Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, this amendment is a third amendment to two others that have been offered and have actually been included in the managers' amendment. I thank, again, Senator Hatch, Senator Durbin, Senator Grassley, and others for their consideration. This amendment, the third, is designed to protect children who through no fault of their own are involved in bankruptcy. It provides legal and legitimate college savings accounts established for the benefit of children which will be beyond the reach of creditors. This amendment parallels Senator Hatch's provisions to protect retirement savings accounts, and particularly contains measures to prevent fraudulent transfers of assets intended solely to avoid the rightful reach of creditors. So we have written into this the exact same kind of parallel provisions that the seniors' retirement accounts include. The amendment complements other provisions that are included in the managers' amendment. Those provisions ensure that the lawful funds for the benefit of children--such as child support, disability payments, and foster care payments--would also be preserved for children and not creditors. Again, that goes back almost 100 years in trying to see to it that innocent children are not going to be harmed and hurt as a result of this process. In addition, we agreed that household goods exclusively and primarily for children, such as toys, children's furnishings, and items used by parents provided for their children, would also be protected. Again, it was a consensus. I commend my colleagues for recognizing that these issues are important as well. Taken together, the provisions of this amendment and the managers' amendment will continue the 95-year-old principle of the bankruptcy code that women and children must be first in bankrupt credit alliances. I believe that these important improvements in the bill reinforce the historic protections that are given families in bankruptcy proceedings. Those who are innocent and most vulnerable deserve the most protection. I am very grateful, as I said a moment ago, to the chairman of the full committee and the subcommittee and the ranking member, Senator Durbin, who has worked hard to ensure these protections for children and families were not weakened in the pending legislation. In the rush that was going on around here a number of weeks ago, we almost blew by these historic protections which we provide for families. As a result of their leadership, these protections have been included in legislation. I am confident that in conference they will preserve them. This amendment would strengthen the principle that children ought to come before credit card companies. Legal proceedings, including bankruptcy proceedings, should be designed to protect against the impoverishment of children and innocent adults. Otherwise, impoverishment will produce dependency, in which case no one wins-- neither the individual impoverished, nor the credit card company. I also would like to express for the record my concern that my colleagues in conference firmly support the Senate legislation. I think it is critically important that we hold these provisions. Again, we all recognize the importance of this legislation. There has been a flood of people taking advantage of the Bankruptcy Act. Too many have been doing that. This legislation is going to tighten that up considerably. But I think as we call for a higher degree of responsibility on the part of our citizenry when it comes to their fiscal and financial responsibility, it is also incumbent that we ask the credit card companies to exercise responsibility as well. This legislation, I think, strikes a good balance between stopping the incredible amount of people taking advantage of the Bankruptcy Act with little or no repercussions, it would appear, and also seeing to it that the innocents--particularly children--are not going to be adversely affected by this process. As has been noted by some of our colleagues over the last week or so, as you consider this bill, just last year alone 3 billion credit card solicitations were sent out across this country, many with already preapproved proposals. I hope that credit card companies will exercise some restraint and responsibility in trying to slow down what is an exploding amount of consumer debt in this country. During good times, no one talks about it much. But when you get a downturn in the economy, it becomes a major problem. There is corporate debt, and consumer debt. We have to try to get a better handle on it. I am very grateful to the managers of the legislation--I see my colleague from Iowa has arrived on the floor as well as the Senator from Utah--and for their consideration of this amendment. As I said, it tracks Senator Hatch's very good amendment on seniors' retirement accounts to see to it that education is going to be something that we continue to support as strongly as we have for the 21st century because of rising college costs, to see to it that these educational accounts are going to be for the children that need them. I think it is a very wise decision. Indeed, I am grateful for their support. Mr. HATCH addressed the Chair.

Mr. DODD. Mr. President, I ask my colleague to yield for a minute on that point, if I could. Let me again thank him for his courtesies and his staff's courtesies over the last number of days in working this out. He has made a very good point. What we will certainly try to do here--and I agree with him--is to see to it that this amendment, the safeguard aspects of it, conform in many ways--exactly, if it is not the case--with the retirement savings accounts since both are parallel ideas. I have instructed my staff to work with the Senator's staff to iron out those details, to check this out thoroughly. Obviously, I think we all agree this is needed to protect the long-term education needs of families, but obviously--and I want to state it very clearly-- it certainly also is our intention to see to it that people are not given an opportunity to avoid their responsibilities when it comes to their financial matters. So we think we can do that pretty effectively. My intention and that of the Senator from Iowa is to see that it is done before this bill goes to the President for his signature. I thank him again for his support.

Mr. DODD. I yield back the time.

Mr. DODD. Mr. President, a provision of this bill that the Senator from Illinois and I drafted and had put into the Managers' Package would require the Federal Trade Commission to promulgate regulations to define household goods ``in a manner suitable and appropriate for cases under Title 11 of the U.S. Code.'' What would be ``suitable and appropriate'' in the bankruptcy context?

