Accepted 
Accounting Principles (GAAP). Instead, the rule seems to have left 
banks in a state of confusion. This is distressing.
  This present confusion over excessive reserve amounts creates a 
disincentive for banks to maintain the necessary protection against 
today's fluctuating economy. Unfortunately, banks are receiving 
conflicting signals concerning loan loss withholdings by two differing 
interest groups: the SEC and the bank regulators.
  Aren't we supposed to learn from our mistakes? One need only look to 
the Savings and Loan debacle in the 1980's to understand the urgent 
need to create a clear and concise, uniform standard regarding loan 
loss reserves. The safety and soundness of our banking industry is 
vitally important to our economy and it is obvious the SEC's mandate 
does not reflect common sense or the well-being of the American people. 
That should alarm everyone.
  The financial security and lifetime savings of millions of Americans 
depends on the ability of banks to establish and follow safe, sound and 
reasonable lending practices. Maintaining adequate and realistic loan 
loss reserves is a key part of this process. Any concerns the SEC has 
with the market value of financial institutions must be reasonable, 
based on common sense, and arrived at in conjunction with the banks and 
bank deregulators. Moreover, these loan loss reserve guidelines must 
not be allowed to become the tail wagging the regulatory dog; seen as 
more important than the goal of protecting basic fiscal soundness of 
our banks. Hopefully, the SEC will end its efforts to force hanks to 
drop conservative lending policies, at least without clear 
congressional action.

                                Congress of the United States,

                                Washington, DC, February 11, 1999.
     In re loan reserve hearing.

     Hon. James A. Leach,
     Chairman, Committee on Banking and Financial Services, House 
         of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Mr. Chairman: I wanted to express my appreciation to 
     both you and Chairwoman Roukema for your commitment to pursue 
     the issue of loan loss reserve limits, and the Security and 
     Exchange Commission's regulation of those limits in the 
     Committee this session.
       As you know, in September 1998, the Securities and Exchange 
     Commission (SEC) found that some banks had been aggressively 
     reserving for future loan losses, which the Commission argued 
     made it difficult for investors to understand the real profit 
     picture of these banks. In the past, bank regulators were 
     often scrutinized banks for under-reserving.
       Banks are highly regulated and closely supervised by 
     regulatory agencies familiarly with the individual banks they 
     regulate and the credit quality of their loan portfolios. It 
     is inefficient, unreasonable, and inappropriate for the SEC 
     to exert discretion over a bank's credit philosophy, which 
     could result in banks lowering the level of reserves they put 
     aside to protect against credit losses. With a fluctuating 
     economy, to undertake such actions or implement policies 
     discourages banks from conservatively reserving for loan 
     losses. Such a policy by the SEC could in fact be detrimental 
     to the health of our financial industry.
       This action taken by the SEC now places our banks in a 
     highly uncertain and arbitrary regulatory environment. A 
     hearing to clarify the past and approaching loan-loss reserve 
     levels would clarify regulatory efforts by the SEC, and its 
     effects on current banking regulatory procedures.
       With warm regards, I am,
           Very truly yours,
                                                         Bob Barr,
     Member of Congress.
                                  ____



                                Congress of the United States,

                                 Washington, DC, January 20, 1999.
     In re loan loss reserve hearing.

     Hon. James A. Leach,
     Chairman, Committee on Banking and Financial Services, House 
         of Representatives, Rayburn House Office Building, 
         Washington DC.
       Dear Mr. Chairman: As the 106th Congress begins, and the 
     Banking and Financial Services Committee begins to formulate 
     its agenda for the upcoming session, I wanted to take this 
     opportunity to outline a proposed hearing for the Banking 
     Committee to consider.
       In September 1998, the Securities and Exchange Commission 
     (SEC) found that some

[[Page 15080]]

     banks had been aggressively reserving for future loan losses 
     which the Commission argued made it difficult for investors 
     to understand the real profit picture of these banks, In the 
     past, bank regulators often scrutinized banks for under-
     reserving.
       With a fluctuating economy, many experts agree it is 
     inadvisable to expect institutions to operate in a manner in 
     which they maintain only marginal reserves. However, the 
     SEC's recent inquiry into the ``excess'' reserves at some 
     banks is the first time the Commission has judged a bank's 
     reserve to be too large. The SEC puts forth the novel 
     argument that banks which over-reserve for future loan-losses 
     make it difficult for investors to understand the true profit 
     picture.
       This increased scrutiny of banks' earnings management has 
     sent mixed signals to the banking community. It is my 
     understanding a loan loss reserve is a subjective matter 
     which is determined every quarter by a bank's management, its 
     Board of Directors, and the bank's principal regulator as to 
     the adequacy of the level at any given time. Under the 
     scenario not advocated by the SEC, banks are now faced with a 
     highly uncertain and arbitrary regulatory environment.
       A hearing to clarify the past and approaching loan-loss 
     reserve levels would serve a beneficial purpose to clarify 
     regulatory efforts of the SEC and its effects on current 
     banking regulatory procedures
       I will look forward to hearing from you with regard to the 
     proposed hearing.
       With warm regards, I am,
           Very truly yours,
                                                         Bob Barr,
     Member of Congress.
                                  ____


Markup of H.R. 10, the Financial Services Act of 1999, Wednesday, March 
10, 1999, House of Representatives, Committee on Banking and Financial 
                       Services, Washington, DC.

       The Chairman. The Clerk will call up the amendment.
       Ms. Cole. Amendment offered by Mr. Barr. Page 96 after 
     line----
       The Chairman. Without objection, the amendment will be 
     considered as read and Mr. Barr is recognized.
       Mr. Barr. Thank you, Mr. Chairman. Mr. Chairman, this 
     amendment provides for at least a partial redress for a 
     problem that has arisen last fall in which the Securities and 
     Exchange Commission, in not consulting with federal banking 
     agencies, took action against a major bank--in this case, Sun 
     Trust--forcing it to lower its loan loss reserves after it 
     had already set those, by $100 million.
       As far as I know, Mr. Chairman, this is the first instance 
     in which the SEC or any federal agency has taken against a 
     bank for being perhaps, too conservative in seeking to 
     protect its customers, its shareholders, against possible 
     problems in the future economy.
       If in fact, we are witnessing here some action or policy on 
     the part of the SEC that is going to create uncertainty with 
     regard to banks being able to establish proper and 
     conservative reserves for future loan losses, then I think at 
     least it ought to be something that is done in consultation 
     with the banking agencies, the federal banking agencies.
       I have been looking at this and appreciate very much the 
     very strong support and active involvement of Chairwoman 
     Marge Roukema in this regard as well.
       And what I have proposed here, Mr. Chairman, is a very 
     simple, straightforward amendment that simply requires that 
     within 60 days after the enactment of this Act the SEC and 
     the federal banking agencies will consult with each other 
     concerning these matters of future loan loss reserves, so 
     that we don't have a patchwork lack of policy in this regard.
       Moreover, Mr. Chairman, at subparagraph B, I provide that 
     pursuant to and as a result of these negotiations the SEC and 
     the banking agencies submit a report to the Congress 
     reflecting the results of their consultation, so that we can 
     have, and so that the banking industry knows where they 
     stand.
       I think this is very, very prudent and a good management 
     too, Mr. Chairman, and will avoid the disruptions that 
     certainly will occur if the SEC is allowed to unilaterally, 
     without consulting with the banking agencies, force banks 
     after the fact to lower their loan loss reserves.
       This is not, as far as I can tell, Mr. Chairman, an 
     instance in which Sun Trust had done anything wrong. As a 
     matter of fact, they were being very, very prudent in setting 
     their future loan loss reserves.
       So I would urge other members to adopt this very reasonable 
     approach which hopefully will avoid further disruptions. It 
     will impose no significant cost on anybody but hopefully will 
     avoid significant costs in the future by forcing the SEC to 
     work with the federal banking agencies as opposed to possibly 
     adverse to them.
       I understand that the SEC is interested in working 
     something out on this, Mr. Chairman, but I don't think that 
     obviates the need for this amendment at this time. If in 
     fact, something is worked out then that will be just fine.
       But I do think that it is important for this committee at 
     this time and for the full House in taking up consideration 
     of H.R. 10 to tell the SEC, if you are going to take this 
     sort of action which is something that is very novel, at 
     least do so in consultation with the federal banking 
     agencies.
       So that the banks know where things stand and if they do 
     have to change their policies at least they know in advance 
     as opposed to coming in--the SEC that is--coming in after the 
     fact and forcing them to expend very significant sums of 
     money and causing disruptions to shareholders and to the 
     banking community.
       I would urge adoption of the amendment.
       The Chairman. Mrs. Roukema.
       Mrs. Roukema. Mr. Chairman, may I be recognized out of my 
     own time?
       The Chairman. Yes, you are.
       Mrs. Roukema. Thank you. Thank you, Mr. Chairman. I 
     apologize to you and all the members of the committee, and 
     now especially to Mr. Barr because I have arrived so late 
     here.
       Believe it or not because of weather conditions I have been 
     traveling since 7 o'clock yesterday morning to get back here 
     to Washington. And you might not believe that, but that was 
     the fact, and I apologize for being late but it couldn't be 
     helped. God wasn't working with me today.
       Now, Mr. Barr and I have been working on this. I think we 
     have had consistent opinions on this problem of loan loss 
     reserves, and I believe he and I have the same amendment that 
     was put forth.
       However, I have been working with the SEC and the other 
     regulators on this and I have just learned moments before I 
     entered here that aside from it being imminent where we had a 
     draft of the agreement that the SEC and the regulators are 
     working on the same things that Mr. Barr and I had been 
     trying to get agreement on, I have just been informed not 
     more than two or three minutes ago that agreement has been 
     completely reached by all parties, including the SEC, and 
     that the final agreement is being faxed.
       Now, it is my understanding that accomplishes completely 
     what Mr. Barr and I have been trying to do here. So I would 
     say that pending receipt of that final agreement, I don't 
     know whether there is any point to passing this legislation, 
     this amendment or not, or whether we should reserve judgment 
     until Mr. Barr, I, and other staff and the Chairman go over 
     it, because I believe it has accomplished our purpose.
       Certainly the questions that I've asked all have been 
     answered at least on the phone and in the first draft. So we 
     are waiting momentarily for that final draft to be here.
       Mr. Bachus. Would the Chairwoman yield?
       Mrs. Roukema. Yes. Yes, I yield to my friend.
       Mr. Barr. If we could procedurally, Mr. Chairman, I would 
     have no objection to withholding the amendment at this time 
     so long as we will have an opportunity before a final voting 
     on H.R. 10 in this committee, to resurrect it if it becomes 
     necessary. Or if not, we could incorporate the agreement that 
     we hope has been reached and reflects our views in the final 
     product.
       The Chairman. Let me just respond generally----
       Mrs. Roukema. If that is possible that would certainly be a 
     sensible way, I would think, of approaching the subject. 
     Because it is something that we do want to see is corrected 
     in this legislation, if need be.
       The Chairman. Well, if the gentlelady would yield, let me 
     say to both her and Mr. Barr that this is a very 
     extraordinary subject matter and it is one that would 
     necessitate Congressional intervention if the various 
     regulators did not come to mutual understanding.
       I appreciate the offer of the gentleman, Mr. Barr. I think 
     it is the most appropriate offer, and that is to withdraw the 
     amendment at the moment and then to review what has occurred.
       And in that event let me say, the amendment is withdrawn 
     and the Chair would ask unanimous consent to return to the 
     subject matter in the event that Mrs. Roukema and Mr. Barr 
     are dissatisfied in a fundamental way with what is apparently 
     proceeding today in the Executive Branch.
       Without objection so ordered. The subject matter is 
     reserved and the amendment is withdrawn. Are there further 
     amendments to Title I?
       Mrs. Roukema. Thank you, Mr. Chairman.
       Ms. Waters. Mr. Chairman.
       The Chairman. I said to Mrs. Waters that I would recognize 
     her next.
       Ms. Waters. Yes, thank you very much, Mr. Chairman. This is 
     really offered by Mr. Gutierrez. I and Ms. Schakowsky have 
     supported and co-sponsored this with him. He had to leave so 
     he asked me to take it up. So the amendment is at the desk.

  Mrs. ROUKEMA. Madam Chairman, I yield such time as she may consume to 
the gentlewoman from New York (Mrs. Kelly) from the committee.
  Mrs. KELLY. Madam Chairman, I rise in support of the amendment.
  I thank my good friend from New Jersey for yielding me time.
  Madam Chairman, I rise in strong support of this amendment. This loan 
loss reserve issue is creating a great deal of confusion for banks

[[Page 15081]]

that are publicly traded on an exchange or market. This situation where 
they are torn between directions from their primary bank regulator and 
the SEC need not happen if proper communications are established 
between the regulators. In this case--the proper loan loss reserves 
needed by the banks--communication was clearly lacking. This language 
does not stop the SEC from doing anything, it simply requires them to 
communicate as they should have been doing all along.
  We held a hearing on this loan loss reserve issue in our Financial 
Institutions Subcommittee on June 16. The message we heard from all 
parties involved was that better communication is necessary. I hope all 
of my colleagues on both sides of the aisle will join us in support of 
this common sense amendment.
  Mrs. ROUKEMA. Madam Chairman, I yield such time as he may consume to 
the gentleman from New York (Mr. LaFalce), the ranking member.
  Mr. LaFALCE. Madam Chairman, I rise in support of the amendment.
  Mrs. ROUKEMA. Madam Chairman, I yield such time as he may consume to 
the gentleman from Texas (Mr. Bentsen), also a member of the committee.
  Mr. BENTSEN. Madam Chairman, I rise in support of the amendment.
  Mrs. ROUKEMA. Madam Chairman, I yield myself such time as I may 
consume.
  Madam Chairman, I want to again stress there is no change in GAP, no 
change in the accounting standards or the statutory requirements and 
the statutory authority of the SEC. It simply requires absolute 
coordination and conferring.
  Mr. DINGELL. Madam Chairman, I yield myself such time as I may 
consume.
  Madam Chairman, let me read the language of the amendment again so 
everybody understands what we are talking about. It says, ``The 
Securities and Exchange Commission shall consult and coordinate 
comments with the appropriate Federal banking agency before taking any 
action or rendering any opinion.''
  That makes the SEC subject to the bank regulators in matters in which 
it has traditionally acted under its powers given it by the Congress of 
the United States. Never before has it been subject to the jurisdiction 
of the bank regulators.
  Now, the bank regulators said they did not need this authority. As a 
matter of fact, the joint guidance issued in March of this year by the 
SEC and by the bank regulators reaffirmed the importance of credible 
financial statements and meaningful disclosure to investors to a safe 
and sound financial system.
  The joint interagency letter reaffirms the policy set by Congress 
that the banks should follow GAP when recording and reporting loan 
locations.
  I would simply advise my colleagues, there is no reason to do this. 
The bank regulators do not seek the authority to have this done. The 
only good-hearted folks who want to do it is the bankers. The bankers 
simply do not want to tell the people all the things they should. They 
want to be able to get things cooked around the way they might like to 
have them done.
  I would also inform my colleagues that there is something else. This 
is going to impose interminable amounts of delay on banks in getting 
decisions on matters important to them which are charged to the SEC 
because of the immense amount of coordination, the immense amount of 
time, the immense amount of effort, and the immense amount of action 
that will be required by both the SEC and by the bank regulators.
  If my colleagues want to waste time, hurt banking, hurt consumers, 
and see to it that the people do not receive an honest picture of 
events going on in the bank, this is the amendment for them. If, 
however, my colleagues want to continue a system which works generally 
well and which causes no problem and which the bank regulators seek no 
change, then vote with me. Vote against the amendment.
  Madam Chairman, I include for the Record the Joint Release that I 
referred to as follows:
         Securities and Exchange Commission, Federal Deposit 
           Insurance Corporation, Federal Reserve Board, Office of 
           Comptroller of the Currency, Office of Thrift 
           Supervision,
                                   Washington, DC, March 10, 1999.


                          joint press release

       The Securities and Exchange Commission, Federal Deposit 
     Insurance Corporation, Federal Reserve Board, Office of 
     Comptroller of the Currency, and Office of Thrift Supervision 
     have jointly issued the attached letter to financial 
     institutions on the allowance for loan losses.
  Attachment:


           joint interagency letter to financial institutions

       Last November, the Securities and Exchange Commission, 
     Federal Deposit Insurance Corporation, Federal Reserve Board, 
     Office of Comptroller of the Currency, and Office of Thrift 
     Supervision (the Agencies) issued a Joint Interagency 
     Statement in which they reaffirmed the importance of credible 
     financial statements and meaningful disclosure to investors 
     and to a safe and sound financial system. The Joint 
     Interagency Statement underscored the requirement that 
     depository institutions record and report their allowance for 
     loan and lease losses in accordance with generally accepted 
     accounting principles (GAAP). We stress and continue to 
     emphasize the importance of depository institutions having 
     prudent, conservative, but not excessive, loan loss 
     allowances that fall within an acceptable range of estimated 
     losses. We recognize that today instability in certain global 
     markets, for example is likely to increase loss inherent in 
     affected institutions' portfolios and consequently require 
     higher allowances for credit losses than were appropriate in 
     more stable times.
       Despite the issuance of the November Joint Interagency 
     Statement, there is continued uncertainty among financial 
     institutions as to the expectations of the banking and 
     securities regulators on the appropriate amount, disclosure 
     and documentation of the allowance for credit losses. The 
     Agencies now announce additional measures designed to address 
     this continued uncertainty. These measures are consistent 
     with the Agencies' mutual objective of, and focus on, 
     addressing prospectively, where feasible, issues related to 
     improving the documentation, disclosure, and reporting of 
     loan loss allowances of financial institutions.
       The Agencies are establishing a Joint Working Group, 
     comprised of policy representatives from each of the 
     Agencies, to gain a better understanding of the procedures 
     and processes, including ``sound practices,'' used generally 
     by banking organizations to determine the allowance for 
     credit losses. An important aspect of the Joint Working 
     Group's activities will be to receive input from 
     representatives of the banking industry and the accounting 
     profession on these matters, and will not involve joint 
     examinations of institutions. The common base of knowledge 
     that results will facilitate the joint and individual efforts 
     of the Agencies to provide improved guidance on appropriate 
     procedures, documentation, and disclosures to the banking 
     industry. This will assist the banking community in complying 
     with GAAP and will improve comparability among financial 
     statements of depository and other lending institutions. The 
     Joint Working Group will also share information and insights 
     concerning issues of mutual concern that may arise.
       Using information gathered through the Joint Working Group 
     and from representatives of the accounting profession and the 
     banking industry, the Agencies will work together to issue 
     parallel guidance, on a timely basis, and within a year on 
     the first two items listed below, in the following key areas 
     regarding credit loss allowances:
       Appropriate Methodologies and Supporting Documentation.--
     The Agencies intend to issue guidance that will suggest 
     procedures and processes necessary for a reasoned assessment 
     of losses inherent in a portfolio and discuss ways to ensure 
     that documentation supports the reported allowance.
       Enhanced Disclosures.--This guidance will address 
     appropriate disclosures of allowances for credit losses and 
     the credit quality of institutions' portfolios by identifying 
     key areas for enhanced disclosures, including the need for 
     institutions to disclose changes in risk factor and asset 
     quality that affect allowances for credit losses. The 
     enhanced disclosures would contribute to better understanding 
     by investors and the public of the risk profile of banking 
     institutions and improve market discipline.
       The Agencies will work together to encourage and support 
     the Financial Accounting Standards Board's process of 
     providing additional guidance regarding accounting for 
     allowances for loan losses. The Agencies emphasize that GAAP 
     requires that management's determination be based on a 
     comprehensive, adequately documented, and consistently 
     applied analysis of the particular institution's exposures, 
     the effects of its lending and collection policies, and its 
     own loss experience under comparable conditions.
       In addition, the Agencies will support and encourage the 
     task force of the American Institute of Certified Public 
     Accountants (AICPA) that is developing more specific guidance 
     on the accounting for allowances for credit losses and the 
     techniques of measuring the credit loss inherent in a 
     portfolio

[[Page 15082]]

     at a particular date. In particular, the AICPA task force 
     will focus on providing guidance on how best to distinguish 
     probable-losses inherent in the portfolio as of the balance 
     sheet date--the guidepost agreed to by the Agencies for 
     reporting allowances in accordance with GAAP--from possible 
     or future losses not inherent in the balance sheet as of that 
     date. Additionally, the Agencies will ask the AICPA task 
     force to consider recently developed portfolio credit risk 
     measurement and management techniques that are consistent 
     with GAAP as part of this effort. The AICPA project already 
     has been initiated and will include representatives from the 
     accounting profession and the banking industry, as well as 
     observers from the SEC and the banking agencies.
       Senior staff of the Agencies will continue to meet to 
     discuss banking industry accounting and financial disclosure 
     policy issues of interest that affect the transparency of 
     financial reporting and bank safety and soundness. These 
     discussions will address progress in the application of 
     accounting and disclosure standards by banking institutions, 
     including those impacting the allowance for credit losses, 
     with particular focus on recently identified issues and 
     trends. The meetings also will be used to coordinate projects 
     of the Agencies in areas of mutual interest. The first of 
     these meetings was held on January 27.
       The Agencies believe that the actions announced above will 
     promote a better and clearer understanding among financial 
     institutions of the appropriate procedures and processes for 
     determining credit losses in accordance with GAAP. The 
     Agencies intend that these steps will enhance the 
     transparency of financial information and improve market 
     discipline, consistent with safety and soundness objectives. 
     In recognition of the specialized regulatory nature of the 
     banking industry and in order to resolve ongoing 
     uncertainties in the industry, with the announcement of these 
     initiatives, the Agencies' focus, in so far as feasible, will 
     be on enhancing allowance practices going forward.
                                  ____

     To: Washington, Consuela.
     Subject: More on loan loss.
     Re: the transcript I just sent you--I know a few of the bank 
           regulators kind of waffled or ducked a little on the 
           answer to ``do we need regulation?'' but NONE of them 
           said anything close to ``yes.''
       Also, below is an excerpt from the appendix to the OCC's 
     written testimony for the loan loss hearing (also on the H. 
     Banking website):
       Question 4. Please discuss whether the SEC has consulted 
     with and coordinated its comments on loan loss reserves with 
     the Federal Reserve and other federal banking regulators. 
     Please discuss whether you believe consultation between the 
     SEC and the regulators prior to the SEC issuing loan loss 
     reserve comments would be workable and whether prior 
     consultation would promote a more consistent approach to 
     GAAP.
       Answer 4. Although SEC staff occasionally consult with the 
     OCC's Chief Accountant's staff on accounting issues, the SEC 
     has not generally done so on issues involving comments for a 
     specific registrant, particularly regarding the registrant's 
     loan loss reserve.
       The OCC believes that such consultation would promote a 
     more consistent approach to GAAP. However, because of 
     examination timing and other logistical issues, such 
     consultation, if practiced for all filings, might detract 
     from the SEC's ability to ensure that registrants receive 
     timely reviews of their statements. A more efficient approach 
     would be for the SEC to consult with bank regulators on 
     filings where it has significant questions pertaining to a 
     registrant's loan loss reserve.

