John Dingell

Mr. DINGELL

Mr. DINGELL. Mr. Chairman, my old dad taught me to measure twice and cut once. He said that that was better carpentry, and he was right. This amendment is essentially a bipartisan agreement reached in the Senate between Senators Abraham and Leahy. It is supported by the administration and it does not bear with it the threat of veto of the legislation without this amendment. It recognizes the validity of electronic signatures and contracts. It stays out of the more complicated questions and controversy associated with electronic records attendant on those contracts. It also avoids the problem of telling the contracting parties exactly what they do. Here is what the substitute does do. It says a contract may not be denied legal effect or enforceability solely because of electronic signature or an electronic record was used in the formation. It allows parties to the transaction to determine appropriate electronic signature technologies for their transaction. It protects parties by requiring that the electronic record be delivered in the form that can be retained by the parties for later reference, and it can be used to prove the terms of the agreement. It sets forth principles to guide the Federal Government in expanding the use of electronic signatures in international transactions. It requires the Federal Government to study legal and regulatory barriers to electronic contracts. Now, here is what it does not do. It does not hurt the ability of States to establish safeguards, such as consumer protection laws for electronic commerce. It does not wipe out the ability of Federal regulators to eliminate abuses that may occur when electronic records are used. It does not wipe out State laws and regulations on the maintenance of records critical to protection of individual rights and claims. It does not preempt State and Federal records signature requirements, including those in tax laws and regulatory statutes. We do not need to sacrifice consumer protections to facilitate electronic commerce. The concerns that I pointed out earlier are avoided. Electronic commerce will go forward, the parties will define the terms under which they will function, State laws will be protected, consumers will be protected, and entrepreneurs on the Internet will also be protected. And consumers will know that they have the means to protect themselves on terms of contracts in which they enter. Mr. Chairman, may I inquire as to how much time I have consumed?

Mr. DINGELL. Mr. Chairman, I reserve the balance of my time.

Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the gentleman from New York (Mr. LaFalce). (Mr. LaFALCE asked and was given permission to revise and extend his remarks.)

Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished gentleman from New York (Mr. Weiner), a member of the Committee on the Judiciary.

Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished gentleman from New York (Mr. LaFalce).

Mr. DINGELL. Mr. Chairman, I yield myself 4 minutes. Mr. Chairman, this bill in its original form passed from the Committee on Commerce unanimously. Now, what happened between now and then is really very interesting. The bill has been changed. The Members on the minority side consulted extensively with our good friend, the chairman of the committee, and we were negotiating with him; and there were a number of agreements made to change the bill to make it still more acceptable and more workable. But then something funny happened on the way to the floor. The distinguished gentleman from Virginia, or somebody else, all of a sudden decided they are going to put the bill on the floor, and they decided they were going to terminate the negotiations without any notice to the minority. They then took the step of making some significant changes in the bill. It is not the bill that came out of the Committee on Commerce to which the minority objects. We will be happy to vote for that right this minute. But what we are confronted with here is the unfortunate situation where our dear friends on the majority side have changed the bill with no notice, and it is quite different than the original bill. Now, what is the basic objection to the bill? Let us try and understand to what does the minority really object. The minority objects not to the idea that we should authorize under law a uniform system of recognizing the electronic signature of contracts. What is objected to here is something quite different, and that is that all of the matters which are associated with the contract and with contracting are with one swoop of the pen or one click of the computer changed so that they immediately go into force and that no right on the part of the individual who contracts remains intact after the original electronic signature has taken place. Now, what can happen? A number of matters of notice come electronically. They are not in hard copy and in writing. The right of the contracting parties to say but certain other things have to be under signature and on paper in the conventional fashion as required by existing State law and by even things going back to common law and ordinary business practices and transactions are no longer permitted. Those are done once they have made the initial electronic contracts by a further electronic transaction. Now, what is wrong with that? First of all, the hard drive may crash. Second of all, the Y2K bug may strike. Third of all, these notices may get lost in cyberspace. The individual may do a bad job of notifying the other party of an address change. Or the computer may crash. Or any of many things may transpire. The parties cannot even agree to these questions amongst themselves. That is wrong. If we want to go forward, let us proceed and go forward on the bill that was adopted by the Committee on Commerce. Let us adopt this, which allows everything that the original legislation would have done and which was supported by both sides, majority and minority. Let us proceed in that fashion. I see no benefit to moving forward with a bill which is so strongly objected to, which is not in the Senate language, and which is threatened with a veto by the President. All I am suggesting is that they listen to the words of my old dad. When we are going to make this size of massive change, do it sensibly. Know what we are accomplishing. As my dad used to warn me when I was doing carpentry, he would say, ``Measure twice. Cut once. Be careful.'' That is what I am suggesting to this body. Measure twice. Cut once. Adopt the amendment. Get the bill signed. And then let us proceed forward to such other matters as may be required.

