Spencer Bachus

Mr. BACHUS

Mr. BACHUS. Mr. Chairman, I yield myself 1 minute. Mr. Chairman, the U.S. motion picture and TV industry makes movies that are seen around the world. But, unfortunately, foreign countries are offering tax incentives to attract that production overseas, and I think most of us have seen movies lately that were set here, but filmed in Canada or Mexico. This amendment would help stop that, and it simply will allow the motion picture industry, the TV industry, to operate under the current Hours of Service regulations. Not only the motion picture industry and the TV industry which asked me to bring this amendment, but the Teamsters Union have endorsed this amendment. It will simply allow those drivers who drive out to the location for an hour or 2 hours, then have 9 hours of rest and then have 2 hours in the evening to continue those hours of service. They have an excellent and exemplary safety record.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I thank the gentleman for yielding me this time. First of all, I want to express my respect for my colleague, the gentleman from Alabama (Mr. Rogers), for bringing this legislation to the floor. I will say this. It is a sad commentary on our time when we even have to have legislation like this. You would not really think in a country that is at war, and we are at war, with soldiers in the field, young men and women risking their lives every day, that such disrespect would be shown to them by men and women their own age. My son is a Marine. I cannot imagine him being assigned to a college, a university. He has actually left college to go in the Marines. I cannot imagine him coming home from the sacrifice he has made, going on to that college campus and seeing young men and women who, while he was serving in the Marines, were enjoying their college education because he and other young men and women sacrificed for them and served in their place. The gentlewoman, who I respect from the San Francisco Bay area, and the gentleman from Massachusetts, who I respect, they both said this is about discrimination. I think the gentleman from Iowa said it best when he said it is about discrimination, but it is about discrimination against our military and those that serve in our uniform. Let us not involve our young men and women who are risking their lives every day. Let us not involve them in some policy discussion. Let us not endanger their lives and the lives of those who serve next to them in this debate. If law students want to debate this issue, if they want to write in the paper, that is one thing, but when they block military recruiters, as they have done, it is time for us to end this foolishness. It is our responsibility as a Congress. Support this legislation.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I rise today to recognize the contributions and accomplishments of an extraordinary man who, for a quarter century, devoted his whole heart, mind and spirit to the success of the Nation's community banks. Today the Independent Community Bankers of America at their National Convention is honoring and celebrating Kenneth A. Guenther, as he completes 25 years of leadership. As president and chief executive officer, Ken Guenther has led the ICBA with an uncompromising intellect, conviction and courage. Through unceasing effort, he strengthened the trade association to help shepherd community banks through a period of remarkable challenges and change for the banking industry. Throughout his tenure, Ken Guenther has represented community banks with unflagging passion, credibility and tenacity in Washington. He demonstrated foresight and innovation in harnessing the collective economic might of community banks to assure their future. His integrity and commitment to excellence will be long remembered. His lasting legacy will be a vibrant community banking industry, the foundation of America's economic prosperity and liberty. Mr. Speaker, I ask my colleagues to join me in commemorating the quarter century of incomparable service and dedication Kenneth A. Guenther has devoted to the Nation's community banks.

Mr. BACHUS

Mr. BACHUS. Mr. Chairman, I yield back the balance of my time.

Mr. BACHUS. Mr. Chairman, I thank the chairman for yielding me this time. Mr. Chairman, the financial services industry spends a great deal of time and a great deal of money every year complying with outdated and ineffective regulations. That is money that could be loaned to consumers and industries to buy new cars, new homes, new factories, new businesses, and that is what this bill is all about. It is also, as the chairman correctly said, delivering on a promise that this Congress made these same institutions, when we imposed title III of the PATRIOT Act, and also the Sarbanes-Oxley accountability measures. We told them that we would come and follow that with legislation to compensate them for that cost. And in that regard, as the chairman so well put, I want to commend the financial institutions in this country for helping starve al Qaeda and other terrorist organizations. They have done an excellent job of cutting off the flow, not only to the terrorist organizations but also to narcotics traffickers and other criminal organizations, which is another benefit of these new money laundering legislations that this Congress put on the financial institutions. So it has had a very positive effect even on some areas that we might not have anticipated. Secondly, I would like to commend the ranking member, the gentleman from Massachusetts (Mr. Frank). I would like to commend him for working closely on this legislation. We talk about bipartisanship in this body. This committee, under the chairman, the gentleman from Ohio (Mr. Oxley) and the ranking member, the gentleman from Massachusetts (Mr. Frank), has achieved on more than one occasion, on many occasions, a bipartisan spirit of cooperation which I think ought to be the model for other committees in the Congress as a whole. So I commend both these gentlemen. I would like to commend the two sponsors of this bill, the gentlewoman from West Virginia (Mrs. Capito). She has done an excellent job. I would also like to commend the Democratic member of the committee who offered this legislation, and that is the gentleman from Arkansas (Mr. Ross). Finally, I would like to call special attention to the legislation of the gentleman from Oklahoma (Mr. Lucas), the provisions within this legislation which will greatly improve the coordination between home and host State supervisors of State-chartered banks. When State- chartered banks branch beyond State lines, there is a great need for the bank supervisors to coordinate in the supervision. And I think this is a long overdue provision. I would also like to commend the gentleman from Massachusetts (Mr. Frank) and the gentleman from Ohio (Mr. Gillmor) for working out, I think, an excellent compromise on this ILC provision, their compromise, the widespread almost unanimous support of the committee. There are Members who this morning have protested it. The gentleman from Iowa (Mr. Leach) had offered on another bill the way he wanted to address this. The committee on the bank interest bill actually rejected that idea, competing idea, by a vote of 50 to 8. So this has been an issue that has been debated on prior occasions. Finally, I would like to say that this is a regulatory relief bill, not a regulatory burden bill. For that reason, I will be offering an amendment to take and strike section 614 which equates independent contractors who do business with the bank, whether they be attorneys, whether they be accountants, whether they be appraisers, whether they be real estate agents, all sorts of independent contractors, which equates them with having the same knowledge of banking operation as insiders. That is simply not the case. And, in fact, I believe strongly that in these cases they ought to have the right to a jury trial, to a full hearing. But if we do not strike section 614, any accountants, any attorney, any realtor, any appraiser who does business with the bank, will be subjected to having the same knowledge as an insider. Simply not the case. I think we all agree they do not have that same knowledge. And I oppose the Weiner amendment which is a regulatory burden amendment. Mr. Chairman, I rise in strong support of H.R. 522, the Financial Services Regulatory Relief Act of 2003. I want to begin by thanking Chairman Oxley for the tremendous leadership he has shown in steering this complex bill through the legislative process. I also want to thank the ranking member of the committee, Mr. Frank, for his support of this important piece of legislation. This bipartisan legislation, introduced by our colleagues on the subcommittee, Mrs. Capito and Mr. Ross, reflects a commonsense approach to easing regulatory burdens imposed on our nation's depository institutions. H.R. 1375 is largely a product of recommendations that the committee has received over the last several years from the Federal and State financial regulators. The legislation has strong bipartisan support and was approved by the Financial Services Committee by a unanimous voice vote. It is supported by a host of interested parties, including the Financial Services Roundtable, America's Community Bankers, the National Association of Federal Credit Unions, and the Credit Union National Association. The banking industry estimates that it spends somewhere in the neighborhood of $25 billion annually to comply with regulatory requirements imposed at the Federal and State levels. A large portion of that regulatory burden is justified by the need to ensure the safety and soundness of our banking institutions; enforce compliance with various consumer protection statutes; and combat laundering and other financial crimes. However, not all regulatory mandates that emanate from Washington, DC, or other State capitals across the country are created equal. Some are overly burdensome, unnecessarily costly, or largely duplicative of other legal requirements. Where examples of such regulatory overkill can be identified, Congress should act to eliminate them. The bill that Congresswoman Capito and Congressman Ross have introduced--and that I am proud to cosponsor along with Chairman Oxley--contains a broad range of constructive provisions that, taken as a whole, will allow banks and other depository institutions to devote more resources to the business of lending to consumers and less to the bureaucratic maze of compliance with outdated and unneeded regulations. Reducing the regulatory burden on financial institutions will also lower the cost of credit for consumers. In closing, let me once again commend Mrs. Capito and Mr. Ross for this important legislative as well as the full committee chairman, Mr. Oxley. The chairman has demonstrated a strong commitment to getting regulatory relief legislation enacted this year. I look forward to working with him to help accomplish that objective.