Mr. DODD. May I add something?

Mr. DODD. My concern with the definition is particularly for children, and is about personal property of little value to creditors. Would you agree that the Federal Trade Commission should promulgate regulations that will allow debtors to keep property that is commonly used by children or commonly used for the upbringing of children?

Mr. DODD. Yes. A debtor's child and parent should be allowed to keep these items. Children's property generally has no resale value, but replacement costs can be substantial.

Mr. DODD. As the co-author of this provision, I concur.

Mr. DODD. And I think we have achieved a sensible result. In light of the fact that we have taken no testimony on this issue and have no real expertise in this area, it only makes sense to have the FTC attempt to craft a definition. I compliment the Senator from Illinois for his efforts. It has been a pleasure working with him. patent reform legislation amendment

Mr. DODD

Mr. DODD. Mr. President, most of us are aware that there is a very serious computer problem, the year 2000 computer problem or Y2K problem, which has the potential to dramatically disrupt our energy, transportation, banking and health sectors, just to name a few. As most of you know, the year 2000 computer technology problem stems from the earlier programing of two digit date codes; many old programs were written assuming the year would begin with ``19.'' Therefore the year-2000 computer problem means that if an unknown number of programs and microchips around the world aren't fixed or replaced, computers that read ``00'' as the year 1900, not 2000 will fail or malfunction on January 1, 2000. To correct this problem millions of dollars have been earmarked by government and industry to identify, correct and test the millions of lines of code and embedded chips that perform mission-critical functions. Senator Bennett and I co-chair the Senate's Year 2000 Committee and we are actively reviewing the progress of U.S. industry and government agencies. Both must bring their own systems into compliance and the government agencies must monitor the compliance status of the areas that they regulate. This is truly a world-wide phenomenon, and while the United States is doing a pretty good job of playing catch up, many nations of the world have hardly begun to address their own year 2000 or Y2K problems. From time to time I will come to the Senate floor to brief the other Members and the public on the progress of the committee's work and the highlight problems areas. One such problem area was highlighted during the committee's hearing on health concerns. Whereas, in many industries, there are areas termed mission-critical which refers to embedded or coded systems without which the primary objective of that system fails. In the health field, there are life-critical systems which sustain human life. An example of a life-critical embedded system would be a cardiac monitor in the intensive-care unit of a hospital. If it fails, the patient could lose his or her life. With this in mind I was deeply disturbed to learn, during one of the committee's earlier hearings, that the FDA's attempts to survey and document year 2000 compliance within the medical device industry had indicated an unacceptable low level of response. At the committee's July 23, 1998 hearing on the health care industry, I was shocked by the fact that instead of taking steps to deal with this problem, the medical device industry, as a whole, at that time, seemed to be exacerbating the problem by refusing to provide information either to the FDA or to even the hospitals and clinics which use the devices every day. I made it clear that this sort of attitude was stunningly short-sighted and could only cause harm to both the makers and users of these devices. Indeed, the committee learned that the FDA on June 28, 1998 requested that the nearly 2000 medical device manufacturers immediately respond and indicate their level of year 2000 compliance. This initial lack of response was indeed irresponsible. According to the FDA, of the nearly 1,935 medical manufacturers surveyed, approximately 755 replied. Let me repeat this. Of the nearly 2,000 manufactures of life-critical medical devices, the FDA tells us that less than 40 percent responded to the oversight agency tasked with insuring that critical medical devices still work when you and I and the people we love are in need and might depend on this sophisticated equipment. Again this is unacceptable. I am therefore submitting a list of those manufacturers that did not reply to the FDA's request for information to the Record for all Americans to see. It is my hope that these companies quickly comply and provide information as to the year 2000 readiness of these critical medical devices. It is also my hope that this will serve as a wake up call to other industries to be vigilant, responsible and pro-active in their efforts to insure that Americans wake up to a wonderful new year on January first of the year 2000. Mr. President, I ask unanimous consent the list of these companies be printed in the Record. I understand the Government Printing Office estimates the cost of printing this list to be $1,426.00.

