Michael Oxley

Mr. OXLEY

Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentlewoman from Pennsylvania (Ms. Hart), a valuable member of our committee from the Keystone State.

Mr. OXLEY. I yield to the gentleman from Alabama.

Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentlewoman from New York (Mrs. Kelly), the chairwoman of the Subcommittee on Oversight and Investigations of the Committee on Financial Services.

Mr. OXLEY. Mr. Chairman, the answer is no. The Member from Massachusetts is correct. The identity theft protections in this bill amend section 605 of the Fair Credit Reporting Act. The uniform standard for section 605 is contained in section 624(b)(1)(e) which states that, ``No requirement or prohibition may be imposed under the laws of any State with respect to any subject matter regulated under section 605.'' The section goes on to describe section 605 saying that it relates to information contained in consumer reports, and now to identity theft prevention. That means that 605 is the section for identity theft protections, but the uniform standard requirement is still limited to the subject matters that our provisions actually address such as investigating address changes, fraud alerts, truncating credit card account numbers, blocking bad credit information, establishing red flag guidelines for identity theft prevention, and reconciling address changes. State identity theft laws that address different issues such as limiting Social Security number use or criminal penalties on identity theft perpetrators are not preempted. We have agreed with the gentleman from Massachusetts (Mr. Frank) to clarify this in the manager's amendment to underscore in the uniform standards provision that describes section 605 that it only relates to the specific identity theft prevention subjects covered and not to other identity theft issues outside of the subject matters covered in the uniform standard.

Mr. OXLEY. Mr. Chairman, let me just say, having participated obviously in the markup and listening to the debate on the floor, I think all Members want to preserve the protected class. I do not think that is really an issue. Also, I think there is some concern that very small agencies ought to have some exemption from the free credit report. I would indicate to the gentleman from Massachusetts (Mr. Frank) my efforts to try to solve that problem. I think it is going to be impossible at this point in the process, but going forward, particularly in conference, I have every reason to think that we can come to a good conclusion. We all, I think, recognize that the protected class should continue to have access to free credit reports, as they always have had, as the gentlewoman from Oregon (Ms. Hooley) so carefully pointed out. The real issue is the exemptions of the small agencies that represent approximately 10 percent of those credit reports. I do not think at the end of the day the position of the gentleman from Massachusetts (Mr. Frank) and the gentleman from Louisiana (Mr. Baker) are all that different, and I would simply say that I would pledge my efforts towards reaching a good conclusion towards both gentlemen's aims.

Mr. OXLEY. Mr. Chairman, I reserve a point of order.

Mr. OXLEY. Mr. Chairman, I understand the gentleman's concern and we have had some discussion about it. I would be pleased to work with him to explore what might be done to remedy these situations. It is certainly unfortunate that under our current system some situations like the ones you mentioned do arise preventing consumers, who are low credit risks, from obtaining credit quickly. I look forward to working with the gentleman from Michigan (Mr. Ehlers) to see if we can address the legitimate concerns he raises.

Mr. OXLEY. Mr. Chairman, will the gentleman yield?

Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from Alabama (Mr. Bachus).

Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume, and in conclusion I would say to my good friend from Pennsylvania that this is a philosophical difference. Clearly, he makes some interesting arguments. The amendment was, in fact, rejected in the committee. In fact, FCRA, as other Members have said on both sides of the aisle today, has been a very successful piece of legislation. It has provided consistency, reliability, certainty, and uniformity in our credit laws. And that has had enormous consequences for our economy and for consumers, as has been chronicled time and time again during the period of this debate. I would suggest that this act that we are now seeking to make permanent has stood the test of time for 7 years, and it is now time that we make this permanent so that credit agencies, people who get credit, issuers, furnishers, everybody concerned knows what the rules are, knows that those rules are effective and work well, and that they will be permanent. So I respectfully oppose the Kanjorski amendment. Mr. Chairman, I yield back the balance of my time.

Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, this amendment, first of all, was defeated on a bipartisan vote of 44 to 22 in the Committee on Financial Services. Chairman Greenspan has raised serious concerns about this amendment. Let me quote, if I may, from a letter from Chairman Greenspan to the gentleman from Delaware (Mr. Castle) who had requested the response from the Fed, and specifically Chairman Greenspan, regarding the amendment offered by the gentleman from Vermont. He says in part, ``The information gathered by credit reporting companies on the borrowing and payment experiences of consumers is a cornerstone of the consumer credit system in this country. Experience indicates that access to the information assembled by these companies and credit evaluation systems based on that information have improved the overall quality and reduced the cost of credit decisions while expanding the availability of credit.'' He goes on to end in this way: ``In sum, in deciding whether to restrict the use of certain information in credit evaluations, the Congress should be aware that such restrictions are likely to diminish the effectiveness of statistical systems that have played a significant role in reducing the overall cost of credit and widening its availability.'' So what we have here is the chairman of the Fed saying that the Sanders amendment is going to have a chilling effect on the availability of credit, and could drive up the cost of credit at the same time, basically saying to those of us who are good credit risks, we will be asked to pay for those who are less responsible in paying back those credit card debts. Now, the committee did adopt an amendment offered by the gentlewoman from New York (Mrs. Maloney) that specifically addresses the issue raised by the gentleman from Vermont. It requires any preapproved credit card solicitation to disclose the credit card issuer's ability to adjust the interest rate for reasons other than delinquencies on the credit card account. The notice will educate the consumer and allow him or her to act accordingly. So in place of this rather draconian approach by the gentleman from Vermont, we have the gentlewoman from New York's amendment, which is part of this bill that we are debating now, adopted in the committee unanimously, that would provide more information, more notice to the consumer, to make certain that they are aware that, should a delinquency occur, it is a possibility that the interest rate could go up. Essentially, this is an overkill amendment, and the committee found by a two-to-one margin that indeed that was the case. Nothing has changed from the time that the committee adopted the bill to today on the floor. So the amendment would clearly increase the cost, and probably decrease the availability of credit for credit card borrowers. Lenders must have the ability to adjust the interest rate on a loan in order to adequately price for that borrower's risk. It seems obvious that those who are good credit risks are able to obtain credit at lower costs. That is how our system works. If someone who is a good credit risk suddenly imposes additional risk to the lender, the lender should be able to adjust for this increased risk. The amendment would prohibit a credit card issuer from doing this in many circumstances, and what the likely impact of this Sanders amendment would be lenders would be forced to offer credit card accounts at higher interest rates in order to buffer against any potential future risk that any borrower may present. Frankly, for those of us, the vast majority of us, those who pay their credit card bills monthly and are responsible, why should we be faced with a potential for higher interest rates and less available on that score? Adjusting the price of credit to match the level of risk imposed by the customer is not a bait-and-switch tactic, it is simply good, common sense, and such adjustments are already adequately addressed by existing law, particularly in regard to the Maloney amendment. To that extent, I oppose the Sanders amendment. Mr. Chairman, I reserve the balance of my time.

Mr. OXLEY. Mr. Chairman, I am pleased to yield 3 minutes to the gentleman from Delaware (Mr. Castle).

Mr. OXLEY. Mr. Chairman, I yield 4 minutes to the gentleman from Ohio (Mr. Tiberi).

Mr. OXLEY. Mr. Chairman, will the gentleman yield?

Mr. OXLEY. Mr. Chairman, I claim the time in opposition to the Sanders amendment.