Mr. BACHUS. Mr. Chairman, I rise in opposition to the Weiner amendment, and I yield myself such time as I may consume. Mr. Chairman, what this amendment does is it says, when a customer accepts a bad check from a third party and deposits that check into his account and the bank takes a hit, and it does take a hit anywhere from, according to the Massachusetts Division of Banks, which is one of the more liberal supervisors, it says that cost can be as much as $15, $14.46. It can be as little as $1 or $2. But this is not a pro-consumer bill; this is, in my mind, a pro-either customer who accepts a bad check, or a pro-person who issues worthless checks. I mean, the only person that is rewarded by this provision is someone who issues a bad check. As drafted, it is not even clear whether the fee prohibition will apply only to the customer who accepts a bad check but, apparently, the prohibition will also pass through to the person who wrote the bad check. So we have the perverse situation here where banks cannot charge for worthless checks. This provision is actually going to discourage responsibility by customers. It is going to prohibit the bank from passing that charge on to the customer who writes the check. In fact, what it could do is, if this thing passes, a fraudulent attempt could simply be to write a bunch of bad checks, deposit them in my account or deposit them in a friend's account, and we could swap and we could start inundating the bank with worthless checks. Who would be saddled with that? Well, according to the gentleman from New York (Mr. Weiner), the bank, because the bank cannot pass it on to the customer, so what would the bank do? It would raise its fees to everyone. The end result would be that those customers, those of us who are diligent in determining who we are dealing with and accepting checks from other parties, would end up with the burden. This really creates an unfair situation where customers who do not deposit bad checks or high-risk checks subsidize those who do on the cost of handling those items. In my mind, it is just the American system; banks are no different from you and I. When they incur costs, they ought to be able to charge the party responsible for causing that cost. Depository institutions should be allowed to charge those customers who cause the institution to incur the cost. It is just simply the way we have done business in this country since the start. We are simply absolving people of responsibility who are the people in the position to take responsibility. A customer who deposits a bad check has the opportunity, he often has the opportunity to pass any fees that are assessed back to the person who wrote the check. So even if this is drafted, and I believe it is drafted where it is just a prohibition, it does not say that they can put it on anybody. They cannot put it on their customer. They certainly do not have any connection or relationship with the third party who wrote the bad check, so it is going to be almost very impractical, if not illegal under this provision, for them to charge the person who wrote the bad check. Right now, I think it works very well. A landlord gets a bad check from a renter, the landlord takes that check down and deposits it to the bank, the bank gets stiffed with a bad check, it passes it back to the landlord, the landlord turns around and charges it to the renter. That is the way it ought to be. The bank, and all of the customers of the bank, should not have to pay for a renter who writes a worthless check to the landlord. That ought to be charged to the landlord, and then they can pass that back to the renter. Let me simply close by saying this is a regulatory relief bill that we promised to the financial institutions because of all of the costs they were incurring as a result of the PATRIOT Act. It is not a regulatory burden bill. We do not reward someone with more punishment. We have imposed all of these money-laundering requirements on them, and we told them we would come back in this legislation and help them recover some of the costs, and thrifts are going to be stuck with this, credit unions cannot charge. It is going to really hurt a lot of institutions and a lot of customers.

Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, we are concerned about many of the same things the gentlewoman from Texas (Ms. Jackson-Lee) is concerned about. We simply think that existing law addresses these concerns. And I have reiterated those. Mr. Chairman, I yield back the balance of my time.