Mr. DODD

Mr. DODD. Mr. President, President Pastrana is visiting the United States this week, and the Committee on Foreign Relations will have the honor of receiving him on September 24. At that time we will have an opportunity to discuss at length President Pastrana's vision for his country. I look forward to the opportunity to do so. Exhibit 1 Inaugural Speech as President of the Republic by Mr. Andres Pastrana Arango This day is not only mine, but of all of us Colombians. The solemn oath that I have taken today before almighty God and before you is a sacrament of our democracy. It is an oath pronounced throughout our history that, in this case, acquires a greater dimension since it requires that we likewise succeed in the fulfillment of our obligations and not repeat the errors of the past. Proud of our heritage, we are now going to seek the best for our future. We are not only conferring the presidency upon me today; we are also inaugurating a new era for Colombia on the right path. I make a commitment to myself and to you to govern without privileges nor discriminations, but for all Colombians. Those who hold the highest positions in government shall have the greatest obligations under the law, and those who think that power gives one the right to break the law shall not govern. Put simply, there shall be no room for corruption in my administration and it shall not be tolerated nor forgiven. I want--and I shall accept nothing less--this administration to go down in history as the cleanest of all administrations. Within the immense margin of our challenges, let us risk facing the big changes that we need. Let us again trust that our cities and our countryside become safe and peaceful. Let us believe that once again our industry and our agriculture will prosper, that our children will receive a good education, that their health will be protected, and that their parents will be safe from the scourge of unemployment. Fulfilling these expectations implies serious and sustained efforts, a common cause and the uncommon courage to gather new ideas and be willing to never quit nor give up. For change does not happen in a week, a month, or a year. Perhaps, it will not even be complete at the end of this administration. We are at the dawn of a new era, not yet in its splendor. But change begins today. We have vast natural resources but, more importantly, great human talent. If we prepare ourselves conscientiously, we should not fear the economy's globalization. On the contrary, we shall welcome it and we shall compete and prosper within it. I see a Colombia proudly acknwoeldged in our hemisphere and in the entire world, for navigating through the prodigies of cyberspace and not in the artificial paradises of cocaine. I see a proud Colombia, with enough authority to challenge other nations to control their own drug demand, because we were able to combat our own country's supply and demand. As President, I shall not surrender even a bit of our sovereighnty, but I shall appeal to the entire country to comply with the law and to build the prosperity that shall make Colombia a magnet for investment with its modern economy. We shall look for prosperity not only in industry and enterprise, but also in agriculture, which has been abused of for many years without being paid its due. We are going to invest more in the countryside. Let us not forget that the land is the soul of Colombia and that those who cultivate it are the soul of the land. Colombians, during my campaign I proposed ten great changes. Each one of them is equally important and they shall all be promoted. We must try again, and trust once again, that we can change and attain a better country. I ask for your help, for, more than the decisions of a President, it is your hands that shall mold the final substance of our efforts. To the people of Colombia, I owe the privilege of being the leader that shall close the doors of the 20th century and open those of the 21st century, towards the vast horizon of the Third Millenium. I have been given the responsibility of continuing and improving, wherever possible, the accomplishments of other leaders. But more than six million Colombians, and a broad consensus of the country, have chosen me to find the road to this Promised Land that Colombia should be. A colombia in peace A very wise Spanish saying says, ``Without peace, there is no bread''. Therefore, first of all, I want peace, which means peace and bread. And it is the Promised Land that we yearn for, a Colombia in peace. But reconciliation requires a government that is able to organize collective leadership for peace. This implies sacrifices, requires renunciation, and demands serious commitments that would be sterile, as long as Cain continues killing Abel. The President of the Republic assumes the non-renounceable leadership of building peace. Do not expect me to build a bureaucracy for peace. As of now, I invite all Colombians to continue and to work within the ``Agenda for Peace'' that I am going to lead. It must be clear for every one that I shall recover for the State the monopoly of force for peace, social justice, and the happiness of the Colombian people. Every minute that we save on war is an investment in life. International cooperation in our peace processes should not be viewed as the inability to build it ourselves, but as a new way of making peace. The call to peace as a necessary condition for the country's project is evident. But peace demands the transformation of the human energy of animosity, which is characteristic of wars, into vital energy for the reconstruction of a new Colombia. It is precisely this vital energy that should not permit that violent acts, like those of recent days, occur again; acts that fill me, like their families and all my countrymen, with pain. They do not contribute to the atmosphere of understanding that we, myself personally and my entire administration, are ready to propitiate by putting all of our efforts into it. The first question is that of identity. What is Colombia and what do we want it to be? Historically, the nation looked for its identity in a homogeneity that was excluding, which despised diversity or nullified it. A country demanded a religion, a language, and even a dominant ethnic group. From dictatorial positions or from republican pacts, these conditions of identity were being imposed for an indefinite time to conform other systems of power. A subsequent evolution, particularly the current one, demonstrates that those that have been excluded in any way, usually demand, with great violence, the acknowledgment of their existence and their right to participate. The point is that the identity of the new Colombia that faces the challenges of the 21st century and is handed over to the new generations must be inclusive of Colombian diversity, not exclusive, as it has been until now for a significant number of Colombians. Keeping the nation united must be the origin and the end of this historic determination in favor of peace. a model for development and social justice I receive a country with seriously affected economic indicators and with its public finances in ruin. I, therefore, intend to do an inventory of the conditions in which I received them. But we shall also promptly present, in the coming weeks, the great guidelines of the measures to be taken in order to bring Colombia out of the situation in which we found it. A fundamental part of this recovery program is budget adjustments. Our country cannot continue to carelessly spend beyond its possibilities. If we did so, the already serious unemployment situation that we inherited would be even more overwhelming. And the imbalances everywhere would make the economy unmanageable and would commit the development of the country for a long time. Therefore we shall rigorously dedicate ourselves, from the very first days of this administration, to putting the fiscal house in order. But we shall not only organize public finances. We also have to reactivate an equitable economic growth. The development plan that the administration must submit to Congress within the first six months, as stated by the Constitution, shall be the opportunity to draft the navigational chart that shall permit us to open the doors of the 21st century to a society with better and more equal growth. In this purpose, the search for peace is not only a common yearning but also an intelligent strategy for economic development. Peace is the most urgent task on our country's agenda and the best social contract that we can make towards the future. drug trafficking We must take advantage of the closing of the century to do an inventory of the serious damage caused to society by drug trafficking. Ecologically, there is no doubt that it is the main predator of large areas of Colombian territory, which is valued in the world for the diversity of its environmental treasures. Not to mention, the increase in corruption, whose effect on institutions has become one of the most fatal aggressors that the Colombian State has confronted in all its history. Or the increase in violence, due to easy money for the attainment of objectives that used to be the fruit of years and years of honest labor. Or the increase in drug use. If Colombia survives in spite of so many misfortunes, it is only because of the moral fortitude of a people that has known how to face them. But let us not ask it for more miracles. the ``peace fund'' with tri-partite contributions In order to reach this national objective, besides the political initiatives that we are implementing, peace shall be the common thread of the next development plan. It shall be funded by