Michael Oxley

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from Illinois (Mrs. Biggert).

Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Alabama (Mr. Bachus), the chairman of the Subcommittee on Financial Institutions and Consumer Credit, who has done such a wonderful job on this bill.

Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on the conference report and insert extraneous material thereon.

Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from Florida (Ms. Harris).

Mr. OXLEY. Mr. Speaker, I yield myself the remaining time. First of all, I want to thank the staff. I always tend to forget to do that, and we have been through a lot on this bill. This is a complicated piece of legislation that got more complicated as we took on this whole issue of identity theft, and throughout this process, the staff on both sides of the aisle have been just superb, working late nights and early mornings to get us where we are today, and I want to personally thank them for their efforts. They know who they are, and I know who they are and we most appreciate it, and also to the Members, I think this is, Mr. Speaker, perhaps a textbook example of how the legislative process ought to work in terms of hearings, in terms of everybody having an opportunity to have their say, involving Members on both sides of the aisle, many of them newer Members, freshmen Members, to really get their feet wet on an important piece of legislation that we bring to the floor today and this conference report that will close it out. This is truly a historic day, and I think in the real traditional way that we have started in the Committee on Financial Services of turning out good legislation in a bipartisan manner, and for that, I am very thankful to all concerned.

Mr. OXLEY. Mr. Speaker, I reserve the balance of my time. I have the right to close, is that correct, Mr. Speaker?