  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from New Jersey (Mrs. Roukema).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mrs. ROUKEMA. Madam Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 235, further proceedings 
on the amendment offered by the gentlewoman from New Jersey (Mrs. 
Roukema) will be postponed.


          Sequential Votes Postponed In Committee Of The Whole

  The CHAIRMAN. Pursuant to House Resolution 235, proceedings will now 
resume on those amendments on which further proceedings were postponed 
in the following order: Amendment No. 1 offered by the gentleman from 
North Carolina (Mr. Burr), amendment No. 4 offered by the gentleman 
from Georgia (Mr. Barr), amendment No. 7 offered by the gentleman from 
Utah (Mr. Cook), and amendment No. 8 offered by the gentlewoman from 
New Jersey (Mrs. Roukema).
  The Chair will reduce to 5 minutes the time for any electronic vote 
after the first vote in this series.


         Amendment No. 1 Offered By Mr. Burr of North Carolina

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment No. 1 offered by the gentleman from North Carolina 
(Mr. Burr) on which further proceedings were postponed and on which the 
ayes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 238, 
noes 189, not voting 7, as follows:

                             [Roll No. 268]

                               AYES--238

     Abercrombie
     Aderholt
     Archer
     Armey
     Bachus
     Baird
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Boswell
     Boucher
     Brady (TX)
     Brown (FL)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clay
     Clayton
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (FL)
     Davis (VA)
     Deal
     Delahunt
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Dixon
     Doolittle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehrlich
     Emerson
     Etheridge
     Everett
     Ewing
     Fletcher
     Fowler
     Franks (NJ)
     Gallegly
     Gekas
     Gibbons
     Gillmor
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hilleary
     Hilliard
     Hobson
     Horn
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hyde
     Isakson
     Istook
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E.B.
     Jones (NC)
     Kasich
     Kelly
     Kildee
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     Meek (FL)
     Metcalf
     Miller (FL)
     Minge
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Ose
     Oxley
     Packard
     Paul
     Payne
     Pease
     Peterson (MN)
     Peterson (PA)
     Pickering
     Pitts
     Pombo
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Reynolds
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Rush
     Salmon
     Sanford
     Sawyer
     Saxton
     Schaffer
     Scott
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Skelton
     Smith (TX)
     Souder
     Spence
     Spratt
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Toomey
     Towns
     Traficant
     Udall (CO)
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watt (NC)
     Watts (OK)
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Wynn
     Young (AK)
     Young (FL)

                               NOES--189

     Ackerman
     Allen
     Andrews
     Baldacci
     Baldwin
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Blagojevich
     Blumenauer
     Bonior
     Bono
     Boyd
     Brady (PA)
     Brown (OH)
     Campbell
     Capps
     Capuano
     Cardin
     Carson
     Clement
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Danner
     Davis (IL)
     DeFazio
     DeGette
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Ehlers
     Engel
     English
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Frank (MA)
     Frelinghuysen
     Frost
     Gejdenson
     Gephardt
     Gilchrest
     Gilman
     Gonzalez
     Gordon
     Green (WI)
     Gutierrez
     Hall (OH)
     Hefley
     Hill (IN)
     Hill (MT)
     Hinchey
     Hinojosa
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Hostettler
     Hutchinson
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson, Sam
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kilpatrick
     Kind (WI)
     Klink
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     Lampson

[[Page 15083]]


     Lantos
     Larson
     Leach
     Lee
     Levin
     Lofgren
     Lowey
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McKinney
     McNulty
     Meehan
     Meeks (NY)
     Menendez
     Mica
     Millender-McDonald
     Miller, Gary
     Miller, George
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Petri
     Phelps
     Pickett
     Pomeroy
     Porter
     Rahall
     Rangel
     Regula
     Reyes
     Riley
     Rivers
     Rodriguez
     Roemer
     Roukema
     Roybal-Allard
     Royce
     Ryan (WI)
     Ryun (KS)
     Sabo
     Sanchez
     Sanders
     Sandlin
     Scarborough
     Schakowsky
     Serrano
     Sherman
     Sisisky
     Skeen
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (WA)
     Snyder
     Stabenow
     Stark
     Stearns
     Tanner
     Tiahrt
     Tierney
     Turner
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Waters
     Waxman
     Wexler
     Weygand
     Woolsey
     Wu

                             NOT VOTING--7

     Borski
     Brown (CA)
     Fossella
     Ganske
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2025

  Messrs. DAVIS of Illinois, NUSSLE, OBERSTAR, RILEY, DEUTSCH, and 
TIAHRT changed their vote from ``aye'' to ``no.''
  Mrs. THURMAN, Ms. EDDIE BERNICE JOHNSON of Texas, and Messrs. 
ABERCROMBIE, SHADEGG, HILLIARD, DIXON, UDALL of Colorado, and LAZIO 
changed their vote from ``no'' to ``aye.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.


                      Announcement By The Chairman

  The CHAIRMAN. Pursuant to House Resolution 235, the Chair announces 
that it will reduce to a minimum of 5 minutes the period of time within 
which a vote by electronic device will be taken on each amendment on 
which the Chair has postponed further proceedings.


             Amendment No. 4 Offered by Mr. Barr of Georgia

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment No. 4 offered by the gentleman from Georgia (Mr. Barr) 
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. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 129, 
noes 299, not voting 6, as follows:

                             [Roll No. 269]

                               AYES--129

     Aderholt
     Archer
     Armey
     Barcia
     Barr
     Bartlett
     Barton
     Blunt
     Boehner
     Bonilla
     Bono
     Brady (TX)
     Burr
     Buyer
     Callahan
     Camp
     Campbell
     Chabot
     Chenoweth
     Clement
     Coble
     Coburn
     Collins
     Combest
     Cook
     Crane
     Cubin
     Deal
     DeMint
     Doolittle
     Dreier
     Duncan
     Ehrlich
     English
     Everett
     Fletcher
     Gallegly
     Gekas
     Gibbons
     Gillmor
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Green (WI)
     Gutknecht
     Hall (TX)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Istook
     Jenkins
     Johnson, Sam
     Jones (NC)
     Kingston
     Largent
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas (OK)
     Manzullo
     McInnis
     McIntyre
     McKeon
     Metcalf
     Miller, Gary
     Miller, George
     Mink
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Norwood
     Ose
     Packard
     Paul
     Pease
     Peterson (MN)
     Pickering
     Pickett
     Pitts
     Pombo
     Radanovich
     Reynolds
     Riley
     Rivers
     Rohrabacher
     Royce
     Ryan (WI)
     Ryun (KS)
     Sanford
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Sherwood
     Shuster
     Skeen
     Smith (MI)
     Smith (NJ)
     Spence
     Stearns
     Stump
     Sununu
     Tancredo
     Taylor (MS)
     Taylor (NC)
     Thornberry
     Tiahrt
     Toomey
     Walden
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weller
     Wicker
     Woolsey
     Young (AK)

                               NOES--299

     Abercrombie
     Ackerman
     Allen
     Andrews
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barrett (NE)
     Barrett (WI)
     Bass
     Bateman
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Boehlert
     Bonior
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Bryant
     Burton
     Calvert
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chambliss
     Clay
     Clayton
     Clyburn
     Condit
     Conyers
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crowley
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Dunn
     Edwards
     Ehlers
     Emerson
     Engel
     Eshoo
     Etheridge
     Evans
     Ewing
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gilchrest
     Gilman
     Gonzalez
     Gordon
     Granger
     Greenwood
     Gutierrez
     Hall (OH)
     Hansen
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Houghton
     Hoyer
     Hutchinson
     Hyde
     Inslee
     Isakson
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (CT)
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Larson
     Latham
     Lazio
     Leach
     Lee
     Levin
     Lewis (GA)
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McDermott
     McGovern
     McHugh
     McIntosh
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Mica
     Millender-McDonald
     Miller (FL)
     Minge
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Northup
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Oxley
     Pallone
     Pascrell
     Pastor
     Payne
     Peterson (PA)
     Petri
     Phelps
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Rodriguez
     Roemer
     Rogan
     Rogers
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Saxton
     Schakowsky
     Scott
     Serrano
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shows
     Simpson
     Sisisky
     Skelton
     Slaughter
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Sweeney
     Talent
     Tanner
     Tauscher
     Tauzin
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thune
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Vitter
     Walsh
     Waters
     Watt (NC)
     Waxman
     Weiner
     Weldon (PA)
     Wexler
     Weygand
     Whitfield
     Wilson
     Wise
     Wolf
     Wu
     Wynn
     Young (FL)

                             NOT VOTING--6

     Borski
     Brown (CA)
     Fossella
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2033

  Mr. NADLER changed his vote from ``aye'' to ``no.''
  Mr. TAYLOR of Mississippi changed his vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.


                  Amendment No. 7 Offered by Mr. Cook

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment No. 7 offered by the gentleman from Utah (Mr. Cook) 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. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 114, 
noes 313, not voting 7, as follows:

[[Page 15084]]



                             [Roll No. 270]

                               AYES--114

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Barr
     Bartlett
     Bentsen
     Biggert
     Blunt
     Boehner
     Bonilla
     Boswell
     Burton
     Buyer
     Callahan
     Cannon
     Chambliss
     Coburn
     Collins
     Cook
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (VA)
     DeLay
     DeMint
     Diaz-Balart
     Dreier
     Duncan
     Dunn
     Engel
     English
     Everett
     Fletcher
     Gibbons
     Gilchrest
     Goodling
     Goss
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hoekstra
     Horn
     Hostettler
     Hutchinson
     Isakson
     Jenkins
     Kingston
     Kuykendall
     Latham
     Leach
     Lewis (KY)
     Linder
     Maloney (NY)
     McCollum
     McCrery
     McGovern
     McInnis
     McIntosh
     McKeon
     McNulty
     Metcalf
     Miller, Gary
     Morella
     Myrick
     Nadler
     Nethercutt
     Norwood
     Nussle
     Ose
     Packard
     Paul
     Peterson (MN)
     Riley
     Rogers
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Scarborough
     Sessions
     Shadegg
     Shuster
     Simpson
     Slaughter
     Smith (MI)
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Tancredo
     Taylor (NC)
     Terry
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Walden
     Weldon (FL)
     Weller
     Wicker

                               NOES--313

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barrett (NE)
     Barrett (WI)
     Barton
     Bass
     Bateman
     Becerra
     Bereuter
     Berkley
     Berman
     Berry
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Boehlert
     Bonior
     Bono
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Calvert
     Camp
     Campbell
     Canady
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Combest
     Condit
     Conyers
     Cooksey
     Costello
     Cox
     Coyne
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Eshoo
     Etheridge
     Evans
     Ewing
     Farr
     Fattah
     Filner
     Foley
     Forbes
     Ford
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Graham
     Granger
     Green (WI)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Holden
     Holt
     Hooley
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inslee
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (CT)
     Johnson, E.B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     LaTourette
     Lazio
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (CT)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McHugh
     McIntyre
     McKinney
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Murtha
     Napolitano
     Neal
     Ney
     Northup
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Oxley
     Pallone
     Pascrell
     Pastor
     Payne
     Pease
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Saxton
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Sisisky
     Skeen
     Skelton
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Talent
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Vitter
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Waxman
     Weiner
     Weldon (PA)
     Wexler
     Weygand
     Whitfield
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--7

     Borski
     Brown (CA)
     Chenoweth
     Fossella
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2040

  So the amendment was rejected.
  The result of the vote was announced as above recorded.


                Amendment No. 8 Offered by Mrs. Roukema

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment No. 8 offered by the gentlewoman from New Jersey (Mrs. 
Roukema) 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. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 407, 
noes 20, not voting 7, as follows:

                             [Roll No. 271]

                               AYES--407

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Crowley
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeFazio
     Delahunt
     DeLauro
     DeLay
     DeMint
     Dickey
     Dicks
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fattah
     Filner
     Fletcher
     Foley
     Forbes
     Ford
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hilleary
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E.B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Mascara
     Matsui
     McCarthy (NY)
     McCollum
     McCrery
     McDermott
     McGovern
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nadler
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz

[[Page 15085]]


     Ose
     Owens
     Oxley
     Packard
     Pascrell
     Paul
     Payne
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Reyes
     Reynolds
     Riley
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Toomey
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Waxman
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Young (AK)
     Young (FL)

                                NOES--20

     DeGette
     Deutsch
     Dingell
     Engel
     Hill (MT)
     Larson
     Luther
     Markey
     Martinez
     McCarthy (MO)
     McKinney
     Pallone
     Pastor
     Rangel
     Rivers
     Rush
     Sanchez
     Stark
     Towns
     Wynn

                             NOT VOTING--7

     Borski
     Brown (CA)
     Diaz-Balart
     Fossella
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2048

  Mr. LUTHER changed his vote from ``aye'' to ``no.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. It is now in order to consider Amendment No. 9 printed 
in House Report 106-214.


         Amendment No. 9 Offered by Mr. Watt of North Carolina

  Mr. WATT of North Carolina. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 9 offered by Mr. Watt of North Carolina:
       Page 325, line 25, strike the ``or'' after the semicolon.
       Page 326, line 4, strike the period and insert ``; or''.
       Page 326, after line 4, insert the following new 
     subparagraph:
       ``(C) in the case of an institution or subsidiary at which 
     insurance products are sold or offered for sale, the fact 
     that--
       ``(i) the approval of an extension of credit to a customer 
     by the institution or subsidiary may not be conditioned on 
     the purchase of an insurance product by such customer from 
     the institution or subsidiary; and
       ``(ii) the customer is free to purchase the insurance 
     product from another source.''.

  The CHAIRMAN. Pursuant to House Resolution 235, the gentleman from 
North Carolina (Mr. Watt) and a Member opposed each will control 5 
minutes.
  Madam Chairman, I claim the time on the other side.
  The CHAIRMAN. Is the gentleman in opposition?
  Mr. HILL of Montana. I am momentarily leaning against this amendment, 
however I am persuadable.
  The CHAIRMAN. The gentleman from Montana will be recognized for 5 
minutes.
  Mr. WATT of North Carolina. Madam Chairman, I yield myself 3 minutes.
  Madam Chairman, this amendment is noncontroversial, I believe, and I 
hope that there is no opposition to it.
  In this day in which we are moving toward allowing banks and 
insurance companies and securities companies to come together into one 
corporation, the concern that I hear more often than any other concern 
as I talk to constituents is a concern that when they go to borrow 
money from a bank, that bank will require them as a condition of 
getting the loan to use other services that are being brought into this 
umbrella such as requiring them to purchase insurance from a subsidiary 
of the bank or an affiliate of the bank, and of course that would be 
extremely unfair and put the customer at a disadvantage and would put 
the financial institution at a substantial advantage if they could 
require as a condition of getting a loan that insurance be bought from 
one of the affiliated companies.
  So in the Committee on Banking and Financial Services I offered this 
amendment. It passed overwhelmingly in the Committee on Banking and 
Financial Services, and for some reason when the bill was re-printed, 
it was not there. So I offered the amendment before the Committee on 
Rules to get this reinstated.
  Let me be clear that this does not prohibit a bank from requiring 
insurance to be purchased in connection with a loan, because many loans 
are securitized with life insurance or other kinds of insurance, title 
insurance. What it says is that that lender cannot require that the 
customer obtain that insurance from one of its affiliates, and it 
should be clear that the customer is free to go to an unaffiliated 
company to obtain insurance if in fact that insurance is required as a 
condition of the loan.
  Let me make one other quick point. This amendment becomes even more 
important in light of all of the discussions about privacy because if 
there is to be a sharing of information among affiliates, one of the 
things that will be able to be shared is the expiration dates on 
insurance policies, and that in and of itself is likely to put a 
subsidiary insurance company at an advantage because they may know when 
an insurance policy is expiring. All the more reason we need to make it 
absolutely explicitly clear that no customer can be required to 
purchase insurance from a subsidiary or affiliate of the lending 
company as a condition for getting the loan.
  Madam Chairman, I reserve the balance of my time.
  Mr. HILL of Montana. Madam Chairman, I yield myself 3 minutes.
  Madam Chairman, I first want to join with the chairman to state that 
I do support the amendment and compliment the gentleman from North 
Carolina (Mr. Watt) for bringing it forward. This bill is going to 
create new financial institutions, allow them to provide new services 
which will hopefully lower the cost to consumers and create greater 
competition, and in the end the consumers are going to benefit that.
  But there is a serious concern, and that has to do with lending 
institutions who have the ability to exert undue influence, some would 
say even potentially coercive influence over their customers.
  H.R. 10, this bill, substantially erodes the States' supervision over 
insurance sales. In fact, it defers to the Comptroller of the Currency 
with regard to the sale of insurance by national banks. And there is 
great concern on my part and others about this bill for that reason, 
and it is my hope that we will go beyond this amendment in conference 
to deal with this.
  But it is extremely important, I think, that the House tonight assert 
the concept that lenders cannot exert this influence, tying sales of 
other services in order to influence a loan. Today in every State in 
the union that conduct is assured through the actions of insurance 
commissioners and state legislators. Unfortunately this law, H.R. 10 if 
it passes, will preempt that making that authority void.
  I think it is important for Members in the Chamber then tonight to 
say that no consumer who is applying for a loan or any form of credit 
should mistakenly believe that their purchase of insurance, or any 
other service for that matter, from that lender will enhance their 
ability to get that loan and that credit.
  I have a similar provision in this bill with regard to the conduct of 
the activity of title insurance, however it goes substantially further. 
It reasserts the State authority over the conduct of title insurance 
sales activity.
  Again, I hope that the conferees will find a better solution than 
just this amendment, but I think it is essential tonight that the House 
make clear that

[[Page 15086]]

we want these protections for consumers in its place.
  I would like to just speak briefly to the bill. I hope tonight that 
we will have an overwhelming support for this bill. I have some 
concerns about the State regulation of insurance and the structure of 
these new financial institutions, but it is essential that we modernize 
our financial institutions.
  We have a trade surplus in services and substantially a consequence 
of our competitiveness in financial services, and if we want to 
maintain the jobs and the opportunities, the investment in our economy 
and the growth, then we need to have institutions that are competitive 
internationally.
  Madam Chairman, I would urge all my colleagues to support this bill 
and to support this amendment.
  Madam Chairman, I reserve the balance of my time.
  Mr. WATT of North Carolina. Madam Chairman, I yield 1 minute to the 
gentleman from New York (Mr. LaFalce).
  Mr. LaFALCE. Madam Chairman, I rise in support of the amendment, and 
I thank the gentleman from North Carolina for offering it.
  This provision was included within the product produced by the 
Committee on Banking and Financial Services as were a number of other 
important consumer protection provisions. The Committee on Rules 
permitted this amendment to be offered; that is good. They could have 
permitted the other consumer protection provisions that were included 
in the banking bill to come before the floor also; most importantly, 
the one prohibiting redlining by insurance companies that would 
affiliate with banks. They should not have permitted an amendment on an 
insurance provision on which there was never a hearing allowing the 
redomestication of mutual insurance companies in order to rip off the 
policyholders in order to satisfy the greed of the officers and 
directors of those mutual insurance companies.
  Support the Watt amendment. Strongly oppose the Bliley amendment.
  Mr. HILL of Montana. Madam Chairman, I yield 1 minute to the 
gentleman from Iowa (Mr. Leach), chairman of the Committee on Banking 
and Financial Services.
  Mr. LEACH. Madam Chairman, I thank the gentleman for yielding this 
time to me, and I would like to address briefly the Watt amendment. 
This is an extraordinarily thoughtful amendment brought by one of the 
most thoughtful Members of our body. Indeed, as chairman of the 
committee, I would like to say as strongly as I can I know of no more 
constructively involved member of the Committee on Banking and 
Financial Services or of this Congress than the gentleman from North 
Carolina (Mr. Watt), and I would urge support of this amendment. It 
makes good common sense.

                              {time}  2100

  Mr. WATT of North Carolina. Madam Chairman, I yield 1 minute to the 
gentlewoman from Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Madam Chairman, I would say to the gentleman from 
Iowa (Mr. Leach) and the gentleman from North Carolina (Mr. Watt), the 
sponsor of this amendment, I stood here, having been a freshman member 
of the Committee on Banking and Financial Services, going through H.R. 
10, and wondered what was in it for the consumer.
  Under financial modernization, a bank can become an insurance 
company; an insurance company could become a bank? What would happen to 
the consumer?
  Thank God, thanks to the leadership of our ranking member and the 
gentleman from North Carolina (Mr. Watt) and other members of the 
committee, there were consumer protection provisions like this one that 
said that even if I get a loan from bank A, I do not have to get my 
insurance from bank A.
  So all the little old women walking into banks could say, someone is 
looking out for me.
  I am pleased to stand here in favor, Madam Chairman, of this 
amendment. I stand here in support of this amendment believing it will 
help H.R. 10 get closer to the bill that came out of the Committee on 
Banking and Financial Services.
  Mr. HILL of Montana. Madam Chairman, I yield myself such time as I 
may consume.
  Madam Chairman, I think what is important for all the Members in the 
Chamber to understand is that, without this amendment, H.R. 10, in 
essence, creates a void with regard to the regulation of insurance with 
regard to this activity, the potential course of sale of insurance or 
other services to loan customers of lending institutions.
  So I would urge all of my colleagues to support this amendment.
  Madam Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from North Carolina (Mr. Watt).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 10 printed 
in House Report 106-214.