tri-partite contributions from different sources. Firstly, the government itself, which, as a consequence of the austerity program to be undertaken, shall free significant resources to be earmarked for strategic investments for peace. Secondly, contributions from the international community that has demonstrated its interest in collaborating financially to acclimatize peace in Colombia. And thirdly, monies that wealthy Colombians shall contribute, through a ``Peace Bond of Compulsory Subscription'', whose authorization we shall request from Congress, and through which the valuable demonstrations of so many good-willed Colombians may become concrete. As I said in my campaign, we shall submit a bill before Congress that shall permit the gradual reduction of the Aggregated Value Tax while simultaneously and forcefully combating current tax evasion. Moreover, once the fiscal adjustment program yields results, we shall propose a reduction of income tax rates for those companies generating new employment. our foreign policy The transparent and categorical mandate that I have received from the Colombian people must also transform our international position in order to carry out a foreign policy with a broad consensus, that is coherent and systematic, that overcomes the exclusivism of any group, region, or party. Our diplomacy shall be efficient, able to work without disadvantages, respectful of commitments and aware of its non-renounceable dignity and its well-earned rights. I am convinced that the irreversible purpose of globalization demands a more equitable international order. We do not want to be simple spectators but, rather, diligent actors in this new world commitment. I am aware that our international agenda demands a different way of looking at it. We do not reject responsibility. We assume it. Our foreign policy shall be aimed at strengthening our negotiating power with regards to fundamental issues on the global agenda. We shall reaffirm our commitment to the promotion and defense of human rights and International Humanitarian Law, with acts and effective actions. As President of the Republic, I shall fully exercise the constitutional duty of leading foreign relations, aware that the leadership of the Head of State in a regime like ours is irreplaceable. Our foreign policy shall be guided by the protection of Colombia's essential rights. We share the great principles contained in the United Nations Charter and in the instruments of the Inter American system. Colombia's international word is sacred to us. We defend the sanctity of treaties and the good faith in relations among States. We have always supported the pacific and negotiated solution to conflicts. National heritage is the product of law, never of force or of arbitrary imposition. We believe in the force of multilateralism, in the collective action organized to confront problems and to prevent and resolve divergences and conflicts. Venezuela is the country with which Colombia has made more progress in economic integration. The strong historic and cultural ties that unite us shall permit us to foster understanding in all areas in order to continue making progress in the process of binational integration and in the consolidation of the Andean Community of Nations in order to project it to the entire continent. The United States, as hemispheric power and because it is the biggest and most advanced economy in the world, is a fundamental country for Colombia's international relations. We also begin a new era of understanding and trust with them, which will permit the diversification of our common agenda so as to continue on the road of true cooperation, more as brothers than as good neighbors. Regarding Europe and the Pacific Basin countries, we shall continue strengthening our economic and cultural relations, as well as the ties among the various integration blocks that exist today. In this respect, we shall assign particular importance to the European Union, Latin American and Caribbean Summit that will take place next year, as a result of the dialogue between the European Union and the Rio Group. Colombia embarks today on search of the international community, to re-assume the leadership that belongs to it in the ``New World'' design. Social Justice This is evident: peace is not possible without social justice. Colombia is a society torn by social distances. It is urgent, therefore, to improve the distribution of national wealth, to make society cohesive and direct it towards peace, through education, health and employment. The world is changing in giant leaps. Society has discovered that its great source of wealth is no longer mineral but human. To invest in it, as well as in our natural resources, is the change that will make us strong. And this, in turn, compels us to reflect upon the meaning of continued fighting over scarce material resources instead of strengthening our democracy and developing our industry and our trade, based on human resources, education, technology, and science. Therefore, it is time to break with history and to change our course. Thus, the development model that I propose to you is not dependent upon peace negotiations but, rather, establishes the basis for a transparent, fertile, and lasting peace. The economy and employment The macroeconomic effort shall be aimed at the urgent generation of employment. To generate employment--good employment--is essential if we want to have a real future. Employment is not only the new name for peace but also our first expression of solidarity. In order to attain the goals of collective improvement, it is necessary to build a strong and solidary economy, which we are lacking today. Correcting the imbalances and channeling the economy towards development and full employment again will initially demand the adoption of severe but essential measures. Economy and education must go hand in hand to establish the basis for progress. The coming Third Millennium needs new learning. We are going to change education in Colombia so that it may become an open door, where the question will not be how much money the family has but, rather, how much talent the student has. Awakening young people to knowledge is the only way to face the future successfully. Preferential Option for the Poor My administration makes and reaffirms a preferential option for the poor. We do not want a Colombia with excluded persons. The government's task is to foster and consolidate economic growth that will reduce the injustices of poverty and demonstrate, with its results, that it is worthwhile to be just. For my administration, the poor are a moral commitment, a political commitment, an economic commitment, a cultural commitment, and not just a statistic index. A plan for overcoming poverty convokes, channels, and opens new dimensions for international cooperation and must prevent poverty from being the dangerous ally of those who, with drug trafficking, try to undermine the foundations of the nation and of the international community. Being solidary in Colombia means helping to create jobs, investing in the creation of jobs, buying at a fair price to create and foster the quality of those jobs. When I think of globalization, I think about its most urgent aspect, which is globalization of solidarity. recovering values This is why, together with Gustavo Bell, I would like to invite all of you to recover values. This country must organize itself and become strong against corruption. We cannot continue to tolerate the systematic robbery of goods belonging to the community. It is necessary to end corruption, and the people have taken a first step with their vote. The President and each one of his officials must be a model for others. Their words must be truthful and their example must be clear. There is no greater corruption or lie than good advice followed by bad example. Let no one be wrong. The government shall persecute the corrupt, shall bring them to light, and shall rescue the institutions from the claws of the corrupt. the need for political reform For all these reasons, a thorough political reform must be undertaken. ``We cannot pour new wine into old vessels.'' The recovery of politics for the common good, for social justice, for solidarity, and for development requires the creation of new forms of governing, of controlling, of competing for power, of designing laws, of creating the future. I thank God for the privilege of having my mother and family here present. I thank Divine Providence for the gift of Nohra's company and leadership and of Santiago, Laura, and Valentina's challenging future. And I thank the Lord for having given me in Misael Pastrana a living example of values, of loyalty to life, of love of country. He was a patriot who, in light of Colombia's destiny and uncertainties, affirm and warn, ``the promised land is at stake''. It is necessary for ``The New Dawn'' brings us optimism, faith, truth, solidarity, and the commitment required to change history because no one will do for us what we must do for ourselves. Dear friends: A ``New Dawn'' begins now! Today, it is not only the inauguration of a new President, but also the opening of a new era for the nation. With Gustavo Bell we will make the dream of ``The Great Alliance for Change'' come true for Colombia. The glory of a leader consists in attaining peace, striving for the citizens' well-being and happiness. Achieving this shall be the only reward I will aspire to at the end of my mandate. This is no time for hesitation or doubt. This is a moment for decisions and courage. Long and difficult is the road leading to the Colombia we yearn for. Let us begin now! Tomorrow will be another day!