Mr. BACHUS. Mr. Chairman, I yield myself 3 minutes. Mr. Chairman, my amendment simply strikes section 614, and what 614 does is, in a read relief bill, it actually shifts a burden to any independent contractor that deals with the banks, and it creates a presumption or a burden of proof on any independent contractor dealing with a bank in an enforcement provision by one of the regulatory agents. It puts a burden of proof on them in an administrative court hearing to basically prove their innocence. And they have no right to a trial by jury. They have no right to an appeal and trial de novo. Their assets can be frozen while these hearings are going on. And I think that that is a tremendous hammer to give to the regulatory bodies, one that we certainly do not need to do in this bill. What section 614 would do, and I will be brief in this, is it simply equates and says that an independent contractor dealing with a bank will be treated as having the same knowledge or an equivalent knowledge as a bank insider, a director or a board member of that bank. So if they are an attorney, if they are an accountant, if they are an appraiser, if they are a Realtor, or if they are any of these affiliated parties, they are treated as if they have the inside knowledge of a bank insider; and that is simply not the case. Not only are they equated with that knowledge, but when these charges are brought against them, as I said a minute ago, they have no right to a jury trial, and the administrative judge that makes a determination on whether they are guilty or innocent is appointed by the regulatory agent. And right now the burden of proof is on the regulatory agent to prove that the insider knew, had knowledge, or was reckless. And I think that standard proved to be the right standard during the savings and loan crisis during the mid-1980s. There has been no shortage of enforcement action by the regulators. So I simply say, let us strike section 614. The gentlewoman from Oregon (Ms. Hooley), the gentleman from Alabama (Mr. Davis), and the gentleman from Virginia (Mr. Cantor) are supporting me in this amendment, as are the American Bar Association, the appraisers, the accounting organizations, all of which simply are aghast that we would put some provision like this in a bill which would give the regulators such ominous authority. Mr. Chairman, I reserve the balance of my time.

Mr. BACHUS. Mr. Chairman, I offer an amendment. The Chairman pro tempore. The Clerk will designate the amendment.

Mr. BACHUS. Mr. Speaker, on that I demand the yeas and nays.

Mr. BACHUS. Mr. Chairman, I rise in opposition to the amendment, and claim that time, and I yield myself such time as I may consume. Mr. Chairman, I believe that the gentlewoman's concerns are already fully addressed in this legislation. I believe that because the current law requires Federal financial regulators to closely examine the impact of any mergers, not only on the financial system, but also on the communities involved. If my colleagues will look at 12 USC 1842, it says: ``A Federal financial regulator may not approve any merger where the proposed acquisition merger or consolidation may substantially lessen competition, tend to create a monopoly, or restrain trade, unless it finds that the anti-competitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the communities to be served.'' This section of the U.S. Code goes on to state that in every acquisition, merger, or consolidation the regulator shall take into consideration the financial and managerial resources and future prospects of the company or companies and bank concerns and the convenience and needs of the community. Let me stress that: and the convenience and needs of the communities. All mergers, acquisitions, and consolidations are subject to antitrust review by the Department of Justice to ensure that there is not a negative impact on the financial system or on the communities that the financial institutions serve. So we have all of these tests, all of these hurdles that must be gone through. Finally, not only that, but notice must be given that a merger is being considered, and under the Community Reinvestment Act, members of the affected communities have the ability to comment on the impact of the merger to the banking agency. So we have all of this. Nothing in this regulation relief bill changes that. These same protections and considerations apply when a financial institution is participating in an expedited merger process. Accordingly, this amendment simply is not necessary. It will add additional cost. And I must urge its defeat on the grounds I have just stated and on the further grounds, as I have said in opposing the last amendment, that we promised the financial institutions, the credit unions, the thrifts, and the small banks, those that have the greatest regulatory burden, the greatest percentage of cost in complying with these new money laundering provisions, that we would take the burdens off of them, not put more burdens on them. So I would urge the defeat of this amendment. Mr. Chairman, I reserve the balance of my time.