Mr. OXLEY. Mr. Speaker, I yield myself 6 minutes. Mr. Speaker, I am proud to bring before the House today the conference report on H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003. This is a bipartisan bill that will foster economic growth and development throughout this country. When 9/11 hit our country, Congress responded quickly with the passage of the USA PATRIOT Act and the Terrorism Risk Insurance Act. When corporate scandals threatened to undermine the integrity of the stock market, we responded with the passage of the Sarbanes-Oxley Act. And today, as the laws governing our national credit markets are set to expire, we must again respond swiftly and responsibly with the passage of this bipartisan solution to keep the American economy stable and growing and assure that the American consumer continues to enjoy the benefits of a robust national credit granting system. One of the hallmarks of the modern U.S. economy is quick and convenient access to consumer credit. Though it would seem unimaginable a generation ago, consumers can now qualify for a mortgage over the telephone, walk into a showroom and finance the purchase of a car in one sitting, and get department store credit within minutes. As the distinguished Federal Trade Commission chairman Tim Muris has stated, the ``miracle of instant credit'' created by our national credit reporting system has given American consumers a level of access to financial services and products that is unrivaled anywhere in the world. The protection and growth of these services, as provided for in this legislation, are critical to the success of our economy. Since the Fair Credit Reporting Act's uniform national standards were established in 1996, we have achieved some of the lowest mortgage rates and credit rates on record, with more competition and more offerings for consumers than ever before. This has led to the record level of credit available today to all Americans, regardless of income level. Over the past 30 years, the availability of nonmortgage credit to households in the lowest income bracket has increased by nearly 70 percent, including a nearly threefold increase in the number of low- income households owning credit cards just in this last decade. The increase of available credit, coupled with the declining price of this credit, has also fueled the record homeownership levels we are experiencing today, again with the largest gains achieved by low- and moderate-income groups. These improvements in the credit and mortgage systems have saved consumers nearly $100 billion annually, according to some estimates. In addition to preserving our vital national credit system, this legislation is an extremely comprehensive consumer protection bill. The protections are designed to meet head-on the growing crime of identity theft which has accompanied the expanding credit market in our country. The FTC released a study in early September which revealed the damaging extent of this crime in our country. Ten million Americans were victimized by identity thieves last year alone, costing consumers and businesses over $55 billion, not counting the 300 million hours spent by victims to try to repair damaged credit records. The financial costs are staggering, with over $10,000 stolen in the average fraud. The Committee on Financial Services has worked tirelessly to explore and find solutions to this destructive crime. Over 100 witnesses have come before the committee since last April to discuss the renewal of the Fair Credit Reporting Act, and many of them focused their statements on the urgent need to increase safeguards designed to protect consumers and businesses alike from this crime. With the bipartisan support in the House, as well as valuable input and assistance from our friends in the Senate, we have a bill before us today that empowers both consumers and businesses as we attempt to eliminate this terrible crime. Congress needs to pass strong, uniform identity theft protection; and it needs to do it now. This conference report preserves many key elements designed to fight identity theft from the bill that passed the House with close to 400 votes. These strong new identity theft provisions standards established by the bill will be national, ensuring uniform protection for consumers in all 50 States. This legislation includes provisions that allow consumers to place fraud alerts, allowing consumers to block information from being given to a credit bureau, providing identity theft victims with a summary of their rights, giving consumers the right to see their credit scores, giving all consumers the right to a free copy of their credit report, restricting access to consumers' sensitive health information, simplifying the way consumers can limit unsolicited marketing offers, ensuring improved accuracy of credit reporting procedures, and providing consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking. This legislation also provides valuable tools and resources to financial institutions to ensure accuracy and prevent identity theft. These provisions include requiring creditors to take certain precautions before extending credit to consumers who have placed fraud alerts in their files; prohibiting merchants from printing more than the last five digits of a payment card on an electronic receipt, and others. Mr. Speaker, this is a rather lengthy and long statement, and I will submit this for the Record. I want to thank my ranking member, the gentleman from Massachusetts, for taking on this challenging and important legislation. Also to the chairman of our Subcommittee on Financial Institutions, the gentleman from Alabama (Mr. Bachus), who sat through hours of hearings, over 100 witnesses in eight separate hearings; to Chairman Shelby who chaired the conference committee and also, of course, is the chairman of the Banking Committee in the Senate, as well as Ranking Member Sarbanes for working in good faith on this effort. Mr. Speaker, this was indeed truly a bipartisan, bicameral effort. We worked very closely with the White House and the Treasury to put together this conference report. This is good public policy. It is good for the country's economy, maintaining this constant flow of credit that we have come to take for granted. This is positive legislation, and I urge all Members to give it their strong support. This legislation also provides valuable tools and resources to financial institutions to ensure accuracy and prevent identity theft. These provisions include: Requiring creditors to take certain precautions before extending credit to consumers who have placed ``fraud alerts'' in their files; prohibiting merchants from printing more than the last 5 digits of a payment card on an electronic receipt; requiring banks to develop policies and procedures to identify potential instances of identity theft; and requiring financial institutions to reconcile potentially fraudulent consumer address information. It is our duty to protect our national credit system and the economic growth that this system promotes by continuing to provide Americans with the most affordable and accessible credit market in the world today. We must ensure that the U.S. remains the engine of growth for the global economy. I want to thank my ranking member from Massachusetts, Mr. Frank, for taking on this challenging and imperative legislative project and for engaging all the major stakeholders in crafting a bipartisan piece of well balanced, highly effective legislation. I would also like to thank my friends from the Senate Banking Committee, Chairman Shelby and Ranking Member Sarbanes, for working in good faith to resolve differences between the House and Senate products. And finally, a huge debt of gratitude is owed by Members of this body to the gentleman from Alabama, Spencer Bachus, who wrote the House version of this bill; presided over countless hearings in his capacity as Chairman of the Financial Institutions and Consumer Credit Subcommittee; and helped lead the House conferees to a successful outcome in our negotiations with the Senate. Without the gentleman from Alabama, we would not be standing on the House floor today about to pass this historic consumer protection legislation. The final FCRA legislation states that no requirement or prohibition may be imposed under the laws of any State with respect to the conduct required under the nine specific provisions included in the new identity theft preemption provision of the law. Accordingly, States cannot act to impose any requirements or prohibitions with respect to the conduct addressed by any of these provisions or the conduct addressed by any of the federal regulations adopted under these nine provisions. All of the rules and requirements governing the conduct of any person in these areas are governed solely by federal law and any State that attempts to impose requirements or prohibitions in these areas would be preempted. I should note that the legislation lists the provisions to be preempted. However, to the extent such provisions would enjoy preemption under another provision in the FCRA, the other provision would control. One of the central elements of the approach taken by the bill that the House passed overwhelmingly last September was to make the new fraud prevention and mitigation provisions contained in the legislation the new uniform national standards on those subject matters. The bill was drafted in this way because identity theft is a national concern, not only because of its impact on our system of granting credit, but because it knows no boundaries. The consumer victim may be in one State, the financial institution victim in another State, and the perpetrator may be in a third State. The credit bureaus that receive and report information relating to a fraudulent account may be in yet a fourth State. In drafting the House bill, we were careful to stipulate--and to clarify in a colloquy on the House floor among the gentleman from Massachusetts, Mr. Frank, the gentleman from Alabama, Mr. Bachus, and myself--that the uniform national standards for identity theft were limited to the subject matters that the bill's provisions actually address, such as fraud alerts, blocking bad credit information, and truncating credit card account numbers at the point of sale. Thus, for example, this national uniformity would not affect State criminal statutes, or State laws governing the public display of social security numbers. The conference committee further refined this standard, by providing that the new uniform national standards on identity theft created by this legislation apply with respect to the conduct required by those specific provisions. I strongly urge my colleagues to vote for this Conference Report. Mr. Speaker, I reserve the balance of my time.

Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr. LaTourette), a former prosecutor, who has done such great work, particularly in the identity theft part of the legislation. (Mr. LaTOURETTE asked and was given permission to revise and extend his remarks.)

Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Gillmor), a valuable member of the committee. (Mr. GILLMOR asked and was given permission to revise and extend his remarks.)