Mr. DINGELL. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, I have here a Floor Alert from the National Conference of State Legislatures, Office of State-Federal Relations, in which they point out that the substitute offered by my friends and colleagues and me will accomplish the purposes of ensuring the proper recognition of electronic signatures without trampling on the rights of consumers and without engaging in the completion of legislation which will be opposed and vetoed by the administration. Our proposal here is fair. There is no significant trampling on State laws. There is a piece of legislation which will be accepted by the administration and which will protect the rights of consumers. Messages which would be transported in cyberspace and perhaps lost to the detriment of consumers who might find as a result of that foreclosures of mortgages and other hurtful actions by the seller will not be occurring. I think this is a sensible way to proceed. Let us know what we are doing. We embarked upon this process in the idea that we would have a bill which would approve electronic signatures. The original committee bill did that. Declarations were festooned upon the committee bill. This amendment gives all of the rights to the parties that they want. An individual to that contract may waive contract rights to carry the matter more far and further forward, but this proposal that we confront and seek to amend will impose upon innocent persons conditions which will only be understood by lawyers and experts in electronic matters. Be fair to your constituents and to the people. Allow them to proceed slowly into the time of cyberspace. Do not put them at risk because all of a sudden they are going to find to their vast surprise, somewhere hidden in a contract which they had signed electronically are a waiver of a whole plethora of rights that are very important to them. Accept the amendment. Vote for it. And in failing that, reject the bill. It is not in the interests of your constituents.

Mr. DINGELL. Mr. Chairman, I demand a recorded vote.

Mr. DINGELL

Mr. DINGELL. Mr. Speaker, I rise in support of the Conference Report on H.R. 1554. Consumers will greatly benefit from the bill. They will finally be legally entitled to receive their local broadcast stations when they subscribe to satellite television service. No longer will consumers be required to fool with rabbit ears, or erect a huge antenna on their rooftop, to receive their local network stations. The satellite dish they buy this holiday season will be able to provide them with a one- stop source for all their television programming. But the bill helps consumers in another very important way. Cable television prices were deregulated on April 1st of this year, despite the fact that effective competition to these systems was practically non-existent at that time. This bill now will allow satellite companies to compete more effectively with cable systems, and provide a real- market check on the rates they charge consumers. If cable rates continue to climb, as they have done for the past several years, consumers will be able to fight back--they'll now have a real choice for their video programming service. Despite these benefits, it is true that in some of the smaller markets around the country, satellite companies will not provide local broadcast signals right away. This is due to technical capacity limitations that currently exist. In those smaller markets, consumers who subscribe to satellite TV will still be required to get their local stations over-the-air through the use of a conventional antenna. This raises an important question that is the subject of considerable debate. The question is whether these consumers can actually receive an acceptable picture over-the-air, through the use of an antenna. The House bill would have given the Federal Communications Commission authority to change the rules governing which consumers receive an acceptable picture, and which do not. Those who do not would be allowed to subscribe to out-of-market, or ``distant'' network signals as part of their satellite television service. Unfortunately, the House position was not adopted by the Conferees. Instead, the Conference Report simply requires the FCC to study this question and report back to Congress. A study will not help consumers who want satellite service, but are denied access to network programming. I hope that the distinguished Chairman of the Commerce Committee will take swift and appropriate action when that FCC report comes back to this body with its recommended changes. These rules need to be changed if we are ever going to have truly effective competition to cable. Mr. Speaker, I believe that the Conference Report, on balance, is a pro-consumer, pro-competitive piece of legislation and recommend its approval.