Mr. BACHUS

Mr. BACHUS. Mr. Chairman, I thank the chairman for yielding me this time. Mr. Chairman, I rise in strong support of this bill and would urge this body to adopt it. I would like to adopt the words of Edith Jones, who served on the Bankruptcy Commission and is on the Fifth Circuit Court of Appeals, when she said ``bankruptcy reform legislation is essential to restoring integrity to personal and business bankruptcies, redressing the imbalances and opportunities for manipulation that plague current law, and encouraging individual responsibility in financial affairs.'' However, and I say this to the gentleman from Wisconsin (Chairman Sensenbrenner), he has done an outstanding job on this legislation. It is very much a thankless job, and it is with some hesitancy that I rise simply to point out one provision that I share with Judge Jones when she says, however, ``Section 414, in removing investment bankers from a rigorous standard of disinterestedness, is out of character with the rest of this important legislation and should be eliminated.'' Section 414 of the present legislation, I think, is a large snake. It is the proverbial fox in the henhouse. And what section 414 does is it eliminates the disinterested rule. That rule has existed in bankruptcy law for 66 years. Under current law, a person that advises the trustee must be ``disinterested'' in order to avoid conflicts of interest. Section 414 eliminates that exclusion. Consequently, section 414 would allow the same entities that may be engaged in negligence or even fraud prior to bankruptcy to advise the trustee during the bankruptcy process. Our experience alone with the recent wave of corporate scandals means that we need to carefully examine any provision that would weaken the conflict of interest standards. Weakening those standards in the bankruptcy code promotes conflicts of interest rather than corporate reform. Let me quote the Wall Street Journal addressing this section 414: ``Relaxing the disinterestedness rules will serve to reward firms that had some part of the company's demise . . . By allowing firms that helped the company into bankruptcy continue to stay on the payroll, the firms are being rewarded for essentially failing at the task for which they were hired.'' Eliot Spitzer has testified against section 414. He says, ``The inherent conflict of interest created by section 414 and the perverse incentives created by such a section ought to be clear to all,'' and I would agree with him. And here we have the Attorney General of New York and we have the very conservative Judge Jones agreeing on this point, as did almost all the bankruptcy commissioners. No convincing case has been made for drastically weakening the current standard as section 414 does. Indeed, one would be hard pressed to offer any public policy rationale for this change. As Judge Jones said, section 414 is totally out of character with the rest of this important legislation. And I include a copy of her letter. Let me conclude by saying that section 414, which is contrary to the legislation's goal of creating a fair and more streamlined bankruptcy system, must be addressed at conference. Nonetheless, I strongly support this much-needed bankruptcy reform legislation which will limit abuses of the bankruptcy system without affecting bankruptcy protection to all who truly need it. U.S. Court of Appeals Fifth Circuit, March 11, 2003. Hon. F. James Sensenbrenner, Jr., Chairman, House Committee on the Judiciary, Rayburn House Office Building, Washington, DC. Dear Mr. Chairman: I understand that the House Committee on the Judiciary will consider H.R. 975, bankruptcy reform legislation, on the morning of March 11, 2003. I also understand that the Committee may consider whether or not to retain Section 414 of the bill, which would amend the ``disinterested person'' standard codified at 11 U.S.C. Sec. 101(14). As a former member of the National Bankruptcy Review Commission and, in that capacity, a consistent advocate of maintaining strict disinterestedness standards for bankruptcy professionals, I urge the Committee not to change existing law. I support Congressman Bachus's effort to remove Section 414. The National Bankruptcy Review Commission was asked to recommend a modification of the disinterestedness standard in order to accommodate, as I recall, the geographic growth and increasing sophistication of professional firms of all kinds involved in Chapter 11 bankruptcy practice. Despite fervent lobbying by prominent bankruptcy professionals and scholars, the Commission resisted making such a recommendation. We voted (by a lopsided majority, I believe) to retain the standard as it has existed since the 1930's. The Commission report cites two reasons for retaining a strict prophylactic standard for all bankruptcy professionals. These are worth brief restatement. First, such a standard can alone protect integrity in the bankruptcy process. If professionals who have previously been associated with the debtor continue to work for the debtor during a bankruptcy case, they will often be subject to conflicting loyalties that undermine their foremost fiduciary duty to the creditors. Strict disinterestedness, required by current law, eliminates such conflicts or potential conflicts. Second, enforcing a strict standard of disinterestedness is necessary to maintain public confidence in the integrity of the bankruptcy system. A bankruptcy case should not be subject to the criticism that professional fees are generated to no purpose or for a bad purpose such as delay. The courts' efforts to ensure that fees remain reasonable are enhanced when, because of the complete disinterestedness of participating professionals, no hidden motives may be imputed to the actors in the case. One need not focus solely on today's high-profile bankruptcy cases to realize that the challenge of maintaining disinterested professional services has permeated modern corporate reorganization law. The Commission, for instance, voted to retain the original standard in the wake of the criminal conviction of a prominent bankruptcy lawyer and several well-known instances in which law firms were required to disgorge part of their fees--all for violating disinterestedness standards. Given the ongoing nature of the problem, I do not see how any professional group can advocate, consistent with the public interest, eliminating the statutory requirement of disinterestedness. Moreover, as it appears likely that many future complex bankruptcy cases will arise in which the role of investment bankers will have to be explored, it seems particularly unwise to grant that group--alone among bankruptcy professionals--a status insulated from the strict disinterestedness requirement. Since the close of the Commission's work in October 1997, I have been a proponent of the bankruptcy reform legislation that has been repeatedly passed by Congress. I still believe the bankruptcy reform legislation is essential to restoring integrity to personal and business bankruptcies, redressing the imbalances and opportunities for manipulation that plague current law, and encouraging individual responsibility in financial affairs. Section 414, in removing investment bankers from a rigorous standard of disinterestedness, is out of character with the rest of this important legislation, however, and it should be eliminated. Very truly yours, Edith H. Jones.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, yes, I share that understanding. Not only should consumers know they can opt out of getting these offers, they should also know that opting out or not affects their chances of getting additional credit offers with competitive terms.

Mr. BACHUS. Mr. Speaker, it is, yes.