Mr. OXLEY. Mr. Speaker, does the gentleman have any further speakers?

Mr. OXLEY. Mr. Speaker, I move to suspend the rules and agree to the conference report on the bill (H.R. 2622) to amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes.

Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Sessions), a distinguished member of the Committee on Rules, who has an important measure in this legislation.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I ask unanimous consent that the Committee on Financial Services be discharged from further consideration of the Senate bill (S. 1768) to extend the national flood insurance program, and ask for its immediate consideration in the House.

Mr. OXLEY. Mr. Speaker, I offer an amendment in the nature of a substitute.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I rise in support of the conference report for H.R. 2417, the Intelligence Authorization Act for Fiscal Year 2004, and to note the Financial Services Committee's interest in three sections of the report. All of the sections seek to improve this country's ability to fight the financing of terrorists, and I wholeheartedly support them. Section 105 of the report establishes an Office of Intelligence and Analysis within the Department of the Treasury, headed by an Assistant Secretary appointed by the President after consultation with the Director of Central Intelligence. Formation of the office is necessary because the Treasury's Office of Foreign Assets Control and its Financial Crimes Enforcement Network are essential tools in the fight against the funding of terrorism, but today lack access to some ``secure'' information essential to that effort. Establishment of the office creates a secure channel for that information to flow, as necessary, to FinCEN and OFAC, and for them to send back appropriate information. Section 374 modernizes the definition of financial institutions that may be served administrative subpoenas, as rigidly controlled by the existing Right to Financial Privacy Act. When that Act was written, banks were really the only ``financial Institutions'' a terrorist might have used to stash or transfer money. As our efforts to stamp out terror financing have become more successful, a lot of that activity has moved over into other, less-traditional sorts of financial-services businesses--even, for example, to dealers in precious commodities such as gold or diamonds. The USA PATRIOT Act appropriately expanded the definition of ``financial institution'' to include these other financial-services businesses. This section establishes parity in the definition of ``financial institution'' between the PATRIOT Act and the RFPA, allowing the judicious use of administrative subpoenas in terror cases to reflect this larger universe of businesses that might be exploited. Here I must note my discomfort that the conference report ignores the Financial Services Committee's request that Section 374 include the right to injunctive relief as provided for in Section 1118 of the Right to Financial Privacy Act. Section. 376 allows for the ``in camera'' review of sensitive information that leads to imposition of `'special measures'' isolating rogue countries or banks, as defined under Sec. 311 of the PATRIOT Act. Under the previous version of Sec 311, there is no ability to protect this sensitive information should it be necessary for the imposition of the ``special measures,'' and that omission argues against use of the powers as effectively as we would like. For example, if the Central Intelligence Agency should have information that a bank were doing business with a terrorist, it quite possibly would be counterproductive to expose the CIA's sources and methods to indict individuals or shut down the bank, but the Treasury's ``special measures'' under Sec. 311 could effectively isolate the bank if the sensitive information could be used ``in camera.'' This section merely provides protection of that sensitive information that might be used to support the imposition of those measures. Mr. Speaker, these three sections are all important tools in the fight against terrorism, and I strongly support their inclusion. I regret that Section 1118 was not reference in the report's Section 374, and the Financial Services Committee reserves the right to address that issue later. Meanwhile, I support the conference report and ask for its immediate passage.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, let me thank the gentleman from Ohio (Mr. Ney) for his leadership on this issue. I certainly share the sentiments expressed by the gentleman from Massachusetts (Mr. Frank) regarding the need to really get at reforming this flood insurance program. The 1- year extensions year after year were something that I think grated on a lot of folks, the taxpayer groups and the environmental groups. Had it not been for the gentleman from Oregon (Mr. Blumenauer) and the gentleman from Nebraska (Mr. Bereuter), we probably would not be here today. I want to give them particular acknowledgment for their efforts to craft a compromise, and it was not easy. We have been through this I do not know how many years. These two gentlemen have toiled in the vineyards trying to get this legislation passed, and it is a real tribute to their perseverance that we are here today. And I also thank the gentleman from Massachusetts (Mr. Frank) for his incisive leadership as well, as well as the gentleman from Louisiana (Mr. Baker) because he was an integral part of forming the compromise that led to a unanimous vote in the subcommittee as well as the full committee and bringing this to the floor today. This program is vital. We proved that by letting it expire some time for the first part of the year and then came back and made it retroactive as indicated, but we found out very quickly it was incredibly important from a lot of housing groups that we needed to move and move fast. It was, I think, the first bill that was passed in the last year to make up that difference. This gives us an opportunity to really reform this program in the right way. We hopefully are in a situation where the other body can take a look at this. We would, of course, agree to a short-term extension but at the same time get some assurances that we can really address this problem. There are too many people out there who depend on this program, there are too many taxpayers who have been ripped off over the years by the abuse of this program, and that is what the reform really does. From the environmental side, from the taxpayer side, this is good legislation, crafted by the committee and made better by the gentleman from Louisiana (Mr. Baker) and his efforts. I want to thank all of them for their efforts. Also I see the gentleman from Texas (Mr. Green) who has also been a participant in this and has some very important issues to raise in terms of property values that have arisen in his Houston district. We were pleased to add that language to the legislation as well.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation, and to insert extraneous material thereon.