                 Amendment No. 10 Offered by Mr. Bliley

  Mr. BLILEY. Madam Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 10 offered by Mr. Bliley:
       Page 327, after line 16, insert the following subsection 
     (and redesignate subsequent subsections accordingly):
       ``(e) Domestic Violence Discrimination Prohibition.--
       ``(1) In general.--In the case of an applicant for, or an 
     insured under, any insurance product described in paragraph 
     (2), the status of the applicant or insured as a victim of 
     domestic violence, or as a provider of services to victims of 
     domestic violence, shall not be considered as a criterion in 
     any decision with regard to insurance underwriting, pricing, 
     renewal, or scope of coverage of insurance policies, or 
     payment of insurance claims, except as required or expressly 
     permitted under State law.
       ``(2) Scope of application.--The prohibition contained in 
     paragraph (1) shall apply to any insurance product which is 
     sold or offered for sale, as principal, agent, or broker, by 
     any insured depository institution or wholesale financial 
     institution or any person who is engaged in such activities 
     at an office of the institution or on behalf of the 
     institution.
       ``(3) Sense of the congress.--It is the sense of the 
     Congress that, by the end of the 30-month period beginning on 
     the date of the enactment of this Act, the States should 
     enact prohibitions against discrimination with respect to 
     insurance products that are at least as strict as the 
     prohibitions contained in paragraph (1).
       ``(4) Domestic violence defined.--For purposes of this 
     subsection, the term `domestic violence' means the occurrence 
     of 1 or more of the following acts by a current or former 
     family member, household member, intimate partner, or 
     caretaker:
       ``(A) Attempting to cause or causing or threatening another 
     person physical harm, severe emotional distress, 
     psychological trauma, rape, or sexual assault.
       ``(B) Engaging in a course of conduct or repeatedly 
     committing acts toward another person, including following 
     the person without proper authority, under circumstances that 
     place the person in reasonable fear of bodily injury or 
     physical harm.
       ``(C) Subjecting another person to false imprisonment.
       ``(D) Attempting to cause or cause damage to property so as 
     to intimidate or attempt to control the behavior of another 
     person.
       Page 336, after line 13, insert the following new subtitle 
     (and redesignate subsequent subtitles and amend the table of 
     contents accordingly):

             Subtitle B--Redomestication of Mutual Insurers

     SEC. 311. GENERAL APPLICATION.

       This subtitle shall only apply to a mutual insurance 
     company in a State which has not enacted a law which 
     expressly establishes reasonable terms and conditions for a 
     mutual insurance company domiciled in such State to 
     reorganize into a mutual holding company.

     SEC. 312. REDOMESTICATION OF MUTUAL INSURERS.

       (a) Redomestication.--A mutual insurer organized under the 
     laws of any State may transfer its domicile to a transferee 
     domicile as a step in a reorganization in which, pursuant to 
     the laws of the transferee domicile and consistent with the 
     standards in subsection (f), the mutual insurer becomes a 
     stock insurer that is a direct or indirect subsidiary of a 
     mutual holding company.
       (b) Resulting Domicile.--Upon complying with the applicable 
     law of the transferee domicile governing transfers of 
     domicile and completion of a transfer pursuant to this 
     section, the mutual insurer shall cease to be a domestic 
     insurer in the transferor domicile and, as a continuation of 
     its corporate existence, shall be a domestic insurer of the 
     transferee domicile.

[[Page 15087]]

       (c) Licenses Preserved.--The certificate of authority, 
     agents' appointments and licenses, rates, approvals and other 
     items that a licensed State allows and that are in existence 
     immediately prior to the date that a redomesticating insurer 
     transfers its domicile pursuant to this subtitle shall 
     continue in full force and effect upon transfer, if the 
     insurer remains duly qualified to transact the business of 
     insurance in such licensed State.
       (d) Effectiveness of Outstanding Policies and Contracts.--
       (1) In general.--All outstanding insurance policies and 
     annuities contracts of a redomesticating insurer shall remain 
     in full force and effect and need not be endorsed as to the 
     new domicile of the insurer, unless so ordered by the State 
     insurance regulator of a licensed State, and then only in the 
     case of outstanding policies and contracts whose owners 
     reside in such licensed State.
       (2) Forms.--
       (A) Applicable State law may require a redomesticating 
     insurer to file new policy forms with the State insurance 
     regulator of a licensed State on or before the effective date 
     of the transfer.
       (B) Notwithstanding subparagraph (A), a redomesticating 
     insurer may use existing policy forms with appropriate 
     endorsements to reflect the new domicile of the 
     redomesticating insurer until the new policy forms are 
     approved for use by the State insurance regulator of such 
     licensed State.
       (e) Notice.--A redomesticating insurer shall give notice of 
     the proposed transfer to the State insurance regulator of 
     each licensed State and shall file promptly any resulting 
     amendments to corporate documents required to be filed by a 
     foreign licensed mutual insurer with the insurance regulator 
     of each such licensed State.
       (f) Procedural Requirements.--No mutual insurer may 
     redomesticate to another State and reorganize into a mutual 
     holding company pursuant to this section unless the State 
     insurance regulator of the transferee domicile determines 
     that the plan of reorganization of the insurer includes the 
     following requirements:
       (1) Approval by board of directors and policyholders.--The 
     reorganization is approved by at least a majority of the 
     board of directors of the mutual insurer and at least a 
     majority of the policyholders who vote after notice, 
     disclosure of the reorganization and the effects of the 
     transaction on policyholder contractual rights, and 
     reasonable opportunity to vote, in accordance with such 
     notice, disclosure, and voting procedures as are approved by 
     the State insurance regulator of the transferee domicile.
       (2) Continued voting control by policyholders; review of 
     public stock offering.--After the consummation of a 
     reorganization, the policyholders of the reorganized insurer 
     shall have the same voting rights with respect to the mutual 
     holding company as they had before the reorganization with 
     respect to the mutual insurer. With respect to an initial 
     public offering of stock, the offering shall be conducted in 
     compliance with applicable securities laws and in a manner 
     approved by the State insurance regulator of the transferee 
     domicile.
       (3) Award of stock or grant of options to officers and 
     directors.--For a period of 6 months after completion of an 
     initial public offering, neither a stock holding company nor 
     the converted insurer shall award any stock options or stock 
     grants to persons who are elected officers or directors of 
     the mutual holding company, the stock holding company, or the 
     converted insurer, except with respect to any such awards or 
     options to which a person is entitled as a policyholder and 
     as approved by the State insurance regulator of the 
     transferee domicile.
       (4) Contractual rights.--Upon reorganization into a mutual 
     holding company, the contractual rights of the policyholders 
     are preserved.
       (5) Fair and equitable treatment of policyholders.--The 
     reorganization is approved as fair and equitable to the 
     policyholders by the insurance regulator of the transferee 
     domicile.

     SEC. 313. EFFECT ON STATE LAWS RESTRICTING REDOMESTICATION.

       (a) In General.--Unless otherwise permitted by this 
     subtitle, State laws of any transferor domicile that conflict 
     with the purposes and intent of this subtitle are preempted, 
     including but not limited to--
       (1) any law that has the purpose or effect of impeding the 
     activities of, taking any action against, or applying any 
     provision of law or regulation to, any insurer or an 
     affiliate of such insurer because that insurer or any 
     affiliate plans to redomesticate, or has redomesticated, 
     pursuant to this subtitle;
       (2) any law that has the purpose or effect of impeding the 
     activities of, taking action against, or applying any 
     provision of law or regulation to, any insured or any 
     insurance licensee or other intermediary because such person 
     has procured insurance from or placed insurance with any 
     insurer or affiliate of such insurer that plans to 
     redomesticate, or has redomesticated, pursuant to this 
     subtitle, but only to the extent that such law would treat 
     such insured licensee or other intermediary differently than 
     if the person procured insurance from, or placed insurance 
     with, an insured licensee or other intermediary which had not 
     redomesticated;
       (3) any law that has the purpose or effect of terminating, 
     because of the redomestication of a mutual insurer pursuant 
     to this subtitle, any certificate of authority, agent 
     appointment or license, rate approval, or other approval, of 
     any State insurance regulator or other State authority in 
     existence immediately prior to the redomestication in any 
     State other than the transferee domicile.
       (b) Differential Treatment Prohibited.--No State law, 
     regulation, interpretation, or functional equivalent thereof, 
     of a State other than a transferee domicile may treat a 
     redomesticating or redomesticated insurer or any affiliate 
     thereof any differently than an insurer operating in that 
     State that is not a redomesticating or redomesticated 
     insurer.
       (c) Laws Prohibiting Operations.--If any licensed State 
     fails to issue, delays the issuance of, or seeks to revoke an 
     original or renewal certificate of authority of a 
     redomesticated insurer immediately following redomestication, 
     except on grounds and in a manner consistent with its past 
     practices regarding the issuance of certificates of authority 
     to foreign insurers that are not redomesticating, then the 
     redomesticating insurer shall be exempt from any State law of 
     the licensed State to the extent that such State law or the 
     operation of such State law would make unlawful, or regulate, 
     directly or indirectly, the operation of the redomesticated 
     insurer, except that such licensed State may require the 
     redomesticated insurer to--
       (1) comply with the unfair claim settlement practices law 
     of the licensed State;
       (2) pay, on a nondiscriminatory basis, applicable premium 
     and other taxes which are levied on licensed insurers or 
     policyholders under the laws of the licensed State;
       (3) register with and designate the State insurance 
     regulator as its agent solely for the purpose of receiving 
     service of legal documents or process;
       (4) submit to an examination by the State insurance 
     regulator in any licensed state in which the redomesticated 
     insurer is doing business to determine the insurer's 
     financial condition, if--
       (A) the State insurance regulator of the transferee 
     domicile has not begun an examination of the redomesticated 
     insurer and has not scheduled such an examination to begin 
     before the end of the 1-year period beginning on the date of 
     the redomestication; and
       (B) any such examination is coordinated to avoid 
     unjustified duplication and repetition;
       (5) comply with a lawful order issued in--
       (A) a delinquency proceeding commenced by the State 
     insurance regulator of any licensed State if there has been a 
     judicial finding of financial impairment under paragraph (7); 
     or
       (B) a voluntary dissolution proceeding;
       (6) comply with any State law regarding deceptive, false, 
     or fraudulent acts or practices, except that if the licensed 
     State seeks an injunction regarding the conduct described in 
     this paragraph, such injunction must be obtained from a court 
     of competent jurisdiction as provided in section 314(a);
       (7) comply with an injunction issued by a court of 
     competent jurisdiction, upon a petition by the State 
     insurance regulator alleging that the redomesticating insurer 
     is in hazardous financial condition or is financially 
     impaired;
       (8) participate in any insurance insolvency guaranty 
     association on the same basis as any other insurer licensed 
     in the licensed State; and
       (9) require a person acting, or offering to act, as an 
     insurance licensee for a redomesticated insurer in the 
     licensed State to obtain a license from that State, except 
     that such State may not impose any qualification or 
     requirement that discriminates against a nonresident 
     insurance licensee.

     SEC. 314. OTHER PROVISIONS.

       (a) Judicial Review.--The appropriate United States 
     district court shall have exclusive jurisdiction over 
     litigation arising under this section involving any 
     redomesticating or redomesticated insurer.
       (b) Severability.--If any provision of this section, or the 
     application thereof to any person or circumstances, is held 
     invalid, the remainder of the section, and the application of 
     such provision to other persons or circumstances, shall not 
     be affected thereby.

     SEC. 315. DEFINITIONS.

       For purposes of this subtitle, the following definitions 
     shall apply:
       (1) Court of competent jurisdiction.--The term ``court of 
     competent jurisdiction'' means a court authorized pursuant to 
     section 314(a) to adjudicate litigation arising under this 
     subtitle.
       (2) Domicile.--The term ``domicile'' means the State in 
     which an insurer is incorporated, chartered, or organized.
       (3) Insurance licensee.--The term ``insurance licensee'' 
     means any person holding a license under State law to act as 
     insurance agent, subagent, broker, or consultant.
       (4) Institution.--The term ``institution'' means a 
     corporation, joint stock company, limited liability company, 
     limited liability partnership, association, trust, 
     partnership, or any similar entity.
       (5) Licensed state.--The term ``licensed State'' means any 
     State, the District of Columbia, American Samoa, Guam, Puerto

[[Page 15088]]

     Rico, or the United States Virgin Islands in which the 
     redomesticating insurer has a certificate of authority in 
     effect immediately prior to the redomestication.
       (6) Mutual insurer.--The term ``mutual insurer'' means a 
     mutual insurer organized under the laws of any State.
       (7) Person.--The term ``person'' means an individual, 
     institution, government or governmental agency, State or 
     political subdivision of a State, public corporation, board, 
     association, estate, trustee, or fiduciary, or other similar 
     entity.
       (8) Policyholder.--The term ``policyholder'' means the 
     owner of a policy issued by a mutual insurer, except that, 
     with respect to voting rights, the term means a member of a 
     mutual insurer or mutual holding company granted the right to 
     vote, as determined under applicable State law.
       (9) Redomesticated insurer.--The term ``redomesticated 
     insurer'' means a mutual insurer that has redomesticated 
     pursuant to this subtitle.
       (10) Redomesticating insurer.--The term ``redomesticating 
     insurer'' means a mutual insurer that is redomesticating 
     pursuant to this subtitle.
       (11) Redomestication or transfer.--The terms 
     ``redomestication'' and ``transfer'' mean the transfer of the 
     domicile of a mutual insurer from one State to another State 
     pursuant to this subtitle.
       (12) State insurance regulator.--The term ``State insurance 
     regulator'' means the principal insurance regulatory 
     authority of a State, the District of Columbia, American 
     Samoa, Guam, Puerto Rico, or the United States Virgin 
     Islands.
       (13) State law.--The term ``State law'' means the statutes 
     of any State, the District of Columbia, American Samoa, Guam, 
     Puerto Rico, or the United States Virgin Islands and any 
     regulation, order, or requirement prescribed pursuant to any 
     such statute.
       (14) Transferee domicile.--The term ``transferee domicile'' 
     means the State to which a mutual insurer is redomesticating 
     pursuant to this subtitle.
       (15) Transferor domicile.--The term ``transferor domicile'' 
     means the State from which a mutual insurer is 
     redomesticating pursuant to this subtitle.

     SEC. 316. EFFECTIVE DATE.

       This subtitle shall take effect on the date of the 
     enactment of this Act.

                         Parliamentary Inquiry

  Mr. VENTO. Madam Chairman, parliamentary inquiry.
  Madam Chairman, is it possible to have this amendment divided by 
unanimous consent?
  The CHAIRMAN. Under the rule, the amendment is not divisible; and the 
Committee cannot alter that feature of the rule.
  Mr. VENTO. Even though these are separate topics, completely separate 
topics, in the amendment?
  The CHAIRMAN. It is not in order under the rule, even by unanimous 
consent.
  Mr. LaFALCE. Even though it is not in order under the rule that we 
oppose, could we not divide it if there were unanimous consent?
  The CHAIRMAN. The Committee of the Whole cannot change the rule.
  Mr. LaFALCE. Could we have unanimous consent to rise and then ask 
unanimous consent to go into the full House and then request a division 
of this amendment into two parts?
  Mr. BLILEY. I object.
  The CHAIRMAN. No request has been made.


                     Motion Offered by Mr. LaFalce

  Mr. LaFALCE. Madam Chairman, I move that the Committee do now rise 
for the purpose aforestated.
  The CHAIRMAN. The question is on the motion offered by the gentleman 
from New York (Mr. LaFalce).
  The question was taken, and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. LaFALCE. Madam Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 179, 
noes 232, not voting 23, as follows:

                             [Roll No. 272]

                               AYES--179

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldwin
     Barcia
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dixon
     Doggett
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank (MA)
     Frost
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (CT)
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Millender-McDonald
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Payne
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Slaughter
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Woolsey
     Wu

                               NOES--232

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Coble
     Coburn
     Collins
     Cook
     Cooksey
     Costello
     Cox
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Dingell
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Ford
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, George
     Minge
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Ose
     Oxley
     Packard
     Pastor
     Paul
     Pease
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Portman
     Pryce (OH)
     Quinn
     Rahall
     Ramstad
     Regula
     Reynolds
     Riley
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--23

     Baldacci
     Barton
     Borski
     Brown (CA)
     Clay
     Combest
     Dicks
     Dooley
     Doyle
     Fossella
     Green (TX)
     Gutierrez
     Holden
     Lipinski
     Menendez
     Miller, Gary
     Nussle
     Pelosi
     Pombo
     Porter
     Radanovich
     Rogan
     Sawyer

                              {time}  2124

  Mrs. MYRICK, Mr. GUTKNECHT, Mr. GREENWOOD, and Mrs. MORELLA changed 
their vote from ``aye'' to ``no.''

[[Page 15089]]


  Mr. HOEFFEL, Mr. DAVIS of Illinois, Ms. SANCHEZ, and Ms. McKINNEY 
changed their vote from ``no'' to ``aye.''
  So the motion to rise was rejected.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. Pursuant to House Resolution 235, the gentleman from 
Virginia (Mr. Bliley) and a Member opposed each will control 5 minutes.
  Mr. LaFALCE. Madam Chairman, I am opposed to the amendment.
  The CHAIRMAN. The gentleman from New York (Mr. LaFalce) will be 
recognized to control the time in opposition.
  The Chair recognizes the gentleman from Virginia (Mr. Bliley).
  Mr. BLILEY. Madam Chairman, I yield myself 1\1/2\ minutes.
  Madam Chairman, this amendment is simple and straightforward. It does 
only two things. First, it prohibits banks from discriminating against 
victims of domestic violence and insurance sales.
  The majority of States already have laws preventing discrimination 
against victims of domestic violence. However, H.R. 10 would allow 
Federal banking regulators to preempt a number of State consumer 
protection laws, and in addition, a few States have not yet acted on 
this issue.
  This amendment would not preempt State laws, but ensures where no 
protections for domestic violence victims existed or where the banking 
regulators were trying to preempt such laws, the domestic violence 
victims will be protected.
  Second, the bill would allow mutual insurance companies to 
redomesticate and reorganize into a mutual holding company or into a 
stock company. Without the redomestication provision, mutual insurance 
companies will be placed at a severe disadvantage in raising capital 
and competing with other financial holding companies.
  It only takes effect in States that have not enacted laws governing 
mutual holding companies, and it requires approval from the insurance 
regulator that the company has met numerous specific consumer 
protections.
  Madam Chairman, I yield 1\1/2\ minutes to the gentlewoman from 
Colorado (Ms. DeGette).
  Ms. DeGETTE. Madam Chairman, I rise in reluctant support of the 
Bliley amendment. I guess I am pleased, if a little bit puzzled, that 
this amendment has been coupled, the domestic violence amendment has 
been coupled with redomestication of mutual insurers. I think the only 
two things that are the same in these concepts are the word 
``domestic.''