Mr. OXLEY. Mr. Chairman, I am pleased to yield 2 minutes to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume, as I feel compelled to respond to my good friend from Massachusetts in his somewhat overheated rhetoric regarding the revolution, which I know started in his district. And I am also sorry that we did not hear the famous story about his local banker, Mr. Wentworth. I am sure the other Members, who were not on the committee, have not had an opportunity to hear about it. I also am concerned that the gentleman was unable to hear 100 witnesses in eight separate hearings chaired by our good friend, the gentleman from Alabama. Regulatory black hole? I would invite my good friend from Massachusetts to read this piece of legislation. This is the strongest piece of privacy legislation I would say ever passed, certainly in recent Congresses. That is why we had 61 members of our committee vote for the final product when it came to the final vote. So I would say to my good friend, this really is crunch time as far as whether we are going to have a uniform standard that can protect consumers, can set out the rights that they have to protect their privacy, to protect their ability to fight off the horrible crime of identity theft, which affects 10 million Americans. That is what this bill is all about. And we are dedicated to this national standard that has had so much success since the 1996 act. My friend from Delaware points it out so well, of the progress that we have made. We simply cannot allow ourselves to slip back and allow for States to start to move the goal post and to essentially lower those standards so that we end up with the system that we had before 1996, which would result in higher interest rates, less access to credit, and longer waits for credit. We do not want to go back to the bad old days; we want to move forward. And so I would suggest to the Members that that is what this bill is all about. So, Mr. Chairman, I have great respect for my friend from Massachusetts, and am actually going to yield some of my time to him, since I miss him so much.

Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from Alabama (Mr. Bachus).

Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from Delaware (Mr. Castle).

Mr. OXLEY. Number 15? I would give it 35 minutes. How is that for a compromise?

Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from Virginia (Mr. Cantor).

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

Mr. OXLEY. Mr. Chairman, I ask unanimous consent that debate on the following amendments, and any amendments thereto, be limited to the time specified equally divided and controlled by the proponent and opponent as follows: The amendments numbered 2, 5, 7, 9, and 10 in the Congressional Record shall be debatable for 10 minutes; The amendments numbered 1, 6, 11, 12, and 16 in the Congressional Record shall be debatable for 20 minutes; And the amendments numbered 15 and 4 in the Congressional Record shall be debatable for 30 minutes.

