E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 106 CONGRESS, FIRST SESSION

Vol. 145 WASHINGTON, THURSDAY, JULY 1, 1999 No. 96 House of Representatives The House met at 10 a.m. and was Bless this Congress with Your protec- MESSAGE FROM THE SENATE called to order by the Speaker pro tem- tion, Your provision, and Your priest- A message from the Senate by Mr. pore (Mr. EWING). hood. Give them wisdom to make the Lundregan, one of its clerks, an- f right decisions before a holy, righteous nounced that the Senate had passed a and loving God. In Jesus’ name, Amen. joint resolution of the following title, DESIGNATION OF THE SPEAKER in which the concurrence of the House f PRO TEMPORE is requested: The SPEAKER pro tempore laid be- S.J. Res. 21. Joint resolution to designate THE JOURNAL fore the House the following commu- September 29, 1999, as ‘‘Veterans of Foreign nication from the Speaker: The SPEAKER pro tempore (Mr. Wars of the United States Day’’. f WASHINGTON, DC, EWING). The Chair has examined the July 1, 1999. Journal of the last day’s proceedings WELCOMING REVEREND CHRIS I hereby appoint the Honorable THOMAS W. and announces to the House his ap- GEESLIN, HARVEST CHRISTIAN EWING to act as Speaker pro tempore on this proval thereof. FELLOWSHIP, FREDERICK, MD day. Pursuant to clause 1, rule I, the Jour- J. DENNIS HASTERT, nal stands approved. (Mr. BARTLETT of Maryland asked Speaker of the House of Representatives. Ms. ESHOO. Mr. Speaker, pursuant and was given permission to address f to clause 1, rule I, I demand a vote on the House for 1 minute.) Mr. BARTLETT of Maryland. Mr. agreeing to the Speaker pro tempore’s PRAYER Speaker, it gives me great pleasure to approval of the Journal. introduce to my colleagues a con- The Reverend Chris Geeslin, Harvest The SPEAKER pro tempore. The stituent and a friend, Pastor Chris Christian Fellowship, Frederick, Mary- question is on the Chair’s approval of land, offered the following prayer: Geeslin. the journal. Pastor Geeslin is a graduate of the Almighty God, we acknowledge our The question was taken; and the dependence on Thee, and we beg Thy Evangel Seminary of Harrisonburg, Speaker pro tempore announced that Virginia, with a Master’s degree in blessing upon our children, our par- the ayes appeared to have it. theological studies, and is currently a ents, our teachers, our leaders, and our Ms. ESHOO. Mr. Speaker, I object to doctoral candidate at the Wagner Insti- country. the vote on the ground that a quorum tute in Colorado Springs, Colorado. Gracious Father, we thank You for is not present and make the point of Pastor Chris resides in Frederick, the great prosperity You have given us, order that a quorum is not present. Maryland, with his wife of 15 years, the wealthiest Nation in the world. The SPEAKER pro tempore. Evi- Maryellen and their four children. Pas- Yet, we come this morning with sor- dently a quorum is not present. tor Chris started the Frederick Wor- rowful hearts at the recent tragedies Pursuant to clause 8, rule XX, fur- ship Center, an evangelical transde- and continued social ills in our Nation. ther proceedings on the question of ap- nominational church in Frederick 19 Lord, we humbly ask that You would proving the Journal are postponed. years ago. His church was instrumental heal our land. We rededicate our Na- The point of no quorum is considered in starting the Crisis Pregnancy Cen- tion and ourselves to Your gracious withdrawn. ter, my favorite charity; the Downtown Lordship. Pour out Your love, accept- Community Church, a ministry to the ance, and forgiveness as we come with f inner-city of Frederick; and most re- heartfelt humility and repentance be- cently has completed a merger with fore You. PLEDGE OF ALLEGIANCE the Word of Life Church, now called O God, we recognize that some things The SPEAKER pro tempore. Will the the Harvest Christian Fellowship. cannot be changed by legislation, but gentleman from Illinois (Mr. SHIMKUS) Pastor Chris is also the executive di- only by our Nation being reconciled to come forward and lead the House in the rector of Servant Ministries, a hub- You, as stated in Your word, ‘‘If my Pledge of Allegiance. ministry for pastors, intercessors, and people who are called by my name will Mr. SHIMKUS led the Pledge of Alle- ministry leaders who desire to be humble themselves and pray, and seek giance as follows: networked in prayer for their commu- my face and turn from their wicked I pledge allegiance to the Flag of the nity, city, and national leader so that ways, then I will hear from heaven, I United States of America, and to the Repub- ‘‘none should perish.’’ will forgive their sin, and will heal lic for which it stands, one nation under God, Please join me in welcoming Pastor their land.’’ indivisible, with liberty and justice for all. Chris Geeslin.

b This symbol represents the time of day during the House proceedings, e.g., b 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

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. H5182 CONGRESSIONAL RECORD — HOUSE July 1, 1999 ANNOUNCEMENT BY THE SPEAKER America. Just in the past decade, we minute and to revise and extend her re- PRO TEMPORE have seen the tearing down of the Ber- marks.) The SPEAKER pro tempore. The lin Wall, the democratization of all of Ms. ESHOO. Mr. Speaker, yesterday Chair will recognize 5 one-minutes on Eastern Europe, the breakup of the So- the Research and Development tax credit in our Nation expired. H.R. 835, a each side. viet Union. And we should recognize that the sacrifice of our soldiers have bipartisan bill supported by over 150 of f meant freedom and democracy for hun- our colleagues, would make this Re- COMMEMORATING 25TH ANNIVER- dreds of millions of other people all search and Development tax credit per- SARY OF FBI’S ‘‘CRISIS NEGO- around the world. manent. TIATION PROGRAM’’ So it is a weekend where we should Mr. Speaker, because the tax credit practice great gratitude. And, in my has expired, we need to act. What are (Mr. HYDE asked and was given per- opinion, Mr. Speaker, I hope more and we waiting for? We really should pass mission to address the House for 1 more Americans do what I do every this bill because the bill is good public minute and to revise and extend his re- morning when I get up. First I thank policy. Making the R&D tax credit per- marks.) God for my life, and then I thank vet- manent is critical to the continuing Mr. HYDE. Mr. Speaker, July 5 will erans for my way of life. growth of America’s economy, espe- mark the 25th anniversary of the Fed- f cially our new economy. eral Bureau of Investigation’s Crisis If this tax credit were made perma- Negotiation Program. The program DEPARTMENT OF INTERIOR COM- nent, our GDP would increase by near- created the Crisis Negotiation Unit, PLIANCE REQUIREMENT ENDAN- ly $28 billion over the next 20 years. which has worked to negotiate the re- GERS RANCHING INDUSTRY American businesses, Mr. Speaker, lease of hostages for the last 25 years. (Mr. GIBBONS asked and was given cannot base their planning on a year- We live in a very dangerous world, permission to address the House for 1 to-year renewal of this credit anymore one that has for two decades seen a minute and to revise and extend his re- than the American family should base steady rise in hostage-taking incidents. marks.) their financial planning on a year-to- We know that we will face new chal- Mr. GIBBONS. Mr. Speaker, the De- year renewal of the home mortgage de- lenges from criminals and terrorists in partment of Interior has issued a pol- duction. the next century and that the work of icy that requires compliance with the So now that the tax credit has ex- this unit will be even more vital to the National Environmental Policy Act pired, Congress should extend it. What security of the American people both prior to the renewal or transfer of any are we waiting for, Mr. Speaker? Let us at home and abroad. livestock grazing permits. take action on this and expand our The FBI Special Agents who serve in Well, the Department now also re- economy in a new and better way. quires that the Bureau of Land Man- the Crisis Negotiation Unit deserve the f agement complete an environmental gratitude of our Nation for their brav- assessment or environmental impact SALUTE TO NEW MILITARY SERV- ery and for their devotion. They de- statement prior to this grazing permit ICE STUDENTS OF PENNSYL- serve recognition of the fact that they reissuance or transfer. VANIA have saved the lives of countless hos- If any of these studies are challenged (Mr. PITTS asked and was given per- tages and law enforcement personnel in by some extremist special-interest the most dire of circumstances. mission to address the House for 1 groups or if the analyses are not com- minute and to revise and extend his re- The Crisis Negotiation Unit has also plete before the permit or lease ex- protected numerous potential innocent marks.) pires, the permittee is kicked off the Mr. PITTS. Mr. Speaker, as we cele- bystanders from harm in many high- allotment without recourse even if the brate the Declaration of Independence profile hostage crises, like the Luft- range is in excellent condition. on the 4th of July this weekend, I rise hansa skyjacking at John F. Kennedy Completing these analyses and im- to talk about the students who will en- Airport in 1993 to many serious inci- plementing the resulting decisions will sure that the United States remains a dents that have received little or no likely take many, many years. During beacon of freedom throughout the publicity. those years, the permittee will be ex- world. On behalf of the House of Representa- cluded from the allotment, essentially This year I had the pleasure of nomi- tives, I commend and congratulate the destroying their livelihood, and bank- nating 25 young men and women from Crisis Negotiation Unit and its Special rupting another family business. the 16th Congressional District of The problem here, Mr. Speaker, is Agents on their 25th anniversary. They Pennsylvania to the United States that NEPA applies to ‘‘a major Federal deserve our special thanks for a job military services academies. A number action significantly impacting the well done and our prayers for all the of those students were appointed to the dangers they are sure to face in the quality of the human environment.’’ The Department of Interior has not ex- academies. coming years. This week, those young men and plained why a simple paper transaction f women will start a journey; four years requires years of study. of study at premier institutions of IN APPRECIATION OF THE VET- The Secretary of Interior is attempt- higher learning, followed by active ERANS OF THE UNITED STATES ing to destroy the ranching industry and is assaulting generations of fami- duty in the United States Armed (Mr. MCNULTY asked and was given lies who have nurtured and cared for Forces. Throughout their 4 years, they permission to address the House for 1 our public lands. Such unreasonable will not only study academics but pre- minute and to revise and extend his re- regulation is the death of all good busi- pare themselves militarily and phys- marks.) ness. ically for service to the Nation as mili- Mr. MCNULTY. Mr. Speaker, we are f tary officers. They are living proof that about to again celebrate our independ- patriotism is alive at the turn of the ence day. I mentioned on the floor yes- ANNOUNCEMENT BY THE SPEAKER millennium, and they are tomorrow’s terday how grateful we should be to all PRO TEMPORE leaders. Therefore, I would like to join the men and women who wore the uni- The SPEAKER pro tempore. The their parents and friends in saluting form of the United States military Chair announces to all the Members these outstanding students. through the years. Because had it not that the Chair will recognize up to ten f been for their sacrifice, we would not 1-minutes on each side, not five. PRESIDENTIAL ELECTION DE- have the privilege of going around f bragging about how we live in the BATES SHOULD INCLUDE ALL freest and most open democracy on the MAKING RESEARCH AND DEVEL- VIABLE CANDIDATES face of the Earth. OPMENT TAX CREDIT PERMA- (Mr. TRAFICANT asked and was Freedom is not free. We paid a tre- NENT given permission to address the House mendous price for it. But it goes be- (Ms. ESHOO asked and was given per- for 1 minute and to revise and extend yond freedom in the United States of mission to address the House for 1 his remarks.) July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5183 Mr. TRAFICANT. Mr. Speaker, last to stop hemming and hawing and take language, but it brings up some inter- November polls in Minnesota said it heed of the needs of our seniors. esting questions. What does the Presi- was a two-man race for governor. Beam Plainly speaking, the President has a dent’s plan do? Does it target those me up. Who were they polling? plan to save Medicare by dedicating 15 most in need? Does it threaten the sol- Bullwinkle? Jesse Ventura, the third percent of the Federal budget surplus. vency of Medicare? Does it take money candidate, actually won due to the de- The plan modernizes Medicare by add- out of the Social Security Trust Fund? bates and quite frankly he is a breath ing a vital drug benefit, eliminating Who pays? Will seniors pay higher pre- of fresh air in our country. the copay on preventive services, pro- miums? Will the Government set price That is the reason, another reason, viding a buy-in option for the vulner- controls? Will all Americans face high- why I have reintroduced my bill that able and offering needed assistance for er taxes? Will payments to hospitals, would require that all presidential de- low-income beneficiaries. The Repub- doctors and other health care providers bates must include every candidate lican leadership has no Medicare plan be cut? Does the plan address holistic that has a mathematical chance of and really has only one choice. Roll up medicine and Medicare fraud, waste winning. They qualify on enough State your sleeves, work with the Democrats, and abuse? Will Medicare innovation be ballots. They qualify for matching save Medicare. threatened? Will seniors be able to par- funds. They give the American people a Mr. Speaker, we need to protect our ticipate based upon their choice? choice, and they make the two major seniors. We can do it and we can do it What we need to focus on is providing party candidates tell us what they now. drug coverage, solvency and choice to really feel. f our seniors. That is what we will be I yield back Bullwinkle, and I yield working for. COMPASSIONATE CONSERVATISM back the fact that the Federal Election f Commission can do this without my (Mr. ROGAN asked and was given PASS RESEARCH AND bill. permission to address the House for 1 DEVELOPMENT TAX CREDIT f minute and to revise and extend his re- marks.) (Mr. UDALL of Colorado asked and b 1015 Mr. ROGAN. Mr. Speaker, Dr. Joseph was given permission to address the Jacobs wrote an exceptional book House for 1 minute.) U.S. MISSES BOAT ON LATIN Mr. UDALL of Colorado. Mr. Speak- AMERICAN TRADE about ‘‘compassionate conservatism,’’ a slogan today adopted by the distin- er, it is July. Half a year is gone. Next (Mr. CHABOT asked and was given guished governor of Texas, George W. week we will go home to tell our con- permission to address the House for 1 Bush. The concept reminds me that stituents what the House has accom- plished. What will we say? If we are minute.) many liberals go through their lives candid, we will have to say, not Mr. CHABOT. Mr. Speaker, we have thinking that they are compassionate all heard the old expression, ‘‘You enough. because of their willingness to spend We have not acted to protect pa- snooze, you lose.’’ An article in yester- other people’s money. day’s Washington Times brings that tients’ rights. We have not acted to re- So often there is absolutely no rec- form campaign finance. We have not old expression to mind. It was entitled, ognition from liberals that conserv- EU, that is European Union, Latin acted to help communities respond to atives share many of the same ulti- growth and sprawl. We have not even Trade Zone Doesn’t Include U.S. mate goals. But we certainly disagree It seems that while our government done an easy thing like renewing the over the best ways in which to achieve research and development tax credit. It has dawdled, European governments them. That is why we hear day after have worked hard to cultivate trade re- expired last night. day on the House floor the motives of We need to do better. In fact, we need lationships in our own backyard. Latin conservatives attacked. In my view, to make the credit permanent and American countries and the European the liberal version of compassion has broaden it. A temporary credit like the Union worked toward lowering trade done more harm and has had more dev- one that expired last night is a less ef- barriers, and our government stands astating consequences on the less for- fective credit because researchers can- idly by. tunate than the most fiscally conserv- not count on it. Making it permanent Trade means jobs. Trade means eco- ative lawmaker ever could have. Theirs would end this uncertainty. A broader nomic growth. Trade means a higher is the philosophy of dependence on gov- credit would benefit small businesses standard of living for the American ernment. We conservatives share the and high-tech entrepreneurial start- people. Let us not continue to sit back philosophy of celebrating individual ups. Under the law that just expired, and watch while Europe and Latin self-reliance. Compassion is not a prod- these firms did not benefit. We should America reap the benefits of an aggres- uct of policy. It is a product of the go further and use the credit to pro- sive trade policy. Let us work with our human heart. There is no compassion mote collaboration between the Fed- trading partners to tear down barriers in destroying the motivation of the eral Government, the private sector and open up markets for American less fortunate to achieve, to grow and and universities like the University of products around the world. Mr. Speak- to prosper. Colorado in my district. er, we can ill afford to be pushed out of f Half the year is gone, but half re- the international trade markets. Let MEDICARE mains. We need to stop wasting time us get back in the game. and missing deadlines. Let us pass this Mr. DREIER. Mr. Speaker, if the gen- (Mr. SHIMKUS asked and was given tax credit as soon as possible. tleman will yield, I would simply like permission to address the House for 1 f to congratulate the gentleman on his minute and to revise and extend his re- remarks; and I would like to associate marks.) TOP TEN TERRIBLE TAX ACT myself with the gentleman’s state- Mr. SHIMKUS. Mr. Speaker, since (Mr. TANCREDO asked and was ment. the bipartisan Medicare Commission given permission to address the House f met, the Medicare debate has come for 1 minute and to revise and extend front and center. Republicans want to his remarks.) THE PRESIDENT’S MEDICARE improve the access of seniors to pre- Mr. TANCREDO. Mr. Speaker, the PROPOSAL scription drugs. No senior should have House will soon consider legislation to (Ms. WOOLSEY asked and was given to worry about whether they can afford implement the budget resolution’s call permission to address the House for 1 the medicines they need to stay for $778 billion in tax relief over the minute and to revise and extend her re- healthy. We need to work in a bipar- next 10 years. While I believe today’s marks.) tisan manner to solve this problem, complicated and cumbersome Tax Code Ms. WOOLSEY. Mr. Speaker, it is putting politics aside. This issue is too needs to be completely replaced, this time that this Congress gets smart and important. will take time as the American people starts to invest in our 39 million Medi- The President has recently entered debate alternative tax systems. In the care beneficiaries. I urge my colleagues this debate, and we are awaiting bill meantime, we can take a major step H5184 CONGRESSIONAL RECORD — HOUSE July 1, 1999 toward tax simplification by elimi- Ewing LaTourette Rohrabacher Oberstar Sabo Thompson (MS) Farr Lazio Ros-Lehtinen Pallone Schaffer Udall (CO) nating 10 of the worst taxes in the Tax Fattah Leach Rothman Pastor Schakowsky Udall (NM) Code today. We should pull these taxes Fletcher Levin Roukema Peterson (MN) Stupak Velazquez out by their roots, not just reduce Foley Lewis (CA) Roybal-Allard Pickett Sweeney Visclosky them, trim them or cut them back or Forbes Lewis (GA) Royce Pomeroy Tauscher Waters Fowler Lewis (KY) Rush Ramstad Taylor (MS) Weller decrease them. This will make it more Franks (NJ) Linder Ryan (WI) Riley Thompson (CA) difficult for them ever to grow back Frelinghuysen Lipinski Ryun (KS) again. Frost Lofgren Salmon ANSWERED ‘‘PRESENT’’—1 That is why I am introducing the Top Gallegly Lowey Sanchez Carson Ganske Lucas (KY) Sanders Ten Terrible Tax Act today—boy, that Gejdenson Lucas (OK) Sandlin NOT VOTING—19 is quite alliterative—which would com- Gekas Luther Sanford Archer Ehrlich Rangel pletely eliminate 10 of the most egre- Gibbons Maloney (CT) Sawyer Blunt Evans Scott Saxton gious taxes on the American people, in- Gilchrest Maloney (NY) Brown (CA) Fossella Tierney Gilman Manzullo Scarborough Conyers Green (TX) Wise cluding estate and gift taxes, the tax Gonzalez Martinez Sensenbrenner Cox Hutchinson Young (AK) on telephone calls, capital gains taxes Goode Mascara Serrano Cubin Hyde and the tax increase on Social Security Goodlatte Matsui Sessions Cummings Nadler Goodling McCarthy (MO) Shadegg beneficiaries. The American people de- Gordon McCarthy (NY) Shaw b 1106 serve to keep more of their hard-earned Goss McCollum Shays So the Journal was approved. money and the Top Ten Terrible Tax Graham McCrery Sherman Granger McHugh Sherwood The result of the vote was announced Act would provide much-needed tan- Green (WI) McInnis Shimkus as above recorded. gible tax relief to every American. Greenwood McIntosh Shows Gutierrez McIntyre Shuster f f Gutknecht McKeon Simpson WAIVING POINTS OF ORDER Hall (TX) McKinney Sisisky THE JOURNAL Hansen Meehan Skeen AGAINST CONFERENCE REPORT Hastings (WA) Menendez Skelton ON H.R. 775, YEAR 2000 READI- The SPEAKER pro tempore (Mr. Hayes Metcalf Slaughter NESS AND RESPONSIBILITY ACT EWING). Pursuant to clause 8 of rule Hayworth Mica Smith (MI) XX, the pending business is the ques- Herger Millender- Smith (NJ) Mr. DREIER. Mr. Speaker, by direc- Hill (IN) McDonald Smith (TX) tion of the Committee on Rules, I call tion of the Speaker’s approval of the Hill (MT) Miller (FL) Smith (WA) Journal. Hilleary Miller, Gary Snyder up House Resolution 234 and ask for its The question is on the Speaker’s ap- Hinojosa Minge Souder immediate consideration. proval of the Journal of the last day’s Hobson Mink Spence The Clerk read the resolution, as fol- Hoeffel Moakley Spratt lows: proceedings. Hoekstra Mollohan Stabenow The question was taken; and the Holden Moore Stark H. RES. 234 Speaker pro tempore announced that Holt Moran (VA) Stearns Resolved, That upon adoption of this reso- Stenholm Hooley Morella lution it shall be in order to consider the the ayes appeared to have it. Horn Murtha Strickland Mr. MCNULTY. Mr. Speaker, I object Hostettler Myrick Stump conference report to accompany the bill to the vote on the ground that a Houghton Napolitano Sununu (H.R. 775) to establish certain procedures for quorum is not present and make the Hoyer Nethercutt Talent civil actions brought for damages relating to Hulshof Ney Tancredo the failure of any device or system to process point of order that a quorum is not Hunter Northup Tanner or otherwise deal with the transition from present. Inslee Norwood Tauzin the year 1999 to the year 2000, and for other Taylor (NC) The SPEAKER pro tempore. Evi- Isakson Nussle purposes. All points of order against the con- Istook Obey Terry dently a quorum is not present. Jackson (IL) Olver Thomas ference report and against its consideration The Sergeant at Arms will notify ab- Jackson-Lee Ortiz Thornberry are waived. The conference report shall be sent Members. (TX) Ose Thune considered as read. The vote was taken by electronic de- Jefferson Owens Thurman The SPEAKER pro tempore (Mr. Jenkins Oxley Tiahrt vice, and there were—yeas 358, nays 56, John Packard Toomey EWING). The gentleman from California answered ‘‘present’’ 1, not voting 19, as Johnson (CT) Pascrell Towns (Mr. DREIER) is recognized for 1 hour. follows: Johnson, E. B. Paul Traficant Mr. DREIER. Mr. Speaker, for pur- Johnson, Sam Payne Turner [Roll No. 262] Jones (NC) Pease Upton poses of debate only, I yield the cus- YEAS—358 Jones (OH) Pelosi Vento tomary 30 minutes to the gentleman Kanjorski Peterson (PA) Vitter from South Boston, Massachusetts (Mr. Abercrombie Boswell Coyne Kaptur Petri Walden MOAKLEY), the distinguished ranking Ackerman Boucher Cramer Kasich Phelps Walsh Allen Boyd Crowley Kelly Pickering Wamp minority member of the Committee on Andrews Brady (PA) Cunningham Kennedy Pitts Watkins Rules, pending which I yield myself Armey Brady (TX) Danner Kildee Pombo Watt (NC) such time as I might consume. During Bachus Brown (FL) Davis (FL) Kilpatrick Porter Watts (OK) Baker Brown (OH) Davis (IL) Kind (WI) Portman Waxman consideration of this rule, all time that Baldacci Bryant Davis (VA) King (NY) Price (NC) Weiner I will be yielding is for debate purposes Baldwin Burr Deal Kingston Pryce (OH) Weldon (FL) Ballenger Burton DeGette only. Kleczka Quinn Weldon (PA) Mr. Speaker, the resolution provides Barcia Buyer Delahunt Klink Radanovich Wexler Barr Callahan DeLauro Knollenberg Rahall Weygand for the consideration of the conference Barrett (NE) Calvert DeLay Kolbe Regula Whitfield report to accompany H.R. 775, the Y2K Barrett (WI) Camp DeMint Kuykendall Reyes Wicker Act. The rule waives points of order Bartlett Campbell Deutsch LaHood Reynolds Wilson Barton Canady Diaz-Balart Lampson Rivers Wolf against the conference report and its Bass Cannon Dickey Lantos Rodriguez Woolsey consideration. The rule further pro- Bateman Capps Dicks Largent Roemer Wu Becerra Capuano Dingell vides that the conference report be Larson Rogan Wynn considered as read. This rule is a fair Bentsen Cardin Dixon Latham Rogers Young (FL) Bereuter Castle Doggett rule which will enable the House to ex- Berkley Chabot Dooley NAYS—56 peditiously consider this important Berman Chambliss Doolittle Berry Chenoweth Doyle Aderholt Ford Lee and very timely matter. Biggert Clayton Dreier Baird Frank (MA) LoBiondo Mr. Speaker, we all know the year Bilirakis Clement Duncan Bilbray Gephardt Markey 2000 is right around the corner, and Bishop Clyburn Dunn Bonior Gillmor McDermott Blagojevich Coble Edwards Borski Hall (OH) McGovern most Americans have heard that some Bliley Coburn Ehlers Clay Hastings (FL) McNulty computers may, I underscore may, Blumenauer Collins Emerson Costello Hefley Meek (FL) have a problem dealing with this his- Boehlert Combest Engel Crane Hilliard Meeks (NY) toric date change. Now, I am not an Boehner Condit Eshoo DeFazio Hinchey Miller, George Bonilla Cook Etheridge English Kucinich Moran (KS) alarmist, and I hope that we will not Bono Cooksey Everett Filner LaFalce Neal suffer major problems, but that does July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5185 not mean that we can sit back and ig- of frivolous litigation in time to do Mr. MOAKLEY. Mr. Speaker, I yield nore this very important issue. some good. Mr. Speaker, that is ex- 4 minutes to the gentlewoman from The fact is we live in the computer actly what we are doing today. California (Ms. LOFGREN). age. We have a digital economy. There- So I strongly urge all of my col- b 1115 fore, we have a responsibility to do leagues to support this bipartisan con- what we can to help people solve Y2K ference report. It is a credit to this in- Ms. LOFGREN. Mr. Speaker, I am problems before anything goes wrong. stitution and to the bipartisan team- very pleased to support the rule on this That is what we are doing here today work that is so often critical to enact- conference report and look forward to by passing this bipartisan conference ing meaningful legislation. So I urge voting for the conference report itself. report on H.R. 775, the Year 2000 Readi- support of both the rule and the con- I think that this is a good example of ness and Responsibility Act. ference report. what we can accomplish when we ex- Mr. Speaker, I come to this issue Mr. Speaker, I reserve the balance of tend our hands across the aisle and with the belief that the American pri- my time. work in a bi-partisan way to come up vate sector is clearly the most ener- Mr. MOAKLEY. Mr. Speaker, I yield with solutions that are practical and getic, creative, and powerful force in myself such time as I may consume. effective. As I mentioned about a week ago the world. In particular, our high tech- Mr. Speaker, I thank the gentleman today, there are probably a dozen dif- nology, computer and software compa- from California (Mr. DREIER), my dear ferent ways we could draft a bill that nies are the best and the brightest. If friend, the chairman of the Committee would address the Y2K issues. The con- anyone is up to tackling this tech- on Rules for yielding me the customary ference report is one of them. There is nology challenge, they are. Mr. Speak- half hour. no one way it is perfect, but certainly er, I am very glad that they are on our Mr. Speaker, when the House version it is workable and one approach that I of this bill came to the floor a few team. think will gain broad support in this But make no mistake about it, there weeks ago, it was a massive tort re- House on both sides of the aisle. are some hurdles standing in the way form package masquerading as a way I wanted to say something else today of the kind of teamwork and coopera- to exterminate the millennium bug. about bi-partisanship. I want to note tion needed to solve Y2K problems. A The version of that bill was dangerous that yesterday, once again, as has broad coalition of private sector com- and probably would have made matters happend for years now, the research panies believe that uncertainty regard- even worse. Fortunately, this bill has and development tax credit expired. ing unbridled Y2K litigation is the big- changed significantly from the original This is a terrible situation that we gest hurdle for them of all. This view is version. Although I still have some have allowed to occur once again. not limited just to the high-tech and concerns over the measure, it is still a High-tech companies in Silicon Valley computer companies. It cuts across the vast improvement over the last become frustrated when the research business community large and small, version. and development tax credit expires including retail, manufacturing, and Mr. Speaker, in exactly 6 months, all each year. And, as we know, if the re- services alike. of us will find out whether the pre- search and development tax credit is Fixing the Y2K computer bug should dictions of doom and gloom sur- not lengthy or permanent, it is very not be a partisan issue. That is why rounding the event of the year 2000 are difficult to get the maximum value out over a year ago I began to work with all they are cracked up to be. We will of that research and development tax my colleagues on both sides of the see whether or not medical care, food credit. aisle, and with a broad private sector safety, and environmental safety are That’s why I and 157 other Members coalition, to enact a targeted Y2K liti- compromised in any way because, right of this House, support H.R. 835, a bill to gation reform bill. Mr. Speaker, I am now, high-tech companies from Boston make the research and development happy to say that we are now nearing to Silicon Valley are working very tax credit permanent. We have not yet the finishing line. hard to correct their programs in order acted on this bill. I would therefore In particular, I want to applaud the to ward off potential disasters. I cer- ask, in the spirit of bi-partisanship evi- work of my colleagues, the gentleman tainly hope that they succeed. denced by this Y2K bill, that we bring from Virginia (Mr. DAVIS), the gen- But in case they do not, Mr. Speaker, the R&D permanent tax credit to this tleman from California (Mr. DOOLEY), they should be held responsible for floor for a vote no later than the week the gentleman from California (Mr. problems that might arise within rea- of July 12. I know that once we get the COX), the gentleman from Virginia (Mr. son because even though we need to R&D tax credit to the floor, we will MORAN), and the gentleman from Ala- weed out frivolous claims and encour- have an overwhelming vote in support bama (Mr. CRAMER) for joining in this age alternatives to lawsuits, we still of that permanent extension. I look bipartisan introduction of H.R. 775. need to preserve the people’s judicial forward to doing that. The conference agreement is clearly recourse. I do not want, as has happened sev- a product of compromise, and that is What I would prefer, Mr. Speaker, is eral times each year in the past, to not a criticism of it. It says a lot about for companies to work out these prob- have a gap where the R&D tax credit the leadership and skill of our col- lems before anything horrible happens. was not renewed and, did not exist, as leagues, the gentleman from Virginia I hope this bill will help get us there, it does not exist today. (Mr. GOODLATTE), and the gentleman and I hope Congress will keep working We know from the 1998 study by Coo- from Illinois (Mr. HYDE), and the gen- with the high-tech firms to help them pers & Lybrand that the permanent tleman from Detroit, Michigan (Mr. fix the problem now so that we can R&D tax credit would likely have CONYERS), and the gentlewoman from minimize the amount of pain and suf- prompted an additional $41 billion in California (Ms. LOFGREN). fering felt in the days following Janu- research and development investment I will say that I greatly appreciated ary 1, 2000. from 1998 through 2010, a 31-percent re- when the gentleman from Michigan Mr. Speaker, I urge my colleagues to turn on investments. (Mr. CONYERS) was able to sit upstairs support this rule. So let us celebrate what we have in the Committee on Rules with the Mr. Speaker, I reserve the balance of achieved here on the Y2K remediation gentleman from Virginia (Mr. GOOD- my time. bill, and let it serve as a challenge to LATTE) and the gentleman from Vir- Mr. DREIER. Mr. Speaker, I yield us to do the same thing with regard to ginia (Mr. DAVIS) in support of this myself such time as I may consume. the R&D tax credit by making it per- conference agreement. Mr. Speaker, I have no speakers at manent. When I joined my friend from Fair- this time, and I would urge that we Mr. MOAKLEY. Mr. Speaker, I have fax, Virginia (Mr. DAVIS) in intro- move ahead with the expeditious con- no further requests for time, and I ducing H.R. 775 on February 23, we sideration of this rule. I hope that my yield back the balance of my time. talked about the importance of enact- friend on the minority could help us Mr. DREIER. Mr. Speaker, I yield ing meaningful bipartisan Y2K litiga- move along. myself such time as I may consume to tion reform as quickly as possible this Mr. Speaker, I reserve the balance of simply congratulate my California col- year so that we would lift the shadow my time. league on her superb statement, and I H5186 CONGRESSIONAL RECORD — HOUSE July 1, 1999 would say that the spirit of bipartisan- Hall (OH) McGovern Sanford NOT VOTING—10 Hall (TX) McHugh Sawyer ship which we have shown on this Y2K Becerra Doolittle Lewis (CA) Hansen McInnis Saxton Brown (CA) Ehrlich Pickett litigation reform bill is, I hope, a Scarborough Hastings (FL) McIntosh Brown (FL) Fossella Schaffer model we can use not only for, as she Hastings (WA) McIntyre Cox Green (TX) said, research and development tax Hayes McKeon Schakowsky Scott credit, making that permanent, but Hayworth McKinney b 1141 Hefley McNulty Sensenbrenner Serrano also in just a few minutes when we con- Herger Meehan So the resolution was agreed to. Sessions sider the very important rule on H.R. Hill (IN) Meek (FL) The result of the vote was announced Shadegg Hill (MT) Meeks (NY) 10, financial services modernization. Shaw as above recorded. With that, I urge support of the rule Hilleary Menendez Shays A motion to reconsider was laid on and the conference report. Hilliard Metcalf Sherman the table. Hinchey Mica Mr. Speaker, I have no further re- Sherwood Stated for: Hinojosa Millender- Shimkus quests for time, and I yield back the Hobson McDonald Shows Mr. DOOLITTLE. Mr. Speaker, on rollcall balance of my time. Hoeffel Miller (FL) Shuster No. 263, I voted ``yes'' on the Y2K Rule, but The SPEAKER pro tempore (Mr. Hoekstra Miller, Gary Simpson my vote was not recorded. On the subsequent Holden Miller, George Sisisky EWING). All time has expired. Holt Minge Skeen vote, I discovered that my voting was not Without objection, the previous ques- Hooley Mink Skelton being read by the voting machine. The card tion is ordered on the resolution. Horn Moakley Slaughter has been turned in for replacement. Had I There was no objection. Hostettler Mollohan Smith (MI) been present, I would have voted ``yes.'' Houghton Moore Smith (NJ) The SPEAKER pro tempore. The Hoyer Moran (KS) Smith (TX) f question is on the resolution. Smith (WA) Hulshof Moran (VA) PROVIDING FOR CONSIDERATION The question was taken; and the Hunter Morella Snyder Speaker pro tempore announced that Hutchinson Murtha Souder OF H.R. 10, FINANCIAL SERVICES Hyde Myrick Spence ACT OF 1999 the ayes appeared to have it. Spratt Inslee Nadler Stabenow Mr. MOAKLEY. Mr. Speaker, I object Isakson Napolitano Mr. SESSIONS. Mr. Speaker, by di- Stark Istook Neal rection of the Committee on Rules, I to the vote on the ground that a Stearns Jackson (IL) Nethercutt quorum is not present and make the Stenholm call up House Resolution 235 and ask Ney point of order that a quorum is not Jackson-Lee Strickland for its immediate consideration. (TX) Northup present. Stump The Clerk read the resolution, as fol- Jefferson Norwood Stupak The SPEAKER pro tempore. Evi- Jenkins Nussle Sununu lows: dently a quorum is not present. John Oberstar Sweeney H. RES. 235 Johnson (CT) Obey The Sergeant at Arms will notify ab- Talent Resolved, That at any time after the adop- Johnson, E. B. Olver Tancredo sent Members. Johnson, Sam Ortiz Tanner tion of this resolution the Speaker may, pur- The vote was taken by electronic de- Jones (NC) Ose Tauscher suant to clause 2(b) of rule XVIII, declare the vice, and there were—yeas 423, nays 1, Jones (OH) Owens Tauzin House resolved into the Committee of the not voting 10, as follows: Kanjorski Oxley Taylor (MS) Whole House on the state of the Union for Kaptur Packard Taylor (NC) consideration of the bill (H.R. 10) to enhance [Roll No. 263] Kasich Pallone Terry competition in the financial services indus- YEAS—423 Kelly Pascrell Thomas try by providing a prudential framework for Kennedy Pastor Thompson (CA) Abercrombie Callahan Dixon the affiliation of banks, securities firms, and Kildee Paul Thompson (MS) Ackerman Calvert Doggett other financial service providers, and for Kilpatrick Payne Thornberry Aderholt Camp Dooley Thune other purposes. The first reading of the bill Allen Campbell Doyle Kind (WI) Pease King (NY) Pelosi Thurman shall be dispensed with. All points of order Andrews Canady Dreier Tiahrt against consideration of the bill are waived. Archer Cannon Duncan Kingston Peterson (MN) Kleczka Peterson (PA) Tierney General debate shall be confined to the bill Armey Capps Dunn Toomey Klink Petri and shall not exceed 90 minutes, with 45 min- Bachus Capuano Edwards Towns Knollenberg Phelps Baird Cardin Ehlers Traficant utes equally divided and controlled by the Kolbe Pickering Baker Carson Emerson Turner chairman and ranking minority member of Baldacci Castle Engel Kuykendall Pitts Udall (CO) the Committee on Banking and Financial Baldwin Chabot English LaFalce Pombo Udall (NM) Services and 45 minutes equally divided and Ballenger Chambliss Eshoo LaHood Pomeroy Upton controlled by the chairman and ranking mi- Barcia Chenoweth Etheridge Lampson Porter Velazquez nority member of the Committee on Com- Barr Clay Evans Lantos Portman Vento merce. After general debate the bill shall be Barrett (NE) Clayton Everett Largent Price (NC) Visclosky Barrett (WI) Clement Ewing Larson Pryce (OH) Vitter considered for amendment under the five- Bartlett Clyburn Farr Latham Quinn Walden minute rule. In lieu of the amendments now Barton Coble Fattah LaTourette Radanovich Walsh printed in the bill, it shall be in order to con- Bass Coburn Filner Lazio Rahall Wamp sider as an original bill for the purpose of Bateman Collins Fletcher Leach Ramstad Waters amendment under the five-minute rule an Bentsen Combest Foley Lee Rangel Watkins amendment in the nature of a substitute Bereuter Condit Forbes Levin Regula Watt (NC) Berkley Conyers Ford consisting of the text of the Rules Com- Lewis (GA) Reyes Watts (OK) Berman Cook Fowler mittee Print dated June 24, 1999. That Lewis (KY) Reynolds Waxman Berry Cooksey Frank (MA) amendment in the nature of a substitute Linder Riley Weiner Biggert Costello Franks (NJ) Weldon (FL) shall be considered as read. All points of Bilbray Coyne Frelinghuysen Lipinski Rivers LoBiondo Rodriguez Weldon (PA) order against that amendment in the nature Bilirakis Cramer Frost Weller of a substitute are waived. No amendment to Bishop Crane Gallegly Lofgren Roemer Lowey Rogan Wexler that amendment in the nature of a sub- Blagojevich Crowley Ganske Weygand Lucas (KY) Rogers stitute shall be in order except those printed Bliley Cubin Gejdenson Whitfield Lucas (OK) Rohrabacher Blumenauer Cummings Gekas Wicker in the report of the Committee on Rules ac- Luther Ros-Lehtinen Blunt Cunningham Gephardt Wilson companying this resolution. Each amend- Boehlert Danner Gibbons Maloney (CT) Rothman Wise ment may be offered only in the order print- Boehner Davis (FL) Gilchrest Maloney (NY) Roukema Wolf ed in the report, may be offered only by a Bonilla Davis (IL) Gillmor Manzullo Roybal-Allard Woolsey Member designated in the report, shall be Bonior Davis (VA) Gilman Markey Royce Wu considered as read, shall be debatable for the Bono Deal Gonzalez Martinez Rush Wynn time specified in the report equally divided Borski DeFazio Goode Mascara Ryan (WI) Young (AK) Boswell DeGette Goodlatte Matsui Ryun (KS) Young (FL) and controlled by the proponent and an op- Boucher Delahunt Goodling McCarthy (MO) Sabo ponent, shall not be subject to amendment, Boyd DeLauro Gordon McCarthy (NY) Salmon and shall not be subject to a demand for divi- Brady (PA) DeLay Goss McCollum Sanchez sion of the question in the House or in the Brady (TX) DeMint Graham McCrery Sanders Committee of the Whole. All points of order Brown (OH) Deutsch Granger McDermott Sandlin Bryant Diaz-Balart Green (WI) against the amendments printed in the re- port are waived. The Chairman of the Com- Burr Dickey Greenwood NAYS—1 Burton Dicks Gutierrez mittee of the Whole may: (1) postpone until Buyer Dingell Gutknecht Kucinich a time during further consideration in the July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5187 Committee of the Whole a request for a re- ing time to 5 minutes on any postponed services industry in America is a com- corded vote on any amendment; and (2) re- question, provided voting time on the plicated matter. Congress recognizes duce to five minutes the minimum time for first in any series of questions is not that busy American families where electronic voting on any postponed question less than 15 minutes. Finally, the rule many times both parents work to make that follows another electronic vote without intervening business, provided that the min- provides for one motion to recommit, ends meet have little time to consider imum time for electronic voting on the first with or without instructions. complicated banking law. But Congress in any series of questions shall be 15 min- Mr. Speaker, this rule allows for con- now is working again to repeal Glass- utes. At the conclusion of consideration of sideration of a total of 11 amendments, Steagall with exactly these hard-work- the bill for amendment the Committee shall five which are offered by the Demo- ing Americans in mind. rise and report the bill to the House with crats on a bipartisan basis. The rule, This legislation is designed to give such amendments as may have been adopted. like the underlying legislation, de- all Americans the benefit of one-stop Any Member may demand a separate vote in serves strong bipartisan support. shopping for all their financial services the House on any amendment adopted in the Ten of the amendments made in Committee of the Whole to the bill or to the needs. New companies will offer a order with this rule are debatable for 10 broad array of financial products under amendment in the nature of a substitute minutes each. They address important made in order as original text. The previous one roof, bringing convenience and question shall be considered as ordered on issues such as limitation of fees associ- competition. More products will be of- the bill and amendments thereto to final ated with acquiring financial products fered to more people at a lower price. passage without intervening motion except and taking steps to prevent institu- As a result of this legislation, Ameri- one motion to recommit with or without in- tions from requiring customers to pur- cans will have more time to spend with structions. chase insurance products as a condi- their families, more money to spend on tion of receiving a loan and other im- b 1145 their children, and the opportunity to portant items. save for their future. The SPEAKER pro tempore (Mr. This rule also allows 30 minutes of Americans deserve the most efficient EWING). The gentleman from Texas debate on an important amendment, borrowing and investment choices. (Mr. SESSIONS) is recognized for 1 hour. crafted in a bipartisan manner to Americans deserve the freedom to pur- Mr. SESSIONS. Mr. Speaker, for pur- strengthen the bill’s provisions related sue financial options without being poses of debate only, I yield the cus- to maintaining the privacy of a con- charged three different times by three tomary 30 minutes to the gentleman sumer’s personal financial information. different companies for a product. This privacy amendment is truly his- from Massachusetts (Mr. MOAKLEY), This legislation is designed to in- toric. It represents the strongest pro- pending which I yield myself such time crease market forces in an already consumer privacy language ever con- as I may consume. During consider- competitive marketplace to drive down ation of this resolution, all time yield- sidered by the House. This work product that we present costs and broaden the number of poten- ed is for purposes of debate only. tial customers for securities and other Mr. Speaker, this legislation before today comes as a result of extensive work out of two major committees, in- products that are before us today. us is a structured rule providing for the Mr. Speaker, I urge my colleagues to consideration of H.R. 10, the Financial cluding the Committee on Banking and Financial Services and the Committee support this well-balanced rule that is Services Modernization Act of 1999. an extremely complicated and delicate Passage of this rule today is another on Commerce who have primary juris- diction over this bill. In an intensely piece of legislation. step in the long and carefully consid- Mr. Speaker, I reserve the balance of ered repeal of the Depression-era rules bipartisan effort to bring together or to merge the best parts of both of these my time. that govern our Nation’s modern finan- Mr. MOAKLEY. Mr. Speaker, I thank bills, colleagues of mine on the Com- cial services industry. my colleague from Texas for yielding The rule provides for 90 minutes of mittee on Rules on both sides of the aisle have crafted what I think is the me the customary half-hour, and I general debate, 45 minutes equally di- yield myself such time as I may con- vided between the chairman and the best legislation for America. In fact, a senior member of the Committee on sume. ranking member of the Committee on Mr. Speaker, Congress has been Banking and Financial Services, the Banking and Financial Services and 45 gentleman from Minnesota (Mr. working on a banking modernization minutes divided equally between the bill for decades. Last night, June 30, VENTO), yesterday stated in testimony chairman and ranking member of the before the Committee on Rules, and I 1999, we finally had a chance to get it Committee on Commerce. quote, ‘‘Obviously the issues with pri- right. Last night, we had a bill that The rule also waives all points of vacy that have been worked out here managed the confusing crossroads order against consideration of the bill. are stronger than either bill from the where banks, insurance companies and The rule makes in order an amendment other committees.’’ This compromise securities industries meet. It had bi- in the nature of a substitute consisting is well crafted and bipartisan. partisan support in two committees. It of the text of the Committee on Rules Mr. Speaker, this rule meets the twin would have passed the House over- print dated June 24, 1999, as original goals the Committee on Rules grappled whelmingly. It would have been signed text for the purposes of amendment. with yesterday, allowing fair and vig- by the President quickly. And for the The rule also waives all points of orous debate on various alternatives, first time since 1933, Mr. Speaker, the order against the amendment in the yet moving this delicate compromise United States would have updated its nature of a substitute. forward to House passage. banking laws. The rule further provides that no Mr. Speaker, 65 years ago, on the But, for some reason, the Republican amendment to the amendment in the heels of the great Depression, the leadership decided that it was more im- nature of a substitute shall be in order Glass-Steagall Act was passed, prohib- portant to keep Democrats out of the except those printed in the Committee iting affiliation between commercial process than to pass this banking bill. on Rules report, which may be offered banking, insurance and securities. After years, Democrats and Repub- only by a Member designated in the re- However, merely 2 years after pas- licans together worked out a bill to port, shall be considered as read, shall sage, the first attempt at repealing modernize financial services, but the be debatable for the time specified in Glass-Steagall was instituted by Sen- Republican leadership decided to make the report equally divided and con- ator Carter Glass, one of the sponsors war instead of history and remove sev- trolled by the proponent and opponent, of the legislation. He recognized that eral important provisions because they and shall not be subject to amendment changes in the world and in the mar- were authored by Democrats. and shall not be subject to a demand ketplace called for more effective legis- This pattern of sabotaging bills with for a division of the question. lation. overwhelming bipartisan support in The rule also waives all points of Two generations later, the need to committees then removing Demo- order against the amendments printed modernize our financial laws is more cratic-authored provisions and passing in the report. appropriate than ever. bills by the narrowest of margins with The rule allows the chairman of the There is no doubt about it, reexam- the fewest Democratic votes is becom- Committee of the Whole to reduce vot- ination of regulation of the financial ing more the rule than the exception. H5188 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Mr. Speaker, we do not have to look think it is time the American people view of a perfect world in order to any further than the agriculture appro- get a little more from their Congress. achieve the laudable goals of financial priations bill, the legislative branch Mr. Speaker, I feel the American peo- modernization, but, Mr. Speaker, sadly appropriations bill, the DOD rule and ple have had enough investigations, last night the spirit of compromise and the juvenile justice bill to see the pat- they have had enough partisanship. sacrifice broke down in spite of the fact tern that has emerged. They want their Medicare protected, that 5 of 11 of the amendments that Mr. Speaker, why does the Repub- they want their Social Security shored were adopted had Democratic names on lican leadership feel compelled to do up, they want their medical records them; broke down, and my Democrat this? On a substantive level, it is the kept private, and they want their colleagues on the Committee on Rules American people who ultimately lose banks to operate fairly. decided to undermine the years of hard out. b 1200 work and jeopardize the success of fi- The gentlewoman from California nancial modernization over the fate of (Ms. LEE) had an amendment to require They want their Congress to pass one amendment. insurance companies to treat people some bills, even if Democrats vote for Perhaps more disappointing is their from low-income areas the same as them, that will make their lives just a decision to dishonor a commitment to anyone else. It passed the Committee little bit easier, their children a little bipartisanship on the bill and on an on Banking and Financial Services. It bit safer and their world a little bit amendment that will protect the pri- was part of the bill. And, last night, fairer. vacy of consumers’ financial personal the Republican Committee on Rules Mr. Speaker, I am sorry that I have information. This is not a policy issue. took it out. to withdraw my support from this rule. The substance of the privacy amend- The gentlewoman from New York I hoped we could have passed this bill ment has not changed. It is a case of (Ms. SLAUGHTER) had an amendment to with a wide range of support. I had political one-upsmanship that dis- strengthen family decision-making by hoped the American people would be misses the interest of the American requiring parents’ signatures on credit put first. people. card increases for children under 18. I urge my colleagues to oppose this I hate to say it, but it appears that Last night, the Committee on Rules’ rule. the Democrats are grasping at straws Republican members refused to allow Mr. Speaker, I reserve the balance of to find any issue with traction that it. my time. bolsters their political advantage The gentleman from Massachusetts Mr. SESSIONS. Mr. Speaker, I yield whether or not the policy is sound. (Mr. MARKEY) had an amendment to myself such time as I may consume. As a moderate Republican and a per- protect people’s private information Mr. Speaker, I am very pleased and son who advocates reaching out across from becoming part of Big Brother’s honored to have the gentleman from party lines to build consensus, I have marketing arsenal. Last night, the Re- Massachusetts (Mr. MOAKLEY) to stand to say that today I understand the publican leadership refused to allow it. up and to talk about this process that public’s cynicism about politics and The gentleman from Oklahoma (Mr. we have been going through. As he is politicians. It is truly a sad day for LARGENT) had a great amendment, to well aware, for many weeks we have America when their elected representa- enable the Federal Reserve to protect worked together in a bipartisan basis. tives expend their energy to create small towns and rural areas from being It is absolutely true that last night we chaos for political gain rather than taken over by mega-banks the way came at the time a vote was necessary progress for the American people. It is hardware stores have been taken over for us to decide what would be made in no wonder the American people are by Wal-Mart. It was part of the Com- order, and I would like to reiterate jaded. I know I am. But I cling to the merce bill. Last night, the Republican that there were 11 amendments, 5 hope that we will use our better judg- Committee on Rules took it out. which were offered by Democrats or on ment and redeem ourselves by voting The gentleman from California (Mr. a bipartisan basis that were accepted, to pass this rule and moving forward to CONDIT) had an amendment to keep and one of those amendments that was pass historic bipartisan financial mod- people’s personal medical records pri- accepted was crafted very carefully, ernization legislation. I urge a yes vote vate. Last night, the Committee on with a lot of hard work by the gentle- on the previous question and the rule. Rules refused to allow it. woman from Ohio (Ms. PRYCE). Mr. MOAKLEY. Mr. Speaker, I yield The gentlewoman from Colorado (Ms. Mr. Speaker, I yield 3 minutes to the 5 minutes to the gentleman from Texas DEGETTE) had an amendment to pro- gentlewoman from Ohio (Ms. PRYCE) to (Mr. FROST), a member of the Com- hibit insurance companies from dis- join in this debate. mittee on Rules and the caucus chair. criminating against victims of domes- Ms. PRYCE of Ohio. Mr. Speaker, I Mr. FROST. Mr. Speaker, it is with tic abuse. It passed the committee thank the gentleman from Texas (Mr. great sadness that I rise in opposition overwhelmingly, but the Republican SESSIONS) for yielding this time to me. to this rule. I do so, Mr. Speaker, in leadership took it out. I rise in strong support of this fair and spite of my efforts to work with the Meanwhile, for some reason, Mr. balanced rule which the House or Republican majority to pass a mean- Speaker, that I still cannot fathom, which allows the House to debate and ingful and bipartisan financial services last night the Republican leadership vote on the Financial Services Act. Up- modernization bill. included an amendment which will dating our Nation’s antiquated bank- Mr. Speaker, I must oppose this rule shut down the Bank Secrecy Act and ing laws has been a goal of Congress for because the Republican majority has cripple law enforcement’s ability to nearly 20 years, and we are finally deliberately given short shrift to red- trace and recover ill-gotten money. standing on the doorstep of success. lining, an issue fundamental to Demo- In other words, the Republican lead- The journey to this point has been ar- crats and has denied us even the right ership is protecting the privacy of sus- duous, but those of us who have worked to bring this subject up on the floor pected felons while at the same time on this legislation understand the today. Democratic opposition to this opening up the private lives of Amer- great benefit to our Nation’s competi- rule because of this move on the part of ican families. They are choosing enor- tiveness and to American consumers the Republican leadership should come mous corporations over victims of who will enjoy more seamless financial as no surprise. I would like to review abuse and profits over progress. services as a result. how we reached this situation. Mr. Speaker, when this new Congress The delicately crafted compromise Several weeks ago, I was encouraged began, I was hopeful about the new Re- legislation that will allow us to by the Republican leadership on the publican leadership. I was hopeful they achieve these goals is protected by this Committee on Rules to work on a bi- would put partisanship aside, reinvigo- balanced rule, and anyone who claims partisan solution to the issue of finan- rate the committee process and pass to be for financial services moderniza- cial privacy. I along with ranking some bills to help the American people. tion should support the rule. It is our Democrats on the Committee on Bank- But, Mr. Speaker, I am very sorry to best chance to go forward. ing and Financial Services, the gen- see that party politics is still winning There are many who have sacrificed tleman from New York (Mr. LAFALCE) out over responsible legislating, and I their own key issues and set aside their and the gentleman from Minnesota July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5189

(Mr. VENTO) worked closely with my rule without Democrat support. In rule, and I suspect that when our colleague on the Committee on Rules, doing so they have made a decision to amendment is offered on the floor, the gentlewoman from Ohio (Ms. jeopardize essential and critical legis- there are going to be a lot of Demo- PRYCE) to develop a reasonable com- lation if even a few members of their crats who were going to cosponsor that promise on what has become a very own party desert them. Stated more amendment who were going to vote contentious issue. We believed we had simply: The Republican leadership runs with us on that amendment because come up with just such a compromise. the very real risk of snatching defeat they thought it was a good amendment While our amendment gained support from the jaws of victory. last night and they think it is a good of a number of members of the Demo- This is a tragedy for our country. It amendment today. cratic Caucus, a significant number of is high time that we pass financial So let us support the rule, let us get our caucus oppose it because they be- modernization legislation, that we away from this nonsense of partisan- lieve it does not go far enough. leave behind the depression era laws ship, pass this rule and pass this his- While my Democratic colleagues and that hamstring the financial services toric legislation as well. I were working to fashion this com- industry and prevent them from be- Mr. MOAKLEY. Mr. Speaker, I yield promise, it came to my attention that coming truly competitive in the global 2 minutes to the gentleman from New the leadership of the Committee on marketplace. With the hard work of a York (Mr. LAFALCE), the ranking mem- Banking and Financial Services and number of Members of good will on ber on the Committee on Banking and the Committee on Commerce had uni- both sides of the aisle, that objective laterally dropped from H.R. 10 an im- Financial Services. was in sight, yet, Mr. Speaker, the (Mr. LAFALCE asked and was given portant provision relating to insurance Committee on Rules majority last redlining against minorities and permission to revise and extend his re- night denied the one amendment that marks.) women. This provision had been part of could have guaranteed passage of the Mr. LAFALCE. Mr. Speaker, I regret the Committee on Banking and Finan- rule and perhaps the bill. cial Services bill reported by the Com- so very much that I must come here I cannot understand how the Repub- and oppose the rule because from the mittee on Banking and Financial Serv- lican leadership could let this happen. ices, and its inclusion had been instru- beginning of this Congress I have But their decision has been made, and worked so closely with the chairman of mental in assuring the large bipartisan now all of us must live with the con- majority approval of the bill in the the Committee on Banking and Finan- sequences. cial Services, the gentleman from Iowa Committee on Banking and Financial Mr. SESSIONS. Mr. Speaker, I yield 2 (Mr. LEACH), the chairman of the Com- Services. minute to the gentleman from Findley, The gentleman from Iowa (Mr. mittee on Rules, the gentleman from Ohio (Mr. OXLEY). California (Mr. DREIER), and so many LEACH) had been told by his ranking (Mr. OXLEY asked and was given Members on my side of the aisle such member that this provision had to stay permission to revise and extend his re- as the gentleman from Minnesota (Mr. in the text of the bill in order for marks.) Democrats to continue to support the Mr. OXLEY. Mr. Speaker, the gen- VENTO), et cetera, to craft a bill that bill. Yet when the Committee on Bank- tleman protested too much. we could wrap up and give almost as a ing and Financial Services and the When I came to the Committee on gift and say: Pass it. And I think we Committee on Commerce Republicans Rules yesterday in support of the bi- did, and unfortunately last night the met to reconcile the two differing partisan amendment on privacy and I gift was unraveled. versions of the bill, the antiredlining was greeted by my friends on both We thought that there would be basic language was dropped. sides of the aisle saying that we had a Committee on Banking and Financial Let us talk about what was dropped. positive amendment that was going to Services text. In considerable part This is a provision that seeks to pre- deal with the privacy issue, it was sup- there was, but in some important parts vent a financial holding company from ported by broad sectors of both parties, there was not. For example, the issue engaging in the new activities allowed and when I left the Committee on of insurance redlining, I advised my by H.R. 10 if an affiliated insurance Rules late yesterday afternoon, my as- chairman that this was taking on in- company engages in discriminatory in- sumption was that not only would that creased importance. I went to the Com- surance redlining. Mr. Speaker, this is amendment be made in order, but the mittee on Rules and said, I have a con- a fundamental issue for Democrats. sumer amendment that I would like to This is an issue of fairness and equity. amendment would be cosponsored by Democrats and Republicans alike. offer with four parts; the most impor- It is an issue that divides right from tant part is the Barbara Lee amend- wrong. When I found out later that evening, last evening, that there had been a fail- ment. I cannot begin to tell you how I told the Republicans on the Com- many Democratic votes I might lose if mittee on Rules in no uncertain terms ure on the part of my friends on the Democratic side to cosponsor the bill, I this is not base text or at least per- that it would be unlikely that a single mitted as an amendment. Democrat would vote for this rule if was deeply offended. There was something else I said too: this language were not restored to the Now I do not get on this floor very Look at the gentleman from Ohio (Mr. bill either by incorporating it into the often and get partisan, but I am telling OXLEY), he said we worked out a good base text or allowing an amendment to my colleagues, around this place your restore it on the floor. Let there be no word is your bond, and if you tell me bipartisan amendment on privacy. He mistake. I made this very clear long that you are going to cosponsor an is right, it is good. It could be better, before last night’s meeting. This was amendment with me, I fully expect no question about it, but it is very, no surprise. that you will carry through. And the very good. But on the issue of medical Yet, Mr. Speaker, last night the Re- fact is that because of some political privacy, which is totally different, I publican majority on the Committee gamesmanship and somebody trying to said we have a big concern. on Rules cavalierly ignored my advice. take partisan advantage of somebody Virtually every medical association By doing so they have created a situa- of goodwill, we find ourselves today in and health association in the entire tion in which it is impossible to con- a partisan debate over an issue like fi- United States is concerned. We can sider this bill on a bipartisan basis. nancial services that has been bipar- deal with that concern by either mak- They have thrown away the bipartisan tisan and supported by bipartisan ma- ing crystal clear, explicit that the lan- goodwill and the hard work and dedica- jorities in both the Committee on Com- guage on medical privacy does not pre- tion to the issue of financial services merce and the Committee on Banking empt the right of the Secretary of HHS modernization as well as the hard work and Financial Services. And I think it to issue regulations subsequent to Au- that went into what could have been a is an outrage, an outrage, for people gust 21, and the bill, the amendment of true bipartisan compromise on the like me who acted in good faith to have the gentleman from Iowa (Mr. most contentious issue of the bill, that the rug pulled out from under me be- GANSKE), just does not do that, it does of financial privacy. cause of some political game playing. not address the issue. Or alternatively, It is clear that the Republican lead- Now I want everybody to support the take the amendment of the gentleman ership has decided to try to pass this rule. This is a good rule, it is a fair from California (Mr. WAXMAN) which H5190 CONGRESSIONAL RECORD — HOUSE July 1, 1999 would delete the medical privacy provi- are losing market share to foreign fi- vital to detecting and investigating money sions. The amendment of the gen- nancial institutions. This bill will laundering. Combating money laundering, in tleman from Ohio (Mr. OXLEY) and my- modernize the industry and relieve turn, has proven to be a remarkably effective self and others does not deal with that U.S. financial institutions of their cur- way to attack drug cartels and other crimi- nal groups. In Operation Casablanca, the issue at all; that is in base text now. rent international competitive dis- largest drug money laundering case in U.S. They did not do that. They allowed advantage. history. Customs used suspicious activity re- some other amendments that are atro- It comes down to this: The philos- ports (SARs) and currency transaction re- cious, that undermine the Bank Se- ophy of this Congress is to encourage ports (CTRs) to identify subjects and assets crecy Act. It would permit the re- competition in order to provide more linked to the overall conspiracy. By weak- domestication of mutual insurance efficient service and superior products ening these BSA reporting requirements, companies that has nothing whatso- to the consumer. We did that in tele- Paul-Barr-Campbell would mark a retreat in ever to do with financial services. communications. We put market forces our fight against narcotraffickers. to work in crafting Medicare. Today we In addition to keeping drug money out of b 1215 our financial institutions, the record-keep- lay the foundation for a new financial Mr. SESSIONS. Mr. Speaker, I yield 3 ing and reporting requirements also help law services industry that creates more enforcement detect and investigate financial minutes to the gentleman from At- choices and lower prices for consumers crimes aimed at those institutions. Accord- lanta, Georgia (Mr. LINDER). and enables companies to compete in ing to the FBI, during FY 1998, it used SARs Mr. LINDER. Mr. Speaker, I thank the global marketplace. in 98 percent of the cases initiated by its fi- the gentleman from Texas (Mr. SES- Are all the interested parties happy nancial institution fraud unit. In the same SIONS) for yielding the time. with everything in the bill? No, cer- period, the Department of Justice secured Mr. Speaker, I rise in strong support tainly not; including me. 2,613 fraud-related convictions in cases in- for House Resolution 235, a structured There is an amendment that I wish volving SARs, and restored more than $490 rule providing for consideration of H.R. million in proceeds to victims of fraud were made in order but it could not be, schemes. 10, the Financial Services Act of 1999. and that is probably a pretty good indi- Mr. Speaker, what we are witnessing Every Administration since 1970 has sup- cation that we have a good piece of leg- ported the BSA. Because of the BSA, the this afternoon is the politics of legisla- islation in front of us. United States is viewed as a leader through- tive destruction. There are some in I urge all of my colleagues to ignore out the world in assuring that individual this Congress whose game is to stop the demagoguery, understand that freedom and reasonable financial trans- important legislation, especially his- there is an effort here to make a par- parency are not only compatible but go hand toric legislation, and there should be tisan victory. Support this rule and in hand. I urge you to support law enforce- no doubt that this banking bill is an pass this historic legislation. ment and protect the integrity of our finan- historic accomplishment. Mr. MOAKLEY. Mr. Speaker, I yield cial institutions from drug traffickers and This bill has been painstakingly other criminals by opposing the Paul-Barr- myself such time as I may consume. Campbell amendment. crafted to achieve a balance between Mr. Speaker, I was just handed a let- Sincerely, all of the parties, and we have a great ter written by Robert Rubin, Depart- ROBERT E. RUBIN. opportunity to promote competition, ment of Treasury, who I am sure is not Mr. Speaker, I yield 3 minutes to the protect consumers and give firms the engaged in this political plight. I would gentleman from Michigan (Mr. DIN- ability to compete globally as we enter like to read a paragraph. GELL), the ranking member of the Com- the 21st century, and this rule will hold ‘‘While the amendment purports to mittee on Commerce. together the compromise legislation be about bank customer privacy, in re- that Members have constructed after ality it will significantly undermine (Mr. DINGELL asked and was given many years of hard work. Unfortu- the crucial law enforcement tool, the permission to revise and extend his re- nately, because some Members did not Bank Secrecy Act. The amendment marks.) get everything they wanted, they de- would eliminate the mandatory report- Mr. DINGELL. Mr. Speaker, this is a cided to threaten the passage of the ing of suspicious activity, enabling bad rule. It is a bad bill, and the proc- legislation. money launderers to deposit as much ess is arrogantly crafted to deny the Earlier this week, we had a strong, as $25,000 of dirty money with no report House the opportunity to consider im- bipartisan privacy amendment with being filed, and eviscerate provisions portant questions. Democrat and Republican cosponsors. I aimed at preventing money laundering It is the function of the Committee sat through 4 hours of testimony in the at financial institutions.’’ Signed Rob- on Rules to make possible an orderly Committee on Rules yesterday, and ert Rubin. debate but also to see to it that impor- leading Democrats on the Committee This was done away with as a result tant national questions are discussed. on Banking and Financial Services ar- of the Paul amendment. This is not a rule; it is a gag rule. gued that this privacy legislation was a Mr. Speaker, I include the letter for The committee has chosen to deny great accomplishment and that the the RECORD. the committees and the Members of language would benefit American con- DEPARTMENT OF THE TREASURY, this body opportunities to discuss very sumers. Then last night, because they Washington, DC, July 1, 1999. important matters. did not get everything they wanted, Hon. RICHARD A. GEPHARDT, The rule is unfair to taxpayers. It some Members took their names off the Minority Leader, greatly prevents us from addressing House of Representatives, Washington, DC. the question of how we will assure that bipartisan amendment and decided for DEAR DICK: I write to express my concern partisan purposes to jeopardize this im- about the Paul-Barr-Campbell amendment to banking insurance paid for by the tax- portant legislation. H.R. 10, the Financial Services Act of 1999. payer will not be used to cover risky, Perhaps because of this kind of par- The Department of the Treasury strongly op- speculative activities. No amendment tisan demagoguery, and we are going poses this amendment. can be offered on this point. to hear the minority demagogue pri- While the amendment purports to be about The rule is unfair to consumers. The vacy and redlining all afternoon, much bank customer privacy, in reality it will sig- rule does not permit amendments to nificantly undermine a critical law enforce- restore consumer protections stripped of the financial services industry re- ment tool—the Bank Secrecy Act (BSA). The mains the same as it was 66 years ago. amendment would eliminate the mandatory out of the bill by the Committee on We have a chance to change the New reporting of suspicious activity enable Rules. Deal regulations that locked down cer- money launderers to deposit as much as The bill preempts more than 1,700 tain activities and interests of finan- $25,000 of dirty money with no report being State insurance laws across the coun- cial security. H.R. 10 will free the mar- filed, and eviscerate provisions aimed at pre- try, and, if this bill passes in its cur- ket to determine the future of the fi- venting money laundering at financial insti- rent form, every State insurance law nancial services industry. tutions. that is to protect consumers of insur- For nearly 30 years, the BSA has been a I am also surprised that any Member critical component of our attack on money ance products will be essentially ren- would endanger banking moderniza- laundering. Its requirements help prevent dered null and void. tion, because the timing of this legisla- the placement of dirty money in our finan- We will be allowed to consider one tion is critical. American institutions cial institutions and provide information consumer-related provision. That is an July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5191 amendment to deny consumers mean- securities. I think there should be a to put in order an amendment which ingful information on the costs of prod- provision in this bill that protects a would allow for medical records, your ucts that they buy, and we will change person who has insurance information children’s Ritalin, your daughter’s ano- that. on their health from having that infor- rexia, your wife’s breast condition, This rule is unfair to investors. The mation transferred over to the banking your father’s prostate condition to be bill still contains enormous loopholes side. protected. They will not allow the in investor protections when securities I do not want information like this, Condit amendment to be debated on are sold or underwritten by banks. An or HIV positive status, being trans- the floor. amendment to close just one of those ferred to the banking component. So in Mr. Speaker, there is a Dickensian loopholes was denied by the Committee this bill there is a provision that was quality to this wire. Yes, we want fi- on Rules. passed by the Committee on Banking nancial industries to be able to work The worst thing that this bill does is and Financial Services with a lot of more efficiently, but it is the best of it denies protection of privacy of Amer- Democrat votes. Most of the Demo- wires and the worse of wires simulta- ican people. It does not allow the ordi- crats on the Committee on Banking neously. nary citizen to know that his personal and Financial Services voted for this The Republicans are saying we need financial information is not going to be language that says that unless a con- commerce but commerce without a thrown around wherever the holder of sumer authorizes, someone cannot take conscience, without any protection for that particular information might that health information from the in- poor people, without any protection for choose to place it. surance portion and transfer it to the medical records, without any protec- We have an amendment which would banking portion, or outside of it. tion for everyone’s financial secrets have assured protection of that. That Nothing in this legislation precludes that no one else has any business get- amendment is prohibited by this rule. the Secretary of Health and Human ting into. In like fashion, the medical informa- Services from going ahead and issuing Mr. Speaker, they are willing to pro- tion of every citizen is, under this leg- her regulations. I want it to be on the tect people’s secrets from being robbed islation, thrown open to the gaze of all. record that the intent of the author of by third parties but not against embez- The result of that, of course, is going this provision, me, specifically says zlement inside of a bank. They can to be significant loss of personal pri- this legislation does not preclude the take someone’s information and sell it vacy by ordinary citizens with regard Secretary from going ahead and issuing to anybody they want. to medical conditions and medical regulations. Specifically in this bill, This is a terrible rule. This is a rule care. this language, it says that if com- which compromises the individual in- I think that is wrong. The Com- prehensive medical privacy legislation tegrity of every American in our coun- mittee on Rules did not permit an passes, it supersedes this language. try. I strongly urge a no vote on the amendment to address that question. This is an important consumer consid- rule so that we can have the proper My question to the Republican lead- eration. We should have something in amendments put in order to give the ership, my question to the Committee this bill that protects a consumer from American individual the protections thinking that their private health in- on Rules is: What are they afraid of? which they are going to need as we surance information can be shared with Why is it they are gagging this body? move to this new era of cyber-banking. those affiliates within that financial Why is it that they refuse to allow Every American has a right to services company. these questions to be debated? knowledge about information being This is a consumer protection. Does Let us allow the House to work its gathered about them, notice that it is will. Let us allow fair consideration of it go as far as some of the people who want comprehensive language? No. going to be reused for purposes other all of the important questions that Does it deal with research? No. Those than that which they originally in- need to be addressed. If my colleagues are very complicated issues that we tended, and the right to say no to are right, I am sure they will prevail. If need to deal with, but this is some- banks, to hospitals, to insurance com- they have the votes, they might even thing that we all should support, and I panies, to anyone else that seeks to use prevail when they are not right, but urge my colleagues to support the rule. a family’s private information as a the hard fact of the matter is at least Mr. MOAKLEY. Mr. Speaker, I yield product. allow the House to address these ques- 3 minutes to the gentleman from Mas- The Ganske amendment does not pro- tions. They are important. sachusetts (Mr. MARKEY), the author of vide that protection. The exceptions in I am sorry to see the day when the the privacy amendment that was not the Ganske amendment swallow this Committee on Rules would exert such allowed. rule. There is no protection against outrageous power. Mr. MARKEY. Mr. Speaker, I thank medical records being compromised. Mr. SESSIONS. Mr. Speaker, I would the gentleman from Massachusetts Vote no on this rule. Send it back to inquire as to the time remaining on (Mr. MOAKLEY) for yielding me this the Committee on Rules. Allow for both sides. time. these amendments to be brought out The SPEAKER pro tempore (Mr. Mr. Speaker, this is a terrible rule. here on the floor for a full debate of the EWING). The gentleman from Texas The gentlewoman from California (Ms. modern financial era and what it 1 (Mr. SESSIONS) has 15 ⁄2 minutes re- LEE) in the Committee on Banking and means to every American in our coun- maining. The gentleman from Massa- Financial Services wanted an amend- try. chusetts (Mr. MOAKLEY) has 14 minutes ment to protect against insurance com- Mr. SESSIONS. Mr. Speaker, I yield 2 remaining. panies redlining the poorest people in minutes to the gentleman from Iowa Mr. SESSIONS. Mr. Speaker, I yield 2 our country. The Committee on Rules (Mr. LEACH), the gentleman who is the minutes to the gentleman from Des strips out the protection for those poor chairman of the Committee on Bank- Moines, Iowa (Mr. GANSKE). people, just strips it out. That is not ing and Financial Services and a gen- (Mr. GANSKE asked and was given fair. It is a bad rule. tleman who has been engaged in the permission to revise and extend his re- I won my amendment in the Com- methodical, bipartisan effort to get marks.) mittee on Commerce guaranteeing the this bill where it is. Mr. GANSKE. Mr. Speaker, as Mem- protection of privacy for the checks, b bers on both sides of the aisle know, I for the mortgages, for the insurance 1230 have stood on this floor night after records, for the brokerage receipts of Mr. LEACH. Mr. Speaker, I thank the night talking about abuses in the HMO every American, inside the bank, out- gentleman for yielding time to me. industry and insurance, and I do that side the bank. The Committee on Rules Frankly, Mr. Speaker, perspective is not to bash the insurance industry but strips it out. They will not allow for very difficult to bring to situations to try to protect patients. those protections to be built into this like this. Let me say that I believe There is a provision in this bill that bill, and no amendment will be put on both sides have some truth. I am not a I think helps protect consumers. We the floor which makes it possible. great enthusiast for this rule, but I are talking about creating an entity The gentleman from California (Mr. would urge serious consideration to its that combines insurance, banking and CONDIT) asked the Committee on Rules passage. I will vote for it. H5192 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Frankly, the main two amendments maneuvers that we face each and every Mr. SESSIONS. Mr. Speaker, I yield 5 that I asked to be placed in order were day in this House. How tragic. minutes to the gentleman from Texas the Largent amendment, which would This anti-redlining amendment is to (Mr. DELAY), the majority whip. have protected community banks prevent insurance affiliates from red- Mr. DELAY. Mr. Speaker, in urging somewhat stronger, and the Lee lining. It fits squarely into our coun- adoption of this rule, I want to just amendment. By background, let me try’s history to not tolerate discrimi- touch on two issues that may be trou- stress, the Lee amendment comes from nation in its many forms, but particu- bling some of our colleagues. the Committee on Banking and Finan- larly not to allow discrimination in First, we are blessed in America with cial Services. It passed by a one-vote housing. a greatly diversified financial services margin in committee. I voted for the It was adopted in open session on a industry. Oftentimes, however, these Lee amendment. I would have sup- rollcall bipartisan vote. Whether it was financial institutions, their regulators, ported it on the House floor. by one vote or by 20 votes, it was demo- and Members of Congress find them- But I would also say to my col- cratically adopted. The amendment is selves at odds on important policy, leagues that if they look at the big pic- an important tool in fighting redlining business, and competitive issues. ture, two aspects have to be under- and racial discrimination. It is incon- While some banks are a part of a very stood. ceivable to me that members of the large, diversified holding company and One, the principal committee of ju- Committee on Rules would go on can take advantage of sophisticated de- risdiction over the act that it modifies record as opposing fair housing and in livery systems, others are independent is the Committee on the Judiciary, and support of redlining. and must fend for themselves. the Committee on the Judiciary ob- I urge rejection of this horrendous, Regulations are written chiefly to jected to its consideration in this bill outrageous rule. keep the large, complex organizations before it had a chance to look at it. Mr. Speaker, we have not allowed banks to operating within the law, but then they That is something that in my view the discriminateÐwhy should we allow insurance are similarly applied to the same Committee on Rules gave dispropor- Companies to discriminate? small, independent bank. This situa- tionate attention to, but it was a valid It is vital to remember, to know that the Su- tion is made worse for the small com- consideration. preme Court, in recent years, upheld the Fair munity bank when we consider that Second, let me just say on redlining, Housing Act as covering the sale of home- their primary competitors escape the it is an important issue. But the most owner's insurance. The NAACP, and the Jus- consequences of heavy regulatory and important aspect on this bill relates to tice Department sued the American Family tax burden. the Community Reinvestment Act, Mutual Insurance company on discrimination This is wrong. Federal policies should which this bill broadens in two pro- in selling their homeowner insurance. The Su- not be implemented to create an unfair found ways. One, it makes CRA a con- preme Court ruled in their favor and the com- competitive advantage that benefits dition of affiliation for banks if they pany settled. Thus, there is no question of fed- one industry over another, where they want to affiliate with insurance compa- eral interest in the sale of homeowners' insur- compete for the same customer base. nies and securities firms, and second, it ance. We often overlook the fact that small applies the CRA to a newly created in- I have been informed that this amendment banks are small businesses themselves. stitution called wholesale financial in- displeases the insurance industry. I hope that They serve as economic engines that stitutions. These are strong steps to- I am wrong. We are almost forty years from drive the local rural economies, bene- wards protecting against redlining. the blood, sweat and deaths of the civil rights fiting millions of consumers, small Finally, I would caution people on movement. The cause for that struggle re- businesses, family farms, and local the rhetoric of privacy. There has mains in 1999. This modest amendment asks merchants. never been a bill in the modern genera- the minimum: that insurance companies, just Having said that, however, and as a tion that in its underlying text has like banks, should not discriminate. free market proponent, I must also add brought more privacy protection to fi- H.R. 10 is heavily biased toward the inter- that I am sensitive to the community nancial services than this one. The ests of the financial services industry with little banks’ concerns. Although I am sen- amendment that is being worked on concern for consumers and communities. De- sitive to those concerns, I cannot agree brings even more. It may not go quite letion of the Fair Housing Act protections ex- with their position that we should act as far as some might want, but it none- acerbates this imbalanceÐand reinforces the to isolate them from competition. theless is the strongest privacy protec- image of H.R. 10 as an industry legislative No, I say to my colleagues, that is tion bill ever brought before this body product. not a satisfactory answer to their con- in any modern Congress. The record of companies on fair lending, cerns. Instead, let us work together in Mr. MOAKLEY. I yield myself such redlining, and discrimination should be a con- passing this rule and H.R. 10 today, and time as I may consume, Mr. Speaker. sideration in establishing eligibility for the for- then work to pursue regulatory and tax I am sure if the gentleman’s two mation of a financial holding company. Elimi- relief for small community banks. It is amendments had been adopted in the nation of this provision rewards the crucial that we act to preserve the Committee on Rules, we would not lawbreakers and allows the guilty companies open market competition, rather than have had this fight on the floor. It to have the same rights, the same privileges, attempting to burden their potential probably would have been passed al- the same benefits as the majority of compa- competitors, and rather than attempt- ready. nies which are law abiding. ing to turn back the clock. Mr. Speaker, I yield 1 minute to the I am shocked. I do not want to believe that Congress should work to help unbur- gentlewoman from California (Ms. insurance companies, in the lushness of our den the community banks in this coun- LEE). booming economy, would resist the idea be- try. Ms. LEE. Mr. Speaker, I thank my hind the legislation. As I said earlier, the goal Mr. Speaker, my second point con- colleague for yielding time to me. of the legislation is modest. It only asks insur- cerns the unitary thrift issue. H.R. 10 is Mr. Speaker, I rise to speak against ance companies to not be in violation of the designed to help increase competition the rule. First, I cannot believe that Fair Housing Act. That they be fair in selling and to benefit consumers, commu- the Committee on Rules blocked sev- their policies. That the sale of an insurance nities, and businesses. With those goals eral of our important consumer protec- policy should be a business Transaction, not a in mind, how can we justify reining in tion amendments. It is shocking that transaction that gives vent to prejudices, the unitary thrift holding companies? the Committee on Rules blocked the stereotypes as to who is and who is not wor- Mr. Speaker, for the record, I would anti-redlining amendment adopted by thy of being a customer by virtue of their resi- like to clarify that the unitary thrift the Committee on Banking and Finan- dence. holding company is not a loophole. cial Services in markup. The Rules Committee has effectively More than 30 years of experience and Somehow this amendment was just blocked a formal, and democratically arrived-at volumes of legislative history underlay deleted with no vote, no debate, by the decision to eliminate redlining. This blatant the foundation of its structure. Con- stroke of a pen or a computer error. violation of our legislation process is out- gress acted specifically to bring both When I asked my colleagues how this rageous and should be illegal. capital and management expertise into could happen this morning, I was re- I ask my colleagues to vote against the rule the thrift industry and to promote minded of the many anti-democratic and to support a motion to recommit. housing. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5193 Simply put, restricting firms from crimination moving forward in terms ership to walk away from the brink of biparti- transfering ownership in an attempt to of home ownership in this country, and sanship? Was it some new Democratic plot to thwart competition disadvantages in- the many other economic opportuni- gain control? Or a liberal demand for more bu- vestors. In fact, some thrifts were cre- ties; that this financial modernization reaucracy? No, it was a simple request for ated at the urging of the Federal gov- should not just extend to the profit fairness. It was a request that in order for in- ernment. I am strongly opposed to a side the financial institutions bottom surance companies to affiliate under this law legislative taking that might lead to line, but to the service of our constitu- of financial modernization, they had to comply significant costs to the U.S. Treasury. ents, to the minority populations with the Fair Housing Act. Simple stated insur- I feel strongly that investors should blacks, Asians and Hispanics, to all the ance companies that discriminate cannot reap not have value taken from them poor in our society who have a right to the rewards of this Act. Is that such an oner- through some arbitrary action of Con- benefit from financial modernization. ous demand? Should this legislation protect gress. We have a responsibility to make cer- and reward those who practice racial red- No evidence based on safety and tain that this law works for all. lining? That is what the House would be left soundness has been presented that That is what the promise of this bill with in this Rule. It's a matter of fundamental would justify prohibiting unitary is, and Members cannot stand up for fairness. thrifts from being sold to other compa- three or four insurance companies that The Republican majority and leadership run nies. Likewise, no evidence suggests want to get in the way of extending this House and while mistakes have occurred that financial companies that buy uni- that particular benefit to those who on both sides of the aisle, this issue of red- tary thrifts should not continue oper- would be redlined. That is what this lining can still be fixed. Unfortunately stubborn ating their commercial activities. rule does. partisanship and special interests have won Mr. Speaker, today we are focused on There is probably enough blame to go out. As a result, I cannot support this rule. promoting economic efficiency and around on both sides regarding the Mr. MOAKLEY. Mr. Speaker, I yield growth. Congress should do something misunderstanding. There is much good 1 minute to the gentleman from Texas positive for our independent commu- in this bill. We could march forward (Mr. BENTSEN). nity banks, rather than trying to do and change this rule and provide for (Mr. BENTSEN asked and was given something negative to a group of po- the opportunity to in fact challenge permission to revise and extend his re- tential competitors. the redlining that occurs or may arise, marks.) Mr. BENTSEN. Mr. Speaker, unfortu- I urge my colleagues to pass this rule and to fulfill really what is the promise nately, on the way to passing what and adopt H.R. 10, and let us send it to of this Nation to all people, the oppor- would have been a very good bill, would conference. tunity to fully and fairly participate in have worked out the privacy issue in Mr. MOAKLEY. Mr. Speaker, I yield the Nations economy and financial my regard, and I have worked with 2 minutes to the gentleman from Min- market place without discriminatory both sides to try and do this and was nesota (Mr. VENTO). barriers such as redlining! trying to get the rule passed, but the (Mr. VENTO asked and was given Mr. Speaker, as late as yesterday afternoon, leadership, the Republican leadership, permission to revise and extend his re- I fully expected to be speaking in strong sup- through apparently arrogant inepti- marks.) port of the Rule. That expectation was based tude, has messed this thing up. Mr. VENTO. Mr. Speaker, I rise in on the fact that the House would be consid- We told them not to take the Lee strong opposition to the rule. ering a solid, bipartisan legislative product. amendment out, that that would raise Frankly, banking modernization, fi- With Chairman LEACH's leadership, the Finan- the bar and make it impossible to get nancial modernization, is one of the cial Services Modernization Act, as approved the rule done, but they did it anyway. important issues before the Congress. I by the Banking Committee, laid a solid base They say they do not want to stop red- want to commend especially the gen- which Democrats and Republicans alike could lining, they want to stop commerce tleman from Iowa (Chairman LEACH) support. It had the support of the Administra- and banking, but then they made the and my fellow members on the Com- tion and virtually most of the affected financial Burr-Myrick amendment in order. Do mittee on Banking and Financial Serv- entities. There were congressional jurisdic- Members know who that helps? It helps ices for working together. We brought tional differences, to be sure, and pride of au- one insurance company in North Caro- together a good bill, with a lot of effort thorship disagreements but we worked to- lina. This is like a State legislative in terms of the private sector concerns, gether and achieved a good bill prior to the bill. This is like a special interest tax banks, securities, insurance firms, to rules action. The reason for this broad support bill. deal with issues and the administra- was simpleÐmost Democrats and Repub- We worked in a bipartisan way to get tion. licans had put aside most partisan differences this bill done. I take a more free mar- The other side of financial mod- and worked on the issues. In the Banking ket approach on these issues than prob- ernization is how it affects consumers. Committee, very few votes were along party ably most of the Republicans do. We We protected CRA, we provided choice lines and the debate was on the substanceÐ had a good bill going. They messed it for corporations with regards corporate not to score political points. That is why our up. Are they going to do that to every structure and regulator. Frankly, I Committee reported H.R. 10 by a vote of 51 piece of legislation that comes to the think we put together a pretty good to 8. floor? This is just ridiculous. This is an privacy solution that is embodied in My hope for this legislation was raised by important issue that we should get this rule. the solid bipartisan agreement that was done and they failed, and they failed But beyond that, there is an impor- achieved for a strong privacy policy within the miserably. tant issue here of principle, one that I Rules Committee. I was proud to initially co- Mr. MOAKLEY. Mr. Speaker, I yield cannot violate. That is that commu- sponsor that amendment with my Democratic 1 minute to the gentleman from Cali- nities cannot be redlined by insurance and Republican colleagues. It was an amend- fornia (Mr. WAXMAN). companies or anyone else. I know ment which would bring an effective, workable (Mr. WAXMAN asked and was given many stand for those same civil rights, privacy protections for all consumers and an permission to revise and extend his re- those same rights to poor people, to amendment which Democrats and Repub- marks.) minorities and others. licans could support. Mr. WAXMAN. Mr. Speaker, this bill Frankly, the Committee on Rules Unfortunately, late in the night, the bright was supposed to be about financial last night extinguished that bright light of bipartisan cooperation was extin- services, but it actually contains the light of bipartisanship on the basis of guished. With a good meal of bipartisanship most severe invasion of Americans’ something to me that is fundamental set before us, the Majority Party leadership right to medical privacy ever consid- principle. We should correct that. We got a case of indigestion and served the ered by the Congress. had before us a nice, bipartisan meal, House a rule of thin gruel. Instead of using As the L.A. Times wrote in an edi- three courses, and this Committee on Rolaids, the Leadership resorted to the old torial today, ‘‘not a shred of protec- Rules turned that meal to gruel. We home remedyÐmuscle through a rule without tions are left. Health insurers can ped- should address that particular concern. any Democratic support. dle patients’ privacy with little or no We cannot go back on the progress It is an unfortunate decision. What could restraint.’’ Under this bill, health in- that we have made eliminating dis- prompt the Speaker and the Republican lead- surers can sell genetic records to credit H5194 CONGRESSIONAL RECORD — HOUSE July 1, 1999 bureaus, life insurance companies, Mr. INSLEE. Mr. Speaker, this rule ership blocked it. Instead, we have a without the consent or even the knowl- is defective. This rule does not protect bill that enables the insurance and the edge of the patient. Americans’ privacy. It protects piracy. banking industry to disclose an indi- I have a high regard for the gen- It protects the continued piracy of vidual’s personal health and financial tleman from Iowa (Mr. GANSKE). I do banks who are selling our credit card information without their consent. not think he realizes what he has numbers, selling our checking account What will failure to include these opened the door to in terms of the in- information, selling even the account basic privacy provisions in the bill vasion of medical privacy. That is a numbers in our savings accounts to mean for Americans? One could be de- different issue than privacy of finan- telemarketers who call us at night and nied medical coverage based on incor- cial records. But this medical privacy try to sell us products we do not want rect information in one’s medical provision allows information to be and we did not ask for. record, records that consumers would made available and to be sold without Americans deserve the right to say have no opportunity to correct. Med- us ever knowing about it, about our no, to tell banks do not sell my credit ical research would be stifled because most intimate medical problems. card number. Do not sell my account no one would trust that their partici- I would rather have nothing on med- information. Do not sell my checking pation in a medical study would be pri- ical privacy than a provision which account information. vate. takes us a big step backwards. If we kill this rule, we are going to As a cancer survivor, I can tell my Mr. MOAKLEY. Mr. Speaker, I yield give Americans that right. This rule is colleagues that the thought of my per- 1 minute to the gentlewoman from Col- a cruel hoax. It has a loophole big sonal records being zipped around the orado (Ms. DEGETTE). enough to drive an armored car Ms. DEGETTE. Mr. Speaker, here is Internet is frightening. This is the Big another reason to oppose this rule. In through. Because while it says they Brother bill. Big Brother is watching, the Committee on Commerce, the gen- cannot give our information to third watching one’s medical records, watch- tleman from Ohio (Mr. OXLEY), chair- party telemarketers, it allows banks to ing one’s financial records. He knows man of the subcommittee on Finance simply buy the telemarketers and con- when one has been sick. He knows how and Hazardous Materials and I offered tinue to commit the same crime, the much one has in one’s bank account. an amendment to prohibit entities that same sin. All they have got to do is Enough is enough Congress. This bill sell insurance from discriminating change the name on the door, and they violates the constitutional rights of against victims of domestic violence by will continue to violate our privacy American citizens. We can do better. selling, underwriting, or paying insur- rights. Mr. SESSIONS. Mr. Speaker, I yield 1 ance policies by using domestic vio- Listen to the American people. Do minute to the gentleman from Texas lence as an underwriting criteria. not have industry dictate this rule. (Mr. PAUL). This was an amendment unanimously This is the people’s House. Kill this (Mr. PAUL asked and was given per- supported in the committee, passed the rule. mission to revise and extend his re- House last year. It is very important. Mr. SESSIONS. Mr. Speaker, I yield 1 marks.) We should have voted on it by itself. minute to the gentlewoman from New Mr. PAUL. Mr. Speaker, I rise in Unfortunately, the amendment was not Jersey (Mrs. ROUKEMA). strong support of this rule. I am known made in order by itself and was in- Mrs. ROUKEMA. Mr. Speaker, I must to be very concerned about the privacy cluded as part of a very controversial say that I do not believe quite this par- of all Americans and am tenacious in amendment offered by the gentleman tisanship here. After all, this was the protecting the privacy of everyone. from Virginia (Mr. BLILEY). product of years of careful negotiation. I believe I am a well-known civil lib- What we are talking about here is If it had been easy, we would have ertarian. But I do believe this bill ade- trying to help businesses and trying to passed this years ago. quately protects privacy, except in one help consumers. Instead, we are just But having said that, I want to get area. It has not eliminated the poten- getting too cute by half. I think what back to this question of privacy be- tial Know Your Customer regulations. we need to do is send this rule back to cause obviously this does not deal with My amendment permits this. It is the the Committee on Rules so they can all the issues of privacy. But what is in regulations such as Know Your Cus- get all of these amendments straight, this bill that has been stated is excel- tomer that is the motivation for banks and they can benefit consumers as well lent. to collect so much information. as businesses. Now, weeks ago, I, as the chairman of So I rise in support of the rule, but b 1245 the Subcommittee on Financial Insti- also mention that the Paul-Campbell– tutions and Consumer Credit, an- Barr amendment will allow us to bring Then we can all vote for the bill. We nounced that, given the complexities of to the floor an amendment that will can send it on to conference, and we the privacy questions, we were going to eliminate once and for all the avail- can adopt it. have hearings. Those hearings are ability of Know Your Customer regula- Mr. SESSIONS. Mr. Speaker, I yield being held in July. tions by the various regulators. 15 seconds to the gentleman from Iowa This is not the vehicle to write com- I am in strong support of this rule, (Mr. GANSKE) for the purposes of rebut- prehensive privacy reform. I know that believing very sincerely this bill does tal. Mr. GANSKE. Mr. Speaker, I point not only I, but certainly the gentleman protect privacy. But we can make it out that the language on medical pri- from Iowa (Mr. GANSKE) and the gen- better by passing my amendment. vacy says the insurance company shall tleman from Virginia (Mr. BLILEY) and Mr. MOAKLEY. Mr. Speaker, I yield maintain a practice of protecting the the Committee on Commerce will be 1 minute to the gentlewoman from confidentiality of individually identifi- working with us to get a more com- Florida (Mrs. MEEK). able consumer health and medical and prehensive look at the privacy issues. (Mrs. MEEK of Florida asked and was genetic information and may disclose This is not the vehicle for com- given permission to revise and extend such information only with the consent prehensive privacy reform. This is her remarks.) or at the direction of the customer. being used as an excuse to let us not do Mrs. MEEK of Florida. Mr. Speaker, I Mr. MOAKLEY. Mr. Speaker, I yield our job and hand over to the regulators thank the gentleman from Massachu- such time as he may consume to the and the courts the continued rewriting setts for yielding me this time. gentleman from New Jersey (Mr. of financial institutions. That is abro- Mr. Speaker, I stand to ask the Con- MENENDEZ), the chief deputy whip. gation of our constitutional responsi- gress to vote against this rule. I want (Mr. MENENDEZ asked and was bility. to tell my colleagues why. Whenever given permission to revise and extend Mr. MOAKLEY. Mr. Speaker, I yield there are this many kinds of con- his remarks.) 1 minute to the gentlewoman from straints and hesitancies on the part of Mr. MENENDEZ. Mr. Speaker, I rise Connecticut (Ms. DELAURO). the body concerning a bill so important in opposition to the rule. Ms. DELAURO. Mr. Speaker, I rise in as this one, the main thing to do is just Mr. MOAKLEY. Mr. Speaker, I yield opposition to this rule. We had a to kill it. Get rid of it. Vote against it 1 minute to the gentleman from Wash- chance to protect the privacy of Amer- because there are too many ifs in this ington (Mr. INSLEE). ican consumers. The Republican lead- particular rule. The if in terms of the July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5195 gentlewoman from California (Ms. LEE) of patients and consumers, and that is back of the Chamber, the gentleman who tried to make it better by putting wrong. That is flat dead wrong. We from Iowa (Mr. LEACH), the chairman in something against redlining. All of ought to oppose this rule today. of the Committee on Banking, and the the attempts at trying to help in terms I want to speak just for a moment to gentleman from Ohio (Mr. BOEHNER), of privacy were ignored by the Com- the reason why I think we ought to op- who is back in the cloakroom who last mittee on Rules. pose it beyond not protecting our citi- year brought us very close to a victory. Well, that means only one bottom zens’ privacy. But we ought to oppose I think that we unfortunately have line. Vote against the rule so that they it on the medical privacy part of this gotten to the point where we are allow- will have to go back and change this bill. We offered two amendments to the ing what has been said earlier, very, and consider some of the many things Committee on Rules yesterday, both very petty partisanship, to undermine which my colleagues have heard here. were rejected, that simply said let us what is a very, very important issue Holding companies who seek to be set aside the medical privacy part of that needs to be resolved. qualifying financial holding companies this bill. Before we get to the issue of H.R. 10, under H.R. 10 would be prohibited from It has been suggested by the gentle- as we all know, we have to pass this violating the Fair Housing Act if one woman from New Jersey (Mrs. Rou- rule. This is a good rule which should were to take the amendment of the kema) that this is not the place or the have Democrats and Republicans sup- gentlewoman from California (Ms. time. She is right. We ought to debate porting it. It makes in order as the un- LEE). But, no, they did not. They did it in a more comprehensive bill coming derlying bill an amendment in the na- not see the right to take it. So now in July. ture of a substitute which represents they take away the ability to pass a I would ask my colleagues please the extraordinary work of those people bill. Vote against this rule. vote against this rule. Protect the pri- I have mentioned. I think that it helps Mr. MOAKLEY. Mr. Speaker, I yield vacy of the American people. Let us us deal with these very, very com- 1 minute to the gentlewoman from have a privacy debate at the appro- peting interests that have been out California (Ms. ESHOO). priate time. there. Ms. ESHOO. Mr. Speaker, I thank the Mr. SESSIONS. Mr. Speaker, I yield This amendment, the bill that we are very distinguished ranking member of myself such time as I may consume. going to be considering once we pass the Committee on Rules for yielding Mr. Speaker, we are now at the very this bill is, as the gentleman from Iowa me this time. end of this debate on the rule. We have (Chairman LEACH) said when he stood Mr. Speaker, I rise this afternoon in heard and had a vigorous debate today up, the strongest pro consumer effort opposition to the rule. So many of my about. We have had a vigorous debate we could possibly have, the strongest colleagues on this side of the aisle have about the various aspects of this rule privacy language that we could pos- expressed very eloquently their prob- and of the bill that is before us. sibly have. lems with the rule and why they op- I am pleased to say that, until last b 1300 pose it. night, we had been working for weeks My main reason and what brings me to craft a compromise, not only on pri- Now, there has been a lot of criticism to the floor today in opposition is for vacy, but other issues. I can tell my leveled at my friend, the gentleman the reason of privacy, privacy, privacy, colleagues that the compromise that from Iowa (Mr. GANSKE). He and I were privacy. If there is anything that runs was crafted up until last night is the mentioned in my hometown newspaper through the veins of the American peo- one that is in the rule. It was bipar- today. The fact of the matter is, I en- ple, it does not matter what party they tisan until then, and I am very proud courage those critics on the medical belong to, it does not matter where of it. privacy issue to read the bill, and I am they live, it does not matter how much Mr. Speaker, I yield such time as he just going to share a couple of lines. money they have, it does not matter may consume to the gentleman from It says: An insurance company shall what color they are, they want their California (Mr. DREIER) the distin- maintain a practice of protecting the privacy protected. guished chairman of the Committee on confidentiality of individually identifi- There is something wrong when the Rules. able customer health and medical and Congress considers a bill where the Mr. DREIER. Mr. Speaker, I would genetic information, and may disclose bankers know more than our doctors or like to thank the gentleman from such information only, only, with the have the same information. We need to Texas (Mr. SESSIONS) for yielding to consent or at the direction of the cus- stand with our constituents in this bat- me, and I congratulate him on the su- tomer or as otherwise required, as spe- tle, and we need to stand next to what perb management of this rule. cifically permitted, by Federal or State every red-blooded American under- The framers of our Constitution law; and compliance with Federal, stands, that what they have in their wanted the process of lawmaking to be State and local law, compliance with a checking account, what they have in difficult, and they wanted this place to properly authorized civil, criminal or their money market account is no one actually be inefficient because they did regulatory investigation by Federal, else’s business. It should not be sold. It not want one person to get too much State or local authorities is governed should not be marketed. It should be power. by the requirements of this section; or kept private. When I think about where I was 13 in broad protection risk control. I urge a ‘‘no’’ vote on the rule and years ago, I was a Member of the House The fact of the matter is there are the bill. Committee on Banking, and I joined tremendous consumer protections in Mr. MOAKLEY. Mr. Speaker, I yield with the gentleman from New York here to maintain the privacy. 1 minute to the gentleman from Cali- (Mr. LAFALCE) and several of our Mr. Speaker, I am trying to complete fornia (Mr. CONDIT). former colleagues who are no longer my closing statement. I encourage my (Mr. CONDIT asked and was given here, Doug Bernard, Steve Barlett, colleague to actually read the bill. permission to revise and extend his re- Jack Hiler and others. At that time, we Now, let me make a couple of com- marks.) began crafting legislation that allowed ments here about the rule. Mr. CONDIT. Mr. Speaker, I rise in for the establishment of financial serv- If I can close my statement, because opposition to the rule today. We ought ices holding companies with what is I am talking about this issue. We are to do financial services reform. We known as a three-way street for affili- trying to pass this rule. I have read the ought to be doing that. But we ought ation among securities, banks, and in- bill, and I encourage my friend to read not to be doing it at the expense of the surance. It obviously was the wave of exactly what I have read. consumer, at the expense of the patient the future, and it is something that we Let me say that as we look at efforts and the citizen when it comes to pro- are finally dealing with today. by my friend, the gentleman from Mas- tecting their privacy. That is what we Those efforts are finally coming to sachusetts, and by my colleague, the are doing today. fruition after nearly a decade and a gentlewoman from California (Ms. We have made a choice to do this bill, half. It is happening because of the LEE), these issues were put forward to pass this bill in the House today at work of the gentleman from Virginia with one thing in mind, to try to delay the expense of protecting the privacy (Mr. BLILEY) sitting back there in the this process even more than it already H5196 CONGRESSIONAL RECORD — HOUSE July 1, 1999 has been delayed. The goal is, in fact, Camp Hoekstra Quinn Kind (WI) Moore Shows Campbell Horn Radanovich Kleczka Moran (VA) Sisisky to put this off for weeks. They would Canady Hostettler Ramstad Klink Murtha Skelton very much like to do that. Cannon Houghton Regula Kucinich Nadler Slaughter So I think that we have, in fact, put Castle Hulshof Reynolds LaFalce Napolitano Smith (WA) together a very, very important meas- Chabot Hunter Riley Lampson Neal Snyder Chambliss Hutchinson Rogan Lantos Oberstar Spratt ure that finally moves us beyond 1933 Chenoweth Hyde Rogers Larson Obey Stabenow and depression-era legislation. I do not Coble Isakson Rohrabacher Lee Olver Stark think it moves us far enough, but this Coburn Istook Ros-Lehtinen Levin Ortiz Stenholm Collins Jenkins Roukema Lewis (GA) Owens Strickland is a small and first step. Combest Johnson (CT) Royce Lofgren Pallone Stupak We know there is bipartisan support Cook Johnson, Sam Ryan (WI) Lowey Pascrell Tauscher for most of the provisions in this bill. Cooksey Jones (NC) Ryun (KS) Luther Pastor Taylor (MS) We know that there is bipartisan sup- Cox Kasich Salmon Maloney (CT) Payne Thompson (CA) Crane Kelly Sanford Maloney (NY) Pelosi Thompson (MS) port for these packages. I hope very Cubin King (NY) Saxton Markey Peterson (MN) Thurman much that my colleagues on the other Cunningham Kingston Scarborough Martinez Phelps Tierney side of the aisle will join in supporting Davis (VA) Knollenberg Schaffer Mascara Pickett Towns Deal Kolbe Sensenbrenner Matsui Pomeroy Traficant what is a very, very important meas- DeLay Kuykendall Sessions McCarthy (MO) Price (NC) Turner ure. DeMint LaHood Shadegg McCarthy (NY) Rahall Udall (CO) Mr. SANDLIN. Mr. Speaker, I rise today in Diaz-Balart Largent Shaw McDermott Rangel Udall (NM) opposition to this rule. Dickey Latham Shays McGovern Reyes Velazquez Doolittle LaTourette Sherwood McIntyre Rivers Vento I support financial services modernization, Dreier Lazio Shimkus McKinney Rodriguez Visclosky Mr. Speaker, and voted for H.R. 10 during Duncan Leach Shuster McNulty Roemer Waters committee consideration of the bill in the Dunn Lewis (CA) Simpson Meehan Rothman Watt (NC) Ehlers Lewis (KY) Skeen Meek (FL) Roybal-Allard Waxman House Banking Committee. In order to deliver Ehrlich Linder Smith (MI) Meeks (NY) Rush Weiner financial services to consumers effectively in Emerson Lipinski Smith (NJ) Menendez Sabo Wexler today's economy, and in order to compete English LoBiondo Smith (TX) Millender- Sanchez Weygand Everett Lucas (KY) Souder McDonald Sanders Wise with financial conglomerates from overseas, Ewing Lucas (OK) Spence Miller, George Sandlin Woolsey American financial institutions need a modern- Fletcher Manzullo Stearns Minge Sawyer Wu ized legal and regulatory environment. Amer- Foley McCollum Stump Mink Schakowsky Wynn ican consumers deserve the opportunity to Forbes McCrery Sununu Moakley Scott Fowler McHugh Sweeney Mollohan Sherman take advantage of technological advances that Franks (NJ) McInnis Talent have made one-stop shopping for financial Frelinghuysen McIntosh Tancredo NOT VOTING—5 services possible. Gallegly McKeon Tanner Brown (CA) Graham Serrano Ganske Metcalf Tauzin Fossella Green (TX) However, the Republican leadership and the Gekas Mica Taylor (NC) Rules Committee have denied this House the Gibbons Miller (FL) Terry b 1323 opportunity to vote on several significant Gilchrest Miller, Gary Thomas Mr. SKEEN changed his vote from amendments on both sides of the aisle. Gillmor Moran (KS) Thornberry Gilman Morella Thune ‘‘nay’’ to ‘‘yea.’’ Amendments preventing ``redlining'' and dis- Goode Myrick Tiahrt So the resolution was agreed to. crimination by insurance companies, pro- Goodlatte Nethercutt Toomey The result of the vote was announced moting community banks in rural areas and Goodling Ney Upton Gordon Northup Vitter as above recorded. protecting consumers' medical privacy infor- Goss Norwood Walden A motion to reconsider was laid on mation, just to mention a few. If we want a Granger Nussle Walsh the table. Green (WI) Ose Wamp good bill, one that we can be proud of, we f must vote against this rule. Greenwood Oxley Watkins Gutknecht Packard Watts (OK) CONFERENCE REPORT ON H.R. 775, Mr. DREIER. Mr. Speaker, I yield Hansen Paul Weldon (FL) back the balance of my time. Hastert Pease Weldon (PA) YEAR 2000 READINESS AND RE- Mr. SESSIONS. Mr. Speaker, I yield Hastings (WA) Peterson (PA) Weller SPONSIBILITY ACT back the balance of my time, and I Hayes Petri Whitfield Hayworth Pickering Wicker Mr. GOODLATTE. Mr. Speaker, pur- move the previous question on the res- Hefley Pitts Wilson suant to House Resolution 235, I call up olution. Herger Pombo Wolf the conference report on the bill (H.R. The previous question was ordered. Hill (MT) Porter Young (AK) Hilleary Portman Young (FL) 775) to establish certain procedures for The SPEAKER pro tempore. The Hobson Pryce (OH) civil actions brought for damages re- question is on the resolution. lating to the failure of any device or The question was taken; and the NAYS—203 system to process or otherwise deal Speaker pro tempore announced that Abercrombie Clyburn Frank (MA) with the transition from the year 1999 the ayes appeared to have it. Ackerman Condit Frost to the year 2000, and for other purposes. Mr. MOAKLEY. Mr. Speaker, I object Allen Conyers Gejdenson Andrews Costello Gephardt The Clerk read the title of the bill. to the vote on the ground that a Baird Coyne Gonzalez The SPEAKER pro tempore (Mr. quorum is not present and make the Baldacci Cramer Gutierrez LAHOOD). Pursuant to House Resolu- point of order that a quorum is not Baldwin Crowley Hall (OH) Barcia Cummings Hall (TX) tion 234, the conference report is con- present. Barrett (WI) Danner Hastings (FL) sidered as having been read. The SPEAKER pro tempore. Evi- Becerra Davis (FL) Hill (IN) (For conference report and state- dently a quorum is not present. Bentsen Davis (IL) Hilliard ment, see proceedings of the House of The Sergeant at Arms will notify ab- Berkley DeFazio Hinchey Berman DeGette Hinojosa June 29, 1999 at page H5066.) sent Members. Berry Delahunt Hoeffel Mr. LAHOOD. The gentleman from The vote was taken by electronic de- Bishop DeLauro Holden Virginia (Mr. GOODLATTE) and the gen- vice, and there were—yeas 227, nays Blagojevich Deutsch Holt Blumenauer Dicks Hooley tleman from Michigan (Mr. CONYERS) 203, not voting 5, as follows: Bonior Dingell Hoyer each will control 30 minutes. [Roll No. 264] Borski Dixon Inslee The Chair recognizes the gentleman Boswell Doggett Jackson (IL) from Virginia (Mr. GOODLATTE). YEAS—227 Boyd Dooley Jackson-Lee Aderholt Bass Bonilla Brady (PA) Doyle (TX) GENERAL LEAVE Archer Bateman Bono Brown (FL) Edwards Jefferson Mr. GOODLATTE. Mr. Speaker, I ask Armey Bereuter Boucher Brown (OH) Engel John Bachus Biggert Brady (TX) Capps Eshoo Johnson, E. B. unanimous consent that all Members Baker Bilbray Bryant Capuano Etheridge Jones (OH) may have 5 legislative days within Ballenger Bilirakis Burr Cardin Evans Kanjorski which to revise and extend their re- Barr Bliley Burton Carson Farr Kaptur marks and to include extraneous mate- Barrett (NE) Blunt Buyer Clay Fattah Kennedy Bartlett Boehlert Callahan Clayton Filner Kildee rial on the legislation under consider- Barton Boehner Calvert Clement Ford Kilpatrick ation. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5197 The SPEAKER pro tempore. Is there mittee staffs on both sides of the aisle It also deletes the ‘‘loser pays’’ de- objection to the request of the gen- who worked so hard to make this legis- fense requiring a litigant to pay the tleman from Virginia? lation happen. They are to be com- other side’s attorneys fees if they re- There was no objection. mended for a job well done. jected a pretrial settlement and ulti- Mr. GOODLATTE. Mr. Speaker, I Mr. Speaker, this conference report mately obtained a less favorable ver- yield myself such time as I may con- is a victory for small businesses and a dict. The provision would operate as a sume. victory for consumers. One hundred tremendous disincentive to small busi- Mr. Speaker, today is day 182 of 1999, eighty-two days down and 183 to go, nesses and poor and middle-class vic- half way through the year. now Americans can begin the home- tims of Y2K failures because they have b 1330 stretch in their efforts to keep the Y2K far less financial resources and cannot problem from becoming a reality. afford the risk of paying a large cor- Over the past 6 months, Congress has Mr. Speaker, I reserve the balance of poration’s legal fees based on the out- climbed the mountain of Y2K liability my time. come of a trial. reform legislation, and as we stand at Mr. CONYERS. Mr. Speaker, I yield The conference report also signifi- the legislative summit, ready to pass myself such time as I may consume. cantly narrows the doctrine of joint legislation that Republicans, Demo- I want to stand here today to con- and several liability limitation. The crats and the White House can support, gratulate the gentleman from Virginia House bill, my colleagues will recall, we can only hope that our work will (Mr. GOODLATTE) on the committee; the would have wiped out the doctrine of help those who are climbing an ever- gentleman from Virginia (Mr. DAVIS), joint and several liability. Fortu- larger mountain, those who are trying who has put this bill before us and nately, the conference report excludes to fix their Y2K bugs before they hit. brought it to our attention; and all of individual consumers from this limita- Our job is now done. For the next 6 those in this House and in the other tion and incorporates several changes months, we can only hope that this leg- body who have helped make this a day designed to protect innocent plaintiffs islation, which will greatly reduce the that a conference report can be and help ensure that ‘‘bad actors’’ are threat of frivolous Y2K lawsuits, will brought to the floor for support. It rep- not rewarded. allow our Nation’s businesses to pour resents a marked improvement over Finally, the conference report sig- their energies into avoiding Y2K fail- the House-passed version of the bill of nificantly narrows the bill’s punitive ures instead of planning their Y2K which I was not able to support in the damages limitations. The Committee legal defenses. House form. The bill was improved first on the Judiciary reported a bill that Frankly, I did not think that this in the Senate at the insistence of many would have prevented any plaintiff moment would actually arrive. Just Democrats and again in conference at from ever receiving punitive damages last week, we stood here facing the the insistence of the administration. in a Y2K action. The conference report wide gulf of a weaker Senate-passed As has been suggested, a lot of work is far fairer and caps punitive damages bill. We faced an even wider gulf with went into this, including members of at the lesser of three times the com- the White House which, up until last the staff, and I think we now have a pensatory damages or $250,000 and only week, was nowhere to be seen in the bill, though far from perfect and de- applies caps to small business defend- negotiations and was backing badly de- spite some last-minute drafting ants. feated Senate proposals that provided glitches, I believe it will achieve the So although the legislation is not nothing but smoke and mirrors for ad- purpose of allowing high-tech compa- perfect, on balance I believe it will help dressing the Y2K problem. Fortu- nies to focus on the fixing of the Y2K protect the Nation’s high-tech commu- nately, all parties eventually realized problem without trampling on con- nity against frivolous lawsuits and en- that compromise is an essential part of sumer rights. courage businesses to remedy their successful legislating. Both the House I am glad the administration met Y2K problems without unduly infring- and the White House moved signifi- with the conferees over the past week- ing on the rights of small business and cantly from their original positions to end to achieve this compromise. Had individual plaintiffs. reach an agreement closely resembling we taken up the Senate-passed bill as Mr. Speaker, I include for the the Senate-passed legislation. some in this body were proposing, we RECORD a letter from John Podesta to The final conference report is a would be facing a drastically worse bill myself dated June 30, 1999, as well as a model of compromise. Not only did the which would surely have faced a presi- section-by-section description of the White House get many of the conces- dential veto. More importantly, I can Y2K conference report, as follows: sions it sought, but the core pieces of support this legislation because it rep- THE WHITE HOUSE, the House-passed legislation remain resents a one-time Federal response to Washington, June 30, 1999. firmly in place. Caps on punitive dam- a unique nationwide problem relating Re H.R. 775—the Year 2000 Readiness and Re- sponsibility Act. ages, reform of class action lawsuits, to possible year 2000 computer failures proportionate liability, a 90-day wait- Hon. JOHN CONYERS, JR., and does not serve in any way as prece- House of Representatives, ing period, and contract preservation dent for broader-ranging changes in Washington, DC. all remain in this legislation. our tort laws. In addition, the bill will DEAR REPRESENTATIVE CONYERS: The na- Mr. Speaker, I want to congratulate have no force or effect with respect to tion faces the possibility that widespread all those who have worked hard over actions stemming from any harm oc- frivolous litigation will distract high tech- the past week and over the past 6 curring after January 1, 2003. nology companies and firms throughout the months to make this bill happen. I In my judgment, the final conference economy from the important work of pre- want to commend my colleagues who venting—and if necessary—repairing damage report is far closer in text and in spirit caused by the inability of systems to process worked on this, including the sponsor to the Democratic substitute offered by dates in the new millennium. Special, time- of the bill, the gentleman from Vir- the gentlewoman from California (Ms. limited legislation to deter unwarranted Y2K ginia (Mr. DAVIS), the gentleman from LOFGREN), the gentleman from Virginia lawsuits is important to our economy. California (Mr. DREIER), the gentleman (Mr. BOUCHER) and myself, which re- Over the last few months, the Administra- from California (Mr. COX), the gen- ceived 190 votes here in the House, than tion sought to ensure that, while we deterred frivolous claims, we also preserved impor- tleman from Wisconsin (Mr. SENSEN- it is to the more extreme bill that was tant protections for litigants who suffer BRENNER) and the Democratic sponsors, originally passed by the House. bona fide harm. We believed that the Senate- the gentleman from Virginia (Mr. The conference report improves upon passed bill failed this test. The Conference MORAN), the gentleman from California the House-passed bill in a number of re- Committee agreed to make a list of changes (Mr. DOOLEY) and the gentleman from spects. First, it deletes the so-called that were important to provide necessary Alabama (Mr. CRAMER). I also want to reasonable defense effort. Under this protections. thank Senators MCCAIN, HATCH and the defense, of course, a defendant who was The agreed-upon changes were translated grossly negligent could completely into legislative language extremely nar- other Senate conferees for working so rowly, threatening the effectiveness of the hard to get a good piece of legislation avoid liability as long as he took mini- negotiated protections. Nonetheless, we have that the White House would sign. mal steps to fix the problem, even if concluded that, with these changes, the leg- Finally, I want to commend the these efforts did not result in a cure islation is significantly improved. Specifi- House and Senate personal and com- and caused substantial damages. cally, as modified, the Conference Report: H5198 CONGRESSIONAL RECORD — HOUSE July 1, 1999 ensures that individual consumers can be unconscionability and adhesion reflects an Judiciary Committee approved bill which made whole for harm suffered, even if a par- important change suggested by the White would have completely eliminated the plain- tially responsible party is judgment-proof; House. tiff’s ability to recover any punitive dam- excludes actions brought by investors from (g) Application to Actions Brought by a ages. most provisions of the bill and preserves the Government Entity.—This provision pro- Section 6. Proportionate Liability.—Sets ability of the SEC to bring actions to protect vides limited relief from penalties for Y2K forth a general rule that defendants are lia- investors and the integrity of the national related reporting or monitoring violations. ble only for their proportionate share of li- securities markets; ensures that public Because the provision is limited to a defense ability (in lieu of the common law rule of health, safety and the environment are fully to penalties, the government would be al- joint and several liability applicable in some protected, even if some firms are tempo- lowed to seek injunctive relief to require states). This general rule does not apply in rarily unable to fully comply with all regu- compliance and to correct violations. In ad- cases where the defendant acted with spe- latory requirements due to Y2K failures; en- dition, the defendant would have to show, cific intent to injure the plaintiff or know- courages companies to act responsibly and among other things, that the noncompliance ingly committed fraud. In addition, if por- remediate because those defendants who act was both unavoidable in the face of an emer- tions of the plaintiff’s damage claim ulti- recklessly are liable for a greater share of a gency directly related to a Y2K failure and mately prove to be uncollectible, and the plaintiff’s uncollectible damages; and en- necessary to prevent the disruption of crit- plaintiff is an individual with a net worth of sures that unconscionable contracts cannot ical functions or services that could result in less than $200,000 (a so called ‘‘widow or or- be enforced against unwary consumers or harm to life or property. Other safeguards phan’’) and damages are greater than 10% of small businesses. further limit the applicability of the defense. a plaintiff’s net worth, a solvent defendant is As a result, I will recommend to the Presi- For example, the defendant would not obtain responsible for paying an additional 100% dent that he sign the bill when it comes to the benefit of the defense if the reporting or share of their liability, or an additional 150% his desk. monitoring violations constitute or would of this amount if they acted with ‘‘reckless In the normal course of business, the Ad- create an imminent threat to public health, disregard for the likelihood that its acts ministration would oppose many of the ex- safety, or the environment. The defendant would cause injury.’’ Also, the general pro- traordinary steps taken in this legislation to would also be required to demonstrate that portionate liability rule does not apply to alter liability and procedural rules. The Y2K it previously made a reasonable good faith suits by consumers who sue individually problem is unique and unprecedented. The effort to anticipate, prevent and effectively rather than as part of a larger class (brought Administration’s support for this legislation correct a potential Y2K failure; that it has on behalf of ten or more individuals). Al- in no way reflects support for its provisions notified the agency within 72 hours of the though the section is one-way preemptive of in any other context. violation; and that it has fixed it within 15 state law, it is not intended to allow a de- Sincerely, days. The defense does not apply to any re- fendant to assert that it is subject to some but not other subsections. JOHN PODESTA. porting or monitoring violations occurring This provision is somewhat similar in oper- after June 30, 2000. Many of the safeguards against misuse of ation to a section included in the House SECTION BY SECTION DESCRIPTION OF Y2K Democratic substitute which gave the court CONFERENCE REPORT this defense were added at the insistence of the White House. Absent these changes, the discretion to avoid joint and several liability Section 1. Short Title; Table of Sections.— depending on the defendant’s overall conduct Senate bill could have provided corporate Sets forth the title and table of contents. and share of liability. The exceptions to the polluters and others responsible for health Section 2. Findings and Purposes.—Sets general rule of proportionate liability reflect and safety requirements with complete de- forth a variety of findings designed to estab- changes suggested by the White House to fenses to these reporting or monitoring vio- lish a constitutional nexus for the legisla- make sure that ordinary consumers were tion. lations. (h) Consumer Protection From Y2K fail- protected and so-called ‘‘bad actors’’ were Section 3. Definitions.—Among other defi- ures.—Ensures that homeowners cannot be not rewarded. This represents an effort to nitions, this section defines a ‘‘Y2K action’’ encourage remediation which, of course, is foreclosed on due to a Y2K failure. as any civil action in which the alleged harm This provision did not appear in the House unique to the Y2K problem. The final provi- arises from or is related to an actual or po- passed bill or the House Democratic sub- sions represent an improvement over the tential Y2K failure. stitute. The Senate passed language was House passed bill which would have elimi- This reflects a change suggested by the modified in conference to limit the provi- nated joint and several liability in virtually White House which deletes language which sion’s applicability to residential mortgages, all cases. Section 7. Prelitigation Notice.—Y2K ac- would have permitted the bill to apply to to require consumers to provide notice of the tions would not be permitted to proceed to lawsuits which only indirectly involved Y2K Y2K failure and their inability to pay, and to trial until the defendant has had an oppor- actions. limit the applicability to transactions occur- tunity to fix the Y2K failure within 90 days Section 4. Application of Act.—This in- ring between December 16, 1999 and March 15, cludes nine separate subsections. The most after receiving notice in writing with the 2000. problem described with particularity. The 90 important provisions are as follows: (i) Applicability to Securities Litigation.— day period includes an initial 30 day notice (a) General Rule.—Act only applies to Y2K Specifies that, other than the bystander li- period, and a subsequent 60 day period in failures which occur before January 1, 2003. ability provisions (section 13(b)), the bill This means that the bill represents a one which to remedy the defect. does not apply to securities actions. This provision is substantially identical to time change in tort and contract related ac- Many of the bill’s restrictions only make the House Democratic substitute. tions limited to harm caused during a nar- sense in the context of ordinary tort or con- row three year window. This represents a Section 8. Pleading Requirements.—Re- tract suits, not securities actions which Con- quires greater specificity in the notice of critical improvement over the House passed gress has reformed twice in recent years. damages sought in Y2K actions; the factual bill which had no termination date. This improvement was suggested by the basis for the damages claim; a statement of (c) Claims for Personal Injury or Wrongful White House. specific information regarding the mani- Death Excluded.—Specifies that the bill does Section 4 also includes technical sub- festations of the material defect and the not apply to claims for personal injury or sections specifying that the bill does not cre- facts supporting such material defect; and a wrongful death. ate a new cause of action; only preempts statement of facts showing a strong infer- This reflects an improvement over the state law to the extent it establishes a rule ence that defendant acted with a required House passed bill which only excluded per- that is inconsistent with state law; and does state of mind. sonal injury claims. The existence of this not supersede legislation concerning Y2K This provision is substantially identical to important carve out in the bill illustrates disclosure passed on a bipartisan basis last the House Democratic substitute. that the Y2K problem presents a unique one year. Section 9. Duty to Mitigate.—Provides time issue, and the legislative response Section 5. Punitive Damage Limitations.— that damages awarded in Y2K actions ex- should not apply to ordinary consumers suf- Provides that defendants shall not be subject clude compensation for damages the plaintiff fering personal injuries. In this respect, it to punitive damages unless such damages are could reasonably have avoided in light of any cannot be seen as a precedent for broader proved by ‘‘clear and convincing evidence.’’ disclosure or other information of which the tort reforms. Also caps punitive damages against ‘‘small plaintiff was or reasonably should have been (d) Warranty and Contract Preservation.— businesses’’ at the lesser of 3 times compen- aware. This limitation on damages does not Specifies that contract terms shall be strict- satory damages or $250,000. ‘‘Small business’’ apply where the defendant has engaged in ly enforced, unless such enforcement is in- is defined as individuals having a net worth fraud. consistent with state statutory law, or the of less than $500,000 and businesses with This provision is similar to a provision in- state common law doctrine of fewer than 50 employees. The cap does not cluded in the House Democratic substitute. unconscionability, including adhesion, in ef- apply where the defendant acted with spe- It includes a suggestion made by the White fect on January 1, 1999. cific intent to injure. House that the protection not apply to so- This is a variation of a provision originally This reflects a significant improvement called fraudulent ‘‘bad actors.’’ Again, this is included in the House Democratic substitute over the House passed bill which would have an effort to encourage remediation by all (offered by Reps. Lofgren, Boucher, and Con- capped punitive damages against all defend- parties, which is a unique issue to Y2K liabil- yers). Preserving state laws concerning ants, regardless of their size; and the House ity. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5199

Section 10. Application of Existing Impos- The idea behind this provision is that Y2K B. LIMITS THE LIABILITY OF CORPORATE OFFI- sibility or Commercial Impracticability Doc- actions are inherently interstate and the CERS AND DIRECTORS (SECTION 305 OF HOUSE trines.—Freeze state law on these doctrines problem is uniquely nationwide and federal PASSED BILL) as of January 1, 1999. in its source and impact. This provision in- The original House passed bill also capped This provision represents an effort to in- corporates some White House suggestions the personal liability of corporate directors sure that states do not alter their laws to that safeguards be built into the rule to and officers at the greater of $100,000 or their take advantage of the Y2K problem to make allow some class actions which have a state past 12-months’ compensation. This provi- it easier to bring suits against ‘‘deep pocket’’ focus be permitted to be brought in state sion was unnecessary because under current Y2K defendants. This provision is substan- court. law the ‘‘business judgment rule’’ already in- tially identical to a provision included in the Section 16. Applicability of State Law.— sulates officers and directors from liability House Democratic substitute. Specifies that the bill does not supercede any for their business decisions as long as they Section 11. Damages Limitations by Con- state law with stricter damage and liability acted reasonably in governing the affairs of tract.—Provides that, in Y2K contract ac- limitations. tions, damages are limited to those provided the corporation. The provision also would in the contract, or, if the contract is silent, This provision was not included in either have protected irresponsible and reckless to those provided under state law. the House passed bill or the House Demo- Y2K behavior. This provision was not included in the cratic substitute. C. LOSER PAYS AND FEE DISCLOSURE (TITLE V House passed bill or the House Democratic Section 17. Admissible Evidence Ultimate OF HOUSE PASSED BILL) substitute. Issue in State Courts.—Applies Rule 704 of The House passed bill also included a Section 12. Damages in Tort Claims.—Codi- the Federal Rules of Civil Procedure (con- ‘‘loser pays’’ (or ‘‘English Rule’’) provision fies the so-called ‘‘economic damages’’ rule, cerning the use of expert testimony) to State requiring a litigant to be liable to pay the which prohibits tort plaintiffs from seeking courts. other side’s attorneys fees if they rejected a economic or consequential damages (e.g., This provision was not included in either pre-trial settlement offer and ultimately se- lost profits stemming from a Y2K failure) the House passed bill or the House Demo- cured a less favorable verdict. Because small unless such damages are permitted by con- cratic substitute. businesses and individuals have far less fi- tract. This rule does not apply in cases of in- nancial resources than large defendant cor- tentional torts arising independent of a con- Section 18. Suspension of Penalties for Cer- tain Y2K Failures by Small Business Con- porations and cannot afford the risk of pay- tract. ing a large corporation’s legal fees based on This reflects a variation of a suggestion by cerns.—This section provides for civil pen- the outcome of a trial, the provision would the White House to protect persons who have alty waivers for first-time violations by a have operated as a tremendous disincentive claims for separately cognizable torts, such small business (50 employees or fewer) of fed- to small businesses and poor and middle as some forms of fraud. This is similar to a erally enforceable rules or requirements that class victims of Y2K failures. The provision provision included in the House Democratic are caused by a Y2K failure. In order to ob- was so onerous that it would even apply to a substitute. tain a waiver, small business must meet cer- Section 13. State of Mind; Bystander Li- tain strengthened standards, including, harmed party that prevails in a Y2K action ability; Control.—Subsection (a) freezes among other things, that it made a reason- so long as they obtained less than a pre-trial state law concerning the standard of evi- able good faith effort to anticipate, prevent settlement—in this respect it could actually dence needed to establish defendant’s state and effectively remediate a potential Y2K operate as a ‘‘winner pays’’ provision. The of mind in a tort action (e.g., negligence) as failure; that the first-time violation oc- bill also included a number of procedural re- of January 1, 1999. Subsection (b) provides curred as a result of a Y2K failure signifi- strictions that would have governed the at- that Y2K service providers are not liable to cantly affecting its ability to comply and torney-client relationship—such as the re- third parties who are not in privity with was unavoidable in the face of a Y2K failure; quirement that attorneys disclose to their them unless the defendant actually knew, or that the small business initiated reasonable clients the fee arrangement up-front, and the recklessly disregarded a known and substan- and prompt measures to correct the viola- requirement that attorneys provide a month- tial risk, that a Y2K failure would occur. tion, notified the agency within 5 business ly statement to clients regarding the hours This would make it more difficult for a cus- days, and corrected the violation within a and fees spent on the case. The original tomer of business that was certified to be month of notification. House Republican bill also would have regu- lated attorneys fees for plaintiffs (but not Y2K compliant to sue the consultant who so As was the case with section 4(g), the Ad- defendants) in Y2K actions. certified. Subsection (c) provides that the ministration insisted on developing common fact that a Y2K failure occurred in an envi- sense safeguards so that the provision would Mr. Speaker, I reserve the balance of ronment within the control of the defendant not create new health, and environmental my time. shall not be permitted to constitute a sole problems. For example, the Administration Mr. GOODLATTE. Mr. Speaker, I am basis for the recovery of damages. obtained changes that clarified that it is the Other than bystander liability, these provi- pleased to yield 1 minute to the gen- government that determines whether a small sions were not included in the House passed tleman from California (Mr. ROYCE). business meets the standards for a civil pen- bill or the House Democratic substitute. Mr. ROYCE. Mr. Speaker, as the alty waiver; that an agency may impose a Section 14. Appointment of Special Mas- civil penalty if the noncompliance resulted clocks move forward on December 31, ters or Magistrate Judges for Y2K Actions.— in actual harm (in addition to creating an there is a strong likelihood that some Includes a technical change which would imminent threat to public health, safety, or computers will fail to recognize the merely authorize federal courts to appoint the environment); and that the civil penalty year 2000, instead rolling back to Janu- special masters to consider Y2K matters. This provision was not included in either waiver does not apply to any violations oc- ary 1, 1900. A Y2K-initiated computer the House passed bill or the House Demo- curring after December 31, 2000. crash could have disastrous impacts on cratic substitute. The following anti-consumer provisions many aspects of daily life, ranging Section 15. Y2K Actions as Class Actions.— were dropped entirely by the Conference from transportation and aviation, data Subsection (a) only permits class actions in- from the Republican bill approved by the processing, health care and financial volving material product defects. Subsection House. services. Indeed, American society (b) requires class members to receive direct A. REASONABLE EFFORTS DEFENSE FOR DEFEND- could be confronted by an extended pe- notices of class actions (which shall include ANTS (SECTION 303 OF HOUSE PASSED BILL) information on the attorney’s fee arrange- riod of technological and economic du- ments). Under the so-called ‘‘reasonable efforts’’ ress. Subsection (a) is substantially identical to defense in the original House passed bill, the Instead of taking a proactive ap- a provision included in the House Demo- fact that a defendant took reasonable meas- proach to solving the Y2K problem, cratic Substitute. ures to prevent the Y2K-related failure was a many businesses, large and small, find Subsection (c) places all Y2K class actions complete defense to liability. Thus, despite themselves expending time and energy in federal, rather than state court. The only the defendant’s level of fault, if it made rea- exceptions are where (1) a substantial major- sonable efforts to fix the problem—even if on liability issues. This bipartisan leg- ity of members of the plaintiff class are citi- those efforts did not result in a cure—it islation, of which I am an original co- zens of a single state, the primary defend- would have had no responsibility for dam- sponsor, addresses this concern and ants are citizens of that state, and the ages suffered by the plaintiff. Even if a de- creates incentives for businesses to ad- claims asserted will be governed primarily fendant takes only minimal steps to remedy dress the impending Y2K problem by by the laws of that state; (2) the primary de- a Y2K problem, it would have served as a creating a legal framework by which fendants are states or state officials; (3) the complete defense against a tort action, Y2K-related results will be resolved. plaintiff class does not seek an award of pu- thereby undercutting incentives to prepare We must not permit a climate to fos- nitive damages and the amount in con- for and prevent Y2K errors. The defense was troversy is less than $10 million; or (4) there so broad it would even cover intentional ter in which businesses, paralyzed by are less than 100 members of the class. The wrongdoing or fraud, so long as the mis- fear of unrestrained lawsuits, fail to burden is on the plaintiff to establish that conduct was eventually papered over by take action that would adequately ad- any of these four exceptions apply. some sort of post-hoc reasonable effort. dress this problem. H5200 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Mr. GOODLATTE. Mr. Speaker, I am see this bill enacted without the poten- preciation to the gentlewoman from pleased to yield 5 minutes to the gen- tial of a White House veto. Finally, the California (Ms. LOFGREN), the gen- tleman from Wisconsin (Mr. SENSEN- administration gave specifics on what tleman from Michigan (Mr. CONYERS) BRENNER), a member of the conference they found to be objectionable and sug- and the gentleman from Virginia (Mr. committee and a senior member of the gestions on how to change these provi- BOUCHER) who did craft legislation in Committee on the Judiciary. sions in order for the President to sup- which the White House was actively Mr. SENSENBRENNER. Mr. Speak- port it. engaged and did support and had all er, I rise today in support of the con- Fortunately, the administration’s the elements of being able to solve the ference report to H.R. 775, the Y2K Act. differences with Congress were re- problems that so many of us were con- This bill, while markedly different solved, which allows the conference re- cerned about. from when it was first introduced, has port to be brought to the floor today I am disappointed that we did not retained several key core principles: without the uncertainty of a veto. The prevail on that legislation, but I thank The establishment of uniform legal conference report has the support of them for their leadership. I thank the standards for all businesses and users the broad-based Year 2000 Coalition and gentleman from Virginia (Mr. DAVIS) of computer-related technologies; the the Information Technology Industry and the gentleman from Virginia (Mr. encouragement of alternative dispute Council. GOODLATTE) for where we are today, resolution to avoid costly and time- The conference report includes the and I hope that this House will pass consuming lawsuits; the lessening of following key provisions which warrant this bill because I oppose the original the burden on interstate commerce by its adoption by the House of Represent- version of the bill, and I oppose the bill discouraging frivolous lawsuits while atives: on its final passage, but it does not preserving the ability of individuals It allows class action suits for Y2K mean that we cannot try and improve and businesses who have suffered in- claims to be brought into Federal it. I was delighted to be able to get a jury to obtain relief. courts if they involve $10 million in technical amendment passed on the The year 2000 computer problem, claims or at least 100 plaintiffs. It cre- floor of the House, but it would have commonly referred to as the Y2K bug, ates a proportionate liability formula been good to have had other improve- presents grave challenges to both the for assessing blame so companies would ments, and I felt the bill could have private and public sectors throughout be penalized for their share of any Y2K been made acceptable. the United States. H.R. 775 has had a damage. This formula would make We know there will be a Y2K situa- difficult history in Congress. Substan- whole individual consumers even if one tion, if my colleagues will, but I do not tial changes were made during every of the defendants went bankrupt. It know if we can rely upon all the testi- step of the process, in committees, on caps punitive damages at $250,000, or mony that was presented to establish the House floor, in the other body, and three times the amount of compen- it as a precedent for changing all of the finally in conference committee in an satory damages, whichever is less, for tort laws of this Nation, nor can we effort to deal with this pressing issue individuals with a net worth of up to isolate Y2K and suggest that it has no in a way that is fair and equitable to $500,000 and for companies with fewer limitations on the legislation that we all parties involved, both potential than 50 employees. And it applies cur- are making. plaintiffs and defendants in Y2K-re- rent State standards for establishing In particular, I am very delighted lated disputes. punitive damages instead of creating a that the legislation we are bringing The reason we are here today is be- new preemptive Federal standard. forward now has a sunset provision ac- cause of the persistence of the House In addition, the conference report re- knowledging the fact that this is a lim- and the other body to enact legislation quires plaintiffs to mitigate damages, ited issue and should be isolated to a far enough in advance of the year 2000 defines the term ‘‘economic loss,’’ but certain period of time. It protects the to stem the potential litigation explo- does not place caps on directors and of- consumers by having in homeowner sion over the Y2K bug, one that has ficers liability. protection, a provision that protects been estimated as costing our economy In summary, while H.R. 775 has been homeowners from being evicted be- a potential $1 trillion. Throughout this whittled down by the administration’s cause of a Y2K failure that is impera- whole process, the administration has efforts to accommodate trial lawyers, tive. remained cool to the idea of passing enough substantial provisions remain It also responds to preventive law- any legislation dealing with Y2K liabil- to warrant support by the House of suits. A provision was added to allow ity. In addition, the administration Representatives. suits before Y2K failures. We heard the was noticeably absent at every junc- testimony of a small grocer in Michi- b 1445 tion of this debate. gan who said, ‘‘If I don’t have an oppor- The White House was invited to tes- Ms. LOFGREN. Mr. Speaker, I yield 4 tunity for relief before I collapse, then tify before the House Committee on the minutes to the gentlewoman from you’ve done nothing for me.’’ Judiciary on this legislation but de- Texas (Ms. JACKSON-LEE). I also want to make it clear that I clined. Instead of active participation, Ms. JACKSON-LEE of Texas. Mr. tried to remain open on the bill in rec- the administration chose to issue veto Speaker, I thank the distinguished gen- ognition of the unique problem that it threats to even the amended bipartisan tlewoman from California. attempts to address. I understand the Senate-passed version of the bill with Let me just as a manner and focus on plight of many of our software devel- only general descriptions on which pro- the proceedings that we have had over opers and Y2K solution providers who visions they found to be objectionable. these past couple of months. do not want to take on additional cli- In all, the administration sent five As a Member of the House Committee ents because they fear a costly lawsuit. veto threats, with the fifth being on Science and the House Committee That is understandable. But as a mem- issued on June 24 by the President’s on the Judiciary, I have had the privi- ber of the Committee on Science who chief of staff just prior to the conferees lege of sitting through a number of has sat through numerous hearings on meeting on that day. hearings, I particularly want to thank this subject, I do not feel that we need At the first meeting of the House- the gentlewoman from Maryland (Mrs. to pass open-ended legislation that Senate conference, the House conferees MORELLA) for carrying on with such in- could be used too, used by corporate accepted the Senate amendments to formative hearings on the Y2K mat- America to protect themselves from li- H.R. 775 and added two additional ters, bringing forward so many dif- ability that they have rightfully in- amendments. It was at this conference ferent witnesses from the business curred. I think it is important to strike after the train had already left the sta- community, the legal community and, a balance. tion that the White House finally got of course, a consumer community. One of the amendments that I intro- serious and requested additional time Through those hearings I think I can duced and I truly hoped we would have to work out a compromise. The chair- articulate today that it has taken a chance to debate on the floor was a man of the conference postponed fur- enormous amount of work to bring us sunset amendment, and I am delighted, ther proceedings until the drop-dead to where we are at this juncture, and I as I indicated earlier, that a 3-year date of June 28 in a good-faith effort to would like to lend my thoughts and ap- sunset provision was placed in the bill. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5201 Although I feel that the sunset provi- understand the plight of many of our software the bill, and I am glad the conference sion in the bill which is actually con- developers, and Y2K solution providers who committee has reached an accord with tained in the definition section of H.R. do not want to take on additional clients be- this issue. 775 is not as cleanly implemented as I cause they fear a costly lawsuit. That is under- As my colleagues know, it was over 3 would have liked, the provision does standable. But as a Member of the Committee years ago that we started with my allay many of the concerns that I had on Science who has sat through numerous Committee on Science’s Subcommittee about the original bill. hearings on this subject, I do not feel that we on Technology and the Committee on But let me not be misleading. There needed to pass open-ended legislation that Government Reform and Oversight’s are some concerns, the caps on puni- could be used by corporate America to protect Subcommittee on Government Man- tive damages, and it is interesting that themselves from liability that they have right- agement, Information and Technology this would be noted in the context of fully incurred. chaired by the gentleman from Cali- trial lawyers. I think it is important to One of the amendments that I introduced, fornia (Mr. HORN) to have a complete note that trial lawyers do not decide and that I truly hoped we would have a review of the Y2K problem, and in the punitive damages, it is courts that do chance to debate on the floor, was a sunset course of these hearings it became un- so. I hope we will be able to find suffi- amendment. I am happy to hear that a three- deniably clear that the prevalence of cient relief in this legislation that will year sunset provision was placed in this bill in potential Y2K litigation could ad- allow plaintiffs to be able to secure the conference. Although I feel that the sunset versely impact our Nation’s currently relief that they need and to make provision in the bill, which is actually contained robust economy and tie up our legal themselves whole. in the definitions section of H.R. 775, is not as system long after the problem has been The bill also contains modifications cleanly implemented as I would like, the provi- fixed in the computers, and that is why to the longstanding, well-accepted sion does allay many of the concerns I have I am very pleased that a compromise court doctrine of joint and several li- about the original bill. was able to be crafted that satisfies the ability. The doctrine was established in But let me not be misleadingÐthe bill still concerns of both congressional cham- order to keep plaintiffs who have been contains dangerous measures. It still retains bers and the White House to address wronged by multiple parties from hav- caps on punitive damages, but the caps only the millennium bug and its legal after ing to enter into lawsuit after lawsuit protect small business whose net worth is less effects. against different defendants in order to than $500,000. Large Y2K solution providers The conference report reflects the make them whole. do not need this sort of protectionÐthey have changes of the High Technology Asso- We should consider these issues as we the resources to responsibly remediate Y2K ciation’s industry the Chamber of Com- monitor this legislation, but thank- problems that manifest themselves. This bill merce believe are necessary to close fully, however, the version that has allows plaintiffs to hold them fully responsible, the floodgates of frivolous litigation come back to us from the conference should they choose to behave in a manner be- and protect companies that have en- committee contains a more narrow set fitting of punitive damages. gaged in good faith remedial efforts, of joint and several liability modifica- The bill also contains modifications to the and it does so without taking away an tions. Included in the new version is a long-standing and well-accepted court doctrine aggrieved party’s right to bring a le- clause which protects consumers who of joint and several liability. The doctrine was gitimate lawsuit for negligent Y2K are innocently victimized by Y2K solu- established in order to keep plaintiffs, who failures. This is a legislative solution tion providers who act in bad faith. have been wronged by multiple parties, from that will ensure that the year 2000 It is my hope that the definitional having to enter into lawsuit after lawsuit, problem does not extend well into the structure of what will constitute a Y2K against different defendants, in order to be new millennium. action for the purpose of these law- made whole. In the original version of the bill, I urge all of my colleagues to support suits, along with the sunset provision, joint and several liability was basically elimi- the conference report. This will greatly will help balance between the con- nated. Thankfully, however, the version that assist us to be Y2K okay. sumer and, of course, our providers. has come back to us from the Conference Ms. LOFGREN. Mr. Speaker, I yield I urge my colleagues to vote for this Committee contains a narrowed set of joint such time as she may consume to the conference report. I want to thank all and several liability modifications. Included in gentlewoman from California (Ms. those who brought us to the table of the new version is a clause which protects ESHOO), my colleague from Silicon Val- resolution, and I want to acknowledge consumers who are innocently victimized by ley. the White House was intimately and Y2K solution providers who act in bad faith. actively involved. They just wanted to It is my hope, that the definitional structure Ms. ESHOO. Mr. Speaker, I thank my come down, as we all did, on the side of of what will constitute a Y2K action for the colleague and wonderful leader on this a very good bill. I am watching and purposes of these lawsuits, along with the issue and so many others from the monitoring as well, as I indicate as we sunset provision, will contain the anti-con- Committee on the Judiciary, the gen- all are, for the Y2K event, but I hope sumer provisions contained in this bill. I also tlewoman from California (Ms. that we will watch it together being re- hope that the changes that have been made LOFGREN). I rise in support of the con- flective of the fact that we voted today to the punitive damages and proportional li- ference report, and I first of all want to for a solution that would help us move ability sections in the bill keep this from be- salute everyone that has worked on into the 21st century with the min- coming the bloated tort-reform bill we all bringing this resolution forward. I imum amount of concern. feared when it was originally introduced. think it is a much improved version of Mr. Speaker, I rise to speak in support of With that, I urge my colleagues to vote for the House bill. I did not support the this Conference Report, but first I would like to this Conference Report, and to continue to House bill, and I was reluctant in doing thank the Conferees who worked very hard to work together to protect our constituents from that, and I think many people were find a compromise on certain key issues discomfort stemming from the Y2K bug. surprised that I rose in opposition to raised in this bill. Mr. GOODLATTE. Mr. Speaker, I it, especially because I represent so At the outset, let me say that I opposed the yield 2 minutes to the gentlewoman much of the high technology industry. version of this bill that was introduced in the from Maryland (Mrs. MORELLA). I thought it was an effort that could be House. I opposed the version that came out of Mrs. MORELLA. Mr. Speaker, I improved upon, and we have that here the Judiciary Committee. And I opposed the thank the gentleman for yielding this today, because after all, with the year bill on final passage. But that does not mean time to me. I rise in strong support of 2000 Y2K problem, which has now be- that I did not try to improve the bill at every the conference support on the Y2K Act. come part of our day-to-day language stage. I was able to pass a technical amend- I also want to take a moment to con- across America, we wanted legislation ment on the floor of the House, but there were gratulate the gentleman from Virginia that would help American business other improvements that I would have pre- (Mr. GOODLATTE), the gentleman from spend its time and its resources repair- ferred to have madeÐthat I felt would make Virginia (Mr. DAVIS), the gentleman ing the problem and not moving over the bill much more acceptable. from Wisconsin (Mr. SENSENBRENNER), into their legal departments to contin- I also want to make clear that I tried to re- the conferees and those who worked so ually litigate it. main open this billÐin recognition of the hard on this piece of legislation. I am This legislation provides limits on unique problem that it attempts to address. I honored to be one of the cosponsors of the lawsuits while providing redress for H5202 CONGRESSIONAL RECORD — HOUSE July 1, 1999 real damages, which is what the Amer- no punitive damage awards available failed cloture votes before garnering ican people want and need. It encour- against governmental entities. Their the votes of 12 courageous Democratic ages remediation and alternative dis- original provision offered no protec- senators and passed 62–37. pute resolution over litigation, which I tions at all in this area, at all. So we During that time, the Senate debated think is really fairly enlightened in an have that as well. We were able to and rejected an offer by Senator KERRY area that we need to build upon and do work with the administration. from Massachusetts that had the sup- more and more with. It provides pro- We have Federal jurisdiction over port of the President, but I liken it to tections to companies that have acted class actions now Federalizing class ac- the House substitute offered up on the in good faith while ensuring that bad tions with over 100 plaintiffs who are other side. It failed to win a support of actors will be liable for the damage claiming more than $10 million with even the majority of the Senate by a they have caused. special notice requirements to class fairly substantial margin. I would also I want to take just a brief moment to members. There was nothing offered on note that the Kerry proposal, like the salute my colleague in the other body, the other side when this was offered as substitute offered here, was soundly re- Senator DODD, who has been a real their substitute. jected by the year 2000 Coalition who leader on this issue and has worked on And we also offer in this legislation supported the original legislation in- a bipartisan basis in the other body regulatory relief for small businesses, cluding the vast remnants of the high coupled with the hard work done, of protection for individuals who cannot technology industry. make their mortgage payments be- course, with those that I have men- b 1400 tioned here in the House and finally in cause of a Y2K problem. Nothing was the White House. I am very pleased offered in the original tender from the Despite modifications made to the that the President has signaled that he other side on this issue, so I am grate- Y2K Act by the bipartisan cosponsors will sign this legislation into law. It ful for the support that we have re- in the other body responding to nearly would not be effective if it were passed ceived from the 236 Members of this all of the President’s objections, the in the year 2001. body, from both sides of the aisle, who White House still insisted the Presi- So now is the moment, and I am were willing to start out and support dent would veto the Senate measure. proud to support the conference report. this legislation and not support the fig The President’s statement of adminis- Mr. GOODLATTE. Mr. Speaker, I leaf that was offered up on the other tration policy is that he would accept yield 6 minutes to the gentleman from side in the original legislation. the modified version of proportionate Virginia (Mr. DAVIS) the chief sponsor I also want to thank the U.S. Cham- liability in the Senate bill. He opposed of the legislation. ber of Commerce, Tom Donohue and liability caps on directors and officers. Mr. DAVIS of Virginia. I thank my Lonnie Taylor, in particular, who Those were eliminated. friend for yielding the time. worked very hard on this, National As- The punitive damage caps were se- Mr. Speaker, obviously if we had a sociation of Manufacturers and Jerry verely modified to only apply to small different President and Vice President, Jasinowski and their group, the Infor- businesses with fewer than 50 employ- we would have a stronger bill here mation Technology Industry Counsel ees and individuals with a net worth of today, but I think it shows the willing- and all of my companies out in north- less than half a million dollars; and ness of our side of the aisle to try to ern Virginia, dozens of them, who sup- when the defendant is found to have in- get some kind of bill and some kind of ported this legislation and felt that tentionally injured a plaintiff, by the protections for American industry, par- this is an appropriate, common sense jury, the sky is the limit. ticularly the high technology indus- route even in its weakened state as we In recognizing the need to have a bill tries that are so at risk with the Y2K move forward. enacted into law as soon as possible, bug that we are here today with the And I want to thank the administra- the House conferees accepted the Sen- bill that the President can sign, and tion for coming and meeting us half- ate amendments to the House bill and now that he has indicated he will sign way on this and moving on a number of adopted the Y2K Act with two tech- it, he has given permission to Demo- issues where they appeared intran- nical amendments. But due to the crats who opposed this to vote for it. sigent just 2 or 3 months ago. It takes White House’s failure up to that point I think, as I look at this, going back two to tango, and at the end of the day to come forward with any substantive to what was originally offered on the I am glad that we are all singing from suggestions for a compromise, we in House side, their original bill, this is a the same sheet of music. the House urged them to come to our much stronger bill in final than was of- As the lead sponsor of H.R. 775, the conferees in good faith and provide us fered on the other side of the aisle in year 2000 Readiness and Responsibility with specific language that we would their substitute originally. I just want Act, I am pleased to voice my strong consider in order to get a bill passed to highlight some of those. support for this conference report. I and working to encourage businesses to The conference report, for example, want to congratulate my colleagues spend their dollars on fixing the Y2K grants benefits in consumer and busi- who serve on the Committee on the Ju- problem, not in frivolous litigation. ness. They excluded consumer excep- diciary and their staffs for the long Understanding that, the House and tions, cases from the protections of hours and late nights that they in- Senate conferees were moving quickly this bill. The original bill on the Demo- vested over the last few days and bring- to produce the conference report in cratic side, their substitute that they ing the White House around to making this legislation. We wanted to get it tendered, liability of defendants is real and significant compromises that passed and through before the July 4 joint and several subject to the court’s will allow this critical legislation to recess; and I want to congratulate the discretion in that it should be propor- become law in the very near future. White House on recognizing the neces- tional for a defendant of minimal re- And I want to thank Amy Heerink, sity for this legislation, for a vast sponsibility. Trey Hardin from my staff who worked turnaround from their earlier testi- This mandates proportional liability very hard on this as well. mony before one of our committees unless there are insolvent defendants, More than 6 weeks ago this body where they said no such problem ex- in which case the injured party is made passed a strong and balanced bipar- ists. whole. This is a far more complete pro- tisan legislation that will encourage I urge all of my colleagues to vote tection to companies than was origi- businesses across the Nation to pursue yes on the conference report for H.R. nally offered on the other side. Had we Y2K repair and remediation efforts 775, the Y2K Act. gone in with their entry, we would not without fear of frivolous litigation that Finally, I want to thank my col- be here where we are today with the would otherwise threaten the competi- league, the gentleman from Virginia strengths of this bill. The administra- tiveness of the fastest growing seg- (Mr. GOODLATTE), who steered this tion was willing to come further than ments of the U.S. economy. The Presi- through the Committee on the Judici- their colleagues were on the other side dent said he would veto the House bill. ary and the House. Without the gen- of the aisle. Following passage on May 12, the tleman from Virginia (Mr. GOODLATTE), Or this bill has a limitation on puni- weaker bipartisan compromise crafted this would not be here; and I appreciate tive damages for small businesses and in the Senate faced a veto after two his good work. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5203 Ms. LOFGREN. Mr. Speaker, I yield make the Year 2000 computer problem out having disruptive implications for how fi- 21⁄2 minutes to the gentleman from Vir- the last headache of the 20th century nancial services are delivered or posing a ginia (Mr. MORAN). rather than the first crisis of the 21st. litigative nightmare. I urge adoption of the con- Mr. MORAN of Virginia. Mr. Speak- This legislation accomplishes that ference report. er, as one of the lead Democratic spon- objective. It is good legislation. We Before concluding, I might add that yester- sors of the Year 2000 Readiness and Re- should get a unanimous vote for it. day, June 30, 1999, was a bellwether day in sponsibility Act, I rise today in strong Mr. GOODLATTE. Mr. Speaker, I the banking industry's Y2K readiness program. support of this legislation. Anybody yield 1 minute to the gentleman from Bank regulators had told financial institutions that has followed this legislation Iowa (Mr. LEACH), the chairman of the across the country that they were expected to knows that the debate surrounding it House Committee on Banking and Fi- finish fixing their mission critical systems and on both sides of the aisle has at times nancial Services. testing them for Y2K bugs by that date. The been driven more by political maneu- (Mr. LEACH asked and was given per- Committee expects to have data by Monday, vering than substantive policy con- mission to revise and extend his re- July 26, on the numbers of institutions which cerns. That is why we are so pleased marks.) met the deadline. I am hopeful that the regu- that this truly bipartisan compromise Mr. LEACH. Mr. Speaker, I thank my latory agencies and the banking and financial conference report has been worked out distinguished friend, the gentleman services industry will prove to be sufficiently with both Chambers and the White from Virginia (Mr. GOODLATTE), for prepared that no homeowner will find it nec- House. yielding me this time. essary to avail themselves of the relief in this It was done because all involved de- Mr. Speaker, let me just stress that bill. cided it was more important to our Na- no one knows at this time either in Ms. LOFGREN. Mr. Speaker, I yield tion and our economy to pass Y2K liti- America or worldwide if this is not the myself such time as I may consume. gation reform than to play politics as most exaggerated or the most under- Mr. Speaker, I am happy that we are usual. stated issue in the history of the Amer- here today and about to approve this Currently, American businesses, gov- ican or world economy. conference report with what I’m cer- ernments and other organizations are On the other hand, what this bill does tain will be a very wide margin of votes tirelessly working to correct potential is move in the direction of trying to in support. Just a week ago, I was not Y2K failures. It involves reviewing, deal with some potential problems at all confident that we could achieve testing and correcting billions of lines which may arise, and in this regard, I what we are about to achieve here of computer code. American businesses would like to express particular thanks today. People had dug in and com- will spend an estimated $50 billion to to the extraordinary leadership of the promise seemed unlikely. I was actually a member of the con- reprogram their computers, but despite gentleman from Virginia (Mr. DAVIS) ference committee, as the Speaker well these efforts many of the Y2K com- and the gentleman from Virginia (Mr. knows. It was the first conference com- puter failures will occur because of the GOODLATTE) and the constructive in- volvement of my good friend, the gen- mittee I had ever been a member of, interdependency of the United States and I could easily observe at our first tleman from Virginia (Mr. MORAN). and world economies. and only meeting that there was a In contrast to other problems that Mr. Speaker, I would like to submit great deal of anger in the room. People affect some businesses or even entire additional comments on one very sub- were fed up with the process that industries engaged in damaging activ- tle aspect of this particular bill. These comments relate to Section 4(h) of brought them there, to that meeting. ity, the Y2K problem will affect all as- Without going into who did what to the Senate amendment. pects of our economy, especially the whom, and how it could have been im- most productive high-tech industries. A June 23, 1999, letter from four federal fi- nancial regulatory agenciesÐthe Federal Re- proved, we got past that anger. As the Progressive Policy Institute Many have been mentioned for their serve Board, the Federal Deposit Insurance said, this is a unique, one-time event, contributions to this process. I want to Corporation (FDIC), the Office of the Comp- best understood as an incomparable so- give special thanks to my colleague cietal problem rooted in the early troller of the Currency (OCC), and the Office and my leader on the Committee on stages of our Nation’s transformation of Thrift Supervision (OTS)Ðwarned that in the Judiciary, the gentleman from their view, Section 4(h) was ``drafted so broad- to the digital economy. That is why it Michigan (Mr. CONYERS), the ranking is so important that we do the right ly that it could lead to significant unintended member, whom I think, showed great thing on this legislation. consequences having the potential to ad- serenity and leadership as he tried to Without this legislation, it has been versely affect the safety and soundness of the sort through the many complex issues estimated by legal experts that the banking system and the national economy.'' In that comprise Y2K. litigation surrounding the Year 2000 fact, the letter went so far as to assert that, I also want to mention someone who could be in excess of $1 trillion. If this ``. . . it is difficult to overstate the disruptions has not been praised by anyone else bill does not prevent economic damage that a broad reading of this amendment could today, and that is Senator HATCH. His recoveries, injured plaintiffs will still cause.'' cool voice of reason and comity sug- be able to recover all of their damages Given that assessment, we worked closely gested that the White House should be and defendant companies will still be with House and Senate Judiciary committees invited to sort through these issues held liable for the entire amount of and with the federal regulatory agencies to de- with the conference staff last Friday economic damages that they cause. velop compromise language which the con- and through the weekend and all Additionally, all personal injury ferees have adopted. The new language fo- through Monday night. Senator HATCH claims are exempt from this legisla- cuses narrowly on consumer mortgages and was therefore enormously helpful in tion. prohibits any party from taking action to fore- getting people together. This is the time for Congress to act close on residential property if an actual Y2K I also want to thank the staff. As I to protect American jobs and industry, failure early next year interferes with timely just said, the White House lawyers and and that is what this bill does. and accurate mortgage payments. A con- staff were up all Monday night working The goal of Congress should be to en- sumer who becomes aware that a Y2K failure on this settlement, and I think the courage economic growth and innova- has occurred, and that his or her mortgage Committee on the Judiciary staff put tion, not to foster predatory legal tac- payment was lost or delayed as result of that in similar hours, and this is true on tics that will only compound the dam- failure, will have seven business days to notify both sides of the aisle. I appreciate the age of this one-time national crisis. the mortgage service company in writing. The effort that they put into this. Congress owes it to the American peo- parties to the transaction will then have four I also want to mention my own spe- ple to do everything we can to lessen weeks to work out a solution. This amendment cial counsel, John Flannery, who put the economic impact of the worldwide in no way excuses anyone from fulfilling their in extraordinary efforts trying to keep Y2K problem and not let it unneces- legal and financial obligations but will allow for people working together on this. sarily become a litigation bonanza. extra time to resolve what may be a once-in- This conference report, as I said ear- In summary, in the State of the a-lifetime problem. lier this morning when we were dis- Union address, President Clinton urged The bottom line is that this language accom- cussing the rule, could have been ap- Congress to find solutions that would modates potential homeowner concerns with- proached in a variety of ways. I am H5204 CONGRESSIONAL RECORD — HOUSE July 1, 1999 happy to support this one. I think this the gentleman from Michigan (Mr. ica’s consumers, those folks who not bill is narrowly crafted to deal with CONYERS), and many, many others, in- only rely on businesses to provide them this Y2K event, only months away. As cluding our friends across the aisle and with the goods and services they need the chairman of the Committee on on this side of the aisle. I think it is but who have consumer products in Banking and Financial Services just something that we can be proud of and their homes. Whether they be micro- said, we do not know what is going to I sincerely hope and expect it shall in wave ovens or personal computers or happen when the Year 2000 arrives, or the near future serve as a model for ad- automobiles, whatever the case might strikes, as the case maybe. There are ditional legislative collaboration. be, we want to make sure that they many people in Silicon Valley, many Mr. Speaker, I yield back the balance have the problems that are associated CEOs, who do not believe anything of my time. with Y2K solved; and if they are not much is going to happen when the Year Mr. GOODLATTE. Mr. Speaker, I solved, that they have still their good 2000 strikes. Then there are others who yield 2 additional minutes to the gen- legal remedies. believe a lot may happen. None of us tleman from Virginia (Mr. DAVIS). Under this legislation, they do. If will know—until the event occurs. Mr. DAVIS of Virginia. Mr. Speaker, there is a personal injury involved, for It is because of the latter possibility, let me just say when this came up, we example, this legislation does not af- what could go really wrong that makes sent the conferees last week, the gen- fect their rights to bring a cause of ac- it so very important we take this step tlewoman from California (Ms. tion for injury in any way, shape or to prepare for the possible litigation LOFGREN) and others had said, please form. that may accompany this worst-case work with us. I know there was skep- b ticism, but at the end of the day I 1415 possible scenario. There is a carve-out for consumers I want to underscore, however, the think we recognized that this legisla- with regard to consumer goods that fact that the parties have come to- tion is far better than the current sta- tus quo in terms of the protection it assures them that they can recover the gether on this issue at this time does full amount of their loss if they experi- not mean there will be agreement on a gives to companies and people who have acted innocently and in good faith ence one. wide diversion of seemingly related But the main intent of this legisla- issues. Pending in the Committee on to try to fix the Y2K problem. So we took their suggestions. They tion is to not see those losses occur at the Judiciary are a variety of measures have come over and have met us half- all. That is why I am so proud of this that would change tort law, change way. I think we have the final product. legislation, and have had the oppor- civil law in America dramatically. I would like to rehash this because I tunity to move it through the Com- Some of the people who are going to think it is important for American in- mittee on the Judiciary, through the vote for this conference report will not, dustry to know where the people come House, and through the conference to a in fact, support a wholesale change of from as they try to decide these things, good, solid bill that adheres to the American civil law. and I went through it in that manner. original principles contained in the Let me explain why. When I was But we are here today because we rec- original legislation of the gentleman thinking about this conference report ognize that there is a need and because from Virginia (Mr. DAVIS). and the underlying bill, I was reminded they were ready to meet us halfway on While we have compromised, while of President Abraham Lincoln. In the that issue. So I am glad we have this we have made a number of changes Civil War, President Lincoln suspended final product. with regard to the details of the bill, habeas corpus because the threat to I am proud to stand up here as the the core of the bill in terms of putting the Union was so severe that the Presi- chief sponsor of the legislation and say caps on punitive damages, in this case dent believed he had to resort to this we have a product that I think does, in for small businesses of fewer than 50 extraordinary remedy. That does not large part, what we intended for it to employees, to make sure that we do mean that we held the habeas clause do when we started out. It does not do not have a strong discouragement of any less dear as a guarantor of our lib- everything we wanted, for the reasons I solving this problem, that is in the bill. erty, but we had a crisis that prompted outlined before, but again I want to To move to the standard of propor- this action. urge all of my colleagues to vote yes on tional liability, so somebody who may If bubonic plague were to break out, this. be 1 percent responsible for a Y2K prob- the health officers would not need to Mr. GOODLATTE. Mr. Speaker, I lem does not get stuck with 100 percent get a search warrant when, in pursuit yield myself such time as I may con- of the bill, that is in this legislation. of the plague, they had to gain entry. sume. They will only pay their respective per- That would not mean we had any less Mr. Speaker, first I would like to centage of the problem, except under affinity or affection for the fourth commend the gentleman from Virginia certain details, in which case it can be amendment, which helps keep our (Mr. DAVIS) for his leadership on this a little bit higher. But nonetheless, country free. issue from start to finish. Sometimes they are not going to be, in most cir- In this sense, the Y2K event is simi- individuals introduce legislation and it cumstances, faced with the entire tab lar. Although none of us will be around goes to a committee that they are not if they only caused a small percentage at the next millennium, after the Year a member of and it goes through the of the problem. 2000 this will hopefully not be an issue. process and they are not involved too Class action reform, something that I If it is, we can say here and now, that much. The gentleman from Virginia am vitally interested in because I have at least once a millennium, we will (Mr. DAVIS) has been involved in this introduced legislation on this in a make a special exception to deal with process, he and his staff, from start to broader sense to apply to all class ac- this kind of crisis. finish, and I want to commend him for tions, we have that reform in this leg- I appreciate the fact that the White shepherding this legislation. He has islation. House has sorted through these same done an outstanding job in that regard, It makes sense for our Federal courts policy issues and said as much. making sure that the needs of the high- to handle Y2K class actions when they I think that what we have before us tech community not only in his dis- go beyond the scope of a single State. is a fair and reasoned response that trict in Northern Virginia but all When they have plaintiffs or will provide useful benefit to the high- across the country are met, along with defendents from a multitude of States, tech community and to our economy, the needs of the broader business com- this legislation will allow us in most because the real underlying issue is, if munity who buys this equipment and instances to remove that legislation to we do experience the worst-case sce- needs to make sure that it operates ef- the Federal courts, where they can nario, the hit on our economy would be fectively and have good working sys- consolidate actions from different so enormous, that it would require the tems on January 1 of next year, not a States and they can apply a more con- remedy and relief provided for in this good lawsuit on January 1 of next year. sistent standard, and they can avoid bill. That is what this legislation accom- the kind of forum shopping that takes I am proud to say that this con- plishes. place sometimes now. ference report has the support not only In addition, this legislation is very, In addition, the legislation contains of myself but of the ranking member, very sensitive to the needs of Amer- conditions that if the plaintiffs seek July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5205 punitive damages in their class action sumers with meritorious claims by requiring Condit Hulshof Oberstar Conyers Hunter Obey suit the case can be removed to Federal lawyers to act for their clients' benefit rather Cook Hutchinson Olver court, regardless of the amount in con- than their own. It will guard against unethical Cooksey Hyde Ortiz troversy. So these reforms are vital. lawyers raking off hundreds of millions, and Costello Inslee Ose In addition, there are reforms that even billions of dollars in fees that should go Cox Isakson Owens Coyne Istook Oxley encourage folks to settle their dif- to redress real injuries. Cramer Jackson (IL) Packard ferences outside of the courtroom: A Far too long, the fear of litigation has seri- Crane Jackson-Lee Pallone 90-day cooling off period that is so im- ously impeded remediation of Y2K problems. Cubin (TX) Pascrell portant to allow a defendant who is Cummings Jefferson Pastor Small and large businesses are too often lim- Cunningham Jenkins Payne made aware of a problem that some- iting their own internal reviews, and their ex- Danner John Pease body has in their computer system, in ternal disclosure and cooperation, so that they Davis (FL) Johnson (CT) Pelosi the machinery that is operating the can avoid being accused of making inaccurate Davis (IL) Johnson, E.B. Peterson (MN) Davis (VA) Johnson, Sam Peterson (PA) manufacture of their products, what- statements about their Y2K readiness, or of Deal Jones (NC) Petri ever the case might be, they need to be ``misconduct'' or ``negligence'' when they are DeFazio Jones (OH) Phelps given notice that the problem exists actually trying to fix the problems that some- DeGette Kanjorski Pickering and then an ample amount of time to DeLauro Kaptur Pickett one else created. DeLay Kasich Pitts correct the problem. This bill does This bill will ensure that America does ev- DeMint Kelly Pombo that. erything possible to fix Y2K problems before Deutsch Kildee Pomeroy The thing that pleases me the most Diaz-Balart Kilpatrick Porter January 1, 2000. Inevitably, some Y2K failures Dickey Kind (WI) Portman is that because of the bipartisan com- will occur; and when they do, the innovative Dicks King (NY) Price (NC) promise that we have reached with I procedural reforms in this bill will encouraged Dixon Kingston Pryce (OH) think we are going to see soon an over- alternatives to unnecessary litigation. And the Doggett Kleczka Quinn whelming majority of Members of both Dooley Klink Radanovich bill's pro-consumer class-action reforms will Doolittle Knollenberg Ramstad sides of the aisle voting for this, and ensure fair treatment of every individual, even Doyle Kolbe Rangel with the support of the White House in- in enormous, nationwide Y2K cases. Dreier Kuykendall Regula dicated in several letters that have Dunn LaFalce Reyes As an original cosponsor of this important, Edwards LaHood Reynolds now been received, because of this co- common-sense reform legislation, I am Ehlers Lampson Riley operation we are getting this bill done pleased to join in this effort to help consumers Ehrlich Lantos Rivers in very short order, and that means and preserve our country's high-tech edge in Emerson Largent Rodriguez that we will have about 6 months for Engel Larson Roemer the global economy. English Latham Rogan everybody who is facing this problem Mr. GOODLATTE. Mr. Speaker, I Eshoo LaTourette Rogers to go at solving the problem without urge every Member of the House to Etheridge Lazio Rohrabacher fear of entangling themselves in a liti- Evans Leach Ros-Lehtinen vote for this conference report, and I Everett Levin Roukema gation morass, and that is going to do yield back the balance of my time. Ewing Lewis (CA) Roybal-Allard more than anything else to make sure The SPEAKER pro tempore (Mr. Farr Lewis (KY) Royce that when that clock ticks to 12:01 on LAHOOD). Without objection, the pre- Fattah Linder Rush January 1 of the year 2000, computers Fletcher LoBiondo Ryan (WI) vious question is ordered on the con- Foley Lofgren Ryun (KS) across the country will know that in- ference report. Forbes Lowey Sabo deed it is the new millenium and that There was no objection. Ford Lucas (KY) Salmon we have not gone back to the horse and Fowler Lucas (OK) Sanchez The SPEAKER pro tempore. The Frank (MA) Luther Sandlin carriage era of 1900. question is on the conference report. Franks (NJ) Maloney (CT) Sanford That, to me, will spell a continuation The question was taken; and the Frelinghuysen Maloney (NY) Sawyer of the success we have had in this Frost Manzullo Saxton Speaker pro tempore announced that Gallegly Markey Scarborough country with a booming economy as a the ayes appeared to have it. result of the high-tech industry that is Ganske Martinez Schaffer Ms. LOFGREN. Mr. Speaker, I object Gejdenson Mascara Sensenbrenner fueling our leadership around the to the vote on the ground that a Gekas Matsui Serrano Gephardt McCarthy (MO) Sessions world, our growth in our economy com- quorum is not present and make the pared to other countries around the Gibbons McCarthy (NY) Shadegg point of order that a quorum is not Gilchrest McCollum Shaw world, and the fantastic job creation present. Gillmor McCrery Shays that has taken place of good, high-pay- Gilman McDermott Sherman The SPEAKER pro tempore. Evi- Gonzalez McGovern Sherwood ing jobs. dently a quorum is not present. This industry needs to have this in- Goode McHugh Shimkus The Sergeant at Arms will notify ab- Goodlatte McInnis Shows centive to move forward, rather than sent Members. Gordon McIntosh Shuster the hindrance to be set back with a Goss McIntyre Simpson The vote was taken by electronic de- major problem in the year 2000. We are Graham McKeon Sisisky vice, and there were—yeas 404, nays 24, Granger McNulty Skeen going to accomplish that here with not voting 7, as follows: Green (WI) Meehan Skelton passage of this legislation today, send Greenwood Meek (FL) Slaughter it to the Senate, and then send it to [Roll No. 265] Gutierrez Menendez Smith (MI) the President, and get on with the YEAS—404 Gutknecht Metcalf Smith (NJ) Hall (TX) Mica Smith (TX) business of getting ready for the new Abercrombie Berkley Burr Hansen Millender- Smith (WA) millennium. Ackerman Berman Burton Hastert McDonald Snyder Mr. COX. Mr. Speaker, I am pleased today Aderholt Berry Buyer Hastings (FL) Miller (FL) Souder Allen Biggert Callahan Hastings (WA) Miller, Gary Spence to support the conference report on H.R. 775, Andrews Bilbray Calvert Hayes Miller, George Spratt the Y2K Act of 1999. This bill seeks to pro- Archer Bilirakis Camp Hayworth Minge Stabenow mote Y2K preparedness and prevent a crush- Armey Bishop Campbell Hefley Mink Stearns Bachus Blagojevich Canady ing, $1 trillion lawsuit tax on American workers Herger Moakley Stenholm Baird Bliley Cannon Hill (IN) Mollohan Strickland and familiesÐthe cost of litigation predicted to Baker Blumenauer Capps Hill (MT) Moore Stump result from the Y2K bug. Baldacci Blunt Cardin Hilleary Moran (KS) Stupak The 1st Y2K lawsuits were filed in mid- Baldwin Boehlert Carson Hilliard Moran (VA) Sununu Ballenger Boehner Castle Hinojosa Morella Sweeney 1997, two and half years before the millen- Barcia Bonilla Chabot Hobson Murtha Talent nium. Some unethical lawyers are now holding Barr Bono Chambliss Hoeffel Myrick Tancredo workshops on how to start Y2K class actions. Barrett (NE) Borski Chenoweth Hoekstra Nadler Tanner Barrett (WI) Boswell Clay They are planning for abusive class actions on Holden Napolitano Tauscher Bartlett Boucher Clayton Holt Neal Tauzin an unprecedented scale, which willÐunless Barton Boyd Clement Hooley Nethercutt Taylor (MS) Congress actsÐinjure virtually every sector of Bass Brady (PA) Clyburn Horn Ney Taylor (NC) Bateman Brady (TX) Coble Hostettler Northup Terry the economy. Becerra Brown (FL) Coburn This bill will prevent extortion suits against Houghton Norwood Thomas Bentsen Brown (OH) Collins Hoyer Nussle Thompson (CA) deep-pockets defendants. It will protect con- Bereuter Bryant Combest H5206 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Thompson (MS) Vento Wexler flict with Yugoslavia), in order to recognize separation from their home, from their Thornberry Visclosky Whitfield the achievement of goals stated therein by— loved ones, and we support them Thune Vitter Wicker (1) the United States Armed Forces who Thurman Walden Wilson through this by giving them a con- participated in Operation Allied Force and Tiahrt Walsh Wise gratulatory word. Toomey Wamp Wolf served and succeeded in the highest tradi- Towns Waters Woolsey tions of the Armed Forces of the United To the President, for his steadfast- Traficant Watkins Wu States; ness, for his perseverance toward the Turner Watt (NC) Wynn (2) the families of American service men goal of victory. Udall (CO) Watts (OK) Young (AK) and women participating in Operation Allied To the Secretary of Defense, the Udall (NM) Weldon (FL) Young (FL) Force, who have bravely borne the burden of Upton Weldon (PA) Chairman of the Joint Chiefs, the Su- Velazquez Weller separation from their loved ones, and staunchly supported them during the con- preme Allied Commander, all of them NAYS—24 flict; for their hard work and planning and Bonior Kucinich Sanders (3) President Clinton, Commander in Chief implementation of this Operation Al- Capuano Lee Schakowsky of United States Armed Forces, for his lead- lied Force. Crowley Lewis (GA) Scott ership during Operation Allied Force; To the Secretary of State, the Na- Delahunt McKinney Stark (4) Secretary of Defense William Cohen, Duncan Meeks (NY) Tierney Chairman of the Joint Chiefs of Staff Gen- tional Security Adviser, and the other Filner Paul Waxman administration officials who engaged Hinchey Rahall Weiner eral Henry Shelton and Supreme Allied Com- Kennedy Rothman Weygand mander-Europe General Wesley Clark, for in diplomatic efforts which, in the end, their planning and implementation of Oper- resolved the Kosovo conflict. NOT VOTING—7 ation Allied Force; And to all the forces of our NATO al- Brown (CA) Goodling Lipinski (5) Secretary of State Madeleine Albright, Dingell Green (TX) National Security Advisor Sandy Berger, and lies. This was not a mere United States Fossella Hall (OH) other Administration officials who engaged effort. It was an effort on behalf of all the NATO nations led by the Secretary b 1442 in diplomatic efforts to resolve the Kosovo conflict; General and the Allied Commander in Messrs. TIERNEY, CAPUANO, KEN- (6) all of the forces from our NATO allies, Europe, General Wesley Clark. NEDY of Rhode Island and MEEKS of who served with distinction and success; and To all the front line states, those New York changed their vote from (7) the front line states, Albania, Mac- edonia, Bulgaria, and Romania, which expe- who bore the burden of refugees and of ‘‘yea’’ to ‘‘nay.’’ having foreign forces on their soil. Al- Mr. BURTON of Indiana changed his rienced firsthand the instability produced by the Federal Republic of Yugoslavia’s policy bania, Macedonia, Bulgaria, and Roma- vote from ‘‘nay’’ to ‘‘yea.’’ of ethnic cleansing. nia, they all experienced the insta- So the conference report was agreed bility produced by the Federal Repub- b to. 1445 lic of Yugoslavia in its policy of ethnic The result of the vote was announced The SPEAKER pro tempore (Mr. cleansing. as above recorded. LAHOOD). Pursuant to the rule, the This is a mere token of appreciation A motion to reconsider was laid on gentleman from Missouri (Mr. SKEL- by this House to each of these people, the table. TON) and the gentleman from South to each of these countries, to each of f Carolina (Mr. SPENCE) each will control those who participated and bore the 30 minutes. burden of victory in Yugoslavia. APPOINTMENT OF CONFEREES ON The Chair recognizes the gentleman S. 1059, NATIONAL DEFENSE AU- from Missouri (Mr. SKELTON). Mr. Speaker, I reserve the balance of THORIZATION ACT FOR FISCAL Mr. SKELTON. Mr. Speaker, I yield my time. YEAR 2000 myself such time as I may consume, Mr. SPENCE. Mr. Speaker, I yield Mr. SPENCE. Mr. Speaker, pursuant and I move that the motion to instruct myself such time as I may consume. to clause 1 of rule XXII, and by direc- be adopted by this House. Mr. Speaker, the motion by the gen- tion of the Committee on Armed Serv- This is a motion to require or to urge tleman from Missouri speaks to an ices, I offer a privileged motion. the conferees to adopt section 1207 of uncontroversial provision offered by The SPEAKER pro tempore. The the House amendment. The House will the gentleman from Mississippi (Mr. Clerk will report the motion. remember this is an amendment of- TAYLOR) and adopted by a voice vote on The Clerk read as follows: fered by the gentleman from Mis- June 10 during House consideration of Mr. SPENCE moves that the House take sissippi (Mr. TAYLOR) which dealt with H.R. 1401. the goals for the conflict in Yugo- from the Speaker’s table the Senate bill (S. Section 1207, the provision in ques- slavia. I might say that these goals 1059) to authorize appropriations for fiscal tion in the motion, has two parts. The year 2000 for military activities of the De- were set forth by numerous people, in- first part restates the authorities of partment of Defense, for military construc- cluding General Wesley Clark, includ- the Congress under the Constitution to tion, and for defense activities of the Depart- ing the President, including the Sec- declare war and provide for the com- ment of Energy, to prescribe personnel retary General of NATO. They have strengths for such fiscal year for the Armed mon defense. The second part estab- been the polestars of this whole con- Forces, and for other purposes, with the lishes eight policy goals for the NATO flict. House amendment thereto, insist on the military operation against Yugoslavia House amendment, and agree to the con- We do this in a customary manner, Mr. Speaker. Customarily, at the end which, at the time the provision was ference requested by the Senate on the dis- adopted, was winding down and, in agreeing votes of the two Houses thereon. of a conflict, we compliment as a body fact, is now over. The SPEAKER pro tempore (Mr. those who participated in and helped The gentleman’s motion does go be- LAHOOD). The question is on the mo- achieve a victory. There is no question yond the text of the House-passed lan- tion offered by the gentleman from about it, this is a substantial victory guage and asserts that the House South Carolina (Mr. SPENCE). for the allies, a substantial victory for should support section 1207 in order to The motion was agreed to. NATO, and a substantial victory for the United States of America. recognize the efforts of our troops, the MOTION TO INSTRUCT CONFEREES OFFERED BY First, we speak of the United States military chain of commands and a long MR. SKELTON Armed Forces. True, it was an air war list of others. While I do not believe Mr. SKELTON. Mr. Speaker, I offer a primarily, but many of the Army and that section 1207 or its legislative his- motion to instruct conferees. much of the Navy were deeply in- tory had, or has, anything to do with The Clerk read as follows: volved. But for that effort, it would not the assertions contained in this mo- Mr. SKELTON moves that the managers on have been nearly as well done or as tion, I nonetheless support the motion the part of the House at the conference on of the gentleman from Missouri and the disagreeing votes of the two Houses on well planned nor as well executed. the amendment of the House to the bill S. To the families of American service- specifically want to commend the 1059 be instructed to insist upon the provi- men and women who bear the brunt of United States military and our NATO sions contained in section 1207 of the House their spouses and their mothers and allies who executed Operation Allied amendment (relating to goals for the con- their fathers being gone, because of the Force with skill and courage. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5207 Our Armed Forces, together with the urge my colleagues to vote for this mo- Mr. SKELTON. Mr. Speaker, I yield 1 military forces of NATO allies, con- tion to instruct conferees. minute to the gentleman from Wis- ducted a military campaign involving Mr. SPENCE. Mr. Speaker, I yield 3 consin (Mr. KIND). over 35,000 aircraft sorties without a minutes to the gentleman from Cali- Mr. KIND. Mr. Speaker, I thank the single casualty. The United States was fornia (Mr. CUNNINGHAM). gentleman for yielding me this time. responsible for the bulk of this mili- Mr. CUNNINGHAM. Mr. Speaker, Mr. Speaker, I respectfully disagree tary effort, especially with regard to while I agree with my friend, the gen- with my friend from California. Let us air strikes against the most heavily de- tleman from Missouri (Mr. SKELTON), give credit where credit is due. It was fended and difficult targets in Kosovo on the service of our military men and because of the strength and persever- and Serbia. women, because their efforts are lauda- ance and unity of all 19 democratic na- In addition, the United States forces tory, I disagree extremely with the tions of NATO that finally got provided most of the essential military laudatory comments about our diplo- Milosevic to capitulate and end the capabilities in the areas of intelligence matic corps and the President in this atrocities in Kosovo. But, ultimately, surveillance, reconnaissance, aerial re- effort. As a veteran, it is sickening to the credit belongs to those young men fueling, electronic warfare and combat me, and I will tell my colleagues why. and women in American and NATO search and rescue. While having to The total number of people killed in uniform who were being asked yet carry out what unexpectedly and un- Kosovo prior to our bombing was 2,012. again in the 20th century to restore fortunately turned into the equivalent We have killed more than five times some peace and humanity to the Euro- of a major theater war, the United that amount in our bombing, and yet pean continent. States Armed Forces were also pro- we are supposed to be saving people. A few weeks ago I had the oppor- viding almost simultaneously signifi- There has been a forced and increased tunity to travel to the Balkans and to cant contributions to the humani- evacuation of Albanians outside of the meet and see firsthand those troops tarian assistance effort as part of our country. The United States flew 85 per- who were carrying out this dangerous Operation Allied Harbor in Macedonia cent of all the sorties and provided 90 mission. I wish all Americans had the percent of all of the weapons, and we opportunity to experience what I did and Albania. Mr. Speaker, irrespective of how one are only supposed to pay 15 percent of and to feel the patriotism and the pride might feel about the policy assump- it. If my colleagues will remember, in that I felt in those troops over there. tions and judgments that unfortu- Desert Storm, George Bush actually b 1500 nately got us into this conflict, as- made $2 billion. We did not have to spend $100 billion in the war and re- They performed their mission with sumptions and judgments which I building Kosovo. honor and with great success. Unfortu- strongly disagreed with at the time, Rambouillet was a joke to start with nately, two young officers were not these in no way are endorsed by the and, in my opinion, caused us to go able to return home safely. These were motion of the gentleman from Mis- there. Jesse Jackson said that we need Chief Warrant Officer David Gibbs of souri. I believe we can join together in to understand both sides of an issue. Ohio and Chief Warrant Officer Kevin commending the dedication and cour- One, what were the fears of the Serbs? Riechert from a small town in my con- age of all those in the Armed Forces One, that the number of Serbs that gressional district in western Wis- who carried out this difficult military were killed by the KLA was going to consin, Chetek. campaign. I am prepared to support continue if Rambouillet existed. There I am sure that all our thoughts and this motion. are 300,000 Albanians that live in Yugo- prayers go out to their families today. Mr. Speaker, I reserve the balance of slavia that have not left, where the I just wanted to recognize and ac- my time. KLA is not. Secondly, that none of knowledge their service and the sac- Mr. SKELTON. Mr. Speaker, I yield 1 their police forces could stay and pro- rifice they and their families made on minute to the gentlewoman from Cali- tect the Serbs. And we can see what is behalf of our country. fornia (Mrs. TAUSCHER). happening today there. Third, they Mr. SPENCE. Mr. Speaker, I yield 3 Mrs. TAUSCHER. Mr. Speaker, I were afraid that no one would protect minutes to the gentleman from Geor- thank my colleague for yielding me them at all. And to me this is a trav- gia (Mr. KINGSTON). this time, and I rise in strong support esty. Mr. KINGSTON. Mr. Speaker, I of the motion to instruct conferees on Our diplomatic corps did not make thank the gentleman for yielding me the Defense Authorization bill to insist this happen. If my colleagues will take the time. on language in the House bill articu- a look, it was Russia. From the day we Mr. Speaker, I want to speak about lating the goals and objectives of the started bombing, I said, we need Russia some concerns and reservations about air campaign in Yugoslavia. to negotiate, we need Scandinavian and what we are doing here. Because I cer- Our military forces with our NATO we need Italian troops to resolve this, tainly, unequivocally, join 435 Members allies have done a tremendous job in A, to protect both sides; and, B, to have of this House in support of our Armed Kosovo. They have ended Yugoslav ag- some stability in there. And yet the Forces and the great work that they gression against its own people, forced United States and our diplomatic corps have done and their families who have the withdrawal of Yugoslav military did not. supported them throughout this and I forces from Kosovo, reached an agree- We are going to see increased inter- support the whole chain in that re- ment with Yugoslavia on an inter- est rates. We will see us pay $100 billion spect. But I must say, I am very con- national military presence in Kosovo, before this is over. And my colleagues cerned that this could be misconstrued and started the safe return of Kosovo that want to save Social Security and as an endorsement of support for our refugees. Medicare, where do they think this policy in Kosovo. The success we have achieved in comes out of? The surplus. Because I, as do so many Members of Kosovo could not have been achieved General Reimer told me that we used this House, oppose this war. This was without strong leadership from Presi- 1 year of life in our aircraft, which the result of diplomatic ineptitude. It dent Clinton and his senior military were already devastated with parts, is bad foreign policy. The President advisers. In particular, General Wesley and most of those are engines and so and the leaders never have told the Clark distinguished himself by con- on. If we take a look, one-half of our American people what our American ducting an air campaign that suffered tankers participated, but we used all peril was in Kosovo. We do know that not a single combat casualty. I will be the crew. We are only keeping 23 per- one of the goals was to try to bring introducing legislation shortly, Mr. cent of our military personnel in here, peace to that area, and yet we are Speaker, to award General Clark the and it has been devastating. going to have 50,000 ‘‘peacekeepers’’ Congressional Gold Medal for his ef- So, yes, our troops were exemplary, acting as proactive police officers in forts. we did the job. But, in my opinion, the that area for an unlimited amount of Or Nation’s goals and objectives have President of the United States and the time. I hardly say that that is a fitting been achieved with unparalleled suc- whole diplomatic corps, through their conclusion to a war and animosities cess. We owe our military personnel a failure, caused the war in the first that date back at least to the Field of debt of gratitude for their service. I place. Blackbirds in 1389. H5208 CONGRESSIONAL RECORD — HOUSE July 1, 1999 So I want to say, unequivocally, that We in Puerto Rico are pleased to But the President did not say that. this House Member joins many, many have participated in the endeavor to The President took action, and thank other House Members in saying we did secure democracy for Kosovo. A por- God he took action and saved thou- not support this war and do not want tion of our military’s training was car- sands upon thousands of lives. to have this vote being construed as ried out in Vieques, Puerto Rico. Dur- The fallacy that ethnic cleansing supporting the war. I do not think that ing that training, a tragic accident oc- somehow was not happening and that the President showed great leadership, curred when a bomb went 11⁄2 miles off the bombing caused it is nonsense. It is nor did most of his cabinet members, target and killed one civilian and in- what I have been calling for years when they cannot define what the peril jured four others. ‘‘quiet ethnic cleansing’’ or ‘‘slow eth- is, why we are in a conflict, and when I urge the conferees to address the nic cleansing.’’ And we put a stop to it the result of that conflict or that ac- safety and security concerns of the and we allowed ethnic Albanians, who tion is the evacuation of 855,000 people 9,300 American citizens who reside in constituted 90 percent of the popu- from the country and then another Vieques. The accident of April 19 un- lation of Kosovo before the war, to be 500,000 within the country who have derscored the hazards to which the able to live normal lives. lost their homes, and now, after al- residents of the island are exposed by So I think that our Armed Forces ready spending $12 billion in the Bal- the bombings during our military ma- ought to be praised. The President of kans and another $5 billion in Kosovo neuvers at the Navy range. the United States deserves all the itself, we are going to be spending bil- We must consider other options for praise there can be. And my colleagues lions more to rebuild that society, training which do not pose a danger to on the other side of the aisle that were which I will not say we should run from the U.S. citizens in Vieques, Puerto calling this ‘‘Clinton’s war’’ ought to that responsibility at all. Rico. be calling it ‘‘Clinton’s victory’’ be- But I do think now we are in it, and Mr. SPENCE. Mr. Speaker, I reserve cause the President deserves the credit. it just seems to me that this adminis- the balance of my time. I am very, very proud of what we did. tration’s whole policy in the Balkans Mr. SKELTON. Mr. Speaker, I yield 3 I want to say, I hope that there will be autonomy and self-governing. But, has been a quagmire. It has been vague. minutes to the gentleman from New as I have always said, I believe, long It has been haphazard. I do not believe York (Mr. ENGEL). range, the solution for Kosovo is inde- that this is an outstanding chapter in Mr. ENGEL. Mr. Speaker, I thank pendence because those people have the American diplomatic history whatso- the gentleman from Missouri (Mr. same right of self-determination and ever. Skelton) for yielding me the time. independence that the other people of So I do understand that the gen- Mr. Speaker, I rise in strong support former Yugoslavia when the former tleman from Missouri (Mr. SKELTON) of this motion. I certainly commend Yugoslavia broke up and Croatia and has great respect for the armed serv- our brave United States Armed Forces, Bosnia and Macedonia and Slovenia all ices, which we all admire and we all their families. I believe that President had the right to self-determination. join him in doing. I am going to sup- Clinton ought to get all the praise pos- The ethnic Albanians in Kosovo, in my port this portion because the armed sible for the conduct of this war. Sec- estimation, ought to have that same services personnel are being com- retary Cohen, Secretary Albright, all the NATO allies, the front-line states, right. mended. But I do want to emphasize So, again, I commend the gentleman strongly that a large number of Mem- Albania, Macedonia, Romania, and Bul- from Missouri (Mr. SKELTON) for this. I bers of the House on the Democratic garia, this was truly a united effort. I very much regret that we needed think we all ought to go on record as and Republican side oppose this policy praising the Armed Forces and com- this vehicle to put forth this resolution in the Balkans, oppose this war, and we mend President Clinton. commending our Armed Forces. The have great questions about the so- Mr. SKELTON. Mr. Speaker, may I called peace agreement. Senate, as the gentleman from Mis- inquire as to the amount of time that How long are we going to be there? souri (Mr. SKELTON) pointed out, we have remaining on this side, please? When do we get out? What will be the unanimously adopted a resolution sev- The SPEAKER pro tempore (Mr. result? Why is Russia in the process eral weeks now. We have been trying to LAHOOD). The gentleman from Missouri get the Republican leadership to allow when they did not contribute to this (Mr. SKELTON) has 191⁄2 minutes re- yet they are going to have a major part us to have a similar resolution on the maining. The gentleman from South in the rebuilding of Kosovo? Will this floor, but they have denied it. This is Carolina (Mr. SPENCE) has 21 minutes make Kosovo more western, or is it the only vehicle. remaining. going to make them more pro-Russia? What, frankly, really bothers me is Mr. SKELTON. Mr. Speaker, I yield 1 So I just wanted to air those reserva- that the same critics in this House who minute to the gentleman from Penn- tions, Mr. Speaker. were calling the war ‘‘Clinton’s war’’ sylvania (Mr. HOEFFEL). Mr. SKELTON. Mr. Speaker, I yield and were saying that bombing would Mr. HOEFFEL. Mr. Speaker, I thank myself such time as I may consume. never work and the war would never be the gentleman for yielding me the Mr. Speaker, there is a limitation on won and this was a tragedy and this time. time, but I wish to point out to my was a travesty now will not give credit Mr. Speaker, I rise in strong support friend from California that the wording where credit is due. of his motion to recommit. Of course herein is a reflection exactly of the The fact is we won this war. We we should commend the troops. Of matter that was passed in the United ought to be proud of winning this war. course we should commend the Presi- States Senate unanimously. The President was right. The President dent. Of course we should commend the I might also say that, because of did the right thing in Kosovo. Secretaries of State and Defense and what we did, the horrors, the deaths, I co-chaired the Albanian Issues Cau- all of the NATO leaders and all the the starvings, the burned homes, the cus, and we have been yelling for years NATO countries and all the front-line rapes, and all the tragedies have come and years about the ethnic cleansing States that stood up to this terrible to an end because of what we, our lead- that is going on in Kosovo, the lack of situation in Kosovo. ership, our Armed Forces, and our al- human rights, the fact that the ethnic What astonishes me is that it was lies did. So this is an effort to com- Albanians there were denied for years bad enough that the effort here in this mend all of them in urging the House and years the basic rights. House was not bipartisan to support to adopt section 1207. I am proud of our country for step- our effort in Kosovo and today we do Mr. Speaker, I yield 1 minute to the ping in and standing up for human not have bipartisan support to com- gentleman from Puerto Rico (Mr. RO- rights. I am proud of our President for mend the effort in Kosovo. We have to MERO-BARCELO´ ). taking a stand. It would have been po- resort to this parliamentary effort to Mr. ROMERO-BARCELO´ . Mr. Speak- litically easier for him to just sit back get a vote to commend these terrific er, I rise in strong support of the mo- and say, what can we do? This is not achievements. And I think it is a sad tion to instruct conferees and to com- our war. Ethnic cleansing and geno- day. mend our troops for the success in cide, as abhorrent as it is, there is My father and grandfather, lifelong Kosovo. nothing we can do about it. Republicans, taught me that politics July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5209 ended at the water’s edge. Well, I am sult in Kosovo possible, to our very Mr. SKELTON. Mr. Speaker, I yield 2 afraid to tell the gentleman and the brave and noble troops, to their fami- minutes to the gentleman from Guam House that this Republican party is not lies who supported them back home, to (Mr. UNDERWOOD). my grandfather’s or my father’s Repub- our allies who stood with us, to the Mr. UNDERWOOD. Mr. Speaker, I lican party. Something has gone wrong front-line States who endured, and, thank the gentleman for yielding me here. But we had strong leadership. yes, to the leaders of our country, the this time, and I rise in very, very NATO did the right thing. military leaders in uniform, the diplo- strong support of this motion to in- I support the motion of the gen- matic leaders at the State Department, struct conferees that has been pre- tleman. Secretary Cohen at the Defense De- sented by the ranking member of the Mr. SKELTON. Mr. Speaker, I yield 1 partment, and certainly to the Com- Committee on Armed Services. One of minute to the gentleman from Texas mander in Chief, to President Clinton. the basic principles that we learn in (Mr. REYES). These are words that are definitely trying to deal with fellow human Mr. REYES. Mr. Speaker, I thank the worthy of being said by this Congress. beings in our lives is that we should gentleman for yielding me the time. It is also important to support this give credit where credit is due. What Mr. Speaker, I rise in support of this motion because it looks forward. It rec- this motion to instruct conferees does motion by my good friend from Mis- ognizes that although the conflict is is basically to recognize success, the souri. This motion instructs conferees hopefully over in Kosovo, the job is success of our armed services, the suc- to retain the provisions of the defense not, that there still are objectives to be cess of our joint efforts along with our authorization legislation relating to met to establish a framework under NATO allies, and in particular also the the goals for the conflict in Yugo- international law for a Democratic contributions of front line states that slavia. government to make sure that those, surround the Federal Republic of Yugo- Maintaining this language will allow including President Milosevic, who slavia, the success of our diplomatic ef- us to recognize the brave men and commit crimes against humanity are forts, and the success of the leadership women in the U.S. Armed Forces who brought to justice, to be sure that refu- of our military as well as our civilian have served this Nation so well. gees are brought to a safe and humane authorities and, of course, the success Through their efforts and the efforts of home and resting place once again. of our President. But this is not just about a great vic- our allies in NATO, we have stopped a This resolution is in the finest bipar- tory. It is about a great success, with brutal tyrant from continuing his at- tisan tradition of our country. It looks some fairly limited objectives. I am tempts to destroy a region and its peo- forward and says there is work still to sure that many people will take the ple. This motion not only praises our be done in a bipartisan way, and it time to point out and there will be lots uniformed personnel, but it also recog- looks backward to the brave and noble of discussion about the problems that nizes the critical contributions of their work of our troops, their families, and this has created. It will be pointed out families. Without the sacrifices of the their leaders and delivers a well-de- that there will be problems with the husbands and wives and children back served thanks. I am proud to support it. occupation of Kosovo, problems associ- home, we could not have accomplished ated with civil administration, infra- our military goals. Mr. SKELTON. Mr. Speaker, I yield 1 structure, trying to bring people to- When we debated the defense author- 1 ⁄2 minutes to the gentleman from Vir- ginia (Mr. MORAN). gether who have experienced lots of di- ization on the floor of this House, the vision and have been subjected to all b 1515 military conflict was underway. Now, the kinds of things which have gone on however, we are afforded an oppor- Mr. MORAN of Virginia. I want to under the leadership of Milosevic. But I tunity to show our thanks on the thank the very distinguished gen- would like to point out that the prob- record for the victory that they have tleman from Missouri for finding a way lems of peace are infinitely preferable achieved. Now, as the peacekeeping to bring this resolution to the floor. We to the problems of war. work begins, we must continue to sup- ought to be proud of what we have What we have here is a resolution port the military’s efforts and stand by done. Nineteen nations worked to- that highlights our gratitude to the our military men and women in the gether cooperatively to stand up for men and women of our armed services field and their military and civilian the freedoms that we enjoy and to and their families and President Clin- leaders. stand up against thuggery. The ton and Secretary of Defense William I urge my colleagues to vote for this Kosovar Albanians had been denied vir- Cohen and Chairman of the Joint motion. tually every freedom that we take for Chiefs of Staff General Shelton, Su- Mr. SKELTON. Mr. Speaker, I yield 2 granted in this country since 1989, but preme Allied Commander Europe Gen- minutes to the gentleman from New that is not why we got involved. We eral Wesley Clark for their planning Jersey (Mr. ANDREWS). got involved because we knew a war and implementation, Secretary of (Mr. ANDREWS asked and was given criminal had 40,000 troops massed on State Madeleine Albright and National permission to revise and extend his re- the border, was going to go into Kosovo Security Adviser Sandy Berger. We marks.) and was going to burn homes, often- must send a message of gratitude to all Mr. ANDREWS. Mr. Speaker, I thank times with people in them, rape of those who worked hard for this suc- my friend the gentleman from Missouri women, execute men, that is what he cess. (Mr. SKELTON), our ranking member, would have been able to do in order to Mr. SPENCE. Mr. Speaker, I yield 5 for yielding me the time. clear their country of people based minutes to the gentleman from Texas Mr. Speaker, the system that is over purely upon their ethnicity. That is (Mr. DELAY), the majority whip. 200 years old in our country has been a wrong. Mr. DELAY. Mr. Speaker, I thank the very wise one indeed. It is a system in The free nations of the world stood gentleman from South Carolina for which we vigorously debate and often up and were successful, and in the proc- yielding me this time. I want this body disagree about what direction our ess they showed that we can prevail to know and through this body the Na- country’s policies should go in before without the loss of one American sol- tion to know that I support the troops. we engage in conflict. But it is also a dier, sailor or airman. We were success- I think the job that they gave to us and tradition that says that, once we en- ful with an air war when people said it did for us was outstanding. As always, gage in conflict, we unify. could not be done. We were successful our men and women in uniform have It is the wisdom of this motion to in- in putting strength and resoluteness in done an outstanding and admirable job. struct that reflects that tradition, and NATO. This set a precedent. We should I would vote for this motion to instruct it is because of that wisdom that I rise be proud of what we have accom- if that is what we were doing. But I in strong support of the motion. This plished. And we should tell the rest of have got to tell my colleagues, a dec- motion appropriately looks both back- the world that we are proud in a bipar- laration of success in Yugoslavia by ward and forward. tisan manner. the media and the White House does It looks backward to say thank you That is what this resolution is all not mean that victory was actually at to a lot of people who made a tremen- about. It should be passed unani- hand. This charade in the Balkans has dous effort to make the successful re- mously. gone on long enough. H5210 CONGRESSIONAL RECORD — HOUSE July 1, 1999 How can you call it victory when Therefore, I am going to vote against ership? Listening to some of my col- Milosevic is still in power? The agree- the motion to instruct and hopefully leagues on the floor this afternoon, I ment that they signed to end the we can bring a resolution to this floor can only conclude that this is the case. bombing is an agreement that commending our troops. These troops under the leadership of Milosevic would have signed before the Mr. SKELTON. Mr. Speaker, I yield the President of the United States and bombing. How can you call it a victory myself such time as I may consume. the NATO officials stopped a modern when the reasons that we went to war Let me take this opportunity to point day Holocaust from taking place in are exactly the reasons why it cannot out a bit of history, that I supported eastern Europe. be called a victory. The President said the efforts of our country regarding the Mr. Speaker, we should overlook par- that if we did nothing, there would be Contras, that I supported President tisanship today and vote for the mo- Kosovar Albanians destroyed and Bush’s efforts, successful efforts tion to instruct. killed and refugees would flood the bor- against Saddam Hussein, that I sup- Mr. SPENCE. Mr. Speaker, I yield 3 ders, there would be instability in the ported this country and NATO’s efforts minutes to the gentleman from Wash- region, and that NATO’s credibility against Mr. Milosevic. Omar Bradley, ington (Mr. METCALF). would be undermined if we did nothing. the famous Missourian, Second World Mr. METCALF. Mr. Speaker, I rise in Take a look at it. Thousands of War General, once said that ‘‘second strong support and pride in our service Kosovars were killed, refugees had lost place doesn’t count on the battlefield.’’ personnel in this most difficult Kosovo their homes, they are coming back to We were victorious, Mr. Speaker. situation. But I cannot vote for this burned-out homes and areas that are Milosevic’s troops, his presence is no motion. I can neither support nor con- absolutely devastated. Instability is longer in Kosovo. Was it worth it to done this military bombing of Kosovo. still in the region. In fact, I contend take on Saddam Hussein? Certainly. It Bombing is by definition an act of war there is even more instability in the re- was well worth it to take on Milosevic. which if I read the Constitution cor- gion because we now have a partitioned The killing has stopped. The NATO al- rectly must be supported by a vote of Kosovo, including Russian troops re- liance has held together. Congress. There was no such vote for a introduced into Yugoslavia, something I might point out to this body that declaration of war. I am very reticent that we have been afraid of ever since we are talking about section 1207, and to allow any President to commit acts World War II. And NATO’s credibility in particular in response to the gen- of war without such a declaration. The has been undermined. NATO for the tleman from Texas, I wish to read sub- bombing probably killed 7,500 people first time in the history of NATO section 7 that says, ‘‘President and did an immense amount of damage. Now we will be asked to go in and re- changed its mission from being a defen- Slobodan Milosevic will be held ac- pair it. sive organization to being an organiza- countable for his actions while Presi- I think the Congress should notify tion that bombs and invades sovereign dent of the Federal Republic of Yugo- the President that from now on, no nations. I contend that their credi- slavia in initiating four armed con- money will be available for acts of war bility is seriously undermined. On top flicts,’’ et cetera. Also section 8 says, without a declaration of such by Con- of all that, our relationships with Rus- ‘‘Bringing to justice through the Inter- gress. I believe the cost in billions of sia and our relationships with China national Criminal Tribunal of Yugo- dollars now will be borrowed—we have and many other countries in the region slavia individuals in the Federal Re- not got the money to pay it—now will have been seriously undermined. public of Yugoslavia.’’ be borrowed from our children and That is a victory? Was it worth it? That is what we are commending, grandchildren and they will pay inter- Was it worth it to bomb? Was it worth that is what we are instructing the est on it the rest of their lives. I think it to devastate and suck the very conferees to adopt, among other items. this is atrocious. strength out of our defenses so that the Mr. Speaker, it is with pleasure that Mr. SKELTON. Mr. Speaker, I yield 3 fact that we had to move an entire air- I yield 3 minutes to the gentleman minutes to the gentleman from Con- craft carrier task force out of the Pa- from Georgia (Mr. LEWIS). necticut (Mr. GEJDENSON). cific and leave our troops in Korea at Mr. LEWIS of Georgia. Mr. Speaker, Mr. GEJDENSON. Mr. Speaker, I am risk and move it to the Adriatic Sea? I want to thank my friend for yielding impressed by the agility of the major- Was it worth it to take our stockpile of me this time. ity party. They come to the floor with cruise missiles and reduce them from Three weeks ago, the Federal Repub- incredible arguments on why we can 1,000 that we need for a two-theater lic of Yugoslavia agreed to comply never recognize a Clinton accomplish- war down to what some people say is with NATO’s demands to withdraw its ment. less than 45 and we do not have a pro- forces from Kosovo, ending more than The whip was in the well saying that, duction line to build any more? Was it 80 days of hostility. well, Clinton went to Yugoslavia and worth it to put the United States in In bringing this conflict to a close, Milosevic was there before and he is one of the weakest positions that it has the United States and NATO brought still there now. Let me tell my col- been in many, many a year in its abil- an end to a Yugoslavian campaign of leagues, when the Democrats were in ity to fight a two-theater war? I think ethnic cleansing, rape and murder. It control, George Bush went to Iraq. not. ended the flood of refugees fleeing After the Bush administration told I do not think this House ought to be Kosovo and gave hope to hundreds of Saddam Hussein, ‘‘Oh, you can take a commending a President for his leader- thousands of men, women and children little bit of Iraq, we don’t get involved ship, particularly someone like Sandy that they would soon be able to return in Arab land disputes,’’ and then Presi- Berger, Mr. Speaker, whom many peo- to their homes. dent Bush, with a majority of Con- ple on both sides of the aisle have ques- More than 2 weeks ago, the Senate gress, went to Iraq and Democrats and tioned his leadership, in a motion to passed a resolution commending all Republicans alike commended the instruct. I think this is a terrible mis- those involved in our Nation’s success- President for a job well done, those take to bring this kind of debate to the ful efforts in Kosovo. We had hoped who voted for the war and those who floor of the House. But it is here and that the leadership in the House would did not. we have to debate it. bring forth a similar bipartisan resolu- I reiterate, once again, that this body tion commending our troops and con- b 1530 unanimously supports our troops and gratulating President Clinton and This Congress, on the majority side, the job that they have done when other administration officials for their cannot find it in its nature to recognize asked to go. We have no question that leadership. even one act the President may achieve they did the best, the job that they To date, they have refused to bring that is successful, stopping a slaughter were trained to do, under very difficult up such a resolution. For goodness similar to the ones that led to World circumstances. But for us to call this a sake, is the dislike so intense, the ha- War II. Every argument; we have hit victory and to commend the President tred so great of President Clinton that buildings, we have caused damage, as if of the United States as the Commander the Republican majority cannot bring the thousands of people killed by in Chief showing great leadership in themselves to commend our troops and Milosevic were irrelevant. The Presi- Operation Allied Force is a farce. congratulate the President for his lead- dent deserves no credit. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5211 How many speeches did we hear on So what do we have here? We have a This is a very sad day in the history the other side that bombing would resolution where we are using the pa- of this body. never work? We have never been able triotic troops as the cover, as the cover Mr. SKELTON. Mr. Speaker, I yield 1 to achieve a goal through bombing day to allow a Commander in Chief with a minute to the gentleman from North after day on the floor. We achieved our policy that is being questioned by Dakota (Mr. POMEROY). goal. We have rid Kosovo of Mr. Members on both sides of the aisle in Mr. POMEROY. Mr. Speaker, this is Milosevic and his murderers. We are in this body to be able to have him say a very dysfunctional Chamber. Blind the process of trying to establish a that we praised him for his actions. partisan hatred infuses, it seems like peaceful society where people can live If my colleagues want to have the all issues, even something as we look civilly together. It will not be easy. vote on supporting the President’s ac- back at a successful completion of a But just as Mr. Milosevic is still in tions, then have the guts to have that military conflict, an end of a series of control, so is Saddam Hussein still in vote separately. Have their up or down atrocities against a people too horrible control. Our goals were never the re- vote. Let us see how and whether Con- to fully contemplate. moval simply of these presidents. God gress comes out in terms of whether or The preceding speaker is 100 percent knows we all hope that Mr. Milosevic not they agree that this President did incorrect in suggesting that this con- and Mr. Saddam Hussein are tried as a good job. Let us have that debate. flict created the humanitarian catas- war criminals. But to come to this Let us talk about the fact that our re- trophe unleashed by Slobodan floor under almost any excuse because lations with Russia and China have Milosevic. The American people know God forbid they should ever say a good never been worse in this decade. Let us what happened. The military action word about what President Clinton did; talk about the fact that we are driving under the leadership of the President he had the courage to lead the West, to the Duma election this December into ended this humanitarian crisis and keep NATO united and to succeed in the hands of the ultra nationalists be- stopped the slaughter of a people. We stopping murder on our watch. cause of our deliberate policy of not in- ought to be proud as Americans for the First the argument was we could not volving the Russians for the first 3 role played by our military, the role succeed, second the argument was the weeks, and if a Member challenges me, played by our troops, the role played danger was too great. The only loss of I will show them a confidential inter- by our leaders, including President life was not in combat, as sad as that nal State Department memorandum Clinton, and it might be tough in light was. I believe two pilots died in a heli- that outlines that because I have it. of this partisan period that we are in to This debate is not about honoring our copter crash. say so, but nothing less is deserved. This President succeeded to lead a troops, and it is unfortunate because The President provided leadership successful policy, and this Congress those on the other side know they when leadership was needed, and the boxed the Members on this side, Mem- had a chance to vote, and there was military conflict has been successfully bers who want to display their patriot- one day here where somebody described concluded. ism and their thanks for America’s it better than I can. Congress voted. Mr. SPENCE. Mr. Speaker, I yield 2 sons and daughters for the job they did. They decided not to go back, not to go additional minutes to the gentleman But as the President did when he used forward, and by an even vote, I think of from California (Mr. CUNNINGHAM). the military and paraded them down 213 to 213, did not even vote to support Mr. CUNNINGHAM. Mr. Speaker, the White House lawn for that photo what we were doing. where do we have to go from here? op, as the President did when he stood Now after the fact take your partisan First of all, NATO nations have got to on the deck of an aircraft carrier and hate aside for one moment. Recognize upgrade their own military so that we talked about his commitment for our our troops and our Commander in do not have to fly 85 percent of all the military while cutting the budget to an Chief. They politicize the foreign pol- sorties and drop 90 percent of the unprecedented level, we are again icy of this country I believe more than bombs in the future. We cannot afford going to give this President cover. it, to take the lead in all of these. it has ever been politicized. We always We are going to let him hide behind Tudjman’s ethnic cleansing is 750,000 had the courage to come down here, the skirts of the women who served in out of Croatia, is a war criminal, and if we were wrong initially, we the military in combat and did the should be attacked. Izetbegovic accord- stood up and commended Reagan or service for this because we are going to ing to the Mujahedeem and Hamas Bush or whatever Republican President let him hide behind the uniforms of our was here. Have the guts to do the same. military personnel to get a victory should be a war criminal right along Mr. SPENCE. Mr. Speaker, I yield 4 based on the military so he can tell the with Milosevic. A supplemental check, our next sup- minutes to the gentleman from Penn- fact that Congress is supportive of plemental, should be a check from sylvania (Mr. WELDON). what he did. (Mr. WELDON of Pennsylvania asked I have never been more sick in the 13 NATO paying for our fair share. We are and was given permission to revise and years that I have been here that we supposed to pay for 15 percent, not an extend his remarks.) would have to have a vote where we use 80 percent of a war that happened. Mr. WELDON of Pennsylvania. Mr. our military to give cover to a policy When we talk about 300,000 Albanians Speaker, I thank my good friend and that should be openly debated, and if and Yugoslavs that live peacefully, chairman for yielding this time to me, Members want to debate support for how about the 200,000 Serbs that are and I rise with a great deal of dis- the President’s policy, I would say to now evacuated. My colleagues do not appointment. I have the highest re- my colleague make that the motion to think that those men, women, and chil- spect for my good friend from Missouri. instruct conferees, make it be on the dren are innocent victims, that we I think he is a great American. I have administration and the policy, but do have a great victory on our hands and acknowledged that publicly on a reg- not use the troops as political pawns. we ought to take care and have as ular and consistent basis. All of us praise our troops, but Demo- much compassion for them as well. I would join with him in a heartbeat crats and Republicans alike express Efforts to repay and the relationship if this were a resolution honoring our grave concerns about what we have with Russia has got to be a priority. troops, and the gentleman knows if done here. Now Russia, in my opinion, is our that were the case, that resolution We caused the worst humanitarian enemy, but we have made great gains would pass this body 435 to zip with no crisis in the history of Europe in help- with Russia, and unless we continue in dissenters. But if we took the resolu- ing to push a million people out into that direction, then all is lost. I think tion and if we want to honor the Presi- the hinterlands, and now we are not we need to take a look at the Progres- dent, which is evidently what some on going to have a chance to say that. All sive Caucus in this House listed under the other side want to do, then let us we are going to do is say because it has the web page: Democrats Socialists for have that vote. Take out the troops a paragraph that praises the President, America, and their last of their 12 and just honor the President for his all of us then must be behind what he point agenda is to cut defense by 50 role. I would say this to my colleagues: did. percent should remove that from their That would not pass this body. That What a crock of my colleagues know agenda because it does disservice to resolution would not pass this body. what. our men and women in military and H5212 CONGRESSIONAL RECORD — HOUSE July 1, 1999 disservice to the national security of to go to war tomorrow because this ad- gas centrifuge technology that he was this country. ministration has pulled money out of using for nuclear weapons? We need to take a look at how we are the cash register that was meant for How could you have voted to con- going to conduct ourselves in these bullets and used it for peacekeeping op- demn Israel in the U.N. for bombing wars, and when the gentlemen say this erations, we are going to have people the Osirak nuclear power plant? is partisan; no, there is a disagreement die because they run out of bullets. How could you have not killed the on what victory is and that we should Today we are 131⁄2 percent below the Red Guard when you had a chance? not have been there in the first place. civilian pay rate for our military. That How could you have not wiped out Sad- Not partisan, but a fact that we should means that we have 10,000 military dam Hussein when you had a chance? not have been there in the first place families on food stamps. That is a di- We did not do that. We praised and expend the resources of this coun- rect result of the President’s leadership George Bush, after a successful mili- try when there was only 2,000 people or lack thereof. If my colleagues think tary campaign, as our Commander-in- killed and we killed over 7,500. the President has paid our men and Chief. The majority in this House Mr. SKELTON. Mr. Speaker, I yield 1 women in the military adequately, should be ashamed. They continue this minute to the gentleman from Florida then vote for this resolution. But I am pathology of bitter hatred of the Presi- (Mr. DAVIS). not going to do that. Today our mis- dent at the expense of our country. (Mr. DAVIS of Florida asked and was sion-capable rates have dropped like a Mr. SPENCE. Mr. Speaker, I yield 1 given permission to revise and extend rock for lack of spare parts, and that is minute to the gentleman from Penn- his remarks.) because the President has not put sylvania (Mr. WELDON). Mr. DAVIS of Florida. Mr. Speaker, I enough money in the military budget Mr. WELDON of Pennsylvania. Mr. rise in support of the motion to in- for spares, for aircraft and the Army, Speaker, I thank my distinguished struct conferees. This is not a vote of a the Navy, the Marine Corps and the Air chairman, the gentleman from South popularity contest with respect to the Force. I am not going to commend the Carolina (Mr. SPENCE), for yielding me President. This is a vote to recognize President for that. this time. the achievement of goals. So, Mr. Speaker, if the President Mr. Speaker, I say to my colleague We had several debates on the floor wants to really do something that and friend, I agree with him. Let us of this House. We had disagreement as thanks our military families for their have the question on whether or not we to those goals. But ultimately we as a valiant effort in this war, I suggest support this President. country, acted in furtherance of goals, Mr. MARKEY. No. that he pay them, increase their pay to Mr. WELDON of Pennsylvania. That and we achieved those. Why did we the full 13 percent like President achieve those goals? Because we had is what you just said. Reagan did when he came in and closed Mr. MARKEY. No. our best men and women in the coun- that 12.6 percent pay gap, and I rec- Mr. WELDON of Pennsylvania. You try here in the field giving their very ommend that he supply adequate am- just said in your statement, and I will best efforts, and by the grace of God we munition so that they can fight wars take your words down if you want to prevailed. without running out of ammunition, repeat them, that we voted on whether Were mistakes made? Of course there and I recommend that he comes for- or not to support the policies of Presi- were. Were lessons learned? Absolutely. ward with all the spares and the mod- dent Bush. An important part of our job is to ernization that is required to keep 55 What I am saying and what my col- think about what lessons were learned. airplanes a year from falling out of the leagues are saying, let us have that de- But we did achieve those goals, and I sky and crashing, resulting in 55 deaths bate. Let us have a real amendment, do not think anybody can stand here in peacetime operations like we had not a phony amendment, where we today and say that everybody did not last year. have the President’s policies hidden be- give it their best effort. b 1545 hind the skirts and the uniforms of the So let us come together as a country men and women in this military. through this Congress. Let us recognize This President has hollowed out the Mr. MARKEY. Will the gentleman that we achieved those goals. Let us be military. If he was a Republican, I yield? thankful we succeeded. Let us learn would say exactly the same thing. Mr. WELDON of Pennsylvania. No, I our lessons from Kosovo and let us put We have some fault, I think, Mr. will not yield. this behind us and recognize our troops Speaker, because we have allowed our- Mr. MARKEY. You are over the line. and everybody who played a part in the selves as a Congress to be finessed by Mr. WELDON of Pennsylvania. Reg- mission. this administration and not to come ular order, Mr. Speaker. Mr. SPENCE. Mr. Speaker, I yield 3 back with all the requirements our The gentleman knows full well, as all minutes to the gentleman from Cali- military really needs. of our colleagues on the other side fornia (Mr. HUNTER). I recommended a $28 billion emer- know, if there is a freestanding amend- Mr. HUNTER. Mr. Speaker, I read gency supplemental because that is ment on supporting the troops, it will the resolution. It starts out com- what the services said they needed, and pass 435 to 0. If there is a freestanding mending the troops, and of course that yet when we even tried to get above $6 motion to recommit or motion to in- is the most important thing that we billion and finally got to $12 billion, struct that only supports the Presi- can do. I think we should all be in- the President resisted that mightily. dent, they could not get the votes. You volved in that. It then goes on to com- Mr. SKELTON. Mr. Speaker, I yield 1 could not get the votes. mend Secretary Albright and the Presi- minute to the gentleman from Massa- Let us have that vote. Let us have dent of the United States in this oper- chusetts (Mr. MARKEY). the vote you want. Let us have the pol- ation. Mr. MARKEY. Mr. Speaker, when icy decision that you have asked for, Mr. Speaker, I voted for the air war. George Bush came to this Chamber but you will not give it to us. I voted to support the operation even after a successful campaign in destroy- Mr. SKELTON. Mr. Speaker, I yield 1 though it was a retroactive vote that ing the designs which Saddam Hussein minute to the gentlewoman from Con- was placed before us. But I am not had on Kuwait, he came to this Cham- necticut (Ms. DELAURO). going to vote to support the Presi- ber and we rose as one, not Democrat, Ms. DELAURO. Mr. Speaker, I rise in dent’s leadership, and I am not going not Republican, not liberal, not con- strong support of the motion to in- to vote, make that vote, for partisan servative. We stood to praise our Com- struct the conferees, yes, to commend reasons. I am going to vote because of mander-in-chief. the President of the United States, our the President’s leadership and because We did not say, Mr. President, how Commander-in-Chief, and our troops, of his treatment of the military. could April Glasbie, your ambassador for the success of the air war over Now let us review the facts: to Iraq, have told those people we Yugoslavia. Today we have shorted our military would have no protest if you had de- I say shame on those who do not people $13 billion worth of ammunition. signs on Kuwait? Which she did. want to honor our troops or to honor That is all the way from cruise missiles We could have said, Mr. President, our Commander-in-Chief. If we may re- to M16 bullets. That means, if we have how could you have not detected the call in this body, some of these are the July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5213 same people, indeed, who refused to au- through in the 1960s and 1970s should serve our praise for doing the job we sent thorize the air strikes in Yugoslavia never come back to this country again, them to do in Yugolsavia. when our young men and women were, because they do so willingly when they But there are other aspects to this resolution in fact, flying through enemy fire. step forward to carry that banner for that I find troubling. I can't help but think that What is also interesting to note is us. the agreement signed to end this conflict could over the last 2 weeks, the House Demo- I would not be in favor of this. I guess have been signed before the conflict began, cratic leadership have urged a similar I cannot get myself to the inflamed avoiding significant suffering and loss of life on kind of an effort to have a bipartisan pitch of some of my opponents or some all sides. resolution in the same way that the of my colleagues, but the feeling is just Having visited refugee camps in Albania other body did, and they have been as heartfelt. These young men and and Macedonia, and having traveled to Yugo- turned down at every single turn, in women are the finest we have, and they slavia during the N.A.T.O. bombing, I have order to do this in a bipartisan way. deserve our praise, and that is who we seen first-hand the suffering of innocent peo- If we are serious about what we are should be praising specifically and no ple. Ethnic cleansing is evil, and we are right doing here today, we need in fact to one else in this. to oppose it. But I cannot in good conscience say, thanks, and commend the Com- Mr. SPENCE. Mr. Speaker, I yield deny my belief that this conflict and the ref- mander-in-Chief of this United States the balance of my time to the gen- ugee crisis could have been avoided but for for his leadership and his efforts to tleman from California (Mr. HUNTER). the failure of our diplomatic efforts and our honor the valor of the young men and The SPEAKER pro tempore. The gen- lack of foresight in anticipting events. women who fought so bravely so that tleman from California (Mr. HUNTER) is Mr. Speaker, with all the suffering that has in fact, yes, we can stand here today recognized for 1 minute. taken place, this is time for solemn reflection, and talk to the people of the United Mr. HUNTER. Mr. Speaker, I appre- not celebration. States. That is what both of them did ciate the gentleman from South Caro- Ms. DELAURO. Mr. Speaker, I rise in strong for us. lina (Mr. SPENCE) for yielding the bal- support of the motion to instruct conferees to The SPEAKER pro tempore (Mr. ance of his time. commend the President and our troops for the LAHOOD). The gentleman from South Mr. Speaker, let me just say to my success of the air war over Yugoslavia. Carolina (Mr. SPENCE) has 3 minutes colleagues, if this President will close By passing this amendment, we reaffirm remaining, the gentleman from Mis- the $13 billion ammunition shortage Congress' support for our men and women in souri (Mr. SKELTON) has 1 minute re- and supply adequate ammunition to the armed forces who carried out this vital maining, and the gentleman from Mis- our troops, I will personally join with mission, and for their efforts to bring justice to souri (Mr. SKELTON) has the right to the gentleman from Missouri (Mr. a devastated region and send an important close. SKELTON) in offering any type of a reso- message to Milosevic that his savage cam- Mr. SPENCE. Mr. Speaker, I yield 2 lution to thank the President for doing paign of ethnic cleansing will not be tolerated. minutes to the gentleman from Cali- that and say that he is doing a good 27 Reservists from the 103rd Air Control fornia (Mr. KUYKENDALL), a Marine vet- job. Squadron in OrangeÐpart of my District in eran and the father of an F–14 female If he will take the 10,000 service peo- ConnecticutÐvolunteered to join our troops pilot. ple off of food stamps and close that supporting the NATO effort in Kosovo. I am Mr. KUYKENDALL. Mr. Speaker, we 131⁄2 percent pay disparity between the proud of the dedication and bravery of these in this country did not recognize the civilian sector and the military sector, men and women, and honored to have the op- service of those that fought the war I will join with the gentleman from portunity to commend them for the sacrifice that I was part of. We did a terrific job Missouri (Mr. SKELTON) in saying the they made to protect our nation and the val- recognizing the young men and women President is doing a good job in leading ues it represents. we sent to the Persian Gulf. the military. We must let our forces know of our prayers I will stand foursquare in front of The President right now is not doing and our gratitude for their efforts to counter anybody to praise the young men and a good job in leading the military. He aggression, end the misery, and foster peace. women in this military force we have is willing to do anything to thank Support the Motion to Instruct. in the field today. They are asked to do them except pay them and arm them, Mr. HAYES. Mr. Speaker, our airmen and more with less, more frequently, than and I am going to vote no on this reso- soldiers deployed to Kosovo executed their any force we have had in our recent lution. mission, albeit unclear, with swiftness and pre- history that I am aware of. Mr. SKELTON. Mr. Speaker, I yield cision. Thanks to them and the rigorous train- I live that from my past experience. myself such time as I may consume. ing they undertake daily, the crisis in Kosovo I live it from my current experience Mr. Speaker, there is an old saying is over. For this I, my colleagues, the Amer- with a daughter that is involved in that a rose by any other name is still ican people, and the ethnic Albanian of those kinds of conflicts. a rose, and I say, Mr. Speaker, today Kosovo are grateful, and as a member of the I find it distasteful, in order to stand that victory by any other name is still Armed Services Committee, I'm proud to take up, and want to praise the civilian a victory. any opportunity to thank and honor them. leadership, which is actually their We won this for a number of reasons; I cannot, however, support a motion that praise comes by being elected to those the troops. Representing the Fourth commends this Administration for its role in jobs and being approved by us to hold District of Missouri, I feel compelled to the Kosovo conflict. How can we praise the those positions as secretaries of de- compliment the 509th Bomb Wing of Administration for a mission that was never fense or other elected leadership that the United States Air Force led by defined, an exit strategy that was never com- are civilian. And I am happy to sign on Brigadier General Leroy Barnidge, for municated, and a failure to consult the Con- any motion to praise everyone from the magnificent job that they did. gress of the United States? While I am glad General Shelton and General Clark, They, and many others, won by the that the violence in Kosovo has ceased, I re- whether I agreed or disagreed with how air war; and also but for the Army and main critical of the means which brought about they managed that war on down, be- what they did, their presence, the Navy the end. And quite frankly, I believe the Presi- cause they put themselves in the posi- and what they did and its flying mis- dent should feel fortunate that we appear to tion of putting young people in harm’s sions, all of them did a good job. have at least temporarily resolved the conflict. way. The civilian leadership is not the I think we are losing sight of what Mr. Speaker, the Administration never pre- one where that praise needs to be. It this instruction is. We all voted on this sented the Congress and the American people needs to be to the people who were amendment. It passed the House unani- with a clear outline of our goals in Kosovo. doing the job, the people who were mously. So I say let us vote on the in- More importantly, never were we provided with there and had their lives at risk and struction. The other arguments are the leadership that the people of our nation had their families torn apart because of side issues. A victory is a victory, Mr. and of the entire free world have come to ex- those deployments. Speaker. pect from the United States. I very much want to praise them, and Mr. BLAGOJEVICH. Mr. Speaker, I cannot Fortunately, our fighting forces prevailed I do every time I see some of them, and vote against this resolution because I support and proved, once again, that they are the fin- I will continue to do that because the our troops. Our Nation is forever indebted to est in the world. But to suggest that they times that I and my counterparts lived our service men and women, and they de- ended the conflict in Kosovo because they H5214 CONGRESSIONAL RECORD — HOUSE July 1, 1999 were given a blueprint for victory is simply Minge Ramstad Stupak b 1616 Mink Rangel Tanner wrong. Moakley Regula Tauscher Mr. MCINTOSH and Mr. WATTS of The SPEAKER pro tempore. Without Mollohan Reyes Taylor (MS) Oklahoma changed their vote from objection, the previous question is or- Moore Rodriguez Thompson (CA) ‘‘yea’’ to ‘‘nay.’’ dered. Moran (KS) Roemer Thompson (MS) Moran (VA) Rothman Thornberry Mr. McCOLLUM changed his vote There was no objection. Morella Roybal-Allard Thurman from ‘‘nay’’ to ‘‘yea.’’ The SPEAKER pro tempore. The Murtha Rush Tierney So the motion was agreed to. question is on the motion to instruct Nadler Sabo Towns Traficant The result of the vote was announced offered by the gentleman from Mis- Napolitano Sanchez Neal Sanders Turner as above recorded. souri (Mr. SKELTON). Northup Sandlin Udall (CO) A motion to reconsider was laid on The question was taken, and the Nussle Sawyer Udall (NM) the table. Oberstar Schakowsky Upton Speaker pro tempore announced that Velazquez The SPEAKER pro tempore (Mr. Obey Scott the noes appeared to have it. Vento Olver Serrano LAHOOD). The Chair will appoint con- Visclosky Mr. ENGEL. Mr. Speaker, I object to Ortiz Shaw ferees after the next motion. Walsh Owens Shays the vote on the ground that a quorum Waters MOTION TO CLOSE CONFERENCE COMMITTEE Pallone Sherman is not present and make the point of Watt (NC) MEETING ON S. 1059, NATIONAL DEFENSE AU- Pascrell Sherwood order that a quorum is not present. Waxman THORIZATION ACT FOR FISCAL YEAR 2000, WHEN Pastor Shows The SPEAKER pro tempore. Evi- Weiner CLASSIFIED NATIONAL SECURITY INFORMA- Payne Sisisky Weller TION IS UNDER CONSIDERATION dently a quorum is not present. Pelosi Skelton Wexler The Sergeant at Arms will notify ab- Phelps Slaughter Weygand Mr. SPENCE. Mr. Speaker, pursuant Pomeroy Smith (WA) Wise to clause 12(a)(2) of House rule XXII, I sent Members. Porter Snyder Wolf offer a motion. The SPEAKER pro tempore. Without Portman Spence Woolsey objection, the Chair will reduce to 5 Price (NC) Spratt Wu The SPEAKER pro tempore. The minutes the vote on closing the con- Pryce (OH) Stabenow Wynn Clerk will report the motion. Quinn Stenholm Young (FL) ference that will immediately follow Rahall Strickland The Clerk read as follows: the first vote on instructing conferees. Mr. SPENCE of South Carolina moves that There was no objection. NAYS—162 the conference committee meetings on the bill (S. 1059) be closed to the public at such The vote was taken by electronic de- Abercrombie Goss Pickering times as classified national security infor- vice, and there were—yeas 261, nays Aderholt Graham Pickett Archer Granger Pitts mation is under consideration, provided, 162, answered ‘‘present’’ 5, not voting 7, Armey Green (WI) Pombo however, that any sitting Member of Con- as follows: Bachus Gutknecht Radanovich gress shall have the right to attend any [Roll No. 266] Baker Hall (TX) Reynolds closed or open meeting. Ballenger Hansen Riley YEAS—261 Barr Hastings (WA) Rogers The SPEAKER pro tempore. The Ackerman Dixon Jackson-Lee Barrett (NE) Hayes Rohrabacher question is on the motion offered by Allen Doggett (TX) Bartlett Hayworth Ros-Lehtinen the gentleman from South Carolina Barton Hefley Roukema Andrews Dooley Jefferson (Mr. SPENCE). Baird Doyle John Bass Herger Royce Biggert Baldacci Dreier Johnson (CT) Hill (MT) Ryan (WI) Pursuant to clause 11 of rule XXII, Bilirakis Hilleary Ryun (KS) Baldwin Dunn Johnson, E. B. this vote must be taken by the yeas Blunt Hoekstra Salmon Barcia Edwards Jones (OH) Boehner Hostettler Sanford and nays. Barrett (WI) Ehlers Kanjorski Bonilla Hunter Saxton This will be a 5-minute vote. Becerra Emerson Kaptur Brady (TX) Istook Scarborough Bentsen Engel Kennedy The vote was taken by electronic de- Bryant Jackson (IL) Schaffer Berkley English Kildee vice, and there were—yeas 413, nays 9, Berman Kilpatrick Burr Jenkins Sensenbrenner Eshoo Burton Johnson, Sam Sessions not voting 12, as follows: Berry Etheridge Kind (WI) Bilbray King (NY) Buyer Jones (NC) Shadegg [Roll No. 267] Evans Campbell Kasich Shimkus Bishop Farr Kleczka YEAS—413 Bliley Klink Canady Kelly Shuster Fattah Blumenauer Kolbe Cannon Kingston Simpson Ackerman Boucher Crane Filner Boehlert LaFalce Chabot Knollenberg Skeen Aderholt Boyd Crowley Foley Bonior LaHood Chambliss Kucinich Smith (MI) Allen Brady (PA) Cubin Forbes Bono Lampson Chenoweth Kuykendall Smith (TX) Andrews Brady (TX) Cummings Ford Borski Lantos Coble Largent Souder Archer Brown (FL) Cunningham Frank (MA) Boswell Larson Coburn Lazio Stark Armey Brown (OH) Danner Franks (NJ) Boucher Latham Collins Lee Stearns Bachus Bryant Davis (FL) Frelinghuysen Boyd LaTourette Combest Lewis (KY) Stump Baird Burr Davis (IL) Frost Brady (PA) Leach Condit Linder Sununu Baker Burton Davis (VA) Brown (FL) Ganske Levin Conyers LoBiondo Sweeney Baldacci Buyer Deal Brown (OH) Gejdenson Lewis (CA) Cook Lucas (OK) Talent Baldwin Callahan DeGette Callahan Gekas Lewis (GA) Cooksey Manzullo Tancredo Ballenger Calvert Delahunt Calvert Gephardt Lofgren Crane McCrery Tauzin Barcia Camp DeLauro Camp Gilchrest Lowey Cubin McInnis Taylor (NC) Barr Campbell DeLay Capps Gillmor Lucas (KY) Cunningham McIntosh Terry Barrett (NE) Canady DeMint Capuano Gilman Luther Deal McKeon Thomas Barrett (WI) Cannon Deutsch Cardin Gonzalez Maloney (CT) DeLay McKinney Thune Bartlett Capps Diaz-Balart Carson Gordon Maloney (NY) DeMint Metcalf Tiahrt Barton Capuano Dickey Castle Greenwood Markey Diaz-Balart Myrick Toomey Bass Cardin Dicks Clay Gutierrez Martinez Doolittle Nethercutt Vitter Bateman Carson Dingell Clayton Hall (OH) Mascara Duncan Ney Walden Becerra Castle Dixon Clement Hastert Matsui Ehrlich Norwood Wamp Bentsen Chabot Doggett Clyburn Hastings (FL) McCarthy (MO) Everett Ose Watkins Bereuter Chambliss Dooley Costello Hill (IN) McCarthy (NY) Ewing Oxley Watts (OK) Berkley Chenoweth Doolittle Coyne Hilliard McCollum Fletcher Packard Weldon (FL) Berman Clay Doyle Cramer Hinchey McDermott Fowler Paul Weldon (PA) Berry Clayton Dreier Crowley Hinojosa McGovern Gallegly Pease Whitfield Biggert Clement Duncan Cummings Hobson McHugh Goode Peterson (MN) Wicker Bilbray Clyburn Dunn Danner Hoeffel McIntyre Goodlatte Peterson (PA) Wilson Bilirakis Coble Edwards Davis (FL) Holden McNulty Goodling Petri Young (AK) Bishop Coburn Ehlers Davis (IL) Holt Meehan Blagojevich Collins Ehrlich Davis (VA) Hooley Meek (FL) ANSWERED ‘‘PRESENT’’—5 Bliley Combest Engel DeFazio Horn Meeks (NY) Blunt Condit English Bateman Blagojevich Rogan Boehlert Conyers Eshoo DeGette Houghton Menendez Bereuter Rivers Delahunt Hoyer Mica Boehner Cook Etheridge Hulshof Bonilla Cooksey Evans DeLauro Millender- NOT VOTING—7 Deutsch Hutchinson McDonald Bonior Costello Everett Dickey Hyde Miller (FL) Brown (CA) Gibbons Smith (NJ) Bono Cox Ewing Dicks Inslee Miller, Gary Cox Green (TX) Borski Coyne Farr Dingell Isakson Miller, George Fossella Lipinski Boswell Cramer Fattah July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5215

Filner Lewis (KY) Roukema NAYS—9 Messrs. MCCOLLUM, BACHUS, and LA- Fletcher Linder Roybal-Allard Blumenauer Lee Owens ALCE Foley LoBiondo Royce F ; DeFazio McKinney Stark Forbes Lofgren Rush From the Committee on Commerce, Kucinich Oberstar Watt (NC) Ford Lowey Ryan (WI) for consideration of sections 326, 601, Fowler Lucas (KY) Ryun (KS) NOT VOTING—12 602, 1049, 1050, 3151–53, 3155–65, 3173, 3175, Frank (MA) Lucas (OK) Sabo Abercrombie Franks (NJ) Lipinski 3176–78 of the Senate bill, and sections Frelinghuysen Luther Sanchez Brown (CA) Gibbons Salmon Frost Maloney (CT) Sanders 601, 602, 653, 3161, 3162, 3165, 3167, 3184, Emerson Green (TX) Smith (MI) Gallegly Maloney (NY) Sandlin 3186, 3188, 3189, and 3191 of the House Fossella Larson Souder Ganske Manzullo Sanford amendment, and modifications com- Sawyer Gejdenson Markey b 1626 mitted to conference: Messrs. BLILEY, Gekas Martinez Saxton Gephardt Mascara Scarborough So the motion was agreed to. BARTON of Texas, and DINGELL; Gilchrest Matsui Schaffer The result of the vote was announced Provided that Mr. BILIRAKIS is ap- Gillmor McCarthy (MO) Schakowsky as above recorded. pointed in lieu of Mr. BARTON of Texas Gilman McCarthy (NY) Scott for consideration of sections 326, 601, Gonzalez McCollum Sensenbrenner A motion to reconsider was laid on Goode McCrery Serrano the table. and 602 of the Senate bill, and sections Goodlatte McDermott Sessions Stated for: 601, 602, and 653 of the House amend- Goodling McGovern Shadegg ment, and modifications committed to Shaw Mr. LARSON. Mr. Speaker, on rollcall No. Gordon McHugh 267, a motion to close portions of D.O.D. au- conference. Goss McInnis Shays AUZIN Graham McIntosh Sherman thorization conference, I was out of the Cham- Provided that Mr. T appointed Granger McIntyre Sherwood ber on legislative business. Had I been in lieu of Mr. BARTON of Texas for con- Green (WI) McKeon Shimkus sideration of sections 1049 and 1050 of Shows present, I would have voted ``Yea.'' Greenwood McNulty (Mr. ARMEY asked and was given the Senate bill, and modifications com- Gutierrez Meehan Shuster Gutknecht Meek (FL) Simpson permission to speak out of order for 1 mitted to conference. Hall (OH) Meeks (NY) Sisisky minute.) From the Committee on Education Hall (TX) Menendez Skeen and the Workforce, for consideration of Skelton LEGISLATIVE PROGRAM Hansen Metcalf Slaughter sections 579 and 698 of the Senate bill, Hastings (FL) Mica Mr. ARMEY. Mr. Speaker, I am Smith (NJ) and sections 341, 343, 549, 567, and 673 of Hastings (WA) Millender- pleased to announce to my colleagues Smith (TX) Hayes McDonald the House amendment, and modifica- Smith (WA) that, pending completion of today’s Hayworth Miller (FL) tions committed to conference: Messrs. Snyder legislative business, we will be ad- Hefley Miller, Gary Spence GOODLING, DEAL of Georgia, and Mrs. Herger Miller, George journing for the Independence Day Dis- Spratt MINK of Hawaii. Hill (IN) Minge Stabenow trict Work period. Members will be Hill (MT) Mink Stearns happy to know that the House will, b 1630 Hilleary Moakley Stenholm Hilliard Mollohan therefore, not be in session tomorrow. From the Committee on Government Strickland Please be advised that we expect votes Hinchey Moore Stump Reform, for consideration of sections Hinojosa Moran (KS) Stupak to run late into the evening. By com- 538, 652, 654, 805–810, 1004, 1052–54, 1080, Moran (VA) Hobson Sununu pleting our work tonight, Members will 1101–1107, 2831, 2862, 3160, 3161, 3163, and Hoeffel Morella Sweeney be able to return home a day sooner Hoekstra Murtha Talent 3173 of the Senate bill, and sections 522, Holden Myrick Tancredo than expected. 524, 525, 661–64, 672, 802, 1101–05, 2802, Holt Nadler Tanner Mr. Speaker, I would furthermore and 3162 of the House amendment, and Hooley Napolitano Tauscher like to notify Members that we will be Neal modifications committed to con- Horn Tauzin returning on Monday, July 12 at 12:30 Hostettler Nethercutt Taylor (MS) ference: Messrs. BURTON of Indiana, Houghton Ney Taylor (NC) p.m. for morning hour debates. We will SCARBOROUGH and CUMMINGS; Hoyer Northup Terry begin legislative business at 2 p.m., Provided that Mr. HORN is appointed Hulshof Norwood Thomas with no votes expected until 6 p.m. Hunter Nussle in lieu of Mr. SCARBOROUGH for consid- Thompson (CA) There will be an official Whip notice Hutchinson Obey Thompson (MS) eration of sections 538, 805–810, 1052– Hyde Olver Thornberry distributed to Members’ offices next 1054, 1080, 2831, 2862, 3160, and 3161 of the Inslee Ortiz Thune week outlining the legislative agenda. Senate bill and sections 802 and 2802 of Isakson Ose Thurman The SPEAKER pro tempore. Without Istook Oxley Tiahrt the House amendment. Jackson (IL) Packard Tierney objection, the Chair appoints the fol- From the Committee on Inter- Jackson-Lee Pallone Toomey lowing conferees: national Relations, for consideration of (TX) Pascrell Towns From the Committee on Armed Serv- Jefferson Pastor sections 1013, 1043, 1044, 1046, 1066, 1071, Traficant ices, for consideration of the Senate Jenkins Paul Turner 1072, and 1083 of the Senate bill, and John Payne Udall (CO) bill and the House amendment, and sections 1202, 1206, 1301–1307, and 1404, Johnson (CT) Pease Udall (NM) modifications committed to con- 1407, 1408, 1411, and 1413 of the House Johnson, E. B. Pelosi Upton ference: Messrs. SPENCE, STUMP, amendment, and modifications com- Johnson, Sam Peterson (MN) Velazquez UNTER ATEMAN ANSEN ELDON Jones (NC) Peterson (PA) Vento H , B , H , W of mitted to conference: Messrs. GILMAN, Jones (OH) Petri Visclosky Pennsylvania, HEFLEY, SAXTON, BUYER, BEREUTER, and GEJDENSON. Kanjorski Phelps Vitter Mrs. FOWLER, Messrs. MCHUGH, TAL- From the Committee on the Judici- Kaptur Pickering Walden ENT, EVERETT, BARTLETT of Maryland, ary, for consideration of sections 3156 Kasich Pickett Walsh Kelly Pitts Wamp MCKEON, WATTS of Oklahoma, THORN- and 3163 of the Senate bill and sections Kennedy Pombo Waters BERRY, HOSTETTLER, CHAMBLISS, 3166 and 3194 of the House amendment, Kildee Pomeroy Watkins HILLEARY, SKELTON, SISISKY, SPRATT, and modifications committed to con- Kilpatrick Porter Watts (OK) RTIZ ICKETT VANS AYLOR Kind (WI) Portman Waxman O , P , E , T of Mis- ference: Messrs. HYDE, MCCOLLUM and King (NY) Price (NC) Weiner sissippi, ABERCROMBIE, MEEHAN, CONYERS. Kingston Pryce (OH) Weldon (FL) UNDERWOOD, REYES, TURNER, Ms. From the Committee on Resources, Kleczka Quinn Weldon (PA) SANCHEZ, Mrs. TAUSCHER, Mr. ANDREWS for consideration of sections 601, 602, Klink Radanovich Weller Knollenberg Rahall Wexler and Mr. LARSON; 695, 2833, and 2861 of the Senate bill, Kolbe Ramstad Weygand From the Permanent Select Com- and sections 365, 601, 602, 653, 654, and Kuykendall Rangel Whitfield mittee on Intelligence, for consider- LaFalce Regula 2863 of the House amendment, and Wicker ation of the matters within the juris- LaHood Reyes Wilson modifications committed to con- Lampson Reynolds Wise diction of that committee under clause ference: Messrs. YOUNG of Alaska, TAU- Lantos Riley Wolf 11 of rule X: Messrs. GOSS, LEWIS of ZIN and GEORGE MILLER of California. Largent Rivers Woolsey California, and DIXON; From the Committee on Science, for Latham Rodriguez Wu LaTourette Roemer Wynn From the Committee on Banking and consideration of sections 1049, 3151–53, Lazio Rogan Young (AK) Financial Services, for consideration of and 3155–65 of the Senate bill, and sec- Leach Rogers Young (FL) section 1059 of the Senate bill and sec- tions 3167, 3170, 3184, 3188–90, and 3191 of Levin Rohrabacher Lewis (CA) Ros-Lehtinen tion 1409 of the House bill, and modi- the House amendment, and modifica- Lewis (GA) Rothman fications committed to conference: tions committed to conference: Messrs. H5216 CONGRESSIONAL RECORD — HOUSE July 1, 1999

SENSENBRENNER, CALVERT and PERMISSION FOR COMMITTEE ON FINANCIAL SERVICES ACT OF 1999 COSTELLO. APPROPRIATIONS TO HAVE The SPEAKER pro tempore (Mr. From the Committee on Transpor- UNTIL FRIDAY, JULY 9, 1999, TO LAHOOD). Pursuant to House Resolu- tation and Infrastructure, for consider- FILE PRIVILEGED REPORT ON A tion 235 and rule XVIII, the Chair de- ation of sections 601, 602, 1060, 1079, and BILL MAKING APPROPRIATIONS clares the House in the Committee of FOR DEPARTMENT OF INTERIOR 1080 of the Senate bill, and sections 361, the Whole House on the State of the AND RELATED AGENCIES FOR 601, 602, and 3404 of the House amend- Union for the consideration of the bill, FISCAL YEAR 2000 ment, and modifications committed to H.R. 10. conference: Messrs. SHUSTER, Mr. YOUNG of Florida. Mr. Speaker, b 1638 GILCHREST and DEFAZIO. I ask unanimous consent that the Com- mittee on Appropriations may have IN THE COMMITTEE OF THE WHOLE From the Committee on Veterans’ until Friday, July 9, 1999, to file a priv- Accordingly, the House resolved Affairs, for consideration of sections ileged report on a bill making appro- itself into the Committee of the Whole 671–75, 681, 682, 696, 697, 1062, and 1066 of priations for the Department of Inte- House on the State of the Union for the the Senate bill, and modifications com- rior and related agencies for the fiscal consideration of the bill (H.R. 10) to en- mitted to conference: Messrs. BILI- year 2000, and for other purposes. hance competition in the financial RAKIS, QUINN and FILNER. The SPEAKER pro tempore (Mr. services industry by providing a pru- There was no objection. LAHOOD). Is there objection to the re- dential framework for the affiliation of quest of the gentleman from Florida? banks, securities firms, and other fi- f There was no objection. nancial service providers, and for other The SPEAKER pro tempore. All purposes, with Mrs. EMERSON in the points of order are reserved on the bill. chair. ANNOUNCEMENT BY CHAIRMAN OF f The Clerk read the title of the bill. COMMITTEE ON RULES REGARD- The CHAIRMAN. Pursuant to the ING AMENDMENT PROCESS FOR PERMISSION FOR COMMITTEE ON rule, the bill is considered as having H.R. 434, AFRICA GROWTH AND APPROPRIATIONS TO HAVE been read the first time. OPPORTUNITY ACT; AND H.R. UNTIL FRIDAY, JULY 9, 1999, TO Under the rule, the gentleman from 1211, FOREIGN RELATIONS AU- FILE PRIVILEGED REPORT ON A Iowa (Mr. LEACH), the gentleman from THORIZATION ACT, FISCAL BILL MAKING APPROPRIATIONS New York (Mr. LAFALCE), the gen- YEARS 2000 AND 2001 FOR MILITARY CONSTRUCTION, tleman from Virginia (Mr. BLILEY), and FAMILY HOUSING, AND BASE RE- the gentleman from Michigan (Mr. DIN- Mr. DREIER. Mr. Speaker, the Com- ALIGNMENT AND CLOSURE FOR GELL) each will control 221⁄2 minutes. mittee on Rules is expected to meet THE DEPARTMENT OF DEFENSE The Chair recognizes the gentleman the week of July 12 to grant a rule FOR FISCAL YEAR 2000 from Iowa (Mr. LEACH). which may limit amendments for con- Mr. LEACH. Madam Chairman, I sideration of H.R. 434, the Africa Mr. YOUNG of Florida. Mr. Speaker, I ask unanimous consent that the Com- yield myself such time as I may con- Growth and Opportunity Act. The sume. Committee on Rules is also expected to mittee on Appropriations may have until Friday, July 9, 1999 to file a privi- (Mr. LEACH asked and was given per- meet the week of July 12 to grant a leged report on a bill making appro- mission to revise and extend his re- rule which may limit amendments for priations for military construction, marks.) consideration of H.R. 1211, the Foreign family housing, and base realignment Madam Chairman, I realize that feel- Relations Authorization Act, Fiscal and closure for the Department of De- ings are imperfect with relation to the Years 2000 and 2001. fense for the fiscal year 2000, and for rule debate. For all the frustration on Any Member contemplating an other purposes. the minority side, it is more than amendment to H.R. 434 should submit The SPEAKER pro tempore. Is there matched by this Member whose advice 55 copies of the amendment and a brief objection to the request of the gen- was disregarded by the Rules Com- explanation of the amendment to the tleman from Florida? mittee on key amendments. Nonethe- Committee on Rules no later than There was no objection. less the big picture is that this is a noon, Tuesday, July 13. Amendments The SPEAKER pro tempore. All good bill, good for individual citizens should be drafted to the text of the bill points of order are reserved on the bill. and the economy at large. I ask all my as reported by the Committee on Ways f colleagues to vote on the quality of the and Means on June 17. end product, not the process of consid- APPOINTMENT OF CONFEREES ON eration which I acknowledge has been Any Member contemplating an H.R. 1905, LEGISLATIVE BRANCH imperfect. amendment to H.R. 1211 should also APPROPRIATIONS ACT, 2000 In this regard, let me stress that the submit 55 copies of the amendment and Mr. TAYLOR of North Carolina. Mr. big picture is that financial moderniza- a brief explanation of the amendment Speaker, I ask unanimous consent to tion legislation will save the public ap- to us up in the Committee on Rules no take from the Speaker’s table the bill proximately $15 billion a year. It will later than 4 p.m. on Tuesday, July 13. (H.R. 1905) making appropriations for provide increased services to individ- For those who are not aware of it, the Legislative Branch for the fiscal uals and firms, particularly those in the Committee on Rules is located in year ending September 30, 2000, and for less comprehensively served parts of room H–312 in the Capitol. That is other purposes, with Senate amend- the country. It will also allow U.S. fi- right upstairs. ments thereto, disagree to the Senate nancial companies to compete more Amendments should be drafted to the amendments, and agree to the con- fully abroad. The economy on a global basis is text of H.R. 2415, the American Em- ference asked by the Senate. The SPEAKER pro tempore. Is there changing and we must be prepared to bassy Security Act of 1999, as intro- objection to the request of the gen- lead market developments, rather than duced by the gentleman from New Jer- tleman from North Carolina? The Chair lose market share. In this effort, the sey (Mr. SMITH) and the gentlewoman hears none and, without objection, ap- fundamental precept of the bill is to from Georgia (Ms. MCKINNEY) on July points the following conferees: Messrs. end the arbitrary constraints on com- 1, 1999. TAYLOR of North Carolina, WAMP, merce implicit in the 65-year-old Glass- Members should use the Office of LEWIS of California, Ms. GRANGER, and Steagall law. Competition is the Amer- Legislative Counsel to ensure that Messrs. PETERSON of Pennsylvania, ican way and enhanced competition is their amendments are properly drafted YOUNG of Florida, PASTOR, MURTHA, the underlying precept of this bill. and should check with the Office of the HOYER and OBEY. In this regard, I’d like to address the Parliamentarian to be certain their There was no objection. issues of bigness and of privacy. With amendments comply with the rules of The SPEAKER pro tempore. All regard to conglomeration which is pro- the House. points of order are reserved on the bill. ceeding at a pace with which I am July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5217 deeply uncomfortable, it should be un- But, this year it appears that we may be power does not automatically lead to in- derstood that the big are getting bigger closer than ever before to final passage. The creased competition, innovation or customer from the top down, utilizing regulatory bill before us today is the result of months and service. fiat. What this bill does is provide a months of tough negotiation and compromise; But the solution to the problem of con- modern regulation framework for among different congressional committees, dif- centration of economic power is to empower change. It empowers all equally. ferent political parties, different industrial our smaller financial institutions to compete Smaller institutions will be provided groupings and different regulators. No single against large institutions, combining the new the same competitive tools that cur- individual or group got allÐor even mostÐof powers granted in this legislation with their rently are only available to a few. In- what it wanted. Equity and the public interest personal service and local knowledge in order deed, in a David and Goliath world, have prevailed. to maintain and increase their market share. H.R. 10 is the community bankers and It should be remembered that while the For many communities, retaining their local, independent insurance agents’ sling- work of Congress inevitably involves adjudi- independent bank depends upon granting that shot. cating regulatory turf battles or refereeing in- bank the power to compete against mega-gi- Finally, with regard to privacy, let dustrial groups fighting for their piece of the ants which are being formed under the current me stress no financial services bill in pie, the principal work of Congress is the work regulatory and legal framework. modern history has gone to this floor of the peopleÐto ensure that citizens have ac- H.R. 10 provides community banks with the with stronger privacy provisions. Im- cess to the widest range of products at the tools to compete, not only against large mega- portantly, pretext calling—the idea lowest possible price; that taxpayers are not banks but also against new technologies such that someone can call a financial insti- put at risk; that large institutions are able to as Internet banking. Banks which stick with of- tution and obtain your financial infor- compete against their larger international ri- fering the same old accounts and services in mation—is now effectively outlawed; vals; and that small institutions can compete the same old ways will find their viability medical records are protected; and in- effectively against big ones. threatened. Those that innovate and adapt dividuals are given powerful new rights We address this legislation in the shadow of under the provisions of this bill will be extraor- to prevent financial institutions from major, ongoing changes in the financial serv- dinarily well positioned to grow and serve their transferring or selling information to ices sector, largely the result of decisions by customer base. third parties. the courts and regulators, who have stepped Large financial institutions can already offer Here, let me stress, if Congress subse- forward in place of Congress. Many of us a variety of services. But community banks quently passes more comprehensive have concern about certain trends in finance. are usually not large enough to utilize legal medical records provisions, they will Whether one likes or dislikes what is hap- loopholes like Section 20 affiliates or the cre- be allowed to bolster or supercede pening in the marketplace, the key is to en- ation of a unitary thrift holding company to these safeguards and if HHS promul- sure that there is fair competition among in- which large financial institutionsÐcommercial gates regulations in this area they dustry groups and protection for consumers. In as well as financialÐhave turned. would augment the provisions of this this regard, this bill provides for functional reg- By bolstering the viability of community- bill. Nothing in this act is intended to ulation with state and federal bank regulators based institutions and providing greater flexi- shackle Executive Branch actions in overseeing banking activities, state and fed- bility to them, H.R. 10 increases the percent- this area. age of dollars retained in local communities. In conclusion, I would like to thank eral securities regulators governing securities activities and the state insurance commis- Community institutions are further protected by my Democratic colleagues on the a small, but important provision that prohibits Banking Committee and, in particular, sioners looking over the operations of insur- ance companies and sales. banks from setting up ``deposit production of- JOHN LAFALCE and BRUCE VENTO, and The benefits to consumers in this bill cannot fices'' which gather up deposits in commu- JOHN DINGELL of the Commerce Com- nities without lending out money to people in mittee, whose support I have been ap- be stressed more. First, they will gain in im- proved convenience. This bill allows for one- the community. preciative in the past and whose dis- Additionally, the bill before us strengthens sent I respect today; also my friends stop shopping for financial services with bank- ing, insurance and securities activities being the Community Reinvestment Act by making TOM BLILEY, MIKE OXLEY, DAVID available under one roof. compliance with the act a condition for a bank DREIER, JOHN BOEHNER and so many Second, consumers will benefit from in- to affiliate with a securities firm or securities others, like MARGE ROUKEMA, SUE creased competition and the price advantages company. CRA is also expanded to a newly KELLY, PAT TOOMEY and RICK LAZIO, created entity called Wholesale Financial Insti- whose leadership has been so important that competition produces. tutions. to bringing this bill to the floor. Third, there are increased protections on in- One of the most controversial provisions in The legislation before the House is historic surance and securities sales, a required dis- H.R. 10 is the provision in Title IV which pro- win-win-win legislation, updating America's fi- closure on ATM machines and screens of hibits commercial entities from establishing nancial services system for the 21st Century. bank fees and a requirement that the Federal It's a win for consumers who will benefit Reserve Board hold public hearings on large thrifts in the future. Under current law, com- from more convenient and less expensive fi- financial services merger proposals. mercial entities are already prohibited from nancial services, from major consumer protec- Fourth, the Federal Home Loan Bank reform buying or owning commercial banks. This re- tion provisions and from the strongest financial provisions expand the availability of credit to striction between commercial banking and and medical privacy protections ever consid- farmers and small businesses and for rural commerce is not only maintained in H.R. 10 ered by the Congress. and low-income community economic develop- but extended to restrict future commercial af- It's a win for the American economy by ment projects. filiations with savings associations. modernizing the financial services industry and Fifth, the bill also contains major consumer The reason this restriction on commerce savings an estimated $15 billion in unneces- privacy protections making so-called pretext and banking is being expanded is several fold. sary costs. calling, in which a person uses fraudulent First, savings associations that once were ex- And, it's a win for America's international means to obtain private financial information of clusively devoted to providing housing loans, competition position by allowing U.S. compa- another person, a federal crime punishable by have become more like banks, devoting more nies to compete more effectively for business up to five years in jail and a fine of up to of their assets to consumer and commercial around the world and create more financial $250,000; would wall off the medical records loans. Hence the appropriateness for com- services jobs for Americans. held by insurance companies from transfer to parability between the commercial bank and It would be an understatement to say that any other party; and requires banks to dis- thrift charter is self-evident. this has not been an easy, nor a quickly-pro- close their privacy policies to customers. Second, this provision must be viewed with duced piece of legislation to bring before the A bipartisan amendment developed by the history of past legislative efforts affecting House. members of the Banking, Commerce and the banking and thrift industries. The S&L in- For many of the 66 years since the Con- Rules Committee will further enhance these dustry has tapped the U.S. Treasury for $140 gress enacted the Glass-Steagall Act in 1933 protections and I urge its adoption. billion to clean up the 1980s S&L crisis. In to separate commercial banking from invest- In closing, I'd like to emphasize again the 1996, savings associations received a multi- ment banking, there have been proposals to philosophic underpinnings of this legislation. billion dollar tax break to facilitate their conver- repeal the act. The Senate has thrice passed Americans have long held concerns about big- sion to a bank charter. Also, in 1996, the repeal legislation and last year the House ap- ness in the economy. As we have seen in S&Ls tapped the banking industry for $6 to $7 proved the 105th Congress version of H.R. 10. other countries, concentration of economic billion to help pay over the next 30 years for H5218 CONGRESSIONAL RECORD — HOUSE July 1, 1999 their FICO obligations, that part of the S&L (Mr. LAFALCE asked and was given Material, the coach of our successful bailout costs that remained with the thrift in- permission to revise and extend his re- baseball team. dustry. marks.) (Mr. OXLEY asked and was given During this time period, Congress has liber- Mr. LAFALCE. Madam Chairman, permission to revise and extend his re- alized the qualified thrift lending test and the first, I want to thank the Chairman of marks.) restrictions on the Federal savings association the Committee on Banking and Finan- Mr. OXLEY. Madam Chairman, I rise charter. These legislative changes are in addi- cial Services, the gentleman from Iowa in support of H.R. 10, the Financial tion to the numerous advantages that the in- (Mr. LEACH), for working collegially Services Act of 1999. dustry has historically enjoyed, such as the with so many of us on the Democratic This is indeed an historic occasion, broad preemption rights over state laws and side of the aisle in order to produce a something that many of us have more liberal branching laws. bipartisan bill out of the Committee on worked on for a number of years. As a H.R. 10 continues the Congressional grant Banking and Financial Services that matter of fact, this is by my count the of benefits to the thrift industry by repealing could be signed by the President and 10th time in the last 20 years that we the SAIF special reserve, providing voluntary enacted into law. Each side had to give have sought to bring our financial laws membership by Federal savings associations and take, each side had to make tre- into the modern world as we enter the in the Federal Home Loan Bank System, al- mendous amount of concessions, but 21st century. So here is hoping that lowing state thrifts to keep the term ``Federal'' we did in order to advance the public number 11 is the charm. in their names, and allowing mutual S&L hold- interest and financial services mod- Building on the progress we made ing companies to engage in the same activi- ernization. last year through the help of many ties as stock S&L holding companies. people that I see here on the floor, in- b 1645 Opponents of this provision correctly argue cluding our good friend, the gentleman that commercial companies that have acquired We produced a bill with a 51–8 vote, from Ohio (Mr. BOEHNER), the gen- thrifts (so-called unitary thrift holding compa- 21–6 on the Democratic side of the tleman from Virginia (Chairman BLI- nies) before and after the S&L debacles of the aisle. The Democrats voted for it, how- LEY), the gentleman from Iowa (Chair- 1980s have not, for the most part, caused tax- ever, in large part because we were able man LEACH), the gentleman from payer losses. However, the Federal deposit in- to retain the strongest community re- Michigan (Mr. DINGELL), the gentleman surance fund that was bailed out by the tax- investment provisions, because we were from New York (Mr. TOWNS) and oth- payers applied to the entire thrift industry in- able to have strong consumer protec- ers, that we passed this bill by one vote cluding the unitary thrift holding companies. tion before and beyond that, most espe- in the House. Three years ago some $6 billion to $7 billion cially provisions regarding redlining in I suspect this year it will be far dif- in thrift industry liabilities left over from clean- the insurance industry. Once that erod- ferent and it will be a large vote, be- ing up the S&Ls were transferred to the com- ed, so too did a lot of the Democratic cause the time has come for financial mercial banking industry with the under- support. And that is unfortunate. It is services modernization in this Congress standing that sharing liabilities would be unfortunate. and indeed in this country. matched by ending special provisions. This is There are other provisions that we We have arrived at a point where just another reason to provide comparable regula- are concerned about, too, and that is about everybody, including those on tion. the medical privacy language of the the opposite side of specific issues on It is with this history and the assumption gentleman from Iowa (Mr. GANSKE). I the op-sub issue, for example, agree that decisions in this bill are made in the con- am hopeful that if this bill passes those that the country’s financial regula- text of a legislative continuum that the provi- concerns that we have can be dealt tions crafted during the Depression sion in the bill was added to not only restrict with in conference, and I look forward years of the 1930s need to be brought up the establishment of new unitary thrift holding to a colloquy with the gentleman from to date. companies, but also to require that commer- Iowa (Mr. GANSKE) regarding his dis- The Glass-Steagall Act has outlived cial entities may not buy a thrift from an exist- position on that. its useful purpose. It now serves only ing grandfathered company without first get- There are some amendments that as the cause of inefficiency in the mar- ting Federal Reserve Board approval. have been offered that I do not think kets as our markets change dramati- As we all know, there are complex issues should have been allowed that would cally. involved in this legislation, and there will be create severe difficulties for me, in par- Madam Chairman, we have had a se- differing judgments by Members. One thing we ticular, the amendment of the gen- ries of hearings, for example, in my all may agree upon, however, is that Congress tleman from Texas (Mr. PAUL) which committee about what is going on with needs to reassert its Constitutional role in de- would eviscerate the ability of law en- the securities industry and how on-line termining what should be the laws governing forcement agencies to enforce our anti- financial services, instead of allowing the regu- brokerage has now become the most money-laundering statutes. The FBI is lators and courts to usurp this responsibility. growing part of the securities industry. If Congress turns its back on financial serv- adamantly opposed to that. That shows how things have changed in ices modernization, we should not fool our- I also am adamantly opposed to the technology and in markets and in con- selves that rapid evolution in the fields of Bliley amendment that would be a rip- sumer preference. And yet we continue banking, securities and insurance will cease. It off for the officers of mutual insurance to rely on a 1930 statute known as will not. Financial services modernization will companies at the expense of policy- Glass-Steagall that simply has outlived take place with or without Congressional ap- holders. It would be a Federal intrusion its usefulness. proval. Without this legislation, however, on State law. It would say to insurance That means legislation that will pro- changes in financial services will continue officers, disregard your policyholders if vide for fair competition among all unabated, but they will take place in an ad hoc they want to convert. They are enti- players. And it also means not only manner through the courts and through regu- tled to all the money, not their policy- modernizing the marketplace and latory fiat, and will not be subject to the safe- holders. We must defeat the Bliley treating the consumer as the one who guards and prudential parameters established amendment if this bill is to advance makes those kinds of decisions in the in this legislation. the way I would like it to advance. marketplace to provide that consumer Now is the time for Congress, to step up to I am hopeful that, at the conclusion with a new array of services and prod- the challenge of modernizing our nation's fi- of debate and at the conclusion of the ucts, some products we probably have nancial services sector for the 21st century, to amendment process, we could advance not even thought of or that financial ensure that it remains competitive internation- to conference and then deal with what- service institutions have not even ally, that it is stable and poses the least pos- ever problems are left in conference. thought of yet today will be offered sible threat to the taxpayer, and that it pro- But that remains to be seen. more and more to the consuming pub- vides quality service to all our citizens and Mr. LAFALCE. Madam Chairman, I lic and they are going to be able to communities. reserve the balance of my time. one-stop shop as they go into this fi- Madam Chairman, I reserve the bal- Mr. BLILEY. Madam Chairman, I nancial institution. ance of my time. yield 5 minutes to the gentleman from And ultimately it will not make any Mr. LAFALCE. Madam Chairman, I Ohio (Mr. OXLEY), chairman of the Sub- difference what it says on the door be- yield myself 3 minutes. committee on Finance and Hazardous cause they are going to be able to buy July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5219 a wide variety of products in that area. looks like this Congress is setting out read to my colleagues what he said to And, yes, those functions will be regu- to create the situation that caused the the Committee on Commerce this year. lated by the regulators who know what collapse of the banks in Japan and ‘‘I and my colleagues are firmly of that is all about. It is called functional Thailand by setting up op-subs and by the view that the long-term stability of regulation. Or as chairman of the SEC setting up monstrous conglomerates U.S. financial markets and the inter- Arthur Levitt says, commonsense regu- which will expose the American tax- ests of the American taxpayer would be lation in our marketplace is to protect payers and American investors to all better served by no financial mod- the consumer but not to constrict the manner of mischief and to the most as- ernization bill rather than one that al- marketplace so that people do not have sured economic calamity. lows the proposed new activities to be the ability to make decisions based on The bill is considered under a rule conducted by the bank.’’ And he goes what is in their long-term economic in- which does not afford either an oppor- on to state that he and his colleagues terest. It means legislation that will tunity to offer all the amendments or ‘‘believe strongly that the operating promote, not jeopardize, the long-term to have adequate debate thereof. But subsidiary approach would damage stability of U.S. financial markets and what does the bill do, among other competition in and the vitality of our the interests of American taxpayers. things? financial services industry and poses Americans are becoming increasingly First all, it allows megamergers to serious risks for the American tax- active participants in our booming se- create monstrous institutions which payer.’’ curities markets and going on-line and could engage in almost any sort of fi- He noted that it creates a situation investing, sometimes around the clock, nancial action. It sets up essentially, where banks and other financial activi- for their families’ future, investing for devices like the banks in Japan, which ties will be made too big to fail and their education, for their children’s are in a state of collapse at this time, that the taxpayers then will be com- education, investing for the future that banks in Korea and Thailand, which pelled to come in and bail them out. we have tried to encourage. are in a state of collapse, or banks in So if my colleagues enjoyed the out- One of the frustrations, I guess, in the United States, which could do any- rage of what the Committee on Bank- our country over the years has been thing and which did anything and con- ing and Financial Services did to us on that our savings rate has been far too tributed in a massive way to the eco- the savings and loan reform, this, they low compared to some of our other nomic collapse of this country in 1929 should know, is a perfection of that. competing nations. This will give peo- which was only cleared and cured by That cost us about $500 billion. This, my colleagues can be assured, will cost ple the ability to make long-term World War II. us a lot more. plans, to work with a financial institu- Some of the special abuses of this I urge my colleagues to vote against particular legislation need to be noted. tion that has the ability for them to this abominable legislation. The Committee on Rules has stripped buy their banking products, to get In case my colleagues have any questions out an anti-redlining provision which their securities, their 401(k), their sav- about my views, I want to clearly state for the had been in the law and which is valu- ings, their insurance needs, all of record that I rise to condemn this bill. It is a those, under one roof dealing with pro- able, and it is brazen and outrageous terrible piece of legislation and should cause fessionals that they trust and that discrimination against women and mi- Americans to quake at the prospect of its they know can provide them with the norities and it sanctifies such actions passing. kind of economic security that they by insurance companies and others If you value your civil rights, you should have come to expect. within the banks’ financial holding worry about this bill. The Rules Committee The change already taking place in companies which will be set up here- stripped out an anti-redlining provision, offered the marketplace may make it impos- under. by our colleague Ms. LEE and agreed to by sible for us to try Glass-Steagall re- It attacks the privacy of American the Banking Committee. This brazen act al- form a 12th time, and I would implore citizens. It allows unauthorized dis- lows discrimination against women and minori- the Members to understand that this semination of their personal financial ties by insurance companies within the bill's fi- may be our last really good shot at information and records. It guts the nancial holding companies. bringing our laws up-to-date with what current protections for medical infor- If you have had cancer or diabetes or de- is happening in the marketplace and mation now under State law. And it pression or any other medical condition that what is happening with technology, hampers the ability of the Secretary of could affect your employment or lead to dis- and all of those forces are now moving Health and Human Services to adopt crimination against you, you should fear this us so inextricably in that direction. meaningful protections. bill. It contains a medical privacy provision that Because of the leadership of the gen- Every single health group in the actually sanctifies the unauthorized dissemina- tleman from Iowa (Mr. LEACH), chair- United States and the AFL-CIO oppose tion of your personal medical information man of the Committee on Banking and this provision because it guts the records. It guts many current protections for Financial Services, because of the lead- rights of Americans to know that what medical information and hampers the ability of ership of the gentleman from Virginia they tell their doctor and what their the Secretary of Health and Human Services (Mr. BLILEY) chairman of the Com- doctor tells them is secure. to adopt meaningful protections. Legions of mittee on Commerce, because of par- If we want to protect the security of groups oppose this provision from the Amer- ticipation on the other side of the our own financial records, we should ican Medical Association to the AFL±CIO. aisle, it brings us here today. tremble at this bill. It contains laugh- If you want to protect the privacy of your Let us move forward. Let us support able financial privacy protections that own personal financial records, you should H.R. 10. Let us provide the kind of tell a bank that it only has to disclose tremble at the prospect of this bill. The bill modern financial institutions that all its privacy policy if it happens to have contains laughable financial privacy protec- of us have come to expect. one. In other words, if they are going tions that tell a bank to disclose its privacy Mr. DINGELL. Madam Chairman, I to give them the shaft, they should tell policyÐif it has one. This bill deprives you of yield myself 4 minutes. them. But they can do anything they the right to say no. (Mr. DINGELL asked and was given want in terms of the financial informa- If you own insurance, you should worry if permission to revise and extend his re- tion which they give them and which you bought it from a bank. This bill wipes out marks.) can be used to hurt them in their per- more than 1,700 essential state insurance Mr. DINGELL. Madam Chairman, sonal affairs. laws across the country, with no federal regu- this is a bad bill. We consider it under The bill wipes out more than 1,700 es- lator to fill the void. a bad rule. sential State insurance laws across the If you are a taxpayer, you should recoil in George Santayana said something country. It creates no Federal regu- horror at this bill. No less an august person which I thought was very interesting. lator to fill the void. So, as a result, than Alan Greenspan is worried, and usually He said, ‘‘He who does not learn from their protections when they buy insur- that counts for a lot. Let me read to you what history is doomed to repeat it.’’ ance are stripped away. he said before the Commerce Committee in It looks like this Congress is setting Alan Greenspan, the chairman of the April of this year: out to create exactly the same situa- Federal Reserve, is properly worried, I and my colleagues are firmly of the view tion which caused the 1929 crash. It and that should count for a lot. Let me that the long-term stability of U.S. financial H5220 CONGRESSIONAL RECORD — HOUSE July 1, 1999 markets and the interests of the American sales activities apply to small-town national National Association of Psychiatric Treat- taxpayer would be better served by no finan- bank insurance sales activities under Section ment Centers for Children cial modernization bill rather than one that 92 unless those regulations are prohibited National Association of Social Workers allows the proposed new activities to be con- National Council for Community Behav- ducted by the bank. under the Section 104 preemption standard. ioral Healthcare ORGANIZATIONS OPPOSED TO THE MEDICAL National Depressive and Manic Depressive He reiterated these views to me on June 28 RECORDS PROVISIONS IN H.R. 10 Association in a letter which I intend to put into the Physician Organizations National Foundation for Depressive Illness RECORD, but I want to read just one part: Renal Physicians Association American Medical Association ADDITIONAL VIEWS I and my colleagues on the Board believe American Psychiatric Association strongly that the operating subsidiary ap- American College of Surgeons During the consideration of H.R. 10, an proach would damage competition in and the American College of Physicians/American amendment was offered to add a new section vitality of our financial services industry Society of Internal Medicine 351, entitled ‘‘Confidentiality of Health and and poses serious risks for the American tax- American Academy of Family Physicians Medical Information.’’ While we support in- payer. We have no doubt that the holding American Psychological Association creased protection for medical information, company approach, adopted by the house we opposed this provision, because, unfortu- last year, passed by the Senate this year, and Nurses Organizations nately, the provision weakens existing pro- supported by each previous Treasury and Ad- American Nurses Association tections for medical confidentiality, and es- ministration for nearly 20 years, is the pru- American Association of Occupational tablishes a number of poor precedents for dent and safest way to modernize our finan- Health Nurses private medical information disclosure. cial affiliation laws and does not sacrifice Patient Organizations While the provision at first blush appears any of the benefits of financial reform. National Breast Cancer Coalition to place limits on the disclosure of medical This bill greatly expands the authority of po- Consortium for Citizens with Disabilities/ information, the lengthy list of exceptions to litical appointees and bureaucrats over bank- Privacy Working Group these limits leaves the consumer with little, National Association of People with AIDS if any protection. In fact, the provisions ends ing and monetary policy. That worries Alan up authorizing disclosure of information Greenspan. It should worry all Americans. AIDS Action National Organization for Rare Disorders rather than limiting it. In the earlier debate on the rule, several of In medicine, the first principle is ‘‘Do no National Mental Health Association harm.’’ In crafting a Federal medical privacy my Republican colleagues labeled our con- Myositis Association law, this principle requires that state laws cerns as ``partisan.'' So be it! If the Repub- Infectious Disease Society providing a greater level of protection be left licans want to accuse Democrats of caring Privacy/Civil Rights Organizations about equal rights and protection from dis- in place. Yet section 351 could preempt the Consumer Coalition for Health Privacy laws of 21 states that have enacted medical crimination under the Constitution, I'll proudly American Civil Liberties Union privacy laws. While we agree that genetic in- stand with my Democratic colleagues. If the Center for Democracy and Technology formation should also be protected—in fact, Republicans want to accuse Democrats of Bazwlon Center for Mental Health Law should deserve a higher level of protection— standing for full and fair protection of Ameri- Labor Organizations this provision could also preempt 36 state laws which protect the confidentiality of ge- cans' privacy rights, I'll proudly stand under AFL–CIO netic information. that banner as well. American Federation of State, County and The provision also lacks any right for the What I won't stand for is this abominable Municipal Employees individual to inspect and correct one’s med- legislation. I support responsible financial Service Employees International Union ical records. As a result, an individual has modernization. I do not support this bill. It is a Senior and Family Organizations greater rights to inspect and correct credit terrible piece of legislation and I urge the American Association of Retired Persons information than medical records. House to defeat it so we can go back to the National Senior Citizens Law Center There is no requirement that the customer drawing board and write a good bill. Planned Parenthood Federation of America, even be told that his medical information is In closing, I would like to address an impor- Inc. being provided to a third party. Thus there is tant technical matter and explain the purpose National Partnership for Women and Fam- no way that the customer could prevent the of the Section 303 ``Functional Regulation of ilies records from being disseminated if the cus- tomer believed that statutory rights were Insurance'' reference to Section 13 of the Fed- American Family Foundation Other Organizations being violated. eral Reserve Act. That reference is included to An individual has no right to seek redress ensure that everyone that engages in the busi- American Association for Psychosocial Re- if the rights under this provision are vio- ness of insuranceÐincluding national banks habilitation lated. In fact, the customer is unlikely to selling insurance as agents under the small- American Counseling Association even know that the rights were violated. The American Lung Association town sales provision commonly known as only enforcement authority is given to the American Occupational Therapy Associa- states. If the individual is unlikely to have ``Section 92''Ðare subject to state regulation tion of those activities. knowledge of the transfer of confidential American Osteopathic Association medical records, it is hard to understand how Some have argued that this reference is not American Psychoanalytic Association the state Attorney General would know to meant to overrule the Supreme Court's ruling American Society of Cataract and Refrac- bring an action as provided in subsection (b) in the Barnett Bank case. I want to make clear tive Surgery of the provision. Even if the state brings an that that statement is correct to the extent that American Society of Clinical action, it can only enjoin further disclosures. the Commerce Committee intended that all Psychopharmacology The customer has no right to seek damages. American Society for Gastrointestinal En- The provision places absolutely no restric- state functional regulation of the insurance ac- doscopy tivities of financial institutions would be subject tions on the subsequent disclosure of medical American Society of Plastic and Recon- records by anyone receiving the records. to the preemption rules set forth in Section structive Surgeons Once the records are out the door for any of 104. Indeed, that is why there is a specific ref- American Thoracic Society the myriad exceptions in this provision, they erence to Section 104 at the end of Section Anxiety Disorders Association of America are fair game for anyone. 303. And Section 104 incorporates the pre- Association for the Advancement of Psy- We agree that information should be dis- emption standard articulated by the Supreme chology closed only with the consent of the cus- Court in the Barnett Bank case and even spe- Association for Ambulatory Behavioral tomer, as provided in (a)(1), but this right is Health rendered meaningless with the extensive cifically cites that case. Center for Women Policy Studies The statement, however, is incorrect to the laundry list of exceptions that swallows this Children & Adults with Attention-Deficit/ simple rule. We shall only discuss a few of extent that it implies that the Comptroller of Hyperactivity Disorder these exceptions. the Currency remains free to issue his own set Corporation for the Advancement of Psy- The provision allows financial institutions of rules and regulations to govern small-town chiatry to provide medical records, including genetic national bank insurance sales activities. Al- Federation of Behavioral, Psychological information, for purposes of underwriting. thoughÐas the Barnett Bank opinion recog- and Cognitive Sciences As a result, customers could find themselves nizesÐSection 92 specifically authorizes the Intenational Association of Psychosocial being uninsurable, or facing whopping rate Rehabilitation Services Comptroller to issue such regulations, Section increases for health insurance, based upon Legal Action Center their genetic information, or health records. 303 makes clear that States are now the para- National Association of Alcoholism And In addition, the information may be inac- mount authority in the regulation of small-town Drug Abuse Counselors curate, but the customer cannot correct it. national bank insurance sales activities. Under National Association of Developmental The provision allows financial institutions Section 303, all state regulations of insurance Disabilities Councils to provide medical records for ‘‘research July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5221 projects.’’ This term is undefined, and could Edolphus Towns, Frank Pallone, Jr., ices industry and poses serious risks for the include marketing research, or nearly any- Sherrod Brown, Bart Gordon, Peter American taxpayer. We have no doubt that thing else. For example, a customer’s pre- Deutsch, Bobby L. Rush, Ron Klink, the holding company approach, adopted by scription drug information could be provided Bart Stupak, Tom Sawyer, Albert R. the House last year, passed by the Senate to a drug company doing marketing research Wynn, Gene Green, Ted Strickland, this year, and supported by each previous on candidates for a new related drug. Diana DeGette, Thomas M. Barrett, Treasury and Administration for nearly 20 Moreover, the provision establishes no re- and Lois Capps. years, is the prudent and safest way to mod- search protections for individually identifi- THE VERSION OF HR 10 RELEASED BY THE ernize our financial affiliation laws and does able records. The majority of human subject HOUSE RULES COMMITTEE SWEEPS AWAY not sacrifice any of the benefits of financial reform. research studies conducted in this country 1,781 ESSENTIAL STATE INSURANCE LAWS The structure adopted by Congress for fi- are subject to the Common Rule, a set of re- ACROSS THE COUNTRY quirements for federally-funded research. nancial modernization will prove decisive to State governments are solely responsible Analogous requirements apply to clinical the shape of our financial system, the long for regulating the business of insurance in trials conducted pursuant to the FDA’s prod- term health of our economy, and the level of the United States. protection afforded the American taxpayer uct approval procedures. The Common Rule The States regulate insurance in order to dictates that a study must be approved by an long into the next century. Thus, this deci- protect consumers and supervise the sol- sion on banking structure is a policy matter entity that specifically examines whether vency and stability of insurers and agents. the potential benefits of the study outweigh of national importance. Allowing national The version of HR 10 released by the House banks to engage through operating subsidi- the potential intrusion into an individual’s Rules Committee on June 24, 1999 will likely private records and whether the study in- aries in merchant banking, securities under- preempt many State consumer protection writing, and other newly authorized finan- cludes strong safeguards to protect the con- and solvency laws needed to regulate the in- fidentiality of those records. Two weeks ago cial activities is likely to have as profound surance activities of banks and their affili- an impact on our entire financial sector as at a hearing before the Health and Environ- ates. ment Subcommittee, witnesses from the Na- the 1982 legislation regarding the thrift in- dustry. tional Breast Cancer Coalition and the Na- Number of tional Organization for Rare Disorders testi- State laws The problem with the operating subsidiary fied that these Federal standards should be likely pre- approach is that insured banks are supported empted by by the U.S. Government and, consequently, extended to all research using individually- State the House identifiable medical records. Extending these Rules Com- are able to raise funds at a materially lower protections would strengthen confidence in mittee cost, which is equivalent to approximately version of half of the interest spread on an investment the integrity of the research community and H.R. 10 encourage more individuals to participate in grade loan. This subsidized ability to raise studies. Because this provision establishes Alabama ...... 33 lower cost funds provides banks and their op- no protections for individually-identifiable Alaska ...... 30 erating subsidiaries a decisive advantage Arizona ...... 35 over independent securities, insurance and records, it could actually stifle research. Arkansas ...... 41 The provision allows the disclosure of con- California ...... 43 financial services firms. This advantage will fidential medical records ‘‘in connection Colorado ...... 35 inevitably reduce competition and innova- Connecticut ...... 36 tion in and between these industries as it has with’’ a laundry list of transactions, most of Delaware ...... 32 which have nothing to do with medical Florida ...... 40 in other countries that have adopted the uni- records. The provision does not define who Georgia ...... 38 versal banking approach. In addition, the ex- Hawaii ...... 28 periences in Asia demonstrate that linking can receive the records, but instead allows Idaho ...... 31 disclosure to anyone, so long as it is ‘‘in con- Illinois ...... 41 financial markets more tightly to the health nection with’’ a transaction. There was no Indiana ...... 33 of the banking system—as is inevitable Iowa ...... 39 under the operating subsidiary approach— explanation at the markup why medical Kansas ...... 41 records should be disclosed in connection Kentucky ...... 36 makes the economy more vulnerable to cri- with ‘‘the transfer of receivables, accounts, Louisiana ...... 37 ses that affect banks and makes the broader Maine ...... 37 financial markets more dependent on the or interest therein.’’ There is no definition of Maryland ...... 36 ‘‘fraud protection’’ or ‘‘risk control’’ for Massachusetts ...... 32 protection and advantages of the federal which the provision also authorizes disclo- Michigan ...... 33 safety net. Minnesota ...... 36 The operating subsidiary approach also sure. The provision gives carte blanche to fi- Mississippi ...... 32 nancial institutions to disclose confidential Missouri ...... 37 poses substantial risks to the safety and medical records for ‘‘account administra- Montana ...... 36 soundness of our banking system and to the Nebraska ...... 36 tion’’ or for ‘‘reporting, investigating, or pre- American taxpayer. This derives from the Nevada ...... 36 fact that an operating subsidiary of a bank is venting fraud.’’ Reporting to whom? An in- New Hampshire ...... 28 consolidated with, and controlled by, the vestigation by whom? New Jersey ...... 41 While most laws protecting medical New Mexico ...... 31 bank and the fate of the bank and its sub- New York ...... 37 sidiary are inextricably interdependent. The records provide for disclosure in compliance North Carolina ...... 46 with criminal investigations, those laws pro- North Dakota ...... 34 measures contained in H.R. 10 to address vide safeguards to permit the individual the Ohio ...... 38 these risks are not adequate. These measures Oklahoma ...... 31 are based on creating a regulatory account- opportunity to raise legal issues. This provi- Oregon ...... 39 sion does not. In fact, as is the case with all Pennsylvania ...... 35 ing system that is different from market ac- other disclosures in this provision, the con- Rhode Island ...... 35 counting and on the hope that operating sub- South Carolina ...... 34 sidiaries can be quickly divested before prob- sumer would not even be informed that the South Dakota ...... 37 lems spread to the parent bank. We have information has been disclosed. Thus, a cus- Tennessee ...... 37 learned from the thrift crisis of the 1980s tomer’s medical records could be disclosed to Texas ...... 42 Utah ...... 34 that regulatory accounting can give a dan- an opponent in a civil action without the Vermont ...... 32 gerously false sense of security that only customer even knowing it. Virginia ...... 36 Within hours of passage of this provision, Washington ...... 36 masks real problems. In addition, experience West Virginia ...... 34 we began learning from patient groups and with other subsidiaries of national banks il- Wisconsin ...... 33 lustrates that banks can lose far more than others who have fought to improve the pri- Wyoming ...... 31 they invest in an operating subsidiary, that vacy rights of individuals that this provision Total ...... 1,781 those losses can occur quickly and before is seriously flawed. These concerns dem- regulators have an opportunity to act, and onstrate why Congress needs to deal com- Source: National Association of Insurance Commissioners that banks feel forced to support their sub- prehensively with the issue of medical con- BOARD OF GOVERNORS OF THE sidiaries through capital injections and lib- fidentiality, not in a slapdash amendment FEDERAL RESERVE SYSTEM, eral interpretations of the law. Troubled op- that has received no scrutiny. The Health Washington, DC, June 28, 1999. erating subsidiaries are also very difficult to and Environment Subcommittee of the Com- Hon. JOHN D. DINGELL, sell and can result in prolonged exposure and merce Committee has already held a hearing Ranking Minority Member, Committee on Com- expense to the parent bank. In the heat of a on medical privacy, and a Senate committee merce, House of Representatives, Wash- crisis, the taxpayer cannot be confident that has held multiple hearings on the subject. ington, DC. regulatory constraints will prove entirely ef- We look forward to enacting real medical in- DEAR MR. DINGELL: This is in response to fective. formation privacy provisions that will truly your request for the Board’s views on the op- In a world where mega-mergers are in- protect individuals. Unfortunately, this pre- erating subsidiary approach to financial creasing the size of banks on a stand-alone mature move by the Committee will actually modernization contained in H.R. 10. As I basis, the operating subsidiary structure al- set back the health and medical information have testified, I, and my colleagues on the lows banks to increase their balance sheets privacy rights of all Americans. Board believe strongly that the operating in even more dramatic fashion. This, on its John D. Dingell, Henry A. Waxman, Ed- subsidiary approach would damage competi- own, may not be a problem. However, the op- ward J. Markey, Rick Boucher, tion in and the vitality of our financial serv- erating subsidiary structure focuses all H5222 CONGRESSIONAL RECORD — HOUSE July 1, 1999 losses from new activities—as well as the It is now the time for us to catch up institutions will operate. For Congress to not risks from the bank’s direct activities—on with the modern financial world both act today would be a serious abdication of our the bank itself. Thus, the operating sub- domestically and globally and do what responsibility. sidiary structure leads to precisely the type the Constitution requires us to do and Throughout this process, I have based my of organization that inspires too-big-to-fail concerns. not abrogate our responsibility to the support for this bill on some very fundamental Some argue that H.R. 10 does nothing more courts and other Federal regulators. principles: than preserve freedom of choice of manage- I am most intent on saying that, is it It must: ment. However, this is not a matter of choice a perfect bill? No. Can it be after all (1) Preserve the safety and soundness of for private enterprise. Rational management these years of negotiation? Maybe not. the financial systemÐincluding the federal de- will inevitably choose the operating sub- Maybe. But, on the other hand, only posit system and the rest of the federal safety sidiary because it allows the maximum ex- not perfect because we cannot get all net. ploitation of the cheaper funding ability of these industries to agree on every sin- (2) Provide for fair and equal competition; the bank. Because this so-called ‘‘choice’’ in- volves the use of the sovereign credit of the gle thing. But we have compromises and United States, it is a decision that should represented here that strongly protect (3) Protect consumers and enhance their rest exclusively with Congress. the fundamental principles that we choices. It is also noteworthy that the holding com- should have, and that is preserving the H.R. 10 maintains these fundamental prin- pany approach does not in any way diminish safety and soundness of the financial ciples. the powers or attractiveness of the national system. Much like the bill we passed last year, H.R. bank charter. The national bank charter has They are protected here. The Federal 10 creates a new holding company structure flourished in recent years even though na- under which entities that are financial in nature tional banks are not authorized today to deposit system and the rest of the Fed- conduct through operating subsidiaries the eral safety net. If we abandon this now, can directly affiliate. broad new powers permitted in H.R. 10. Nor we are just saying it is just going to This new holding company will be overseen does the holding company approach diminish evolve as the regulators or the courts by the Federal Reserve Board, but each affil- the influence of the Treasury over bank pol- would like them to, without any statu- iate will be regulated by its own ``functional'' icy. Treasury continues to play a significant tory responsibility. regulator. and appropriate role through its oversight of Do we provide for fair and equal com- H.R. 10 includes important new consumer all national banks and thrifts. petition? I believe we do in the real privacy provisions requiring banking institu- On the other hand, the operating sub- world of financial institutions. tions to tell customers their policies for sharing sidiary approach would damage the Federal customer's financial information with bird par- Reserve’s ability to address systemic con- b 1700 cerns in our financial system. This will occur ties for marketing purposes. It would also as the holding company structure atrophies I believe strongly that we have pro- makes ``pre-text calling'' illegal. because of the funding advantage the oper- tected the consumers and enhanced In addition, the bill prohibits all insurance ating subsidiary derives from the federal their choices in this bill. The new hold- companies (including companies not affiliated safety net. ing company structure that is in this under a Financial Holding Company) from dis- I and my colleagues are especially con- bill will be overseen by the Federal Re- closing medical information to third partiesÐ cerned because there is no reason to take the serve Board. H.R. 10 includes new con- without prior consent. In addition to these im- risks associated with the operating sub- sumer privacy. There will be an amend- sidiary approach. The holding company portant privacy provisions, my colleagues and framework achieves all the public and con- ment on the floor that will increase the I will later be offering an amendment that fur- sumer benefits contemplated by H.R. 10 consumer privacy that is in this bill ther enhances privacy protection. without the dangers of the operating sub- and close any of the loopholes that we Finally, we have included legislation that I sidiary approach. can see. introduced which provides important consumer The Board has been a strong supporter of I urge strong support for this bill. ATM disclosures. These provisions mandate financial modernization legislation for near- Madam Chairman, I rise in strong support of clear ATM fee disclosures and guarantees the ly 20 years. We are seriously concerned, how- H.R. 10, the Financial Services Act and asso- consumers rights to opt out of a transaction ever, about the destructive effects of the op- ciate myself with the commentary of our Chair- erating subsidiary approach for the long- before a fee is charged. term health of the national economy and the man, Representative LEACH, and urge my Col- This legislation also includes language I pro- taxpayer. leagues to support this landmark legislation. posed to allow new Financial Holding Compa- Sincerely, As many of my colleagues know, I have nies to retain or acquire commercial entities ALAN GREENSPAN. long been and advocate for passing financial that are ``complimentary'' to their current or fu- Madam Chairman, I reserve the bal- modernization legislation. Markets are chang- ture financial activities. While I do not support ance of my time. ing every day. Technology and market forces full mixing of banking and commerce, this Mr. LEACH. Madam Chairman, I have broken down the barriers between insur- amendment accepts the reality that the lines yield 2 minutes to the gentlewoman ance, securities and banking. Mega-merger between financial and commerce are blurring. from New Jersey (Mrs. ROUKEMA) the deals like Citicorp/Travelers, NationsBank/ At a time when we are allowing various finan- distinguished chairperson of the Sub- Bank of America, Bankers Trust/Deutsche cial to affiliate and create new financial holding committee on Financial Institutions, BankÐare being contemplated or announced companies, it is prudent to provide flexibility whose work on this bill is the most im- daily. for companies to engaged in activities which portant of any Member of this body, We need to replace the outdated Glass- may not meet the definition of financial but are and I very very much appreciate her Steagall Act of the 1930s. Glass-Steagall did complimentary to the financial activities. This friendship and leadership. its part in its day, but the financial world has provision stipulates that the investment in the Mrs. ROUKEMA. Madam Chairman, I changed and we must have a financial system complimentary activity must remain small, and thank the chairman for yielding me that is able to compete in the modern world. will be subject to Federal Reserve review. the time. Our current statutory framework has remained For those of us that serve on the Banking I certainly rise in support, strong stuck in the '30s because of Congress's reluc- Committee, we are painfully aware of how support, of H.R. 10 and associate myself tance to act, hampering the ability of our finan- controversial the issues surrounding the finan- with the commentary of the chairman cial institutions to compete. In the absence of cial services industry can be. To say the least, at the beginning of this discussion and congressional action, federal agencies, the various sectors of the financial services indus- completely disagree with the gen- courts and the industry have been forced to try have had different and often conflicting tleman we just heard. find loopholes and novel interpretations of the views on how best to go about modernization, I have worked on this issue for a long law to allow financial institutions to adapt to an but H.R. 10 includes many compromises be- time, and really it is very clear. We are ever-changing marketplace. Unfortunately, this tween all of the interested parties, and it de- going beyond the 1930 laws, Glass- has resulted in piecemeal regulatory reform serves our support. Steagall, far out-of-date. Technology that may not be in the best interest of the U.S. Did everyone get everything they wanted? and market forces have broken down financial services industry as a whole. No they did not. In fact, I strongly oppose the the barriers here, and over the years As elected representatives of Congress, it is operating subsidiary provisions included in this we have just been letting the regu- our constitutional duty to make the important bill. We must work to improve this regulatory lators and the courts and creative in- policy decisions that determine the structure structure in conference. In addition, while I dustries deal with this. and legal authority under which our financial support the provisions in the bill that would July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5223 close the unitary thrift loophole, I do not sup- serving our enterprise and serving the their operation. As a matter of fact, port permitting the transferability of unitary consumers of this Nation. the Chairman of the Federal Reserve thrift holding companies to commercial enti- The fact is that I think it is due to a Board regulates just such operating ties. The unitary thrift provisions included in lot of hard work on the part of the gen- subsidiaries in the States and in the this bill today do not prohibit transfers to com- tleman from Iowa (Mr. LEACH) and the foreign bank operation. These are safe, mercial entities. gentleman from Virginia (Mr. BLILEY) they are sound, and I think this bill is In short, allowing the transferability of uni- and the gentleman from New York (Mr. a good bill and deserves our support. tary thrifts to commercial entities in the same LAFALCE), so too the work of the gen- H.R. 10 represents the changes in law that as allowing full banking and commerce. I do tleman from Michigan (Mr. DINGELL) we need to catch up with reality by mapping not support full banking and commerce and who is in dissent today. a path of true modernization for financial insti- believe it could pose serious safety and Nevertheless, I think it follows a tra- tutions in the financial services marketplace soundness risks to the deposit insurance fund. dition and path that will, in fact, put for today and tomorrow. We need to enhance We respect to the operating subsidiary, I am us in charge. I think, though, that we the competitiveness of our financial services concerned that losses in an operating sub- probably will not work ourselves out of sector and to move forward with predictable, sidiary could ultimately affect the parent bank. a job with this measure. There is much certain, logical, and uniform regulation. A case in point is the First Options/Conti- to do in many, many aspects of it, but As my colleagues are by now painfully nental Illinois problems in the late 1980sÐ it does for the first time through the aware, there are many Democrats, some of Continental Illinois lost considerable more than work with the various enterprises, the whom supported the bill in the Banking Com- its investment in First Options. While there are industry, the banks, the securities mittee, who can now no longer feel com- firewalls in place that limit the amount of bank firms and the insurance firms that are fortable supporting this legislation. Despite the investment, in times of stress, firewalls melt. already affiliating today under court partisan gamesmanship of the past 24 hours, Such was the case with First Options/Conti- and under regulatory practices, it fi- I remain committed to achieving comprehen- nental Illinois where Continental Illinois in- nally puts a statutory policy path that sive financial modernization through the enact- jected millions of dollars to prevent the failure Congress stipulates in place and one ment of H.R. 10 into law, and thus hope that of First Options. that is effective. Of course there is a we can pass this bill at the end of the day. Furthermore, the likely result of allowing claim that there is $15 billion worth of I have put a great deal of time, effort and bank operating subsidiaries is that an inde- saving that inures to the benefit of our energy working with my Democratic Colleague pendent securities industry will become a thing economy in terms of some of the and my Colleagues from across the aisle. We of the past. The advantage that the U.S. econ- streamlining that takes place with this have been laboring together for many yearsÐ omy has enjoyed is that the credit and capital policy and law. three Congresses on this particular versionÐ markets have grown up separately and are Do we like big banks and big finan- crafting and perfecting a compromise on finan- strong with each having a great deal of depth. cial institutions? Probably