                              {time}  2130

  But the reason I support this amendment is because it is extremely 
important to millions of domestic violence victims around this country, 
many of them women who have been discriminated against, unbelievably, 
in insurance company underwriting and in claims processing and in 
rates.
  We have a woman in Colorado, for example, whose husband tried to 
murder her by burning down their house. She was almost killed, but she 
survived. When the insurance company got the claim, they only paid 50 
percent because they said she was 50 percent responsible for the house 
burning down because she was a domestic violence victim.
  I am disappointed, frankly, that the Committee on Rules did not make 
in order my amendment with the gentleman from Ohio (Mr. Oxley), a stand 
alone amendment, which was unanimously supported in the Committee on 
Commerce, which passed this House last year as part of the House bill, 
and went on to the Senate. I am saddened that that was not done in its 
own right. But, frankly, it was not. So, to me, it is important for the 
millions of domestic violence victims to pass this amendment.
  Mr. LaFALCE. Madam Chairman, I yield myself 2 minutes.
  Madam Chairman, this amendment is a travesty and should be opposed. 
It is absolutely outrageous that the Committee on Rules has permitted 
the combination of prohibitions against discrimination because of 
domestic violence with redomestication of mutual insurance companies.
  My colleagues would get 100 percent of this body to vote for the 
prohibition with respect to domestic violence, and they know that. No 
one should vote for the redomestication of mutual insurance company, 
and that is the only reason the gentleman from Virginia (Mr. Bliley) 
has combined them, because no one would vote for his amendment if it 
were standing by itself.
  Why? Because greed is involved. Greed on the part of the officers and 
directors of the mutual insurance companies.
  Why? Because theft is involved. Theft is involved of the ownership 
right of, not millions, but tens of millions of policy holders, women 
and men and children, et cetera. One is stealing their rights by this 
Federal law.
  Why? Because this is an anti-States rights amendment. That is why the 
National Conference of State Legislatures have said, do not pass this 
amendment. We recognize the provisions of domestic violence. We love 
those. But we do not want you to infringe on our rights.
  The gentleman from Virginia said, well, if the State has got a mutual 
holding company provision, it does not apply. Well, New York does not. 
Massachusetts does not. Countless other States do not. The gentleman 
would override theirs.
  The gentleman said, well, the State insurance regulator has to 
approve. Not of the host States, just of the States they want to go to. 
They will pick the worst State in the Union, they will go to that 
State, and, of course, the insurance regulator will permit it. They 
will do anything to get a domestic, a mutual insurance company to 
relocate so long as they can satisfy the officers and directors.
  There is no good reason for it. There has been no hearing on it. It 
has absolutely no relationship to financial services modernization. It 
has absolutely no relationship to affiliation. What is this? It is a 
pay off to the mutual insurance industry. No more. No less.
  Mr. BLILEY. Madam Chairman, I yield 1 minute to the gentlewoman from 
New York (Mrs. Kelly).
  Mrs. KELLY. Madam Chairman, I rise today in support of the amendment 
of the gentleman from Virginia (Mr. Bliley) to put this redomestication 
provision back in this legislation. This is a technical issue, and I 
think I want to try to clarify what this amendment seeks to do.
  Mutual insurance companies are essentially cooperatives and they have 
no stockholders, only policy holders. A mutual company may own the 
stock of the subsidiary, but, having no shareholders, it is confined to 
lower subsidiaries if they want to diversify.
  This structure imposes serious limitations on the ability of a mutual 
company to make significant acquisitions in order to stay competitive. 
In addition, a mutual insurer cannot sell stock, thereby limiting its 
ability to raise capital to diversify.
  Taken together, these factors place mutual insurers at a substantial 
disadvantage in an affiliated environment such as H.R. 10 allows for.
  While State laws generally permit insurers to move their base, States 
are capable of imposing significant practical barriers to 
redomestication. I do not believe that a mutual insurer's ability to 
participate fully in an affiliated financial services environment 
should depend solely on the State where they are based.
  It is for these reasons I believe we should support this amendment.
  Mr. LaFALCE. Madam Chairman, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Madam Chairman, this is the most shameful 
abuse of the democratic process I have ever seen. My colleagues have an 
effort not to stop the insurance company from demutualizing, but simply 
to require them to abide by the State law where they were chartered and 
their contract with their policy holders.
  The gentleman from Virginia is not saying they should be able to 
demutualize, he is saying they should be able to do it without sharing 
with the policyholders what they pledged to the policyholders they 
would do when

[[Page 15090]]

they sold them the policy. That is so hard to defend that he is 
literally hiding behind battered women.
  Why are these together? Domestic violence and redomestication? I am 
surprised the gentleman does not have in there housebreaking one's dog 
for domestic animals because that is all it has got in common.
  The gentleman has something so bad it cannot stand on its own. He is 
asking to give permission to the mutual insurance companies. What the 
gentlewoman from New York (Mrs. Kelly) said is completely irrelevant. 
No one is trying to stop them from demutualizing.
  They now have to, in certain States, demutualize in accordance with 
the rules of that State where they were chartered and in accordance 
with what they promise the policyholders. This is a license for them to 
avoid States rights, break the rules that they have for policyholders, 
and the gentleman shamefully does it by hiding behind the victims of 
domestic violence.
  Mr. BLILEY. Madam Chairman, I yield the balance of my time to the 
gentleman from New York (Mr. Towns).
  Mr. TOWNS. Madam Chairman, let me say that, first of all, the 
argument is the Committee on Rules. My colleagues point to the fact 
that the Committee on Rules did it again. That is what they are really 
saying. But I do not think that my colleagues should forget about what 
we are dealing with here. We are talking about two things, domestic 
violence and redomestication. I think that these issues are very, very 
important.
  Also, I want to talk about the fact that insurance, the last time I 
heard, was under the jurisdiction of the Committee on Commerce. I mean, 
unless something changed over the last 24 hours, the Committee on 
Commerce had jurisdiction over insurance. So, therefore, I think that 
the Committee on Commerce here really has a lot to say about this 
issue.
  I think that the other thing that I would like to just sort of talk 
about, mutual insurance companies would be placed at a severe 
disadvantage in terms of raising capital. I think that capital is very, 
very important. This amendment corrects that. I think that we need to 
make certain that that is done. I think that is important that we do 
that.
  Let me say to my colleagues that I think this is a good amendment, 
and I urge support of it.
  Mr. LaFALCE. Madam Chairman, I yield 1 minute to the gentleman from 
North Carolina (Mr. Watt).
  Mr. WATT of North Carolina. Madam Chairman, I rise in opposition to 
particularly the last part of this amendment. It really is a real 
disservice to mutual policyholders, who are owners of the insurance 
company. To allow an insurance company to take the assets and convert 
to a stock company puts those policyholders at a real disadvantage.
  Now, I had some experience with this. The last case that I ever 
handled in the practice of law was one of these cases where a mutual 
company, without the authorization of the insureds, tried to do this 
very thing. They ended up understating the value of the assets. They 
were not going to give the insurance policyholders one dime until we 
got involved, and they ended up paying them millions of dollars.
  I think this is a bad idea, and we should vote against this 
amendment.
  Mr. LaFALCE. Madam Chairman, I yield 1 minute to the gentleman from 
Wisconsin (Mr. Barrett) for closure.
  Mr. BARRETT of Wisconsin. Madam Chairman, the States rights, States 
rights, States rights. Where are they? Where are the States rights?
  We have got all these elected officials at the State level, and we do 
not trust them. Because if they refuse to pass a law that the mutual 
insurance companies like, we are going to just allow them to pack up 
and move out of State.
  This is the most hypocritical amendment for advocates of States 
rights that I have seen in this Chamber. How anybody can vote for this 
amendment and claim they are in favor of States rights defies logic.
  It is a rip-off. It is a rip-off to shareholders and for stockholders 
and mutual insurance policyholders who bought those policies because 
they would be owners of that company. It rips them off. It is wrong, 
wrong, wrong.
  It is unfortunate that it is being hidden behind battered women. That 
is disgusting. This amendment should be voted down. We should do it 
right, provide protection for the battered women, and not allow this 
dangerous rip-off.
  The CHAIRMAN. All time for debate on this amendment has expired.
  The question is on the amendment offered by the gentleman from 
Virginia (Mr. Bliley).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. BLILEY. Madam Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 235, further proceedings 
on the amendment offered by the gentleman from Virginia will be 
postponed.
  It is now in order to consider amendment No. 11 printed in House 
Report 106-214.


                 Amendment No. 11 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. 11 offered by Mr. Oxley:
       Page 378, beginning on line 16, strike subtitle A of title 
     V and insert the following (and conform the table of contents 
     accordingly):

        Subtitle A--Disclosure of Nonpublic Personal Information

     SEC. 501. PROTECTION OF NONPUBLIC PERSONAL INFORMATION.

       (a) Privacy Obligation Policy.--It is the policy of the 
     Congress that each financial institution has an affirmative 
     and continuing obligation to respect the privacy of its 
     customers and to protect the security and confidentiality of 
     those customers' nonpublic personal information.
       (b) Financial Institutions Safeguards.--In furtherance of 
     the policy in subsection (a), each agency or authority 
     described in section 505(a) shall establish appropriate 
     standards for the financial institutions subject to their 
     jurisdiction relating to administrative, technical, and 
     physical safeguards--
       (1) to insure the security and confidentiality of customer 
     records and information;
       (2) to protect against any anticipated threats or hazards 
     to the security or integrity of such records; and
       (3) to protect against unauthorized access to or use of 
     such records or information which could result in substantial 
     harm or inconvenience to any customer.

     SEC. 502. OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL 
                   INFORMATION.

       (a) Notice Requirements.--Except as otherwise provided in 
     this subtitle, a financial institution may not, directly or 
     through any affiliate, disclose to a nonaffiliated third 
     party any nonpublic personal information, unless such 
     financial institution provides or has provided to the 
     consumer a notice that complies with section 503(b).
       (b) Opt Out.--
       (1) In general.--A financial institution may not disclose 
     nonpublic personal information to nonaffiliated third parties 
     unless--
       (A) such financial institution clearly and conspicuously 
     discloses to the consumer, in writing or in electronic form 
     (or other form permitted by the regulations prescribed under 
     section 504), that such information may be disclosed to such 
     third parties;
       (B) the consumer is given the opportunity, before the time 
     that such information is initially disclosed, to direct that 
     such information not be disclosed to such third parties; and
       (C) the consumer is given an explanation of how the 
     consumer can exercise that nondisclosure option.
       (2) Exception.--This subsection shall not prevent a 
     financial institution from providing nonpublic personal 
     information to a nonaffiliated third party to perform 
     services or functions on behalf of the financial institution, 
     including marketing of the financial institution's own 
     products or services or financial products or services 
     offered pursuant to joint agreements between two or more 
     financial institutions that comply with the requirements 
     imposed by the regulations prescribed under section 504, if 
     the financial institution fully discloses the providing of 
     such information and enters into a contractual agreement with 
     the third party that requires the third party to maintain the 
     confidentiality of such information.
       (c) Limits on Reuse of Information.--Except as otherwise 
     provided in this subtitle, a nonaffiliated third party that 
     receives from

[[Page 15091]]

     a financial institution nonpublic personal information under 
     this section shall not, directly or through an affiliate of 
     such receiving third party, disclose such information to any 
     other person that is a nonaffiliated third party of both the 
     financial institution and such receiving third party, unless 
     such disclosure would be lawful if made directly to such 
     other person by the financial institution.
       (d) Limitations on the Sharing of Account Number 
     Information for Marketing Purposes.--A financial institution 
     shall not disclose an account number or similar form of 
     access number or access code for a credit card account, 
     deposit account, or transaction account of a consumer to any 
     nonaffiliated third party for use in telemarketing, direct 
     mail marketing, or other marketing through electronic mail to 
     the consumer.
       (e) General Exceptions.--Subsections (a) and (b) shall not 
     prohibit the disclosure of nonpublic personal information--
       (1) as necessary to effect, administer, or enforce a 
     transaction requested or authorized by the consumer, or in 
     connection with--
       (A) servicing or processing a financial product or service 
     requested or authorized by the consumer;
       (B) maintaining or servicing the consumer's account with 
     the financial institution; or
       (C) a proposed or actual securitization, secondary market 
     sale (including sales of servicing rights), or similar 
     transaction related to a transaction of the consumer;
       (2) with the consent or at the direction of the consumer;
       (3) to protect the confidentiality or security of its 
     records pertaining to the consumer, the service or product, 
     or the transaction therein, or to protect against or prevent 
     actual or potential fraud, unauthorized transactions, claims, 
     or other liability, for required institutional risk control, 
     or for resolving customer disputes or inquiries, or to 
     persons holding a beneficial interest relating to the 
     consumer, or to persons acting in a fiduciary capacity on 
     behalf of the consumer;
       (4) to provide information to insurance rate advisory 
     organizations, guaranty funds or agencies, applicable rating 
     agencies of the financial institution, persons assessing the 
     institution's compliance with industry standards, and the 
     institution's attorneys, accountants, and auditors;
       (5) to the extent specifically permitted or required under 
     other provisions of law and in accordance with the Right to 
     Financial Privacy Act of 1978, to law enforcement agencies 
     (including a Federal functional regulator, a State insurance 
     authority, or the Federal Trade Commission), self-regulatory 
     organizations, or for an investigation on a matter related to 
     public safety;
       (6) to a consumer reporting agency in accordance with the 
     Fair Credit Reporting Act, or in accordance with 
     interpretations of such Act by the Board of Governors of the 
     Federal Reserve System or the Federal Trade Commission, 
     including interpretations published as commentary (16 C.F.R. 
     601-622);
       (7) in connection with a proposed or actual sale, merger, 
     transfer, or exchange of all or a portion of a business or 
     operating unit if the disclosure of nonpublic personal 
     information concerns solely consumers of such business or 
     unit; or
       (8) to comply with Federal, State, or local laws, rules, 
     and other applicable legal requirements; to comply with a 
     properly authorized civil, criminal, or regulatory 
     investigation or subpoena by Federal, State, or local 
     authorities; or to respond to judicial process or government 
     regulatory authorities having jurisdiction over the financial 
     institution for examination, compliance, or other purposes as 
     authorized by law.

     SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY.

       (a) Disclosure Required.--A financial institution shall 
     clearly and conspicuously disclose to each consumer, at the 
     time of establishing the customer relationship with the 
     consumer and not less than annually, in writing or in 
     electronic form (or other form permitted by the regulations 
     prescribed under section 504), its policies and practices 
     with respect to protecting the nonpublic personal information 
     of consumers in accordance with the rules prescribed under 
     section 504.
       (b) Information To Be Included.--The disclosure required by 
     subsection (a) shall include--
       (1) the policy and practices of the institution with 
     respect to disclosing nonpublic personal information to 
     nonaffiliated third parties, other than agents of the 
     institution, consistent with section 502 of this subtitle, 
     and including--
       (A) the categories of persons to whom the information is or 
     may be disclosed, other than the persons to whom the 
     information may be provided pursuant to section 502(e); and
       (B) the practices and policies of the institution with 
     respect to disclosing of nonpublic personal information of 
     persons who have ceased to be customers of the financial 
     institution;
       (2) the categories of nonpublic personal information that 
     are collected by the financial institution;
       (3) the policies that the institution maintains to protect 
     the confidentiality and security of nonpublic personal 
     information in accordance with section 501; and
       (4) the disclosures required, if any, under section 
     603(d)(2)(A)(iii) of the Fair Credit Reporting Act.

     SEC. 504. RULEMAKING.

       (a) Regulatory Authority.--The Federal banking agencies, 
     the National Credit Union Association, the Secretary of the 
     Treasury, and the Securities and Exchange Commission, shall 
     jointly prescribe, after consultation with the Federal Trade 
     Commission, and representatives of State insurance 
     authorities designated by the National Association of 
     Insurance Commissioners, such regulations as may be necessary 
     to carry out the purposes of this subtitle. Such regulations 
     shall be prescribed in accordance with applicable 
     requirements of the title 5, United States Code, and shall be 
     issued in final form within 6 months after the date of 
     enactment of this Act.
       (b) Authority To Grant Exceptions.--The regulations 
     prescribed under subsection (a) may include such additional 
     exceptions to subsections (a) and (b) of section 502 as are 
     deemed consistent with the purposes of this subtitle.

     SEC. 505. ENFORCEMENT.

       (a) In General.--This subtitle and the rules prescribed 
     thereunder shall be enforced by the Federal functional 
     regulators, the State insurance authorities, and the Federal 
     Trade Commission with respect to financial institutions 
     subject to their jurisdiction under applicable law, as 
     follows:
       (1) Under section 8 of the Federal Deposit Insurance Act, 
     in the case of--
       (A) national banks, Federal branches and Federal agencies 
     of foreign banks, and any subsidiaries of such entities, by 
     the Office of the Comptroller of the Currency;
       (B) member banks of the Federal Reserve System (other than 
     national banks), branches and agencies of foreign banks 
     (other than Federal branches, Federal agencies, and insured 
     State branches of foreign banks), commercial lending 
     companies owned or controlled by foreign banks, organizations 
     operating under section 25 or 25A of the Federal Reserve Act, 
     bank holding companies and their nonbank subsidiaries or 
     affiliates (except broker-dealers, affiliates providing 
     insurance, investment companies, and investment advisers), by 
     the Board of Governors of the Federal Reserve System;
       (C) banks insured by the Federal Deposit Insurance 
     Corporation (other than members of the Federal Reserve 
     System), insured State branches of foreign banks, and any 
     subsidiaries of such entities, by the Board of Directors of 
     the Federal Deposit Insurance Corporation; and
       (D) savings association the deposits of which are insured 
     by the Federal Deposit Insurance Corporation, and any 
     subsidiaries of such a savings association, by the Director 
     of the Office of Thrift Supervision.
       (2) Under the Federal Credit Union Act, by the 
     Administrator of the National Credit Union Administration 
     with respect to any Federal or state chartered credit union, 
     and any subsidiaries of such an entity.
       (3) Under the Farm Credit Act of 1971, by the Farm Credit 
     Administration with respect to the Federal Agricultural 
     Mortgage Corporation, any Federal land bank, Federal land 
     bank association, Federal intermediate credit bank, or 
     production credit association.
       (4) Under the Securities Exchange Act of 1934, by the 
     Securities and Exchange Commission with respect to any 
     broker-dealer.
       (5) Under the Investment Company Act of 1940, by the 
     Securities and Exchange Commission with respect to investment 
     companies.
       (6) Under the Investment Advisers Act of 1940, by the 
     Securities and Exchange Commission with respect to investment 
     advisers registered with the Commission under such Act.
       (7) Under Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U. S. C. 4501 et seq.), by the 
     Office of Federal Housing Enterprise Oversight with respect 
     to the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.
       (8) Under the Federal Home Loan Bank Act, by the Federal 
     Housing Finance Board with respect to Federal home loan 
     banks.
       (9) Under State insurance law, in the case of any person 
     engaged in providing insurance, by the State insurance 
     authority of the State in which the person is domiciled, 
     subject to section 104 of this Act.
       (10) Under the Federal Trade Commission Act, by the Federal 
     Trade Commission for any other financial institution that is 
     not subject to the jurisdiction of any agency or authority 
     under paragraphs (1) through (9) of this subsection.
       (b) Enforcement of Section 501.--
       (1) In general.--Except as provided in paragraph (2), the 
     agencies and authorities described in subsection (a) shall 
     implement the standards prescribed under section 501(b) in 
     the same manner, to the extent practicable, as standards 
     prescribed pursuant to subsection (a) of section 39 of the 
     Federal Deposit Insurance Act are implemented pursuant to 
     such section.
       (2) Exception.--The agencies and authorities described in 
     paragraphs (4), (5), (6), (9),

[[Page 15092]]

     and (10) of subsection (a) shall implement the standards 
     prescribed under section 501(b) by rule with respect to the 
     financial institutions subject to their respective 
     jurisdictions under subsection (a).
       (c) Definitions.--The terms used in subsection (a)(1) that 
     are not defined in this subtitle or otherwise defined in 
     section 3(s) of the Federal Deposit Insurance Act shall have 
     the meaning given to them in section 1(b) of the 
     International Banking Act of 1978.

     SEC. 506. FAIR CREDIT REPORTING ACT AMENDMENT.

       (a) Amendment.--Section 621 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681s) is amended--
       (1) in subsection (d), by striking everything following the 
     end of the second sentence; and
       (2) by striking subsection ``(e)'' and inserting in lieu 
     thereof the following:
       ``(e) Regulatory Authority.--
       ``(1) The Federal banking agencies referred to in 
     paragraphs (1) and (2) of subsection (b) shall jointly 
     prescribe such regulations as necessary to carry out the 
     purposes of this Act with respect to any persons identified 
     under paragraphs (1) and (2) of subsection (b), or to the 
     holding companies and affiliates of such persons.
       ``(2) The Administrator of the National Credit Union 
     Administration shall prescribe such regulations as necessary 
     to carry out the purposes of this Act with respect to any 
     persons identified under paragraph (3) of subsection (b).''.
       (b) Conforming Amendment.--Section 621(a) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681s(a)) is amended by 
     striking paragraph (4).

     SEC. 507. RELATION TO OTHER PROVISIONS.

       This subtitle shall not apply to any information to which 
     subtitle D of title III applies.

     SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL 
                   AFFILIATES.

       (a) In General.--The Secretary of the Treasury, in 
     conjunction with the Federal functional regulators and the 
     Federal Trade Commission, shall conduct a study of 
     information sharing practices among financial institutions 
     and their affiliates. Such study shall include--
       (1) the purposes for the sharing of confidential customer 
     information with affiliates or with nonaffiliated third 
     parties;
       (2) the extent and adequacy of security protections for 
     such information;
       (3) the potential risks for customer privacy of such 
     sharing of information;
       (4) the potential benefits for financial institutions and 
     affiliates of such sharing of information;
       (5) the potential benefits for customers of such sharing of 
     information;
       (6) the adequacy of existing laws to protect customer 
     privacy;
       (7) the adequacy of financial institution privacy policy 
     and privacy rights disclosure under existing law;
       (8) the feasibility of different approaches, including opt-
     out and opt-in, to permit customers to direct that 
     confidential information not be shared with affiliates and 
     nonaffiliated third parties; and
       (9) the feasibility of restricting sharing of information 
     for specific uses or of permitting customers to direct the 
     uses for which information may be shared.
       (b) Consultation.--The Secretary shall consult with 
     representatives of State insurance authorities designated by 
     the National Association of Insurance Commissioners, and also 
     with financial services industry, consumer organizations and 
     privacy groups, and other representatives of the general 
     public, in formulating and conducting the study required by 
     subsection (a).
       (c) Report.--Before the end of the 6-month period beginning 
     on the date of the enactment of this Act, the Secretary shall 
     submit a report to the Congress containing the findings and 
     conclusions of the study required under subsection (a), 
     together with such recommendations for legislative or 
     administrative action as may be appropriate.

     SEC. 509. DEFINITIONS.

       As used in this subtitle:
       (1) Federal banking agency.--The term ``Federal banking 
     agency'' has the meanings given to such terms in section 3 of 
     the Federal Deposit Insurance Act.
       (2) Federal functional regulator.--The term ``Federal 
     functional regulator'' means--
       (A) the Board of Governors of the Federal Reserve System;
       (B) the Office of the Comptroller of the Currency;
       (C) the Board of Directors of the Federal Deposit Insurance 
     Corporation;
       (D) the Director of the Office of Thrift Supervision;
       (E) the National Credit Union Administration Board;
       (F) the Farm Credit Administration; and
       (G) the Securities and Exchange Commission.
       (3) Financial institution.--The term ``financial 
     institution'' means any institution the business of which is 
     engaging in financial activities or activities that are 
     incidental to financial activities, as described in section 
     6(c) of the Bank Holding Company Act of 1956.
       (4) Nonpublic personal information.--
       (A) The term ``nonpublic personal information'' means 
     personally identifiable financial information--
       (i) provided by a consumer to a financial institution;
       (ii) resulting from any transaction with the consumer or 
     the service performed for the consumer; or
       (iii) otherwise obtained by the financial institution.
       (B) Such term does not include publicly available 
     information, as such term is defined by the regulations 
     prescribed under section 504.
       (C) Notwithstanding subparagraph (B), such term shall 
     include any list, description, or other grouping of consumers 
     (and publicly available information pertaining to them) that 
     is derived using any personally identifiable information 
     other than publicly available information.
       (5) Nonaffiliated third parties.--The term ``nonaffiliated 
     third parties'' means any entity that is not an affiliate of, 
     or related by common ownership or affiliated by corporate 
     control with, the financial institution, but does not include 
     a joint employee of such institution.
       (6) Affiliate.--The term ``affiliate'' means any company 
     that controls, is controlled by, or is under common control 
     with another company.
       (7) Necessary to effect, administer, or enforce.--The term 
     ``as necessary to effect, administer or enforce the 
     transaction'' means--
       (A) the disclosure is required, or is a usual, appropriate 
     or acceptable method, to carry out the transaction or the 
     product or service business of which the transaction is a 
     part, and record or service or maintain the consumer's 
     account in the ordinary course of providing the financial 
     service or financial product, or to administer or service 
     benefits or claims relating to the transaction or the product 
     or service business of which it is a part, and includes--
       (i) providing the consumer or the consumer's agent or 
     broker with a confirmation, statement, or other record of the 
     transaction, or information on the status or value of the 
     financial service or financial product; and
       (ii) the accrual or recognition of incentives or bonuses 
     associated with the transaction that are provided by the 
     financial institution or any other party;
       (B) the disclosure is required, or is one of the lawful or 
     appropriate methods, to enforce the rights of the financial 
     institution or of other persons engaged in carrying out the 
     financial transaction, or providing the product or service;
       (C) the disclosure is required, or is a usual, appropriate, 
     or acceptable method, for insurance underwriting at the 
     consumer's request or for reinsurance purposes, or for any of 
     the following purposes as they relate to a consumer's 
     insurance: account administration, reporting, investigating, 
     or preventing fraud or material misrepresentation, processing 
     premium payments, processing insurance claims, administering 
     insurance benefits (including utilization review activities), 
     participating in research projects, or as otherwise required 
     or specifically permitted by Federal or State law; or
       (D) the disclosure is required, or is a usual, appropriate 
     or acceptable method, in connection with--
       (i) the authorization, settlement, billing, processing, 
     clearing, transferring, reconciling, or collection of amounts 
     charged, debited, or otherwise paid using a debit, credit or 
     other payment card, check, or account number, or by other 
     payment means;
       (ii) the transfer of receivables, accounts or interests 
     therein; or
       (iii) the audit of debit, credit or other payment 
     information.
       (8) State insurance authority.--The term ``State insurance 
     authority'' means, in the case of any person engaged in 
     providing insurance, the State insurance authority of the 
     State in which the person is domiciled.
       (9) Consumer.--The term ``consumer'' means an individual 
     who obtains, from a financial institution, financial products 
     or services which are to be used primarily for personal, 
     family, or household purposes, and also means the legal 
     representative of such an individual.
       (10) Joint agreement.--The term ``joint agreement'' means a 
     formal written contract pursuant to which two or more 
     financial institutions jointly offer, endorse, or sponsor a 
     financial product or service, and any payments between the 
     parties are based on business or profit generated.