Mr. DINGELL

Mr. DINGELL. Madam Speaker, to paraphrase the words Charles Dickens penned in 1859, this is the best of bills; this is the worst of bills. It is an act of wisdom; it is an act of foolishness. It wisely recognizes the technological and regulatory changes that have blurred the lines between industries and products, and builds a new regulatory structure to house and foster competition and innovation. However, it unwisely fails to recognize that, for all that has changed dramatically, human nature has not. Prodigious failures and frauds are no less possible, indeed, perhaps are even more likely today. Yet S. 900 provides inadequate protections for taxpayers, depositors, investors, and consumers. Now, I can tell that some of my colleagues are bracing themselves for a speech about the Crash of 1929 and the Great Depression that followed it. I am not giving that speech today. I am not opposing S. 900 because I am stuck in the past. I am opposing S. 900 because it's a bad bill today and for the future. About the past, I will only observe that he who does not learn from it, is doomed to repeat it. This bill bears dangerous seeds. First, S. 900 facilitates affiliations between banks, brokerages, and insurance companies, creating institutions that are ``too big to fail.'' However, it does not reform deposit insurance or antitrust implementation and enforcement. The bill's supporters tout all the benefits to consumers, but woe to the American people when they have to pick up the tab for one of these failures or when competition disappears and prices shoot up. It also authorizes banks' direct operating subsidiaries to engage in risky new principal activities like securities underwriting and, in five years, merchant banking with Treasury and Federal Reserve approval. The flimsy limitations and firewalls will not hold back contagion and underscore the foolishness in not reforming deposit insurance, and thus the threat to taxpayers and depositors. Second, the privacy provisions in S. 900 are a sham. The bill gives financial institutions new access to our personal financial and other information for purposes of cross-marketing and profiteering. Under S. 900, a customer cannot opt out of information sharing if his financial institution enters a ``joint marketing agreement'' with unaffiliated third parties. This loophole makes the privacy protections about as effective as a lace doily would be in holding back a flood. Third, this bill undermines the Community Reinvestment Act. Many of my colleagues will speak to this point more eloquently than I, and I associate myself with their remarks. At the appropriate point, I will include National Community Reinvestment Coalition's letter in the Record. Fourth, it undermines the separation of banking and commerce. Title IV closes the unitary thrift loophole by barring future ownership of thrifts by commercial concerns. But about 800 firms that are grandfathered can engage in any commercial activity, even if they were not so engaged on the grandfather date. Moreover, title I allows the new financial holding companies (which incorporate commercial banks) to engage in any ``complementary'' activities to financial activities determined by the Federal Reserve. And in a piece of circular mischief, any S&L holding company, whether or not grandfathered, can engage in any activities determined to be ``complementary'' for financial holding companies. Title I of S. 900 also waters down the prudential limitations that the House had imposed on merchant banking. S. 900 clearly ignores the warning of then Treasury Secretary Rubin to Congress in May of this year: ``We have serious concerns about mixing banking and commercial activities under any circumstances, and these concerns are heightened as we reflect on the financial crisis that has affected so many countries around the world over the past two years.'' Fifth, the conference agreement would let banks evaluate and process health and other insurance claims without having to comply with state consumer protections. This means that banks, of all people, will make important medical benefit decisions that patients and doctors should make. According to the National Association of Insurance Commissioners, S. 900 could prevent up to 1,781 state insurance consumer protection laws and regulations from being applied to banks that conduct insurance activities. State laws could be preempted that require consumers to be paid claims they are due and that protect consumers against predatory practices of banks that sell credit insurance. S. 900 also preempts state consumer privacy laws restricting the dissemination of medical and other personal information by a bank engaged in insurance activities. The conference committee rejected an amendment that I offered to address these serious shortcomings. Sixth, S. 900 contains provisions (subtitle B of title III) on the redomestication of mutual insurers that are opposed by the National Conference of State Legislatures and the National Conference of State Legislatures and the National Conference of Insurance Legislators. They contend that this legislation is anti-consumer and not in the public interest in that it would preempt the anti-mutualization laws in 30 states and places as many as 35 million policyholders, many of our constituents, at risk of losing $94.7 billion in equity. Their letter also follows my statement. Finally, our capital markets are the envy of the world and their success rests on the high level of public confidence in their integrity, fairness, transparency, and liquidity. While S. 900 pays lip service to the functional regulation of securities by the SEC, it, in fact, creates too many loopholes in securities regulation--too many products are carved out, and too many activities are exempted--thus preventing the SEC from effectively monitoring and protecting U.S. markets and investors. In a final indignity, the effective date of the securities title was extended mysteriously to 18 months from the one year approved by the conference committee. So, the title I Glass- Steagall repeal is effective 120 days after date of enactment, the insurance provisions are effective on date of enactment, the pitiful privacy provisions are effective six months after the date of enactment, but the banks do not have to comply with the federal securities laws until 18 months or a year and a half after the date of enactment. This makes absolutely no sense whatsoever, but, considering all the other problems with this bill, is par for the course. I support modernization of our financial laws. I support competition and innovation. I do not believe either should be accomplished at the expense of taxpayers, depositors, investors, consumers, and our communities. S. 900 is a bad bill for the reasons I have outlined. I therefore refused to sign the conference report and I will vote ``no'' on passage.