Mr. BACHUS. Mr. Speaker, I thank the chairman for yielding me this time. I am going to limit my time to thanking Members, because this legislation I think more than anything is a testimony of what we as Members do when we all work in the best interests of the American public. This bill contains sweeping new protections against identity fraud. It also will enable consumers, which make up 70 percent of our economy, to have available more credit and more choices. And as important as that is, it does a third thing. It has many different tools to ensure that our credit information is accurately reported and that our private information and confidential information such as medical records are not shared. At this time, I would like to thank the cosponsors. This bill was introduced by me; the gentlewoman from Oregon (Ms. Hooley), whom we have heard from; the gentlewoman from Illinois (Mrs. Biggert); and the gentleman from Kansas (Mr. Moore). The gentlewoman from Oregon (Ms. Hooley), the gentlewoman from Illinois (Mrs. Biggert), and the gentleman from Kansas (Mr. Moore) all had significant input into this legislation. The gentleman from Ohio (Mr. LaTourette), a lot of the fraud provisions were drafted by him or the gentlewoman from Oregon (Ms. Hooley). The gentleman from Pennsylvania (Mr. Kanjorski), the gentleman from Delaware (Mr. Castle), the gentlewoman from New York (Mrs. Maloney), the gentleman from Arizona (Mr. Shadegg), the gentleman from Tennessee (Mr. Ford), the gentleman from Ohio (Mr. Tiberi), the gentleman from Texas (Mr. Hinojosa), the gentleman from Texas (Mr. Hensarling), the gentleman from New York (Mr. Crowley), the gentleman from Texas (Mr. Sessions), the gentleman from Arizona (Mr. Ross), the gentleman from Utah (Mr. Matheson), the gentleman from Alabama (Mr. Davis), the gentleman from Louisiana (Mr. Baker), the gentleman from New York (Mr. King), the gentleman from Oklahoma (Mr. Lucas), and the gentleman from Kentucky (Mr. Lucas), the gentleman from Ohio (Mr. Ney), the gentlewoman from New York (Mrs. Kelly), the gentleman from North Carolina (Mr. Jones), the gentleman from New York (Mr. Israel), the gentlewoman from Pennsylvania (Ms. Hart), the gentleman from North Carolina (Mr. Miller), the gentlewoman from West Virginia (Mrs. Capito), the gentlewoman from New York (Mrs. McCarthy), the gentleman from South Carolina (Mr. Barrett), the gentleman from Florida (Mr. Feeney), and the gentlewoman from Florida (Ms. Harris). All of these Members participated in this process, and the bill, which was passed almost unanimously by the House, went over to the Senate; and I would like to credit the other body for working, I think, in a professional manner and improving what we thought was a wonderful bill. And then, in conference, I would finally like to salute the gentleman from Ohio (Chairman Oxley), first, for giving me the opportunity of working on this legislation; and secondly, I would like to salute him and the gentleman from Massachusetts (Mr. Frank), our conferees, Mr. Sarbanes and Chairman Shelby. All of the people I have named deserve particular praise for a wonderful piece of legislation. Mr. Speaker, I rise in strong support of the conference report to H.R. 2622, the Fair and Accurate Credit Transactions Act (``FACT Act''). H.R. 2622 represents the culmination of my efforts, and those of my colleagues, to craft legislation to strengthen our economy and to provide consumers with meaningful identity theft protections. The FACT Act is the bi-partisan product of a thorough review of the Fair Credit Reporting Act (``FCRA''), identity theft, and related issues, Indeed, the legislation was approved overwhelmingly in the House by a vote of 392-30 and in the Senate by a vote of 95-2. I want to express my deepest sense of gratitude to Chairman Oxley who gave me the opportunity to introduce this landmark piece of legislation and then skillfully guided it through the legislative process. In my career as a legislator, it is only on a rare occasion when you get the chance to draft legislation in such a bipartisan and cooperative atmosphere. The Chairman deserves a lot of credit for establishing such a collegial process, and I think our legislative product is better because of his efforts. As Chairman of the Subcommittee on Financial Institutions and Consumer Credit. I conducted 8 hearings on the FCRA and related issues over the past year, receiving testimony from nearly one hundred witnesses including consumer groups, businesses, law enforcement, and various government regulators. On June 26, 2003, I introduced H.R. 2622 with Representatives Hooley, Biggert, and Moore. The FACT Act--a byproduct of our hearings and bipartisan cooperation--passed its version of FCRA legislation--S. 1753--by a vote of 95-2. This week, the conference report to H.R. 2622 was approved almost unanimously by the conferees from both the House and Senate. H.R. 2622 is supported by a broad coalition of interested parties, including large financial institutions, community banks, credit unions, retailers as well as the Administration. H.R. 2622 will benefit consumers and our economy by ensuring the continuity of our national uniform credit system. Indeed, our economy depends on several national delivery systems--each represented by incredible amounts of investment and infrastructure. For example, the national interstate highway system and our telecommunications networks are all critical to our national economy. Today we can drive from state to state without worrying about whether a road will come to an abrupt end at the state line. Our consumer credit system is similar to these examples--we do not really think about it, we just expect that it will work. Although not perfect, our consumer credit system makes life better, easier, and cheaper for American consumers. Just as our highway and telecommunications networks have improved and become more efficient over the years, so has our credit system. Creditors have always needed to evaluate the likelihood that a borrower would repay a loan. As a result of the framework established by the FCRA, creditors, no longer need to ``eyeball'' an applicant and review application materials for days or weeks. Rather, our national credit system has produced a virtually seamless system whereby consumers can apply for, and receive a decision on, credit within minutes. The national uniform system has also lowered costs and increased choice and convenience for American consumers. By far the most striking result of our national credit system is the dramatically increased availability of credit--or the ``democratization'' of credit. However, this system could be put in jeopardy if the state law uniform standards in the FCRA were permitted to expire on January 1, 2004. H.R. 2622 would ensure the continuity of our national credit system by making these standards permanent. The conference report also directly addresses the problem of identity theft. Sec. 151 of the conference report requires that the FTC and the federal banking regulators provide identify theft victims with a summary of their rights. It is important for the agencies to let consumers know that identity thieves target home computers because they contain a goldmine of personal financial information about individuals. In educating the public about how to avoid becoming a victim of identity theft, the FTC and the federal banking regulators should inform consumers about the risks associated with having an `always on' Internet connection not secured by a firewall, not protecting against viruses or other malicious codes, using peer-to-peer file trading software that might expose diverse contents of their hard drives without their knowledge, or failing to use safe computing practices in general. Identity theft occurs when a criminal obtains enough information about an individual to allow the criminal to ``assume'' that individual's identity for nefarious purposes. My Subcommittee heard from two identity theft victims. Their stories were truly nightmarish, and we need to work to prevent countless others from joining the ranks of identity theft victims. Not only does identity theft harm the direct victims, but it also has an impact on all consumers. Financial institutions lose millions of dollars each year as a result of identity theft. This increased cost on financial institutions is absorbed, at least in part, through increased costs of financial products and services to all consumers. H.R. 2622 will also improve consumers' access and understanding of their credit information by allowing consumers to request a free credit report annually from each credit bureau. In addition, consumers will have the opportunity to obtain their credit scores from credit bureaus. Transparency in the credit granting and reporting process will increase consumers' financial literacy and improve their confidence in the financial services system in general. I want to commend Chairman Oxley for the tremendous leadership he has shown in steering this complex bill through the legislative process. I also want to thank the Ranking Member of the Committee, Mr. Frank, for his support of this important piece of legislation. In addition, let me commend Ms. Hooley, Ms. Biggert, Mr. Moore, Mr. LaTourette and the Members of the Financial Services Committee on each of their efforts. I also appreciate the efforts of Mr. Sanders, the Ranking Member on my subcommittee, for his work on this issue. Lastly, I want to mention my appreciation for the input we received from the Administration, particularly from Treasury Secretary John Snow and Treasury Assistant Secretary for Financial Institutions Wayne Abernathy. Let me also take this opportunity to thank the staff members on the House Financial Services Committee who worked on this legislation. Both Chairman Oxley and Ranking Member Frank are to be commended for assembling such a talented group of staff to work on H.R. 2622. On the majority side, I would like to thank Bob Foster, Hugh Halpern, Carter McDowell, Jim Clinger; Robert Gordon, Charles Symington, Karen Lynch-- who no longer works for the committee but did a lot of work on this issue before leaving--and Dina Ellis, my designee on the Committee. I would also like to thank Warren Tryon of my staff for his work on this issue. On the minority staff, I would like to thank the following staff members: Jeanne Roslanowick, Jaime Lizarraga, Ken Swab, Erika Jeffers, Dean Sagar and Warren Gunnels. In conclusion, I would like to note that I am proud of the work we have done in crafting H.R. 2622. This has been, by necessity, a long and thorough process. I believe H.R. 2622 presents a solid achievement in protecting the security of consumers' personal information, enhancing the transparency of the credit reporting process, and ensuring continued access to a wide variety of financial products at low cost. Mr. Speaker, our economy today is important to all of us. That goes without saying. But what a lot of people do not realize is that two- thirds of our economy is consumer spending. That is the driver in our economy today. And consumer spending today is contingent upon maintaining a national uniform credit reporting system. I urge all of my colleagues to support our economy by voting for H.R. 2622. Announcement by the Speaker Pro Tempore