     SEC. 510. EFFECTIVE DATE.

       This subtitle shall take effect 6 months after the date on 
     which the rules under section 503 are promulgated, except--
       (1) to the extent that a later date is specified in such 
     rules; and
       (2) that section 506 shall be effective upon enactment.

  The CHAIRMAN. Pursuant to House Resolution 235, the gentleman from 
Ohio (Mr. Oxley) and a Member opposed each will control 15 minutes.
  Mr. MARKEY. Madam Chairman, I rise to request control of the time in 
opposition to the amendment.
  The CHAIRMAN. Is the gentleman opposed to the amendment?

[[Page 15093]]


  Mr. MARKEY. I am in momentary opposition to the amendment.
  The CHAIRMAN. The gentleman from Ohio (Mr. Oxley) and the gentleman 
from Massachusetts (Mr. Markey) each will control 15 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).
  Mr. OXLEY. Madam Chairman, I yield myself 3 minutes.
  Madam Chairman, I want to talk about what the brave new world of 
financial services marketplace is going to look like and what it is 
going to look like realistically as opposed to some of the scare 
stories my colleagues are going to hear from the gentleman from 
Massachusetts (Mr. Markey).
  Basically, it means more choice of services and products, varied for 
the consumer, the joint ventures and, yes, the responsible sharing of 
consumer information taking place in the market today.
  The reality is, the integrated products and services today's consumer 
expects from his or her financial institutions require information 
sharing, especially among affiliates. After all, in the eyes of the 
consumer, what are affiliates other than different departments of the 
same company that they are dealing with.
  One can bet, for example, that if a consumer in Ohio, for example, 
has a relationship with bank one and is applying for a preapproved 
mortgage loan, he expects them to know when he calls that he has a 
savings account, a checking account, a car loan, and a CD with them. 
The last thing he wants is more government regulation and more forms to 
fill out when he is dealing with his own company.
  The amendment I offer today with the gentlewoman from Ohio (Ms. 
Pryce) and the gentlewoman from New Jersey (Mrs. Roukema) takes a more 
realistic, more free market, more consumer friendly approach to the 
issue of privacy.
  The amendment, I want to make this very clear, requires mandatory 
disclosure for the first time of financial institutions' privacy policy 
in clear and conspicuous language. The amendment provides an opt-out 
provision, enabling consumers who so choose not to have their 
confidential financial information disclosed to unaffiliated third 
parties.
  It includes a prohibition on the sharing of consumer account numbers 
to third parties in connection with the marketing of products, thus 
addressing concerns regarding third-party telemarketing.
  The amendment requires the financial institution regulators to set 
and enforce standards for the security of confidential information. An 
amendment requires the Secretary of Treasury to do a comprehensive 
study on privacy issues as it relates to affiliate structure.
  I would point out to the Members this issue of information sharing 
within affiliates has had no hearing whatsoever, the Committee on 
Banking and Financial Services or in the Committee on Commerce. This 
would require a study by the Treasury Department to find out exactly 
where the pressure points are.
  Madam Chairman, these are strong, new protections for consumer 
privacy, unheard of before. It takes a huge step in providing the kind 
of privacy for consumers and, at the same time, at the same time, 
allowing the efficiencies of the marketplace to work so effectively.
  We trust consumers to make those kinds of choices when they are 
dealing with their financial services company. If they do not like that 
privacy policy or they think that they are having their information 
passed on, they can simply change companies and vote with their feet.

                              {time}  2145

  That is what this amendment does. We trust the consumer. We think 
this is the best approach to privacy. I would ask support of the Oxley 
amendment.
  Madam Chairman, I reserve the balance of my time.
  Mr. MARKEY. Madam Chairman, I yield myself such time as I may 
consume.
  Madam Chairman, maybe there are Members in this institution and maybe 
there are Americans who do not share the same concerns I have about my 
financial privacy. When I go to the ATM machine in this building, I go 
over and I punch in my four numbers, and then, as the machine spits out 
the hundred dollars, I pocket that and out spits a receipt. The receipt 
tells me what my balance is.
  Now, I do not know about the other people in this Chamber, but I hide 
that sheet from the intern or the page who is standing right behind me, 
because I do not want them to know what my balance is.
  Now, maybe I am different from other people in this room. As a matter 
of fact, I do not even throw away that slip in the bucket that is right 
there. I walk 10 buckets away, or I pocket it because I do not want 
anyone to know what my balance is.
  Now, the Oxley amendment makes some progress because it gives an 
opportunity for a consumer to block the sale of that information to an 
unaffiliated company. That is progress. However, it does not stop 
within a bank holding company, if our checking records or any of our 
banking records are now affiliated with a new brokerage or a new 
insurance or a new telemarketing firm, because in fact the bank holding 
company can now be affiliated with a telemarketer. Or, looking earlier 
at the Burr amendment, perhaps television stations. Perhaps it will be 
CNBC. Perhaps it will be the Drudge Report. They can be affiliated with 
anything, anything, potentially. Well, we do not get any protection 
because they can share the information with anyone they affiliate with.
  So the Oxley amendment does take a step forward, yes. Yes, indeed. 
But only when we reach, only when we reach the recommittal motion, 
which is coming up in about 15 or 20 minutes, will we get a chance to 
close the big loophole. The big loophole. And all I ask of my 
colleagues is that while, in fact, the Oxley amendment shuts down sale 
to robbers, that is burglars, those outside the bank holding company, 
it does not do anything about electronic embezzlers inside the bank 
holding company marketing it, not just to its affiliates, but they can 
market it because they are affiliates to anyone else in the world. That 
is the loophole. We have no privacy.
  So the Oxley amendment is a good step forward but with a big loophole 
left that the recommittal motion is going to give every Member out here 
a chance to vote in a substantive way for, as they will for the health 
care provision that the gentleman from California (Mr. Condit) wants 
and the redlining provision that the gentlewoman from Texas (Ms. 
Jackson-Lee) wants.
  But the key here is to understand that at least on this Oxley 
amendment, while it is a good step forward, there is another big vote 
coming up in about 15 minutes after that, and this is just a preview of 
coming attractions that we are going to try to give our colleagues 
during the course of this debate on Oxley.
  Madam Chairman, I reserve the balance of my time.
  Mr. OXLEY. Madam Chairman, I yield 2 minutes to the gentleman from 
Louisiana (Mr. Baker), a member of the Committee on Banking and 
Financial Services and a subcommittee chair.
  Mr. BAKER. Madam Chairman, I thank the gentleman for yielding me this 
time.
  Madam Chairman, if we listened to the previous speaker's concerns 
about security and privacy in today's world, with computers on 
everyone's desk at home, computers across this Nation in business at 
this moment exchanging billions of pieces of information, we should be 
extremely concerned about privacy. I would merely point out, if Al Gore 
had not invented the Internet to begin with, we would not be having 
this problem tonight.
  But let us get to the current state of law. The fact is, if we do not 
adopt this amendment and approve this bill there is no privacy 
constraints not only on financial institutions but on free enterprise 
institutions outside the financial marketplace.
  Let us talk about the amendment. What does it do? It says, if someone 
is

[[Page 15094]]

outside the bank, we can no longer give them proprietary private 
information of those customers, which does not belong to them. We 
cannot sell it to them, we cannot give it to them, we cannot do 
anything with it because that is prohibited by this law. First time 
ever. Federal law prohibits the use of proprietary financial 
institution information to third parties. This is a major step forward.
  This kind of reminds me like my first experience in one of those big 
grocery stores. As I walked down the aisle I saw jeans for 12 bucks. 
First time in my life. That was a big deal. I walked around the corner, 
and I saw tires for four-wheelers. My goodness, how did they get here? 
I went around the next corner, and I ran into one of these nice ladies, 
and she had these little bitty wieners they only give out one at a 
time. But they were selling those little wieners in the store, along 
with the tires, along with the jeans, along with everything else. I 
thought this is amazing. What convenience. And great prices, too.
  If we adopt this bill tonight, without the extreme provisions that 
the gentleman from Massachusetts (Mr. Markey) proposes, we can have the 
same thing in financial services. We can go to one location and we can 
buy insurance, we can invest in stocks, we can manage our retirement 
fund, all with the ease of dealing with one person and one institution.
  What about the small town bank? The guy who runs the small town bank, 
he is the loan officer, he is the chief executive officer. He opens up 
in the morning; he closes at night. He sells insurance. If we took the 
Markey position with technology, that guy would have to have some type 
of surgery to split his head because he could not talk to the customer 
about two products. It would be prohibited because he would be sharing 
information improperly.
  Please, this is a good product. It is the right approach. It is the 
right time.
  Mr. MARKEY. Madam Chairman, I yield 3 minutes to the gentleman from 
New York (Mr. LaFalce), the ranking member of the Committee on Banking 
and Financial Services.
  Mr. LaFALCE. Madam Chairman, I rise in support of this amendment. 
And, first of all, I want to give special thanks to two members from my 
staff, Dean Sagar and Tricia Hasten, who worked so hard on this; 
Kirsten Johnson from the staff of the gentleman from Minnesota (Mr. 
Vento); Kristi from the staff of the gentleman from Texas (Mr. Frost); 
and so many other people, the gentlewoman from Ohio (Ms. Pryce) and her 
staff, et cetera; the gentleman from Iowa (Mr. Leach) and his staff.
  This is a significant advancement with respect to privacy. There is 
no question about it. The gentleman from Massachusetts (Mr. Markey) had 
two options, to offer an amendment as a substitute for this, and I 
think this would have been preferable if we had to choose between the 
two; or to offer an amendment that would augment this. In his motion to 
recommit he will offer an amendment that will augment this; and, 
therefore, we could have the best of both worlds. So I advise my 
colleagues of that.
  Now, what is good about this? What is excellent about this? Well, 
first of all, it creates for the very first time an affirmative and 
continuing obligation, a duty on the part of financial institutions to 
protect customer information. That does not exist under current law.
  I introduced this bill in the last Congress. We were unable to get 
it. We did not even get it in the Committee on Banking and Financial 
Services' product. We have it in this amendment. This is terrific.
  Further, not only do we create an obligation, we give the financial 
regulators the ability to articulate standards that the financial 
institutions must meet in order to fulfill that obligation. This, too, 
is terrific. I thank my staff. We have opt-out language that was 
contained in the amendment of the gentleman from Ohio (Mr. Gillmor).
  I introduced a bill to fulfill the challenge that the Comptroller of 
the Currency gave when he gave his speech talking about seamy financial 
institution practices. To fulfill the challenge of the lawsuit brought 
by the Attorney General from Minnesota, the bill would have been not 
just an opt-out or an opt-in but an actual prohibition. We have that in 
this amendment.
  We have a prohibition on the disclosure of account numbers. We 
prohibit financial institutions from sharing with unaffiliated parties 
any credit card savings and transaction account numbers or other means 
of access to such accounts for purposes of marketing to the consumer, 
including telemarketing, including direct mail, and including E-mail 
marketing.
  We have a prohibition on third party resale of private information. 
We prohibit unaffiliated third parties that receive confidential 
customer information from a financial institution from reselling or 
sharing this information with any other unaffiliated parties.
  Let us not look a gift horse in the mouth. This is a terrific 
amendment. We would not have gotten here without the gentleman from 
Washington (Mr. Inslee), we would not have gotten here without the 
gentleman from Massachusetts (Mr. Markey), and I thank them for that. 
Let us accept this and then let us go forward.
  Mr. OXLEY. Madam Chairman, I yield 3 minutes to the gentlewoman from 
Ohio (Ms. Pryce), who has done such a wonderful job in leading us in 
this effort on privacy.
  Ms. PRYCE of Ohio. Madam Chairman, I thank my friend for yielding 
this time.
  Madam Chairman, let me ask my colleagues if they are tired of their 
phone ringing in the middle of dinner only to be solicited for lawn 
care service. Are they tired of getting so much junk mail that they 
have to empty their trash twice as often as they used to? Are they 
tired of their teenagers being solicited for a new credit card every 
other week? Are they tired of wondering who in the world is giving out 
their addresses and phone numbers to these strangers? Well, I am, and I 
am mad as heck about it.
  So today I am taking the floor to issue a public service warning to 
all of our constituents: ``Mr. and Mrs. America, your personal 
financial information may be disclosed by your bank to any Tom, Dick 
and Harry without your knowledge and without your consent.''
  That is right, America, in all the years of banking law in this 
country there are no laws on the book to protect your privacy. Can you 
imagine that? That is wrong. It is un-American, it is anti-consumer, 
and it has to stop. The privacy amendment being offered here tonight is 
a historic precedent to put an end to that.
  Now, many of my friends on the other side of the aisle say it is not 
perfect or complete enough, but, Madam Chairman, for the first time 
ever we will be saying that each financial institution has a legal 
obligation to protect the privacy and confidentiality of its customers. 
And for the first time ever we will be saying that every financial 
institution must adhere to strict standards to ensure the security and 
confidentiality of customer records. And for the first time ever we 
will require every institution to fully disclose to a customer up front 
what their privacy policy is. And perhaps most importantly, for the 
first time ever we will require that financial institutions give their 
customers a right to just say no to the sharing of what most Americans 
hold very, very dear: private information about themselves and their 
families.
  Madam Chairman, make no mistake, this is a landmark privacy 
legislation which was drafted in a bipartisan fashion. And given that 
current law gives our constituents no protection whatsoever, and given 
that our colleagues in the other body have no privacy protection in 
their banking bill whatsoever, and given that last year's version of 
this very bill had no privacy protections whatsoever, while customers 
are growing more and more troubled by random telemarketing and junk 
mail, it is critical we adopt this amendment.
  Privacy is a very personal thing. Americans feel very strongly about 
protecting it. Let us heed the voice of America. I urge adoption of the 
amendment.

[[Page 15095]]


  Mr. MARKEY. Madam Chairman, I yield 3 minutes to the gentleman from 
Washington (Mr. Inslee).
  Mr. INSLEE. Madam Chairman, the previous speaker, the gentlewoman 
from Ohio (Ms. Pryce), is entirely correct. Americans are sick and 
tired of having their personal financial information, their credit 
cards, their savings account information given away to telemarketers 
and getting those obnoxious calls during dinner time.

                              {time}  2200

  She is right. But they are just as tired of getting those calls from 
the affiliates of banks as they are from third parties of banks.
  That is why it is imperative to augment the Oxley amendment by the 
motion to recommit to make sure that Americans have the right to stop 
not only third parties but affiliates from making those calls and 
violating their privacy.
  Now, if I can share with Members something I learned yesterday and I 
think it is important in this debate. The members of the industry have 
objected to affiliate coverage of this vital protection, and they have 
said that if we do this, the financial system would collapse, there is 
simply no way that the banking system could accommodate this reasonable 
consumer protection.
  Well, guess what? In Minnesota yesterday, a major U.S. bank got 
caught with its hand in the cookie jar. They were, in fact, giving away 
consumer private financial information. It was being used to telemarket 
to consumers. And when they were caught by the Minnesota attorney 
general, they said, mea culpa, you got us. We give up. But do my 
colleagues know what they agreed to? They agreed to a Minnesota consent 
decree, to a judicial order prohibiting sharing with their affiliate 
and their third parties because they knew that this could be done.
  I am here to say, if it is good enough for the good folks in 
Minnesota, it is good enough for everybody across America and the U.S. 
Congress ought to be just as progressive and just as effective as the 
Minnesota attorney general and we ought to make sure that affiliates 
are covered just as well. That is why we have got to pass this motion 
to recommit.
  Before I sit, we have talked a lot about privacy. I want to commend 
the work of the gentleman from Iowa (Chairman Leach) and the gentleman 
from New York (Mr. LaFalce) on this program. We have made some 
advancement. But we will be sorely, sorely feeling bad when our 
consumers look back to tonight and say to me and the gentleman from 
Massachusetts (Mr. Markey) and the rest of us, why did we not take care 
of the affiliates at the same time we took care of the third parties?
  It is our chance to do it tonight. Pass the motion to recommit and 
finish the job.
  Mr. OXLEY. Madam Chairman, I am pleased to yield 2 minutes to the 
gentlewoman from New Jersey (Mrs. Roukema) who has taken great 
leadership on this issue and who is the Subcommittee Chair on Financial 
Institutions and Consumer Credit.
  Mrs. ROUKEMA. Madam Chairman, I thank my colleague the gentleman from 
Ohio (Mr. Oxley) for yielding me the time.
  Madam Chairman, I have got to say that I am really very pleased by 
this debate thus far. I appreciate everything that the gentleman from 
New York (Mr. LaFalce) has said. I think that is very constructive. And 
certainly I want to commend the gentleman from Ohio (Mr. Oxley) and the 
gentlewoman from Ohio (Ms. Pryce) and I think she and the gentleman 
from New York (Mr. LaFalce) have greatly strengthened the whole 
argument for this by saying this gives us more privacy than under any 
law that we have ever had.
  This is a giant step in the right direction. But I must also say that 
it is more than just a start. It is not the whole thing, but it is much 
more than just a start. It is literally a foundation for whatever we 
might do in the future. But it is a wonderful foundation, a strong 
foundation.
  I want to say that, as the Chairwoman of the Subcommittee on 
Financial Institutions and Consumer Credit, some weeks ago before this 
privacy thing erupted, really I had set privacy hearings for July 21 
and 22 with the recognition that there are some complexities that are 
here that we will have to deal with.
  The gentleman from Ohio (Mr. Oxley) pointed out that there is a 
report that we are going to be looking for as part of this amendment. 
But I want to point out to my colleagues that there are complexities to 
privacy and accountability here that have not been completely thought 
through.
  For example, some may be concerned about the exceptions included in 
this bill. But, in my opinion, these exceptions are included to ensure 
that everyday transactions like mortgage servicing, securitization of 
mortgages, printing of checks can continue under our new financial 
system. But there are also exceptions that allow our law enforcement 
officials to conduct important investigations relating to public 
safety.
  This is just another way of saying that this is a wonderful 
foundation, more than a small step, in the right direction. It is a 
giant step. But we have more to do, and this puts us on the right 
direction.
  Mr. MARKEY. Madam Chairman, could the Chair tell me how much time is 
remaining.
  The CHAIRMAN. The gentleman from Massachusetts (Mr. Markey) has 5\1/
2\ minutes remaining. The gentleman from Ohio (Mr. Oxley) has 5 minutes 
remaining.
  Mr. MARKEY. Madam Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Barton).
  Mr. BARTON of Texas. Madam Chairman, I want to rise to commend the 
distinguished subcommittee chairman for what he has done but to condemn 
him for not going as far as he should.
  The bill as reported out of the Committee on Banking and Financial 
Services had no privacy protection at all. The bill that was reported 
out of the Committee on Commerce had privacy provisions that the 
gentleman from Massachusetts (Mr. Markey) offered that some people 
thought was too inflexible.
  I supported the gentleman from Massachusetts (Mr. Markey). I worked 
with him and his staff to come up with a modified Markey-Barton-
Dingell-Inslee-Eshoo et al. amendment that we offered to the Committee 
on Rules that was not ruled in order.
  I remember the old days when we thought that banks should be banks 
and insurance companies should be insurance companies and brokers 
should be brokers. That was the good ol' days of the 1980s, not the 
1940s or 1950s.
  Well, tonight we have before us a mega-financial service reform bill 
that, according to those that support it, is going to allow companies 
to operate through hundreds of subsidiaries and affiliates, hundreds.
  The question that I ask this body and the country is: If we are 
concerned about the selling and sharing of information to third 
parties, should we not be just as concerned about the selling, sharing, 
transmitting, or accessing that information inside of these affiliates 
if there are going to be dozens or hundreds of these affiliates?
  I think that what the gentleman from Ohio (Mr. Oxley) and the 
gentlewoman from Ohio (Ms. Pryce) have done is a step in the right 
direction. But it is only a step. Until we solve the riddle of handling 
information within the affiliates structure, we do not have privacy. We 
do not have privacy.
  So I will vote for the amendment because it is a step in the right 
direction, but I will vote against final passage until we get this 
issue settled. It is not going to go away. We need to address it.
  The debate this evening on the floor is good. I commend the gentleman 
from Massachusetts (Mr. Markey) and the gentleman from New York (Mr. 
LaFalce) and the gentleman from Ohio (Mr. Leach) and the gentleman from 
Ohio (Mr. Oxley) and the gentlewoman from Ohio (Ms. Pryce) and others 
for bringing the debate to the country. But the ultimate solution is 
not Oxley-Pryce. We need to go further.