Mr. DODD. Mr. President, on August 7, 1998, Andres Pastrana Arango was sworn in as the 60th President of Colombia, 28 years after his father, Misael Pastrana, took the same oath of office. A former journalist, mayor of Bogota, and Senator, president candidate Andres Pastrana swept into office with the largest electoral margin in his country's history. With the election of President Pastrana I believe that a new opportunity has been created for the United States and Colombia to work closely together to deal with issues of mutual concern to our two countries. I very much hope that both of our governments will take advantage of this opening because it is in the interests of both countries that we do so. In his inaugural speech of August 7, President Pastrana set forth his agenda for his term of office. Breaking the stranglehold of major narcotrafficking organizations and bringing peace to Colombia are among President Pastrana's highest priorities. During the course of his address, he laid out his plans to end the 34 year old civil war and to counter drug trafficking and the violence and corruption it brings with it. In order to tackle the financial, political and social problems of his country, he also pledged to undertake a complete turnaround in Colombia's Government during his administration. I believe that President Pastrana has been very quick in shaping the outline of policies and programs that should help to strengthen democratic institutions in Colombia and respect for human rights. His inaugural address gives me hope that the United States working together with the Government of Colombia can make that a reality. I would urge my colleagues to take the opportunity to read for themselves President Pastrana's Inaugural address. I ask unanimous consent that his address be printed in full at the conclusion of my remarks. THE PRESIDING OFFICER. Without objection; it is so ordered. (See Exhibit 1.)