not. But cial modernization that will put the Congres- Not having an independent securities indus- the fact is that the global marketplace sional imprint on modernization. Our Chair- try will seriously undermine these vitally impor- that we compete in and that we par- man, Mr. LEACH, and the Ranking Member, tant markets. Innovation will be stifled and ticipate in today is actually bringing Mr. LAFALCE were able to work together with these markets will become less competitive. these together and about. This is hap- Members such as myself and Mrs. ROUKEMA And importantly, it will make it much harder on pening in the absence of this law. But to put together a bill. The Administration, the U.S. economy to address economic what we are trying to do is to try to which was opposed to the bill passed last downturns because the securities system will put in place a legal framework to put year, was supportive of our Banking Com- become directly tie to the health of the bank- back some consumer voice, some public mittee product. ing system. Any stresses on the banking sys- policy voice in that process that affects We have accomplished much of which we tem will affect all of the capital markets. I, for consumers. should be proud. one, do not want to see that result, particularly This bill has strengthened Commu- Back in March, the House Banking and Fi- because the simple answer is to allow banks nity Reinvestment Act provisions. This nancial Services Committee approved H.R. 10 and securities firms to become sister compa- bill when the amendment on privacy is on a strong bi-partisan basis, 51±8 with 21 nies through a holding company which means adopted, I think the banks will have Democratic votes cast in support of the bill. the securities industry will not be tied directly about the strongest privacy policy of Much of this Banking Committee product has to the banking industry. any of the financial entities commer- been carried forward in the product before us For these reasons I will continue to work to cial or otherwise that we have respon- today. change the operating subsidiary and unitary sibility at the national government for Some important provisions are lacking or in- thrift provisions included in H.R. 10 as this bill or, for that matter, even at the State adequate. We do not have complete parity, for moves through conference. However, despite level. We know how important that example, for affiliation between banks and in- the problems I have with these specific provi- issue is. The privacy provisions that surance and securities firms with regard to sions, I believe that we must act today to pass will finally be written into this bill are commercial activities. I would preferred to this landmark legislation. There is far too stronger than those that were in the have gone a little further on limiting Unitary much in this bill that warrants our support. We Commerce bill, stronger than those Thrift Holding CompaniesÐindeed, we could have come too far to turn back now. that were in the Banking provision of have merged the bank and thrift charters. I If we fail to act today, we will lose the op- H.R. 10. would have also hoped that we could have in- portunity to reform our financial system in a Beyond that, I think that the bill cluded fair housing compliance on affiliates, meaningful, rational way. It's now or never. provides many opportunities to deal low-cost banking accounts and application of Years of good faith negotiation and com- with antitrust issues, other issues such Community Reinvestment Act-like require- promise have gone into this bill. as supernotice requirements for merg- ments on products that are similar to bank Support the passage of H.R. 10. ers, mandatory ATM fee disclosure. It products, such as mortgages product sold and Mr. LAFALCE. Madam Chairman, I provides the opportunity for posted pri- issued through affiliates. yield 3 minutes to the distinguished vacy policies. Some medical privacy. I On the main, however, we have a product gentleman from Minnesota (Mr. VENTO) think we are going to have some debate that will remove the rusted chains of Glass- the ranking Democrat on the Sub- about that today. Some would have us Steagall, providing in its place a new financial committee on Financial Institutions believe that no policy is better than services infrastructure to keep U.S. companies and Consumer Credit. the policy that we have in this bill, but competitive in the global marketplace, while Mr. VENTO. Madam Chairman, I rise we are trying to, in fact, do the right ensuring consumers the quality services and in strong support of H.R. 10. This is a thing. As I said, it deals with antitrust protections they deserve. We remove the bar- good work product. This is a legislative concentration. riers preventing affiliation. We provide financial product that finally brings our statu- As far as the operating subsidiary services firms the choice of conducting certain tory provisions of law in line with the goes, I think we ought to look very financial activities in bank holding company af- current developed financial entities closely at Chairman Greenspan’s com- filiates or in subsidiaries of banks on a safe and the future policy path that is nec- ments because he pointed out in 1997 and sound basis. essary to in fact fully engage our econ- that operating subsidiaries pose no Some today may say that the operating sub- omy and our financial institutions in safety soundness problem in terms of sidiary is too risky. That is just not the case. H5224 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Outgoing Treasury Secretary Robert Rubin, that affiliation, including appropriate enforce- insurance and banks affiliateÐso that within the Federal Deposit Insurance Corporation, ment. In addition, H.R. 10 extends the CRA to these confines insurance companies which af- and four past Chairs of the FDIC have all ex- the newly created Wholesale Financial Institu- filiate with a bank will keep confidential cus- plained how the subsidiary structure protects tions (``Woofies''). These provisions represent tomer's health and medical information. This the public interest as well as the affiliate struc- substantial progress and a critical contribution represents an initial effort to assure that health tureÐand provides greater protection for the to the overall balance reflected in this bill. information cannot be used to determine eligi- FDIC and bank safety and soundness. Even Other positive provisions include the re- bility for credit or other financial services. It Chairman GreenspanÐthe foremost opponent quirement that institutions ensure that con- was not our intent to undercut, circumvent of of subsidiariesÐacknowledged in 1997 testi- sumers are not confused about new financial weakenÐbut rather to enhance and protect, mony that the subsidiary approach posed no products along with strong anti-typing the anti- so let us work together in Conference to im- safety and soundness problems. coercion provisions governing the marketing of prove this if the amendment sought by Mr. By requiring bank to be well-capitalized financial products; super notices to customers WAXMAN and Mr. CONDIT cannot be a part of even after investing capital in a subsidiary, we that state that when banks sell non-deposit this process here today. are providing a proper cushion that is not the products they are not insured by the Federal As I noted earlier in my statement, I had S&L crisis all over again. Our national banks Deposit Insurance Corporation (FDIC) like tra- hoped that we could have included a Banking have been and should remain a source of ditional bank accounts are insured; the re- committee reported provision to condition affili- economic strength and a solid foundation to quirement to maintain market-related data and ation of insurance companies with banks construct an economic framework of growth. to produce an annual report on concentration based on compliance with an existing lawÐ This bill will keep them vigorous and viable, of financial resources to assure that commu- the Fair Housing Act. It is a productive provi- with or without a holding company structure nity credit needs are being met; and the dis- sion that more than suggests that companies and does not change the balance between the closure to consumers of ATM fees, not only who seek to expand their opportunities are national bank and state bank dual banking on the computer screen, but, also on the ATM meeting the needs of communities and fol- charters, and regulation structure. machine itself. Additionally, when issuing ATM lowing the law by not discriminating. As I said earlier today, the focus of the cards, banks must issue a warning that sur- There have been settlement agreements lengthy and seemingly endless public debate charges may be imposed by other parties. and consent decrees between the Department over this legislation has been the opening of I would also like to highlight an amendment of Housing and Urban Development, the De- the financial services marketplace to new of I advanced that has been included with a partment of Justice and insurance entities that competition and the reduction of barriers be- minor change from Commerce committee, re- resulted from alleged violations of the Fair tween financial services providers. It is equally quiring public meetings in the case of mega- Housing Act. What has resulted is changes in important that this bill is a positive step for our mergers between banks which both have underwriting guidelines (such as changes constituents and the communities in which more than $1 billion in assets where there eliminating ``year the dwelling the built'' or they live, as well. may be a substantial public impact because of ``minimum dollar amounts of coverage'' OR In general, there are inherent benefits of the larger merger, providing our constituents not denying coverage SOLELY on the basis of being able to provide streamlined, one-stop with the important opportunity to express their information contained in credit reports) that will shopping with comprehensive services choices views regarding mega mergers in their com- better ensure the homeowners are not denied for consumers. According to the Treasury De- munities. insuranceÐand quite possibly the opportunity partment, financial services modernization Importantly, the base text also includes re- to become homeownersÐbecause of discrimi- could mean as much as $15 billion annually in quired posted privacy policies by depository nation. It is indeed unfortunate that neither the base savings to consumers. institutions of financial holding companies to text has not did the rule allow as an amend- There are additional, specific and key posi- clearly and conspicuously disclose to their ment a provision to strengthen fair housing tive consumer and community provisions in customers their privacy policies, specifying and to eliminate discrimination. This provision the base text. what their policies are with regard to a cus- could have been step forward for consumers We have modernized the Community Rein- tomer's information. While an amendment later as much as requiring low-cost banking ac- vestment Act (CRA) in a positive manner. And today will make vast improvements for con- counts could have been. These provisions I am pleased that this bill will not contain pro- sumer privacy, with this provision, customers would have ensured that the benefits of mod- visions that move us back in time for CRA. can learn what a financial institution's policies ernization would be more available to con- The CRA was enacted by Congress in 1977 to are and could be clearly informed of their sumers of all economic means. Low cost ac- combat discrimination. The CRA encourages rights under the Fair Credit Reporting Act to counts could have taken a form similar to the federally-insured financial institutions to help choose not to have their information shared ETA accounts created by Treasury with little meet the credit needs of their entire commu- among affiliates. or no burden, and certainly no credit risk nities by providing credit and deposit services Frankly, in this way, customers would be borne by depository institutions. in the communities they serve on a safe and able to choose whether they want to do busi- Mr. Chairman, in closing, following more sound basis. According to the National Com- ness with institutions that have privacy policies than 20 years of debate on financial mod- munity Reinvestment Coalition, the law has with which they disagree. If they don't like affil- ernization, I think that we are close to achiev- helped bring more than $1 trillion in commit- iate sharing or other parts of the privacy policy ing our goal. And if not on the rule, on much ments to these communities since its enact- that an institution has, they have the benefit of of the substance of the bill before us today, ment. Groups like LISC, Enterprise, Neighbor- living in a country with thousands of small we have done so on a bipartisan basis. We hood Housing Services, and others too plenti- community banks and with other institutions have much to do so we can get this bill ful to mention them all, use CRA to work with even offering banking on the Internet. through a Conference with Members of the their local financial institutions to make their I do want to note something on the medical other body. Their bill has many provisions that communities better places to live. privacy provisions in Title III of the bill. Mindful are extremely problematic for the Administra- CRA's success results from the effective of the deep concerns raised by our colleagues tion and for House Democrats, from debili- partnership of municipal leaders, local devel- on the Commerce Committee and many other tating limitation on the national bank operating opment advocacy organizations, and commu- outside the Congress, I want to state that we subsidiary to outright gutting of the Community nity-minded financial institutions. By creating do not want to preempt any comprehensive Reinvestment Act. such partnerships, the CRA has proven that medical privacy provision. We do not want to I ask my colleagues to join me in supporting local investment is not only good for business, create loopholes or set up consumers to be H.R. 10. I want to thank Chairman LEACH, but critical to improving the quality of life for forced to disclosed private data just to get in- Ranking Member LAFALCE, and Chairwoman low- and moderate-income constituents in the surance coverage. Neither, however, do we ROUKEMA and their respective staff for all of communities financial institutions serve. want to leave wide open the possibility that their work and cooperation on this important Importantly, H.R. 10 ensures CRA will re- within the confines of this new affiliated struc- legislation. main of central relevance in a changing finan- ture this bill creates allowing insurance, bank- Mr. BLILEY. Madam Chairman, I cial marketplace. It furthers the goals of the ing and securities firms to join, that they can yield 2 minutes to the gentleman from Community Reinvestment Act by requiring that learn private medical or genetic information to Ohio (Mr. GILLMOR), the vice chairman all of a holding company's subsidiary deposi- base credit decisions upon. of the committee. tory institutions have at least a ``satisfactory'' I would hope that we will have an oppor- (Mr. GILLMOR asked and was given CRA rating in order to affiliate as a Financial tunity in time to appropriately fix this provision permission to revise and extend his re- Holding Company and in order to maintain and if that means limiting it to situations where marks.) July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5225 Mr. GILLMOR. Madam Chairman, I bill for the most part contains those safe- Under the holding company affiliate struc- thank the gentleman for yielding me guards. ture, if one business goes broke, that failure this time and I thank him for his lead- Two years ago as H.R. 10 was being con- will not affect the safety and soundness of the ership on this issue. I rise in support of sidered in the previous Congress, I was con- bank in the holding company. But under the the bill. cerned with the broad expansion of certain operating-subsidiary structure, if a subsidiary Madam Chairman, this bill makes regulatory powers. My amendment in the of a bank goes broke, that can pose material the most fundamental change in the Commerce Committee two years ago, which risk to the safety and soundness of the bank. laws covering financial institutions in was included in the current bill, created the Banking regulators have indicated that they 60 years. It deals with a broad scope of functional regulation framework for financial do not like deferring to functional regulators for services, banking, insurance, securi- holding companies. The purpose of this ``Fed activities of bank subsidiaries. Do we want a ties. It also recognizes the changes Lite'' regulatory framework is to parallel the fi- politicized federal banking regulator to regulate that have taken place in the economy nancial services affiliate structure envisioned a structure that is supposed to achieve com- over that period of time and also the under this legislation. This parallel regulatory petitive equality across the board for all finan- dramatic change in technology which structure eliminates the duplicative and bur- cial services? The bank holding company affil- has made possible the offering of serv- densome regulations on businesses not en- iate structure is the best institutional vehicle ices now which would not have been gaged in banking activities, and importantly, that permits participation in financial mod- possible before. preserves the role of the Federal Reserve as ernization with the least risk of transferring the The financial combinations author- the prudential supervisor over businesses that safety net subsidy. ized by this bill can result in signifi- have access to taxpayer guarantees and the Regrettably, this bill does not include all the cant savings in the delivery of finan- federal safety net. provisions I introduced in the Commerce Com- cial services. But as institutions are Besides numerous consumer protections, mittee, and which the committee approved, to combined and as they become larger, it H.R. 10 also includes important taxpayer pro- protect the privacy of customers of these is essential that there be safeguards for tections. I am happy that the bill before us merged institutions. However, I am pleased safety and soundness to protect both contains certain provisions that I sponsored that most of my privacy protections were consumers and taxpayers. This bill for before the Commerce Committee. Among made in order to be offered in an amendment the most part contains those safe- those was the requirement that the Federal later in the bill. guards. Reserve consider before approving mergers This amendment which I offered in com- I am also happy that the bill before whether the merged company will be ``too big mittee was an important step forward in pro- us contains several provisions I spon- to fail.'' Mergers that are so big that failure tecting individual privacy. It protected con- sored in the Committee on Commerce. would result in the government or taxpayers sumer privacy by regulating the disclosure and Among those was the requirement that bailing them out should not be permitted. sharing of customer information by financial in- the Federal Reserve consider before ap- We are in the age of megamergers, and the stitutions to third parties. My amendment, which the committee adopt- proving mergers whether the merged creation of increasingly large financial institu- ed, required that a financial institution not only institution would be ‘‘too big to fail.’’ tions. To give you an idea of how big, con- disclose to a customer its policy about transfer Mergers that are if they fail so big that sider that the recent merger of Citicorp and of non-public personal information about the the taxpayers or the government will Travelers created a company with $690 billion customer to a third party, it also requires that have to bail them out simply should in assets. The merger of Bank of America and the customer have the opportunity to opt-out not be permitted. Nations Bank left an institution with $614 bil- of having personal information disclosed to a The bill also contains a provision I lion. To put those figures in prospective, the third party. introduced to prevent discrimination budget for the entire federal government is Privacy is more of a concern than it was in against certain banks in the sale of $1.8 trillion, or one thousand eight hundred bil- the past. George Washington didn't have the title insurance, and those regulatory lion. privacy threats that face even the average in- restrictions I sponsored in last year’s There are clearly economic benefits to be dividual today. To obtain George Washington's bill have stayed in here called ‘‘Fed gained from consolidation. But the larger the private information you would probably have Lite.’’ potential for economic benefits, the larger the had to break into Mount Vernon, and then Regrettably, it does not include some potential costs become to the financial system, have been lucky enough to find the right pa- of the provisions I introduced in the and the American taxpayers, should the com- pers in his desk or strong box. It is now much Committee on Commerce, which the bined entity fail. Any substantial disruption in easier to get anyone's personal information. committee approved, to protect the the institution's operations would likely have a The simple reason for the much greater privacy of customers of merged institu- serious effect on the financial markets. threat to privacy today is the astounding tions. But I am happy that those pri- There is currently no statutory requirement growth of technology and information gath- vacy provisions were made in order in that the Fed explicitly examine whether a com- ering. The tremendous human benefits that the amendment to be offered by the bined entity would be too big to fail. The too have come from these advances also carry gentleman from Ohio (Mr. OXLEY) later big to fail provision does not focus on limiting with them unprecedented new threats to per- in this bill. megamergers, but instead maximizes the sonal privacy. Personal privacy needs reason- I urge the support of that amend- credibility of prudently managed large financial able protections, because personal privacy is ment and I urge the support of the bill. institutions, which will benefit financial con- an important part of individual freedom. Madam Chairman, I rise in support of the sumers and the American taxpayers. Personal information is much more acces- bill. The bill before us also contains the provi- sible now, even without the person whose pri- This bill makes the most fundamental sion I introduced to prevent discrimination vacy is being invaded ever knowing. The sale change in the laws covering financial institu- against certain banks in the sale of title insur- and transfer of personal information, without tions in over 60 years. It deals with the broad ance. This amendment brings the special the individual's knowledge or consent, is both scope of servicesÐincluding banking, insur- carve out for one kind of insurance activity widespread and growing. ance and securities. It recognizes the changes back in line with the purpose of financial mod- Individual privacy is in danger from govern- which have taken place in the economy in that ernizationÐthe consistent application of au- ment, from business, and even from individ- time, and also the dramatic change in tech- thority and restrictions on title insurance activ- uals sitting at home with a computer. My nology which has made possible the offering ity for all banks. amendment recognizes those changes by pro- of services now which would not have been The operating structure of the new financial viding in the area of financial institutions rea- possible before. entities created by this bill is a crucial issue for sonable and realistic privacy protections, with- This bill has the potential of expanding fi- the safety and soundness of our financial sys- out unduly interfering with the normal and rea- nancial services to consumers and creating tem. The question is not how the financial in- sonable conduct of business. more competition. The financial combinations stitutions can best offer and market their finan- Mr. DINGELL. Madam Chairman, I authorized by this bill can result in substantial cial services and products. The fact is, wheth- yield 2 minutes to the distinguished savings in the delivery of financial services. er under an affiliate structure or an operating- gentleman from Michigan (Mr. STU- However, as institutions are combined, and as subsidiary structure, business will make it PAK). they become larger, it is essential that there work either way. Instead, the question is how Mr. STUPAK. Madam Chairman, I be safeguards for safety and soundness to to regulate the structure under which financial thank the gentleman for yielding me protect both consumers and taxpayers. The services and products are offered and sold. this time. H5226 CONGRESSIONAL RECORD — HOUSE July 1, 1999 The banking modernization bill could to vote that will save the American insurance premiums, etc.). Savings are esti- be a good bill, but I oppose the selling people $15 billion a year, that will in- mated at $15 billion a year. Seeing what com- out of your and my personal privacy. I crease privacy protections. You can petition can do in sports and other businesses, oppose compromising my privacy. tell your bank, ‘‘No, I would rather not it is time to find out in financial services. Democrats oppose the selling of the have that information released.’’ Fi- Imagine our American financial firms having privacy of all Americans. All Demo- nally, these two things: to compete effectively in international markets cratic amendments on privacy have It will increase our competitive abil- restrained by laws of yesteryear. In a global been rejected. And why? ity against the world and the global economy the ability of American financial firms Let us take a look at the Los Angeles market, our financial firms, it will in- to compete effectively internationally is man- Times editorial dated today, ‘‘No Pre- crease convenience for Americans, and datory. They can only do so under modern scription for Privacy,’’ and I quote: it will increase competition, lowering laws such as H.R. 10. Let's increase their ef- ‘‘The House must defeat legislation the cost of insurance, mortgages and fectiveness to compete internationally. It is that would allow health insurers to sell all financial services. past due. medical records to other insurers with- I urge the Members to vote ‘‘yes’’ on Americans not only love competition and out the consent or even knowledge of final passage and get us out of the bi- low prices, but also convenience. H.R. 10 the patients. plane, steam engine age. promises better convenience and access to fi- ‘‘Legislators usually become angry 1933. There were no interstate highways. In nancial products, more choices in both urban and defensive when ulterior motives fact, there were no four-lane limited-access and rural America. Time is money and con- are ascribed to legislation. But if vot- highways in America. Most of our U.S. high- venience is paramount in today's fast-moving ers are to believe that this measure is ways were gravel; a few were dirt. society. After years of trying and failing, isn't unrelated to the fact that the insur- In 1933 steam engines pulled trains along it time this Congress finally offered the con- ance industry was the single largest America's railroads. Diesels were still a dec- venience of modern banking to American con- soft-money donor to Republicans in ade away. Today's college graduates have sumers? Convenience and more choices. 1997–98, then let them explain how this never seen a steam engine in revenue service Not only does H.R. 10 offer improved ability anti-consumer amendment benefits on America's railroads. Want to see a working for our companies to compete in the world those voters.’’ steam engine. You had better take a quick trip market, more competition and choice for the Folks, they are selling you out. They to the third world or remote areas of China, for American public, but it also promises in- are selling your privacy, not just your instance, because the last few in service are creased privacy protections. Under an amend- financial privacy but now your medical rapidly disappearing. ment to be offered today, which I support, the privacy. When I go to the bank, when I 1933. Take a trip on a jet airplane. Hardly. American banking customer can tell his local buy insurance, I provide information They were decades away. To get from city to bank, ``I'd rather you did not show that infor- which is personal, private. But this bill city, if there was air service (and that was a mation outside the bank.'' Americans love their allows personal, private medical, finan- big if), you might climb aboard a tri-engine cial information. Every check I ever privacy and what it protected. wood-framed biplane. Today you can see that For all of these reasons, it's time, no it's wrote, every medical decision I ever very aircraft of 1933 in the Smithsonian. Not past time, to modernize our financial services made, they are going to sell it, and even my generation saw them in service. laws. Accomplish this and preserve American they are going to sell it to the tele- However, such is not the case for our finan- financial leadership for the 21st Century by marketers, without my knowledge and cial services laws. The law which regulates without my consent. voting yes on final passage of the Financial and applies to the entire financial services in- I know the Republicans have said Services Act of 1999. dustry (banking, insurance and securities) Mr. LA they will fix it later with comprehen- FALCE. Madam Chairman, I sive privacy legislation. Later, later. today applied in 1933. In fact, it was in 1933Ð yield 2 minutes to the distinguished But once they sell the information, not the year Albert Einstein became famous, gentlewoman from California (Ms. WA- once it is out in the world, once it is but the year he immigrated to AmericaÐthat TERS). Ms. WATERS. Madam Chairman, I out in this electronic world we live in, the law in effect today was enacted by Con- they are going to pass a law then and gress. You may not recall that Congress or rise in opposition to H.R. 10, the Finan- say you cannot have it. Are they going even the events in Washington that year. The cial Services Act of 1999. I must oppose to recall it? Are they going to tell big political happening in 1933 was Calvin this legislation because it distorts the every person, every business to recall Coolidge's funeral. You don't recall that event? intent of the members of the House the information? Plus once it is paid The ``Three Little Pigs'' was making its debut Committee on Banking and Financial for, you think businesses are not going as one of Walt Disney's first productions. It Services who worked hard to develop a to make copies and continue to hold it? has been several years since Walt Disney credible piece of legislation that would Your privacy has been violated. Oh, died. But our 1933 financial services laws of cover the mergers of banks and com- they will stop all right. Will they? Will that day live on today. Yes, like the memory mercial interests. they? Will they let their largest single of Calvin Cooledge's funeral they are dog- Instead of respecting the bipartisan soft-money contributor to the GOP, eared and worn. And every bit as inefficient as work of the House Committees on the insurance industry, call it back? a steam engine would be on today's railroad Banking and Financial Services and They will not. tracks or a tri-engine wood-frame biplane in Commerce, the House Committee on Mr. LEACH. Madam Chairman, I service by today's airlines. Imagine wanting to Rules hijacked this bill. They stripped yield 1 minute to the gentleman from travel across country and finding not only no out the Lee anti-redlining amendment Alabama (Mr. BACHUS), the distin- controlled access highways, but only gravel- that had been adopted in Banking and guished subcommittee chairman. topped or dirt-topped highways. What an inef- the Markey amendment was stripped Mr. BACHUS. Madam Chairman, in ficiency. What an inconvenience. What a cost out on privacy that had been adopted 1933, most of our U.S. highways were to the economy. How outmoded. That's ex- in Commerce. I have never seen this gravel-topped, we had no controlled actly what America's financial services com- before. You vote, you get an amend- interstates like we do today, controlled munity has to contend with today. The law is ment passed, and then the Committee access four-lane highways; our rail- no more intended for today's market than a on Rules literally takes it out without roads were operating steam engines, Model T Ford. This is true of today's outdated a vote? The Committee on Rules then diesels were still several years off; our financial services laws. It is time to bring finan- denied a rule to have a debate on pri- airlines were flying biplanes with three cial modernization laws not only into the late vacy. And, of course, they denied my engines; and we had Glass-Steagall. 20th Century but revise them for the fast-ap- amendment on lifeline banking for low- Today we have interstate highways, proaching 21st Century. H.R. 10 is such a law. income consumers who do not have they have replaced our gravel U.S. But H.R. 10 is more than just an updated or bank accounts with traditional bank- highways; we do not have any more modern approach to banking. It's an improve- ing institutions. steam engines, you have to go to China ment over existing laws. All Americans today The House Committee on Rules fur- to see one; but we still have Glass- would benefit from H.R. 10 in the following ther added a dangerous amendment by Steagall. ways: the gentleman from Iowa (Mr. GANSKE) Thank goodness that today we have a Greaer efficiency in competition will drive that allows private medical record in- modern financial bill that is before us down prices of financial services (loan rates, formation to be given to subsidiaries July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5227 and sold to others. Then, to add insult age businesses are growing. Three secu- personal information will be kept con- to injury, the Committee on Rules rities legends teamed up to create a fidential, they will not be so forth- made in order an amendment by the rival to the New York Stock Exchange. coming, and that will hurt patient care gentleman from Texas (Mr. PAUL), the Money moves from Tokyo and back in and stifle research projects. gentleman from Georgia (Mr. BARR) an instant. A consumer can see and Let us be clear. Privacy must never and the gentleman from California (Mr. speak to a live teller via the Internet. take a back seat to profits. We must CAMPBELL) that can only be identified We simply no longer live in a depres- first fix these provisions and then pass as the Dope Dealers and Money sion era that gave birth to Glass- an outstanding financial services bill. Launderers Act of 1999. The Paul Steagall. Mr. LEACH. Madam Chairman, I amendment adjusts the currency trans- With this bill, working families will yield 1 minute to my great friend, the action reporting requirement from have more choices. Do my colleagues gentleman from Nebraska (Mr. BEREU- $10,000 to $25,000, making it easier for want an account with no commissions TER). drug dealers to spend and launder drug and pricing based on household assets? (Mr. BEREUTER asked and was proceeds. Do my colleagues want to carry a cred- given permission to revise and extend Let us go a little bit further. The it card that has no ATM fees for trans- his remarks.) gentleman from Virginia (Mr. BLILEY) actions worldwide? Do my colleagues Mr. BEREUTER. Madam Chairman, will have Members believe that he is want a e-commerce link that has a re- today marks a positive and long sought doing something about domestic vio- wards point program? milestone along the long journey to fi- lence and protecting the victims. It is With this bill, small businesses will nancial modernization. I commend the a trick. He is allowing these mutual in- have a greater array of products and chairman and the ranking member, the surance companies to move out of their services from which to choose. Do my gentleman from New York (Mr. LA- States that do not allow them to take colleagues want convenient Internet FALCE) and the Committee on Com- their proceeds away from the policy- access to their checking, savings and merce leadership also for their involve- holders and put them in the hands of investment activities? Do my col- ment and cooperation. the officers. He is trying to make Mem- leagues want a discount for goods pur- This bill is necessary to keep the bers believe that he is doing something chased through e-commerce? Do my United States in its preeminent posi- for women. Members do not want their tion in the world’s financial market- fingerprints on this bill. This is a bad colleagues want global market intel- ligence and unified accounting report- place. There are a number of reasons to one. Vote ‘‘no.’’ support. I am going to list just a few: Mr. BLILEY. Madam Chairman, I ing? This bill breaks the chains of Glass- H.R. 10 illustrates that a Federal yield 3 minutes to the gentleman from statutory change in financial law is New York (Mr. LAZIO), a member of the Steagall that no longer serve the inter- ests of American families without imperative. Committee on Commerce and a mem- Second, this measure will allow fi- sweeping us away in a tide of economic ber of the Committee on Banking and nancial companies to offer a diverse euphoria. This bill intends to keep us Financial Services. number of financial products to their as the caretakers of a senior citizen’s Mr. LAZIO. Madam Chairman, let me consumers. nest egg and to ensure that the life begin by congratulating and thanking Third, this bill will have a distinct savings of working families are not lost the gentleman from Virginia (Mr. BLI- positive effect on consumers. LEY) and the gentleman from Iowa (Mr. in economic downturns. Fourth, the bill allows for no mixing LEACH) for the stewardship of this fun- Congress should break down these of banking commerce through a com- damentally important piece of legisla- barriers and encourage competition, mercial basket. tion for the American economy, having creating an environment for more in- Fifth, this measure will necessarily persevered through a number of dif- novative products and better prices. I restrict unitary thrifts. ferent discussions and bringing this to urge my colleagues, Democrats and Re- Sixth, the bill will avoid the threat the verge of passing as an historic publicans, to let American banking of presidential veto by placing the in- piece of legislation. step into the 21st century. Support the tegrated financial activities in the op- Let us go back for a moment to the Financial Services Act. erating subsidiary structure. early 1930s. The stock market col- Mr. DINGELL. Madam Chairman, I Seventh, it balances the interests of lapsed, the SEC did not exist, and there yield 11⁄2 minutes to the distinguished a State in regulating insurance with were few Federal securities laws. In 3 gentlewoman from California (Mrs. that ability of a national bank to sell years between 1930 and 1933, 8,000 banks CAPPS). insurance. went bankrupt and American families Mrs. CAPPS. Madam Chairman, I And Number 8, it strikes an equi- lost $5 billion in deposits, an enormous commend the ranking member, the librium on the issue of securities. sum at the time. gentleman from Michigan (Mr. DIN- My colleagues, I urge strong support To restore American confidence in GELL) and the gentleman from Florida for this legislation. It is a long time our banks, Glass-Steagall erected a (Mr. BLILEY) for their leadership on coming. It is worth the effort. wall between commercial banks and se- this bill. H.R. 10 would be a much more First, a Federal statutory change in financial curities firms. Deposit insurance was efficient financial service bill, bringing law is imperative because Congress must call created so American families knew greater choices and lower prices for a halt to the recent trend of ad hoc financial their financial nest egg was safe. Glass- consumers, and that is a good thing. modernization through regulatory fiat and judi- Steagall made sense, 60 years ago. But But this bill has serious flaws that cial consent. Instead we need to modernize 60 years ago, families kept the bulk of must be corrected. Most important, the the nation's banking laws through statute. their savings in banks, earning low language regarding privacy of medical As a matter of fact, on the first day of Bank- rates of interest. Today, families invest information has to be strengthened. ing Committee consideration of financial mod- in the stock market and 43 percent of The American Nurses Association ernization legislation in 1998, during the 105th adults own a piece of the market be- says this about H.R. 10: Congress, this Member stated: ``Once more, cause Americans in the 1990s seek high- The proposed language would, in fact, we start an effort to modernize our financial in- er returns on their investments. facilitate the broad sharing of sensitive Consumer behavior changed because stitutions structure. It is an effort we have tried health and medical information with- stocks and mutual funds achieved supe- before and must begin someplace. It should rior long-term results, people began out the consent of the consumer. begin in the House, and so I commend you, H.R. 10, as it is now written, will managing their own retirement funds Chairman Leach, for launching this effort. We through individual retirement ac- allow an insurance company to sell need to do this. We need to face up to our re- counts, 401(k) plans and Keogh plans. consumers personal health informa- sponsibilities as a legislative body. There is no In short, Americans are no longer hid- tion. That is wrong. Patients should be doubt about that.'' ing their savings in their mattresses. encouraged to share with their doctors, Second, this Member supports H.R. 10 as it nurses, and therapists all their health will allow financial companies to offer a di- b 1715 information. No diagnosis or treatment verse number of financial services to the con- Today we stand at the center of an is complete without it. But if patients sumer. This bill removes the legislative bar- electronic revolution. On line broker- cannot be sure that this sensitive and riers within the Glass-Stegall Act of 1933 and H5228 CONGRESSIONAL RECORD — HOUSE July 1, 1999 the 1956 Bank Holding Company Act. As a re- it also results in an extremely powerful variety Financial modernization, H.R. 10, repeals sult, H.R. 10 will allow financial companies to of financial institutions that has an uncompeti- the ``broker'' and ``dealer'' exemptions that offer a broad spectrum of financial services to tive advantage over other types of financial in- banks have under Federal law, which subject their customers, including banking, insurance, stitutions. At the H.R. 10, Banking Committee banks to the same regulation as all securities securities, and other financial products through markup in the 106th Congress, I expressed firms. In addition, H.R. 10 replaces the either a financial holding company or through my desire to completely closing the unitary ``broker'' and ``dealer'' exemptions with other an operating subsidiary. thrift loophole. exemptions which allow banks to be able to Banks, securities firms, and insurance com- Financial modernization, H.R. 10, allows for engage in their current activities involving se- panies will be able to affiliate one another no new unitary thrifts; indeed it restricts com- curities. through this financial holding company model. mercial entities from purchasing grand- Lastly, this Member supports H.R. 10 as its These entities will be able to engage in those fathered, existing thrifts. There was a com- passage is necessary to keep the United activities which are defined to be ``financial in promise in the legislation before us which es- States in its preeminent position in the world, nature'' which include: lending, other tradi- tablishes an application process whereby the financial marketplace. U.S. financial institu- tional bank activities, insurance underwriting, Federal Reserve Board and the Office of Thrift tions are among the most competitive pro- financial and investment services, securities Supervision will determine whether an existing viders of financial products in the world. How- underwriting and dealing, merchant banking, unitary thrift holding company may be sold to ever, the financial marketplace is currently un- and other activities. a commercial firm. This Member wants that dergoing three changes which are altering the In order for banks to be able to engage in grandfather loophole closed altogether. financial landscape of the world. the new financial activities, the banks affiliated This Member also believes that the provi- The first of those changes involves a tech- under the holding company or through an op- sions on unitary thrifts in H.R. 10 are better nological revolution including the internet erating subsidiary have to be well-capitalized, than the status quo which allows both new through electronic banking. Technology is blur- well-managed, and have at least a satisfactory unitary thrifts as well the unfettered transfer- ring the distinction between financial products. Community Reinvestment Act rating. ability of existing thrifts to commercial entities. The other two changes include innovations in Third, this Member supports H.R. 10 be- A very recent example is Walmart's recent ap- capital markets, and the globalization of the fi- cause it is very pro-consumer. It will increase plication with the Office of Thrift Supervision to nancial services industry. choices for the consumer in the financial serv- acquire a unitary thrift in Oklahoma. Again, Financial modernization is the proper, ap- ices marketplace by creating an environment this Member wishes that H.R. 10 would go propriate step in this ever-changing financial of greater competition. As a result, financial one step further and prohibit the transferability marketplace. Consequently, in order to main- modernization will allow consumers to be able of existing unitary thrifts to commercial enti- tain American's financial institutions' competi- to choose from a variety of services from the ties. If H.R. 10 passes, this Member is hopeful tive and innovative position abroad, H.R. 10 same, convenient, financial institution. Finan- that such a prohibition could be considered needs to be enacted into law. In the absence cial modernization will give consumers more and adopted during the probably House-Sen- of this bill, the American banking system could options. ate conference on H.R. 10. This Member suffer irreparable harm in the world market as Whether it be in rural Nebraska, or in New would reiterate that his concerns about unitary we will allow our foreign competitors to over- York City, consumers of financial products all thrifts transferability remains as a major con- take U.S. financial institutions in terms of inno- across the United States deserve additional cern regarding H.R. 10. vative products and services. We must simply competitive options. Moreover, under the cur- Sixth, this Member believes that, in order to not allow this to happen. rent setting, many rural communities are avoid the President's veto of H.R. 10, the op- Therefore, for all these reasons, and many under-served in regards to their access to a erating subsidiary structure for these inte- more than have been addressed today by this broad array of financial services. Financial grated financial activities is the preferred finan- Member's colleagues, we must, and will pass modernization will help ensure that the finan- cial structure to adopt. As is well known H.R. 10. This Member urges his colleagues to cial sector keeps pace with the ever-changing among the Members of this body, the Treas- support H.R. 10, the Financial Modernization needs and desires of the all-important con- ury Department desires the operating sub- bill. sumer. sidiary structure. However, the Federal Re- Mr. LAFALCE. Madam Chairman, I In addition, H.R. 10 will also allow financial serve Board desires the affiliate structure. yield 2 minutes to the distinguished institutions to provide more affordable services Both sides of this issue make compelling argu- gentleman from Vermont (Mr. SAND- to the consumer. Financial modernization will ments for their positions on this matter. How- ERS). result in additional competition and in effi- ever, among other important reasons, because Mr. SANDERS. Madam Chairman, I ciency which in turn should result in lower of the threat of a veto, this Member believes rise in strong opposition to this bill. I prices for financial services to the customer. that the operating subsidiary is the best struc- support financial modernization if Fourth, this Member has been a fervent ad- ture for these integrated financial activities. modernization means more choices for vocate of keeping banking and commerce Seventh, this Member supports H.R. 10 be- consumers, more competition, greater separate. In fact, this Member is quite pleased cause, it balances the interest of a state in safety and soundness, stopping unfair that H.R. 10 does not contain a ``commercial regulating insurance with that of the interests bank fees and protecting consumers market basket'' which would have allowed the of a national bank to sell insurance. At the and underserved communities. But very dangerous mix of commerce and bank- outset, this Member notes that he has a Madam Chairman, I believe this legis- ingÐequity positions by commercial banks. strong record of supporting states rights, espe- lation in its current form will do more We must avoid the problems that the Japa- cially in the area of insurance regulation. harm than good. It will lead to fewer nese have lately experienced because of such In that respect it is important to note that banks and financial service providers, a dangerously volatile mixture of commerce H.R. 10 preserves state rights by providing increased charges in fees for individual and banking in their banking institutions. that the state insurance regulator is the appro- consumers and small businesses, dimin- An amendment was initially filed, but not of- priate functional regulator of insurance sales. ish credit for rural America and tax- fered, in the House Banking Committee in the Whether insurance is sold by an independent payer exposure to potential loses 106th Congress which would have allowed for agent or through a national bank, the state, should a financial conglomerate fail. It the mixing of banking and commerce in a five and only the state, is the functional regulator will lead to more megamergers, a small percent market basket. However, this Member of insurance in both instances. Moreover, H.R. number of corporations dominating the believes in large part because of expressed 10 also does not unduly burden the ability of financial service industry and further strong opposition, including vocal and effective national banks to be able to sell insurance. concentration of economic power in opposition of this Member, this amendment Eighth, this Member supports H.R. 10 as it this country. was withdrawn for consideration in the Com- strikes an equilibrium between the interests of It is no secret, Madam Chairman, mittee. securities firms with those banks that will be that far bigger financial institutions Fifth, the issues of the unitary thrift charter allowed to sell securities under H.R. 10. This lead to bigger fees which total more is of significant importance to Nebraska com- measure amends the 1934 Securities Ex- than $18 billion last year. The U.S. mercial banks. One of the reasons this Mem- change Act to provide functional regulation of Public Interest Research Group and the ber is unequivocally opposed to the existence bank securities activities. As a general rule, Federal Reserve Bank have conducted of this unitary thrift charter is because of its securities activities under H.R. 10 will continue studies and confirm that bigger banks mixing of thrift activities with commercial ven- to be regulated by the Securities and Ex- charge larger fees, and there is no ques- tures. However, this is not the sole reasonÐ change Commission. tion in my mind that if this bill is July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5229 passed, that process will be acceler- does not modernize the Community Reinvest- sharing of information between finan- ated. ment Act (CRA) by applying CRA require- cial industry entities and their subsidy This bill is in fact, however, good for ments to new financial conglomerates. It does areas. big banks, but the big banks are doing not stop ATM surcharges. It does not safe- However, it is my concern and the just fine without this bill. Govern- guard stronger consumer protection laws concern of other Members about the ment-insured banks earned a record $18 passed by the various States. It does not pro- confidentiality of sensitive health and billion in just the first 3 months of this vide the strong privacy provisions that will be medical information under the listed year, 2.1 billion more than they earned needed with the creation of large financial exemptions of the current bill. To ad- in the same period last year. At a time service conglomerates, It does not require that dress those concerns I would like to of increasing bank fees, increasing banks serve low- and moderate-income con- ask my colleague and good friend if he ATM surcharges, increasing credit card sumers by offering basic, lifeline accounts. would agree to support at conference fees, increasing minimum balance re- And it does not even include provisions to pro- inclusion of language to allow the ex- quirements, it is time for the Congress tect women and minorities from discrimination change of general economic and clin- to stand up for the consumers. The big in homeowner's insurance and mortgage serv- ical information but prohibit the ex- banks are doing fine. Let us protect the ices. These anti-discrimination provisions were change of personally identifying infor- consumers. Let us vote no on this leg- included in the version of the bill that was re- mation such as the names, addresses, islation. ported out the Banking Committee, but they or social securities of specific patients. Madam Chairman, I rise in opposition to the mysteriously disappeared from the bill when it Mr. GANSKE. Madam Chairman, I bill. came out of the Rules Committee. appreciate the comments of my col- I support financial modernizationÐif mod- At a time of increasing bank fees, ATM sur- league the gentleman from Washington ernization means more choices for consumers; charges, credit card fees, increasing minimum (Mr. BAIRD). We both want privacy for more competition; greater safety and sound- balance requirements, discrimination against our patients. We also both want to see ness; stopping unfair bank fees; and pro- women and minorities, and the loss of many insurance function. I pledge to work tecting consumers and under-served commu- locally-owned banks to large, multi-billion dol- with my colleague and also the gen- nities. lar corporate institutions, Congress should tleman from Massachusetts (Mr. MAR- But Madam Chairman, I believe this legisla- consider pro-consumer legislation to directly KEY), the gentleman from California tion, in its current form, will do more harm address those problems. But this bill is not (Mr. CONDIT), the gentleman from Cali- than good. It will lead to fewer banks and fi- good for consumers, or small businesses, or fornia (Mr. WAXMAN) to improve the nancial service providers; increased charges taxpayers, or under-served communities. I provisions in this bill in conference so and fees for individual consumers and small urge my colleagues to reject this bill. that we can do both. businesses; diminished credit for rural Amer- Mr. BLILEY. Madam Chairman, I Mr. DINGELL. Madam Chairman, I ica; and taxpayer exposure to potential losses yield 2 minutes to the gentleman from yield 4 minutes to the gentleman from should a financial conglomerate fail. It will lead Iowa (Mr. GANSKE), my friend and col- Massachusetts (Mr. MARKEY). to more mega-mergers; and small number of league. corporations dominating the financial service Mr. GANSKE. Madam Chairman, I Mr. MARKEY. Madam Chairman, the industry; and further concentration of eco- yield to the gentleman from New York gentleman from Michigan (Mr. DIN- GELL), myself, many Members of this nomic power in our country. (Mr. LAFALCE), my friend and col- The banking industry is currently involved in league. body over the last 14 years for me have some of the largest mergers in history. Four of Mr. LAFALCE. Madam Chairman, I worked to produce this financial mod- the top ten mergers last year involved bank and many, many others have tremen- ernization bill. Many times I have deals totaling almost $200 billion. Today, dous concerns about the gentleman’s brought it out here on the floor. I can three-quarters of all domestic bank assets are amendment, two in particular. remember our final meeting with held by 100 large banks. And this bill, if Number one, we want to make sure President Bush and Secretary Baker passed in its current form, will further accel- that it does not in any way preclude back in 1990 where it just came down to erate the consolidation of banking and finan- the authority of the Secretary of HHS one final detail. We have been here cial assets that we have seen in recent years. to promulgate medical privacy regula- many times before. It is an important It is no secret, Madam Chairman, that big- tions subsequent to August 21, and it is bill. But it is only half a bill because as ger financial institutions lead to bigger feesÐ imperative that that be made explicit the financial revolution speeded up by which totaled more than $18 billion last year. in conference. the global technology telecommuni- The U.S. Public Interest Research Group and Secondly, there are so many health cations revolution, hits our country, the Federal Reserve Bank have conducted provider organizations, the AMA, the we need to provide protections for ordi- studies and confirmed that bigger banks Nurses Association that have concerns nary people as well. charge higher fees than smaller banks and primarily because of the exceptions in Yes, this bill gives ordinary Ameri- credit unions. The Public Interest Research the gentleman’s amendment, and I cans a window on Wall Street, but si- Group's 1997 study of deposit account fees at want my colleague’s assurance that he multaneously it gives Wall Street a over 400 banks found that big banks charge will work for specific statutory lan- window on each one of our living fees that are 15 percent higher than fees at guage in conference that will deal with rooms. The problem with the Repub- small banks. Credit union fees, by compari- both those problems. lican bill is that it says that if their son, were half those of big banks. And the Mr. GANSKE. Madam Chairman, I checks, and let us just say for the sake Public Interest Research Group's 1998 ATM want to assure my friend that it was of this discussion, they you have had surcharging report found that more big banks not the intent of the language in this their checks in the same bank for the surcharge non-customers, and big-bank sur- bill to preclude the Secretary from last 25 years, every check my col- charges are higher. being able to issue her regulations in leagues have written for your family. This bill is certainly good for the big banks August, and I will work with the gen- Now, after this bill passes, that bank of America, but the big banks are doing fine tleman in conference to make that ex- can now buy a brokerage or an insur- even without this bill. Government-insured plicitly clear in language, that nothing ance affiliate. This legislation says banks earned a record $18 billion in just the in this would preclude her from doing that they can hand over all of my col- first three months of this yearÐ$2.1 billion that. leagues checks for the last 25 years to more than they earned in the same period last Madam Chairman, I yield to the gen- the 300 or 400 brokers in their new affil- year. Bank profits were also up $1.9 billion in tleman from Washington (Mr. BAIRD). iate even though they have got a the first three months of this yearÐbeating the Mr. BAIRD. Madam Chairman, as a broker down the street who has been previous record set in 1998. And, according to clinical psychologist myself and in the their broker for the last 25 years. So the Federal Deposit Insurance Corporation, gentleman’s role as a physician I know every one of the checks that my col- the increase in earnings was led by the largest that we are both concerned about pro- leagues have written are now in the banks, while smaller banks saw their earnings tecting the confidentiality of indi- hands of 300 brokers in town who my decline. vidual medical information. I also colleagues do not want to go through This bill has everything the big banks want, know of the gentleman’s hard work to everything that they have done finan- but it has little or nothing for consumers. It craft language that would limit the cially for the last 25 years. H5230 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Now should people have the right to dened system of regulation in the form actions for unusual or extraordinary cir- say, no, I do not want that? The Repub- of higher costs. cumstances that would have an adverse effect licans refuse to give that right. What The legislation we are voting on on a subsidiary savings association that out- they say is we are going to give people today provides consumers with signifi- weighs the public benefits of the transaction. notification that we are going to com- cant relief from these costs. Indeed, Again, as a member of the House Banking promise their privacy. That is like a with the efficiencies that could be real- Committee, I urge my colleagues to support burglar leaving behind a note saying ized from increased competition among this legislation. what they have stolen, giving notice, banking, securities and insurance pro- Mr. LAFALCE. Madam Chairman, I but my colleagues have no right to viders under this legislation, the Treas- yield 11⁄2 minutes to the gentleman stop it. ury Department tells us that con- from Texas (Mr. BENTSEN), a distin- Now, my colleagues, here is how the sumers will ultimately save as much as guished member of the committee. American people feel about this issue. 5 percent, or $15 billion per year in the (Mr. BENTSEN asked and was given Question, AARP: ‘‘Would you mind if a aggregate. permission to revise and extend his re- company did business with sold infor- As a member of the House Committee marks.) mation about you to another com- on Banking and Financial Services, I Mr. BENTSEN. Madam Chairman, this is, overall, a pretty good bill. It pany?’’ Ninety-two percent of Ameri- urge my colleagues to support this leg- starts to bring statutory law up to pace cans would mind. I do not know who islation. with where the marketplace is. The the other 7 percent are, but 92 percent Madam Chairman, we have the opportunity markets, the financial markets in the would mind. here today to accomplish what no other Con- United States, are the strongest in the Now let us go to the next poll. The gress of the last 20 years has been able to, world, but the laws governing them are next poll is just as bad. Here is the and that is to modernize the depression era greatly outdated. laws governing our financial services sector. In question: ‘‘In the future banks, insur- As a result of financial ance companies, and investment firms doing so, we will create a structure that pro- disintermediation in the markets, we may be able to merge into a single vides lower costs, increased access, better now see different industries, banking company. If they do, would you support services, and greater convenience to con- and securities, securities and insur- or oppose these narrowly merged com- sumers. ance, banking and insurance. It is time panies from internally sharing infor- Every consumer is connected in some way to catch up with that. mation about your accounts or your in- to the financial services industry. Nearly every This bill goes a long way in getting surance policy?’’ Eighty percent would economic transaction involves the exchange of there. It does not create the perfect oppose sharing. Eleven percent would money or the promise of a future exchange of holding company model, the perfect fi- support it. moneyÐmeaning that every day, every con- nancial holding company model, but it Eighty percent oppose. They want sumer in this country feels the weight of an goes a long way to get there. I am very the right. This is the AARP. outdated and overburdened system of regula- much appreciative that we have in- And the final chart: Here is what a tion, in the form of higher costs. cluded the operating subsidiary lan- typical bank’s policy says quite sim- The legislation we are voting on today pro- guage, allowing banks to decide what ply: ‘‘Even if you request to be ex- vides consumers with significant relief from model they want to have, whether a cluded from affiliate sharing of infor- these costs. Indeed, with the efficiencies that national bank or a holding company. I mation, we will share this other infor- could be realized from increased competition think this is very safe and sound. mation about you and your products among banking, securities, and insurance pro- In fact, one of my previous colleagues and services with each other to the ex- viders under this legislation, the Treasury De- mentioned that the chairman of the tent permitted by law.’’ We determine partment has estimated that consumers may Federal Reserve even said that there what the law is. If we do not pass a law, ultimately save as much as 5 percentÐor $15 was no safety and soundness issue; at they are sharing that information. billion per year in the aggregate. least 2 years ago he said that. Then he Madam Chairman, the world breaks This monumental legislation is good for con- entered into a turf battle and changed into three categories, the information sumers and it is good for America. his position, but he has been known to peepers, and they are out there; now, At this time, I would like to commend Rules change his position before. with the new technology, the informa- Committee Chairman DAVID DREIER for his I think this is overall a good bill. tion mining reapers who use these elec- work on the compromise language for Title IV, There are a couple of problems with it. tronic technologies to gather all parts and take a few moments to clarify this lan- Unfortunately, I think we are going of our life, medical, financial, check- guage. backwards in putting restrictions on ing; and third, information keepers. The Title IV of the Dreier substitute amend- unitary thrifts. We are bringing the They used to be our local doctor, our ment to H.R. 10 requires that certain compa- Federal Reserve into regulation of uni- local banker, but they have been pur- nies with nonfinancial activities that propose to tary thrifts where they have never chased by multinational banks, by acquire control of a savings association must been before. I offered amendments in multinational or by national HMOs. notify the Board of Governors of the Federal committee that would have addressed The information keepers of the mod- Reserve in the same manner as a notice of that in a proper way, either with the ern era are the United States Congress. nonbanking activities is filed with the Board FDIC, which has regulatory authority, If we do not pass these laws today, the under section 4(j) of the Bank Holding Com- or bringing the OTS in. Unfortunately, American people are unprotected. pany Act of 1956. This notice would be in ad- the committee did not accept it. dition to the application that is already filed It is ironic again that we made in b 1730 with the Office of Thrift Supervision. The Fed- order the Burr amendment which goes Mr. LEACH. Madam Chairman, I eral Reserve would have the opportunity to re- the other direction for certain entities yield 1 minute to the gentleman from view and take action on the notice prior to the but we take it away from thrifts. California (Mr. ROYCE), my colleague applicable time periods under section 4(j). Madam Chairman, thank you for giving me and great friend. The Federal Deposit Insurance Corporation this opportunity to discuss H.R. 10, financial Mr. ROYCE. Madam Chairman, we and the Office of Thrift Supervision have testi- modernization legislation. As a member of the can create a financial structure that fied that affiliations between commercial com- House Banking Committee, I strongly support provides lower costs, increased access, panies and thrift institutions have not been a this legislation and urge my colleagues to sup- better services, and greater conven- cause for regulatory concern. port it. I believe that this comprehensive bank- ience to consumers. Thus, we do not intend or anticipate that the ing reform legislation will bring new benefits to Every consumer in this country is Federal Reserve Board will treat the affiliation consumers by encouraging competition be- connected in some way to the financial of commercial companies and savings asso- tween banking, securities, and insurance firms services industry. Nearly every eco- ciations as giving rise, per se, to undue con- to create a ``one-stop'' shopping for con- nomic transaction involves the ex- centration of resources, anti-competitive ef- sumers. change of money or the promise of a fu- fects, conflicts of interest or unsound banking Our markets today in the United States are ture exchange of money, meaning that practices. the strongest financial markets in the world every day every consumer feels the Rather, it is intended that the Federal Re- and provide a robust market system for con- weight of an outdated and overbur- serve Board will examine proposed trans- sumers. Yet, our system has been restrained July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5231 by the Glass-Steagall law that requires finan- to provide a written record for their reasoning gaged in commercial activities. If the unitary cial companies to separate their banking, se- related to reviews. thrift holding company charter was so valu- curities, and insurance companies into dif- I filed three amendments in the House able, you would expect that many companies ferent companies. By repealing Glass- Rules Committee that would have corrected would be applying for this specialized charter. Steagall, Congress will bring new competition this inequity. Yet, the evidence does not bear this out. A to financial services so that consumers can Unfortunately, the House Rules Committee powerful reason that limits the number of ap- purchase more products. The net effect of this did not allow any of these amendments to be plicants is the qualified thrift lending test and legislation will be to promote more competi- considered today. My first amendment, which the commercial lending limits have done their tion, create more products at lower prices, and is also jointly supported by Representatives job; a thrift charter is only attractive to those better protect American consumers. It allows ROYCE, INSLEE, and WELLER would strike the companies prepared to commit to residential federal law to catch-up to the fast paced struc- Federal Reserve Board review process and real estate and credit card lending, and a few tural changes occurring in the financial mar- restore the language to the amendment that other forms of consumer banking. For most ketplace. was adopted by the Housing Banking Com- companies, these restrictions are sufficient to While H.R. 10 does not necessarily produce mittee by a roll-call vote. I believe that this is deter interest. the ``ideal'' financial holding company model or the best option and would ensure that trans- Fourth, nearly three-quarters of the recent charter, it does repeal portions of existing reg- fers are reviewed by the Office of Thrift Super- holding company applicants are acceptable to ulatory constraints dating back to the Great vision. critics. A total of 75 companies with non-bank- Depression commensurate with a market that The second amendment which is also spon- ing interests has applied for the thrift charter has matured greatly through disintermediation sored by Representatives ROYCE and INSLEE since the beginning of 1997. Of those, a total brought on by increased consumer wealth, so- would substitute the Federal Deposit Insur- of 55 firms or 73 percent is currently in the in- phistication, and access to information. This ance Corporation as the secondary reviewer in surance and securities businesses and there- proposal should not be viewed as a repudi- cases of unitary thrift holding companies fore could not obtain a bank charter under cur- ation of past regulatory regimes, but rather a mergers. I believe that the FDIC is better rent law. However, under H.R. 10, these firms maturing of such regimes. equipped to review these mergers, because would be eligible to convert a bank charter. In- While this bill is not perfect, it strikes a bal- they already have enforcement authority over deed, the Travelers-Citigroup merger suggests ance in this new marketplace. First, H.R. 10 federally-chartered thrifts and have worked that the bank charter would be preferable and includes multiple structures for banking entities well with thrifts. This amendment would also they would transfer their charter once this through either a holding company-affiliate require that the review process should con- broader bank charter is available. Travelers model or operating subsidiary, which I have sider reasonable criteria related to these re- actually gave up its unitary thrift holding com- long supported and believe is adequately safe views and that the final decisions should be pany status in favor of becoming a bank hold- and sound. In fact, the majority of bank regu- written so that parties would understand the ing company and in the expectation of finan- lators believe this model is in some cases reasoning behind decisions. cial services reform legislation. more safe than an affiliated holding company The third amendment which was also spon- Finally, it is a question of equity. Congress structure. Second, the bill addresses in a pru- sored by Representatives ROYCE and INSLEE allowed for the creation and growth of the uni- dent way the issue of commerce and banking would add the Office of Thrift Supervision to tary thrift charter in the 1960s. To retroactively through a new ``complimentary to banking'' ap- the current Federal Reserve review process. close the market for those who have ``played proach that I hope will meet my previous con- This joint review would help to ensure that by the rules'' and pose no threat to safety and cerns that an outright ban on commerce would grandfathered unitary thrift holding companies soundness of the Nation's federally insured limit future abilities to meet market demands mergers have a fair hearing of their cases and lending does not seem fair. And while H.R. 10 and product development. Finally, it continues that all final decisions would be written. I be- may provide a new financial model we should the efforts of the Community Reinvestment Act lieve that the OTS, as the principal regulatory at least hold harmless those already in the so that all sectors of our society can benefit for unitary thrifts, should be part of the final program and not legislatively depreciate their equally from capital formation and economic decision to approve such mergers. In a case value. Congress has been down that road be- development. It is important that these areas where OTS and the Federal Reserve do not fore with limited success. Such a course devi- of H.R. 10 are not changed or watered down. agree, this amendment would ensure that all ates from the concepts of increased competi- It is regrettable that the Rules Committee final decisions would be written and would tion, economic vibrancy and consumer choice chose to strip the bill of the Lee amendment permit owners to apply for judicial review of that inspired the pending bills. addressing ``redlining'' by insurance compa- any decisions made. Finally, with respect to the issue of privacy, nies. I believe that all of my amendments would I believe that we have structured strong, bipar- Additionally, this bill inadequately addresses improve the current Federal Reserve review tisan financial privacy language which goes far an issue that I have long advocated related to included in this bill. the transferability of unitary thrift holding com- Unitary thrift holding companies have ex- beyond existing law. For the first time transfer panies. In the House Banking Committee, I isted for more than 30 years. During the thrift of specific account information to third parties successfully offered an amendment that would crisis of the 1980's, Congress acted to encour- would be prohibited. Consumers could ``opt- ensure that grandfathered unitary thrift holding age commercial companies to purchase insol- out'' of other third party transfers and financial companies can be sold and transferred. I vent thrifts. As a result, for instance, Ford institutions would be required to establish a fi- strongly believe that we must ensure this Motor Company infused more than $3 billion nancial privacy standard for its customers. transferability in order to protect those unitary in one thrift to prevent their failure. And while some questions remain with respect thrift holding companies which have existed Second, unitary thrift holding companies are to the language on medical privacy, this bill for more than 30 years on a sound and safe safe and sound institutions subject to strict still goes far beyond current law. Passing this manner. regulatory standards as are all federally in- does far more than doing nothing. Regrettably, the bill we are considering sured thrifts. In fact, unitary thrift holding com- While this bill is not perfect, I strongly be- today includes a provision that would make it panies must meet strict standards to stay in lieve that we must act to promote more com- more difficult for these transfers to be ap- business. Unitary thrift holding companies petition and provide new products for con- proved. This bill would impose a new require- must meet the ``Qualified Thrift Lender (QTL)'' sumers. I strongly urge my colleagues to vote ment that the Federal Reserve Board should test in which they purchase and provide mort- for H.R. 10. review any of these mergers. I believe that gages. As opposed to banks, unitary thrift Mr. BLILEY. Madam Chairman, I this Federal Reserve Board review is unnec- holding companies are greatly limited in un- yield 3 minutes to the gentleman from essary and unprecedented. As you may know, derwriting commercial loans. And, Congress Florida (Mr. STEARNS), a member of the unitary thrift holding companies are regu- has prohibited loans from unitary thrift holding the Committee on Commerce. lated on the federal level by the Office of Thrift companies to their non-banking affiliates. I be- (Mr. STEARNS asked and was given Supervision. This new language, would for the lieve that all of these safety and soundness permission to revise and extend his re- first time, subject unitary thrifts to federal regu- protections ensure that taxpayers are pro- marks.) latory oversight by the Federal Reserve Board. tected. Mr. STEARNS. Madam Chairman, I believe that this review process will prevent Third, the thrift business is specialized. As H.R. 10 would modernize America’s fi- transfers and would lower the value of unitary of the end of 1998, there are only 547 thrift nancial service industry. Now, the big thrifts holding companies. I am also concerned holding companies. Of these 547 thrift holding debate seems to be on the privacy pro- that the Federal Reserve will not be required companies, only 24, less than 5% are en- tection. I think this bill contains very H5232 CONGRESSIONAL RECORD — HOUSE July 1, 1999 important, very start-of-the-debate im- gentlewoman from California (Ms. Come on. We can do better than this. I portant, issues for protecting the cus- ESHOO). would say thanks to Mr. and Mrs. tomers of the insurance industry, the Ms. ESHOO. Madam Chairman, I America. This is what brought me to banking industry and the securities in- thank the ranking member, the very the floor. dustries. distinguished ranking member of the Mr. LEACH. Madam Chairman, I One of the most important provisions House Committee on Commerce, the yield 2 minutes to the distinguished of this bill is this privacy information. gentleman from Michigan (Mr. DIN- gentleman from Ohio (Mr. BOEHNER), Now, during consideration of this GELL), for yielding me this time. who has worked on this legislation measure in the House Committee on Madam Chairman, I think I am going more than any noncommittee member Commerce, many of us know the gen- to leave my printed copy just on the in the history of the Congress. To him tleman from Iowa (Mr. GANSKE) offered stand here because really I think ev- I am grateful. an amendment on health information eryone in the Chamber has their minds (Mr. BOEHNER asked and was given confidentiality, a lot of debate on it. made up about what kind of a vote permission to revise and extend his re- We had a lot of debate on it. We talked they are going to cast on this bill. marks.) about it, but all of us felt that this was We are here as representatives for Mr. BOEHNER. Madam Chairman, I just the start. If we did nothing, if we the American people. So my message rise today in support of this landmark could not even get this debate started to the American people, whomever is piece of legislation. In one great cas- and we defeat this bill today, then we tuned in, is what is it that we are de- cade, it washes over decades of obsolete are going to have no privacy. bating? What is it that we are fighting law, congressional inattention and reg- So I think we should not let this and arguing about which is so impor- ulatory creep to give us a modern and small debate that we are having on pri- tant in this bill? prudent legislative framework for one vacy stall the entire bill, because in First of all, this is a bill to reshape of our most important and dynamic in- the end we can amend and we can work financial services and how they are de- dustries. I believe it is the most impor- through HCFA and other places to cre- livered in our great Nation. It is an tant bill that we will debate in this ate more privacy and perhaps more to overhaul of laws that need to be over- Congress this year, and I strongly urge everyone’s liking. hauled because they have not been its passage. Think about it. If we allow a bank, touched really since the Great Depres- In a bill this complex, it is easy to an insurance company, to work to- sion. So we know that there is a timeli- miss the forest for the trees, but the gether and the insurance company does broad direction I think is what is most ness to this effort and an importance a check on a person’s health records, important. Our Nation’s financial serv- attached to it. how does one know that those health I want to raise something to the ices sector is the irrigation system for records could not end up in a bank? Or American people, and the reason why I our economy. If we remove outdated perhaps the bank, when applying for a obstacles to innovation and greater ef- come to the floor in my disappoint- loan, would use some of the informa- ficiency in the financial services indus- ment is because when I cast my votes tion from a person’s health records? So try, we are helping our entire economy in the House Committee on Commerce that is why I think what we offered in become more competitive, more vi- I had every intention of supporting this the full committee was important. brant and healthier. I was also able to have an amend- financial services bill. It is important to recognize addi- This is not an excuse on my part, ment that offered the word genetic in- tional benefits of this legislation. By formation to include in that privacy American people. I feel very strongly putting in place a regulatory system information. So I say to the Members about this. that actually makes sense for today’s What brings me to the floor is the on that side of the aisle, I think ge- financial services industry, not the in- issue of privacy, financial privacy. netic information is something that dustry of 1933, we are both making the Now, if someone asks Mrs. Smith also should be protected. industry more internationally com- how much is in her money market ac- Now, there are a lot of people that petitive and reducing the kinds of risks count, her first reaction is, why should say we are going to stop the Secretary that led to bank and savings and loan of Health and Human Services from I say? It is not anyone’s business. failures of the late 1980s. issuing regulations on this issue as re- Financial dealings and how we con- By giving consumers the chance to quired under the Health Insurance duct our finances is very, very private. do one-stop shopping for all of their fi- Portability and Accountability Act Who we write our checks to, where nancial needs, we are giving them more that we passed in 1996. they go, whether it is to a doctor, control, better information and better This language in this bill says noth- should the bank manager know more choices for their financial needs. ing to stop the Secretary of HHS from or as much as our personal physicians? Madam Chairman, this really is a su- issuing regulations on this matter. In I think not. I think it is the responsi- perb piece of legislation, crafted with fact, Madam Chairman, the cite ref- bility of the House of Representatives, great care, with fairness and with pa- erence in the bill, which is 264(c)(1), if the House of the people, the people tience. Let me say about patience, of we go to look at it, is the very lan- that are out there, to protect their per- the four gentlemen, the two chairmen guage, the very language that gives au- sonal financial privacy. and the two ranking members who I thority to Health and Human Services That is what I am raising in this. Re- have had the pleasure to work with to issue the regulations. gardless of what anyone else says, and over the last 3 years on this legisla- So, Madam Chairman, I think we whomever rises, when one reads the tion, this is a great example of how the should all come together. We have print, it says, we will protect their fi- Congress can work, when we agree on looked at H.R. 10 until we are blue in nancial privacy, dot, dot, dot, with all what the goals are and we work to- the face. We have talked about this. We of these following exceptions. I do not gether and work through all types of should not let this be defeated today, think this is good enough. I know we objections. The gentlemen that I have trying to talk about just the privacy. I can do better. just pointed out deserve a great deal of think it is a first step, so I look for- I think the American consumer de- credit for a job well done. ward to our continuing discussion on serves this kind of protection. In fact, Mr. LAFALCE. Madam Chairman, I this, and we can go back after we have I think there is going to be like a prai- yield 11⁄2 minutes to a distinguished passed H.R. 10 to talk about medical rie fire of objection that moves across member of the committee, the gentle- records and confidentiality with a sep- the country on this issue, because no woman from Oregon (Ms. HOOLEY). arate piece of legislation. one would believe that their elected Ms. HOOLEY of Oregon. Madam So, in the meantime, I support the representative would not stand be- Chairman, I would like to thank my language we have in the bill today pro- tween them, the constituent, and what- distinguished ranking member, the tecting all Americans, consumers, so ever financial institutions are out gentleman from New York (Mr. LA- that their information is not inappro- there. We need them to do business FALCE), and the committee chair, the priately shared. with. But that our personal, private fi- gentleman from Iowa (Mr. LEACH), for Mr. DINGELL. Madam Chairman, I nancial information be sold and dealt all of their hard work that they have yield 3 minutes to the distinguished away and possibly used against us? done on this bill. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5233 I rise today in support of H.R. 10, Why have they reached that conclu- uct that the vast majority of stake- which, in fact, is good for the ordinary sion, when the other side on this issue holders agree on. citizen and, in fact, does provide more say they have put something in the bill The medical privacy provisions hap- privacy protection than they have ever to protect medical privacy? They have pen to be something that I am very in- had before. This bill uses the House a provision saying an organization can- terested in as a physician, and I believe banking bill as its text base, which not give out information without the the language in this bill is pretty good. passed the Committee on Banking and consent or the direction of the cus- Can it be made better? Yes. As a mat- Financial Services 50 to 8. It had sup- tomer, but then they have this huge ter of fact, we put provisions in the port of Democrats, Republicans and the exception. language that say if the administration administration, who took painstaking They can, however, give it without passes regulations that are stronger, work on this particular piece of legisla- ever asking the customer to insurance these provisions expire. We have lan- tion to strike a compromise that is companies, who then can keep a whole guage in there that says if this body also supported by a diverse sector of database on a lot of people’s medical enacts legislation signed by the Presi- the financial services industry. records. They can give it to people par- dent that is stronger, these provisions After 15 years of moving the ball ticipating in research projects. It does expire. down the field, it is time we put it over not say it is a scientific research So to oppose this bill now, at this the goal line. This bill preserves the project. Anybody could say they have a point, when we have an extremely good Community Reinvestment Act, which research project and therefore they get product here, a very, very good product has brought billions of dollars of in- the medical data, and these groups can on this to me is a tremendous dis- vestment into our underserved urban then turn around and sell it. There is service. I believe that all of our col- and rural communities and encom- no restriction on them whatsoever leagues on both sides of the aisle passes important consumer protec- from further disseminating our per- should support this, because this is ex- tions. sonal medical records. tremely good for America. While we may hear otherwise today, This idea that we have to give our Mr. LAFALCE. Madam Chairman, I this bill has good privacy measures in consent is not very convincing when an yield 1 minute to the gentleman from it. Today we have the opportunity to insurance company can say to us that Texas (Mr. SANDLIN). support an amendment that would in order to get insurance, we have to (Mr. SANDLIN asked and was given make those privacy sections even bet- sign a waiver that will allow them to permission to revise and extend his re- ter. With the passage of a strong pri- do whatever they want with our med- marks.) vacy measure, I urge my colleagues to ical records, or we go without insur- Mr. SANDLIN. Madam Chairman, fi- vote yes on H.R. 10. ance. nancial modernization is already oc- Madam Chairman, this bill strength- I feel that this provision is a step curring in this country, and is here to ens the safety and soundness of our fi- backwards. The proponents say they stay. However, burdensome regulatory nancial institutions. This bill gives are following a democratic process. In barriers are hindering the efforts of our consumers one-stop shopping. This bill fact, they snuck the medical records financial institutions to compete glob- gives consumers better privacy protec- provision into the legislation like a ally through the development and de- tion. This bill saves consumers money. midnight prowler, to use the words of livery of new financial products. This This bill is good for the economy. Let the Los Angeles Times. There have only exacerbates or makes worse the us pass stronger privacy amendments. been no hearings on the implications of problems within the financial services Let us put the ball over the goal and what we are doing. industry. pass H.R. 10 today. In fact, we are not even allowed to The bottom line is simple: Financial offer amendments to this provision. modernization is necessary and will b 1745 Under the rule, the gentleman from continue in this country as a result of Mr. BLILEY. Madam Chairman, I California (Mr. CONDIT), who has been market forces, even in the absence of yield 5 minutes to the gentleman from working on health privacy issues for 10 any sort of legislation. However, the Iowa (Mr. LEACH) for purposes of con- years, was even denied a motion to success of American firms and ulti- trol. strike. mately the strength of our economy is Mr. DINGELL. Madam Chairman, I It would be better to strike all the going to depend upon passing a good yield 3 minutes to the distinguished medical provisions, privacy provisions bill, one that will ensure that financial gentleman from California (Mr. WAX- that are in this bill out because they modernization occurs in an efficient MAN). do such a disservice to the idea that we manner, and protects the interests of (Mr. WAXMAN asked and was given are protecting people’s privacy. consumers as well as the safety and permission to revise and extend his re- In 1949 George Orwell wrote a chilling soundness of our financial industries. marks.) novel called 1984 about a society that But as we debate these important Mr. WAXMAN. Madam Chairman, I denied its citizens privacy. It is 15 issues, we must remember community thank the gentleman for yielding time years later than Mr. Orwell predicted, banks. People trust community banks. to me. but today 1984 is becoming a reality. They know their community bankers. Madam Chairman, the proponents of Doublespeak reigns in this House, and We have recognized these institutions this bill say they have increased pri- Big Brother in the form of all-knowing as an integral part of rural America. vacy protection for health records, but financial conglomerates is being We must not overlook them or jeop- in fact, every independent expert that brought to life. ardize their future in any way as we has reviewed the legislation has I urge my colleagues to vote against undertake this monumental legisla- reached exactly the opposite conclu- the bill because of this provision alone. tion. sion. Mr. LEACH. Madam Chairman, I I believe this bill addresses the needs The medical record provisions in H.R. yield 1 minute to the gentleman from of Main Street as much as Wall Street, 10 are opposed by physician organiza- Florida (Mr. WELDON). and I urge Members to cast their vote tions like the American Medical Asso- Mr. WELDON of Florida. Madam in support of this important legisla- ciation and the American Psychiatric Chairman, we have heard that we tion. Association. They are opposed by should should not make the perfect the Mr. LEACH. Madam Chairman, I nurses’ organizations, like the Amer- enemy of the good. We have some peo- yield 2 minutes to the gentlewoman ican Nurses’ Association. They are op- ple, I believe, who would like to make from New York (Mrs. KELLY), who has posed by patients groups, like the Na- the perfect the enemy of the very, worked so diligently on this bill. tional Association of People with AIDS very, very good. Mrs. KELLY. Madam Chairman, I and the Consortium for Citizens With We are about to set history here. thank my good friend, the gentleman Disabilities, and they are opposed by This body has attempted to pass and from Iowa (Mr. LEACH) for yielding privacy experts, like the Consumer Co- enact into law reform of our financial time to me. alition for Health Privacy and the services industry for I understand a Madam Chairman, I rise in strong ACLU. decade and a half, and we have a prod- support of H.R. 10. I would like to take H5234 CONGRESSIONAL RECORD — HOUSE July 1, 1999 just a minute to talk about the provi- by the other body, and I look forward to work- Mr. SWEENEY. Madam Chairman, I sion in H.R. 10 regarding NARAB, the ing with congressional conferees to assure thank the chairman for yielding time National Association of Registered that these important licensing reforms can be to me. Agents and Brokers. achieved in the context of broad moderniza- Madam Chairman, I joined the Com- Under NARAB, States would be en- tion legislation. mittee on Banking and Financial Serv- couraged to streamline insurance agent It is for these common sense provisions that ices, and my desire is to help spur eco- and broker licensing laws, creating rec- we all must join together in support of H.R. 10. nomic growth in my congressional dis- iprocity, uniformity, and eliminating I want to take a moment to thank Chairman trict in upstate New York. In my mind, protectionist residency barriers. The Leach for his superior leadership in steering today is a historic step in that direc- NARAB provisions have been designed H.R. 10 through committee. It was because of tion. I am very proud to fully support to bring true modernization to insur- his patience, thoughtfulness and considerable H.R. 10, because financial services pro- ance licensing, and it is something that knowledge of the financial service industry that vide the basis for private investment in I believe that we really do need to have this legislation has come to the floor with a new business that creates jobs. in the United States of America today. strong bipartisan support it now has. The gen- We here in Congress have the respon- It is for the commonsense provisions tleman from Iowa has also had the assistance sibility to ensure that our financial in H.R. 10 like NARAB that we all need of an excellent staff at his side to assist his services law reflects and therefore does to join together in support of H.R. 10. considerable efforts. Just to name a few, Tony not stifle the level of innovation and Madam Chairman, I rise in strong support of Cole, Gary Parker, Laurie Schaffer and Alison service in the financial services mar- H.R. 10. We have been hearing the debates Watson. There are so many more but I ketplace. so far mostly focus on the more controversial haven't the time to name them all. Chairman We have a responsibility to ensure sections of the bill. Many of the benefits of Leach really does have the highest standards that all participants in the market- H.R. 10 have been heralded here today be- for his staff and they have all lived up to those place, from security brokers to com- cause they represent breakthroughs on issues standards set by the Chairman. munity banks to independent insur- that have been contentious and seemingly ir- Secretary Rubin estimates that passage of ance agents, are given the opportunity reconcilable for many years. Yet there are this legislation will save consumers $15 billion to compete and thereby provide the other modernization provisions which are ex- a year. The efficiencies created by this legisla- best service to our constituents. tremely valuable, but have not been highly tion will allow financial institutions to stop So I urge support for this bill, H.R. publicized because they have been essentially wasting time and money complying with out of 10, and confirm this House’s commit- non-controversial. I'd like to specifically point date laws written in the 1930's and enable ment to that responsibility. to the provisions regarding NARABÐthe Na- them to better serve their customers in the Madam Chairman, I rise in strong support of tional Association of Registered Agents and 21st century. H.R. 10 and commend the hard work of its Brokers. H.R. 10 comes before us with the strong sponsors. Under the NARAB subtitle of Title III, states support of both parties and the administration. I joined the Banking Committee based on would be encouraged to streamline insurance Let's join together in ensuring that we pre- my desire to spur economic growth in my agent and broker licensing lawsÐcreating rec- serve this agreement by passing this rule with Congressional district in Upstate, NYÐby pro- iprocity, uniformity, and eliminating projec- a strong bipartisan vote. I thank the gentleman viding businesses and entrepreneurs with the tionist residency barriers. If a majority of states from California and his colleagues on the access to capital to create new jobs. There- fail to enact reciprocal licensing laws within Rules Committee for their good work on the fore, I am pleased to speak in support of this three years of enactment of this legislation, rule and ask all of my colleagues from both important legislation. NARAB would be created as a uniform, agent/ sides of the aisle to join me in voting for legis- Financial services provide the basis for pri- broker licensing clearinghouse governed by lation years in the making that will improve the vate investment in new business that create state insurance regulators. lives of all Americans, H.R. 10. jobs, for the protection of people's hard- I'd like to thank the bipartisan leadership of Mr. LAFALCE. Madam Chairman, I earned assets from catastrophic loss, and for 1 both the Banking and Commerce Committees yield 1 ⁄2 minutes to the gentlewoman the ability of Americans to save and effectively for including this provision in H.R. 10. Since I from Indiana (Ms. CARSON). plan for their retirements. Ms. CARSON. Madam Chairman, I raised this issue in the Banking Committee in Given the importance of financial services would like to thank the ranking mem- 1997, the National Association of Insurance as the base for our economy, Congress has ber for yielding me the time to engage Commissioners and individual states have sig- many responsibilities to ensure that our laws the chairman of the committee, the nificantly ratcheted up their efforts to achieve are responsive to the everyday function of gentleman from Iowa (Mr. LEACH) in a licensing reform. For many years prior, there these essential markets. colloquy. We have a responsibility to ensure that our were attempts to ease the burden and unnec- Madam Chairman, I would like the laws reflect, and therefore do not stifle, the essary costs associated with multi-state licens- chairman’s clarification with respect level of innovation and service in the financial ing. But those attempts failed to keep pace to section 351 relating to the medical services marketplace. with consolidations in the insurance industry, information confidentiality provisions. We, as a Congress, have a responsibility to along with increasing financial services con- The rule report on page 371, line 7, oversee those laws to ensure that consumers solidation and globalization of insurance mar- subparagraphs 1, 2, and 3, I read each as are treated fairly in the marketplace, protected kets. The NARAB provisions have been de- several separate clauses, and that fol- from fraud and other potential abuses. signed to bring true modernization to insur- lowing clause 1 and before clause 2 We have a responsibility to ensure that all ance licensing laws, in keeping with functional there is an implied ‘‘or’’ that indicates participants in the marketplaceÐfrom securi- state insurance regulations. that each of these is to be read as sepa- ties brokers, to the community banks, to inde- Perhaps the most gratifying development on rate clauses. pendent insurance agentsÐare given the op- the licensing front in recent months has been Mr. LEACH. Madam Chairman, will portunity to compete and thereby provide the the increasing acceptance of NARAB by the the gentlewoman yield? best possible service in the world. NAIC as a good incentive for licensing reform. Ms. CARSON. I yield to the gen- H.R. 10 confirms this House's commitment NAIC President George Reider, Kentucky tleman from Iowa. to these responsibilities. Commissioner George Nichols, North Dakota Mr. LEACH. The gentlewoman has I commend the work of the Chairmen and Commissioner Glenn Pomeroy and others raised a very important point. I fully the Ranking Members. have been doing a superb job in elevating uni- concur in her interpretation. That is I urge your support of the bill. form and reciprocal licensing on the agendas exactly correct. I think it is an impor- Mr. LAFALCE. Madam Chairman, I of individual state legislatures. They under- tant clarification for the RECORD. yield 11⁄2 minutes to the gentleman stand that barriers to competition from out-of- Ms. CARSON. Madam Chairman, I from North Carolina (Mr. PRICE). state insurance agents and brokers is incom- appreciate the gentleman’s comment. (Mr. PRICE of North Carolina asked patible with today's integrated financial institu- Mr. LEACH. Madam Chairman, I and was given permission to revise and tions marketplace. Their commitment to reform yield 1 minute to the gentleman from extend his remarks.) is real, and NARAB will be the assurance their New York (Mr. SWEENEY). Mr. PRICE of North Carolina. Madam efforts will ultimately succeed. (Mr. SWEENEY asked and was given Chairman, I would like to engage the Currently, there is no counterpart NARAB permission to revise and extend his re- managers from both sides, if I might, provision in the financial services bill approved marks.) in a colloquy. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5235 Mr. Chairman and Mr. ranking mem- Mr. PRICE of North Carolina. I ap- will finally act so that financial serv- ber, I first want to express my appre- preciate the gentlemen’s assurances, ices will no longer be hamstrung by ciation to you for the hard work that both the chairman and the ranking outdated restrictions of the 1930s. The you and your colleagues have put into member, that it is not the intent of bill allows financial institutions to the drafting of this complex and nec- this bill as drafted to compromise merge, but prevents banks from merg- essary piece of legislation. these essential consumer protections, ing with commercial businesses, and it I am a former member of the Com- many of them administered by State requires functional regulation. mittee on Banking and Financial Serv- insurance commissioners, and that if The Committee on Rules has changed ices, and I am well acquainted with the there is any remaining ambiguity, that what came out of our Committee on difficulties that have to be overcome that will be attended to in conference. Banking and Financial Services with just to bring a financial services mod- b 1800 tremendous bipartisan support. I thank ernization bill to this floor. I do have a the gentleman from Iowa (Chairman Mr. BLILEY. Madam Chairman, I concern, however, that I hope the gen- LEACH) and the gentleman from New continue to reserve the balance of my tlemen will spend some time address- York (Mr. LAFALCE), the ranking mem- ing before bringing a conference report time. ber, for their leadership. Mr. DINGELL. Madam Chairman, I back to the House. Many of these changes are inappro- continue to reserve the balance of my The National Association of Insur- priate and wrong, such as the medical time. ance Commissioners and North Caro- privacy provision, and they should be lina’s Insurance Commissioner, Jim Mr. LEACH. Madam Chairman, I changed in conference. While I will Long, have expressed to me a concern yield 1 minute to the gentleman from vote for this bill so that it can go to with section 104 of this bill. This is a Texas (Mr. PAUL), one of the most conference, my final vote will be con- section that describes under what cir- thoughtful philosophers of the United tingent on a bill that has strong pri- cumstances State insurance law should States Congress. be preempted in order to ensure that fi- (Mr. PAUL asked and was given per- vacy provisions. Also, we should be cognizant that the nancial institutions are not discrimi- mission to revise and extend his re- nated against. marks.) President will veto any bill that does I know there are differing interpreta- Mr. PAUL. Madam Chairman, I will not contain strong CRA provisions, tions of this section as to what sorts of take my one minute to address the sub- which I also fully support, and are in State laws might be preempted. For ex- ject of privacy, because I do have an the House bill. ample, North Carolina just passed a amendment that I think would improve Mr. BLILEY. Madam Chairman, I Patients’ Bill of Rights. This is legisla- the protection of privacy. yield myself the balance of my time. tion that is very important to our citi- We have had a lot of talk and indica- Madam Chairman, I want to take a zens. I hope the gentlemen can assure tion on this side of the aisle about pro- moment first to recognize the hours me that it is not the Committee’s in- tecting privacy. But I believe the un- and hours of hard work contributed by tention in this bill to allow financial derstanding of what our role is in pro- my finance staff team, Linda Rich, institutions that provide insurance tecting privacy, if it applied across the David Cavicke, Robert Gordon, Brian products to be exempted from this law board, would mean that politicians and McCullough, and the trustee clerks, or other important consumer protec- political action committees could Robert Simison and Mike Flood. tion statutes. never rent a list from the Sierra club They were joined by diligent efforts If there are remaining problems or or the American Civil Liberties Union. of the minority staff, Consuela Wash- ambiguities that need to be cleared up, But I am addressing the subject of ington and Bruce Gwynn. These profes- I hope the gentlemen will work during Know Your Customer. At the same sionals performed above and beyond the conference to clarify in what situa- time we hear these declarations for the call of duty, and the committee is tions State insurance law should and protection of privacy, we hear from the in their debt. should not be preempted by this bill, same people that we cannot get rid of Glass-Steagall, Madam Chairman, and to make sure that functional regu- Know Your Customer. was passed in 1933 in reaction to the fi- lation and vital consumer protections Now, if one wants to really find nancial markets crash in the Great De- are not compromised. something where one invades the pri- pression. Those were extreme times, Mr. LEACH. Madam Chairman, will vacy of the individual citizen, it is this and the American people demanded ex- the gentleman yield? notion that the Federal Government treme measures to rescue them from Mr. PRICE of North Carolina. I yield would dictate a profiling of every bank continuing economic crisis. to the gentleman from Iowa. customer in this country; and then, if Just two years after Glass-Steagall Mr. LEACH. Madam Chairman, let that customer varied its financial ac- was enacted, the law’s primary archi- me say to the gentleman that the tivities at any time, it could be re- tect, the gentleman from Virginia major intent of the law is to maintain named Carter Glass, realized that Con- functional regulation, and the major ported to the various agencies of the Federal Government. Now, that is pri- gress had gone too far, and he began an intent of the law is to have State regu- effort to undue the damage that had lation and law apply without discrimi- vacy. That is what we have to stop. I ask for support for my amendment. been done. nation. Carter Glass may have been the first Mr. LAFALCE. Madam Chairman, Mr. LAFALCE. Madam Chairman, I Congressman who tried to reform will the gentleman yield? yield 2 minutes to the very distin- Mr. PRICE of North Carolina. I yield guished Member of the committee, the Glass-Steagall, but he was not the last. to the gentleman from New York. gentlewoman from New York (Mrs. In just the last 20 years, there have Mr. LAFALCE. Madam Chairman, I MALONEY). been 11 efforts to modernize these ar- share the judgment of the chairman on Mrs. MALONEY of New York. Madam chaic laws. this particular question. That cer- Chairman, I thank the gentleman from Last term, the Committee on Com- tainly is our intent, to prohibit dis- New York for yielding me this time. It merce Republicans and Democrats criminatory action and to preserve the is long past due that we have a bill worked with the Republican leadership maximum amount of consumer protec- that brings our financial services into of the Committee on Banking and Fi- tion. the 21st Century. nancial Services to pass Glass-Steagall With respect to a State’s Patients’ We should be able to compete with on the House floor for the first time Bill of Rights, I strongly support a other industrialized nations where fi- ever. I strongly supported that bill and Federal Patients’ Bill of Rights, and to nancial institutions have been allowed was disappointed that it faltered in the the extent that the State has acted to merge and bring a wide variety of waning days of the Senate. similarly or more strongly, we would products and services to their cus- Today is a historic day. We join to- want to give deference to such a bill of tomers. The bill allows the law to gether here in the House to approve rights. catch up with the reality of the inter- legislation that is long overdue, and we Certainly to the extent that it might national merger movement. are in a stronger position than ever be- need clarification, I am not sure that it Some of these mergers have taken fore to achieve our goal of modernizing does, we would attempt to clarify that. place on the probability that Congress financial regulation in America. H5236 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Every step of the way we were op- of the Subcommittee on Finance and tutions offer large ranges of services, posed by lobbyists and special interest Hazardous Materials, and, of course, not just checking account balances and groups who said it could not be done. the gentleman from Michigan (Mr. DIN- savings account balances. That is good. But we heard the concerns of the GELL), the ranking member on the That is going to provide additional American people about all of these Democratic side for all their hard choice and additional products for the megamergers. We heard the concerns of work. A lot of work and time and effort American consuming public. the local businessmen who want to has gone into this, a lot of hearings In the bill before us, if the Oxley compete, but have one hand tied behind and all of that. amendment is adopted, we are going to their backs by the archaic Glass- But I come today to say that I am protect privacy in most cases for third- Steagall restrictions. We heard from concerned. First, I am concerned about party transfers outside the affiliate the Federal and State financial regu- the privacy issue. I am very concerned structure with some exceptions. We are lators who emphasized the need to pro- about that. I am also concerned about going to allow, within the affiliate tect consumers and preserve the safety the behavior of the Committee on structure, transfers with disclosure. and soundness of our financial system. Rules. I think that we want to be open My opinion is, if it is a necessity to It is a testament to the will of the and want to have the democratic proc- provide privacy for third-party trans- American people that we have heard ess, but when the Committee on Rules actions outside of the affiliate struc- their concerns and are here today to just makes decisions to drop out things ture, it is just as much a necessity to pass legislation to protect the future. just because they have the ability to provide that same opt-out provision The legislation protects American in- drop them out, without having a dis- within the affiliate structure, given the vestors by ensuring that the rules for cussion on them, I think that it does fact that the very reason the bill is be- securities sales will be the same for ev- not serve this body well. It does not fore us is because we want to have erybody, no matter where the securi- serve the American people well. I am these financial service conglomerates. ties activities take place. That means hoping that the Committee on Rules I had offered, with the gentleman that investors will be assured of the will take another look at that and not from Massachusetts (Mr. MARKEY), a protections of the Federal securities continue to behave in that fashion. modified version of his amendment laws, even when they purchase securi- This is not a perfect bill, but it is a that was adopted on a voice vote by the ties in a bank, a protection investors step in the right direction. I think that full Subcommittee on Energy and do not enjoy today. it will make us internationally com- Power and Committee on Commerce. The bill also treats the thrift indus- petitive, which we need to do. The time That was not made in order by the try fairly, by preventing future expan- has come when we need to stop vacil- Committee on Rules. I think that is sion of the unitary thrift system, while lating and to begin to do the right unfortunate. protecting the ability of existing thing, as my constituent Spike Lee I voted for the rule even knowing thrifts to raise capital from the com- says in Brooklyn. that my amendment had not been mercial markets. This is an important I am very happy that at least the made in order. I have spoken with the win for American homebuyers who CRA provision, in terms of the fact Speaker and the majority leader, and I have relied on the thrift industry to re- Community Reinvestment Act is very have their assurances that these pri- alize their American dream of home- important, that they had the common vacy issues will continue to be ad- ownership. sense and good sense to leave that in dressed. This bill provides a better structure there. They did not eliminate that. I I am sure that the gentleman from for regulating the financial market- want to applaud the Committee on Iowa (Chairman LEACH) and the gen- place in the 21st Century. I look for- Rules for that because, I will be honest tleman from Virginia (Chairman BLI- ward to further strengthening that with my colleagues, any bill that does LEY) share these same assurances. structure as we go to conference, by not have the Community Reinvestment But I want to let the body know that eliminating the operating subsidiary Act in a strong way in it, I could not this concern about privacy is not spe- and improving insurance consumer pro- vote for it in any way. So I am happy cifically a Democrat concern or Repub- tections. that at least that part is there. lican concern, it is concern for all Our financial system has not been But to conclude, let me say that I am Americans. It is not going to go away, modernized since the Great Depression. hoping that some of the problems that and we will have to address it as this Federal regulators have been forced to still exists with this legislation that bill moves forward in the conference if invent highly questionable and unau- we will correct it in conference. it passes the House. thorized make-shift regulations to try Mr. LEACH. Madam Chairman, I Madam Chairman, I yield to the gen- and shoehorn an archaic legal system yield 21⁄2 minutes to the gentleman tleman from Iowa (Mr. LEACH) if he into the modern world. It must be from Texas (Mr. BARTON), a distin- wants to make a comment. fixed. It must be fixed by Congress, not guished member of the Committee on Mr. LEACH. Madam Chairman, I some unelected special interest regu- Commerce. would just like to stress there is no in- lators. (Mr. BARTON of Texas asked and tent in this bill to jeopardize any con- H.R. 10 is the solution, and I am was given permission to revise and ex- fidences associated with doctor-patient proud we are at the bridge of achieving tend his remarks.) relationships nor the privacy protec- another historic accomplishment for Mr. BARTON of Texas. Madam Chair- tions currently afforded any medical the American people. man, I thank the distinguished gen- records. Indeed, the intent is to Beginning with the seminal efforts tleman from Iowa (Mr. LEACH), chair- strengthen those protections. To the from the gentleman from Virginia in man of the Committee on Banking and degree that more precision in this area 1935 to repeal the Glass-Steagall bar- Financial Services. is required, this gentleman is prepared riers to competition, Congress has had Madam Chairman, I am standing on to work in conference to ensure that neither the will nor the vision to open the Republican side to express some of that occurs. our financial markets to full competi- the same concerns that have been ex- Mr. BARTON of Texas. Madam Chair- tion. pressed on the Democratic side about man, I appreciate that pledge, and I Mr. DINGELL. Madam Chairman, I the inadequacy about the privacy pro- will work with the gentleman. yield 2 minutes to the distinguished tections in the bill that is pending be- Mr. LAFALCE. Madam Chairman, I gentleman from New York (Mr. fore us. yield 30 seconds to the gentleman from TOWNS). I want to commend the gentlewoman Texas (Mr. BARTON). Mr. TOWNS. Madam Chairman, I from Ohio (Ms. PRYCE) and the gen- Mr. BARTON of Texas. Madam would like to begin by applauding the tleman from Ohio (Mr. GILLMOR) and Speaker, I am just flattered to con- leadership on both sides of the aisle in others on the Republican side for be- tinue to be yielded time. terms of the gentleman from Virginia ginning to address the issue. I yield to the gentleman from New (Mr. BLILEY), the chairman of the com- Sadly, we have not gone as far as we York (Mr. LAFALCE). mittee, and, of course, the gentleman should go. We are about to enter a Mr. LAFALCE. Madam Chairman, it from Ohio (Mr. OXLEY), the chairman brave new world where financial insti- is my expectation that the bipartisan July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5237 amendment that was drafted with the b 1815 work for U.S. financial corporations and our gentlewoman from Ohio (Ms. PRYCE), Mr. LEACH. Madam Chairman, I Nation's capital markets. the gentleman from Texas (Mr. FROST), yield 1 minute to the gentleman from Failure to act now on financial services re- myself, the gentleman from Iowa (Mr. Nebraska (Mr. BEREUTER). form would send a terrible message to global LEACH) and others, and that a motion Mr. BEREUTER. Madam Chairman, I financial markets, and constitute a clear dan- to recommit that will be offered that thank the gentleman for yielding me ger to U.S. economic leadership in the world will take whatever this body works its this time, and in this colloquy with the and so I strongly urge my colleagues to sup- will on and then simply takes the Mar- chairman I would just say that it is port passage of H.R. 10. key-Barton amendment and a provision this Member’s understanding that H.R. Mr. LEACH. Madam Chairman, I striking the medical privacy provisions 10 would not alter the definition of a yield 1 minute to the gentleman from that my colleague is concerned about, diversified savings and loan holding Delaware (Mr. CASTLE), the former and that will be in the motion to re- company. Is this correct? chairman of the Subcommittee on Do- commit. So the gentleman will have an Mr. LEACH. Madam Chairman, will mestic and International Monetary opportunity to vote on exactly what he the gentleman yield? Policy. expressed concern about. Mr. BEREUTER. I yield to the gen- Mr. CASTLE. Madam Chairman, let Mr. BARTON of Texas. Madam Chair- tleman from Iowa. me just congratulate the gentleman man, I look forward to that oppor- Mr. LEACH. The answer to the gen- from Iowa and the gentleman from New tunity. tleman’s question is, yes, that is cor- York for the wonderful and extraor- Mr. LAFALCE. Madam Chairman, I rect. dinary work they have done on this. I yield 11⁄2 minutes to the gentleman Mr. BEREUTER. I thank the chair- rise in strong support of H.R. 10, the from Pennsylvania (Mr. KANJORSKI), man. In particular, it is this Member’s Financial Services Modernization Act the distinguished ranking member of understanding that under H.R. 10 insur- of 1999, and I urge my colleagues to the Subcommittee on Capital Markets, ance revenues will still not be deemed seize the opportunity to pass this his- Securities, and Government Sponsored to be banking related for the purposes toric legislation. Enterprises. of determining whether a savings and This legislation is not just years (Mr. KANJORSKI asked and was loan holding company qualifies as di- overdue, it is decades overdue. H.R. 10 given permission to revise and extend versified. Is this correct? will allow the marketplace to give his remarks.) Mr. LEACH. If the gentleman will American consumers more products Mr. KANJORSKI. Madam Chairman, continue to yield, the answer to that and better choices to build a better fi- I thank the ranking member for yield- question is also yes, that is correct, sir. nancial future for them and their fami- ing me this time. Mr. BEREUTER. Madam Chairman, I lies. H.R. 10 will give American banks, insurance companies and insurance Madam Chairman, I will take just thank the gentleman for his comments. firms the opportunity to compete fair- one second to congratulate the gen- Mr. LAFALCE. Madam Chairman, I yield 1 minute to the gentleman from ly in the international marketplace. EACH) tleman from Iowa (Chairman L We are finally close to achieving the and the gentleman from New York (Mr. New York (Mr. CROWLEY). (Mr. CROWLEY asked and was given overdue goal of financial moderniza- LAFALCE), the ranking member, on a permission to revise and extend his re- tion. The President is ready to work job well done, a number of years that marks.) with us to enact a law. We cannot fal- everybody slaved over this. It is not a Mr. CROWLEY. Madam Chairman, as ter now. This legislation will benefit perfect bill, but I think we should sup- a freshman congressman representing American families and American busi- port the bill and move it on to con- the financial capital of the U.S., I rise ness and maintain sound regulation. ference. today in support of H.R. 10. Seize this great opportunity. Pass H.R. Now, I would like to engage in a col- Madam Chairman, currently our fi- 10. Let us move our financial laws out loquy with the gentleman from Lou- nancial services industry is governed of the 1930s and into the next century. isiana (Mr. BAKER). Madam Chairman, by outdated laws and regulations Vote ‘‘yes’’ on H.R. 10. It means a bet- I rise to engage in a colloquy with him which are costly and inconvenient to ter future for our Nation. about the Federal Home Loan Bank consumers and which have put the in- To say that this legislation is long-overdue is provisions contained in H.R. 10. As he dustry at a competitive disadvantage a tremendous understatement. It is not just will note, and as we have worked over in the global marketplace. years overdue. It is decades overdue. Past at- the years, will there be an under- Modernizing these outdated laws is tempts to pass financial services reform often standing that he and I will work in needed to bring about the real benefits failed because one industry group or another conference together to address issues available to the millions of Americans felt that past bills put them at a disadvantage. to appropriately revise the REFCorp who use financial services and to allow While this legislative struggle has been payments, put a cap on the class B U.S. financial firms to remain the pre- going on, our constituents have been looking stock that can be counted toward dominant force in global markets. for new, efficient and affordable products to meeting the risk-based capital require- Madam Chairman, this legislation give their families financial security. We are ment, and that we should determine strikes a critical, unprecedented bal- long past the days when people were satisfied who should issue debt for the system, ance by providing a new financial serv- with a simple savings account or life insurance and finally to work on the issue ad- ices infrastructure aimed at keeping policy. Most Americans want to maximize their vanced base stock purchase require- the United States competitive in the earnings and to find products that will give ments for non-QTL members? global marketplace while ensuring them the best return. Madam Chairman, I yield to the gen- quality services and protections for The financial services marketplace has been tleman from Louisiana (Mr. BAKER). consumers and communities. struggling to meet consumers needs within a Mr. BAKER. Madam Chairman, I cer- Madam Chairman, I know many of regulatory structure that was created in the tainly appreciate the gentleman’s in- my colleagues are disappointed that 1930s and 1950s. terest and wish to express my full co- stronger privacy language was not in- Our Nation's banking, securities and insur- operation on these matters and others cluded to protect the confidential med- ance laws must be updated to face the chal- that will be before us on the Federal ical and financial information of con- lenges of the next century. Home Loan Bank. I congratulate the sumers. I understand and agree with Over the past three years, Congress has gentleman from Pennsylvania and their disappointment that the Com- moved ever closer to the goal of legislation thank him for all his courtesies and co- mittee on Rules did not rule in order that will benefit consumers and fairly balance operation over the year in making this many Democratic-sponsored amend- the divergent interests of banks, insurance a reality. ments to protect consumers. companies, insurance agents, and securities Mr. KANJORKSI. Madam chairman, I The underlying Banking Committee version firms, as well as the federal and state regu- want to thank the gentleman from is a good bill. Let us not lose sight of what we lators that oversee these industries. Louisiana (Mr. BAKER) for his commit- are trying to do. As a member of the House Banking Com- ment to address these issues in con- Madam Chairman, we simply cannot afford mittee, I have been directly involved in the ference. to wait any longer to create a modern frame- work to modernize our financial services laws H5238 CONGRESSIONAL RECORD — HOUSE July 1, 1999 since I came to Congress in 1993. I have to Mr. LEACH. Madam Chairman, I and now for small business and agricul- tell you it has been a difficult struggle to bal- yield 2 minutes to the gentlewoman tural lending purposes. ance the competing interests of the banking, from Illinois (Mrs. BIGGERT). With the passage of H.R. 10, we are securities and insurance industries. (Mrs. BIGGERT asked and was given opening up small town America banks The legislation before us today, while not permission to revise and extend her re- to the Federal Home Loan Bank credit perfect, has finally won the endorsement of all marks.) window and giving them the oppor- major industry groups. Mrs. BIGGERT. Madam Chairman, I tunity to meet the needs of working Now is the time to act. We must do this to rise in support of H.R. 10 and thank the people, small businesses and farmers benefit consumers who need a variety of fi- gentleman from Iowa for the oppor- across this country. nancial products to help them plan for their tunity to speak. I think it is high time we do some- economic futures. In addition, we must update As a freshman member of the Com- thing in this Congress for those small these laws to allow our financial services pro- mittee on Banking and Financial Serv- banks which have been too long ig- viders to compete effectively in the next cen- ices, I was privileged to help produce in nored and neglected. And in this proc- tury. committee a bipartisan bill that will ess tonight, due to the leadership of The most important reason for supporting modernize our Nation’s banking, insur- the gentleman from Iowa (Mr. LEACH), this legislation is that it will benefit every ance and securities industries. Over the we are going to meet this important American seeking to improve their family's fi- past months I have heard from hun- community need. I congratulate him nancial security by saving and investing more. dreds of my constituents in support of and the ranking member on what I This legislation will help them achieve that this monumental legislation. think will be an important, successful goal by making more savings and investment H.R. 10 allows broad new affiliations night when we pass H.R. 10. products available in one-stop shopping at among banks, securities and insurance Mr. DINGELL. Madam Chairman, I competitive prices. In addition, the bill contains companies. As our Nation and the yield 1 minute to the gentleman from important disclosure and sales standards to world have progressed technologically, Washington (Mr. INSLEE). Mr. INSLEE. Madam Chairman, I re- protect consumers as they shop for these the distinctions between financial gretfully say that I must oppose this products. fields have eased. H.R. 10 reforms the bill. This bill is an abject total failure This legislation will help consumers, but it outdated laws and regulations that add to deal with the issue of telemarketing will also benefit the businesses seeking to pro- cost and inconvenience to consumers and restrict their choices for financial by affiliated telemarketing firms. vide these financial products. It will enable Imagine this: Aunt Emma inherits services. banks, insurance companies and securities $10,000. She puts her $10,000 into her Madam Chairman, H.R. 10 will allow firms to affiliate and operate more competi- trusted bank. Should that banker be our Nation’s financial institutions, se- tively on a level playing field. It will expand the able to call their affiliated tele- curity companies and insurance indus- products that these financial services firms marketing company, tell them that tries to compete in the global market- can offer to their customers, while maintaining Aunt Emma is a ripe target to sell place. I am pleased that the Committee adequate regulation to preserve the safety and some hot stock or annuity, and allow on Banking and Financial Services and soundness of the system. them to call her at 6 o’clock at night the Committee on Commerce over- Madam Chairman, as part of the long delib- and interrupt her watching Jeopardy whelmingly approved this legislation. I erations seeking to treat all financial services to sell her that? And the answer is, hope that any snafus can be worked out providers fairly, I have been particularly inter- ‘‘no,’’ they should not be allowed to do ested in assuring that national banks are per- in the near future, and I urge the sup- that if Aunt Emma does not want it. mitted to compete fairly in selling and under- port of the whole House. Now, why is this important now? writing insurance products. Bank sales and Mr. LEACH. Madam Chairman, I Some people have said we have moved underwriting of insurance will be good for yield 2 minutes to the gentleman from ahead a little on third parties, but we competition and good for American con- Louisiana (Mr. BAKER). are creating an entirely new species of sumers. Mr. BAKER. Madam Chairman, I telemarketer here. We are creating an To be candid, the provisions in this legisla- thank the gentleman for yielding me entirely new species with H.R. 10 of af- tion regarding banking and insurance are not this time; and I wish to extend my ap- filiated firms. And if we are going to perfect. I am sure representatives of the bank- preciation and congratulations on the create the Tyrannosaurus rex of tele- ing and insurance industries can tell you how job the chairman has done over the marketing, we ought to tame that be- they believe the provisions can be improved, decade. He has committed himself to fore we create the species. but the fact of the matter is we have a work- the goal of financial modernization. I Today is the time to tame that. able compromise that will protect consumers do not think without his persistence Today is the time to reject this, go and allow for improved and fair competition in this evening would have been possible. back, and protect the rights of privacy how insurance is sold and underwritten by I wish to speak tonight directly to of our constituents. banks and their new affiliates. the issue of what is in this bill for the Mr. DINGELL. Madam Chairman, I Madam Chairman, on this floor last year, I small town bank. With all the discus- yield 1 minute to the gentleman from said to my colleagues that this is historic legis- sions about op-subs, opting out, and Minnesota (Mr. LUTHER). lation that has been a longtime in coming. privacy issues, there are a great deal of Mr. LUTHER. Madam Chairman, I That statement is more true than ever. concerns that affect many people, but thank the gentleman from Michigan Overall, H.R. 10 is a well-crafted effort to when it comes to the 9,000 small insti- for yielding me this time, and I rise in make our financial services system ready for tutions across this Nation, I think it is opposition to this bill. the 21st century and to meet the needs of important to point out that they are Let me tell my colleagues a little bit American consumers and business. struggling like any other small busi- about my home State of Minnesota’s This is our best opportunity in years to bring ness to survive. Often their product, unique experience with financial pri- our financial laws out of the past and into the money, is hard to come by. As banks vacy rights. Less than a month ago, next century. The Senate has finally passed merge and acquire one another, small Minnesota Attorney General Mike its own legislation and the President is ready town banks do not often have the part- Hatch filed a civil suit against a large to join us in enacting this legislation. ner down the street that can take part financial institution for allegedly sell- Every American who has a bank account, a of that loan and help them extend cred- ing its customers confidential informa- mutual fund, or an insurance policy will have it in the local community. tion to a telemarketer. Of course, the new opportunities and choices to help build fi- The Federal Home Loan Bank provi- bank’s customers had no idea their fi- nancial security for their families. I urge my sions in this legislation provide an ex- nancial data was being handled like colleagues to take this historic step and pass traordinary new opportunity for small this, and they never would have H.R. 10 today. town banks. For banks in asset size dreamed of it. The public reacted very Mr. LAFALCE. Madam Chairman, under $500 million, which is about 85 strongly upon learning the informa- how much time do I have remaining? percent of the banks in America, they tion. The CHAIRMAN. The gentleman can now go to the Federal Home Loan This week that case was settled, only from New York (Mr. LAFALCE) has 11⁄4 Bank and get credit. And get this: after a few weeks, on terms very favor- minutes remaining. Fixed interest rates for up to 15 years; able to Minnesota consumers and very July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5239 similar to the Markey-Dingell-Stupak ervations, reservations that are very I urge support of this bill. I person- amendment. similar to those I expressed. ally believe that we can go forth. To I would simply ask my colleagues They strongly favor the bipartisan the degree there are nuances that need this: Should the consumers of America privacy amendment that the gen- to be corrected, I assure my colleagues be entitled to anything less than what tleman from Texas (Mr. FROST), the they will be. the Minnesota Attorney General ob- gentlewoman from Ohio (Ms. PRYCE), Ms. STABENOW. Madam Chairman, I rise tained for Minnesota consumers after myself, the gentleman from Minnesota today to explain my vote on the Bliley amend- only a few weeks? (Mr. VENTO), the gentleman from Iowa ment to H.R. 10, the Financial Services Act of I urge my colleagues to oppose this (Mr. LEACH) and others have worked 1999. While I support the efforts of my col- bill. All Americans deserve real pri- out so strongly. They are terrific pri- league, Mr. BLILEY, to add new protections for vacy protections, and they deserve vacy. victims of domestic violence, I object to the them now. They strongly oppose the medical second provision in his amendment regarding The CHAIRMAN. The Chair would privacy language of Ganske and want mutual insurance companies. propose to recognize Members for final that deleted. They strongly oppose the One of my top priorities as a legislator here speeches in reverse order of their origi- Paul-Barr-Campbell amendment, et in the House and when I served in both the nal allocations of time under the rule, cetera. They strongly object to the fact Michigan House and Senate, has been to help to wit: The gentleman from Michigan that the Committee on Rules did not the victims of domestic violence. Last year I (Mr. DINGELL), the gentleman from permit the Lee anti-redlining amend- introduced two bills to help victims of domestic New York (Mr. LAFALCE), and the gen- ment. abuse, H.R. 3901, Arrest Policies for Domestic So, in sum, the position of the ad- tleman from Iowa (Mr. LEACH). Violence and H.R. 3902, Court Appointed Mr. DINGELL. Madam Chairman, I ministration and the position that I Special Advocates for Victims of Child Abuse. yield myself the balance of my time. have expressed have been virtually I strongly support the first provision in the Let us talk about medical privacy. identical. They would like us to go for- Bliley amendment that would prohibit banks The Secretary’s recommendations on ward but only if certain amendments from discriminating against victims of domestic this matter would explicitly preserve are defeated and only if certain provi- violence in providing insurance. This provision existing State laws that provide for es- sions within the bill are cured in con- expressed the Sense of Congress that all sential privacy protection. H.R. 10 im- ference. states should enact laws prohibiting such dis- Mr. LEACH. Madam Chairman, I plicitly overrides them. With few ex- crimination. This kind of discrimination must yield myself such time as I may con- ceptions, the Secretary’s recommenda- be stopped so that victims of domestic vio- sume. tions would require consent before Madam Chairman, let me just first lence take the necessary steps toward finan- medical records could be disclosed. thank all associated with this process. cial and personal freedom. Had I been given H.R. 10 permits extensive disclosure My colleagues have had varied perspec- the opportunity to vote on this provision of the without consent. Indeed, there are two tives, and this is a very controversial amendment separately, I would have voted in pages of exceptions in the rule and in bill. The staff has been extraordinarily favor. the bill. professional. I personally believe that Unfortunately, I was compelled to vote The recommendations of the Sec- the committee staff that the gen- against the Bliley amendment due to the lan- retary would prohibit unauthorized dis- tleman from New York (Mr. LAFALCE) guage in the second provision regarding mu- closure of medical records to insurance and I have is as good a staff as any in tual insurance companies. This language companies for underwriting purposes, the history of the Congress. would permit mutual insurance companies to to credit agencies and to banks. H.R. 10 We have also enjoyed working with relocate from one state to another and to reor- expressly allows such disclosure. The the committee staff of the Committee ganize into a mutual holding company or stock Secretary’s recommendations would on Commerce, which does not quite company. This would permit some companies require that any authorization to dis- meet that standard, because we have to operate outside the important safety net of close medical records be truly vol- the highest standard, but we appreciate state regulation. Therefore, in an effort to pro- untary. H.R. 10 permits the insurers to working with the committee staff of tect consumers, I voted against the Bliley coerce consent by saying they will the Committee on Commerce. amendment. refuse the right to insurance unless Let me also say that there are some Mr. POMEROY. Madam Chairman, I am re- that disclosure takes place. perspectives that have been presented luctantly voting yes on H.R. 10. It needs H.R. 10 provides no safeguards ensur- in a contrasting way that on many of workÐa lot of workÐin conference committee ing only genuine medical research the underlying philosophical aspects to fully establish functional regulation of insur- projects attain access to medical there is total consensus in this body. ance in state insurance departments. records. The Secretary’s recommenda- The intent of this legislation is dra- In light of assurances I have received from tions would include express protection matic in the area of privacy. It will be the Banking Committee Chairman and Rank- in that regard. inconceivable to bring forth a law that ing Member to revisit the concerns I have ad- The Secretary’s recommendations will do anything except bolster pri- vanced in this regard I will vote for the bill to would hold third parties responsible for vacy. There is no intent in this law of keep the process moving forward. medical information that they receive. any nature to undercut executive dis- We desperately need financial services H.R. 10 allows third parties to disclose cretion, which may arise later this modernization, but it is vitally important the medical information to anybody. summer if certain follow-on legislation legislation establishing these reforms get it does not arise in a timely fashion from done right. b 1830 another committee of jurisdiction. Mrs. CAPPS. Madam Chairman, tonight I Mr. LAFALCE. Madam Chairman, I In any regard, I am personally con- will vote against H.R. 10. yield myself the balance of my time. vinced that, in any historical landscape I do this with great disappointment because First of all, I would like to thank the of consideration, this is the right bill I truly believe that we must modernize our staff of the Committee on Banking and at the right time. There will be nu- woefully out-of-date financial service laws. Financial Services, the majority and ances that we will all disagree about. Modernizing these laws would create a minority staff. The majority acted in a But the framework is to present a fi- more efficient financial service industry and very bipartisan way. Our minority nancial community that will be second bring greater choice and lower prices for con- staff, Jeanne Roslanovick, Rick to none in the world, a financial com- sumers. Maurano, Dean Sagar, Tricia Haisten, munity that will serve the American But I cannot in good conscience support this Kirsten Johnson, Patty Lord, and so consumer and be so competitive and legislation. The so-called medical privacy pro- many others were just terrific. We broad that it will help bring American vision endangers consumer privacy protection would not be here without them. financial practices and models to the by allowing their sensitive health information to Secondly, I would like to point out rest of the world. So this bill is de- be sold. that there is a Statement of Adminis- signed to look to the next century in I hope to work with my colleagues to tighten tration Policy. The administration such a way that finance will serve these provisions during conference so I can supports the bill that is on the floor rather than be the servant of the peo- support a financial services bill that does not today, but it has some very serious res- ple of the world. endanger patient privacy. H5240 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Mr. GONZALEZ. Madam Chairman, I am of this progress against so-called ``relining'' H.R. 10 permits the unprecedented pre- disappointed that the Rules Committee did not can be attributed to the Community Reinvest- emption of stronger consumer-friendly state allow me the opportunity to offer on the floor ment Act. Under CRA, federal banking agen- laws thereby undermining state authority and the amendment on title insurance. I hoped to cies grade lending institutions on how well harming consumers. Under H.R. 10, progres- be able to explain the treatment of title insur- they meet the credit and capital needs of all sive State banking laws such as those requir- ance in the bill and ensure the protection of the communities in which they are chartered ing low-cost checking accounts or prohibiting Texas state law. and from which they take deposits. ATM surcharges would be weakened. The title insurance section of H.R. 10ÐSec- In my own state of New Jersey, CRA has H.R. 10 fails to provide strong financial and tion 305Ðgenerally prohibits national banks helped provide more than $8 billion in dis- medical privacy protections. If we're going to from underwriting or selling title insurance, ei- counted mortgages, discounted home im- allow H.R. 10 to accelerate mergers, create ther directly or through a subsidiary. There is provement loans, loans to small businesses mega one-stop centers with access to infor- a grandfather clause (Section 305(c)) that en- owned by women and minorities and loans mation about millions of customers, we need ables any national bank or national bank sub- and investments for community and economic to stop information from being disclosed to sidiary currently engaged in title insurance development. Many people who never thought third parties and affiliates. Anything less is un- sales activities to continue to engage in those it would be possible to own their own home acceptable. activities. National banks would remain free, have succeeded through programs made pos- Certainly, we need to preserve America's fi- however, to underwrite and sell title insurance sible by the Community Reinvestment Act. nancial leadership as we approach the 21st products through affiliates. The core prohibi- Madam Chairman, let's help make the century. tion on national bank and national bank sub- American Dream a reality for millions of Amer- Certainly, we need to update our archaic sidiary title insurance sales activities is based icans by continuing to support a strong CRA. laws so that U.S. companies are not at a com- on the idea that there are problems associated Ms. ROYBAL-ALLARD. Madam Chairman, I petitive disadvantage in the global market- with bank sales of title insurance. These are rise in opposition to H.R. 1. Rather than up- place. real problems, and I thought that the best way dating our antiquated banking laws and bring- Certainly, we should promote convenient to address them was to limit bank-related title ing the United States financial system into the and affordable one-stop shopping for con- insurance activities to their affiliates. This was 21st century, H.R. 10 will leave consumers sumers in order to meet all of their financial why I originally offered the amendment that and our communities more vulnerable than needs. was adopted by the House Banking Com- ever before. But not at the expense of consumer privacy. mittee to require that title insurance sales be Why should we allow for the unprecedented Nor at the expense of the Community Rein- done only through affiliates. conglomeration of banks, securities firms, and vestment Act. Section 305(b) of this bill has a ``parity'' ex- insurance companies while at the same time I am not willing to trade the so-called perks ception that grants national banks parity with we ignore the most modest provisions to pro- of financial modernizationÐefficiency, choice, state-chartered banks in the sale of title insur- tect our consumers? convenience, one-stop-shoppingÐfor the deci- ance. The intent is to grant national banks in I am opposed to H.R. 10 for a number of mation of privacy rights and community rein- a State the power to sell title insurance prod- reasons: vestment. It's that simple. ucts in the same manner and to the same ex- H.R. 10 is missing important community re- Our nations consumers should be our num- tent as state-chartered banks that we actually investment provisions. Specifically, the bill fails ber one priority as we contemplate the merits and lawfully engaged in title insurance sales to extend the Community Reinvestment ActÐ of H.R. 10. Unfortunately, H.R. 10 doesn't activities in that State. My amendment would the CRAÐto the banking activities of non- meet this threshold. I urge my colleagues to simply have made it clear that Section 305(b) bank financial institutions that seek to affiliate oppose this bill. was a true parity provision. It would have with banks. In other words, if credit card com- Ms. MCCARTHY of Missouri. Madam Chair- made clear that national banks could sell title panies, securities firms or insurers would like man, I rise today in opposition to this meas- insurance products in a State only if state- to offer traditional banking products such as ure, H.R. 10, as put forth by the Rules Com- chartered banks are actively and lawfully en- checking accounts or loans, they should be mittee. I support financial modernization, but gaged in title insurance activity on the date of subject to the CRA. Why should we make it the current bill fails to achieve the goals set enactment. Alternatively, national banks could easier for banks, brokers and insurance com- out by both the Banking and Commerce Com- sell title insurance if a state expressly author- panies to merge without simultaneously mod- mittees. We can do better than the measure izes bank title insurance sales for national ernizing and expanding the CRA? that we are considering this evening. The banks. Therefore, if the State legislature has The CRA has averaged billions of dollars of committee efforts were solid and established a not expressly authorized title insurance sales investment into communities such as mine, procedure for consensus. The Rules Com- as a lawful power for its State banks, but has where unemployment and poverty levels are mittee refused to allow the consideration of some other general statutory provision that still well above the national average. Low-in- key amendments vital to financial moderniza- might be interpreted as an authorization (but come families, small businesses and small tion so that opportunities for investment and does not explicitly do so), that other general farmers have all benefited from the CRA savings continue fairly, and fair pricing prac- provision would not trigger parity rights for na- through increased opportunities to purchase a tices and misuse of private information essen- tional banks. I thought this clarification was home, and obtain start-up and business ex- tial to consumers are assured. necessary because it is only in states where pansion loans. Let's strengthen it, not weaken In the Commerce Committee on which I state legislatures had actually considered it. serve, agreement was achieved on issues these problems that the unique problems as- H.R. 10 fails to crack down on insurance such as consumer privacy, state regulatory sociated with bank title insurance sales activi- redlining. Missing from this bill is a modest, authority, and the Community Reinvestment ties have been addressed. consumer-friendly provision, authored by my Act (CRA). The bipartisan resolution was al- Texas State insurance law is very important colleague BARBARA LEE, which would combat tered by the Rules Committee to preempt im- to me, and I hope this clarification can still be redlining of neighborhoods by insurance com- portant language to protect consumers against made at some point during the consideration panies. Excluding this provision will once unfair lending, ATM surcharges, and check of the bill. again leave vast segments of our urban and cashing charges. Further, the measure now Mr. PAYNE. Madam Chairman, I rise to ex- rural communities vulnerable to discriminatory preempts essential state insurance laws press my strong support for the Community lending practices by some unscrupulous insur- across the country, including requirements that Reinvestment Act which has helped ensure ance companies. insurance companies pay legitimate claims in fair and equal access to capital and credit. We H.R. 10 isn't friendly to our thrifts and se- a timely manner, invest premiums paid by in- all strive for the American dream of home verely limits their viability. The bill grants the surance consumers in a prudent and safe ownership and many of us aspire to start our Federal Reserve significant and perhaps un- manner, and contribute to state funds estab- own businesses. But that dream is out of warranted new regulatory authority over uni- lished to guarantee the solvency of insurers. reach for some in our society because there tary thrift holding companies. Thrifts have The measure before us no longer includes are financial institutions which discriminate been critically important in serving the financial full disclosure requirements allowing con- against minorities living in working class needs of low income and minority commu- sumers to control how their financial informa- neighborhoods. nities, particularly in the area of mortgage fi- tion will be used, transferred, and shared. Fortunately, blatant discrimination in lending nancing. Threats to the thrift charter would, Consumers should have confidence that per- is declining, and homeownership and small therefore, disproportionately impact low in- sonal information shared with their insurer will business opportunities are on the rise. Much come and minority communities. be kept confidential. To achieve this goal, the July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5241 need to safeguard consumers' personal and served communities. The fact is, CRA has years in the making and this legislation is medical information must be balanced with the provided thousands of families and entre- about as good as it is going to get. On bal- need to allow financial institutions, including preneurs with the credit they needed to buy a ance, it will improve the competitiveness of insurance companies, to efficiently provide home or start a business. CRA works. I urge our financial system and provide more choices services to consumers. my colleagues to support the CRA provisions for consumers. The measure under consideration does not in this bill and oppose any potentially weak- There has emerged a growing concern proactively address the issue of insurance red- ening amendments. about protecting the privacy rights of Ameri- lining. Allowing banks and insurance compa- Second, the bill addresses the important cans. These concerns are independent, but nies to discriminate against consumers for any matter of financial privacy. During the Banking related to financial services. Privacy is a major reason is unacceptable. Violating fair housing Committee's consideration of H.R. 10, I co- issue in business practices generally and in practices should be addressedÐthis is a glar- sponsored an amendment with Mr. INSLEE, of the health care system in particular. I am dis- ing omission in the bill. Washington, addressing financial privacy. That appointed that the Republican Leadership did Finally, as written, this measure will sanctify amendment would have provided consumers not allow several provisions to be discussed the ability of the Comptroller of the Currency with the ability to `opt out' of information shar- that would have strengthened the protections (OCC) to override state consumer laws and ing by their financial institution. Ultimately, our and I believe they would have made H.R. 10 allow national banks to ignore essential con- amendment was defeated. However, due to a better bill. Nonetheless, these concerns are sumer protections, such as unnecessarily high the hard work of Mr. INSLEE, his staff, and the not going to go away. They will be a part of prices on checking accounts and prepayment Banking Committee we are taking positive the Patients' Bill of Rights legislation and may penalties when consumers sell their homes steps toward protecting consumers personal fi- be the subject of a comprehensive stand and pay off their mortgages. Further, we must nancial information. alone bill that will spell out what protections address the issue of operating subsidiaries. This bill also requires greater disclosure of Americans can expect from their government Consumers are easily confused and unfairly policies, procedures, risks, and costs of cer- regarding sensitive and personal data. targeted when subsidiaries are allowed to co- tain transactions, including ATM fees. It re- Even though we were denied an opportunity exist with traditional banking services. Further, quires disclosure of existing privacy policies, to deal with these issues in connection with the Securities Exchange Commission (SEC) contains strong anti-tying and anti-coercion H.R. 10, I hope the attention and the con- and not the Comptroller should regulate these provisions, and includes the requirement to troversy will spur this Congress to action and entitles, to ensure that consumers are properly disclose what products are federally insured that we will not adjourn until we provide a ve- protected. The OCC's focus is on the safety and which ones are not. All of these are pro- hicle for understanding the rights and respon- and soundness of investments, while the SEC consumer and make good business sense. sibility surrounding individual privacy. focuses on consumer protection. However, I am concerned about one glaring Mr. EWING. Madam Chairman, I rise today Each of our lives are impacted daily by fi- omission from this bill. The House Banking in support of H.R. 10. While many of us have nancial transactionsÐwhen we write a check, Committee approved an amendment that reservations about some sections of H.R. 10, have our paychecks directly deposited, pay would have prevented the practice of insur- I believe that the House needs to pass this our bills, buy something over the Internet, pur- ance redlining in low-income communities. legislation to begin the process of modernizing chase a house, or invest for our retirement. Redlining is a practice that strikes at the very outdated, Depression-era laws that separate We must successfully address and modernize heart of what we should be opposingÐdis- the financial services industry. These changes the procedures to safeguard consumer rights crimination based on your neighborhood or in- are long overdue. and prevent the inappropriate use of personal come level. However, I would hope that the conference information. The second concern I have with this bill, as takes a hard look at the so-called parity provi- I will continue my advocacy for the proper it is before us today, is with the potential dis- sion that was added to Section 305 by the balance between consumer privacy and eco- closure of medical or health information. I be- Commerce Committee. This parity provision nomic growth and hope the measure improves lieve that there should be strong firewalls es- would grant title insurance sales authority to so that I can support passage following Con- tablished between affiliates or operating sub- any national bank or its subsidiary located in ference Committee efforts. sidiaries as it pertains to the exchange of a state in which state-chartered banks have Mr. WEYGAND. Madam Chairman, I rise in medical or health information. When a person such authority. I believe that the adoption of support of H.R. 10, the Financial Services Act shares private medical information with an in- any such parity provision is unwarranted. of 1999. surance company they should have every as- For instance, individual consumers pur- I believe the House Banking Committee, of surance that whatever information is shared is chasing homes and refinancing their mort- which I am a member, has done an admirable not then given to the bank or securities com- gages will have to pay for title insurance, and job at balancing the many differing views and pany that happens to own or is affiliated with under the current language in this bill, will pay opinions on how to structure financial services that insurance company. a bank-owned agency to insure the bank and reform. I commend Chairman LEACH, Ranking It is my sincere hope that as this bill moves basically your home. A national bank should Member LAFALCE, and their staffs for all their to conference with the Senate we will continue be prohibited from engaging in title insurance hard work in bringing what I believe is a bal- to make progress on protecting individuals' pri- sales activities in a State unless the state- anced approach to financial services reform to vate medical information. I also hope that we chartered banks in that State are explicitly au- the floor. can reinstate the Banking Committee provision thorized to engage in title insurance sales ac- Mr. Speaker, I have previously stated that that would prohibit insurance redlining. tivities. H.R. 10 should require that subse- there are two fundamental questions to ask H.R. 10 will indeed make U.S. financial in- quent to enactment of the bill, states must ex- when considering the type of financial services stitutions more competitive and assist them in plicitly authorize state banks to sell title insur- overhaul we are debating. First, what effect remaining leaders in the world financial mar- ance. will this legislation have on consumers? Sec- ketplace. It will remove antiquated barriers to Congress has always set the parameters for ond, what effect will the same legislation have expansion and competition. It will also allow fi- the exercise of national bank powers and on U.S. financial institutions' ability to compete nancial institutions to take advantage of new there is no reason to depart from that tradi- in an ever increasing global market place? technologies, economies of scale and scope tional approach in this context. Moreover, In my view, this bill that makes significant that will result in efficiencies providing con- adopting such an approach would ignore the progress on a number of consumer issues. sumers with greater choice at lower costs. unique issues related to bank sales of title in- First, the bill we have before us preserves the Developing this financial services mod- surance that mandate the confinement of such integrity of the Community Reinvestment Act ernization bill has been a long and difficult activities to bank affiliates. Simply stated, I (CRA). In fact, as a requirement of affiliation, process. What we have before us today is a think we should leave it up to the individual a financial holding company must have and carefully constructed, balanced bill that will States to decide what best suits their banking maintain at least a satisfactory CRA rating. make our financial services industry more and title insurance agents and not Wash- Additionally, this bill extends CRA require- competitive, provide consumers with more ington, D.C. There is a very unique relation- ments to any newly created Wholesale Finan- choice, and takes several positive steps re- ship that currently exists and this provision cial Institution. This language will ensure that garding consumer protections. This bill de- would significantly endanger the title insurance financial institutions continue to invest in those serves our support. agents across the nation. communities from which they take deposits. Mr. BLUMENAUER. Madam Chairman, I I am also concerned that the unique needs This investment is crucial in order to meet the support the modernization principles in this of independent bankers are not fully ac- credit and lending needs of traditionally under long overdue financial legislation. It has been counted for by H.R. 10. This issue should be H5242 CONGRESSIONAL RECORD — HOUSE July 1, 1999 resolved in conference, so that independent Thanks to the CRA, many families and time in 66 years, the bill lets them affiliate. In bankers will be able to continue to provide small businesses across the country have good times, this means more innovation, their crucial services to their communities. gained meaningful access to credit for the first greater efficiency, and better products. In bad In conclusion, I would like to express my time. Nationwide, more than one trillion dollars times, it means that their risks will be diversi- support of H.R. 10 and urge my colleagues on has been invested in traditionally underserved fied, protecting our economy and our tax- both sides of the aisle to support the passage neighborhoods as a result of the CRA. payers from the failure of financial firms. of this legislation. I strongly support efforts to apply the CRA's Third, it mixes this new flexibility with pru- Mr. DAVIS of Illinois. Madam Chairman, I requirements to the banking activities of non- dence. We've learned from Japan that we take this opportunity to express my support for bank financial institutions which seek to affil- need to go slow on mixing banking and com- H.R. 10, although reluctantly. In spite of and iate with banks. I deeply regret that the Rules merce. Let's see how we do with affiliation notwithstanding the good premises of this bill, Committee has not made such an amendment I am concerned that it does not go far enough first, then return to the question of commerce in order. and banking. in its protection and/or expansion of Commu- I urge my colleagues to work with me as And fourth, it's politically viable. We all know nity Reinvestment. I represent one of the most Congressional action on financial services leg- the controversy that has always surrounded diverse districts in the nation, the 7th District islation proceeds to ensure that the CRA will this bill. With industry groups historically fight- of Illinois. It contains many of the very wealthy continue to promote equal access to credit. and many of the very poor. Moderately stable, Mr. BOEHNER. Madam Chairman, I rise in ing each other for every advantage, it's no upscale and low-income communities, sixty- support of this landmark legislation. In one surprise that over the last 22 years this bill eight percent of all public housing in Chicago. great cascade, it washes over decades of ob- has failed 11 times. But this bill, building on Community Reinvestment requirements have solete law, Congressional inattention, and reg- the work of last year's, has the support of the been a pipeline and a lifesaver for the inner- ulatory creep to give us a modern and prudent broadest financial services coalition yet. city south and westside of my District. It has legislative framework for one of our most im- Madam Chairman, in closing I want to con- saved communities and revitalized neighbor- portant and dynamic industries. I believe it's gratulate my friends the gentlemen from Iowa hoods. It is amazing to me that, as we debate the most important bill we'll debate this year, and Virginia, the chairmen of the Banking and such a revolutionizing, and modernizing bill, and I strongly urge its passage. Commerce Committees. This is a huge ac- that this House has failed to use this oppor- In a bill this complex, it's easy to miss the complishment for this Congress and for them tunity to elevate the Community Reinvestment forest for the trees. But the broad direction is personally. It's a testament to their leadership Act to its appropriate level. what's most important. Our nation's financial and, given the history of this issue, it's a testa- Since its enactment in 1977, the CRA has services sector is the irrigation system for our ment to their character that we're here today made sure that our banks would reach our economy. By allowing for the quick and effi- to debate and pass this bill. I admire them country's poor communities. At the time of both. 2 cient flow of cash and of capital, it provides CRA's enactment, banks and thrifts held ¤3 of the fuel that the rest of our economy needs to Madam Chairman, I strongly support H.R. all financial industry assets, today that number grow. By calculating and allocating risk effec- 10, the Financial Services Act of 1999. It is has fallen to 1¤4 of financial assets. This tively, it minimizes the harm that sudden dis- the right bill at the right time for our financial steady erosion of CRA's financial base has tortions can do. And by providing a variety of services industry, for its consumers, and for the possibility to threaten the future of the savings, investment, and insurance vehicles our entire economy. Act's effectiveness. Today, the specter of re- for our citizens, it allows us all to plan and duced CRA effectiveness looms over H.R. 10. Mr. STARK. Madam Chairman, lawmakers work for a secure retirement. Much is made of This bill could allow banks to move their casting a ``yea'' vote today on the Financial the dynamism of the so-called high-tech sec- money into their securities and insurance affili- Services Act, H.R. 10, are making a funda- tor, and its growth has been truly phenomenal. ates where the CRA cannot reach. mental error. They are effectively voting to In my district, where nearly 175,000 individ- But without a vibrant, stable, and innovative fi- strip millions of Americans of a basic right: the uals live at or below the poverty level, CRA nancial services marketplace, many of these ability to exercise meaningful control over who has been the most effective means by which high-tech firms would still be languishing on sees their most sensitive information. Title III, they have been able to purchase their home, someone's chalkboard. Subtitle D, Section 351 of the bill gives insur- or start their own business. But now, as a re- We have the most dynamic and competitive ers extensive ability to disclose medical infor- sult of H.R. 10's failure on the CRA, banks' financial service sector in the world. And that's mation without a consumer's consent. ties to the local community will be diminished, why we have to pass this bill. Because the in- If this provision is enacted into law, it will and the needs of the poor may not be met. dustry has so outgrown our Depression-era create legal chaos. As written, it appears to For those living in places like the West Side regulatory framework that soon, the framework overlay myriad state medical privacy laws that of Chicago, maintaining a strong CRA will will be irrelevant. And because our competi- regulate disclosure and access. make all the difference in world. tors are catching up by passing modernized fi- nancial service laws of their own. Unless we Does it make you feel ill to know that under Though I agree that the time has arrived to H.R. 10, a travel insurance agent could peruse tear down the walls that divide the banking, act here today, we may find ourselves ceding our dominance in this critical market to our for- your medical records? Does it make your securities, and insurance industries, there is blood pressure rise to know that under H.R. no reason that the new conglomerates that eign competitors. How does the bill accomplish this? Again, 10, auto insurance companies could use med- this bill will spawn should not also be subject ical data to raise your family's rate? And that to CRA. Though H.R. 10 does not include any the broad strokes are the important ones. First, functional regulation. Conduct should be any insurer, as well as its affiliates and sub- changes that will specifically alter CRA, with- sidiaries, would be legally authorized to share out being amended, H.R. 10 can deteriorate overseen by regulators who understand it. That means that securities activities should be sensitive, personal information with credit re- the financial base of CRA coverage. That a porting companies? basic banking service, whether offered through supervised by securities regulators, even if a parent bank or through a subsidiary bank or they're performed by a bank. It means banking Unless lawmakers appointed as conferees a bank holding company, should affect its cov- activities should be regulated by banking au- for H.R. 10 take action to strike the bill's med- erage under the CRA does not make sense. thorities, and insurance activities by insurance ical privacy provisions, American consumers Even if we pass H.R. 10 in its current form, authorities. Functional regulations means that will wake up to find that the insurance indus- we must recognize a need to expand the cur- proper regulators can see the warning signs of tryÐwhich makes most of its money through rent CRA laws to include all institutions that instability early enough to head it off. Writing underwriting to reduce financial riskÐcan dis- are engaged in banking practices so that a functional regulatory structure is far more close their medical data without authorization CRA's effectiveness in revitalizing low income difficult, however, than simply describing one, in many, many circumstances. And that's communities will never be diminished. As long and the chairmen of the Banking and Com- plainly wrong. as I am a member in Congress, I will stand merce committees have done a superb job. It's also disturbing that the majority leader- guard over the CRA and make sure financial Second, the bill reflects the marketplace fact ship has done next to nothing to advance service companies respect the intent and pur- that banking, securities, and insurance under- comprehensive medical privacy legislation in pose of the CRA. writing all have far more in common than not. the House of Representatives. Title V of the Mr. COYNE. Madam Chairman, as we con- All essentially reflect the same functionsÐcal- 1998 GOP managed care bill, H.R. 4250, fea- sider the legislation before us today, I want to culating and allocating risk, accumulating and tured sorry medical privacy provisions that express my strong support for the Community investing capital. Keeping them apart makes were roundly condemned by consumer groups Reinvestment Act. little sense economically, and so for the first and privacy advocates through the country. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5243 Now the August deadline for action set There is interest within the banking industry The principle behind the bill is functional regu- three years ago by the Health Insurance Port- in American Samoa to be included in the Fed- lation, the activities of any entity should be ability and Accountability Act is fast approach- eral Home Loan Bank program, The Amerika regulated by function. So when a bank en- ing. It is my hope that a coalition of members Samoa Bank, a local bank, is on record in gages in insurance activities, those activities to work together to produce medical confiden- support of including American Samoa in this should be regulated by insurance regulators, tiality legislation that is at least as strong as federal housing program and is looking for- not banking regulators. The same holds true the 1997 recommendations developed by the ward to obtaining access to a source of long- for securities activities. HHS SecretaryÐwith one notable exception. term, low-interest funding to make home The bill seeks to craft a balance between The Secretary's recommendations proposed loans. Congress' authority to grant banks certain no additional restraints on access to medical The number of complaints I receive from powers and the States' authority to regulate data by law enforcement officials in the form constituents in American Samoa concerning certain activities. This balance is particularly of a subpoena or court order requirement. the cost of home loans will further attest to the delicate in the context of state regulation of That is a position with which I strongly dis- need for loans at affordable interest rates in the insurance sales activities of banks and agree. this remote, rural area. their affiliates. Section 104 of the bill sets up It is not too late to enact sound medical pri- Last year, the Federal Housing Finance a fairly complex scheme, designed to allow vacy legislation that puts federal protections in Board issued a final rule including American states to regulate insurance activities without place for consumers across the country, while Samoa within its regulations. I am appreciative substantially interfering with banks' ability to leaving stronger state laws in place and allow- of the willingness and efforts of the Federal sell insurance. While the bill affords states a ing states the flexibility to add additional pro- Housing Finance Board to include American certain amount of certainty regarding what is tections for those customers of the future who Samoa and the Commonwealth of the North- permissible regulation, through a creation of find themselves afflicted with as-yet-unknown ern Mariana Islands within its regulations, and safe harbor, it leaves much to potential chal- disorders, and who, as a result, also suffer that administrative action has been working lenge. As the bill makes clear, our creation of discrimination. well; however, this statutory amendment will a safe harbor is not intended to establish any Enactment of H.R. 10's medical privacy pro- ensure a more permanent solution. kind of inference regarding the permissibility of visions would not only eradicate many existing In the 105th Congress I introduced H.R. state insurance laws that fall outside the safe medical privacy protections, but also hinder 904, a bill which would clarify that American harbor. the HHS Secretary's ability to promulgate reg- Samoa is included in the Federal Home Loan As a result of this legislation, federal bank- ulations under HIPAA if Congress does not act Bank Act. That provision is a part of Section ing regulators and state insurance regulators by next month. 162 of H.R. 10, and I strongly support that will work together cooperatively in the best in- Madam Chairman, we must not do this. The provision. terests of the public. This positive relationship consequences for consumers are far too Mr. SANDLIN. Madam Chairman, I rise should be given an opportunity to develop. grave. today in support of this bill. What we do not want to see is aggressive Mr. FALEOMAVAEGA. Madam Chairman, Financial modernization is already occurring. moves on the part of the OCC, or other fed- H.R. 10 is about as complex a bill as we ad- Innovation and technological advances are al- eral banking regulators, to displace state in- dress in this house. The bill has been in the lowing financial services firms to offer cus- surance laws and regulations applied to making for years, and at times it seemed im- tomers a wide range of new products and thus banks. This legislation is designed to foreclose possible to get a majority of the Banking Com- increasing competition and benefitting con- the OCC's opportunity to do that. mittee, let alone the full House, to agree on its sumers. These changes are occurring globally Mr. PACKARD. Madam Chairman, I would contents. and dramatically changing how financial serv- like to issue my support for H.R. 10, the Fi- Mr. Speaker, I know H.R. 10 remains a con- ices providers operate and deliver their prod- nancial Services Act of 1999. This legislation troversial bill, with supporters on both sides of ucts. In the United States, however, burden- will allow citizens more control of their own many issues. Without getting into the more some regulatory barriers are hindering the ef- money, not Washington bureaucrats. controversial issues, I do wish to comment on forts of our financial institutions to compete H.R. 10 enhances competition in the bank- Section 162 contained in the subtitle entitled globally through the development and delivery ing and financial service markets. As the law ``Federal Home Loan Bank System Moderniza- of new financial products. stands today, the financial sector has to com- tion''. Among other technical amendments, this The buttom line is simple, financial mod- ply with regulations set up after the Great De- section adds American Samoa and the Com- ernization is necessary and will continue as a pression. This has to change. The Financial monwealth of the Northern Mariana Islands to result of market forces, even in the absence of Services Act will allow American companies to the provisions of the Federal Home Loan Bank legislation. However, the success of American enter the new millennium on an equal stand- Act. firms, and ultimately, the strength of the Amer- ing with financial businesses around the world. The condition of much of the private hous- ican economy, depend on a good billÐone The Financial Services Act will benefit each ing in American Samoa is deplorable. Too that will ensure that financial modernization individual who uses a financial institute. In- many people are forced to live without elec- occurs in an efficient manner and protects the creasing free trade inside the financial sector tricity and running water, and many structures interests of customers as well as the safety ensures higher quality services and lower could not withstand gale-force winds, let alone and soundness of our financial system. prices. The government is already far too in- the hurricane-force winds which blow through But as we debate these important issues volved in the lives of private citizens. This leg- Samoa on a regular basis. With an annual per and work to modernize the way our financial islation will increase choices and services for capita income barely over $3,000, and interest services firms do business, we must remem- the American people. rates on commercial home loans in the 13%± ber our community banks. In East Texas, peo- Mr. Speaker, the Financial Services Act will 14% range, there is very little new construc- ple trust their community banks and know their ensure that American companies continue to tion or refurbishment of housing in American local bankers. We have recognized that these lead the world in the financial sector. I urge Samoa. institutions are an integral part of rural Amer- my colleagues to support its passage. To partially address this problem, Public ica and that we must not overlook them or Mr. BONILLA. Madam Chairman, I rise Law 102±547 created a pilot program through jeopardize their future in any way as we un- today in support of our community leaders, which Native American Samoan veterans, and dertake this monumental legislation. I believe America's bankers. Everyday, America's bank- other Native American veterans, could obtain that this bill addresses these needsÐthe ers serve their communities whether it's home loans at moderate rates, and the re- needs of Main Street as much as Wall through lending to home buyers, supporting sponse in American Samoa has been over- StreetÐand I urge you to cast your vote in small businesses or even softball sponsor- whelming. Unfortunately, this pilot program is support. ships. Still, if their actions don't fit into the ar- available only to a small segment of the popu- Mr. NEY. Madam Chairman, I rise today in bitrary mandates of the Community Reinvest- lation residing in American Samoa. support of H.R. 10, The Financial Services ment Act, banks are strapped with large fines During the first five-year authorization of the Modernization Bill of 1999. As a supporter of and their good deeds go unnoticed. VA pilot program, to the best of my knowl- this bill, I want to send a message to the Of- Banks are the primary engines for small edge, no loan went into default and needed to fice of the Comptroller of the Currency, on be- business lending everywhere. Banks, espe- be assumed by the Department of Veterans half of the Members who worked so hard to cially small banks, invest in their communities Affairs. I believe there is now a sufficient track obtain passage of this much-needed legisla- and reflect their communities. If they don't, record for private lenders to feel comfortable tion. they simply do not survive. in making residential loans in American This bill for the first time allows the true The rising tide of CRA threatens to put Samoa. marriage of insurance, banking and securities. these community leaders out of business. The H5244 CONGRESSIONAL RECORD — HOUSE July 1, 1999 CRA has gone far, far beyond its original in- Department or the Federal Trade Commission. in the financial services industry); § 206(b) & tent of ensuring fair lending. Banks are now The amendment in the nature of a substitute (d) (dealing with administrative procedures forced to have employees whose entire job is has language that embodies that principle. for the Securities and Exchange Commission outside the Administrative Procedure Act); devoted to CRA compliance. This language is essentially the same as that § 214 (to the extent that it creates a new Instead of working for their communities, in last year's bill, but certain technical and crime under the Investment Company Act); these folks are working for CRA federal bu- clarifying changes have been made. § 301 (dealing with the continued viability of reaucrats. Instead of helping families buy their In short, no bank is treated differently than the McCarran-Ferguson Act); § 306 (dealing first home, bankers are living in fear of their it otherwise would be because it has some with expedited dispute resolution for dis- next CRA review. other business within its corporate family. putes between state and federal regulators); Our colleagues in the Senate have already Likewise, no other business is treated dif- § 314(a) (dealing with court jurisdiction over approved much-needed changes in CRA. Let's ferently than it otherwise would be because it litigation concerning redomesticated in- has a bank within its corporate family. surer); § 321(d) (dealing with court jurisdic- end the bureaucratic nightmare of CRA and tion over litigation concerning reciprocity give bankers a chance to truly serve their We have embodied that same principle with or uniformity determinations); § 335 (dealing communities. respect to the Federal Trade Commission's with court jurisdiction over litigation con- Mr. HYDE. Madam Chairman, I rise in sup- authority to enforce the Federal Trade Com- cerning the National Association of Reg- port of H.R. 10, the ``Financial Services Act of mission Act and other laws. Section 5 of the istered Agents and Brokers). In addition, 1999.'' For many years, we have been trying Federal Trade Commission Act specifically there are at least two provisions of the bill to repeal the outdated restrictions that keep prohibits the FTC from enforcing the Act as reported by the Banking Committee over banks, securities firms, and insurance compa- against banks because they are heavily regu- which this committee has jurisdiction: § 179 nies from getting into one another's busi- lated. The language in the amendment in the (creating new criminal and civil liability for violations of new privacy requirements) and nesses. After all the debate, I think we have nature of a substitute does not change that, § 193 (to the extent that it limits the claims finally come up with something in this bill that but it does clarify that the bank prohibition of bankruptcy trustees). will open up a whole new world of competition. does not extend to any other non-bank parts The foregoing list is intended to be as com- Financial services are becoming increas- of a bank's corporate family. I would also note prehensive as possible, but any inadvertent ingly globalized, increasingly computerized, that similar language was not necessary for omission of a provision in either the intro- and increasingly seamless. Banking laws the Justice Department because there are no duced or reported versions of the bill that passed during the Depression simply will not specific statutory prohibitions on its ability to the Committee would otherwise have juris- enforce laws against banks, other than the diction over does not waive that jurisdiction. do in the 21st century. I wish that we could The Committee has not yet been able to ob- maintain a world where everyone knew their Hart-Scott-Rodino exemption that I have al- tain a copy of the bill as ordered reported by banker on a first name basis and loans were ready discussed. the Commerce Committee, and it reserves its made on a handshake, and I think in the new With respect to the bankruptcy language on rights with respect to any additional provi- world some banks will provide that kind of wholesale financial institutions, I think that we sions that may be included therein. service to those who demand it. But we need all agree on the substance involved, but the I have several relatively minor concerns not have laws that limit us to that kind of serv- specific language may require some further re- with the language of these provisions, and ice, as desirable as it may seem. Everyone is finement in conference. my staff has been working with the staffs of I will be requesting Judiciary Committee the Banking and Commerce Committees to better off if the market decides what kinds of resolve those concerns. I am confident that services financial firms will offer. conferees on a few narrow parts of the bill, we will resolve them in the near future. For Just think about the progress we have made and I look forward to continuing to work with that reason, I have written to Chairman in the past ten years. When I was a child, only my Banking Committee and Commerce Com- Leach and Chairman Bliley to inform them the wealthy owned stocks. Now, with the mittee colleagues. that I am willing to waive the Committee’s growth of the mutual fund industry and self-di- I will insert four jurisdictional letters relating right to a sequential referral of H.R. 10 sub- rected retirement funds, millions and millions to the Judiciary Committee's participation in ject to the good faith commitment of all of average Americans not only own stocks, this matter for printing in the RECORD. concerned that these minor concerns will be Let me again commend my friends JIM addressed to our satisfaction either in the but make their own investment decisions. base text made in order under the rule or a These developments create wealth, increase LEACH and TOM BLILEY and everyone else who has worked on this legislation, and I ask my manager’s amendment when H.R. 10 goes to people's incentive to produce, and relieve the floor. some of the entitlement burden of govern- colleagues to support it. My doing so does not constitute any waiv- ment. I believe that this bill will bring more HOUSE OF REPRESENTATIVES, er of the Committee’s jurisdiction over these such positive developments. COMMITTEE ON THE JUDICIARY, provisions and does not prejudice its rights Washington, DC, June 15, 1999. I want to say a word about my friends JIM in any future legislation relating to these Hon. DENNIS HASTERT, provisions or other similar provisions that LEACH, chairman of the Banking Committee, Speaker, U.S. House of Representatives, may be included in the Act. I request that and TOM BLILEY, chairman of the Commerce Washington, DC. you appoint Members of this Committee as Committee. They have done an excellent job DEAR MR. SPEAKER: I am writing to let you conferees on these provisions or any other of putting this package together. I commend know of the Committee on the Judiciary’s similar provisions in the bill should it go to them for their work in bringing this bill to the jurisdictional interest in H.R. 10, the ‘‘Fi- conference. floor in a very difficult and contentious environ- nancial Services Act of 1999.’’ As you know, I appreciate your consideration of my ment. the Committee on Banking and Financial views on this issue. Please let me know if I especially want to commend them for Services has filed its report on H.R. 10, and you need any further information. the Committee on Commerce will do so working with me on the bank merger provi- Sincerely, shortly. HENRY J. HYDE, sions of the bill and the bankruptcy provisions The Committee on the Judiciary has juris- Chairman. relating to wholesale financial institutions. diction over several provisions of the bill as Hon. JIM LEACH, Under current law, bank mergers are reviewed introduced: § 104(a)(3) (dealing with the pres- Chairman, Committee on Banking and Finan- under special bank merger statutes, and they ervation of state antitrust laws); cial Services, do not go through the Hart-Scott-Rodino merg- § 104(b)(3)(A) & (b)(4)(B) (dealing with the Washington, DC. er review process that covers most other non-preemption of the McCarran-Ferguson Hon. TOM BLILEY, Act); § 122 (amending Title 18 to create a mergers. Now banks will be able to get into Chairman, Committee on Commerce, crime for misrepresentations regarding fi- Washington, DC. other businesses which they have not been nancial institution liability for obligations DEAR JIM AND TOM. I am writing to let you able to do before. of affiliates); § 136(b) (to the extent that it know of the Committee on the Judiciary’s The principle that we have tried to follow is deals with the treatment of wholesale finan- jurisdictional interest in H.R. 10, the ‘‘Fi- that when mergers occur, the bank part of that cial institutions under the Bank Merger Act nancial Services Act of 1999.’’ As you know, merger will be judged under the current bank and the Bankruptcy Code in the new the Committee on Banking and Financial merger statutes, and we do not intend any § 9B(b)(5) & (e)(3) of the Federal Reserve Act); Services has filed its report on H.R. 10, and change in that process or in any of the agen- § 13(d) (dealing with amendments to the the Committee on Commerce will do so Bankruptcy Code for wholesale financial in- shortly. cies' respective jurisdictions. The non-bank stitutions); § 136(e) (to the extent that it The Committee on the Judiciary has juris- part of that merger, which will fall under the deals with the treatment under the Bank- diction over several provisions of the bill as new Section 6 of the Bank Holding Company ruptcy Code of corporations organized under introduced: § 104(a)(3) (dealing with the pres- Act, will be subject to the normal Hart-Scott- § 25A of the Federal Reserve Act); §§ 141–44 ervation of state antitrust laws); Rodino merger review by either the Justice (dealing with the antitrust review of mergers § 104(b)(3)(A) & (b)(4)(B) (dealing with the July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5245 non-preemption of the McCarran-Ferguson U.S. HOUSE OF REPRESENTATIVES, (1) To enhance competition in the financial Act); § 122 (amending Title 18 to create crime COMMITTEE ON COMMERCE, services industry, in order to foster innova- for mispresentations regarding financial in- Washington, DC, June 18, 1999. tion and efficiency. stitution liability for obligations of affili- Hon. HENRY HYDE, (2) To ensure the continued safety and ates); § 136(b) (to the extent that it deals with Chairman, Committee on the Judiciary, soundness of depository institutions. the treatment of wholesale financial institu- Washington, DC. (3) To provide necessary and appropriate tions under the Bank Merger Act and the DEAR HENRY: Thank you for your letter re- protections for investors and ensure fair and Bankruptcy Code in the new § 9B(b)(5) & garding the Committee on the Judiciary’s ju- honest markets in the delivery of financial (e)(3) of the Federal Reserve Act); § 136(d) risdictional interest in H.R. 10, the ‘‘Finan- services. (dealing with amendments to the Bank- cial Services Act of 1999.’’ (4) To avoid duplicative, potentially con- I acknowledge the Judiciary Committee ruptcy Code for wholesale financial institu- flicting, and overly burdensome regulatory jurisdictional interest in a number of provi- tions); § 136(e) (to the extent that it deals requirements through the creation of a regu- sions in H.R. 10. The Committee on Com- latory framework for financial holding com- with the treatment under the Bankruptcy merce has included your proposed revision to panies that respects the divergent require- Code of corporations organized under § 25A of the antitrust subtitle in its consideration of ments of each of the component businesses of the Federal Reserve Act); §§ 141–44 (dealing the legislation. I will work with you to ad- the holding company, and that is based upon with the antitrust review mergers in the fi- dress any other concerns you have either in principles of strong functional regulation nancial services industry); § 206(b) & (d) base text or as part of a manager’s amend- and enhanced regulatory coordination. (dealing with administrative procedures for ment on the House floor. (5) To reduce and, to the maximum extent the Securities and Exchange Commission I would not oppose Members of the Judici- practicable, to eliminate the legal barriers outside the Administrative Procedure Act); ary Committee being named as conferees for preventing affiliation among depository in- § 214 (to the extent that it creates a new provisions within your Committee’s jurisdic- stitutions, securities firms, insurance com- crime under the Investment Company Act); tion. panies, and other financial service providers § 301 (dealing with the continued viability of Thank you for foregoing a request for a se- and to provide a prudential framework for the McCarran-Ferguson Act); § 306 (dealing quential referral of this important legisla- achieving that result. with expedited dispute resolution for dis- tion. I appreciate your willingness to work (6) To enhance the availability of financial putes between state and federal regulators); with me. services to citizens of all economic cir- § 314(a) (dealing with court jurisdiction over Sincerely, cumstances and in all geographic areas. litigation concerning redomesticated in- TOM BLILEY, (7) To enhance the competitiveness of surer); § 321(d) (dealing with court jurisdic- Chairman. United States financial service providers tion over litigation concerning reciprocity internationally. or uniformity determinations); § 335 (dealing U.S. HOUSE OF REPRESENTATIVES, (8) To ensure compliance by depository in- with court jurisdiction over litigation con- COMMITTEE ON BANKING AND FI- stitutions with the provisions of the Commu- NANCIAL SERVICES, cerning the National Association of Reg- nity Reinvestment Act of 1977 and enhance Washington, DC, June 15, 1999. istered Agents and Brokers). In addition, the ability of depository institutions to meet Hon. HENRY HYDE, there are at least two provisions of the bill the capital and credit needs of all citizens Chairman, Committee on the Judiciary, as reported by the Banking Committee over and communities, including underserved Washington, DC. communities and populations. which this committee has jurisdiction: § 179 DEAR HENRY: Thank you for your letter re- (creating new criminal and civil liability for (c) TABLE OF CONTENTS.—The table of con- garding the Judiciary Committee’s jurisdic- tents for this Act is as follows: violations of new privacy requirements) and tional interest in H.R. 10, the ‘‘Financial Sec. 1. Short title; purposes; table of con- § 193 (to the extent that it limits the claims Services Act of 1999.’’ of bankruptcy trustees). I recognize that the Committee on the Ju- tents. The foregoing list is intended to be as com- diciary has jurisdictional claims to those TITLE I—FACILITATING AFFILIATION AMONG SECURITIES FIRMS, INSUR- prehensive as possible, but any inadvertent provisions in H.R. 10 which affect the Bank- ANCE COMPANIES, AND DEPOSITORY omission of a provision in either the intro- ruptcy Code, criminal sanctions, antitrust INSTITUTIONS duced or reported versions of the bill that laws, the McCarran-Ferguson Act, adminis- the Committee would otherwise have juris- trative procedures and the court system. Subtitle A—Affiliations diction over does not waive that jurisdiction. Your willingness to waive the Committee’s Sec. 101. Glass-Steagall Act reformed. right to a sequential referral of this legisla- The Committee has not yet been able to ob- Sec. 102. Activity restrictions applicable to tion so that we may move it to the floor ex- tain a copy of the bill as ordered reported by bank holding companies which peditiously is appreciated. As outlined in the Commerce Committee, and it reserves its are not financial holding com- your letter, I will continue to work with you panies. rights with respect to any additional provi- in good faith to see that the thrust of the Ju- sions that may be included therein. Sec. 103. Financial holding companies. diciary Committee’s concerns will be ad- Sec. 104. Operation of State law. As you know, I have several relatively dressed as H.R. 10 goes to the floor. In addi- Sec. 105. Mutual bank holding companies minor concerns with the language of these tion, I agree with you that on the provisions authorized. provisions, and my staff has been working within the Judiciary Committee’s jurisdic- Sec. 105A. Public meetings for large bank with yours to resolve them. I am confident tion the Judiciary Committee should be rep- acquisitions and mergers. that we will resolve them in the near future. resented when the bill goes to conference. Sec. 106. Prohibition on deposit production For that reason, I am willing to waive the Thanks again for your cooperation. I ap- offices. Committee’s right to a sequential referral of preciate your willingness to work with the Sec. 107. Clarification of branch closure re- H.R. 10 subject to the good faith commit- Committee on Banking and Financial Serv- quirements. ment of all concerned that these minor con- ices. Sec. 108. Amendments relating to limited cerns will be addressed to our satisfaction ei- Sincerely, purpose banks. JAMES A. LEACH, ther in the base text made in order under the Sec. 109. GAO study of economic impact on Chairman. rule or a manager’s amendment which H.R. community banks, other small 10 goes to the floor. The CHAIRMAN. All time for general financial institutions, insur- debate has expired. ance agents, and consumers. However, my doing so does not constitute Pursuant to the rule, the amendment Sec. 110. Responsiveness to community any waiver of the Committee’s jurisdiction needs for financial services. over these provisions and does not prejudice in the nature of a substitute consisting Subtitle B—Streamlining Supervision of its rights in any future legislation relating of the text of the Committee on Rules Financial Holding Companies to these provisions or any other similar pro- print dated June 24, 1999, is considered visions that may be included in the Act. I as an original bill for the purpose of Sec. 111. Streamlining financial holding will, of course, insist that Members of this amendment under the 5-minute rule company supervision. Committee be named as conferees on these Sec. 112. Elimination of application require- and is considered read. ment for financial holding com- provisions or any other similar provisions in The text of the amendment in the na- panies. the bill should it go to conference. By sepa- ture of a substitute is as follows: Sec. 113. Authority of State insurance regu- rate letter, a copy of which is attached, I am Strike out all after the enacting clause and lator and Securities and Ex- making that request Speaker Hastert today. insert the following: change Commission. I appreciate your consideration of my SECTION 1. SHORT TITLE; PURPOSES; TABLE OF Sec. 114. Prudential safeguards. views on this issue. Please let me know if CONTENTS. Sec. 115. Examination of investment compa- you need any further information. (a) SHORT TITLE.—This Act may be cited as nies. Sincerely, the ‘‘Financial Services Act of 1999’’. Sec. 116. Limitation on rulemaking, pruden- HENRY J. HYDE, (b) PURPOSES.—The purposes of this Act tial, supervisory, and enforce- Chaiman. are as follows: ment authority of the Board. H5246 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Sec. 117. Equivalent regulation and super- Sec. 193. General Accounting Office study of Sec. 306. Expedited and equalized dispute vision. conflicts of interest. resolution for Federal regu- Sec. 118. Prohibition on FDIC assistance to Sec. 194. Study of cost of all Federal bank- lators. affiliates and subsidiaries. ing regulations. Sec. 307. Consumer protection regulations. Sec. 119. Repeal of savings bank provisions Sec. 195. Study and report on adapting exist- Sec. 308. Certain State affiliation laws pre- in the Bank Holding Company ing legislative requirements to empted for insurance compa- Act of 1956. online banking and lending. nies and affiliates. Sec. 120. Technical amendment. Sec. 196. Regulation of uninsured State Sec. 309. Interagency consultation. Subtitle C—Subsidiaries of National Banks member banks. Sec. 310. Definition of State. Sec. 197. Clarification of source of strength Sec. 121. Permissible activities for subsidi- Subtitle B—National Association of doctrine. aries of national banks. Registered Agents and Brokers Sec. 198. Interest rates and other charges at Sec. 122. Safety and soundness firewalls be- interstate branches. Sec. 321. State flexibility in multistate li- tween banks and their financial censing reforms. Subtitle L-Effective Date of Title subsidiaries. Sec. 322. National Association of Registered Sec. 123. Misrepresentations regarding de- Sec. 199. Effective date. Agents and Brokers. pository institution liability TITLE II—FUNCTIONAL REGULATION Sec. 323. Purpose. for obligations of affiliates. Subtitle A—Brokers and Dealers Sec. 324. Relationship to the Federal Gov- Sec. 124. Repeal of stock loan limit in Fed- ernment. eral Reserve Act. Sec. 201. Definition of broker. Sec. 202. Definition of dealer. Sec. 325. Membership. Subtitle D—Wholesale Financial Holding Sec. 203. Registration for sales of private se- Sec. 326. Board of directors. Companies; Wholesale Financial Institutions curities offerings. Sec. 327. Officers. CHAPTER 1—WHOLESALE FINANCIAL HOLDING Sec. 204. Information sharing. Sec. 328. Bylaws, rules, and disciplinary ac- COMPANIES Sec. 205. Treatment of new hybrid products. tion. Sec. 329. Assessments. Sec. 131. Wholesale financial holding compa- Sec. 206. Definition of excepted banking Sec. 330. Functions of the NAIC. nies established. product. Sec. 331. Liability of the Association and the Sec. 132. Authorization to release reports. Sec. 207. Additional definitions. Sec. 133. Conforming amendments. Sec. 208. Government securities defined. directors, officers, and employ- Sec. 209. Effective date. ees of the Association. CHAPTER 2—WHOLESALE FINANCIAL Sec. 210. Rule of construction. Sec. 332. Elimination of NAIC oversight. INSTITUTIONS Sec. 333. Relationship to State law. Subtitle B—Bank Investment Company Sec. 136. Wholesale financial institutions. Sec. 334. Coordination with other regulators. Activities Subtitle E—Preservation of FTC Authority Sec. 335. Judicial review. Sec. 211. Custody of investment company as- Sec. 336. Definitions. Sec. 141. Amendment to the Bank Holding sets by affiliated bank. Company Act of 1956 to modify Sec. 212. Lending to an affiliated investment Subtitle C—Rental Car Agency Insurance notification and post-approval company. Activities waiting period for section 3 Sec. 213. Independent directors. Sec. 341. Standard of regulation for motor transactions. Sec. 214. Additional SEC disclosure author- vehicle rentals. Sec. 142. Interagency data sharing. ity. Subtitle D—Confidentiality Sec. 143. Clarification of status of subsidi- Sec. 215. Definition of broker under the In- aries and affiliates. Sec. 351. Confidentiality of health and med- vestment Company Act of 1940. ical information. Sec. 144. Annual GAO report. Sec. 216. Definition of dealer under the In- Subtitle F—National Treatment vestment Company Act of 1940. TITLE IV—UNITARY SAVINGS AND LOAN HOLDING COMPANIES Sec. 151. Foreign banks that are financial Sec. 217. Removal of the exclusion from the holding companies. definition of investment adviser Sec. 401. Prohibition on new unitary savings Sec. 152. Foreign banks and foreign financial for banks that advise invest- and loan holding companies. institutions that are wholesale ment companies. Sec. 402. Retention of ‘‘Federal’’ in name of financial institutions. Sec. 218. Definition of broker under the In- converted Federal savings asso- Sec. 153. Representative offices. vestment Advisers Act of 1940. ciation. Sec. 154. Reciprocity. Sec. 219. Definition of dealer under the In- TITLE V—PRIVACY vestment Advisers Act of 1940. Subtitle G—Federal Home Loan Bank Subtitle A—Privacy Policy System Modernization Sec. 220. Interagency consultation. Sec. 221. Treatment of bank common trust Sec. 501. Depository institution privacy poli- Sec. 161. Short title. funds. cies. Sec. 162. Definitions. Sec. 222. Investment advisers prohibited Sec. 502. Study of current financial privacy Sec. 163. Savings association membership. from having controlling inter- laws. Sec. 164. Advances to members; collateral. est in registered investment Subtitle B—Fraudulent Access to Financial Sec. 165. Eligibility criteria. company. Information Sec. 166. Management of banks. Sec. 223. Statutory disqualification for bank Sec. 167. Resolution Funding Corporation. Sec. 521. Privacy protection for customer in- wrongdoing. formation of financial institu- Sec. 168. Capital structure of Federal home Sec. 224. Conforming change in definition. loan banks. tions. Sec. 225. Conforming amendment. Sec. 522. Administrative enforcement. Subtitle H—ATM Fee Reform Sec. 226. Church plan exclusion. Sec. 523. Criminal penalty. Sec. 227. Effective date. Sec. 171. Short title. Sec. 524. Relation to State laws. Sec. 172. Electronic fund transfer fee disclo- Subtitle C—Securities and Exchange Com- Sec. 525. Agency guidance. sures at any host ATM. mission Supervision of Investment Bank Sec. 526. Reports. Sec. 173. Disclosure of possible fees to con- Holding Companies Sec. 527. Definitions. sumers when ATM card is Sec. 231. Supervision of investment bank issued. holding companies by the Secu- TITLE I—FACILITATING AFFILIATION Sec. 174. Feasibility study. rities and Exchange Commis- AMONG SECURITIES FIRMS, INSURANCE Sec. 175. No liability if posted notices are sion. COMPANIES, AND DEPOSITORY INSTITU- damaged. TIONS Subtitle D—Disclosure of Customer Costs of Subtitle I—Direct Activities of Banks Acquiring Financial Products Subtitle A—Affiliations Sec. 181. Authority of national banks to un- Sec. 241. Improved and consistent disclosure. SEC. 101. GLASS-STEAGALL ACT REFORMED. derwrite certain municipal (a) SECTION 20 REPEALED.—Section 20 of the TITLE III—INSURANCE bonds. Banking Act of 1933 (12 U.S.C. 377) (com- Subtitle J—Deposit Insurance Funds Subtitle A—State Regulation of Insurance monly referred to as the ‘‘Glass-Steagall Sec. 301. State regulation of the business of Sec. 186. Study of safety and soundness of Act’’) is repealed. insurance. ECTION EPEALED funds. (b) S 32 R .—Section 32 of the Sec. 302. Mandatory insurance licensing re- Sec. 187. Elimination of SAIF and DIF spe- Banking Act of 1933 (12 U.S.C. 78) is repealed. quirements. cial reserves. SEC. 102. ACTIVITY RESTRICTIONS APPLICABLE Sec. 303. Functional regulation of insurance. TO BANK HOLDING COMPANIES Subtitle K—Miscellaneous Provisions Sec. 304. Insurance underwriting in national WHICH ARE NOT FINANCIAL HOLD- Sec. 191. Termination of ‘‘know your cus- banks. ING COMPANIES. tomer’’ regulations. Sec. 305. Title insurance activities of na- (a) IN GENERAL.—Section 4(c)(8) of the Sec. 192. Study and report on Federal elec- tional banks and their affili- Bank Holding Company Act of 1956 (12 U.S.C. tronic fund transfers. ates. 1843(c)(8)) is amended to read as follows: July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5247 ‘‘(8) shares of any company the activities action as may be necessary in order for such ‘‘(i) compete effectively with any company of which had been determined by the Board institution to achieve a rating of ‘satisfac- seeking to provide financial services in the by regulation or order under this paragraph tory record of meeting community credit United States; as of the day before the date of the enact- needs’, or better, at the next examination of ‘‘(ii) use any available or emerging techno- ment of the Financial Services Act of 1999, to the institution; and logical means, including any application be so closely related to banking as to be a ‘‘(B) the plan has been accepted by such necessary to protect the security or efficacy proper incident thereto (subject to such agency. of systems for the transmission of data or fi- terms and conditions contained in such regu- ‘‘(c) ENGAGING IN ACTIVITIES THAT ARE FI- nancial transactions, in providing financial lation or order, unless modified by the NANCIAL IN NATURE.— services; and Board);’’. ‘‘(1) FINANCIAL ACTIVITIES.— ‘‘(iii) offer customers any available or emerging technological means for using fi- (b) CONFORMING CHANGES TO OTHER STAT- ‘‘(A) IN GENERAL.—Notwithstanding section UTES.— 4(a), a financial holding company may en- nancial services. (1) AMENDMENT TO THE BANK HOLDING COM- gage in any activity, and acquire and retain ‘‘(3) ACTIVITIES THAT ARE FINANCIAL IN NA- PANY ACT AMENDMENTS OF 1970.—Section 105 of the shares of any company engaged in any TURE.—The following activities shall be con- the Bank Holding Company Act Amend- activity, that the Board has determined (by sidered to be financial in nature: ‘‘(A) Lending, exchanging, transferring, in- ments of 1970 (12 U.S.C. 1850) is amended by regulation or order and in accordance with vesting for others, or safeguarding money or striking ‘‘, to engage directly or indirectly in subparagraph (B)) to be— securities. a nonbanking activity pursuant to section 4 ‘‘(i) financial in nature or incidental to ‘‘(B) Insuring, guaranteeing, or indem- of such Act,’’. such financial activities; or nifying against loss, harm, damage, illness, (2) AMENDMENT TO THE BANK SERVICE COM- ‘‘(ii) complementary to activities author- disability, or death, or providing and issuing PANY ACT.—Section 4(f) of the Bank Service ized under this subsection to the extent that annuities, and acting as principal, agent, or Company Act (12 U.S.C. 1864(f)) is amended the amount of such complementary activi- broker for purposes of the foregoing. by striking the period and adding at the end ties remains small. ‘‘(C) Providing financial, investment, or the following: ‘‘as of the day before the date ‘‘(B) COORDINATION BETWEEN THE BOARD AND economic advisory services, including advis- of enactment of the Financial Services Act THE SECRETARY OF THE TREASURY.— ing an investment company (as defined in of 1999.’’. ‘‘(i) PROPOSALS RAISED BEFORE THE SEC. 103. FINANCIAL HOLDING COMPANIES. section 3 of the Investment Company Act of BOARD.— 1940). (a) IN GENERAL.—The Bank Holding Com- ‘‘(I) CONSULTATION.—The Board shall notify ‘‘(D) Issuing or selling instruments rep- pany Act of 1956 is amended by inserting the Secretary of the Treasury of, and consult resenting interests in pools of assets permis- after section 5 (12 U.S.C. 1844) the following with the Secretary of the Treasury con- sible for a bank to hold directly. new section: cerning, any request, proposal, or applica- ‘‘(E) Underwriting, dealing in, or making a ‘‘SEC. 6. FINANCIAL HOLDING COMPANIES. tion under this subsection, including a regu- market in securities. ‘‘(a) FINANCIAL HOLDING COMPANY DE- lation or order proposed under paragraph (4), ‘‘(F) Engaging in any activity that the FINED.—For purposes of this section, the for a determination of whether an activity is Board has determined, by order or regulation term ‘financial holding company’ means a financial in nature or incidental to such a fi- that is in effect on the date of enactment of bank holding company which meets the re- nancial activity. the Financial Services Act of 1999, to be so quirements of subsection (b). ‘‘(II) TREASURY VIEW.—The Board shall not closely related to banking or managing or ‘‘(b) ELIGIBILITY REQUIREMENTS FOR FINAN- determine that any activity is financial in controlling banks as to be a proper incident CIAL HOLDING COMPANIES.— nature or incidental to a financial activity thereto (subject to the same terms and con- ‘‘(1) IN GENERAL.—No bank holding com- under this subsection if the Secretary of the ditions contained in such order or regula- pany may engage in any activity or directly Treasury notifies the Board in writing, not tion, unless modified by the Board). or indirectly acquire or retain shares of any later than 30 days after the date of receipt of ‘‘(G) Engaging, in the United States, in company under this section unless the bank the notice described in subclause (I) (or such any activity that— holding company meets the following re- longer period as the Board determines to be ‘‘(i) a bank holding company may engage quirements: appropriate in light of the circumstances) in outside the United States; and ‘‘(A) All of the subsidiary depository insti- that the Secretary of the Treasury believes ‘‘(ii) the Board has determined, under regu- tutions of the bank holding company are that the activity is not financial in nature or lations issued pursuant to section 4(c)(13) of well capitalized. incidental to a financial activity. this Act (as in effect on the day before the ‘‘(B) All of the subsidiary depository insti- ‘‘(ii) PROPOSALS RAISED BY THE TREASURY.— date of enactment of the Financial Services tutions of the bank holding company are ‘‘(I) TREASURY RECOMMENDATION.—The Sec- Act of 1999) to be usual in connection with well managed. retary of the Treasury may, at any time, the transaction of banking or other financial ‘‘(C) All of the subsidiary depository insti- recommend in writing that the Board find an operations abroad. tutions of the bank holding company have activity to be financial in nature or inci- ‘‘(H) Directly or indirectly acquiring or achieved a rating of ‘satisfactory record of dental to a financial activity. controlling, whether as principal, on behalf meeting community credit needs’, or better, ‘‘(II) TIME PERIOD FOR BOARD ACTION.—Not of 1 or more entities (including entities, at the most recent examination of each such later than 30 days after the date of receipt of other than a depository institution, that the institution; a written recommendation from the Sec- bank holding company controls) or other- ‘‘(D) The company has filed with the Board retary of the Treasury under subclause (I) wise, shares, assets, or ownership interests a declaration that the company elects to be (or such longer period as the Secretary of the (including without limitation debt or equity a financial holding company and certifying Treasury and the Board determine to be ap- securities, partnership interests, trust cer- that the company meets the requirements of propriate in light of the circumstances), the tificates or other instruments representing subparagraphs (A), (B), and (C). Board shall determine whether to initiate a ownership) of a company or other entity, ‘‘(2) FOREIGN BANKS AND COMPANIES.—For public rulemaking proposing that the subject whether or not constituting control of such purposes of paragraph (1), the Board shall es- recommended activity be found to be finan- company or entity, engaged in any activity tablish and apply comparable capital and cial in nature or incidental to a financial ac- not authorized pursuant to this section if— other operating standards to a foreign bank tivity under this subsection, and shall notify ‘‘(i) the shares, assets, or ownership inter- that operates a branch or agency or owns or the Secretary of the Treasury in writing of ests are not acquired or held by a depository controls a bank or commercial lending com- the determination of the Board and, in the institution; pany in the United States, and any company event that the Board determines not to seek ‘‘(ii) such shares, assets, or ownership in- that owns or controls such foreign bank, giv- public comment on the proposal, the reasons terests are acquired and held by an affiliate ing due regard to the principle of national for that determination. of the bank holding company that is a reg- treatment and equality of competitive op- ‘‘(2) FACTORS TO BE CONSIDERED.—In deter- istered broker or dealer that is engaged in portunity. mining whether an activity is financial in securities underwriting activities, or an af- ‘‘(3) LIMITED EXCLUSIONS FROM COMMUNITY nature or incidental to financial activities, filiate of such broker or dealer, as part of a NEEDS REQUIREMENTS FOR NEWLY ACQUIRED the Board shall take into account— bona fide underwriting or investment bank- DEPOSITORY INSTITUTIONS.—Any depository ‘‘(A) the purposes of this Act and the Fi- ing activity, including investment activities institution acquired by a bank holding com- nancial Services Act of 1999; engaged in for the purpose of appreciation pany during the 12-month period preceding ‘‘(B) changes or reasonably expected and ultimate resale or disposition of the in- the submission of a notice under paragraph changes in the marketplace in which bank vestment; (1)(D) and any depository institution ac- holding companies compete; ‘‘(iii) such shares, assets, or ownership in- quired after the submission of such notice ‘‘(C) changes or reasonably expected terests are held only for such a period of may be excluded for purposes of paragraph changes in the technology for delivering fi- time as will permit the sale or disposition (1)(C) during the 12-month period beginning nancial services; and thereof on a reasonable basis consistent with on the date of such acquisition if— ‘‘(D) whether such activity is necessary or the nature of the activities described in ‘‘(A) the bank holding company has sub- appropriate to allow a bank holding com- clause (ii); and mitted an affirmative plan to the appro- pany and the affiliates of a bank holding ‘‘(iv) during the period such shares, assets, priate Federal banking agency to take such company to— or ownership interests are held, the bank H5248 CONGRESSIONAL RECORD — HOUSE July 1, 1999 holding company does not actively partici- consolidation, or other type of business com- riod as the Board may permit), the company pate in the day to day management or oper- bination, that— shall execute an agreement acceptable to the ation of such company or entity, except inso- ‘‘(i) is engaged in activities permitted Board to comply with the requirements ap- far as necessary to achieve the objectives of under this subsection or subsection (g); and plicable to a financial holding company. clause (ii). ‘‘(ii) has consolidated total assets in excess ‘‘(3) AUTHORITY TO IMPOSE LIMITATIONS.— ‘‘(I) Directly or indirectly acquiring or of $40,000,000,000, Until the conditions described in a notice to controlling, whether as principal, on behalf unless such holding company has provided a financial holding company under para- of 1 or more entities (including entities, notice to the Board, not later than 60 days graph (1) are corrected— other than a depository institution or sub- prior to such proposed acquisition or prior to ‘‘(A) the Board may impose such limita- sidiary of a depository institution, that the becoming a financial holding company, and tions on the conduct or activities of the com- bank holding company controls) or other- during that time period, or such longer time pany or any affiliate of the company as the wise, shares, assets, or ownership interests period not exceeding an additional 60 days, Board determines to be appropriate under (including without limitation debt or equity as established by the Board, the Board has the circumstances; and securities, partnership interests, trust cer- not issued a notice disapproving the pro- ‘‘(B) the appropriate Federal banking agen- tificates or other instruments representing posed acquisition or retention. cy may impose such limitations on the con- ownership) of a company or other entity, ‘‘(B) FACTORS FOR CONSIDERATION.—In re- duct or activities of an affiliated depository whether or not constituting control of such viewing any prior notice filed under this institution or subsidiary of a depository in- company or entity, engaged in any activity paragraph, the Board shall take into stitution as the appropriate Federal banking not authorized pursuant to this section if— consideration— agency determines to be appropriate under ‘‘(i) the shares, assets, or ownership inter- ‘‘(i) whether the company is in compliance the circumstances. ests are not acquired or held by a depository with all applicable criteria set forth in sub- ‘‘(4) FAILURE TO CORRECT.—If, after receiv- institution or a subsidiary of a depository in- section (b) and the provisions of subsection ing a notice under paragraph (1), a financial stitution; (d); holding company does not— ‘‘(ii) such shares, assets, or ownership in- ‘‘(ii) whether the proposed combination ‘‘(A) execute and implement an agreement terests are acquired and held by an insurance represents an undue aggregation of re- in accordance with paragraph (2); company that is predominantly engaged in sources; ‘‘(B) comply with any limitations imposed underwriting life, accident and health, or ‘‘(iii) whether the proposed combination under paragraph (3); property and casualty insurance (other than poses a risk to the deposit insurance system; ‘‘(C) in the case of a notice of failure to credit-related insurance) or providing and ‘‘(iv) whether the proposed combination comply with subsection (b)(1)(A), restore issuing annuities; poses a risk to State insurance guaranty each depository institution subsidiary to ‘‘(iii) such shares, assets, or ownership in- funds; well capitalized status before the end of the terests represent an investment made in the ‘‘(v) whether the proposed combination can 180-day period beginning on the date such no- ordinary course of business of such insurance reasonably be expected to be in the best in- tice is received by the company (or such company in accordance with relevant State terests of depositors or policyholders of the other period permitted by the Board); or law governing such investments; and respective entities; ‘‘(D) in the case of a notice of failure to ‘‘(iv) during the period such shares, assets, ‘‘(vi) whether the proposed transaction can comply with subparagraph (B) or (C) of sub- or ownership interests are held, the bank reasonably be expected to further the pur- section (b)(1), restore compliance with any holding company does not directly or indi- poses of this Act and produce benefits to the such subparagraph by the date the next ex- rectly participate in the day-to-day manage- public; and amination of the depository institution sub- ment or operation of the company or entity ‘‘(vii) whether, and the extent to which, sidiary is completed or by the end of such except insofar as necessary to achieve the the proposed combination poses an undue other period as the Board determines to be objectives of clauses (ii) and (iii). risk to the stability of the financial system appropriate, ‘‘(4) AUTHORIZATION OF NEW FINANCIAL AC- in the United States. the Board may require such company, under TIVITIES.—The Board shall, by regulation or ‘‘(C) REQUIRED INFORMATION.—The Board such terms and conditions as may be im- order and in accordance with paragraph may disapprove any prior notice filed under posed by the Board and subject to such ex- (1)(B), define, consistent with the purposes of this paragraph if the company submitting tension of time as may be granted in the this Act, the following activities as, and the such notice neglects, fails, or refuses to fur- Board’s discretion, to divest control of any extent to which such activities are, financial nish to the Board all relevant information depository institution subsidiary or, at the in nature or incidental to activities which required by the Board. election of the financial holding company, are financial in nature: ‘‘(D) SOLICITATION OF VIEWS OF OTHER SU- instead to cease to engage in any activity ‘‘(A) Lending, exchanging, transferring, in- PERVISORY AGENCIES.— conducted by such company or its subsidi- vesting for others, or safeguarding financial ‘‘(i) IN GENERAL.—Upon receiving a prior aries pursuant to this section. assets other than money or securities. notice under this paragraph, in order to pro- ‘‘(5) CONSULTATION.—In taking any action ‘‘(B) Providing any device or other instru- vide for the submission of their views and under this subsection, the Board shall con- mentality for transferring money or other fi- recommendations, the Board shall give no- sult with all relevant Federal and State reg- nancial assets. tice of the proposal to— ulatory agencies. ‘‘(C) Arranging, effecting, or facilitating fi- ‘‘(I) the appropriate Federal banking agen- ‘‘(e) SAFEGUARDS FOR BANK SUBSIDIARIES.— nancial transactions for the account of third cy of any bank involved; A financial holding company shall assure parties. ‘‘(II) the appropriate functional regulator that— ‘‘(5) POST-CONSUMMATION NOTIFICATION.— of any functionally regulated nondepository ‘‘(1) the procedures of the holding company ‘‘(A) IN GENERAL.—A financial holding institution (as defined in section 5(c)(1)(C)) for identifying and managing financial and company that acquires any company, or involved; and operational risks within the company, and commences any activity, pursuant to this ‘‘(III) the Secretary of the Treasury, the the subsidiaries of such company, adequately subsection shall provide written notice to Attorney General, and the Federal Trade protect the subsidiaries of such company the Board describing the activity com- Commission. which are insured depository institutions or menced or conducted by the company ac- ‘‘(ii) TIMING.—The views and recommenda- wholesale financial institution from such quired no later than 30 calendar days after tions of any agency provided notice under risks; commencing the activity or consummating this paragraph shall be submitted to the ‘‘(2) the holding company has reasonable the acquisition. Board not later than 30 calendar days after policies and procedures to preserve the sepa- ‘‘(B) APPROVAL NOT REQUIRED FOR CERTAIN the date on which notice to the agency was rate corporate identity and limited liability FINANCIAL ACTIVITIES.—Except as provided in given, unless the Board determines that an- of such company and the subsidiaries of such section 4(j) with regard to the acquisition of other shorter time period is appropriate. company, for the protection of the com- a savings association or in paragraph (6) of ‘‘(d) PROVISIONS APPLICABLE TO FINANCIAL pany’s subsidiary insured depository institu- this subsection, a financial holding company HOLDING COMPANIES THAT FAIL TO MEET RE- tions and wholesale financial institutions; may commence any activity, or acquire any QUIREMENTS.— and company, pursuant to paragraph (3) or any ‘‘(1) IN GENERAL.—If the Board finds, after ‘‘(3) the holding company complies with regulation prescribed or order issued under notice from or consultation with the appro- this section. paragraph (4), without prior approval of the priate Federal banking agency, that a finan- ‘‘(f) AUTHORITY TO RETAIN LIMITED NON- Board. cial holding company is not in compliance FINANCIAL ACTIVITIES AND AFFILIATIONS.— ‘‘(6) NOTICE REQUIRED FOR LARGE COMBINA- with the requirements of subparagraph (A), ‘‘(1) IN GENERAL.—Notwithstanding section TIONS.— (B), or (C) of subsection (b)(1), the Board 4(a), a company that is not a bank holding ‘‘(A) IN GENERAL.—No financial holding shall give notice of such finding to the com- company or a foreign bank (as defined in sec- company shall directly or indirectly acquire, pany. tion 1(b)(7) of the International Banking Act and no company that becomes a financial ‘‘(2) AGREEMENT TO CORRECT CONDITIONS RE- of 1978) and becomes a financial holding com- holding company shall directly or indirectly QUIRED.—Within 45 days of receipt by a fi- pany after the date of the enactment of the acquire control of, any company in the nancial holding company of a notice given Financial Services Act of 1999 may continue United States, including through merger, under paragraph (1) (or such additional pe- to engage in any activity and retain direct July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5249 or indirect ownership or control of shares of ditional 5 years if such extension would not Congress containing a summary of new ac- a company engaged in any activity if— be detrimental to the public interest. tivities which are financial in nature, includ- ‘‘(A) the holding company lawfully was en- ‘‘(g) DEVELOPING ACTIVITIES.—A financial ing grandfathered commercial activities, in gaged in the activity or held the shares of holding company may engage directly or in- which any financial holding company is en- such company on September 30, 1997; directly, or acquire shares of any company gaged pursuant to subsection (c)(1) or (f) of ‘‘(B) the holding company is predomi- engaged, in any activity that the Board has section 6 of the Bank Holding Company Act nantly engaged in financial activities as de- not determined to be financial in nature or of 1956 (as added by subsection (a)). fined in paragraph (2); and incidental to financial activities under sub- (2) OTHER CONTENTS.—Each report sub- ‘‘(C) the company engaged in such activity section (c) if— mitted to the Congress pursuant to para- continues to engage only in the same activi- ‘‘(1) the holding company reasonably con- graph (1) shall also contain the following: ties that such company conducted on Sep- cludes that the activity is financial in na- (A) A discussion of actions by the Board of tember 30, 1997, and other activities permis- ture or incidental to financial activities; Governors of the Federal Reserve System sible under this Act. ‘‘(2) the gross revenues from all activities and the Secretary of the Treasury, whether ‘‘(2) PREDOMINANTLY FINANCIAL.—For pur- conducted under this subsection represent by regulation, order, interpretation, or poses of this subsection, a company is pre- less than 5 percent of the consolidated gross guideline or by approval or disapproval of an dominantly engaged in financial activities if revenues of the holding company; application, with regard to activities of fi- the annual gross revenues derived by the ‘‘(3) the aggregate total assets of all com- nancial holding companies which are inci- holding company and all subsidiaries of the panies the shares of which are held under dental to activities financial in nature or holding company (excluding revenues de- this subsection do not exceed 5 percent of the complementary to such financial activities. rived from subsidiary depository institu- holding company’s consolidated total assets; (B) An analysis and discussion of the risks tions), on a consolidated basis, from engag- ‘‘(4) the total capital invested in activities posed by commercial activities of financial ing in activities that are financial in nature conducted under this subsection represents holding companies to the safety and sound- or are incidental to activities that are finan- less than 5 percent of the consolidated total ness of affiliate depository institutions. cial in nature under subsection (c) represent capital of the holding company; (C) An analysis and discussion of the effect at least 85 percent of the consolidated annual ‘‘(5) neither the Board nor the Secretary of of mergers and acquisitions under section 6 gross revenues of the company. the Treasury has determined that the activ- of the Bank Holding Company Act of 1956 on ‘‘(3) NO EXPANSION OF GRANDFATHERED COM- ity is not financial in nature or incidental to market concentration in the financial serv- MERCIAL ACTIVITIES THROUGH MERGER OR CON- financial activities under subsection (c); ices industry. SOLIDATION.—A financial holding company ‘‘(6) the holding company is not required to (D) An analysis and discussion, by the that engages in activities or holds shares provide prior written notice of the trans- Board and the Secretary in consultation pursuant to this subsection, or a subsidiary action to the Board under subsection (c)(6); with the other Federal banking agencies (as of such financial holding company, may not and defined in section 3(z) of the Federal Deposit acquire, in any merger, consolidation, or ‘‘(7) the holding company provides written Insurance Act), of the impact of the imple- other type of business combination, assets of notification to the Board describing the ac- mentation of this Act, and the amendments any other company which is engaged in any tivity commenced or conducted by the com- made by this Act, on the extent of meeting activity which the Board has not determined pany acquired no later than 10 business days community credit needs and capital avail- to be financial in nature or incidental to ac- after commencing the activity or consum- ability under the Community Reinvestment tivities that are financial in nature under mating the acquisition.’’. Act of 1977. subsection (c). (b) FACTORS FOR CONSIDERATION IN REVIEW- SEC. 104. OPERATION OF STATE LAW. ‘‘(4) CONTINUING REVENUE LIMITATION ON ING APPLICATION BY FINANCIAL HOLDING COM- (a) AFFILIATIONS.— GRANDFATHERED COMMERCIAL ACTIVITIES.— PANY TO ACQUIRE BANK.—Section 3(c) of the Notwithstanding any other provision of this Bank Holding Company Act of 1956 (12 U.S.C. (1) IN GENERAL.—Except as provided in subsection, a financial holding company may 1842(c)) is amended by adding at the end the paragraph (2), no State may, by statute, reg- continue to engage in activities or hold following new paragraph: ulation, order, interpretation, or other ac- shares in companies pursuant to this sub- ‘‘(6) ‘TOO BIG TO FAIL’ FACTOR.—In consid- tion, prevent or restrict an insured deposi- section only to the extent that the aggregate ering an acquisition, merger, or consolida- tory institution or wholesale financial insti- annual gross revenues derived from all such tion under this section involving a financial tution, or a subsidiary or affiliate thereof, activities and all such companies does not holding company or a company that would from being affiliated directly or indirectly or exceed 15 percent of the consolidated annual be any such holding company upon the con- associated with any person or entity, as au- gross revenues of the financial holding com- summation of the transaction, the Board thorized or permitted by this Act or any pany (excluding revenues derived from sub- shall consider whether, and the extent to other provision of Federal law. sidiary depository institutions). which, the proposed acquisition, merger, or (2) INSURANCE.—With respect to affiliations ‘‘(5) CROSS MARKETING RESTRICTIONS APPLI- consolidation poses an undue risk to the sta- between insured depository institutions or CABLE TO COMMERCIAL ACTIVITIES.—A deposi- bility of the financial system of the United wholesale financial institutions, or any sub- tory institution controlled by a financial States.’’. sidiary or affiliate thereof, and persons or holding company shall not— (c) TECHNICAL AND CONFORMING AMEND- entities engaged in the business of insurance, ‘‘(A) offer or market, directly or through MENTS.— paragraph (1) does not prohibit— any arrangement, any product or service of a (1) Section 2 of the Bank Holding Company (A) any State from requiring any person or company whose activities are conducted or Act of 1956 (12 U.S.C. 1841) is amended by add- entity that proposes to acquire control of an whose shares are owned or controlled by the ing at the end the following new subsection: entity that is engaged in the business of in- financial holding company pursuant to this ‘‘(p) INSURANCE COMPANY.—For purposes of surance and domiciled in that State (here- subsection or subparagraph (H) or (I) of sub- sections 5, 6, and 10, the term ‘insurance after in this subparagraph referred to as the section (c)(3); or company’ includes any person engaged in the ‘‘insurer’’) to furnish to the insurance regu- ‘‘(B) permit any of its products or services business of insurance to the extent of such latory authority of that State, not later to be offered or marketed, directly or activities.’’. than 60 days before the effective date of the through any arrangement, by or through any (2) Section 4(j) of the Bank Holding Com- proposed acquisition— company described in subparagraph (A). pany Act of 1956 (12 U.S.C. 1843(j)) is (i) the name and address of each person by ‘‘(6) TRANSACTIONS WITH NONFINANCIAL AF- amended— whom, or on whose behalf, the affiliation re- FILIATES.—A depository institution con- (1) in paragraph (1)(A), by inserting ‘‘or in ferred to in this subparagraph is to be ef- trolled by a financial holding company may any complementary activity under section fected (hereafter in this subparagraph re- not engage in a covered transaction (as de- 6(c)(1)(B)’’ after ‘‘subsection (c)(8) or (a)(2)’’; ferred to as the ‘‘acquiring party’’); fined by section 23A(b)(7) of the Federal Re- and (ii) if the acquiring party is an individual, serve Act) with any affiliate controlled by (2) in paragraph (3)— his or her principal occupation and all of- the company pursuant to section 10(c), this (A) by inserting ‘‘, other than any com- fices and positions held during the 5 years subsection, or subparagraph (H) or (I) of sub- plementary activity under section preceding the date of notification, and any section (c)(3). 6(c)(1)(B),’’ after ‘‘to engage in any activity’’; conviction of crimes other than minor traffic ‘‘(7) SUNSET OF GRANDFATHER.—A financial and violations during the 10 years preceding the holding company engaged in any activity, or (B) by inserting ‘‘or a company engaged in date of notification; retaining direct or indirect ownership or any complementary activity under section (iii) if the acquiring party is not an control of shares of a company, pursuant to 6(c)(1)(B)’’ after ‘‘insured depository institu- individual— this subsection, shall terminate such activ- tion’’. (I) a report of the nature of its business op- ity and divest ownership or control of the (d) REPORT.— erations during the 5 years preceding the shares of such company before the end of the (1) IN GENERAL.—By the end of the 4-year date of notification, or for such shorter pe- 10-year period beginning on the date of the period beginning on the date of the enact- riod as such person and any predecessors enactment of the Financial Services Act of ment of this Act and every 4 years there- thereof shall have been in existence; 1999. The Board may, upon application by a after, the Board of Governors of the Federal (II) an informative description of the busi- financial holding company, extend such 10- Reserve System and the Secretary of the ness intended to be done by the acquiring year period by a period not to exceed an ad- Treasury shall submit a joint report to the party and any subsidiary thereof; and H5250 CONGRESSIONAL RECORD — HOUSE July 1, 1999 (III) a list of all individuals who are, or tion to be paid to broker-dealers with regard tion 5 relates to unfair methods of competi- who have been selected to become, directors thereto; tion. or executive officers of the acquiring party (B) in the case of a person engaged in the (b) ACTIVITIES.— or who perform, or will perform, functions business of insurance which is the subject of (1) IN GENERAL.—Except as provided in appropriate to such positions, including, for an acquisition or change or continuation in paragraph (3), and except with respect to in- each such individual, the information re- control, the State of domicile of such person surance sales, solicitation, and cross mar- quired by clause (ii); from reviewing or taking action (including keting activities, which shall be governed by (iv) the source, nature, and amount of the approval or disapproval) with regard to the paragraph (2), no State may, by statute, reg- consideration used, or to be used, in effecting acquisition or change or continuation in con- ulation, order, interpretation, or other ac- the merger or other acquisition of control, a trol, as long as the State reviews and tion, prevent or restrict an insured deposi- description of any transaction wherein funds actions— tory institution, wholesale financial institu- were, or are to be, obtained for any such pur- (i) are completed by the end of the 60-day tion, or subsidiary or affiliate thereof from pose, and the identity of persons furnishing period beginning on the later of the date the engaging directly or indirectly, either by such consideration, except that, if a source State received notice of the proposed action itself or in conjunction with a subsidiary, af- of such consideration is a loan made in the or the date the State received the informa- filiate, or any other entity or person, in any lender’s ordinary course of business, the tion required under State law regarding such activity authorized or permitted under this identity of the lender shall remain confiden- acquisition or change or continuation in con- Act. tial if the person filing such statement so re- trol; (2) INSURANCE SALES.— quests; (ii) do not have the effect of discrimi- (A) IN GENERAL.—In accordance with the (v) fully audited financial information as nating, intentionally or unintentionally, legal standards for preemption set forth in to the earnings and financial condition of against an insured depository institution or the decision of the Supreme Court of the each acquiring party for the 5 fiscal years affiliate thereof or against any other person United States in Barnett Bank of Marion preceding the date of notification of each based upon affiliation with an insured depos- County N.A. v. Nelson, 517 U.S. 25 (1996), no such acquiring party, or for such lesser pe- itory institution; and State may, by statute, regulation, order, in- riod as such acquiring party and any prede- (iii) are based on standards or require- terpretation, or other action, prevent or sig- cessors thereof shall have been in existence, ments relating to solvency or managerial fit- nificantly interfere with the ability of an in- and similar unaudited information as of a ness; sured depository institution or wholesale fi- date not earlier than 90 days before the date (C) any State from requiring an entity that nancial institution, or a subsidiary or affil- of notification, except that, in the case of an is acquiring control of an entity that is en- iate thereof, to engage, directly or indi- acquiring party that is an insurer actively gaged in the business of insurance and domi- rectly, either by itself or in conjunction with engaged in the business of insurance, the fi- ciled in that State to maintain or restore the a subsidiary, affiliate, or any other party, in nancial statements of such insurer need not capital requirements of that insurance enti- any insurance sales, solicitation, or cross- be audited, but such audit may be required if ty to the level required under the capital marketing activity. the need therefor is determined by the insur- regulations of general applicability in that (B) CERTAIN STATE LAWS PRESERVED.—Not- ance regulatory authority of the State; State to avoid the requirement of preparing withstanding subparagraph (A), a State may (vi) any plans or proposals that each ac- and filing with the insurance regulatory au- impose any of the following restrictions, or quiring party may have to liquidate such in- thority of that State a plan to increase the restrictions which are substantially the surer, to sell its assets, or to merge or con- capital of the entity, except that any deter- same as but no more burdensome or restric- solidate it with any person or to make any mination by the State insurance regulatory tive than those in each of the following other material change in its business or cor- authority with respect to such requirement clauses: porate structure or management; shall be made not later than 60 days after the (i) Restrictions prohibiting the rejection of (vii) the number of shares of any security date of notification under subparagraph (A); an insurance policy by an insured depository of the insurer that each acquiring party pro- (D) any State from taking actions with re- institution, wholesale financial institution, poses to acquire, the terms of any offer, re- spect to the receivership or conservatorship or any subsidiary or affiliate thereof, solely quest, invitation, agreement, or acquisition, of any insurance company; because the policy has been issued or under- and a statement as to the method by which (E) any State from restricting a change in written by any person who is not associated the fairness of the proposal was arrived at; the ownership of stock in an insurance com- with such insured depository institution or (viii) the amount of each class of any secu- pany, or a company formed for the purpose wholesale financial institution, or any sub- rity of the insurer that is beneficially owned of controlling such insurance company, for a sidiary or affiliate thereof, when such insur- or concerning which there is a right to ac- period of not more than 3 years beginning on ance is required in connection with a loan or quire beneficial ownership by each acquiring the date of the conversion of such company extension of credit. party; from mutual to stock form; or (ii) Restrictions prohibiting a requirement (ix) a full description of any contracts, ar- (F) any State from requiring an organiza- for any debtor, insurer, or insurance agent or rangements, or understandings with respect tion which has been eligible at any time broker to pay a separate charge in connec- to any security of the insurer in which any since January 1, 1987, to claim the special de- tion with the handling of insurance that is acquiring party is involved, including trans- duction provided by section 833 of the Inter- required in connection with a loan or other fer of any of the securities, joint ventures, nal Revenue Code of 1986 to meet certain extension of credit or the provision of an- loan or option arrangements, puts or calls, conditions in order to undergo, as deter- other traditional banking product by an in- guarantees of loans, guarantees against loss mined by the State, a reorganization, recapi- sured depository institution, wholesale fi- or guarantees of profits, division of losses or talization, conversion, merger, consolida- nancial institution, or any subsidiary or af- profits, or the giving or withholding of prox- tion, sale or other disposition of substantial filiate thereof, unless such charge would be ies, and identification of the persons with operating assets, demutualization, dissolu- required when the insured depository insti- whom such contracts, arrangements, or un- tion, or to undertake other similar actions tution or wholesale financial institution, or derstandings have been entered into; and which is governed under a State statute any subsidiary or affiliate thereof, is the li- (x) a description of the purchase of any se- enacted on May 22, 1998, relating to hospital, censed insurance agent or broker providing curity of the insurer during the 12-month pe- medical, and dental service corporation con- the insurance. riod preceding the date of notification by versions. (iii) Restrictions prohibiting the use of any any acquiring party, including the dates of (3) PRESERVATION OF STATE ANTITRUST AND advertisement or other insurance pro- purchase, names of the purchasers, and con- GENERAL CORPORATE LAWS.— motional material by an insured depository sideration paid, or agreed to be paid, there- (A) IN GENERAL.—Subject to subsection (c) institution or wholesale financial institu- for; and the nondiscrimination provisions con- tion, or any subsidiary or affiliate thereof, (xi) a description of any recommendations tained in such subsection, no provision in that would cause a reasonable person to be- to purchase any security of the insurer made paragraph (1) shall be construed as affecting lieve mistakenly that— during the 12-month period preceding the State laws, regulations, orders, interpreta- (I) a State or the Federal Government is date of notification by any acquiring party tions, or other actions of general applica- responsible for the insurance sales activities or by any person based upon interviews or at bility relating to the governance of corpora- of, or stands behind the credit of, the institu- the suggestion of such acquiring party; tions, partnerships, limited liability compa- tion, affiliate, or subsidiary; or (xii) copies of all tender offers for, requests nies or other business associations incor- (II) a State, or the Federal Government or invitations for tenders of, exchange offers porated or formed under the laws of that guarantees any returns on insurance prod- for and agreements to acquire or exchange State or domiciled in that State, or the ap- ucts, or is a source of payment on any insur- any securities of the insurer and, if distrib- plicability of the antitrust laws of any State ance obligation of or sold by the institution, uted, of additional soliciting material relat- or any State law that is similar to the anti- affiliate, or subsidiary; ing thereto; and trust laws. (iv) Restrictions prohibiting the payment (xiii) the terms of any agreement, con- (B) DEFINITION.—The term ‘‘antitrust or receipt of any commission or brokerage tract, or understanding made with any laws’’ has the same meaning as in subsection fee or other valuable consideration for serv- broker-dealer as to solicitation of securities (a) of the first section of the Clayton Act, ices as an insurance agent or broker to or by of the insurer for tender and the amount of and includes section 5 of the Federal Trade any person, unless such person holds a valid any fees, commissions, or other compensa- Commission Act to the extent that such sec- State license regarding the applicable class July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5251 of insurance at the time at which the serv- insured depository institution or wholesale other action that is not referred to or de- ices are performed, except that, in this financial institution or any affiliate or sub- scribed in this paragraph. clause, the term ‘‘services as an insurance sidiary thereof, that a written disclosure be (3) INSURANCE ACTIVITIES OTHER THAN agent or broker’’ does not include a referral provided to the consumer or prospective cus- SALES.—State statutes, regulations, inter- by an unlicensed person of a customer or po- tomer indicating that his or her choice of an pretations, orders, and other actions shall tential customer to a licensed insurance insurance provider will not affect the credit not be preempted under subsection (b)(1) to agent or broker that does not include a dis- decision or credit terms in any way, except the extent that they— cussion of specific insurance policy terms that the insured depository institution or (A) relate to, or are issued, adopted, or en- and conditions. wholesale financial institution may impose acted for the purpose of regulating the busi- (v) Restrictions prohibiting any compensa- reasonable requirements concerning the ness of insurance in accordance with the Act tion paid to or received by any individual creditworthiness of the insurance provider of March 9, 1945 (commonly known as the who is not licensed to sell insurance, for the and scope of coverage chosen. ‘‘McCarran-Ferguson Act’’); referral of a customer that seeks to pur- (x) Restrictions requiring clear and con- (B) apply only to persons or entities that chase, or seeks an opinion or advice on, any spicuous disclosure, in writing, where prac- are not insured depository institutions or insurance product to a person that sells or ticable, to the customer prior to the sale of wholesale financial institutions, but that are provides opinions or advice on such product, any insurance policy that such policy— directly engaged in the business of insurance based on the purchase of insurance by the (I) is not a deposit; (except that they may apply to depository customer. (II) is not insured by the Federal Deposit institutions engaged in providing savings (vi) Restrictions prohibiting the release of Insurance Corporation; bank life insurance as principal to the extent the insurance information of a customer (de- (III) is not guaranteed by the insured de- of regulating such insurance); fined as information concerning the pre- pository institution or wholesale financial (C) do not relate to or directly or indi- miums, terms, and conditions of insurance institution or, if appropriate, its subsidiaries rectly regulate insurance sales, solicitations, coverage, including expiration dates and or affiliates or any person soliciting the pur- or cross-marketing activities; and rates, and insurance claims of a customer chase of or selling insurance on the premises (D) are not prohibited under subsection (c). contained in the records of the insured de- thereof; and (4) FINANCIAL ACTIVITIES OTHER THAN INSUR- pository institution or wholesale financial ANCE.—No State statute, regulation, inter- institution, or a subsidiary or affiliate there- (IV) where appropriate, involves invest- ment risk, including potential loss of prin- pretation, order, or other action shall be pre- of) to any person or entity other than an of- empted under subsection (b)(1) to the extent ficer, director, employee, agent, subsidiary, cipal. (xi) Restrictions requiring that, when a that— or affiliate of an insured depository institu- (A) it does not relate to, and is not issued tion or a wholesale financial institution, for customer obtains insurance (other than cred- it insurance or flood insurance) and credit and adopted, or enacted for the purpose of the purpose of soliciting or selling insurance, regulating, directly or indirectly, insurance without the express consent of the customer, from an insured depository institution or wholesale financial institution, or its sub- sales, solicitations, or cross marketing ac- other than a provision that prohibits— tivities covered under paragraph (2); (I) a transfer of insurance information to sidiaries or affiliates, or any person solic- iting the purchase of or selling insurance on (B) it does not relate to, and is not issued an unaffiliated insurance company, agent, or and adopted, or enacted for the purpose of broker in connection with transferring insur- the premises thereof, the credit and insur- regulating, directly or indirectly, the busi- ance in force on existing insureds of the in- ance transactions be completed through sep- ness of insurance activities other than sales, sured depository institution or wholesale fi- arate documents. solicitations, or cross marketing activities, nancial institution, or subsidiary or affiliate (xii) Restrictions prohibiting, when a cus- covered under paragraph (3); thereof, or in connection with a merger with tomer obtains insurance (other than credit (C) it does not relate to securities inves- or acquisition of an unaffiliated insurance insurance or flood insurance) and credit from tigations or enforcement actions referred to company, agent, or broker; or an insured depository institution or whole- in subsection (d); and (II) the release of information as otherwise sale financial institution or its subsidiaries (D) it— authorized by State or Federal law. or affiliates, or any person soliciting the pur- (i) does not distinguish by its terms be- (vii) Restrictions prohibiting the use of chase of or selling insurance on the premises health information obtained from the insur- thereof, inclusion of the expense of insurance tween insured depository institutions, ance records of a customer for any purpose, premiums in the primary credit transaction wholesale financial institutions, and subsidi- other than for its activities as a licensed without the express written consent of the aries and affiliates thereof engaged in the ac- agent or broker, without the express consent customer. tivity at issue and other persons or entities of the customer. (xiii) Restrictions requiring maintenance engaged in the same activity in a manner (viii) Restrictions prohibiting the exten- of separate and distinct books and records that is in any way adverse with respect to sion of credit or any product or service that relating to insurance transactions, including the conduct of the activity by any such in- is equivalent to an extension of credit, lease all files relating to and reflecting consumer sured depository institution, wholesale fi- or sale of property of any kind, or furnishing complaints, and requiring that such insur- nancial institution, or subsidiary or affiliate of any services or fixing or varying the con- ance books and records be made available to thereof engaged in the activity at issue; sideration for any of the foregoing, on the the appropriate State insurance regulator (ii) as interpreted or applied, does not condition or requirement that the customer for inspection upon reasonable notice. have, and will not have, an impact on deposi- obtain insurance from an insured depository (C) LIMITATIONS.— tory institutions, wholesale financial insti- institution, wholesale financial institution, (i) OCC DEFERENCE.—Section 306(e) does tutions, or subsidiaries or affiliates thereof a subsidiary or affiliate thereof, or a par- not apply with respect to any State statute, engaged in the activity at issue, or any per- ticular insurer, agent, or broker, other than regulation, order, interpretation, or other son or entity affiliated therewith, that is a prohibition that would prevent any insured action regarding insurance sales, solicita- substantially more adverse than its impact depository institution or wholesale financial tion, or cross marketing activities described on other persons or entities engaged in the institution, or any subsidiary or affiliate in subparagraph (A) that was issued, adopt- same activity that are not insured deposi- thereof— ed, or enacted before September 3, 1998, and tory institutions, wholesale financial insti- (I) from engaging in any activity described that is not described in subparagraph (B). tutions, or subsidiaries or affiliates thereof, in this clause that would not violate section (ii) NONDISCRIMINATION.—Subsection (c) or persons or entities affiliated therewith; 106 of the Bank Holding Company Act does not apply with respect to any State (iii) does not effectively prevent a deposi- Amendments of 1970, as interpreted by the statute, regulation, order, interpretation, or tory institution, wholesale financial institu- Board of Governors of the Federal Reserve other action regarding insurance sales, solic- tion, or subsidiary or affiliate thereof from System; or itation, or cross marketing activities de- engaging in activities authorized or per- (II) from informing a customer or prospec- scribed in subparagraph (A) that was issued, mitted by this Act or any other provision of tive customer that insurance is required in adopted, or enacted before September 3, 1998, Federal law; and order to obtain a loan or credit, that loan or and that is not described in subparagraph (iv) does not conflict with the intent of credit approval is contingent upon the pro- (B). this Act generally to permit affiliations that curement by the customer of acceptable in- (iii) CONSTRUCTION.