[[Page 15096]]


  Mr. OXLEY. Madam Chairman, I am pleased to yield 1 minute to the 
gentleman from Ohio (Mr. Gillmor) who has been one of the leaders on 
the Committee on Commerce on the banking provisions, as well as the 
privacy provisions.
  Mr. GILLMOR. Madam Chairman, I want to commend the chairman for his 
leadership on the privacy issue. This amendment is an important step in 
protecting individual privacy. It protects it by regulating the 
disclosure and the sharing of consumer information by financial 
institutions.
  It contains a number of the elements that were in an amendment that I 
offered in the Committee on Commerce, and the Committee on Commerce did 
adopt those provisions but it is not in the version before us.
  Consumers feel they have lost control over how their financial 
information is being collected, how it is being distributed by 
institutions having nothing to do with the financial relations they 
have with those providers.
  Personal information is much more accessible now, even without the 
person whose privacy is invaded knowing it is being invaded. The sale 
and transfer of that information is both widespread and it is growing. 
And the simple reason is the astonishing growth in technology today and 
information gathering and the human benefits the tremendous benefits we 
get from that also carry with them unprecedented threats to personal 
privacy and personal privacy need protection because it is an important 
part of individual freedom.
  I urge support of the amendment.
  Mr. MARKEY. Madam Chairman, I yield such time as he may consume to 
the gentleman from Texas (Mr. Frost).
  Mr. FROST. Madam Chairman, I rise in support of the Oxley amendment.
  Mr. MARKEY. Madam Chairman, I yield such time as he may consume to 
the gentleman from Minnesota (Mr. Vento).
  Madam Chairman, I rise in support of the comprehensive privacy 
amendment. I believe that this amendment improves the bill by providing 
consumers with new important safeguards for their financial privacy.
  Public concerns about personal information privacy are growing. 
Seemingly each week, there are new reports of stolen identities, 
selling of consumer financial data, ``cookies'' on Internet sites, 
hijacked ATM cards and numbers. Both the Banking Committee and the 
Commerce Committee, for the first time, addressed consumer privacy in 
H.R. 10. During the Banking Committee debate on this issue, I stated 
that the issue of privacy is even bigger than the financial services 
modernization bill. While it is appropriate to insure that adequate 
privacy safeguards are in place to protect consumer privacy in the new 
financial marketplace, this legislation is not the vehicle to address 
an all embracing comprehensive privacy legislation. This bill will not 
stop identity theft. It will not stop the stealing of Social Security 
numbers nor the filing of false tax returns. H.R. 10 will not stop the 
selling of driver's license information or the selling of its lists or 
attaching cookies to visitors to web sites. Nor will this bill stop the 
diversion of an individual's mail nor the stealing of credit card and 
ATM numbers. Those issues are left for another day and future action.
  H.R. 10 should contain a privacy protection component as it relates 
to financial institutions. That component should not just be a 
rhetorical statement, it must be a workable safeguard for consumers. 
The financial privacy protection amendment pending before the Committee 
is better than the Banking and Commerce Committee alternatives. It is a 
good, workable product that will serve our constituents well. The 
Financial Privacy Protection amendment reinforces the opt-out for third 
party information sharing--a key consumer concern. More importantly, 
the amendment puts in place strong affirmative provisions of law that 
provide absolute protections and benefits for consumers.
  Those provisions include:
  Affirmative privacy responsibility and policy.--Banks, insurance 
companies, credit unions, security firms, mutual funds, thrifts and 
other financial institutions will be required by law to be respect for 
consumer's financial privacy and to have a privacy policy that meets 
federal standards to protect the security and confidentiality of the 
customers personal information.
  Prohibition on sharing account numbers.--Consumer account numbers 
cannot be shared for the purposes of third party marketing. This 
protection applies to all consumers and requires no action on their 
part.
  Workable ``Opt-Out'' on third party information sharing.--Consumers 
can ``opt-out'' of sharing of information with third parties in a 
workable fashion that protects consumers' privacy while allowing the 
processing of services they request.
  Effective regulatory authority.--Regulatory and enforcement authority 
is provided to the specific regulators of each type of financial 
institutions. These regulators can best do the job instead of the 
alternative single regulator who is understaffed and supports privacy 
``self-regulation'' for the industry it is currently charged to 
regulate.
  Prohibits repackaging of consumer information.--Consumer information 
remains protected. It cannot be resold or shared by third parties or 
profiled or repackaged to avoid privacy protections.
  Consumer disclosure.--Consumers must be notified of the financial 
institutions' privacy policy at the time that they open an account and 
at least annually thereafter.
  These common sense, workable provisions will be added to the 
substantial protections already included in H.R. 10 that prohibit 
obtaining customer information through false pretenses and disclosing a 
consumer's health and medical information.
  In addition, the legislation clearly defines what is ``publicly 
available information''. This definition is designed to insure that 
non-public information is not disseminated through a public information 
loophole. Under the amendment, which I helped to draft, publicly 
available information is intended to include information such as:
  Public records from country or municipal sources, such as tax 
assessors' offices, recorders of deeds, tax collectors, planning 
departments and court systems;
  Public records from state sources, such as planning agencies, 
secretaries of state, revenue agencies, departments of motor vehicles, 
state courts, departments of education, departments of forestry, 
environmental reporting agencies and employment security agencies;
  Public records from federal sources, such as federal courts, the IRS, 
FEMA, the USGS, FCC, FAA, U.S. Post Office and Census Bureau; and
  Public information from Journals, newspapers and other publications.
  I do not take a back seat to any Member when it comes to consumer 
rights and consumer privacy. I have worked to protect consumer privacy 
through laws like Truth in Lending, Fair Credit Reporting Act and the 
Electronic Fund Transfer Act. I also introduced one of the first 
proposals to protect a consumer's privacy on the Internet, the Consumer 
Internet Privacy Protection Act.
  During the Banking Committee mark-up, I introduced an amendment that 
would have provided an annual opt-out on affiliate sharing. I withdrew 
that amendment because I realized that it was unworkable. Other 
advocates of the opt-out are to date not dissuaded by the problems. 
Consumer privacy is not insured and consumer services are reduced. 
Unified statements cannot be issued and something as simple as calling 
to get an account balance will become a bureaucratic nightmare. The 
only thing that an affiliate opt-out amendment accomplishes is to 
require financial institutions to restructure themselves to conform to 
the cookie cutter mold developed by Congress.
  A law that requires consumer action is appropriate but third party 
and affiliate ``opt-out'' is hardly the last word in consumer rights. 
The fact is that a number of consumers have such a right today under 
FCRA or institution policies. Even with that authority, only a small 
fraction of individuals, less than 1 percent, exercise that option. 
Consumer choice is nice but what does it really accomplish--what is the 
bottom line.
  Another deficiency of the alternative proposal is the regulator. That 
approach gives enforcement authority to the Federal Trade Commission as 
opposed to the appropriate regulator for each financial institution. 
This is the same regulator who testified last year before the House 
Commerce Subcommittee on Telecommunications on Internet privacy. At 
that time, FTC Chairman Pitofsky testified that: ``The Commission 
believes that self-regulation is preferred to a detailed legislative 
mandate . . .'' We should not turn over such an important enforcement 
authority to such a reluctant regulator.
  Madam Chairman, I urge my Colleagues to support the pending 
amendment. If we are to pass financial modernization, strong consumer 
privacy protection must be a cornerstone of that proposal. The pending 
amendment helps us to achieve that goal.
  Mr. MARKEY. Madam Chairman, I yield myself the balance of the time.
  Madam Chairman, the Oxley amendment is a good step forward. We will 
concede that. But it has huge loopholes in the law that it does not 
close.

[[Page 15097]]

  As soon as we finish this debate on the Oxley amendment, we are going 
to have an opportunity to vote on a recommital motion. Within that 
recommital motion, each Member out here on the floor will have a 
straight shot to vote on the provisions that the Committee on Rules did 
not give the Members a chance to vote on.
  They will have a chance to vote on the Condit amendment. The 
gentleman from California (Mr. Condit) and the gentleman from 
California (Mr. Waxman) have a proposal that will close all the medical 
loopholes. It will ensure that your medical information cannot be given 
away. It will guarantee that the exceptions that are inside of this 
bill that swallow the rule do not allow for families across this 
country to have their medical information sold and bought as though it 
was just an ordinary commodity.
  Every Member on the floor in the recommital motion will also be put 
on substantive record on the issue of financial privacy within the 
holding company. That is, if they have all of their checks inside of a 
bank right now and they do not want them to give it over to a 
telemarketing affiliate, they do not want them to give it over to the 
brokerage affiliate, they do not want them to hand it over to the 
insurance affiliate, they cannot say no. They have no right to say no 
under the Republican bill.
  In the recommital motion, each Member is going to be given an 
opportunity to say to every American, I think you should have the right 
to say no. I do not want any of my children's privacy compromised. I do 
not want my family's privacy compromised. I do not want the medical 
secret of my family out on the street just because it happens to be a 
bank holding company that owns the insurance policy, the checks, or the 
brokerage account and they have a marketing affiliate that sells my 
privacy like it is a commodity to hundreds of companies that are dying 
to find out everything that is going on within my State.
  So we are going to give everyone an opportunity in that recommital 
motion, and we are going to throw in the Lee redlining as well as the 
third little provision. That is only going to be a 5-minute debate 
altogether. But when my colleagues vote on it, they are going on record 
on those issues. Because if it is successful, it goes into the bill 
immediately, and we are voting final passage. And if my colleagues vote 
no, this bill is leaving here with every one on record against medical 
privacy and against the financial privacy provision that ensures that 
the bank holding company and its telemarketing subsidiary, its 
affiliate, cannot just take all their secrets and sell them to the rest 
of the world and make millions of dollars.
  Yes, they call it a synergy, by the way, a synergy. But we are trying 
to take the sin out of the synergy. We are trying to make sure that 
they get the benefits of all these products, they can say yes if they 
want them, but they can say no as well. That is what this is all about. 
It does not stop any bank from trying to get them to buy these 
products. What it says is they have a right to say, no, I do not want 
this. I want the checking account, that is it. Please do not sell the 
rest of the material to anyone else.
  So the Oxley amendment is something that should be supported. I think 
we will all support it unanimously on this side. But the big vote is 
coming up in about 10 more minutes.
  Mr. OXLEY. Madam Chairman, I am pleased to yield 1 minute to the 
gentlewoman from Oregon (Ms. Hooley).
  Ms. HOOLEY of Oregon. Madam Chairman, I thank the gentleman for 
yielding me the time.
  Madam Chairman, I am pleased to support this amendment. It has a 
strong bipartisan protection for consumers. I know there is some honest 
disagreement between my colleagues on this very important issue of 
privacy. But what I would like to do is urge my colleagues to look at 
what is in this amendment, not what is missing.
  My constituents of my district have told me time and time again that 
they do not want their names and permanent information sold to 
companies they have never heard of. If we pass this Oxley amendment, 
consumers will be able to tell their banks; no, I do not want my name 
sold; no, I do not want you to share information with third parties.
  Madam Chairman, this amendment takes us much further than I ever 
dreamt that we would go in strengthening current laws creating new and 
effective protections for consumers on privacy. Most of all, it has 
meaningful enforcement language. I urge its passage.

                              {time}  2215

  Mr. OXLEY. Madam Chairman, I yield 2 minutes to the gentleman from 
California (Mr. Dreier), the chairman of the Committee on Rules.
  Mr. DREIER. Madam Chairman, I rise in strong support of this 
amendment. I would like to begin by not only congratulating the 
gentleman from Ohio (Mr. Oxley) but, of course, my colleague on the 
second row here who worked long and hard as a member of the Committee 
on Rules and, yes, I want to even congratulate, we have once again made 
this a bipartisan effort, when I heard the word ``terrific'' used three 
times by my friend the gentleman from New York (Mr. LaFalce), and I 
know that we will see very broad bipartisan support for what is I think 
a very important measure.
  We are all appalled at the thought of telemarketers getting access to 
information. We all want to do everything that we can to stop that. In 
fact, the base text of this bill has the strongest consumer privacy 
protection we have ever had. But guess what? This amendment, that we 
are all going to be, I hope, overwhelmingly supporting based on the 
statements that I have been hearing, will be even tougher. The fact of 
the matter is this is a very balanced compromise. Why? Because privacy 
is a first priority. That is what it is that the American people want. 
But there are some other demands that they have. They also demand low 
cost and integrated financial products and services, they demand on-
line banking and brokerage services, and they demand protection against 
financial fraud. Quite frankly to meet these demands, all of these 
demands, affiliates have to be able to share some information. That is 
why I am convinced that this now bipartisan effort which has seen many 
Members involved is in fact the balance that is needed for us to deal 
with the issue of privacy as well as meeting consumer demands.
  I encourage my colleagues to support it.
  Mr. OXLEY. Madam Chairman, I yield myself the balance of my time.
  The CHAIRMAN. The gentleman from Ohio is recognized for 1 minute.
  Mr. OXLEY. Madam Chairman, let me reiterate to the Members. Under the 
Oxley amendment, for the first time we are requiring financial services 
organizations to actually have a privacy policy. It has to be printed, 
it has to be explained to the customer, the customer has an opportunity 
to understand exactly what that privacy policy is. It never happened 
before until this amendment becomes law.
  Secondly, now that the consumer who is working with this affiliate 
company understands that policy, he may or may not decide to continue 
to do business with that company. If he is so concerned that the 
company he is dealing with is going to be selling that information or 
leaking that information to other parts of the affiliate, he is going 
to vote with his feet, he is going to act like an educated consumer, to 
quote a famous line from Sy Syms. He is going to be an educated 
consumer, and he is going to go someplace else where his privacy is 
going to be protected. That is the marketplace working very 
effectively, I would say to my friend from Massachusetts, not some 
statute that ties up these financial institutions, costs them millions 
and millions of dollars which is going to be passed on to the consumer 
ultimately and is going to be less and less efficient.
  This is the product that was worked on in a bipartisan way. I ask the 
Members to support the amendment.
  Ms. JACKSON-LEE of Texas. Madam Chairman, I rise in support of the 
Oxley/Pryce/Roukema amendment because it requires financial 
institutions to respect the privacy of its

[[Page 15098]]

customers. This is a basic consumer protection and I urge my colleagues 
to support this amendment.
  The provisions of this amendment include basic consumer privacy 
protections. It requires an ``affirmative and continuing obligation'' 
to protect customer's personal information.
  This amendment requires regulatory standards to insure security and 
confidentiality of customer records to protect against unauthorized 
access and use. With recent advances in technology, there is the 
possibility that a computer hacker can break into a bank's computer 
system and access personal account information.
  This amendment requires that consumers be given the opportunity to 
opt-out of the disclosure of their private information with 
unaffiliated third parties. It also prohibits unaffiliated third 
parties that receive confidential customer information from sharing 
that information with any other unaffiliated parties.
  Another important provision in this amendment requires that all 
financial institutions disclose their policies and practices for 
collecting customer information. All customers should have notice of 
these policies in advance.
  Customers should also have advance knowledge of policies that protect 
their confidential information and the policies that prevent that 
information from being shared with unaffiliated parties. Advance 
knowledge of these policies not only protect the consumer, but it also 
protects the financial institution.
  This amendment prohibits financial institutions from sharing credit 
card, savings and transaction account numbers for purposes of marketing 
to the consumer. This account information is especially sensitive and 
should be kept as confidential as possible.
  These are common sense provisions that protect Americans who are 
sincerely concerned about privacy. These days, many companies have 
access to information about our spending and saving habits because of 
lax privacy laws that only make consumers vulnerable. However, I am 
looking forward to ensuring greater consumer protection as it relates 
to privacy issues--including medical records privacy--as this 
legislation moves to conference.
  I am concerned that this amendment will allow financial institutions 
to share consumer information through their affiliates without 
restriction. However, this amendment is an important first step to 
ensuring a marginal level of privacy for consumers.I support the 
provisions in this amendment and I urge my colleagues to vote for its 
passage.
  Mrs. MALONEY of New York. Madam Chairman, last year H.R. 10 passed 
this Chamber by one vote. In that version of Financial Modernization, 
there were no privacy provisions. This year things have changed. There 
are privacy provisions in the base text and there is this amendment 
which, if adopted, will make this one of the strongest privacy bills to 
involve the financial services industry.
  I would like to thank all of the members who have worked on crafting 
this amendment, including Representatives Frost, LaFalce, Pryce, and 
Oxley. A few days ago I submitted to this informal privacy working 
group a suggested amendment. My proposal would make certain that if an 
affiliate in a holding company were sold to another entity, only the 
information about their own customers could be transferred. No 
information about customers in the original holding company are allowed 
to be shared with the sold entity's new affiliates unless they were 
already a customer. This is an important privacy protection and I was 
pleased that the authors agreed to add it into this amendment.
  Perhaps the most important part of this amendment are the strong 
disclosure provisions. This bill requires financial institutions to 
annually disclose to their customers their policies practices for 
collecting and protecting the customer's private information. Financial 
Modernization means more choices for consumers, and part of that choice 
should include the privacy policies of the firm which is trying to 
attract their business. If a customer is unsatisfied with a privacy 
policy of a firm, they can choose another. But this form of competition 
only works with strong disclosure requirements.
  This amendment will also prohibit financial institutions from 
reselling a consumer's private information to a third party and will 
prohibit them also from sharing a customer's account numbers in order 
to market to that customer. This should prevent many of those unwanted 
telemarketing calls resulting from a relationship with a bank or other 
financial firm.
  There are still some problems with the base text, including the 
problems with the privacy of medical information. But I am pleased with 
the colloquy between Mr. Ganske and Mr. LaFalce and I am confident that 
these issues will be worked out in conference.
  These are the best privacy provisions to ever appear in a draft of 
H.R. 10 and I am supportive of this effort. To be sure, during this 
debate many good issues have been raised about these privacy issues. 
Chairman Leach has announced hearings on privacy for the end of July 
and I am sure the Banking Committee will continue to examine the issue 
and consider appropriate legislation.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Ohio (Mr. Oxley).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.
  Mr. OXLEY. Madam Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 235, further proceedings 
on the amendment offered by the gentleman from Ohio (Mr. Oxley) will be 
postponed.


          Sequential Votes Postponed in Committee of the Whole

  The CHAIRMAN. Pursuant to House Resolution 235, proceedings will now 
resume on those amendments on which further proceedings were postponed 
in the following order: Amendment No. 10 offered by the gentleman from 
Virginia (Mr. Bliley); amendment No. 11 offered by the gentleman from 
Ohio (Mr. Oxley).
  The Chair will reduce to 5 minutes the time for the second electronic 
vote in this series.


                 Amendment No. 10 Offered by Mr. Bliley

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from Virginia (Mr. Bliley) 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. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 226, 
noes 203, not voting 5, as follows:

                             [Roll No. 273]

                               AYES--226

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehner
     Bonilla
     Bono
     Boucher
     Brady (TX)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Castle
     Chabot
     Chambliss
     Coble
     Coburn
     Collins
     Combest
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeGette
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dingell
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Forbes
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gillmor
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Kasich
     Kelly
     Kildee
     King (NY)
     Kingston
     Knollenberg
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     McCollum
     McCrery
     McInnis
     McIntosh
     McIntyre
     McKeon
     Metcalf
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Ose
     Oxley
     Packard
     Pallone
     Pease
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Strickland
     Stump
     Sununu
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Towns
     Traficant
     Upton

[[Page 15099]]


     Vitter
     Walden
     Wamp
     Watkins
     Watts (OK)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--203

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bishop
     Blagojevich
     Blumenauer
     Boehlert
     Bonior
     Borski
     Boswell
     Boyd
     Brady (PA)
     Brown (FL)
     Capuano
     Cardin
     Carson
     Chenoweth
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (IL)
     DeFazio
     Delahunt
     DeLauro
     Dicks
     Dixon
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Foley
     Ford
     Frank (MA)
     Frost
     Gejdenson
     Gephardt
     Gibbons
     Gilchrest
     Gilman
     Gonzalez
     Gordon
     Gutierrez
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Hoyer
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E.B.
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kolbe
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Leach
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McHugh
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Mica
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pascrell
     Pastor
     Paul
     Payne
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Ryun (KS)
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Stupak
     Sweeney
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Walsh
     Waters
     Watt (NC)
     Waxman
     Weiner
     Weldon (FL)
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                             NOT VOTING--5

     Brown (CA)
     Fossella
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2240

  Messrs. MOAKLEY, McHUGH and JONES of North Carolina changed their 
vote from ``aye'' to ``no.''
  Messrs. DAVIS of Florida, VITTER, BROWN of Ohio and DEUTSCH changed 
their vote from ``no'' to ``aye.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.


                      Announcement By The Chairman

  The CHAIRMAN. Pursuant to House Resolution 235, the Chair announces 
that she will reduce to a minimum of 5 minutes the period of time 
within which a vote by electronic device will be taken on the 
additional amendment on which the Chair has postponed further 
proceedings.