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. DODD. How much time remains on the other side?

Mr. DODD. I think the Senator said the Dodd amendment. I think he means the D'Amato amendment. Is that correct?

Mr. DODD. I urge adoption of the amendment.

Mr. DODD. Mr. President, I thank my colleague from Illinois. Just to make the case once again, we have watched consumer debt double to $455 billion in the last couple of years. It has tripled and quadrupled. It seems to me that to listen to what university people are saying, we have more people dropping out of school--as the official at the University of Indiana said, ``We lose more students to credit card debt than academic failure''--we have some indication of what is going on here. To say between the ages of 18 and 21 just to get a parental signature, or an indication of independent economic means, as you would if you were not a student, is not asking too much. It seems to me that is the bare minimum standard of what we ought to be asking of the credit card companies. It is my understanding that most responsible credit card issuers already require them. Is it asking too much that the credit card companies strive to meet their own best practices in order to do something to protect our children? If you are under 18, the law already protects you. It is that window between 18 and 21. Mr. President, I hope that our colleagues will recognize that it is really not fair for middle-income families to get saddled with a $10,000 debt because of solicitations that were made to a student in school. This is a license for us to do something about it.

Mr. DODD. Mr. President, how much time remains?

Mr. DODD. That is false. A person who is unemployed might have unemployment compensation and independent means, and would certainly qualify.

Mr. DODD. That is absolutely false. That person has independent economic means, being a paid member of the military.

Mr. DODD. Mr. President, I thank my colleague for his eloquent, and if it weren't so sad, quite humorous story. Unfortunately, Brendon is not alone. This wasn't just a mistake. Unfortunately, parents can tell you all across the country that this happens with regularity. Let me address, if I can, the argument of my good friend and colleague from Utah and why he is opposed to this bill. The great irony is the 20-year-old who is out working and not in college is disadvantaged. That individual has to prove that they have independent economic means. Listen to this recent report: All the rules have been suspended when it comes to college students. They get a green light, a line of credit that can reach more than $10,000 just on the strength of a signature and a student ID. Almost comically, [the report says], low standards become much different after graduation and bona fide adulthood. So the individual who is out working, who is not in school, who may have a real need for a credit card, has to go through far many more hoops than the students between the ages of 18 and 21 who can get these solicitations. This wasn't Brendon. This was a 19-year-old--get eight cheap flights now while you still have 18 weeks of vacation. How about a platinum card to a 19-year-old without any indication of whether or not she can meet her payments? I don't think it is outrageous to say, look, just show your independent economic means. You have a job, fine. Or get a parental signature. That is not asking too much. Just listen to the administrators at these universities. A terrible thing. We lose more students to credit card debt than academic failure now. The numbers have doubled. It is not overreaching to say to an 18- or 19-year-old that we are going to insist that you prove an independent economic ability to pay--the same as an 18- or 19-year-old would have to do were they not in college--or have a parental signature. Everybody knows that if you are under 18, you can't enter into a contract and have it binding. People have said, ``Why not just make it 18?'' Well, those contracts don't hold up and the bankruptcy laws would not cover it. So between 18 and 21, we are just trying to cover those areas here, statistically. I talked about this study that was done and I failed to identify who did it. Nellie Mae, a major student loan provider in New England, conducted a survey of students who had applied for student loans. ``The results of the credit card examination is alarming.'' Those are their words, not mine. They found that 27 percent of the undergraduate student applicants had four or more credit cards, and 14 percent of the credit card balances, debt, between $3,000 and $7,000, and 10 percent in excess of $7,000. That is before they graduated from college, in addition to student loans. So our efforts here--while the credit card companies see this, apparently, as draconian--will provide relief in the underlying bill. Requiring a little higher standard for college students before they get credit cards is not asking too much. I know the ranking member on the committee wanted to be heard on this, and I see my colleague from Utah. Mr. HATCH addressed the Chair.

Mr. DODD. Mr. President, I yield 3 minutes to the distinguished Senator from Illinois.

Mr. DODD. Mr. President, I yield to my colleague from North Dakota.

Mr. DODD. Mr. President, we have no intervening business between now and 2 o'clock. Several of our colleagues want to speak on this amendment. I ask unanimous consent we take the time between now and 2 o'clock and equally divide it between opponents and proponents of this amendment.