Mr. DINGELL

Mr. DINGELL. Mr. Speaker, what are we doing here in such haste and why? There has been no consultation, no attention to the regular and orderly process. Most Members have not got the vaguest idea what we are doing here. This is a subject which would enable us to function in an intelligent fashion, using the ordinary processes of the House to discuss, to have an opportunity to come to agreement, and to do something which can and should be bipartisan in a bipartisan fashion. The bill, on the other hand, is rushed to the floor without any particular attention, without any consultation, not addressing the problems, and, interestingly enough, if we look at it, we find that the bill is not paid for, probably is going to jeopardize Medicare and Social Security and their trust funds, and it is going to ignore the opportunity to do many things which we could have done. It is not going to pay for most of the benefits, although most Members here are probably going to vote for it, including myself, understanding full well that we have not done the job that we should, not knowing what should be done, having disregarded the regular and orderly process of the House. More importantly, we are going to proceed to move forward, ignoring the opportunity to craft a bill of which we could all, first of all, know what we are doing, and, second of all, a bill in which we could genuinely be proud. We also have an opportunity here to craft a piece of legislation which is not going to hold in it a large number of surprises and perhaps even poison pills. The result of what we are doing today is bad process and is going to probably result in imperfect legislation. It holds within its bounds sure surprises and very little opportunity to address really important problems like the balanced budget and protecting and preserving Medicare and Social Security. Mr. Speaker, I am pleased to see that the Republican leadership is finally getting down to the business of rectifying some of the consequences of the Balanced Budget Act. Like many others here, I am very concerned about its effects on beneficiaries and providers. Regrettably, I am also concerned today by the process. We are voting on a bill that can be and should be bipartisan . . . that is the product of partisan efforts. This is a matter of great importance to the 38 million Americans covered by Medicare, yet we have had less than one day to examine this bill. This is a matter that can and should be the subject of more careful and thoughtful but still expeditious process. Our Republican friends made a great deal about the need to protect the Social Security surplus, but the bill they are offering is not paid for. Preliminary estimates show this bill to cost almost $12 billion-- unpaid for, the bill will shorten the life of the Medicare Trust Fund and increase premiums to seniors. Apparently, fiscal responsibility only suits the Republican party when it is convenient. I am also concerned that we have not done enough. The relief for Medicare patients who need physical therapy is inadequate. The relief for Medicare patients in rural or cancer hospitals is not adequate. And, from what I understand, the Hospital Outpatient policy may be unworkable. A number of Democrats sent a letter to the Speaker yesterday, concerned that we have not done enough to provide relief, asking for the opportunity to offer a paid-for amendment to this bill. Our request was denied. This bill leaves out what is perhaps the most important relief that Congress could offer to Medicare beneficiaries--relief from the high cost of prescription drugs. Seniors should not have to choose between food and needed medicines. Yet, the Speaker would not let us even offer our amendment that would have made prescription drugs more affordable for seniors. This bill provides much needed relief for the Community Health Centers which are critical to providing care to underserved areas. But I am dismayed to see that the bill could not find the money to address the needs of low-income women with breast cancer. But the Republican bill is able to provide more than one billion dollars to HMOs--the same HMOs that HCFA, the IG, and the GAO have noted are already being overpaid. Mr. Speaker, I have a great number of concerns about this bill. Not only with what is in it, but what is not. I am also concerned about the process and the fact this bill is not paid for. The bill is a small step in the direction of ensuring that seniors continue to have access to the same high quality care in Medicare that they have come to depend on, but there are clearly areas that need more help. House of Representatives, Washington, DC, November 4, 1999. Hon. Dennis Hastert, Speaker of the U.S. House of Representatives, The Capitol, Washington, DC. Dear Mr. Speaker: We are writing to ask that you not bring the Medicare Balanced Budget Act legislation (HR 3075 as amended in negotiations with Commerce Committee Republicans) to the floor under suspension of the rules, but instead provide a rule permitting Democratic amendments and a motion to recommit. Because Democrats were not included in the negotiations between the Ways and Means and Commerce Committee Republican members, it is particularly important that we be offered the opportunity for floor amendments. While the Republican bills that have been introduced provide a great deal of needed relief, we believe that-- (1) some additional relief to providers, (2) some beneficiary improvements (in particular help with the high cost of pharmaceuticals), and (3) some alternative policies are desperately needed. The amendments we propose would provide an additional $2.4 billion in paid-for relief, with some going to beneficiaries in lower pharmaceutical prices and other program improvements. Our