                 Amendment No. 11 Offered By Mr. Oxley

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on Amendment No. 11 offered by the gentleman from Ohio (Mr. Oxley) on 
which further proceedings were postponed and on which the ayes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 427, 
noes 1, not voting 6, as follows:

                             [Roll No. 274]

                               AYES--427

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Crowley
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fattah
     Filner
     Fletcher
     Foley
     Forbes
     Ford
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E.B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McDermott
     McGovern
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nadler
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Owens
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Payne
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stark
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Toomey
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Vitter
     Walden
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Waxman
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                                NOES--1

       
     Paul

[[Page 15100]]



                             NOT VOTING--6

     Brown (CA)
     Fossella
     Green (TX)
     Lipinski
     Pelosi
     Walsh

                              {time}  2249

  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. The question is on the committee amendment in the 
nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, is amended, 
was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker having resumed the 
chair, Mrs. Emerson, Chairman 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. 10) to enhance competition in the 
financial services industry by providing a prudential framework for the 
affiliation of banks, securities firms, and other financial service 
providers, and for other purposes, pursuant to House Resolution 235, 
she reported the bill back to the House with an amendment adopted by 
the Committee of the Whole.
  The SPEAKER. Under the rule, the previous question is ordered.
  Is a separate vote demanded on any amendment to the 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. The question is on the engrossment and the third reading 
of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                Motion to Recommit Offered by Mr. Markey

  Mr. MARKEY. Mr. Speaker, I offer a motion to recommit with 
instructions.
  The SPEAKER. Is the gentleman from Massachusetts opposed to the bill?
  Mr. MARKEY. Yes, I am opposed to the bill in its current form, Mr. 
Speaker.
  The SPEAKER. The Clerk will report the motion to recommit.
  The Clerk read as follows:

       Mr. Markey of Massachusetts moves to recommit the bill H.R. 
     10 to the Committee on Banking and Financial Services with 
     instructions to report the same to the House forthwith with 
     the following amendments:
       
       Page 9, after line 19, insert the following new 
     subparagraph (and redesignate the subsequent subparagraph 
     accordingly):
       ``(D) In the case of any bank holding company which 
     underwrites or sells, or any affiliate of which underwrites 
     or sells, annuities contracts or contracts insuring, 
     guaranteeing, or indemnifying against loss, harm, damage, 
     illness, disability, or death--
       ``(i) the company or affiliate has not been adjudicated in 
     any Federal court, and has not entered into a consent decree 
     filed in a Federal court or into a settlement agreement, 
     premised upon a violation of the Fair Housing Act for the 
     activities described in this subparagraph;
       ``(ii) if such company or affiliate has entered into any 
     such consent decree or settlement agreement, the company or 
     the affiliate is not in violation of the decree or settlement 
     agreement as determined by a court of competent jurisdiction 
     or the agency with which the decree or agreement was entered 
     into; or
       ``(iii) the company has been exempted from the requirements 
     of clauses (i) and (ii) by the Board under paragraph (4).
       Page 9, line 24, strike ``and (C)'' and insert ``(C), and 
     (D)''.
       Page 10, line 15, strike ``(1)(D)'' and insert ``(1)(E)''.
       Page 11, after line 4, insert the following new paragraph:
       ``(4) Violations of the fair housing act.--The Board may, 
     on a case-by-case basis, exempt a bank holding company from 
     meeting the requirements of clauses (i) and (ii) of paragraph 
     (1)(D).
       Page 25, line 2, strike ``or (C)'' and insert ``(C), or 
     (D)''.
       Page 26, line 18, strike ``(B) or (C)'' and insert ``(B), 
     (C), or (D)''.
       Page 84, line 18, strike ``(1)(D)'' and insert ``(1)(E)''.
       Page 184, line 17, strike ``(1)(D)'' and insert ``(1)(E)''.
       Page 370, beginning on line 20, strike subtitle D of title 
     III through page 373, line 17 (and conform the table of 
     contents accordingly).
       Strike title V and insert the following (and conform the 
     table of contents accordingly):

                TITLE V--PRIVACY OF CONSUMER INFORMATION

        Subtitle A--Disclosure of Nonpublic Personal Information

     SEC. 501. PROTECTION OF NONPUBLIC PERSONAL INFORMATION.

       (a) Privacy Obligation Policy.--It is the policy of the 
     Congress that each financial institution has an affirmative 
     and continuing obligation to respect the privacy of its 
     customers and to protect the security and confidentiality of 
     those customers' nonpublic personal information.
       (b) Financial Institutions Safeguards.--In furtherance of 
     the policy in subsection (a), each Federal functional 
     regulator shall establish appropriate standards for the 
     financial institutions subject to their jurisdiction, and the 
     Commission shall establish such standards for any financial 
     institutions not subject to such jurisdiction, relating to 
     administrative, technical, and physical safeguards--
       (1) to insure the security and confidentiality of customer 
     records and information;
       (2) to protect against any anticipated threats or hazards 
     to the security or integrity of such records; and
       (3) to protect against unauthorized access to or use of 
     such records or information which could result in substantial 
     harm or inconvenience to any customer.

     SEC. 502. OBLIGATIONS WITH RESPECT TO PERSONAL INFORMATION.

       (a) General Requirements.--Except as otherwise provided in 
     this subtitle, a financial institution may not, directly or 
     through any affiliate, disclose or make an unrelated use of 
     any nonpublic personal information collected by the financial 
     institution in connection with any transaction with a 
     consumer in any financial product or any financial service, 
     unless--
       (1) such financial institution provides or has provided to 
     the consumer a notice that complies with section 503 and the 
     rules thereunder; and
       (2) such financial institution maintains procedures to 
     protect the confidentiality and security of nonpublic 
     personal information.
       (b) Opt-Out Required for Information Transfers.--
       (1) Opportunity to object required.--The Commission shall 
     by rule prohibit a financial institution from making 
     available any nonpublic personal information to any affiliate 
     of the institution, or to any other person that is not an 
     affiliate of the institution, unless the consumer to whom the 
     information pertains--
       (A) is given the opportunity in accordance with such rule 
     to object to the transfer of such information; and
       (B) does not object, or withdraws the objection.
       (2) Flexibility of form.--A financial institution may, in 
     complying with paragraph (1), present the opportunity to 
     object in a manner that permits the consumer to object--
       (A)(i) with respect to both affiliates and nonaffiliated 
     persons;
       (ii) separately with respect to affiliates generally and 
     nonaffiliated persons generally; or
       (iii) separately with respect to specified affiliates and 
     nonaffiliated persons; and
       (B) separately with respect to specified financial and 
     nonfinancial products and services that may be offered to the 
     consumer.
       (c) Access to and Correction of Information Vended to Third 
     Parties.--
       (1) Rule required.--The Commission shall by rule require a 
     financial institution that, for any consideration, makes 
     available nonpublic personal information collected by the 
     financial institution in connection with any transaction with 
     a consumer in any financial product or any financial service 
     to any person or entity other than an employee or agent of 
     such institution, an affiliate of such institution, or an 
     employee or agent of such affiliate, to afford that 
     consumer--
       (A) the opportunity to examine, upon request, the nonpublic 
     personal information that was so made available; and
       (B) the opportunity to dispute the accuracy of any of such 
     information, and to present evidence thereon.
       (2) Exception for proprietary information.--The rule 
     required by paragraph (1) shall not require a financial 
     institution to afford a customer who requests access to the 
     nonpublic personal information that was made available the 
     opportunity to examine or dispute any data obtained by any 
     analysis or evaluation performed using such information, or 
     to examine or dispute the methodology of such analysis or 
     evaluation.
       (d) Limitations on the Sharing of Account Number 
     Information for Marketing Purposes.--A financial institution 
     shall not disclose an account number or similar form of 
     access number or access code for a credit card account, 
     deposit account, or transaction account of a consumer to any 
     nonaffiliated third party for use in telemarketing, direct 
     mail marketing, or other marketing through electronic mail to 
     the consumer.
       (e) General Exceptions.--Subsections (a) and (b) shall not 
     prohibit the disclosing of nonpublic personal information, 
     the making of an unrelated use of such information, or the 
     making available of such information to affiliates or other 
     persons by the financial institution--
       (1) as necessary to effect, administer, or enforce the 
     transaction or a related transaction;

[[Page 15101]]

       (2) with the consent or at the direction of the consumer;
       (3) as necessary to protect the confidentiality or security 
     of its records pertaining to the consumer, the financial 
     service or financial product, or the transaction therein;
       (4) as necessary to take precautions against liability or 
     to protect against or prevent actual or potential fraud, 
     unauthorized transactions, claims, or other liability;
       (5) as necessary to respond to judicial process;
       (6) to the extent permitted or required under other 
     provisions of law and in accordance with the Right to 
     Financial Privacy Act of 1974, to provide information to law 
     enforcement agencies (including a functional regulator, a 
     State insurance authority, or the Commission) or for an 
     investigation on a matter related to public safety;
       (7) to a consumer reporting agency in accordance with title 
     VI of the Consumer Credit Protection Act;
       (8) in executing a sale or exchange whereby the financial 
     institution transfers to another financial institution or 
     other person the business unit or operation, or substantially 
     all the assets of the business unit or operation, with which 
     the customer's transactions were effected; or
       (9) in connection with a proposed or actual securitization, 
     secondary market sale or similar commercial transaction;
       (10) for reinsurance purposes.

     SEC. 503. NOTICE CONCERNING DISCLOSING INFORMATION.

       (a) Rule Required.--The Commission shall, after 
     consultation with the Federal functional regulators and one 
     or more representatives of State insurance regulators, 
     prescribe rules in accordance with this section to prohibit 
     unfair and deceptive acts and practices in connection with 
     the disclosing of nonpublic personal information or with 
     making unrelated uses of such information. Such rules shall 
     require any financial institution, through the use of a form 
     that complies with the rules prescribed under subsection (b), 
     to clearly and conspicuously disclose to the consumer--
       (1) the categories of nonpublic personal information that 
     are collected by the financial institution;
       (2) the practices and policies of the financial institution 
     with respect to disclosing nonpublic personal information, or 
     making unrelated uses of such information, including--
       (A) the categories of persons to whom the information is or 
     may be disclosed or who may be permitted to make unrelated 
     uses of such information, other than the persons to whom the 
     information must be provided to effect, administer, or 
     enforce the transaction; and
       (B) the practices and policies of the institution with 
     respect to disclosing or making unrelated uses of nonpublic 
     personal information of persons who have ceased to be 
     customers of the financial institution; and
       (3) the policies that the institution maintains to protect 
     the confidentiality and security of nonpublic personal 
     information.
       (b) Design of Notice Requirements.--In prescribing the form 
     of a notice for purposes of subsection (a), the Commission 
     shall ensure that consumers are readily able to compare 
     differences in the measures that the financial institution 
     takes, and the policies that the institution has established, 
     to protect the consumer's privacy as compared to the measures 
     taken and the policies established by other financial 
     institutions. Such form shall specifically identify the 
     rights the institution affords consumers to grant or deny 
     consent to (1) the disclosing of nonpublic personal 
     information for any purpose other than as required in order 
     to effect, administer, or enforce the consumer's transaction, 
     or (2) the making of an unrelated use of such information.
       (c) Additional Contents of Rules; Exemptive Rules.--The 
     Commission shall, by rule after consultation with the 
     functional regulators, and may by order--
       (1) specify the disclosures and uses of information which, 
     for purposes of this subtitle and the rules prescribed 
     thereunder, may be treated as necessary to effect, 
     administer, or enforce a consumer's transaction with respect 
     to a variety of financial services and financial products;
       (2) specify timing requirements with respect to notices to 
     new and existing customers, which shall not require notices 
     more frequently than annually unless there has been a change 
     in the information required to be disclosed pursuant to 
     subsection (a); and
       (3) provide, consistent with the purposes of this subtitle, 
     exemptions or temporary waivers to, or delayed effective 
     dates for, any requirement of this subtitle or the rules 
     prescribed thereunder.
       (d) Exemptive Rules To Permit Efficient Data Storage and 
     Retrieval.--The exemptive rules prescribed by the Commission 
     pursuant to subsection (c)(3) shall include such rules as may 
     be necessary to permit financial institutions and their 
     affiliates to establish and maintain efficient systems to 
     collect and access nonpublic personal information in shared 
     or networked data storage and retrieval facilities that are 
     implemented in a manner consistent with the requirements of 
     sections 501 and 502.
       (e) Rulemaking Deadline.--The Commission shall initially 
     prescribe the rules required by this section within one year 
     after the date of enactment of this Act. Such rules, and any 
     revisions of such rules, shall be prescribed in accordance 
     with section 553 of title 5, United States Code.

     SEC. 504. ENFORCEMENT.

       (a) In general.--Except as provided in subsection (d), this 
     subtitle and the rules prescribed thereunder shall be 
     enforced by the Federal Trade Commission under the Federal 
     Trade Commission Act (15 U.S.C. 41 et seq.).
       (b) Actions by the Commission.--The Federal Trade 
     Commission shall prevent any person from violating this 
     subtitle and the rules prescribed thereunder in the same 
     manner, by the same means, and with the same jurisdiction, 
     powers, and duties as though all applicable terms and 
     provisions of the Federal Trade Commission Act (15 U.S.C. 41 
     et seq.) were incorporated into and made a part of this 
     subtitle, except that notwithstanding section 5(a)(2) of such 
     Act (15 U.S.C. 45(a)(2)) the Commission shall, for purposes 
     of this title, have jurisdiction with respect to banks, 
     savings and loan institutions, and Federal credit unions. Any 
     person who violates this subtitle or the rules prescribed 
     thereunder shall be subject to the penalties and entitled to 
     the privileges and immunities provided in the Federal Trade 
     Commission Act in the same manner, by the same means, and 
     with the same jurisdiction, power, and duties as though all 
     applicable terms and provisions of the Federal Trade 
     Commission Act were incorporated into and made a part of this 
     subtitle.
       (c) Treatment of Rules.--A rule issued by the Commission 
     under this title shall be treated as a rule issued under 
     section 18(a)(1)(B) of the Federal Trade Commission Act (15 
     U.S.C. 57a(a)(1)(B)).
       (d) Regulations Prescribed Under Section501.--The 
     regulations prescribed under section 501 by the Federal 
     functional regulators shall be enforced by the Federal 
     functional regulators with respect to financial institutions 
     subject to their jurisdiction under applicable law, as 
     follows:
       (1) Under section 8 of the Federal Deposit Insurance Act, 
     in the case of--
       (A) national banks, Federal branches and Federal agencies 
     of foreign banks, and any subsidiaries of such entities, by 
     the Office of the Comptroller of the Currency;
       (B) member banks of the Federal Reserve System (other than 
     national banks), branches and agencies of foreign banks 
     (other than Federal branches, Federal agencies, and insured 
     State branches of foreign banks), commercial lending 
     companies owned or controlled by foreign banks, organizations 
     operating under section 25 or 25A of the Federal Reserve Act, 
     bank holding companies and their nonbank subsidiaries or 
     affiliates (except broker-dealers, affiliates providing 
     insurance, investment companies, and investment advisers), by 
     the Board of Governors of the Federal Reserve System;
       (C) banks insured by the Federal Deposit Insurance 
     Corporation (other than members of the Federal Reserve 
     System), insured State branches of foreign banks, and any 
     subsidiaries of such entities, by the Board of Directors of 
     the Federal Deposit Insurance Corporation; and
       (D) savings association the deposits of which are insured 
     by the Federal Deposit Insurance Corporation, and any 
     subsidiaries of such a savings association, by the Director 
     of the Office of Thrift Supervision.
       (2) Under the Federal Credit Union Act, by the 
     Administrator of the National Credit Union Administration 
     with respect to any Federal or state chartered credit union, 
     and any subsidiaries of such an entity.
       (3) Under the Farm Credit Act of 1971, by the Farm Credit 
     Administration with respect to the Federal Agricultural 
     Mortgage Corporation, any Federal land bank, Federal land 
     bank association, Federal intermediate credit bank, or 
     production credit association.
       (4) Under the Securities Exchange Act of 1934, by the 
     Securities and Exchange Commission with respect to any 
     broker-dealer.
       (5) Under the Investment Company Act of 1940, by the 
     Securities and Exchange Commission with respect to investment 
     companies.
       (6) Under the Investment Advisers Act of 1940, by the 
     Securities and Exchange Commission with respect to investment 
     advisers registered with the Commission under such Act.
       (7) Under Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U. S. C. 4501 et seq.), by the 
     Office of Federal Housing Enterprise Oversight with respect 
     to the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.
       (8) Under the Federal Home Loan Bank Act, by the Federal 
     Housing Finance Board with respect to Federal home loan 
     banks.

     SEC. 505. FAIR CREDIT REPORTING ACT AMENDMENT.

       (a) Amendment.--Section 621 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681s) is amended--
       (1) in subsection (d), by striking everything following the 
     end of the second sentence; and
       (2) by striking subsection ``(e)'' and inserting in lieu 
     thereof the following:
       ``(e) Regulatory Authority.--
       ``(1) The Federal banking agencies referred to in 
     paragraphs (1) and (2) of subsection (b)

[[Page 15102]]

     shall jointly prescribe such regulations as necessary to 
     carry out the purposes of this Act with respect to any 
     persons identified under paragraphs (1) and (2) of subsection 
     (b).
       ``(2) The Administrator of the National Credit Union 
     Administration shall prescribe such regulations as necessary 
     to carry out the purposes of this Act with respect to any 
     persons identified under paragraph (3) of subsection (b).''.
       (b) Conforming Amendments.--Section 621 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681s) is further amended--
       (1) by striking paragraph (4) of subsection (a); and
       (2) in subsection (b)--
       (A) by inserting ``and bank holding companies, and 
     subsidiaries of bank holding companies other than depository 
     institutions,'' after ``Federal Reserve Act,'' in paragraph 
     (1)(B); and
       (B) by inserting ``, and savings and loan holding companies 
     and subsidiaries of savings and loan holding companies'' 
     after ``Insurance Corporation'' in paragraph (2).

     SEC. 506. DEFINITIONS.

       As used in this subtitle:
       (1) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (2) Federal functional regulator.--The term ``Federal 
     functional regulator'' means--
       (A) the Board of Governors of the Federal Reserve System;
       (B) the Office of the Comptroller of the Currency;
       (C) the Board of Directors of the Federal Deposit Insurance 
     Corporation;
       (D) the Director of the Office of Thrift Supervision;
       (E) the National Credit Union Administration Board;
       (F) the Farm Credit Administration; and
       (G) the Securities and Exchange Commission.
       (3) Financial institution.--The term ``financial 
     institution'' means any institution the business of which is 
     engaging in financial activities or activities that are 
     incidental to financial activities, as determined under 
     section 6(c) of the Bank Holding Company Act of 1956. Such 
     term, when used in connection with a transaction for a 
     consumer, means only the financial institution with which the 
     consumer expects to conduct such transaction and does not 
     include any affiliate, subsidiary, or contractually-related 
     party of that financial institution, even if such affiliate, 
     subsidiary, or party is also a financial institution and 
     participates in the effecting, administering, or enforcing 
     such transaction.
       (4) Nonpublic personal information.--
       (A) The term ``nonpublic personal information'' means 
     personally identifiable financial information--
       (i) provided by a consumer to a financial institution;
       (ii) resulting from any transaction with the consumer or 
     the service performed for the consumer; or
       (iii) otherwise obtained by the financial institution.
       (B) Such term does not include publicly available 
     information, as such term is defined by the regulations 
     prescribed under section 504.
       (C) Notwithstanding subparagraph (B), such term shall 
     include any list, description, or other grouping of consumers 
     (and publicly available information pertaining to them) that 
     is derived using any personally identifiable information 
     other than publicly available information.
       (5) Directory information.--The term ``publicly available 
     directory information'' means subscriber list information 
     required to be made available for publication pursuant to 
     section 222(e) of the Communications Act of 1934 (47 U.S.C. 
     222(3)).
       (6) Unrelated use.--The term ``unrelated use'', when used 
     with respect to information collected by the financial 
     institution in connection with any transaction with a 
     consumer in any financial product or any financial service, 
     means any use other than a use that is necessary to effect, 
     administer, or enforce such transaction.
       (7) Affiliate.--The term ``affiliate'' means any company 
     that controls, is controlled by, or is under common control 
     with another company.
       (8) Necessary to effect, administer, or enforce.--The 
     disclosing or use of nonpublic personal information shall be 
     treated--
       (A) as necessary to effect or administer a transaction with 
     a consumer if the disclosing or use is required, or is one of 
     the usual and accepted methods, to carry out the transaction 
     and record and maintain the customer's account in the 
     ordinary course of providing the financial service or 
     financial product, and includes--
       (i) providing the consumer with a confirmation, statement, 
     or other record of the transaction, or information on the 
     status or value of the financial service or financial 
     product; and
       (ii) the accrual or recognition of incentives or bonuses 
     associated with the transaction that are provided by the 
     financial institution or any other party;
       (B) as necessary to enforce a transaction with a consumer 
     if the disclosing or use is required, or is one of the lawful 
     methods, to enforce the rights of the financial institution 
     or of other persons engaged in carrying out the financial 
     transaction, or providing the financial product or financial 
     service; and
       (C) as necessary to effect, administer, or enforce a 
     transaction with a consumer if the disclosure is made in 
     connection with--
       (i) the authorization, settlement, billing, processing, 
     clearing, transferring, reconciling, or collection of amounts 
     charged, debited, or otherwise paid using a debit, credit or 
     other payment card or account number, or by other payment 
     means;
       (ii) the transfer of receivables, accounts or interests 
     therein; or
       (iii) the audit of debit, credit or other payment 
     information.
     The Commission shall, consistent with the purposes of this 
     subtitle, prescribe by rule actions that shall, in a variety 
     of financial services, and with respect to a variety of 
     financial products, be treated as necessary to effect, 
     administer, or enforce a financial transaction.
       (9) Financial services; financial products; transaction; 
     related transaction.--The Commission shall, consistent with 
     the purposes of this subtitle, prescribe by rule definitions 
     of the terms ``financial services'', ``financial products'', 
     ``transaction'', ``related transaction'', and ``unrelated 
     third party'' for purposes of this subtitle.

     SEC. 507. EFFECTIVE DATE.

       This subtitle shall take effect one year after the date on 
     which the Commission prescribes in final form the rules 
     required by section 503(a), except to the extent that a later 
     date is specified in such rules.

         Subtitle B--Fraudulent Access to Financial Information

     SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF 
                   FINANCIAL INSTITUTIONS.