Mr. OXLEY. Mr. Speaker, I yield myself 5 minutes. Mr. Speaker, I stood on this floor last year and spoke of the need to reform and improve the accounting profession, financial reporting, corporate governance, and Wall Street research practices. Congress responded admirably by passing the Sarbanes-Oxley Act which has proved successful in improving the transparency of financial statements and stemming the alarming rate of corporate fraud. Now, we necessarily turn our focus to mutual funds. We are in the midst of what one former SEC chairman calls the ``biggest financial scandal of the past 50 years.'' An industry representative has lamented the ``shocking betrayal of trust.'' Indeed, the scandals are deeply troubling for a host of reasons. First, we have become a Nation of investors, 95 million strong, and the investment vehicles of choice are mutual funds. It is imperative that Congress ensures that these investors, representing 54 million households, are protected. Second, the nature of the misconduct by trusted fiduciaries, fund executives, directors, and portfolio managers is especially egregious. Secret deals were reached to provide special trading privileges to large, preferred customers. Fund managers and executives were caught market-timing their own funds, and fund directors were found asleep at the switch. Third, the mutual fund fraud is widespread. We are not talking about the actions of a few boiler room operations; we are talking about pervasive financial fraud by all segments of the fund industry, including the most trusted companies. Finally, the regulators charged with investor protection failed to detect or deter improper and illegal practices which have apparently been occurring for a number of years. It is inexcusable that these activities were not uncovered until this year. Long before the current scandal came to light, the Committee on Financial Services has called for reform. I am proud of the work of my colleagues, particularly the gentleman from Louisiana (Mr. Baker), chairman of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. The gentleman from Louisiana (Chairman Baker) held oversight and legislative hearings long before it was fashionable to scrutinize the fund industry. He and I shepherded this legislation through the committee in July, but not without some resistance. The legislation before the House today, the Mutual Funds Integrity and Fee Transparency Act, is a comprehensive reform package which contains numerous provisions to aid investors. I will not go into all of the details but, importantly, it will provide for greater transparency of fund fees, costs, expenses, and operations so that investors can make better informed decisions and help market forces to drive fees down for fund investors. It will strengthen fund management, particularly the board's independent directors, and it will curb the trading abuses which have recently been revealed. We know there are some who believe this legislation goes too far; there are some who think it does not go far enough. To those people, I would say that we have achieved a good balance here. It is proinvestor, it is tough, but it does not regulate for regulation's sake. Again, I would like to commend the gentleman from Louisiana (Mr. Baker) for his outstanding leadership on these issues and for crafting a fine piece of legislation. He was ahead of the curve yet again. Mr. Speaker, I reserve the balance of my time.

Mr. OXLEY. Mr. Speaker, I thank the gentleman for his continued leadership and tenacity on this issue. A few of us were kind of isolated and lonely when this whole issue began. And I suspect that we are now seeing the fruits of your efforts in taking on this difficult issue. And I would say that based on the testimony that Chairman Donaldson gave to the other body just yesterday it is pretty clear that the SEC not only supports our efforts but would indeed support an independent chair. So from that standpoint, obviously, this is the beginning of the process, not the end. And to that end, obviously we will consider other measures going forward. But I think, clearly, as the gentleman pointed out, this is an excellent bill that deals with some of the real abuses that have been out there in the public eye for the last several months. And this is how our process works. As you know, very much like what ended up as Sarbanes-Oxley, this is the House's ability to get our hands around this issue and show that the Members of the House are quite concerned about these burgeoning scandals and are not willing to sit back and allow this to happen on our watch.

Mr. OXLEY. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Delaware (Mr. Castle), distinguished member of the committee.

Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Kelly), the distinguished chairman of the Subcommittee on Oversight and Investigations.

Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. Harris), a valuable member of the committee. (Ms. HARRIS asked and was given permission to revise and extend her remarks.)

Mr. OXLEY. Mr. Speaker, the answer is yes. The rules will ban joint management by the same individual but not the same firm, both the registered investment company and other unregistered investment vehicles. Those rules will address the conflicts of interest that are presented by such an arrangement, including the conflicts raised by the gentleman.

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

Mr. OXLEY. Mr. Speaker, I am pleased to yield 6 minutes to the gentleman from Louisiana (Mr. Baker), the chairman of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.