amendments would also eliminate several policies in the Republican bill which the Administration has identified as unworkable or which would hurt Medicare beneficiaries. As fiscally responsible Democrats, we are concerned that the Republican bill is not paid for, and we urge you to find a way to pay for it, rather than further spending Social Security surpluses. For example, because it is not currently paid for, the Ways and Means bill (HR 3075) shortens the solvency of the Medicare Part A Trust Fund by at least a year, and increases Part B premiums for seniors. Therefore, to avoid this problem, we pay for the additional relief offered by our amendments. Thus we do not hurt Medicare's solvency. The $2.4 billion in relief over five years is paid for by $2.4 billion in Medicare savings from the President's budget proposal of last January. These savings come from Medicare anti-fraud, waste, and abuse proposals. Providing Needed Additional Relief The $2.4 billion provides important, much needed additional relief to: beneficiaries to meet the cost of fighting cancer and the high costs of pharmaceutical insurance,\1\ teaching hospitals, safety net hospitals, which have the lowest overall operating margins, rural hospitals, which have the lowest Medicare margins, skilled nursing homes, home health agencies which are serving the sickest patients, a more rational rehabilitation cap program that will help our most severely disabled stroke patients and amputees, help for hospice agencies facing sky-rocketing pharmaceutical costs for end-of-life painkillers, and the Medicaid and Children's Health Insurance Program, to help the providers serving the low income and to help Puerto Rico and the Possessions with more adequate payment rates. --------------------------------------------------------------------------- \1\ We assume that the bill the Majority brings to the floor will include an expansion of Medicare's coverage of immuno- suppressive drugs, so that transplant patients do not suffer organ rejection. If this provision is not included, we ask permission to include it and pay for it with additional antifraud and abuse provisions. --------------------------------------------------------------------------- This additional relief will further ensure that Medicare beneficiaries are buffered from the cuts in the 1997 BBA and will allow Medicare beneficiaries to continue to receive high quality care. The attached memo describes these amendments in more detail. Help Seniors with the High Cost of Pharmaceuticals We believe we need to help all Medicare beneficiaries with a prescription drug insurance benefit, but that is a larger issue that cannot be addressed in this limited BBA corrections legislation. We hope, Mr. Speaker, that you will make this a priority issue for the Second Session of this Congress. In the meantime, we do believe that this bill gives us the one opportunity this year to help seniors with the exorbitant cost of prescription drugs. We propose an amendment which was offered in the Ways and Means Committee by Rep. Karen Thurman (and supported by all the Democratic members of the Committee) that makes the Allen-Turner-Waxman-Berry pharmaceutical discount bill (HR 664) germane to Medicare. Basically, the amendment says that if a drug manufacturer wants to sell pharmaceuticals to a hospital participating in Medicare, it must also make available to pharmacies for sale to seniors drugs at the best available price for which they offer that drug. By some estimates, this type of program could lower drug costs to seniors by as much as 40%. If we can't pass a major Medicare drug reform bill this fall, we can at least give seniors a chance for the discounts available to large buyers. Preventing Bad Policies If the Majority bill includes certain provisions, we ask that the rule governing debate permits us to strike those anti-beneficiary and anti-consumer provisions: Specifically, we are concerned that the Administration has warned that the hospital out-patient department (HOPD) provisions of the Ways and Means bill are so complicated that they will delay the start of HOPD Prospective Payment (PPS) by at least a year. Such a delay in the PPS will cost beneficiaries about $1.4 billion, with patients' share of total HOPD payments running about 50%. We would move to strike the House HOPD provisions in favor of the Senate's more administrable proposals, but keep the amount of relief to hospitals and patients at the House level. Second, if the Majority bill includes the Commerce Republicans' provision giving ``deemed status'' to HMOs, we would strike that provision. An overwhelming number of House members have just voted in favor of higher quality in managed care plans. Therefore, we find it incredible that the majority may be proposing an amendment to the BBA which would weaken our ability to ensure quality by turning over approval of these plans to participate in Medicare to private groups which are often dominated by the very industry they are supposed to be regulating. If such ``deemed status'' language is included, we will seek to strike it in order to protect beneficiaries. Third, as mentioned above, we propose to strike the unworkable $1500 limit on rehabilitation caps for 2 years while the Secretary develops a rational therapy payment plan. This is the same approach as taken by the Senate Finance Committee. In conclusion, our beneficiaries and providers need the improvements made by the Democratic amendment. We urge you to make it in order. Thank you for your consideration. Sincerely, Charles B. Rangel and others. ------------------------------------------------------------------------ In addition to HR 3075, a $2.4 billion paid-for package [dollars Issue Area expressed as additions to costs in