       (a) Prohibition on Obtaining Customer Information by False 
     Pretenses.--It shall be a violation of this subtitle for any 
     person to obtain or attempt to obtain, or cause to be 
     disclosed or attempt to cause to be disclosed to any person, 
     customer information of a financial institution relating to 
     another person--
       (1) by making a false, fictitious, or fraudulent statement 
     or representation to an officer, employee, or agent of a 
     financial institution;
       (2) by making a false, fictitious, or fraudulent statement 
     or representation to a customer of a financial institution; 
     or
       (3) by providing any document to an officer, employee, or 
     agent of a financial institution, knowing that the document 
     is forged, counterfeit, lost, or stolen, was fraudulently 
     obtained, or contains a false, fictitious, or fraudulent 
     statement or representation.
       (b) Prohibition on Solicitation of a Person To Obtain 
     Customer Information From Financial Institution Under False 
     Pretenses.--It shall be a violation of this subtitle to 
     request a person to obtain customer information of a 
     financial institution, knowing that the person will obtain, 
     or attempt to obtain, the information from the institution in 
     any manner described in subsection (a).
       (c) Nonapplicability to Law Enforcement Agencies.--No 
     provision of this section shall be construed so as to prevent 
     any action by a law enforcement agency, or any officer, 
     employee, or agent of such agency, to obtain customer 
     information of a financial institution in connection with the 
     performance of the official duties of the agency.
       (d) Nonapplicability to Financial Institutions in Certain 
     Cases.--No provision of this section shall be construed so as 
     to prevent any financial institution, or any officer, 
     employee, or agent of a financial institution, from obtaining 
     customer information of such financial institution in the 
     course of--
       (1) testing the security procedures or systems of such 
     institution for maintaining the confidentiality of customer 
     information;
       (2) investigating allegations of misconduct or negligence 
     on the part of any officer, employee, or agent of the 
     financial institution; or
       (3) recovering customer information of the financial 
     institution which was obtained or received by another person 
     in any manner described in subsection (a) or (b).
       (e) Nonapplicability to Insurance Institutions for 
     Investigation of Insurance Fraud.--No provision of this 
     section shall be construed so as to prevent any insurance 
     institution, or any officer, employee, or agency of an 
     insurance institution, from obtaining information as part of 
     an insurance investigation into criminal activity, fraud, 
     material misrepresentation, or material nondisclosure that is 
     authorized for such institution under State law, regulation, 
     interpretation, or order.
       (f) Nonapplicability to Certain Types of Customer 
     Information of Financial Institutions.--No provision of this 
     section shall be construed so as to prevent any person from 
     obtaining customer information of a financial institution 
     that otherwise is available as a public record filed pursuant 
     to the securities laws (as defined in section 3(a)(47) of the 
     Securities Exchange Act of 1934).

     SEC. 522. ADMINISTRATIVE ENFORCEMENT.

       (a) Enforcement by Federal Trade Commission.--Compliance 
     with this subtitle shall

[[Page 15103]]

     be enforced by the Federal Trade Commission in the same 
     manner and with the same power and authority as the 
     Commission has under the title VIII, the Fair Debt Collection 
     Practices Act, to enforce compliance with such title.
       (b) Notice of Actions.--The Federal Trade Commission 
     shall--
       (1) notify the Securities and Exchange Commission whenever 
     the Federal Trade Commission initiates an investigation with 
     respect to a financial institution subject to regulation by 
     the Securities and Exchange Commission;
       (2) notify the Federal banking agency (as defined in 
     section 3(z) of the Federal Deposit Insurance Act) whenever 
     the Commission initiates an investigation with respect to a 
     financial institution subject to regulation by such Federal 
     banking agency; and
       (3) notify the appropriate State insurance regulator 
     whenever the Commission initiates an investigation with 
     respect to a financial institution subject to regulation by 
     such regulator.

     SEC. 523. CRIMINAL PENALTY.

       (a) In General.--Whoever knowingly and intentionally 
     violates, or knowingly and intentionally attempts to violate, 
     section 521 shall be fined in accordance with title 18, 
     United States Code, or imprisoned for not more than 5 years, 
     or both.
       (b) Enhanced Penalty for Aggravated Cases.--Whoever 
     violates, or attempts to violate, section 521 while violating 
     another law of the United States or as part of a pattern of 
     any illegal activity involving more than $100,000 in a 12-
     month period shall be fined twice the amount provided in 
     subsection (b)(3) or (c)(3) (as the case may be) of section 
     3571 of title 18, United States Code, imprisoned for not more 
     than 10 years, or both.

     SEC. 524. RELATION TO STATE LAWS.

       (a) In General.--This subtitle shall not be construed as 
     superseding, altering, or affecting the statutes, 
     regulations, orders, or interpretations in effect in any 
     State, except to the extent that such statutes, regulations, 
     orders, or interpretations are inconsistent with the 
     provisions of this subtitle, and then only to the extent of 
     the inconsistency.
       (b) Greater Protection Under State Law.--For purposes of 
     this section, a State statute, regulation, order, or 
     interpretation is not inconsistent with the provisions of 
     this subtitle if the protection such statute, regulation, 
     order, or interpretation affords any person is greater than 
     the protection provided under this subtitle as determined by 
     the Commission, on its own motion or upon the petition of any 
     interested party.

     SEC. 525. AGENCY GUIDANCE.

       In furtherance of the objectives of this subtitle, each 
     Federal banking agency (as defined in section 3(z) of the 
     Federal Deposit Insurance Act) and the Securities and 
     Exchange Commission or self-regulatory organizations, as 
     appropriate, shall review regulations and guidelines 
     applicable to financial institutions under their respective 
     jurisdictions and shall prescribe such revisions to such 
     regulations and guidelines as may be necessary to ensure that 
     such financial institutions have policies, procedures, and 
     controls in place to prevent the unauthorized disclosure of 
     customer financial information and to deter and detect 
     activities proscribed under section 521.

     SEC. 526. REPORTS.

       (a) Report to the Congress.--Before the end of the 18-month 
     period beginning on the date of the enactment of this Act, 
     the Comptroller General, in consultation with the Federal 
     Trade Commission, Federal banking agencies, the Securities 
     and Exchange Commission, appropriate Federal law enforcement 
     agencies, and appropriate State insurance regulators, shall 
     submit to the Congress a report on the following:
       (1) The efficacy and adequacy of the remedies provided in 
     this subtitle in addressing attempts to obtain financial 
     information by fraudulent means or by false pretenses.
       (2) Any recommendations for additional legislative or 
     regulatory action to address threats to the privacy of 
     financial information created by attempts to obtain 
     information by fraudulent means or false pretenses.
       (b) Annual Report by Administering Agencies.--The Federal 
     Trade Commission and the Attorney General shall submit to 
     Congress an annual report on number and disposition of all 
     enforcement actions taken pursuant to this subtitle.

     SEC. 527. DEFINITIONS.

       For purposes of this subtitle, the following definitions 
     shall apply:
       (1) Customer.--The term ``customer'' means, with respect to 
     a financial institution, any person (or authorized 
     representative of a person) to whom the financial institution 
     provides a product or service, including that of acting as a 
     fiduciary.
       (2) Customer information of a financial institution.--The 
     term ``customer information of a financial institution'' 
     means any information maintained by or for a financial 
     institution which is derived from the relationship between 
     the financial institution and a customer of the financial 
     institution and is identified with the customer.
       (3) Document.--The term ``document'' means any information 
     in any form.
       (4) Financial institution.--
       (A) In general.--The term ``financial institution'' means 
     any institution engaged in the business of providing 
     financial services to customers who maintain a credit, 
     deposit, trust, or other financial account or relationship 
     with the institution.
       (B) Certain financial institutions specifically included.--
     The term ``financial institution'' includes any depository 
     institution (as defined in section 19(b)(1)(A) of the Federal 
     Reserve Act), any broker or dealer, any investment adviser or 
     investment company, any insurance company, any loan or 
     finance company, any credit card issuer or operator of a 
     credit card system, and any consumer reporting agency that 
     compiles and maintains files on consumers on a nationwide 
     basis (as defined in section 603(p)).
       (C) Securities institutions.--For purposes of subparagraph 
     (B)--
       (i) the terms ``broker'' and ``dealer'' have the meanings 
     provided in section 3 of the Securities Exchange Act of 1934 
     (15 U.S.C. 78c);
       (ii) the term ``investment adviser'' has the meaning 
     provided in section 202(a)(11) of the Investment Advisers Act 
     of 1940 (15 U.S.C. 80b-2(a)); and
       (iii) the term ``investment company'' has the meaning 
     provided in section 3 of the Investment Company Act of 1940 
     (15 U.S.C. 80a-3).
       (D) Further definition by regulation.--The Federal Trade 
     Commission, after consultation with Federal banking agencies 
     and the Securities and Exchange Commission, may prescribe 
     regulations clarifying or describing the types of 
     institutions which shall be treated as financial institutions 
     for purposes of this subtitle.

  Mr. MARKEY (during the reading). Mr. Speaker, I ask unanimous consent 
that the motion to recommit be considered as read and printed in the 
Record.
  The SPEAKER. Is there objection to the request of the gentleman from 
Massachusetts?
  There was no objection.
  The SPEAKER. The gentleman from Massachusetts (Mr. Markey) is 
recognized for 5 minutes.
  Mr. MARKEY. Mr. Speaker, the recommittal motion that we are going to 
vote upon in 10 minutes will contain three elements. It will contain 
the amendment of the gentlewoman from California (Ms. Lee) on insurance 
redlining, which she won in the Committee on Banking and Financial 
Services, but the Committee on Rules would not put in order. It will 
include the amendment of the gentleman from California (Mr. Condit) and 
the gentleman from California (Mr. Waxman), which ensures that full 
medical privacy protections are guaranteed. They are not in this bill; 
and third, that the financial privacy amendment, which I won in the 
Committee on Commerce, but not put in order out here, is also voted 
upon.
  Remember, in the Oxley amendment, telemarketing is prohibited by 
unaffiliated companies of a bank holding company but telemarketing of 
the financial data is not stopped inside the bank holding company.
  We are going to prohibit that tonight in the recommittal motion.
  Mr. Speaker, I yield to the gentleman from New York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Speaker, when I appeared before the Committee on 
Rules yesterday, I said there were a number of corrections or 
amendments that should be offered. First of all, I said please restore 
a provision that the Committee on Banking and Financial Services 
adopted or at least allow us to offer it as an amendment. That dealt 
with a prohibition against redlining against an insurance company when 
the insurance company wants to affiliate with a bank. That is in the 
Markey motion to recommit.
  I also said I was very troubled by the Ganske amendment because 
although it is extremely well intentioned, the exceptions to it one 
could drive a Mack truck through it right now, and it might be 
construed as preempting the ability to articulate through regulation 
more broad sweeping privacy protections.
  Also, at that time, the Markey amendment would have been a substitute 
for the excellent privacy provisions that have been worked out in a 
bipartisan fashion. I can support the bill but the bill would be 
improved tremendously by the motion to recommit.
  Mr. MARKEY. Mr. Speaker, I yield to the gentlewoman from California 
(Ms. Lee).
  Ms. LEE. Mr. Speaker, I thank my colleague, the gentleman from 
Massachusetts (Mr. Markey) for yielding and

[[Page 15104]]

for his consistent hard work on behalf of our consumers.
  Mr. Speaker, I wanted to support a reasonable financial services 
modernization bill and I worked very hard with my colleagues to include 
important consumer protections and privacy measures as this bill moved 
to the floor. Unfortunately, however, the Republicans refused to accept 
these amendments, and made matters worse by wiping out an adopted anti-
redling provision to require the insurance industry to comply with the 
Fair Housing Act and not discriminate against the poor, minorities and 
people who live in neighborhoods redlined by the insurance industry.
  We have not allowed banks to discriminate. Why should we allow the 
insurance industry to discriminate?
  We did not adopt this amendment to stall this bill as one of my 
Republican colleagues accused me of earlier. We adopted this amendment 
to provide equal opportunity for all Americans. The Committee on Rules, 
by whatever unDemocratic means they used in a blatant, arrogant misuse 
of their power, deleted this important, agreed-upon amendment. This 
overt violation of the legislative process is outrageous and really 
should be illegal. It is an example of governmental lawlessness.
  Let us restore some integrity to this process and vote for this 
motion to recommit
  Mr. MARKEY. Mr. Speaker, I yield to the gentleman from California 
(Mr. Condit).
  Mr. CONDIT. Mr. Speaker, I rise in support of the recommittal motion 
and am opposed to H.R. 10. Let me simply just say the reason that I 
oppose H.R. 10 and support the motion to recommit is section 351.
  This section of the bill should have been deleted. The privacy part 
related to medical records is inadequate. It does not have consumer 
consent. The definition of the consent under this section on page 371 
is too vague. The health research part of the bill creates loopholes 
for drug companies and marketing firms. Patients rights, they simply do 
not exist; no access to a person's own health records. A person cannot 
even get their own records and have control over them. There is no 
redress if a person's privacy is violated; no restrictions on third 
party entities from disclosing personal information to marketing firms 
or other parties.
  We ought to do this right on behalf of the American people.
  It is important that we do this bill H.R. 10, but it is not more 
important than us protecting people's privacy. That should be our main 
thrust in this bill is to make sure that the people of this country can 
count on us to protect their privacy.
  Mr. MARKEY. Mr. Speaker, this is a pure substance vote. These are the 
votes the bankers did not want to be taken. The reason they did not 
want them to be taken is because they are so hard. Yes, we are going to 
offer full medical privacy protection to all of people's records.

                              {time}  2300

  This is a straight up-or-down substantive vote. Yes, we are going to 
give full financial protection. It does not make any difference whether 
it is some third party or the bank themselves, we have a right to say 
no. If we want all of these services from this new financial structure, 
we can take advantage of them, but we might be part of the 10 percent 
or 20 percent or 30 percent, in the same way that we have an unlisted 
phone number, we just might not want anyone telemarketing to us, even 
from our bank, going through all of our checks. Just say no.
  Thirdly, the point of the gentlewoman from California (Ms. Lee) on 
the insurance industry, why should it be any different on redlining? 
Why should not her community and all the poorer communities of the 
country have those kinds of protections?
  When Members vote for recommital, it goes straight into the bill, it 
is part of it, and then we vote final passage. If Members vote no, they 
are voting not to put it in the bill right now. Recommital does not go 
back to the committee, it just goes right to that desk and into the 
bill immediately.
  This is a straight substance vote. Please, vote for the recommital 
motion, and Members have made this a good financial services 
modernization bill for the banks and for the American people.
  Mr. LEACH. Mr. Speaker, I rise in opposition to the motion.
  The SPEAKER. The gentleman from Iowa (Mr. Leach) is recognized for 5 
minutes.
  Mr. LEACH. First, Mr. Speaker, let me express my appreciation for the 
thoughtfulness of the concerns of the proponents of this motion.
  At the risk of presumption, I would stress that the majority and the 
minority are not as far apart as the rhetoric might lead a listener to 
this debate to expect.
  There are two principal aspects to the amendment. One relates to the 
Lee amendment on redlining, which some of us on this side differ with, 
and others, like myself, find quite reasonable.
  The other relates to privacy. Here I would simply note that the bill 
before us represents the greatest expansion of privacy rights in modern 
day finance. Indeed, it represents, in the words of the gentlewoman 
from Oregon (Ms. Hooley), a movement far further than she would have 
ever have dreamed.
  In the words of the gentleman from Massachusetts (Mr. Markey), it is 
a good step forward. Actually, it is not one but a number of steps 
forward. Let me mention six.
  One, there is a mandatory disclosure by financial institutions of 
privacy policies.
  Two, there are consumer opt-out choices to prevent the sale of 
confidential information to unaffiliated third parties.
  Three, there is a medical opt-in choice to prevent the transfer of a 
consumer's medical information without the consumer's consent.
  Four, there is a prohibition on disclosure of consumer account 
numbers to third party telemarketers.
  Five, there are new privacy enforcement mechanisms for financial 
institution regulators.
  Six, there is a prohibition on pretext calling. This is a policy 
where individuals can call up an institution and claim they are someone 
else and get their information, and now that is outlawed.
  To object to this bill on final passage will be to vote against these 
privacy protections. Indeed, the biggest privacy vote of all our 
careers in the United States Congress will be on final passage of this 
bill. Let me repeat, the biggest privacy vote of all our careers in 
Congress will be on final passage of this bill.
  Now, what is the amendment before us? Basically, the amendment before 
us subtracts one feature of the bill and adds another. What it 
subtracts is the provision of the gentleman from Iowa (Mr. Ganske) 
which imposes important new protections for health and medical privacy. 
I have never known a more misunderstood provision, so let me stress 
what the Ganske provision does.
  It imposes a broad prohibition on the disclosure by an insurance 
company or its affiliates of individually identifiable health, medical, 
and genetic information, unless the customer expressly consents to such 
disclosure.
  If Members strip this provision of H.R. 10 from the bill, they are 
leaving customers of financial companies without any medical privacy 
protections, thereby leading to precisely the kinds of privacy umbrages 
that the opponents of the language claim they want to prevent.
  In this regard, I would stress again that there is no intent in this 
bill to preempt executive branch actions or jeopardize any confidences 
associated with doctor-patient relationships, nor the privacy 
protections currently afforded any medical records.
  Indeed, the intent is to strengthen these protections. To the degree 
that more precision in this area is required, this gentleman is 
prepared to work in conference to ensure that that occurs.
  What is it that this amendment adds? It adds a restriction on the 
ability of financial institutions to share consumer information with 
affiliates that are all part of the same financial organization.
  Unfortunately, there is some question whether this proposed 
restriction

[[Page 15105]]

on affiliate information-sharing might needlessly and dramatically 
increase costs for consumers and financial institutions, reduce 
consumer convenience, impair fraud detection and prevention, and deny 
consumers new cost-effective products.
  It is the intention of the various committees of jurisdiction, 
including the Committee on Banking and Financial Services, to hold 
hearings on this issue in the near future. This Member has an open 
mind. The concerns I raise are questions without definitive answers.
  Accordingly, at this time, I would urge caution, and only ask that 
Members recognize the historical nature of the extraordinary expansion 
of privacy protection contained in this bill.
  In conclusion, I urge an enthusiastic yes vote on final passage, 
again, final passage on the greatest privacy expansion in the history 
of American finance, and a preliminary no vote on the Markey motion to 
recommit until the consequences of his approach receive careful 
scrutiny in the hearings process.
  I thank all, friend and foe, for their courtesies.
  The SPEAKER. Without objection, the previous question is ordered on 
the motion to recommit.
  There was no objection.
  The question is on the motion to recommit.
  The question was taken; and the Speaker announced that the noes 
appeared to have it.
  Mr. MARKEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER. Pursuant to clause 9 of rule XX, the Chair will reduce 
to 5 minutes the minimum time for any electronic vote on the question 
of passage.
  The vote was taken by electronic device, and there were--yeas 198, 
nays 232, not voting 5, as follows:

                             [Roll No. 275]

                               YEAS--198

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Luther
     Maloney (NY)
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Vento
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Woolsey
     Wu
     Wynn

                               NAYS--232

     Aderholt
     Archer
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bereuter
     Biggert
     Bilbray
     Bilirakis
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boucher
     Brady (TX)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Castle
     Chabot
     Chambliss
     Chenoweth
     Coble
     Coburn
     Collins
     Combest
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Cubin
     Cunningham
     Davis (VA)
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Fowler
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Hastert
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (MT)
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Kasich
     Kelly
     King (NY)
     Kingston
     Knollenberg
     Kolbe
     Kuykendall
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McKeon
     Metcalf
     Mica
     Miller (FL)
     Miller, Gary
     Mollohan
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Ose
     Oxley
     Packard
     Paul
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Regula
     Reynolds
     Riley
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanford
     Saxton
     Scarborough
     Schaffer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Spence
     Stearns
     Stump
     Sununu
     Sweeney
     Talent
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--5

     Brown (CA)
     Fossella
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2323

  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER. The question is on the passage of the bill.
  The question was taken; and the Speaker announced that the ayes 
appeared to have it.


                             Recorded Vote

  Mr. LEACH. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 343, 
noes 86, not voting 6, as follows:

                             [Roll No. 276]

                               AYES--343

     Ackerman
     Aderholt
     Allen
     Andrews
     Armey
     Bachus
     Baird
     Baker
     Baldacci
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Bass
     Bateman
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brown (FL)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Cannon
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Clayton
     Clement
     Clyburn
     Coble
     Collins
     Cook
     Cooksey
     Cox
     Cramer
     Crane
     Crowley
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Etheridge
     Everett
     Ewing
     Fletcher
     Foley
     Forbes
     Ford
     Fowler
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode

[[Page 15106]]


     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastert
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hinojosa
     Hobson
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Isakson
     Istook
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E.B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kasich
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Klink
     Knollenberg
     Kolbe
     Kuykendall
     LaFalce
     Largent
     Larson
     Latham
     LaTourette
     Lazio
     Leach
     Levin
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lowey
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Mascara
     Matsui
     McCarthy (NY)
     McCollum
     McCrery
     McGovern
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McNulty
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Minge
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Myrick
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Ose
     Owens
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Pease
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Scott
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Strickland
     Stump
     Sununu
     Sweeney
     Talent
     Tanner
     Tauscher
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thune
     Tiahrt
     Toomey
     Towns
     Traficant
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Watkins
     Watt (NC)
     Watts (OK)
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Wu
     Wynn
     Young (AK)
     Young (FL)

                                NOES--86

     Abercrombie
     Baldwin
     Barrett (WI)
     Barton
     Bonilla
     Brady (PA)
     Brady (TX)
     Brown (OH)
     Campbell
     Capps
     Capuano
     Chenoweth
     Clay
     Coburn
     Combest
     Condit
     Conyers
     Costello
     Coyne
     Cummings
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dingell
     Edwards
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Frank (MA)
     Gejdenson
     Granger
     Hefley
     Hilliard
     Hinchey
     Hoekstra
     Inslee
     Jackson (IL)
     Kaptur
     Kleczka
     Kucinich
     LaHood
     Lampson
     Lantos
     Lee
     Lewis (GA)
     Lofgren
     Luther
     Markey
     Martinez
     McCarthy (MO)
     McDermott
     McKinney
     Meehan
     Mica
     Miller, George
     Mink
     Moran (KS)
     Nadler
     Obey
     Olver
     Ortiz
     Paul
     Payne
     Peterson (MN)
     Phelps
     Rivers
     Rodriguez
     Roybal-Allard
     Sanders
     Schakowsky
     Serrano
     Stark
     Stenholm
     Stupak
     Tancredo
     Taylor (MS)
     Thornberry
     Thurman
     Tierney
     Turner
     Waters
     Waxman
     Woolsey

                             NOT VOTING--6

     Archer
     Brown (CA)
     Fossella
     Green (TX)
     Lipinski
     Pelosi

                              {time}  2332

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________