Mr. BACHUS. Mr. Speaker, if the gentlewoman would yield, I would be glad to engage in a colloquy. I think what the gentlewoman from Florida (Ms. Harris) was inquiring into was that the Florida Banking Association has created a system that permits banks to combat identity theft, check fraud, and other criminal activity. And as I understand it, this system it produces reports that banks use exclusively to fight fraud not for the purpose, either in whole or part, of determining an individual's eligibility for credit insurance and employment. And she has asked me to confirm that information that is provided for the exclusive purpose of detecting, preventing, or deterring a financial crime identity theft, or the funding of a criminal activity does not constitute a consumer report under the Fair Credit Reporting Act, even as amended by this bill. And my response to that is that is correct. Such information was not a consumer report under the Fair Credit Reporting Act as it existed before this legislation, nor will it constitute a consumer report as amended by this bill.

Mr. BACHUS. Mr. Speaker, yes, I agree.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, this legislation is just the latest example of legislation which has moved through the Committee on Financial Services this year. Like deposit insurance reform, like the Fair Credit Reporting Act, like other legislation, it would not have been possible without the leadership of the chairman of this committee, the gentleman from Ohio (Mr. Oxley). I think that there is probably not a Member of this body who would not agree that he has served in an outstanding manner and has had more success than I can remember in the 10 years I have served on the committee. So this is a salute to his leadership. I also want to thank the gentleman from Massachusetts (Mr. Frank), the ranking member on the other side, who has worked very closely with the chairman. With this particular legislation we have been very fortunate on our side, because of the gentleman from New Jersey (Mr. Ferguson) and the gentlewoman from Pennsylvania (Ms. Hart), who is the sponsor of this legislation and will address some of the particulars of it, who are very knowledgeable Members, very active Members. The gentleman from Tennessee (Mr. Ford) has done an outstanding job on his side. As my colleague, the gentleman from Alabama (Mr. Davis), said when this bill came up for debate on the House floor, this is a good bill for consumers, and it is a good bill for the industry. We had the support of various consumer groups. Consumers Union, Consumers Federation of America, United States Public Interest Research Group, and the industry worked very hard on this bill. And I think it is a tribute to what a fine piece of legislation we have that we actually had a recorded vote on this with 429 Members voting ``yes'' and no Members voting ``no.'' The gentleman from Tennessee (Mr. Ford) mentioned the staff when this bill came up before. Those on the Democratic side that contributed: Kevin Swab, Jaime Lizarraga, and Jim Wert worked very hard with the gentleman from Tennessee (Mr. Ford) and the gentlewoman from Pennsylvania (Ms. Hart), from legislative counsel. On our side we had Kevin MacMillan who sort of led the effort, Hugh Halpern, Dina Ellis, Jim Clinger, Carter McDowell, Karen Lynch, and also, of course, Bob Foster. The gentleman from Ohio (Mr. Oxley) is to be saluted again for assembling such a wonderful staff as worked on this bill. Let me just conclude by saying that what this bill does, to me, more than anything else, and the most significant thing about it, it makes America more competitive in the world market. It makes our economy stronger; it makes our economy better. By making our economy stronger, by making it better, by making it more efficient, it is a job which I think will encourage job formation in America. It will keep jobs from migrating overseas. Today we have a law that has been on the books for 100 years, and this is the first year that we have actually made significant changes to the way that we treat checks. Today, checks are returned to the bank that they were originally drawn on. When this legislation comes into being, we will basically update that law 100 years. The technology has really been here for 20 and 30 years to have done this, but the bipartisan effort and the leadership to get this bill has not been here. But today, they come together. The Senate has worked with the House, Democrats with the Republicans, and today we will bring our banking system, our transfer of checks into the 21st century. Let me conclude by saying we have done this and we have also added new consumer protections that go beyond present law. We have done all of that, and we have done it in a unanimous, cooperative spirit. So Mr. Speaker, this bill deserves the support of each and every Member of this body. Mr. Speaker, present law requires that checks be returned to the bank where they were originally drawn, and that way of doing business has basically been the law and the procedure in this country for over 100 years. We have technology now that makes something else possible, and that is electronic transfer, as opposed to transfer of the paper check. What we have in our country today is an antiquated process, which is also a tedious process, which each day involves as many as 10 to 12,000 cars, trucks and airplanes returning checks when none of this is necessary. The credit unions some 20 years ago went away from this process. They have had zero consumer complaints. The largest banks have made agreements between banks, and they have gone away from this process; but today, two-thirds of the checks still are processed in this outdated manner. What this House has done in a bipartisan way is take a bill that has been cosponsored by two of our most able Members, the gentlewoman from Pennsylvania (Ms. Hart) and the gentleman from Tennessee (Mr. Ford), very aware of this issue, very knowledgeable on the issue, they have drafted this bill. The committee has looked at the bill. We have made changes to protect the consumer, slight changes. The bill as it exists today has been endorsed by the Federal Reserve, all the regulators, all the financial institutions involved, all the trade groups, consumer groups. It is a model for what this House can do when it puts aside its differences and works together for the good of the Nation as a whole. This bill is good for customers. This bill is good for consumers. This bill is good for the economy. We have talked about little things such as airport congestion, how this will help address that, congestion on the roadway, our energy dependence. I want to commend, in closing, the gentleman from Ohio (Mr. Oxley), who has made this one of his three goals for this year to move this legislation; the gentleman from Massachusetts (Mr. Frank), the ranking member, who identified this as necessary legislation. My colleagues may say, well, this ought to be simple. For 20 years we tried to reform our check-clearing process. We have not been able to do it until this moment. This House today I think will take a historic step in making us more competitive in the world economy by bringing our check-clearing system up to a model for the world. Mr. Speaker, I commend the gentleman from Tennessee (Mr. Ford) and the gentlewoman from Pennsylvania (Ms. Hart).