Mr. DINGELL

Mr. DINGELL. Madam Speaker, I yield myself the remaining time for purposes of closing. Madam Speaker and my colleagues, I think we ought to look at what we are doing here tonight. We are passing a bill which is going to have very little consideration, written in the dark of night, without any real awareness on the part of most of what it contains. I just want to remind my colleagues about what happened the last time the Committee on Banking brought a bill on the floor which deregulated the savings and loans. It wound up imposing upon the taxpayers of this Nation about a $500 billion liability. That is what it cost to clean up that mess. Now, at the same time, the banks by engaging in questionable practices wound up in a situation where the Fed and the Treasury Department had to bail them out also at the taxpayers' expense. But it did not show. Having said that, what we are creating now is a group of institutions which are too big to fail. Not only are they going to be big banks, but they are going to be big everything, because they are going to be in securities and insurance, in issuance of stocks and bonds and underwriting, and they are also going to be in banks. And under this legislation, the whole of the regulatory structure is so obfuscated and so confused that liability in one area is going to fall over into liability in the next. Taxpayers are going to be called upon to cure the failures we are creating tonight, and it is going to cost a lot of money, and it is coming. Just be prepared for those events. You are going to find that they are too big to fail, so the Fed is going to be in and other Federal agencies are going to be in to bail them out. Just expect that. With regard to the privacy, let us take a look at it. We are told about all the protections for privacy that you have here. If you want to have a good laugh, laugh at it, because here is the joke: The only thing the banks are going to be required to say with regard to what they are going to do with regard to your privacy, and this is everything, from your health to your financial situation, to everything else, is ``we are going to stick it to you.'' The privacy that you are going to have under this legislation is absolutely nothing. And what is going to drive that is going to be a simple fact, and that is that the banks are all going to be competing with the most diligence, and the result will be that those protections are going to be manifested in a race to the bottom. Consumers, investors and the American public will have no protection to their privacy whatsoever under this bill. The only thing the banks have to say and the other institutions have to say is ``we are going to stick it to you.'' Vote against the conference report.

Mr. DINGELL. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. DINGELL. I rise to inquire, Madam Speaker, if my good friend, the gentleman from New York (Mr. LaFalce) or the gentleman from Minnesota (Mr. Vento), who is claiming time in opposition to the bill is in fact opposed to the bill.

Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the gentleman from Washington (Mr. Inslee), a member of the Committee on Banking and Financial Services. (Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. DINGELL. Madam Speaker, I yield 1 minute to the gentlewoman from Illinois (Ms. Schakowsky), a member of the Committee on Banking and Financial Services.

Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the gentleman from Minnesota (Mr. Luther).

Mr. DINGELL. Madam Speaker, how much time do we have remaining?

Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the distinguished gentleman from Illinois (Mr. Gutierrez).

Mr. DINGELL. Madam Speaker, I yield 2 minutes to the distinguished gentleman from Massachusetts (Mr. Markey), a member of the Committee on Commerce.

Mr. DINGELL. Madam Speaker, I yield myself 3 minutes. (Mr. DINGELL asked and was given permission to revise and extend his remarks.) General Leave

Mr. DINGELL. Madam Speaker, I rise to claim time in opposition to the legislation.

Mr. DINGELL. Madam Speaker, I yield 2 minutes to the distinguished gentlewoman from California (Ms. Waters), a member of the Committee on Banking and Financial Services.

Mr. DINGELL. Madam Speaker, I rise in strong opposition to this bill. It recognizes technological and regulatory changes that have blurred the lines between industries and products. However, it fails to recognize that human nature has not changed. It also fails to recognize something else. The technology that has changed has made it much easier to take money from the innocent and from the unsuspecting. It relaxes protection for investors, taxpayers, depositors, and consumers. Let us talk about what is wrong with the legislation. First, it facilitates affiliations between banks, brokerages, and insurance companies, and facilitates the creation of institutions too big to fail. It does not reform deposit insurance or antitrust implementation and enforcement. Woe to the American people when they have to pick up the tag for one of the failures that is going to occur when competition disappears and prices shoot up and misbehavior or unwise behavior takes place. It also authorizes banks' direct operating subsidiaries to engage in risky new principle activities, like securities underwriting, and in 5 years, merchant banking. The flimsy limitations and firewalls here will not hold back the contagion and misfortune that follows the foolishness in not reforming deposit insurance, thus creating enormous risk to taxpayers and depositors. Second, the privacy provisions in S. 900 are at best a sham. The gentleman from Massachusetts (Mr. Markey) and other colleagues will set forth at length the points that need to be made on this matter. I associate myself with their remarks. It should be noted, as a third point, that this bill undermines the Community Reinvestment Act. Many of my colleagues will speak to this point more eloquently than I. I wish to associate myself with their remarks. Fourth, it undermines the separation of banking and commerce. Title IV closes the unitary thrift loophole by barring future ownership of thrifts by commercial concerns, but some 800 firms are grandfathered and can engage in any commercial activity, even if they are not so engaged on the grandfather date. Moreover, Title I allows new financial holding companies, which incorporate commercial banks, to engage in any complementary activities to financial activities determined by the Federal Reserve. Any S&L holding company, whether or not grandfathered, can engage in activities determined to be complementary for financial holding companies. S. 900 clearly ignores the warning that Secretary Rubin gave to Congress in May: ``We have serious concerns about mixing banking and commercial activities under any circumstances, and these concerns are heightened as we reflect on the financial crisis that has affected so many countries around the world for the past 2 years.'' Fifth, the conference agreement would let banks evaluate and process health and other insurance claims without having to comply with State consumer protections. This means banks, of all people, will make important medical benefit decisions that patients and doctors should make. According to the National Association of Insurance Commissioners, S. 900 would prevent up to 1,781 State insurance protection laws and regulations from being applied to banks that conduct insurance activities. Sixth, it contains provisions with regard to the redomestication of mutual insurers that will have a devastating effect upon State regulation and upon the investors and insurance customers. Madam Speaker, I include for the Record the following documents: National Community Reinvestment Coalition, November 1, 1999. Dear Member of Congress: On behalf of our 700 member community organizations, the National Community Reinvestment Coalition (NCRC) urges you to vote against the Gramm-Leach- Bliley Financial Services Modernization Act of 1999. NCRC believes the Gramm-Leach-Bliley bill will undermine progress in neighborhood revitalization by chipping away at major provisions of CRA (Community Reinvestment Act). It also misses a vital opportunity to greatly expand access to credit and capital to America's working class and minority communities by modernizing CRA as Congress modernizes the financial services industry. During the 1990's, a strengthened Community Reinvestment Act (CRA) has played a major role in increasing