Mr. OXLEY. Thirty minutes, Mr. Chairman.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I want to first applaud the Committee on Rules for granting an open rule here. This is a bill that in many ways reflects all of the folks in our district who rely on getting credit to make this economy run. That is pretty much everybody that we represent, and so to have a full and open debate on this legislation, after all, we are, in fact, reauthorizing the Fair Credit Reporting Act, and we will be making a lot of these provisions permanent, so this is a very important debate. Obviously, the opportunity to debate this fully is the proper thing to do. This bill that we will be taking up under this open rule is in many ways landmark legislation, historic legislation that addresses some of the real needs that people have out there in terms of obtaining credit, of keeping our economy moving with easily available credit, for eliminating the paperwork and the time that it took for a long time to get auto loans and other consumer loans, and just as importantly, to protect individuals against theft of their own identity. We carefully crafted, with the work of the gentlewoman from Oregon (Ms. Hooley), the gentleman from Ohio (Mr. LaTourette), the chairman of the subcommittee, the gentleman from Alabama (Mr. Bachus), and other members of the committee, particularly the gentleman from Massachusetts (Mr. Frank), to not only make this a reauthorization of the Fair Credit Reporting Act, but to encompass the real need to change the law as it regarded identity theft. The Federal Trade Commission recently completed a study that indicated that every year 10 million Americans have their identity stolen. One of the most gripping hearings that the gentleman from Alabama (Mr. Bachus) conducted was to hear from a woman from Cleveland, a constituent of the gentleman from Ohio (Mr. LaTourette), testifying about how long it took her once she found out she was a victim of identity theft, to get her good credit back, the time it took, the amount of money it took, and this could be the kind of story that literally millions of people can tell every day. So we set about working with the gentlewoman from Oregon (Ms. Hooley) and the gentleman from Ohio (Mr. LaTourette) and others to craft legislation that we could make part of this historic bill that we are going to be voting on this afternoon. That was our goal and clearly we met it. The bill that we debated and marked up first in the subcommittee and then in our full committee turned out to be a bipartisan product that all of us can take a great deal of pride in. It is really how this place ought to work. It is how the legislative process ought to work when working on important pieces of legislation in a bipartisan manner to solve problems that bedevil our constituents. I think that is why the Committee on Rules recommended an open rule because they felt that we had this good bipartisan support; indeed, a 61-3 vote that came out of our committee, and a wide number of Members on both sides of the aisle, whether they were on the Committee on Financial Services or not, who share the same goals as we do in pursuing our efforts to reauthorize this legislation and particularly to provide strong consumer protections and protections against the theft of one's identity. Mr. Speaker, that is what brings us here today. I would expect after some very vigorous debate and some amendments proffered, that at the end of the day, we will see a strong bipartisan vote in the House for this legislation. I think that we will look back on this with a great deal of pride in what we have been able to accomplish. Make no mistake about it, we have to reauthorize the existing Fair Credit Reporting Act by the end of this session of Congress. To do anything less would be a dereliction of our duty to maintain the strong credit reporting system that we have developed in this country in the 1996 Act. That is why I support the rule and obviously support passage of this historic legislation. Again, I thank the Committee on Rules for making our job just a little bit easier. I would like to thank Mr. Sessions and the rest of the Committee on Rules for crafting a good rule that provides for the consideration of H.R. 2622, the Fair and Accurate Credit Transactions Act, or FACT Act. The rule before us today is a modified open rule that gives Members on both sides of the aisle full opportunity to propose amendments to this bipartisan legislation. It also allows our Democrat colleagues a motion to recommit. It is not surprising that we would take up this important consumer protection legislation under such an open process. From the very beginning of the Financial Services Committee's consideration of this bill we have worked cooperatively with our Democrat colleagues on the committee. In April of this year, the ranking minority member of the committee, Mr. Frank, and I announced that the committee would hold comprehensive hearings on issues relating to the reauthorizing of the Fair Credit Reporting Act, landmark consumer protection legislation first enacted in 1970. The legislation that emerged from that process-- which included eight hearings and testimony from over 100 witnesses--is bipartisan in the truest sense of that word, as demonstrated by the overwhelming 61-3 committee vote on final passage. Committee members, Republicans and Democrats alike, have realized that the FACT Act is critically important to the U.S. economy and the American public. How many times over the past 2 years have we heard that it is the American consumer who has almost single-handedly kept our economy afloat? At a time in our history when consumer spending accounts for over two-thirds of gross domestic product, any disruption in the free flow of affordable credit would have serious consequences for job creation and economic growth. By preserving our national credit reporting system the FACT ensures that this disruption will not put the brakes on an economy that is on the mend. The FACT Act is one of the most comprehensive consumer protection bills the Congress will enact this year. It significantly advances the fight against identity theft, one of the fastest growing crimes in America. A study conducted by the FTC just last week outlines the dramatic increase in the rate and cost of identity theft crimes. The study indicates that 10 million Americans were victimized by identity thieves last year. The financial costs are staggering with over $10,000 stolen in the average fraud, and American businesses and innocent victims spending upwards and innocent victims spending upwards of $55 billion due to identity theft. The FTC's findings underscore the urgent need for Congress to pass this legislation. While many members in our Committee contributed to this work product, I wanted to mention two members who deserve special recognition. I would like to thank Mr. Frank for his contributions to this legislation, in particular for his attention to the legislation's provisions on medical privacy and on the accuracy of consumer reports. I also want to recognize the contribution of the author of this legislation, Mr. Bachus, the chairman of the Financial Institutions and Consumer Credit Subcommittee, who painstakingly reviewed the issues addressed in this legislation in an exhaustive series of hearings and ushered the bill so successfully through his subcommittee. On a related note, since the Financial Services Committee reported out H.R. 2622, the Government Accounting Office (GAO) submitted a statement to the Senate Banking Committee on July 31, 2003, emphasizing the critical nature of accurate credit reporting to the consumer credit process, and some notable inconsistencies in the accuracy of consumer credit reporting today. It has recently come to my attention that reporting an accurate date of delinquency may be complicated by the relationship between the credit grantor, which originates and controls that data, and the data furnisher's role as the ``intermediary'' between the creditor and the consumer reporting agency. Maintaining and reporting accurate credit data will necessarily be a cooperative effort between the creditor and all other businesses engaged by the creditor to perform collection and data furnishing services. As this legislation moves to conference committee, I will continue to study the date of delinquency issue in hopes that the data furnishers who establish and follow the reasonable procedure requirements created in H.R. 2622 are not subject to unreasonable enforcement actions. I urge my colleagues to support this fair rule and support the bill.