Mr. DODD. Mr. President, one of the most troubling developments in the hotly contested battle among the credit card issuers to sign up new customers has been the aggressive way in which they have targeted people under the age of 21, particularly college students. We are engaged, obviously, in a debate about the bankruptcy bill here. The authors of this bill, and I commend them for it, recognize there has been an explosion of people who are taking advantage of the Bankruptcy Act to avoid their financial obligations. It seems appropriate in the context of this bill that we also recognize that there has been an explosion of efforts to sign up younger people, particularly on college campuses, to credit cards, recognizing that, as many have pointed out, these students are ill prepared to meet their own financial obligations. Inevitably, they either incur debt and end up in tremendous difficulty or their parents assume the responsibilities, which can occur with upper-income people who can afford it. Just this past August, to make the point, a fellow by the name of John Simpson, who is an administrator at the University of Indiana, said: This is a terrible thing. We lose more students to credit card debt than academic failure, at the University of Indiana. What I am trying to lay out here is a proposal that is not outrageous. Basically, what it says is if you are between the ages of 18 and 21--no contract is valid for someone under 18, so a credit card obligation for someone under 18 would be voided anyway. But between 18 and 21, either show that individual has independent economic means--a job or whatever--or parental permission. If you can do that, fine, then you can market and issue a credit card to those individuals. We set up separate standards on drinking in this country for those 21 and under, and for tax purposes. It seems to me this little window in here could save an awful lot of students, an awful lot of families, the kind of hardship. Let me lay out the case for you here on a factual basis. Solicitations to this age group have become more intense for a variety of reasons. First, it is one of the few market segments in which there are always new faces to go after. It is also an age group in which brand loyalty can be established. In the words of one major credit card issuer, we are in the relationship business and we want to build relationships early on. Recent press stories have reported that people hold on to their first credit card for up to 15 years. In fact, people under the age of 21 are such a hot target for credit card marketers that the upcoming card marketing conference this year-- this is the card marketing conference 1998, which is going to be held in Las Vegas. They have a seminar beginning at 12 noon on the day of this conference that is entitled ``Targeting Teens: You Never Forget Your First Card,'' to give you an idea of how much a part of this the credit card companies have in mind. As I say, this is indicating their deep interest in this constituency. Credit card issuers are also enticing colleges and universities to help promote their products. Professor Robert Manning at Georgetown University here in Washington told my staff that some colleges receive tens of thousands of dollars per year for exclusive marketing agreements. Other colleges receive as much as 1 percent of all student charges from credit card issuers in return for marketing or affinity agreements. Even those colleges who don't enter into such agreements are making money. Robert Bugai, president of College Marketing Intelligence, told the American Banker that colleges charge up to $400 per day for each credit card company that sets up a table on campus. That can run into the tens of thousands of dollars by the end of just one semester. Last February, I went to the main campus of the University of Connecticut to meet with student leaders about this issue. Quite honestly, I was surprised by the amount of solicitations going on in the student union, and I was also surprised the degree to which the students themselves were concerned about the constant barrage of offers they were receiving. The offers seemed very attractive, Mr. President. One student intern in my office this summer received four solicitations in just 2 weeks. One promised ``get eight cheap flights now while you still have 18 weeks of vacation.'' That is the solicitation, part of it geared to this young woman in my employment. Another promised a platinum card with what appeared to be a low interest rate, until you read, of course, the fine print that it applied only to balance transfers, not to the account overall. Only one of the four, Discover card, offered a brochure about credit terms, but in doing so, often offered a spring break sweepstakes in order to attract these students. In fact, the Chicago Tribune reported just last month that the average college freshman will receive 50 solicitations during their first few months at college. The Tribune further reported that college students get green-lighted for a line of credit that can reach more than $10,000 just on the strength of a signature and a student identification card. Mr. President, there is a serious public policy question about whether people in that age bracket can be presumed to be able to make the sensible financial choices that are being forced on them from this barrage of marketing. While it is very difficult to get reliable information from the credit card issuers about their marketing practices to people under the age of 21, those statistics that are available are deeply, deeply troubling. The American Banker newspaper reported that Visa found that 8.7 percent of bankruptcy filers were under the age of 25. A Chicago Tribune article from August 16 of this year cited that bankruptcies ``among those under 25 have doubled over the last 5 years from 250,000 to 500,000.'' The bankruptcy legislation, the underlying bill, is going to make it harder to take the bankruptcy act. I understand that. I am not opposed to that idea. But if simultaneously you are going out and aggressively sending eight solicitations to an 18-year-old in my office promising them free vacation breaks or flights, I think there is something wrong here. I don't mind getting tougher on the bankruptcy laws, but I think we have to get a little tougher to say the 18-, 19- and 20-years-olds who have no independent financial means and without parental permission are getting signed up merely on a student ID card and signature, incurring $10,000 worth of debt. The same survey found that 27 percent of undergraduate student applicants had four or more credit cards--27 percent, four or more credit cards--and found that 14 percent had credit card balances between $3,000 and $7,000, while 10 percent had credit card balances greater than $7,000. This figure of 24 percent with credit card debts in excess of $3,000 is more than double the number from last year. Moreover, while there is evidence that student debt is