access to loans and investments for working class and minority communities. Federal Reserve Governor Edward Gramlich recently estimated that CRA-related home, small business, and economic development loans total $117 billion annually. Contrary to what is being said, this bill will have a negative impact on CRA and the considerable progress of lending to low- and moderate-income communities made by our nation. By stretching out small bank CRA exams to five years for an ``Outstanding'' rating and four years for a ``Satisfactory'' rating, this bill will reduce the effectiveness of CRA as a tool in rural and small town America. Small banks (under $250 million in assets) will become adept at gaming the CRA process. They will relax their CRA lending in underserved communities for three or four years, and then hustle to make loans the last year before a ``twice in a decade'' CRA exam. The current practice of CRA exams occurring once every two years keeps small banks on their toes since they know that the next exam is just around the corner. In addition, NCRC objects to the so-called ``sunshine'' provision of this legislation. While no one can argue with the concept of sunshine, the provisions in this bill provide no real sunshine and are aimed instead at chilling the First Amendment rights of advocates. By requiring special reporting requirements only of those groups which comment on applications and the CRA records of banks, this bill provides a disincentive for community groups to particpate in the CRA process. Additionally this bill prevents banking agencies from monitoring the level of loans and investments made under CRA agreements during CRA exams and merger applications. These provisions are bad public policy designed solely to restrict the ability of communities to demand accountability and continue reinvestment from their financial institutions. NCRC understands the symbolic importance of the ``have and maintain'' CRA rating clause in this bill. We believe that the requirement that financial holding companies have at least a ``Satisfactory'' CRA rating in order to merge or engage in new non-banking financial activities is useful because it will give the industry even more incentive to avoid failing CRA ratings. On a practical level, however, this so-called ``extension of CRA'' is largely illusory. By not requiring applications and public comment periods when financial holding companies merge or engage in the new insurance, securities, and other non-banking activities, this bill eliminates the most effective tool communities have to insure the accountability of financial holding companies to their community. We also hasten to point out that the ``have and maintain'' provision is unlikely to have any practical effect. Due to the bank regulators' rampant grade inflation, none of the largest holding companies that would most likely be affected by this clause have any depository institutions with a less than Satisfactory CRA rating. Satisfactory CRA ratings have become so automatic that recently the OCC granted a ``Satisfactory'' rating to a Mississippi institution and the Federal reserve approved a major merger of that institution at the same time that the Department of Justice was in the process of finding that the bank was in violation of the nation's fair lending laws. Meanwhile, the most important issues confronting the continued progress of reinvestment are not addressed by this legislation. Because of the current link of CRA to depository institutions, some holding companies whose depository institutions are covered by CRA are simultaneously engaging in predatory, subprime lending through affiliates not covered by CRA. Other non-depository affiliates that will be making considerable number of loans will simply overlook low- and moderate-income communities. The financial modernization bill misses an important opportunity to extend CRA and fair lending laws to non-depository affiliates of holding companies that make significant amounts of loans. The explosion of internet banking is muddling the significance of what are called ``service areas'' in the Community Reinvestment Act. A large institution which takes deposits and makes loans throughout the nation can nonetheless restrict its ``service area'' to one small locale if it operates without the traditional bricks and mortar branch structure. These and other fundamental issues relating to the updating and modernizing of CRA should have been dealt with in a financial modernization bill and were not. Finally, we want to be sure that you are clearly aware that the vast majority of community groups do not support this bill despite claims to the contrary. While we know of one high profile group that has endorsed this bill, we are unaware of any others. Almost all of our members, who represent the heart of the community reinvestment industry in this country, have been expressing their profound disappointment in this legislation. Millions of low- and moderate-income and minority individuals and families have become homeowners and small business owners because of a strong Community Reinvestment Act. We urge you to vote against this bill because of its failure to adequately update and protect CRA. Attached please find a list of NCRC's 700 community organization and local public agency members organized by state. Sincerely, John Taylor, President and CEO.

Mr. DINGELL. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this measure.