Mr. BACHUS

Mr. BACHUS. I will say this: Yes, there are provisions of California law that were preempted, but they are provision where we established a consumer protection on a national basis. And in almost every one of these cases, we went beyond what most States do.

Mr. BACHUS. Mr. Chairman, Members are back in their office and they are listening to this debate, and one of the things that they may or may not have heard, but if they did, is that both gentlewomen from California may have been misled on this legislation into thinking that nothing in this law preempted California. I, in fact, went back to the debate at the time that the gentlewoman from California (Ms. Waters) offered a similar amendment to what is being offered on the floor today, and I want to read to her just by way of refreshing our memory, not to dispute what she says, and quote what she said. She said, ``I, in good faith, would not like to preempt the work of the State of California, the legislators who have spent so much time. Nor would I like to be on record preempting them with supporting this legislation, when I know that we are going to have a ballot measure that is going to be passed. The people of the State of California are going to pass this ballot measure that will give them further protections. I do not believe that a ballot measure should be preempted here at the national level.'' She offered this amendment. It was defeated 56 to 6, and then as the legislation passed out of the full committee, the gentlewoman from California (Ms. Lee) and the gentlewoman from California (Ms. Waters) joined the gentleman from Vermont (Mr. Sanders) and voted against the whole thing because, in fact, it did preempt something in California. What is it that it preempts? The legislation that California just passed did three things. Number one, it required opt-in for third party nonaffiliate sharing. Nothing in this legislation changes that. It had new Gramm-Leach-Bliley privacy notices. Nothing in this legislation affects that. There is only one thing and one thing alone that this legislation ``preempts'' California, and that is the required opt-out for affiliate sharing, and that is also the present law. So what was passed in California, as far as the required opt-out for affiliate sharing, the citizens of California did not get anything because the national law today preempts that. It had no effect. If our national standards expire January 1, yes, they would, but as the gentleman from Ohio (Mr. Oxley) said, Gramm-Leach-Bliley, we are going to address that next year and look at those affiliate sharing things. In fact, the chairman of the committee in the Senate says he is going to look at them, and I think that he probably will. We may address them in conference, but we did not open up that debate. We did not address it with our hearing.

Mr. BACHUS. Mr. Chairman, will the gentleman yield for just a moment, before he yields to the gentleman from Massachusetts, because I think it probably has something to do with it.

Mr. BACHUS. Mr. Chairman, let me reiterate again, because I think it is important that the gentlewoman from California (Ms. Waters) know this, nothing in this legislation will, in any way, stop SB1, the California bill, from requiring opt-in for third-party nonaffiliate sharing, nothing. The gentlewoman mentioned third parties, this was all about allowing institutions to share their privacy or their records with third parties. That is not what this bill is about. This bill does not authorize that. This bill does not permit that. There is nothing that does that. There is nothing in this bill that stops the second component of that new California law, and that is the privacy notices. Nothing in this legislation stops that. What this legislation does is it continues the present law. Gramm- Leach-Bliley addressed the privacy issues, not fair credit reporting, and we are going to address those issues in hearings next year. As the gentleman from Massachusetts said, the chairman of the Senate has said he may address affiliate sharing in the Senate. That is fine. We may address it in conference. We did not address it in this bill. We did not do anything not allowed by present law. Currently, the present law does not preempt that. Finally, we established a high bar wherever we established a bar. The gentleman from California (Mr. Sherman) talked about one of the most important things that they did in California, and that is the telephone numbers, giving the telephone numbers. We put that in this bill over strong industry opposition. It is in there. It is an important new right that everyone in 50 States will have, and it is part of a national standard.

Mr. BACHUS. Mr. Chairman, the problem that the gentleman from California has identified is a real problem, and it does need a solution. I want to reiterate what the gentleman from Massachusetts said, because I think there is genuine support for finding a solution to this. The last thing we want is for small- and middle-sized businesses to be burdened down and not to report information to the national credit reporting system because this could actually encourage a situation in which people, knowing that they do not participate because of a liability, target them, do business with them and knowing that they are not part of the national credit reporting system. The more information that goes into that system, the more valuable it is. It is often these small- and middle-sized businesses that in fact do not have the sophistication to collect bad debts or to write off bad debts; and when they take a loss, it is more severe because it reflects a greater percentage. So the very businesses that need to be not only furnishing information but drawing information, we need to do everything we can to encourage those retailers and others to participate in the system. I fear that unless somewhere in conference or in the Senate, and I would say to the gentleman from California, we just simply have not come up with the right language yet, but I know the gentleman from Ohio is very committed to working on this issue. I want to commend the gentleman from California for working on this issue and identifying it and bringing it to our attention, along with the National Retail Association that has made us very aware that this is a weakness of the bill as it now exists.