skyrocketing, some surveys by credit card issuers themselves show that this same group of consumers is woefully uninformed about the basic credit card terms and issues. A 1993 American Express/Consumer Federation of America study found that only 22 percent of more than 2,000 college students surveyed knew that the annual percentage rate is the best indicator of the true cost of a loan. Only 30 percent of those surveyed knew that each bank set the interest rate on their credit card, so that it is possible to shop around for the best rate. Only 30 percent knew that interest was charged on new purchases if you carry a balance over from the previous month. Some college administrators, bucking the trend to use credit card issuers as a source of income, have become so concerned that they have banned credit card companies from their campuses and have even gone so far as to ban credit card advertisements from the campus bookstores. Roger Witherspoon, Vice President of Student Development at John Jay College of Criminal Justice in New York, banned card solicitors saying indebtedness was causing students to drop out: Middle-class parents can bail out their kids when this happens, but lower-income parents can't-- Mr. Witherspoon said in an interview. Kids only find out later how much it messes up their lives. That is a quotation from the American Banker. The amendment I am proposing today does not take any such Draconian action against the credit card companies. Let me state, by the way--and I should have said this at the outset--many credit card companies do require parental notice or approval or evidence of independent means. There are many who do this, but there are some who do not at all. As most laws, it is not targeted to those who show good judgment and good sense, but to the few who do not. Unfortunately, here we have a few who do not at all. This amendment does not go so far as to ban credit cards or ban advertising. It merely says, look, between the ages of 18 and 21, either show you have the independent means to meet the obligations or get a signature from a parent that they understand that their child is about to take out a credit card. I agree with those who argue, as I said, there are millions of people under the age of 21 who hold full-time jobs who are as deserving of credit as anyone over the age of 21. I agree with that. I also believe students should continue to have access to credit, and we should not prohibit the market from making that available. I also recognize the period of time from 18 to 21 is an age of transition from adolescence to adulthood, and as we do many places in Federal law, extra care is needed to make sure mistakes made from youthful inexperience does not haunt these people for the rest of their lives or a good part of it. All my amendment does is require a credit card issuer, prior to granting credit, to obtain one of two things from the applicant under 21: Either they get the signature of a parent or guardian, or they obtain information that demonstrates the existence of an independent means of paying off the amount of credit offered. Federal law already says people under age 21 shouldn't drink alcohol. Our Tax Code makes the presumption if someone is a full-time student under the age of 23 that they are financially dependent on their parents or their guardians. Is it so much really to ask that credit card issuers, in the midst of a bankruptcy bill that will make it tougher for people to take this act, is it so much to ask that we try to find out if someone under the age of 21 is financially capable of paying back their debt or that their parents are willing to assume the financial responsibility? Mr. President, it is my understanding that most, as I said, responsible credit card issuers already require this information in one form or another. Is it too much to ask the entire credit card industry to strive to meet their own best practices when it comes to our children? Mr. President, I do not believe this amendment is either unduly burdensome on the credit card industry nor is it unfair to the people under the age of 21. The fact of the matter is that these abusive solicitations assume that if the young adult is unable to pay, they will be bailed out by their parents. Many times this means that parents must sacrifice other things in order to make sure their child does not start out their adult life in a financial hold with an ugly black mark on their credit history. By adopting this amendment, Mr. President, the Senate will send a clear message to those aggressive credit card companies that we will no longer countenance this abusive behavior. This amendment corrects that behavior by making those overly aggressive companies, credit companies, exercise their best judgment--instead of their most craven instincts-- when it comes to people obtaining their own credit cards for the very first time. Mr. President, I note as well in an interview on an NPR program just a few days ago on this very issue, Nancy Lloyd, who is the editor-at- large for Kiplinger's Personal Finance magazine, had this to say about this practice. She said: . . . that the real reason that credit-card companies are going after college students is that they know that after a parent has spent several tens of thousands of dollars to educate their student, that if they fall behind on their bills that the parent will bail them out, even though legally they don't really have to [if they are younger than 18]. Mr. President, I do not think this is a radical proposal here. It is again a huge problem. NBC, I think last evening, ran a special report on the ``Fleecing of America'' where they talked about this problem. I think there have been a number of other reports on this. We began this issue last December in raising the question when I went to my own campuses in Connecticut, as I mentioned a moment ago, to find out how widespread this was. And, again, the information we have been able to gather indicates, I think based on the data we have, limited as it is, that this is a growing problem. The debt has doubled now in the last year. It is going to get worse. If we adopt the underlying bill, which I hope we do, then obviously the ability to use the Bankruptcy Act to excuse obligations are going to get tougher. So it seems to me if we are going to do a favor to the banks by making it tougher for people to avoid their financial responsibilities, which we should, we should also send a message that we do not believe you ought to be dumping, as we did last year in this country, 3 billion credit card solicitations but particularly dumping these where there is a student ID and a signature from a 19-year-old, without independent means or parental approval, to assume $3,000, $4,000, $5,000, $6,000, $7,000, $8,000, $9,000, $10,000 worth of financial debt. I think that is wrong. I think we ought to try to stop it. I think this amendment brings us in the right direction, and I urge its adoption. Mr. HATCH addressed the Chair.