Mr. BACHUS. Mr. Chairman, the gentleman from Ohio (Mr. Tiberi) spoke in opposition to this amendment and I think basically said everything that needed to be said on this particular amendment; and I think the most important thing he said is that Congress has demonstrated, because they have done it in the past, they are free to revisit and fine-tune FCRA anytime they wish; and they did that in 1996, even though there was not an impending deadline. Far more important is what we learned in our hearing and how good the national credit reporting system is to our Nation. I am not sure that anybody disagrees with that, that anybody thinks that it ought to be experimented with, that it ought to expire in 9 years. It is very good for consumers. It has been particularly good in democratizing credit and extending credit to middle- and low-income Americans; and to limit that to 9 years, we do not do that with the Community Reinvestment Act. We do not do that to the Equal Credit Opportunity Act. We do not do that to our other acts which protect consumers, and this act is for the benefit of consumers and it protects consumers. Let me conclude by saying the gentleman from Ohio (Mr. Tiberi) is one of our younger members of our committee, an outstanding member. It is just one example of the many young members that we have on our committee that have really had real input in this bill. I want to commend all of them. I will close by commending the gentleman from Ohio (Mr. Oxley) giving me the opportunity to work on this bill, for making it a priority, for realizing early that we needed multiple hearings. I would also like to commend these people: the gentleman from Massachusetts (Mr. Frank), the gentlewoman from Oregon (Ms. Hooley), the gentleman from Kansas (Mr. Moore), the gentleman from Ohio (Mr. LaTourette), the gentlewoman from Illinois (Mrs. Biggert), and other members of the committee.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I thank the vice chairman of the Committee on Rules for yielding me this time. Mr. Speaker, our economy today is important to all of us. That goes without saying. But what a lot of people do not realize is that two- thirds of our economy is consumer spending. That is the driver in our economy today. And consumer spending today is contingent upon maintaining a national uniform credit reporting system. We have that today, but it will expire December 31. Now, what has the national uniform credit reporting system done? A lot of people do not know that it exists, but we use it every day and the benefits to our country and to the American people have been immense. We have held eight hearings. We have had over 100 witnesses, and we have brought out legislation to protect the national uniform credit reporting system by a vote of 61 to 3 from the committee. Since the institution of the national uniform credit reporting system, the number of Americans having credit extended to them has tripled in percentages. There was a time in this country, and our grandfathers and even our fathers or mothers might tell us about it, that when they needed a loan, they had to be eyeballed. We heard testimony of this in the committee. An individual went down to the bank, they sat down and they were asked a series of questions. They could ask about your family. A lot of times credit was based on an individual's family or whether they had lived in a community for 2 or 3 years. Credit could not be taken across State lines. Credit could not even be taken from one city to another. If someone moved and credit was dependent, and they had not had a job for over a year or 2 years, they did not get credit. That is all ended today. Almost all Americans today can get credit and credit from a number of sources. Contrast that to Europe, contrast that to Asia where less than half the people in those countries today enjoy credit. Today, we can go down and buy an automobile, and within an hour it can be financed on the spot. We can apply for a home mortgage and have 20 or 30 different opportunities and rates. Credit cards? Some have argued there is too much credit out there. But let me say this. The other option is no credit. And in a country where we enjoy freedom and we enjoy choice, having a choice or having the ability to get a credit card is an important privilege. Today or tomorrow we are going to vote on this legislation. It goes beyond renewing our national uniform credit reporting system. It addresses the shortcomings of that system. Most all of us have had constituents come to us, most of my colleagues in this body have shared stories with me and said there is something inaccurate on my credit report, and even though I have tried to repair it, it keeps popping up. There are important new rights for consumers to ensure that their credit reports will be more accurate in the future. What will that mean to them? It could mean getting a loan on a home mortgage at a half a percent or a quarter percent lower rate. What could that mean to them? It could mean as much as $50,000 or $75,000 over the term of the loan. We have another problem in this country. The FTC said yesterday that it is a problem costing American consumers $50 billion, something that was not even in our vocabulary 10 years ago, and it is called ID theft. There was a time that if someone wanted to rob, they went to a bank. Then we protected our banks with security guards and safes and systems like that. Then they started robbing railroad trains. They started attacking those because they were defenseless. Today, they do not have to rob a bank, if they are smart. They do not have to break into the mail. All they have to do is go on a computer and steal someone's ID. ID theft. The FTC says that it cost American consumers $50 billion last year. They say that there are probably a half million Americans who do not even know they have been the victim of ID theft. Many of those that we all represent have had $100 or $50 or $20 taken from them by ID theft. They do not know it, and they may never know it. This bill offers important new protections in that regard, and it does what the consumer groups have said was the number one need of Americans, and that is the ability to have their credit report, to have a free credit report, to be able to look at that credit report and see if it is accurate. This bill gives that right. Also, if someone has been the victim of ID theft, and the gentlewoman from Oregon (Ms. Hooley), who cosponsored this bill with me along with the gentleman from Kansas (Mr. Moore), who cosponsored this bill with me, the gentlewoman from Illinois (Mrs. Biggert), who cosponsored this bill, who were original lead cosponsors, all of them had constituents who told horror stories of being the victims of ID theft and not being able to defend themselves in a fair and expeditious manner, this legislation today will help those we represent who have been the victim of ID theft. It will also protect the rest of us from becoming victims of ID theft. Will it end ID theft? No, it will not end ID theft. Will it help us protect ourselves against ID theft? Yes. Will it help us have more accurate credit reports? Yes. Will it help us continue to offer low interest rates and choices to low- and middle-income Americans? Yes, it will. Will it continue to help us protect an economy that is driven by consumer spending? Yes. An important bill? As important in finance as the national interstate highway system is to us in transportation. Imagine if we did not have a national interstate system today for transportation. Well, imagine what it would be like if we do not pass this bill, and we do not do it in an expeditious manner, and we cripple this national uniform reporting agency. Our interstates today run straight through. They are seamless. We do not have a bunch of traffic lights on our interstates. What we have today and what we want to preserve is a seamless standard, one uniform standard nationwide; and that is what this bill we bring to the floor does today. Our constituents will know nothing about this bill. They will probably read nothing about this bill. But this bill is very important to them. It is very important to business people. Today, a car dealer, every day, cannot make a sale without going to the national uniform credit reporting system. The national automobile dealers have joined over 100 other business groups in saying this is their number one priority for the year. Mr. Speaker, this bill is the result of the leadership of the gentleman from Ohio (Mr. Oxley), and it is the result of bipartisan support. It had 32 original cosponsors almost evenly divided between Democrats and Republicans. It is a good product. It is good for our constituents. Secretary of the Treasury John Snow advocated and was successful in his suggestion being incorporated in this bill for further protections for the American people. And we will hear a lot about those in the next 4 or 5 hours as we consider this bill. Mr. Speaker, we will need to consider the good within it. And I appreciate the gentleman on the other side of the aisle saying he supported the underlying bill. Let us not unravel that bill today. Some of these amendments may be considered innocuous, but after 6 months of looking at it and building a consensus, what we have included in this bill is what business groups, consumer groups, and other groups came to a consensus on. The administration, Democrats, Republicans in committee feel this is the very best bill; and that is what we will vote on today, hopefully.