—Nothing in this para- are authorized or permitted by Federal law. surance, or that insurance is available from graph shall be construed to limit the applica- (c) NONDISCRIMINATION.—Except as pro- the insured depository institution or whole- bility of the decision of the Supreme Court vided in any restrictions described in sub- sale financial institution, or any subsidiary in Barnett Bank of Marion County N.A. v. section (b)(2)(B), no State may, by statute, or affiliate thereof. Nelson, 116 S. Ct. 1103 (1996) with respect to regulation, order, interpretation, or other (ix) Restrictions requiring, when an appli- a State statute, regulation, order, interpre- action, regulate the insurance activities au- cation by a consumer for a loan or other ex- tation, or other action that is not described thorized or permitted under this Act or any tension of credit from an insured depository in subparagraph (B). other provision of Federal law of an insured institution or wholesale financial institution (iv) LIMITATION ON INFERENCES.—Nothing in depository institution or wholesale financial is pending, and insurance is offered or sold to this paragraph shall be construed to create institution, or subsidiary or affiliate thereof, the consumer or is required in connection any inference with respect to any State stat- to the extent that such statute, regulation, with the loan or extension of credit by the ute, regulation, order, interpretation, or order, interpretation, or other action— H5252 CONGRESSIONAL RECORD — HOUSE July 1, 1999 (1) distinguishes by its terms between in- tions each of which has total assets of (C) by inserting after subclause (X) the fol- sured depository institutions or wholesale fi- $1,000,000,000 or more, the Board shall, as nec- lowing new subclause: nancial institutions, or subsidiaries or affili- essary and on a timely basis, conduct public ‘‘(XI) assets that are derived from, or are ates thereof, and other persons or entities meetings in 1 or more areas where the Board incidental to, consumer lending activities in engaged in such activities, in a manner that believes, in the sole discretion of the Board, which institutions described in subparagraph is in any way adverse to any such insured de- there will be a substantial public impact.’’. (F) or (H) of section 2(c)(2) are permitted to pository institution or wholesale financial (b) FEDERAL DEPOSIT INSURANCE ACT.—Sec- engage,’’; institution, or subsidiary or affiliate thereof; tion 18(c) of the Federal Deposit Insurance (2) in paragraph (2), by striking subpara- (2) as interpreted or applied, has or will Act (12 U.S.C. 1828(c)) is amended by adding graph (B) and inserting the following new have an impact on depository institutions or at the end the following new paragraph: subparagraphs: wholesale financial institutions, or subsidi- ‘‘(12) PUBLIC MEETINGS.—In each merger ‘‘(B) any bank subsidiary of such company aries or affiliates thereof, that is substan- transaction involving 1 or more insured de- engages in any activity in which the bank tially more adverse than its impact on other pository institutions each of which has total was not lawfully engaged as of March 5, 1987, persons or entities providing the same prod- assets of $1,000,000,000 or more, the respon- unless the bank is well managed and well ucts or services or engaged in the same ac- sible agency shall, as necessary and on a capitalized; tivities that are not insured depository insti- timely basis, conduct public meetings in 1 or ‘‘(C) any bank subsidiary of such company tutions, wholesale financial institutions, or more areas where the agency believes, in the both— subsidiaries or affiliates thereof, or persons sole discretion of the agency, there will be a ‘‘(i) accepts demand deposits or deposits or entities affiliated therewith; substantial public impact.’’. that the depositor may withdraw by check or (3) effectively prevents a depository insti- (c) NATIONAL BANK CONSOLIDATION AND similar means for payment to third parties; tution or wholesale financial institution, or MERGER ACT.—The National Bank Consolida- and subsidiary or affiliate thereof, from engaging tion and Merger Act (12 U.S.C. 215 et seq.) is ‘‘(ii) engages in the business of making in insurance activities authorized or per- amended by adding at the end the following commercial loans (and, for purposes of this mitted by this Act or any other provision of new section: clause, loans made in the ordinary course of Federal law; or ‘‘SEC. 6. PUBLIC MEETINGS FOR LARGE BANK a credit card operation shall not be treated (4) conflicts with the intent of this Act CONSOLIDATIONS AND MERGERS. as commercial loans); or generally to permit affiliations that are au- ‘‘In each case of a consolidation or merger ‘‘(D) after the date of the enactment of the thorized or permitted by Federal law be- under this Act involving 1 or more banks Competitive Equality Amendments of 1987, tween insured depository institutions or each of which has total assets of $1,000,000,000 any bank subsidiary of such company per- wholesale financial institutions, or subsidi- or more, the Comptroller shall, as necessary mits any overdraft (including any intraday aries or affiliates thereof, and persons and and on a timely basis, conduct public meet- overdraft), or incurs any such overdraft in entities engaged in the business of insurance. ings in 1 or more areas where the Comp- such bank’s account at a Federal reserve troller believes, in the sole discretion of the bank, on behalf of an affiliate, other than an (d) LIMITATION.—Subsections (a) and (b) shall not be construed to affect the jurisdic- Comptroller, there will be a substantial pub- overdraft described in paragraph (3).’’; and tion of the securities commission (or any lic impact.’’. (3) by striking paragraphs (3) and (4) and (d) HOME OWNERS’ LOAN ACT.—Section 10(e) agency or office performing like functions) inserting the following new paragraphs: of the Home Owners’ Loan Act (12 U.S.C. ‘‘(3) PERMISSIBLE OVERDRAFTS DESCRIBED.— of any State, under the laws of such State— 1463) is amended by adding at the end the fol- For purposes of paragraph (2)(D), an over- (1) to investigate and bring enforcement lowing new paragraph: draft is described in this paragraph if— actions, consistent with section 18(c) of the ‘‘(7) PUBLIC MEETINGS FOR LARGE DEPOSI- ‘‘(A) such overdraft results from an inad- Securities Act of 1933, with respect to fraud TORY INSTITUTION ACQUISITIONS AND MERG- vertent computer or accounting error that is or deceit or unlawful conduct by any person, ERS.—In each case involving 1 or more in- beyond the control of both the bank and the in connection with securities or securities sured depository institutions each of which affiliate; transactions; or has total assets of $1,000,000,000 or more, the ‘‘(B) such overdraft— (2) to require the registration of securities Director shall, as necessary and on a timely ‘‘(i) is permitted or incurred on behalf of or the licensure or registration of brokers, basis, conduct public meetings in 1 or more an affiliate which is monitored by, reports dealers, or investment advisers (consistent areas where the Director believes, in the sole to, and is recognized as a primary dealer by with section 203A of the Investment Advisers discretion of the Director, there will be a the Federal Reserve Bank of New York; and Act of 1940), or the associated persons of a substantial public impact.’’. ‘‘(ii) is fully secured, as required by the broker, dealer, or investment adviser (con- Board, by bonds, notes, or other obligations sistent with such section 203A). SEC. 106. PROHIBITION ON DEPOSIT PRODUC- TION OFFICES. which are direct obligations of the United (e) DEFINITIONS.—For purposes of this sec- (a) IN GENERAL.—Section 109(d) of the Rie- States or on which the principal and interest tion, the following definitions shall apply: gle-Neal Interstate Banking and Branching are fully guaranteed by the United States or (1) INSURED DEPOSITORY INSTITUTION.—The Efficiency Act of 1994 (12 U.S.C. 1835a(d)) is by securities and obligations eligible for set- term ‘‘insured depository institution’’ in- amended— tlement on the Federal Reserve book entry cludes any foreign bank that maintains a (1) by inserting ‘‘, the Financial Services system; or branch, agency, or commercial lending com- Act of 1999,’’ after ‘‘pursuant to this title’’; ‘‘(C) such overdraft— pany in the United States. and ‘‘(i) is incurred on behalf of an affiliate (2) STATE.—The term ‘‘State’’ means any (2) by inserting ‘‘or such Act’’ after ‘‘made solely in connection with an activity that is State of the United States, the District of by this title’’. so closely related to banking, or managing Columbia, any territory of the United (b) TECHNICAL AND CONFORMING AMEND- or controlling banks, as to be a proper inci- States, Puerto Rico, Guam, American MENT.—Section 109(e)(4) of the Riegle-Neal dent thereto, to the extent the bank incur- Samoa, the Trust Territory of the Pacific Is- Interstate Banking and Branching Efficiency ring the overdraft and the affiliate on whose lands, the Virgin Islands, and the Northern Act of 1994 (12 U.S.C. 1835a(e)(4)) is amended behalf the overdraft is incurred each docu- Mariana Islands. by inserting ‘‘and any branch of a bank con- ment that the overdraft is incurred for such SEC. 105. MUTUAL BANK HOLDING COMPANIES trolled by an out-of-State bank holding com- purpose; and AUTHORIZED. pany (as defined in section 2(o)(7) of the ‘‘(ii) does not cause the bank to violate any Section 3(g)(2) of the Bank Holding Com- Bank Holding Company Act of 1956)’’ before provision of section 23A or 23B of the Federal pany Act of 1956 (12 U.S.C. 1842(g)(2)) is the period. Reserve Act, either directly, in the case of a amended to read as follows: SEC. 107. CLARIFICATION OF BRANCH CLOSURE member bank, or by virtue of section 18(j) of ‘‘(2) REGULATIONS.—A bank holding com- REQUIREMENTS. the Federal Deposit Insurance Act, in the pany organized as a mutual holding company Section 42(d)(4)(A) of the Federal Deposit case of a nonmember bank. shall be regulated on terms, and shall be sub- Insurance Act (12 U.S.C. 1831r–1(d)(4)(A)) is ‘‘(4) DIVESTITURE IN CASE OF LOSS OF EX- ject to limitations, comparable to those ap- amended by inserting ‘‘and any bank con- EMPTION.—If any company described in para- plicable to any other bank holding com- trolled by an out-of-State bank holding com- graph (1) fails to qualify for the exemption pany.’’. pany (as defined in section 2(o)(7) of the provided under such paragraph by operation SEC. 105A. PUBLIC MEETINGS FOR LARGE BANK Bank Holding Company Act of 1956)’’ before of paragraph (2), such exemption shall cease ACQUISITIONS AND MERGERS. the period. to apply to such company and such company (a) BANK HOLDING COMPANY ACT OF 1956.— SEC. 108. AMENDMENTS RELATING TO LIMITED shall divest control of each bank it controls Section 3(c)(2) of the Bank Holding Company PURPOSE BANKS. before the end of the 180-day period begin- Act of 1956 (12 U.S.C. 1842(c)(2)) is amended— (a) IN GENERAL.—Section 4(f) of the Bank ning on the date that the company receives (1) by striking ‘‘FACTORS.—In every case’’ Holding Company Act of 1956 (12 U.S.C. notice from the Board that the company has and inserting ‘‘FACTORS.— 1843(f)) is amended— failed to continue to qualify for such exemp- ‘‘(A) IN GENERAL.—In every case’’; and (1) in paragraph (2)(A)(ii)— tion, unless before the end of such 180-day (2) by adding at the end the following new (A) by striking ‘‘and’’ at the end of sub- period, the company has— subparagraph: clause (IX); ‘‘(A) corrected the condition or ceased the ‘‘(B) PUBLIC MEETINGS.—In each case in- (B) by inserting ‘‘and’’ after the semicolon activity that caused the company to fail to volving 1 or more insured depository institu- at the end of subclause (X); and continue to qualify for the exemption; and July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5253 ‘‘(B) implemented procedures that are rea- and any subsidiary of such company to sub- tory institution and the Board cannot make sonably adapted to avoid the reoccurrence of mit reports under oath to keep the Board in- such determination through examination of such condition or activity. formed as to— the affiliated depository institution or bank The issuance of any notice under this para- ‘‘(i) its financial condition, systems for holding company. graph that relates to the activities of a bank monitoring and controlling financial and op- ‘‘(B) LIMITATIONS ON EXAMINATION AUTHOR- shall not be construed as affecting the au- erating risks, and transactions with deposi- ITY FOR BANK HOLDING COMPANIES AND SUB- thority of the bank to continue to engage in tory institution subsidiaries of the holding SIDIARIES.—Subject to subparagraph (A)(ii), such activities until the expiration of such company; and the Board may make examinations under 180-day period.’’. ‘‘(ii) compliance by the company or sub- subparagraph (A)(i) of each bank holding (b) INDUSTRIAL LOAN COMPANIES AFFILIATE sidiary with applicable provisions of this company and each subsidiary of such holding OVERDRAFTS.—Section 2(c)(2)(H) of the Bank Act. company in order to— Holding Company Act of 1956 (12 U.S.C. ‘‘(B) USE OF EXISTING REPORTS.— ‘‘(i) inform the Board of the nature of the 1841(c)(2)(H)) is amended by inserting before ‘‘(i) IN GENERAL.—The Board shall, to the operations and financial condition of the the period at the end ‘‘, or that is otherwise fullest extent possible, accept reports in ful- holding company and such subsidiaries; permissible for a bank controlled by a com- fillment of the Board’s reporting require- ‘‘(ii) inform the Board of— pany described in section 4(f)(1)’’. ments under this paragraph that a bank ‘‘(I) the financial and operational risks holding company or any subsidiary of such within the holding company system that SEC. 109. GAO STUDY OF ECONOMIC IMPACT ON company has provided or been required to may pose a threat to the safety and sound- COMMUNITY BANKS, OTHER SMALL FINANCIAL INSTITUTIONS, INSUR- provide to other Federal and State super- ness of any subsidiary depository institution ANCE AGENTS, AND CONSUMERS. visors or to appropriate self-regulatory orga- of such holding company; and (a) STUDY REQUIRED.—The Comptroller nizations. ‘‘(II) the systems for monitoring and con- General of the United States shall conduct a ‘‘(ii) AVAILABILITY.—A bank holding com- trolling such risks; and study of the projected economic impact and pany or a subsidiary of such company shall ‘‘(iii) monitor compliance with the provi- the actual economic impact that the enact- provide to the Board, at the request of the sions of this Act and those governing trans- ment of this Act will have on financial insti- Board, a report referred to in clause (i). actions and relationships between any sub- tutions, including community banks, reg- ‘‘(iii) REQUIRED USE OF PUBLICLY REPORTED sidiary depository institution and its affili- istered brokers and dealers and insurance INFORMATION.—The Board shall, to the fullest ates. companies, which have total assets of extent possible, accept in fulfillment of any ‘‘(C) RESTRICTED FOCUS OF EXAMINATIONS.— $100,000,000 or less, insurance agents, and reporting or recordkeeping requirements The Board shall, to the fullest extent pos- consumers. under this Act information that is otherwise sible, limit the focus and scope of any exam- (b) REPORTS TO THE CONGRESS.— required to be reported publicly and exter- ination of a bank holding company to— (1) IN GENERAL.—The Comptroller General nally audited financial statements. ‘‘(i) the bank holding company; and of the United States shall submit reports to ‘‘(iv) REPORTS FILED WITH OTHER AGEN- ‘‘(ii) any subsidiary of the holding com- the Congress, at the times required under CIES.—In the event the Board requires a re- pany that, because of— paragraph (2), containing the findings and port from a functionally regulated non- ‘‘(I) the size, condition, or activities of the conclusions of the Comptroller General with depository institution subsidiary of a bank subsidiary; or regard to the study required under sub- holding company of a kind that is not re- ‘‘(II) the nature or size of transactions be- section (a) and such recommendations for quired by another Federal or State regulator tween such subsidiary and any depository in- legislative or administrative action as the or appropriate self-regulatory organization, stitution which is also a subsidiary of such Comptroller General may determine to be the Board shall request that the appropriate holding company, appropriate. regulator or self-regulatory organization ob- could have a materially adverse effect on the tain such report. If the report is not made (2) TIMING OF REPORTS.—The Comptroller safety and soundness of any depository insti- available to the Board, and the report is nec- General shall submit— tution affiliate of the holding company. essary to assess a material risk to the bank (A) an interim report before the end of the ‘‘(D) DEFERENCE TO BANK EXAMINATIONS.— holding company or any of its subsidiary de- 6-month period beginning after the date of The Board shall, to the fullest extent pos- pository institutions or compliance with this the enactment of this Act; sible, use, for the purposes of this paragraph, Act, the Board may require such subsidiary (B) another interim report before the end the reports of examinations of depository in- to provide such a report to the Board. of the next 6-month period; and stitutions made by the appropriate Federal ‘‘(C) DEFINITION.—For purposes of this sub- (C) a final report before the end of the 1- and State depository institution supervisory section, the term ‘functionally regulated year period after such second 6-month pe- authority. nondepository institution’ means— riod,’’ ‘‘(E) DEFERENCE TO OTHER EXAMINATIONS.— ‘‘(i) a broker or dealer registered under the The Board shall, to the fullest extent pos- SEC. 110. RESPONSIVENESS TO COMMUNITY Securities Exchange Act of 1934; NEEDS FOR FINANCIAL SERVICES. sible, address the circumstances which might ‘‘(ii) an investment adviser registered otherwise permit or require an examination (a) STUDY.—The Secretary of the Treasury, under the Investment Advisers Act of 1940, or in consultation with the Federal banking by the Board by forgoing an examination and with any State, with respect to the invest- instead reviewing the reports of examination agencies (as defined in section 3(z) of the ment advisory activities of such investment Federal Deposit Insurance Act), shall con- made of— adviser and activities incidental to such in- ‘‘(i) any registered broker or dealer by or duct a study of the extent to which adequate vestment advisory activities; services are being provided as intended by on behalf of the Securities and Exchange ‘‘(iii) an insurance company subject to su- Commission; the Community Reinvestment Act of 1977, pervision by a State insurance commission, ‘‘(ii) any investment adviser registered by including services in low- and moderate-in- agency, or similar authority; and or on behalf of either the Securities and Ex- come neighborhoods and for persons of mod- ‘‘(iv) an entity subject to regulation by the change Commission or any State, whichever est means, as a result of the enactment of Commodity Futures Trading Commission, is required by law; this Act. with respect to the commodities activities of ‘‘(iii) any licensed insurance company by (b) REPORT.—Before the end of the 2-year such entity and activities incidental to such or on behalf of any state regulatory author- period beginning on the date of the enact- commodities activities. ity responsible for the supervision of insur- ment of this Act, the Secretary of the Treas- ‘‘(2) EXAMINATIONS.— ance companies; and ury, in consultation with the Federal bank- ‘‘(A) EXAMINATION AUTHORITY.— ‘‘(iv) any other subsidiary that the Board ing agencies, shall submit a report to the ‘‘(i) IN GENERAL.—The Board may make ex- finds to be comprehensively supervised by a Congress on the study conducted pursuant to aminations of each bank holding company Federal or State authority. subsection (a) and shall include such rec- and each subsidiary of a bank holding com- ‘‘(3) CAPITAL.— ommendations as the Secretary determines pany. ‘‘(A) IN GENERAL.—The Board shall not, by to be appropriate for administrative and leg- ‘‘(ii) FUNCTIONALLY REGULATED NONDEPOSI- regulation, guideline, order or otherwise, islative action with respect to institutions TORY INSTITUTION SUBSIDIARIES.—Notwith- prescribe or impose any capital or capital covered under the Community Reinvestment standing clause (i), the Board may make ex- adequacy rules, guidelines, standards, or re- Act of 1977. aminations of a functionally regulated non- quirements on any subsidiary of a financial Subtitle B—Streamlining Supervision of depository institution subsidiary of a bank holding company that is not a depository in- Financial Holding Companies holding company only if— stitution and— SEC. 111. STREAMLINING FINANCIAL HOLDING ‘‘(I) the Board has reasonable cause to be- ‘‘(i) is in compliance with applicable cap- COMPANY SUPERVISION. lieve that such subsidiary is engaged in ac- ital requirements of another Federal regu- Section 5(c) of the Bank Holding Company tivities that pose a material risk to an affili- latory authority (including the Securities Act of 1956 (12 U.S.C. 1844(c)) is amended to ated depository institution, or and Exchange Commission) or State insur- read as follows: ‘‘(II) based on reports and other available ance authority; ‘‘(c) REPORTS AND EXAMINATIONS.— information, the Board has reasonable cause ‘‘(ii) is registered as an investment adviser ‘‘(1) REPORTS.— to believe that a subsidiary is not in compli- under the Investment Advisers Act of 1940, or ‘‘(A) IN GENERAL.—The Board from time to ance with this Act or with provisions relat- with any State, whichever is required by time may require any bank holding company ing to transactions with an affiliated deposi- law; or H5254 CONGRESSIONAL RECORD — HOUSE July 1, 1999 ‘‘(iii) is licensed as an insurance agent with brokers, dealers, and investment advisers re- change Commission for the registered the appropriate State insurance authority. quired to be registered under State law; and broker, dealer, investment adviser (solely ‘‘(B) RULE OF CONSTRUCTION.—Subpara- ‘‘(C) the relevant State insurance authori- with respect to investment advisory activi- graph (A) shall not be construed as pre- ties with regard to all interpretations of, and ties or activities incidental thereto), or in- venting the Board from imposing capital or the enforcement of, applicable State insur- vestment company, as the case may be, de- capital adequacy rules, guidelines, stand- ance laws (and rules, regulations, orders, and termines in writing sent to the holding com- ards, or requirements with respect to— other directives issued thereunder) relating pany and the Board that the holding com- ‘‘(i) activities of a registered investment to the activities, conduct, and operations of pany shall not provide such funds or assets adviser other than investment advisory ac- insurance companies and insurance agents.’’. because such action would have a material tivities or activities incidental to invest- SEC. 112. ELIMINATION OF APPLICATION RE- adverse effect on the financial condition of ment advisory activities; or QUIREMENT FOR FINANCIAL HOLD- the insurance company or the broker, dealer, ‘‘(ii) activities of a licensed insurance ING COMPANIES. investment company, or investment adviser, agent other than insurance agency activities (a) PREVENTION OF DUPLICATIVE FILINGS.— as the case may be. or activities incidental to insurance agency Section 5(a) of the Bank Holding Company ‘‘(2) NOTICE TO STATE INSURANCE AUTHORITY activities. Act of 1956 (12 U.S.C. 1844(a)) is amended by OR SEC REQUIRED.—If the Board requires a ‘‘(C) LIMITATIONS ON INDIRECT ACTION.—In adding the following new sentence at the bank holding company, or an affiliate of a developing, establishing, or assessing hold- end: ‘‘A declaration filed in accordance with bank holding company, which is an insur- ing company capital or capital adequacy section 6(b)(1)(D) shall satisfy the require- ance company or a broker, dealer, invest- rules, guidelines, standards, or requirements ments of this subsection with regard to the ment company, or investment adviser de- for purposes of this paragraph, the Board registration of a bank holding company but scribed in paragraph (1)(A) to provide funds shall not take into account the activities, not any requirement to file an application to or assets to an insured depository institution operations, or investments of an affiliated acquire a bank pursuant to section 3.’’. subsidiary of the holding company pursuant (b) DIVESTITURE PROCEDURES.—Section investment company registered under the In- to any regulation, order, or other action of 5(e)(1) of the Bank Holding Company Act of vestment Company Act of 1940, unless the in- the Board referred to in paragraph (1), the 1956 (12 U.S.C. 1844(e)(1)) is amended— vestment company is— Board shall promptly notify the State insur- (1) by striking ‘‘Financial Institutions Su- ‘‘(i) a bank holding company; or ance authority for the insurance company, pervisory Act of 1966, order’’ and inserting ‘‘(ii) controlled by a bank holding company the Securities and Exchange Commission, or ‘‘Financial Institutions Supervisory Act of by reason of ownership by the bank holding State securities regulator, as the case may 1966, at the election of the bank holding company (including through all of its affili- be, of such requirement. company— ates) of 25 percent or more of the shares of ‘‘(3) DIVESTITURE IN LIEU OF OTHER AC- the investment company, and the shares ‘‘(A) order’’; and TION.—If the Board receives a notice de- (2) by striking ‘‘shareholders of the bank owned by the bank holding company have a scribed in paragraph (1)(B) from a State in- holding company. Such distribution’’ and in- market value equal to more than $1,000,000. surance authority or the Securities and Ex- serting ‘‘shareholders of the bank holding ‘‘(4) TRANSFER OF BOARD AUTHORITY TO AP- change Commission with regard to a bank company; or PROPRIATE FEDERAL BANKING AGENCY.— holding company or affiliate referred to in ‘‘(A) IN GENERAL.—In the case of any bank ‘‘(B) order the bank holding company, after that paragraph, the Board may order the holding company which is not significantly due notice and opportunity for hearing, and bank holding company to divest the insured engaged in nonbanking activities, the Board, after consultation with the primary super- depository institution not later than 180 in consultation with the appropriate Federal visor for the bank, which shall be the Comp- days after receiving the notice, or such banking agency, may designate the appro- troller of the Currency in the case of a na- longer period as the Board determines con- priate Federal banking agency of the lead in- tional bank, and the Federal Deposit Insur- sistent with the safe and sound operation of sured depository institution subsidiary of ance Corporation and the appropriate State the insured depository institution. such holding company as the appropriate supervisor in the case of an insured non- ‘‘(4) CONDITIONS BEFORE DIVESTITURE.—Dur- Federal banking agency for the bank holding member bank, to terminate (within 120 days ing the period beginning on the date an order company. or such longer period as the Board may di- to divest is issued by the Board under para- ‘‘(B) AUTHORITY TRANSFERRED.—An agency rect) the ownership or control of any such graph (3) to a bank holding company and designated by the Board under subparagraph bank by such company. ending on the date the divestiture is com- (A) shall have the same authority as the The distribution referred to in subparagraph Board under this Act to— pleted, the Board may impose any conditions (A)’’. or restrictions on the holding company’s ‘‘(i) examine and require reports from the SEC. 113. AUTHORITY OF STATE INSURANCE REG- bank holding company and any affiliate of ownership or operation of the insured deposi- ULATOR AND SECURITIES AND EX- tory institution, including restricting or pro- such company (other than a depository insti- CHANGE COMMISSION. hibiting transactions between the insured tution) under section 5; (a) BANK HOLDING COMPANIES.—Section 5 of ‘‘(ii) approve or disapprove applications or the Bank Holding Company Act of 1956 (12 depository institution and any affiliate of transactions under section 3; U.S.C. 1844) is amended by adding at the end the institution, as are appropriate under the ‘‘(iii) take actions and impose penalties the following new subsection: circumstances.’’. under subsections (e) and (f) of section 5 and ‘‘(g) AUTHORITY OF STATE INSURANCE REGU- (b) SUBSIDIARIES OF DEPOSITORY INSTITU- section 8; and LATOR AND THE SECURITIES AND EXCHANGE TIONS.—The Federal Deposit Insurance Act ‘‘(iv) take actions regarding the holding COMMISSION.— (12 U.S.C. 1811 et seq.) is amended by adding company, any affiliate of the holding com- ‘‘(1) IN GENERAL.—Notwithstanding any at the end the following new section: pany (other than a depository institution), other provision of law, any regulation, order, ‘‘SEC. 45. AUTHORITY OF STATE INSURANCE REG- or any institution-affiliated party of such or other action of the Board which requires ULATOR AND SECURITIES AND EX- company or affiliate under the Federal De- a bank holding company to provide funds or CHANGE COMMISSION. posit Insurance Act and any other statute other assets to a subsidiary insured deposi- ‘‘(a) IN GENERAL.—Notwithstanding any which the Board may designate. tory institution shall not be effective nor en- other provision of law, any regulation, order, ‘‘(C) AGENCY ORDERS.—Section 9 of this Act forceable with respect to an entity described or other action of the appropriate Federal and section 105 of the Bank Holding Com- in subparagraph (A) if— banking agency which requires a subsidiary pany Act Amendments of 1970 shall apply to ‘‘(A) such funds or assets are to be provided to provide funds or other assets to an insured orders issued by an agency designated under by— depository institution shall not be effective subparagraph (A) in the same manner such ‘‘(i) a bank holding company that is an in- nor enforceable with respect to an entity de- sections apply to orders issued by the Board. surance company, a broker or dealer reg- scribed in paragraph (1) if— ‘‘(5) FUNCTIONAL REGULATION OF SECURITIES istered under the Securities Exchange Act of ‘‘(1) such funds or assets are to be provided AND INSURANCE ACTIVITIES.—The Board shall 1934, an investment company registered by a subsidiary which is an insurance com- defer to— under the Investment Company Act of 1940, pany, a broker or dealer registered under the ‘‘(A) the Securities and Exchange Commis- or an investment adviser registered by or on Securities Exchange Act of 1934, an invest- sion with regard to all interpretations of, behalf of either the Securities and Exchange ment company registered under the Invest- and the enforcement of, applicable Federal Commission or any State; or ment Company Act of 1940, or an investment securities laws (and rules, regulations, or- ‘‘(ii) an affiliate of the depository institu- adviser registered by or on behalf of either ders, and other directives issued thereunder) tion which is an insurance company or a the Securities and Exchange Commission or relating to the activities, conduct, and oper- broker or dealer registered under the Securi- any State; and ations of registered brokers, dealers, invest- ties Exchange Act of 1934, an investment ‘‘(2) the State insurance authority for the ment advisers, and investment companies; company registered under the Investment insurance company or the Securities and Ex- ‘‘(B) the relevant State securities authori- Company Act of 1940, or an investment ad- change Commission for the registered broker ties with regard to all interpretations of, and viser registered by or on behalf of either the or dealer, the investment company, or the the enforcement of, applicable State securi- Securities and Exchange Commission or any investment adviser, as the case may be, de- ties laws (and rules, regulations, orders, and State ; and termines in writing sent to the insured de- other directives issued thereunder) relating ‘‘(B) the State insurance authority for the pository institution and the appropriate Fed- to the activities, conduct, and operations of insurance company or the Securities and Ex- eral banking agency that the subsidiary July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5255

shall not provide such funds or assets be- termine whether there is a continuing need (1) IN GENERAL.—The Federal Deposit In- cause such action would have a material ad- for any such restriction or requirement to surance Corporation may, by regulation or verse effect on the financial condition of the carry out the purposes of the Act, including order, impose restrictions or requirements insurance company or the broker, dealer, in- any purpose described in paragraph (2); and on relationships or transactions between a vestment company, or investment adviser, as (B) modify or eliminate any restriction or State nonmember bank (as defined in section the case may be. requirement the Comptroller finds is no 3 of the Federal Deposit Insurance Act) and ‘‘(b) NOTICE TO STATE INSURANCE AUTHOR- longer required for such purposes. a subsidiary of the State nonmember bank ITY OR SEC REQUIRED.—If the appropriate (b) BOARD OF GOVERNORS OF THE FEDERAL which the Corporation finds are consistent Federal banking agency requires a sub- RESERVE SYSTEM.— with the public interest, the purposes of this sidiary, which is an insurance company, a (1) IN GENERAL.—The Board of Governors of Act, the Federal Deposit Insurance Act, or broker or dealer, an investment company, or the Federal Reserve System may, by regula- other Federal law applicable to State non- an investment adviser (solely with respect to tion or order, impose restrictions or require- member banks and the standards in para- investment advisory activities or activities ments on relationships or transactions— graph (2). incidental thereto) described in subsection (A) between a depository institution sub- (2) STANDARDS.—The Federal Deposit In- (a)(1) to provide funds or assets to an insured sidiary of a bank holding company and any surance Corporation may exercise authority depository institution pursuant to any regu- affiliate of such depository institution (other under paragraph (1) if the Corporation finds lation, order, or other action of the appro- than a subsidiary of such institution); or that such action will have any of the fol- priate Federal banking agency referred to in (B) between a State member bank and a lowing effects: subsection (a), the appropriate Federal bank- subsidiary of such bank, (A) Avoid any significant risk to the safety ing agency shall promptly notify the State which the Board finds are consistent with and soundness of depository institutions or insurance authority for the insurance com- the public interest, the purposes of this Act, any Federal deposit insurance fund. pany, the Securities and Exchange Commis- the Bank Holding Company Act of 1956, the (B) Enhance the financial stability of sion, or State securities regulator, as the Federal Reserve Act, and other Federal law banks. case may be, of such requirement. applicable to depository institution subsidi- (C) Avoid conflicts of interest or other ‘‘(c) DIVESTITURE IN LIEU OF OTHER AC- aries of bank holding companies or State abuses. TION.—If the appropriate Federal banking banks (as the case may be), and the stand- (D) Enhance the privacy of customers of agency receives a notice described in sub- ards in paragraph (2). the State nonmember bank or any subsidiary section (a)(2) from a State insurance author- (2) STANDARDS.—The Board of Governors of of the bank. ity or the Securities and Exchange Commis- the Federal Reserve System may exercise (E) Promote the application of national sion with regard to a subsidiary referred to authority under paragraph (1) if the Board treatment and equality of competitive op- in that subsection, the appropriate Federal finds that such action will have any of the portunity between subsidiaries owned or con- banking agency may order the insured depos- following effects: trolled by domestic banks and subsidiaries itory institution to divest the subsidiary not (A) Avoid any significant risk to the safety owned or controlled by foreign banks oper- later than 180 days after receiving the no- and soundness of depository institutions or ating in the United States. tice, or such longer period as the appropriate any Federal deposit insurance fund. (3) REVIEW.—The Federal Deposit Insur- Federal banking agency determines con- (B) Enhance the financial stability of bank ance Corporation shall regularly— sistent with the safe and sound operation of holding companies. (A) review all restrictions or requirements the insured depository institution. (C) Avoid conflicts of interest or other established pursuant to paragraph (1) to de- ‘‘(d) CONDITIONS BEFORE DIVESTITURE.— abuses. termine whether there is a continuing need During the period beginning on the date an (D) Enhance the privacy of customers of for any such restriction or requirement to order to divest is issued by the appropriate the State member bank or any subsidiary of carry out the purposes of the Act, including Federal banking agency under subsection (c) the bank. any purpose described in paragraph (2); and to an insured depository institution and end- (E) Promote the application of national (B) modify or eliminate any restriction or ing on the date the divestiture is complete, treatment and equality of competitive op- requirement the Corporation finds is no the appropriate Federal banking agency may portunity between nonbank affiliates owned longer required for such purposes. impose any conditions or restrictions on the or controlled by domestic bank holding com- insured depository institution’s ownership of SEC. 115. EXAMINATION OF INVESTMENT COMPA- panies and nonbank affiliates owned or con- NIES. the subsidiary including restricting or pro- trolled by foreign banks operating in the (a) EXCLUSIVE COMMISSION AUTHORITY.— hibiting transactions between the insured United States. (1) IN GENERAL.—Except as provided in depository institution and the subsidiary, as (3) REVIEW.—The Board of Governors of the paragraph (3), the Commission shall be the are appropriate under the circumstances.’’. Federal Reserve System shall regularly— sole Federal agency with authority to in- SEC. 114. PRUDENTIAL SAFEGUARDS. (A) review all restrictions or requirements spect and examine any registered investment (a) COMPTROLLER OF THE CURRENCY.— established pursuant to paragraph (1) to de- company that is not a bank holding company (1) IN GENERAL.—The Comptroller of the termine whether there is a continuing need or a savings and loan holding company. Currency may, by regulation or order, im- for any such restriction or requirement to (2) PROHIBITION ON BANKING AGENCIES.—Ex- pose restrictions or requirements on rela- carry out the purposes of the Act, including cept as provided in paragraph (3), a Federal tionships or transactions between a national any purpose described in paragraph (2); and banking agency may not inspect or examine bank and a subsidiary of the national bank (B) modify or eliminate any restriction or any registered investment company that is which the Comptroller finds are consistent requirement the Board finds is no longer re- not a bank holding company or a savings and with the public interest, the purposes of this quired for such purposes. loan holding company. Act, title LXII of the Revised Statutes of the (4) FOREIGN BANKS.— (3) CERTAIN EXAMINATIONS AUTHORIZED.— United States, and other Federal law appli- (A) IN GENERAL.—The Board may, by regu- Nothing in this subsection prevents the Fed- cable to national banks, and the standards in lation or order, impose restrictions or re- eral Deposit Insurance Corporation, if the paragraph (2). quirements on relationships or transactions Corporation finds it necessary to determine (2) STANDARDS.—The Comptroller of the between a branch, agency, or commercial the condition of an insured depository insti- Currency may exercise authority under para- lending company of a foreign bank in the tution for insurance purposes, from exam- graph (1) if the Comptroller finds that such United States and any affiliate in the United ining an affiliate of any insured depository action will have any of the following effects: States of such foreign bank that the Board institution, pursuant to its authority under (A) Avoid any significant risk to the safety finds are consistent with the public interest, section 10(b)(4) of the Federal Deposit Insur- and soundness of depository institutions or the purposes of this Act, the Bank Holding ance Act, as may be necessary to disclose any Federal deposit insurance fund. Company Act of 1956, the Federal Reserve fully the relationship between the depository (B) Enhance the financial stability of Act, and other Federal law applicable to for- institution and the affiliate, and the effect of banks. eign banks and their affiliates in the United such relationship on the depository institu- (C) Avoid conflicts of interest or other States, and the standards in paragraphs (2) tion. abuses. and (3). (b) EXAMINATION RESULTS AND OTHER IN- (D) Enhance the privacy of customers of (B) EVASION.—In the event that the Board FORMATION.—The Commission shall provide the national bank or any subsidiary of the determines that there may be circumstances to any Federal banking agency, upon re- bank. that would result in an evasion of this para- quest, the results of any examination, re- (E) Promote the application of national graph, the Board may also impose restric- ports, records, or other information with re- treatment and equality of competitive op- tions or requirements on relationships or spect to any registered investment company portunity between subsidiaries owned or con- transactions between operations of a foreign to the extent necessary for the agency to trolled by domestic banks and subsidiaries bank outside the United States and any affil- carry out its statutory responsibilities. owned or controlled by foreign banks oper- iate in the United States of such foreign (c) DEFINITIONS.—For purposes of this sec- ating in the United States. bank that are consistent with national treat- tion, the following definitions shall apply: (3) REVIEW.—The Comptroller of the Cur- ment and equality of competitive oppor- (1) BANK HOLDING COMPANY.—The term rency shall regularly— tunity. ‘‘bank holding company’’ has the same (A) review all restrictions or requirements (c) FEDERAL DEPOSIT INSURANCE CORPORA- meaning as in section 2 of the Bank Holding established pursuant to paragraph (1) to de- TION.— Company Act of 1956. H5256 CONGRESSIONAL RECORD — HOUSE July 1, 1999

(2) COMMISSION.—The term ‘‘Commission’’ ‘‘(3) an investment company registered (1) by redesignating section 5136A as sec- means the Securities and Exchange Commis- under the Investment Company Act of 1940; tion 5136C; and sion. ‘‘(4) an insurance company or an insurance (2) by inserting after section 5136 (12 U.S.C. (3) FEDERAL BANKING AGENCY.—The term agency, with respect to the insurance activi- 24) the following new section: ‘‘Federal banking agency’’ has the same ties and activities incidental to such insur- ‘‘SEC. 5136A. SUBSIDIARIES OF NATIONAL BANKS. meaning as in section 3(z) of the Federal De- ance activities, subject to supervision by a ‘‘(a) SUBSIDIARIES OF NATIONAL BANKS AU- posit Insurance Act. State insurance commission, agency, or THORIZED TO ENGAGE IN FINANCIAL ACTIVI- (4) REGISTERED INVESTMENT COMPANY.—The similar authority; or TIES.— term ‘‘registered investment company’’ ‘‘(5) an entity subject to regulation by the ‘‘(1) EXCLUSIVE AUTHORITY.—No provision means an investment company which is reg- Commodity Futures Trading Commission, of section 5136 or any other provision of this istered with the Commission under the In- with respect to the commodities activities of title LXII of the Revised Statutes of the vestment Company Act of 1940. such entity and activities incidental to such United States shall be construed as author- (5) SAVINGS AND LOAN HOLDING COMPANY.— commodities activities.’’. izing a subsidiary of a national bank to en- The term ‘‘savings and loan holding com- SEC. 117. EQUIVALENT REGULATION AND SUPER- gage in, or own any share of or any other in- pany’’ has the same meaning as in section VISION. terest in any company engaged in, any activ- 10(a)(1)(D) of the Home Owners’ Loan Act. (a) IN GENERAL.—Notwithstanding any ity that— SEC. 116. LIMITATION ON RULEMAKING, PRUDEN- other provision of law, the provisions of— ‘‘(A) is not permissible for a national bank TIAL, SUPERVISORY, AND ENFORCE- (1) section 5(c) of the Bank Holding Com- to engage in directly; or MENT AUTHORITY OF THE BOARD. pany Act of 1956 (as amended by this Act) ‘‘(B) is conducted under terms or condi- The Bank Holding Company Act of 1956 (12 that limit the authority of the Board of Gov- tions other than those that would govern the U.S.C. 1841 et seq.) is amended by inserting ernors of the Federal Reserve System to re- conduct of such activity by a national bank, after section 10 the following new section: quire reports from, to make examinations of, unless a national bank is specifically author- ‘‘SEC. 10A. LIMITATION ON RULEMAKING, PRU- or to impose capital requirements on bank ized by the express terms of a Federal stat- DENTIAL, SUPERVISORY, AND EN- holding companies and their nonbank sub- ute and not by implication or interpretation FORCEMENT AUTHORITY OF THE to acquire shares of or an interest in, or to BOARD. sidiaries or that require deference to other control, such subsidiary, such as by para- ‘‘(a) LIMITATION ON DIRECT ACTION.— regulators; and graph (2) of this subsection and section 25A ‘‘(1) IN GENERAL.—The Board may not pre- (2) section 10A of the Bank Holding Com- scribe regulations, issue or seek entry of or- pany Act of 1956 (as added by this Act) that of the Federal Reserve Act. ‘‘(2) SPECIFIC AUTHORIZATION TO CONDUCT ders, impose restraints, restrictions, guide- limit whatever authority the Board might ACTIVITIES WHICH ARE FINANCIAL IN NATURE.— lines, requirements, safeguards, or stand- otherwise have to take direct or indirect ac- Subject to paragraphs (3) and (4), a national ards, or otherwise take any action under or tion with respect to bank holding companies bank may control a financial subsidiary, or pursuant to any provision of this Act or sec- and their nonbank subsidiaries, hold an interest in a financial subsidiary, tion 8 of the Federal Deposit Insurance Act shall also limit whatever authority that a that is controlled by insured depository in- against or with respect to a regulated sub- Federal banking agency (as defined in sec- stitutions or subsidiaries thereof. sidiary of a bank holding company unless the tion 3(z) of the Federal Deposit Insurance ‘‘(3) ELIGIBILITY REQUIREMENTS.—A na- action is necessary to prevent or redress an Act) might otherwise have under any statute tional bank may control or hold an interest unsafe or unsound practice or breach of fidu- to require reports, make examinations, im- in a company pursuant to paragraph (2) only ciary duty by such subsidiary that poses a pose capital requirements or take any other if— material risk to— direct or indirect action with respect to ‘‘(A) the national bank and all depository ‘‘(A) the financial safety, soundness, or bank holding companies and their nonbank institution affiliates of the national bank stability of an affiliated depository institu- subsidiaries (including nonbank subsidiaries are well capitalized; tion; or of depository institutions), subject to the ‘‘(B) the national bank and all depository ‘‘(B) the domestic or international pay- same standards and requirements as are ap- institution affiliates of the national bank ment system. plicable to the Board under such provisions. are well managed; ‘‘(2) CRITERIA FOR BOARD ACTION.—The (b) CERTAIN EXAMINATIONS AUTHORIZED.— ‘‘(C) the national bank and all depository Board shall not take action otherwise per- No provision of this section shall be con- institution affiliates of such national bank mitted under paragraph (1) unless the Board strued as preventing the Federal Deposit In- have achieved a rating of ‘satisfactory record finds that it is not reasonably possible to ef- surance Corporation, if the Corporation finds of meeting community credit needs’, or bet- fectively protect against the material risk at it necessary to determine the condition of an ter, at the most recent examination of each issue through action directed at or against insured depository institution for insurance such bank or institution; and the affiliated depository institution or purposes, from examining an affiliate of any ‘‘(D) the bank has received the approval of against depository institutions generally. insured depository institution, pursuant to the Comptroller of the Currency. ‘‘(b) LIMITATION ON INDIRECT ACTION.—The its authority under section 10(b)(4) of the ‘‘(4) ACTIVITY LIMITATIONS.—In addition to Board may not prescribe regulations, issue Federal Deposit Insurance Act, as may be any other limitation imposed on the activity or seek entry of orders, impose restraints, necessary to disclose fully the relationship of subsidiaries of national banks, a sub- restrictions, guidelines, requirements, safe- between the depository institution and the sidiary of a national bank may not, pursuant guards, or standards, or otherwise take any affiliate, and the effect of such relationship to paragraph (2)— action under or pursuant to any provision of on the depository institution. ‘‘(A) engage as principal in insuring, guar- this Act or section 8 of the Federal Deposit SEC. 118. PROHIBITION ON FDIC ASSISTANCE TO anteeing, or indemnifying against loss, Insurance Act against or with respect to a fi- AFFILIATES AND SUBSIDIARIES. harm, damage, illness, disability, or death nancial holding company or a wholesale fi- Section 11(a)(4)(B) of the Federal Deposit (other than in connection with credit-related nancial holding company where the purpose Insurance Act (12 U.S.C. 1821(a)(4)(B)) is insurance) or in providing or issuing annu- or effect of doing so would be to take action amended by striking ‘‘to benefit any share- ities; indirectly against or with respect to a regu- holder of’’ and inserting ‘‘to benefit any ‘‘(B) engage in real estate investment or lated subsidiary that may not be taken di- shareholder, affiliate (other than an insured development activities; or rectly against or with respect to such sub- depository institution that receives assist- ‘‘(C) engage in any activity permissible for sidiary in accordance with subsection (a). ance in accordance with the provisions of ‘‘(c) ACTIONS SPECIFICALLY AUTHORIZED.— a financial holding company under para- this Act), or subsidiary of’’. Notwithstanding subsection (a), the Board graph (3)(I) of section 6(c) of the Bank Hold- may take action under this Act or section 8 SEC. 119. REPEAL OF SAVINGS BANK PROVISIONS ing Company Act of 1956 (relating to insur- IN THE BANK HOLDING COMPANY ance company investments). of the Federal Deposit Insurance Act to en- ACT OF 1956. force compliance by a regulated subsidiary ‘‘(5) SIZE FACTOR WITH REGARD TO FREE- Section 3(f) of the Bank Holding Company STANDING NATIONAL BANKS.—Notwithstanding with Federal law that the Board has specific Act of 1956 (12 U.S.C. 1842(f)) is amended to jurisdiction to enforce against such sub- paragraph (2), a national bank which has read as follows: total assets of $10,000,000,000 or more may not sidiary. ‘‘(f) [Repealed].’’. ‘‘(d) REGULATED SUBSIDIARY DEFINED.—For control a subsidiary engaged in financial ac- purposes of this section, the term ‘regulated SEC. 120. TECHNICAL AMENDMENT. tivities pursuant to such paragraph unless subsidiary’ means any company that is not a Section 2(o)(1)(A) of the Bank Holding such national bank is a subsidiary of a bank bank holding company and is— Company Act of 1956 (12 U.S.C. 1841(o)(1)(A)) holding company. ‘‘(1) a broker or dealer registered under the is amended by striking ‘‘section 38(b)’’ and ‘‘(6) LIMITED EXCLUSIONS FROM COMMUNITY Securities Exchange Act of 1934; inserting ‘‘section 38’’. NEEDS REQUIREMENTS FOR NEWLY AFFILIATED ‘‘(2) an investment adviser registered by or Subtitle C—Subsidiaries of National Banks DEPOSITORY INSTITUTIONS.—Any depository on behalf of either the Securities and Ex- SEC. 121. PERMISSIBLE ACTIVITIES FOR SUBSIDI- institution which becomes an affiliate of a change Commission or any State, whichever ARIES OF NATIONAL BANKS. national bank during the 12-month period is required by law, with respect to the in- (a) FINANCIAL SUBSIDIARIES OF NATIONAL preceding the date of an approval by the vestment advisory activities of such invest- BANKS.—Chapter one of title LXII of the Re- Comptroller of the Currency under para- ment adviser and activities incidental to vised Statutes of United States (12 U.S.C. 21 graph (3)(D) for such bank, and any deposi- such investment advisory activities; et seq.) is amended— tory institution which becomes an affiliate July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5257

of the national bank after such date, may be ‘‘(ii) the Secretary of the Treasury deter- ‘‘(3) AUTHORIZATION OF NEW FINANCIAL AC- excluded for purposes of paragraph (3)(C) dur- mines the activity to be financial in nature TIVITIES.—The Secretary of the Treasury ing the 12-month period beginning on the or incidental to such financial activities in shall, by regulation or order and in accord- date of such affiliation if— accordance with subparagraph (B) or para- ance with paragraph (1)(B), define, consistent ‘‘(A) the national bank or such depository graph (3). with the purposes of this Act, the following institution has submitted an affirmative ‘‘(B) COORDINATION BETWEEN THE BOARD AND activities as, and the extent to which such plan to the appropriate Federal banking THE SECRETARY OF THE TREASURY.— activities are, financial in nature or inci- agency to take such action as may be nec- ‘‘(i) PROPOSALS RAISED BEFORE THE SEC- dental to activities which are financial in essary in order for such institution to RETARY OF THE TREASURY.— nature: achieve a rating of ‘satisfactory record of ‘‘(I) CONSULTATION.—The Secretary of the ‘‘(A) Lending, exchanging, transferring, in- meeting community credit needs’, or better, Treasury shall notify the Board of, and con- vesting for others, or safeguarding financial at the next examination of the institution; sult with the Board concerning, any request, assets other than money or securities. and proposal, or application under this sub- ‘‘(B) Providing any device or other instru- ‘‘(B) the plan has been accepted by such section, including any regulation or order mentality for transferring money or other fi- agency. proposed under paragraph (3), for a deter- nancial assets. ‘‘(7) DEFINITIONS.—For purposes of this sec- mination of whether an activity is financial ‘‘(C) Arranging, effecting, or facilitating fi- tion, the following definitions shall apply: in nature or incidental to such a financial nancial transactions for the account of third ‘‘(A) COMPANY; CONTROL; AFFILIATE; SUB- activity. parties. SIDIARY.—The terms ‘company’, ‘control’, ‘‘(II) BOARD VIEW.—The Secretary of the ‘‘(4) DEVELOPING ACTIVITIES.—Subject to ‘affiliate’, and ‘subsidiary’ have the same Treasury shall not determine that any activ- subsection (a)(2), a financial subsidiary of a meanings as in section 2 of the Bank Holding ity is financial in nature or incidental to a national bank may engage directly or indi- Company Act of 1956. financial activity under this subsection if rectly, or acquire shares of any company en- ‘‘(B) FINANCIAL SUBSIDIARY.—The term ‘fi- the Board notifies the Secretary in writing, gaged, in any activity that the Secretary has nancial subsidiary’ means a company which not later than 30 days after the date of re- not determined to be financial in nature or is a subsidiary of an insured bank and is en- ceipt of the notice described in subclause (I) incidental to financial activities under this gaged in financial activities that have been (or such longer period as the Secretary de- subsection if— determined to be financial in nature or inci- termines to be appropriate in light of the cir- ‘‘(A) the subsidiary reasonably concludes dental to such financial activities in accord- cumstances) that the Board believes that the that the activity is financial in nature or in- ance with subsection (b) or permitted in ac- activity is not financial in nature or inci- cidental to financial activities; cordance with subsection (b)(4), other than dental to a financial activity. ‘‘(B) the gross revenues from all activities activities that are permissible for a national ‘‘(ii) PROPOSALS RAISED BY THE BOARD.— conducted under this paragraph represent bank to engage in directly or that are au- ‘‘(I) BOARD RECOMMENDATION.—The Board less than 5 percent of the consolidated gross thorized under the Bank Service Company may, at any time, recommend in writing revenues of the national bank; Act, section 25 or 25A of the Federal Reserve that the Secretary of the Treasury find an ‘‘(C) the aggregate total assets of all com- Act, or any other Federal statute (other than activity to be financial in nature or inci- panies the shares of which are held under dental to a financial activity (other than an this paragraph do not exceed 5 percent of the this section) that specifically authorizes the activity which the Board has sole authority national bank’s consolidated total assets; conduct of such activities by its express to regulate under subparagraph (C)). ‘‘(D) the total capital invested in activities terms and not by implication or interpreta- ‘‘(II) TIME PERIOD FOR SECRETARIAL AC- conducted under this paragraph represents tion. TION.—Not later than 30 days after the date less than 5 percent of the consolidated total ‘‘(C) WELL CAPITALIZED.—The term ‘well of receipt of a written recommendation from capital of the national bank; capitalized’ has the same meaning as in sec- the Board under subclause (I) (or such longer ‘‘(E) neither the Secretary of the Treasury tion 38 of the Federal Deposit Insurance Act period as the Secretary of the Treasury and nor the Board has determined that the activ- and, for purposes of this section, the Comp- the Board determine to be appropriate in ity is not financial in nature or incidental to troller shall have exclusive jurisdiction to light of the circumstances), the Secretary financial activities under this subsection; determine whether a national bank is well shall determine whether to initiate a public and capitalized. rulemaking proposing that the subject rec- ‘‘(F) the national bank provides written ‘‘(D) WELL MANAGED.—The term ‘well man- ommended activity be found to be financial notice to the Secretary of the Treasury de- aged’ means— in nature or incidental to a financial activ- scribing the activity commenced by the sub- ‘‘(i) in the case of a depository institution ity under this subsection, and shall notify sidiary or conducted by the company ac- that has been examined, unless otherwise de- the Board in writing of the determination of quired no later than 10 business days after termined in writing by the appropriate Fed- the Secretary and, in the event that the Sec- commencing the activity or consummating eral banking agency— retary determines not to seek public com- the acquisition. ‘‘(I) the achievement of a composite rating ment on the proposal, the reasons for that ‘‘(c) PROVISIONS APPLICABLE TO NATIONAL of 1 or 2 under the Uniform Financial Insti- determination. BANKS THAT FAIL TO MEET REQUIREMENTS.— tutions Rating System (or an equivalent rat- ‘‘(C) AUTHORITY OVER MERCHANT BANKING.— ‘‘(1) IN GENERAL.—If a national bank or de- ing under an equivalent rating system) in The Board shall have sole authority to pre- pository institution affiliate is not in com- connection with the most recent examina- scribe regulations and issue interpretations pliance with the requirements of subpara- tion or subsequent review of the depository to implement this paragraph with respect to graph (A), (B), or (C) of subsection (a)(3), the institution; and activities described in section 6(c)(3)(H) of appropriate Federal banking agency shall ‘‘(II) at least a rating of 2 for management, the Bank Holding Company Act of 1956. notify the Comptroller of the Currency, who if that rating is given; or ‘‘(2) FACTORS TO BE CONSIDERED.—In deter- shall give notice of such finding to the na- ‘‘(ii) in the case of any depository institu- mining whether an activity is financial in tional bank. tion that has not been examined, the exist- nature or incidental to financial activities, ‘‘(2) AGREEMENT TO CORRECT CONDITIONS RE- ence and use of managerial resources that the Secretary shall take into account— QUIRED.—Not later than 45 days after receipt the appropriate Federal banking agency de- ‘‘(A) the purposes of this Act and the Fi- by a national bank of a notice given under termines are satisfactory. nancial Services Act of 1999; paragraph (1) (or such additional period as ‘‘(E) INCORPORATED DEFINITIONS.—The ‘‘(B) changes or reasonably expected the Comptroller of the Currency may per- terms ‘appropriate Federal banking agency’ changes in the marketplace in which banks mit), the national bank and any relevant af- and ‘depository institution’ have the same compete; filiated depository institution shall execute meanings as in section 3 of the Federal De- ‘‘(C) changes or reasonably expected an agreement acceptable to the Comptroller posit Insurance Act. changes in the technology for delivering fi- of the Currency and the other appropriate ‘‘(b) ACTIVITIES THAT ARE FINANCIAL IN NA- nancial services; and Federal banking agencies, if any, to comply TURE.— ‘‘(D) whether such activity is necessary or with the requirements applicable under sub- ‘‘(1) FINANCIAL ACTIVITIES.— appropriate to allow a bank and the subsidi- section (a)(3). ‘‘(A) IN GENERAL.—For purposes of sub- aries of a bank to— ‘‘(3) COMPTROLLER OF THE CURRENCY MAY section (a)(7)(B), an activity shall be consid- ‘‘(i) compete effectively with any company IMPOSE LIMITATIONS.—Until the conditions ered to have been determined to be financial seeking to provide financial services in the described in a notice to a national bank in nature or incidental to such financial ac- United States; under paragraph (1) are corrected— tivities only if— ‘‘(ii) use any available or emerging techno- ‘‘(A) the Comptroller of the Currency may ‘‘(i) such activity is permitted for a finan- logical means, including any application impose such limitations on the conduct or cial holding company pursuant to section necessary to protect the security or efficacy activities of the national bank or any sub- 6(c)(3) of the Bank Holding Company Act of of systems for the transmission of data or fi- sidiary of the bank as the Comptroller of the 1956 (to the extent such activity is not other- nancial transactions, in providing financial Currency determines to be appropriate under wise prohibited under this section or any services; and the circumstances; and other provision of law for a subsidiary of a ‘‘(iii) offer customers any available or ‘‘(B) the appropriate Federal banking agen- national bank engaged in activities pursuant emerging technological means for using fi- cy may impose such limitations on the con- to subsection (a)(2)); or nancial services. duct or activities of an affiliated depository H5258 CONGRESSIONAL RECORD — HOUSE July 1, 1999 institution or any subsidiary of the deposi- ‘‘SEC. 46. SAFETY AND SOUNDNESS FIREWALLS ‘‘(A) shall be an affiliate of the bank and tory institution as such agency determines APPLICABLE TO SUBSIDIARIES OF any other subsidiary of the bank which is to be appropriate under the circumstances. BANKS. not a financial subsidiary; and ‘‘(4) FAILURE TO CORRECT.—If, after receiv- ‘‘(a) LIMITING THE EQUITY INVESTMENT OF A ‘‘(B) shall not be treated as a subsidiary of ing a notice under paragraph (1), a national BANK IN A SUBSIDIARY.— the bank. ‘‘(1) CAPITAL DEDUCTION.—In determining bank and other affiliated depository institu- ‘‘(3) APPLICATION TO TRANSACTIONS BE- whether an insured bank complies with ap- tions do not— TWEEN FINANCIAL SUBSIDIARY AND NONBANK plicable regulatory capital standards— ‘‘(A) execute and implement an agreement AFFILIATES.— ‘‘(A) the appropriate Federal banking agen- in accordance with paragraph (2); ‘‘(A) IN GENERAL.—A transaction between a cy shall deduct from the assets and tangible ‘‘(B) comply with any limitations imposed financial subsidiary and an affiliate of the fi- equity of the bank the aggregate amount of under paragraph (3); nancial subsidiary shall not be deemed to be the outstanding equity investments of the ‘‘(C) in the case of a notice of failure to a transaction between a subsidiary of a na- bank in financial subsidiaries of the bank; comply with subsection (a)(3)(A), restore the tional bank and an affiliate of the bank for and national bank or any depository institution purposes of section 23A or section 23B of the ‘‘(B) the assets and liabilities of such fi- affiliate of the bank to well capitalized sta- Federal Reserve Act. nancial subsidiaries shall not be consoli- tus before the end of the 180-day period be- ‘‘(B) CERTAIN AFFILIATES EXCLUDED.—For dated with those of the bank. ginning on the date such notice is received purposes of subparagraph (A) and notwith- ‘‘(2) INVESTMENT LIMITATION.—An insured by the national bank (or such other period standing paragraph (4), the term ‘affiliate’ permitted by the Comptroller of the Cur- bank shall not, without the prior approval of the appropriate Federal banking agency, shall not include a bank, or a subsidiary of a rency); or bank, which is engaged exclusively in activi- ‘‘(D) in the case of a notice of failure to make any equity investment in a financial subsidiary of the bank if that investment ties permissible for a national bank to en- comply with subparagraph (B) or (C) of sub- gage in directly or which are authorized by section (a)(3), restore compliance with any would, when made, exceed the amount that the bank could pay as a dividend without ob- any Federal law other than section 5136A of such subparagraph on or before the date on the Revised Statutes of the United States. which the next examination of the deposi- taining prior regulatory approval. ‘‘(3) TREATMENT OF RETAINED EARNINGS.— ‘‘(4) EQUITY INVESTMENTS EXCLUDED SUB- tory institution subsidiary is completed or JECT TO THE APPROVAL OF THE BANKING AGEN- by the end of such other period as the Comp- The amount of any net earnings retained by a financial subsidiary of an insured deposi- CY.—Subsection (a)(1) shall not apply so as to troller of the Currency determines to be ap- limit the equity investment of a bank in a fi- propriate, tory institution shall be treated as an out- standing equity investment of the bank in nancial subsidiary of such bank, except that the Comptroller of the Currency may require the subsidiary for purposes of paragraph (1). any investment that exceeds the amount of a such national bank, under such terms and ‘‘(b) OPERATIONAL AND FINANCIAL SAFE- dividend that the bank could pay at the time conditions as may be imposed by the Comp- GUARDS FOR THE BANK.—An insured bank of the investment without obtaining prior troller of the Currency and subject to such that has a financial subsidiary shall main- approval of the appropriate Federal banking extension of time as may be granted in the tain procedures for identifying and managing agency and is in excess of the limitation Comptroller of the Currency’s discretion, to any financial and operational risks posed by which would apply under subsection (a)(1), divest control of any subsidiary engaged in the financial subsidiary. but for this paragraph, may be made only activities pursuant to subsection (a)(2) or, at ‘‘(c) MAINTENANCE OF SEPARATE CORPORATE with the approval of the appropriate Federal the election of the national bank, instead to IDENTITY AND SEPARATE LEGAL STATUS.— banking agency (as defined in section 3(q) of cease to engage in any activity conducted by ‘‘(1) IN GENERAL.—Each insured bank shall the Federal Deposit Insurance Act) with re- a subsidiary of the national bank pursuant ensure that the bank maintains and complies spect to such bank.’’. to subsection (a)(2). with reasonable policies and procedures to (d) ANTITYING.—Section 106(a) of the Bank ‘‘(5) CONSULTATION.—In taking any action preserve the separate corporate identity and Holding Company Act Amendments of 1970 is under this subsection, the Comptroller of the legal status of the bank and any financial amended by adding at the end the following Currency shall consult with all relevant Fed- subsidiary or affiliate of the bank. new sentence: ‘‘For purposes of this section, eral and State regulatory agencies.’’. ‘‘(2) EXAMINATIONS.—The appropriate Fed- a subsidiary of a national bank which en- (b) CLERICAL AMENDMENT.—The table of eral banking agency, as part of each exam- gages in activities pursuant to subsection sections for chapter one of title LXII of the ination, shall review whether an insured (a)(2) or (b)(4) of section 5136A of the Revised Revised Statutes of the United States is bank is observing the separate corporate Statutes of the United States shall be amended— identity and separate legal status of any sub- deemed to be a subsidiary of a bank holding (1) by redesignating the item relating to sidiaries and affiliates of the bank. company, and not a subsidiary of a bank.’’. section 5136A as section 5136C; and ‘‘(d) FINANCIAL SUBSIDIARY DEFINED.—For (2) by inserting after the item relating to SEC. 123. MISREPRESENTATIONS REGARDING DE- purposes of this section, the term ‘financial POSITORY INSTITUTION LIABILITY section 5136 the following new item: subsidiary’ has the meaning given to such FOR OBLIGATIONS OF AFFILIATES. ‘‘5136A. Subsidiaries of national banks.’’. term in section 5136A(a)(7)(B) of the Revised (a) IN GENERAL.—Chapter 47 of title 18, SEC. 122. SAFETY AND SOUNDNESS FIREWALLS Statutes of the United States. United States Code, is amended by inserting BETWEEN BANKS AND THEIR FINAN- ‘‘(e) REGULATIONS.—The appropriate Fed- after section 1007 the following new section: CIAL SUBSIDIARIES. eral banking agencies shall jointly prescribe (a) PURPOSES.—The purposes of this section regulations implementing this section.’’. ‘‘§ 1008. Misrepresentations regarding finan- are— (c) TRANSACTIONS BETWEEN FINANCIAL SUB- cial institution liability for obligations of (1) to protect the safety and soundness of SIDIARIES AND OTHER AFFILIATES.—Section affiliates any insured bank that has a financial sub- 23A of the Federal Reserve Act (12 U.S.C. ‘‘(a) IN GENERAL.—No institution-affiliated sidiary; 371c) is amended— party of an insured depository institution or (2) to apply to any transaction between the (1) by redesignating subsection (e) as sub- institution-affiliated party of a subsidiary or bank and the financial subsidiary (including section (f); and affiliate of an insured depository institution a loan, extension of credit, guarantee, or (2) by inserting after subsection (d), the shall fraudulently represent that the institu- purchase of assets), other than an equity in- following new subsection: tion is or will be liable for any obligation of vestment, the same restrictions and require- ‘‘(e) RULES RELATING TO BANKS WITH FI- a subsidiary or other affiliate of the institu- ments as would apply if the financial sub- NANCIAL SUBSIDIARIES.— tion. sidiary were a subsidiary of a bank holding ‘‘(1) FINANCIAL SUBSIDIARY DEFINED.—For ‘‘(b) CRIMINAL PENALTY.—Whoever violates company having control of the bank; and purposes of this section and section 23B, the subsection (a) shall be fined under this title, (3) to apply to any equity investment of term ‘financial subsidiary’ means a company imprisoned for not more than 5 years, or the bank in the financial subsidiary restric- which is a subsidiary of a bank and is en- both. tions and requirements equivalent to those gaged in activities that are financial in na- ‘‘(c) INSTITUTION-AFFILIATED PARTY DE- that would apply if— ture or incidental to such financial activities FINED.—For purposes of this section, the (A) the bank paid a dividend in the same pursuant to subsection (a)(2) or (b)(4) of sec- term ‘institution-affiliated party’ has the dollar amount to a bank holding company tion 5136A of the Revised Statutes of the same meaning as in section 3 of the Federal having control of the bank; and United States. Deposit Insurance Act and any reference in (B) the bank holding company used the ‘‘(2) APPLICATION TO TRANSACTIONS BE- that section shall also be deemed to refer to proceeds of the dividend to make an equity TWEEN A FINANCIAL SUBSIDIARY OF A BANK AND a subsidiary or affiliate of an insured deposi- investment in a subsidiary that was engaged THE BANK.—For purposes of applying this sec- tory institution. in the same activities as the financial sub- tion and section 23B to a transaction be- ‘‘(d) OTHER DEFINITIONS.—For purposes of sidiary of the bank. tween a financial subsidiary of a bank and this section, the terms ‘affiliate’, ‘insured (b) SAFETY AND SOUNDNESS FIREWALLS AP- the bank (or between such financial sub- depository institution’, and ‘subsidiary’ have PLICABLE TO SUBSIDIARIES OF BANKS.—The sidiary and any other subsidiary of the bank same meanings as in section 3 of the Federal Federal Deposit Insurance Act (12 U.S.C. 1811 which is not a financial subsidiary) and not- Deposit Insurance Act.’’. et seq.) is amended by inserting after section withstanding subsection (b)(2) and section (b) CLERICAL AMENDMENT.—The table of 45 (as added by section 113(b) of this title) 23B(d)(1), the financial subsidiary of the sections for chapter 47 of title 18, United the following new section: bank— States Code, is amended by inserting after July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5259

the item relating to section 1007 the fol- ‘‘(ii) AVAILABILITY.—A wholesale financial by instead reviewing the reports of examina- lowing new item: holding company or a subsidiary of such tion made of— ‘‘1008. Misrepresentations regarding financial company shall provide to the Board, at the ‘‘(i) any registered broker or dealer or any institution liability for obliga- request of the Board, a report referred to in registered investment adviser by or on behalf tions of affiliates.’’. clause (i). of the Commission; and ‘‘(ii) any licensed insurance company by or SEC. 124. REPEAL OF STOCK LOAN LIMIT IN FED- ‘‘(C) EXEMPTIONS FROM REPORTING REQUIRE- ERAL RESERVE ACT. MENTS.— on behalf of any State government insurance agency responsible for the supervision of the Section 11 of the Federal Reserve Act (12 ‘‘(i) IN GENERAL.—The Board may, by regu- insurance company. U.S.C. 248) is amended by striking the para- lation or order, exempt any company or class ‘‘(E) CONFIDENTIALITY OF REPORTED INFOR- graph designated as ‘‘(m)’’ and inserting of companies, under such terms and condi- MATION.— ‘‘(m) [Repealed]’’. tions and for such periods as the Board shall provide in such regulation or order, from the ‘‘(i) IN GENERAL.—Notwithstanding any Subtitle D—Wholesale Financial Holding provisions of this paragraph and any regula- other provision of law, the Board shall not be Companies; Wholesale Financial Institutions tion prescribed under this paragraph. compelled to disclose any nonpublic informa- CHAPTER 1—WHOLESALE FINANCIAL ‘‘(ii) CRITERIA FOR CONSIDERATION.—In tion required to be reported under this para- HOLDING COMPANIES making any determination under clause (i) graph, or any information supplied to the SEC. 131. WHOLESALE FINANCIAL HOLDING COM- with regard to any exemption under such Board by any domestic or foreign regulatory PANIES ESTABLISHED. clause, the Board shall consider, among such agency, that relates to the financial or oper- ational condition of any wholesale financial Section 10 of the Bank Holding Company other factors as the Board may determine to holding company or any subsidiary of such Act of 1956 (12 U.S.C. 1841 et seq.) is amended be appropriate, the following factors: company. to read as follows: ‘‘(I) Whether information of the type re- ‘‘(ii) COMPLIANCE WITH REQUESTS FOR INFOR- ‘‘SEC. 10. WHOLESALE FINANCIAL HOLDING COM- quired under this paragraph is available from MATION.—No provision of this subparagraph PANIES. a supervisory agency (as defined in section shall be construed as authorizing the Board ‘‘(a) COMPANIES THAT CONTROL WHOLESALE 1101(7) of the Right to Financial Privacy Act to withhold information from the Congress, FINANCIAL INSTITUTIONS.— of 1978) or a foreign regulatory authority of or preventing the Board from complying ‘‘(1) WHOLESALE FINANCIAL HOLDING COM- a similar type. with a request for information from any PANY DEFINED.—The term ‘wholesale finan- ‘‘(II) The primary business of the company. other Federal department or agency for pur- cial holding company’ means any company ‘‘(III) The nature and extent of the domes- poses within the scope of such department’s that— tic and foreign regulation of the activities of or agency’s jurisdiction, or from complying ‘‘(A) is registered as a bank holding com- the company. with any order of a court of competent juris- pany; ‘‘(3) EXAMINATIONS.— diction in an action brought by the United ‘‘(B) is predominantly engaged in financial ‘‘(A) LIMITED USE OF EXAMINATION AUTHOR- States or the Board. activities as defined in section 6(f)(2); ITY.—The Board may make examinations of ‘‘(iii) COORDINATION WITH OTHER LAW.—For ‘‘(C) controls 1 or more wholesale financial each wholesale financial holding company purposes of section 552 of title 5, United institutions; and each subsidiary of such company in States Code, this subparagraph shall be con- ‘‘(D) does not control— order to— sidered to be a statute described in sub- ‘‘(i) a bank other than a wholesale finan- ‘‘(i) inform the Board regarding the nature section (b)(3)(B) of such section. cial institution; of the operations and financial condition of ‘‘(iv) DESIGNATION OF CONFIDENTIAL INFOR- ‘‘(ii) an insured bank other than an institu- the wholesale financial holding company and MATION.—In prescribing regulations to carry tion permitted under subparagraph (D), (F), its subsidiaries; out the requirements of this subsection, the or (G) of section 2(c)(2); or ‘‘(ii) inform the Board regarding— Board shall designate information described ‘‘(iii) a savings association; and ‘‘(I) the financial and operational risks in or obtained pursuant to this paragraph as ‘‘(E) is not a foreign bank (as defined in within the wholesale financial holding com- confidential information. section 1(b)(7) of the International Banking pany system that may affect any depository ‘‘(F) COSTS.—The cost of any examination Act of 1978). institution owned by such holding company; conducted by the Board under this section ‘‘(2) SAVINGS ASSOCIATION TRANSITION PE- and may be assessed against, and made payable RIOD.—Notwithstanding paragraph (1)(D)(iii), ‘‘(II) the systems of the holding company by, the wholesale financial holding company. the Board may permit a company that con- and its subsidiaries for monitoring and con- ‘‘(4) CAPITAL ADEQUACY GUIDELINES.— trols a savings association and that other- trolling those risks; and ‘‘(A) CAPITAL ADEQUACY PROVISIONS.—Sub- wise meets the requirements of paragraph (1) ‘‘(iii) monitor compliance with the provi- ject to the requirements of, and solely in ac- to become supervised under paragraph (1), if sions of this Act and those governing trans- cordance with, the terms of this paragraph, the company divests control of any such sav- actions and relationships between any depos- the Board may adopt capital adequacy rules ings association within such period not to itory institution controlled by the wholesale or guidelines for wholesale financial holding exceed 5 years after becoming supervised financial holding company and any of the companies. under paragraph (1) as permitted by the company’s other subsidiaries. ‘‘(B) METHOD OF CALCULATION.—In devel- Board. ‘‘(B) RESTRICTED FOCUS OF EXAMINATIONS.— oping rules or guidelines under this para- ‘‘(b) SUPERVISION BY THE BOARD.— The Board shall, to the fullest extent pos- graph, the following provisions shall apply: ‘‘(1) IN GENERAL.—The provisions of this sible, limit the focus and scope of any exam- ‘‘(i) FOCUS ON DOUBLE LEVERAGE.—The section shall govern the reporting, examina- ination of a wholesale financial holding com- Board shall focus on the use by wholesale fi- tion, and capital requirements of wholesale pany under this paragraph to— nancial holding companies of debt and other financial holding companies. ‘‘(i) the holding company; and liabilities to fund capital investments in ‘‘(2) REPORTS.— ‘‘(ii) any subsidiary (other than an insured subsidiaries. ‘‘(A) IN GENERAL.—The Board from time to depository institution subsidiary) of the ‘‘(ii) NO UNWEIGHTED CAPITAL RATIO.—The time may require any wholesale financial holding company that, because of the size, Board shall not, by regulation, guideline, holding company and any subsidiary of such condition, or activities of the subsidiary, the order, or otherwise, impose under this sec- company to submit reports under oath to nature or size of transactions between such tion a capital ratio that is not based on ap- keep the Board informed as to— subsidiary and any affiliated depository in- propriate risk-weighting considerations. ‘‘(i) the company’s or subsidiary’s activi- stitution, or the centralization of functions ‘‘(iii) NO CAPITAL REQUIREMENT ON REGU- ties, financial condition, policies, systems within the holding company system, could LATED ENTITIES.—The Board shall not, by for monitoring and controlling financial and have a materially adverse effect on the safe- regulation, guideline, order or otherwise, operational risks, and transactions with de- ty and soundness of any depository institu- prescribe or impose any capital or capital pository institution subsidiaries of the hold- tion affiliate of the holding company. adequacy rules, standards, guidelines, or re- ing company; and ‘‘(C) DEFERENCE TO BANK EXAMINATIONS.— quirements upon any subsidiary that— ‘‘(ii) the extent to which the company or The Board shall, to the fullest extent pos- ‘‘(I) is not a depository institution; and subsidiary has complied with the provisions sible, use the reports of examination of de- ‘‘(II) is in compliance with applicable cap- of this Act and regulations prescribed and pository institutions made by the Comp- ital requirements of another Federal regu- orders issued under this Act. troller of the Currency, the Federal Deposit latory authority (including the Securities ‘‘(B) USE OF EXISTING REPORTS.— Insurance Corporation, the Director of the and Exchange Commission) or State insur- ‘‘(i) IN GENERAL.—The Board shall, to the Office of Thrift Supervision or the appro- ance authority. fullest extent possible, accept reports in ful- priate State depository institution super- ‘‘(iv) LIMITATION.—The Board shall not, by fillment of the Board’s reporting require- visory authority for the purposes of this sec- regulation, guideline, order or otherwise, ments under this paragraph that the whole- tion. prescribe or impose any capital or capital sale financial holding company or any sub- ‘‘(D) DEFERENCE TO OTHER EXAMINATIONS.— adequacy rules, standards, guidelines, or re- sidiary of such company has provided or been The Board shall, to the fullest extent pos- quirements upon any subsidiary that is not a required to provide to other Federal and sible, address the circumstances which might depository institution and that is registered State supervisors or to appropriate self-regu- otherwise permit or require an examination as an investment adviser under the Invest- latory organizations. by the Board by forgoing an examination and ment Advisers Act of 1940, except that this H5260 CONGRESSIONAL RECORD — HOUSE July 1, 1999 clause shall not be construed as preventing which was predominately engaged as of Jan- directly or indirectly, and which engages in the Board from imposing capital or capital uary 1, 1997, in financial activities in the any activity pursuant to subsection (c) or (g) adequacy rules, guidelines, standards, or re- United States (or any successor to any such of section 6, comply with the provisions of quirements with respect to activities of a company) may engage in, or directly or indi- sections 23A and 23B of the Federal Reserve registered investment adviser other than in- rectly own or control shares of a company Act in the same manner and to the same ex- vestment advisory activities or activities in- engaged in, activities related to the trading, tent as such transactions would be required cidental to investment advisory activities. sale, or investment in commodities and un- to comply with such sections if the bank ‘‘(v) LIMITATIONS ON INDIRECT ACTION.—In derlying physical properties that were not were a member bank. developing, establishing, or assessing hold- permissible for bank holding companies to ‘‘(3) TREATMENT AS A WHOLESALE FINANCIAL ing company capital or capital adequacy conduct in the United States as of January 1, INSTITUTION.—Any foreign bank which is, or rules, guidelines, standards, or requirements 1997, if such wholesale financial holding com- is affiliated with a company which is, treat- for purposes of this paragraph, the Board pany, or any subsidiary of such holding com- ed as a wholesale financial holding company shall not take into account the activities, pany, was engaged directly, indirectly, or under this subsection shall be treated as a operations, or investments of an affiliated through any such company in any of such ac- wholesale financial institution for purposes investment company registered under the In- tivities as of January 1, 1997, in the United of subsections (c)(1)(C) and (c)(3) of section vestment Company Act of 1940, unless the in- States. 9B of the Federal Reserve Act, and any such vestment company is— ‘‘(B) LIMITATION.—The attributed aggre- foreign bank or company shall be subject to ‘‘(I) a bank holding company; or gate consolidated assets of a wholesale fi- paragraphs (3), (4), and (5) of section 9B(d) of ‘‘(II) controlled by a bank holding company nancial holding company held under the au- the Federal Reserve Act, except that the by reason of ownership by the bank holding thority granted under this paragraph and not Board may adopt such modifications, condi- company (including through all of its affili- otherwise permitted to be held by all whole- tions, or exemptions as the Board deems ap- ates) of 25 percent or more of the shares of sale financial holding companies under this propriate, giving due regard to the principle the investment company, and the shares section may not exceed 5 percent of the total of national treatment and equality of com- owned by the bank holding company have a consolidated assets of the wholesale finan- petitive opportunity. market value equal to more than $1,000,000. cial holding company, except that the Board ‘‘(4) SUPERVISION OF FOREIGN BANK WHICH ‘‘(vi) APPROPRIATE EXCLUSIONS.—The Board may increase such percentage of total con- MAINTAINS NO BANKING PRESENCE OTHER THAN shall take full account of— solidated assets by such amounts and under CONTROL OF A WHOLESALE FINANCIAL INSTITU- ‘‘(I) the capital requirements made appli- such circumstances as the Board considers TION.—A foreign bank that owns or controls cable to any subsidiary that is not a deposi- appropriate, consistent with the purposes of a wholesale financial institution but does tory institution by another Federal regu- this Act. not operate a branch, agency, or commercial latory authority or State insurance author- ‘‘(3) CROSS MARKETING RESTRICTIONS.—A lending company in the United States (and ity; and wholesale financial holding company shall any company that owns or controls such for- ‘‘(II) industry norms for capitalization of a not permit— eign bank) may request a determination company’s unregulated subsidiaries and ac- ‘‘(A) any company whose shares it owns or from the Board that such bank or company tivities. controls pursuant to paragraph (1) or (2) to be treated as a wholesale financial holding ‘‘(vii) INTERNAL RISK MANAGEMENT MOD- offer or market any product or service of an company, except that such bank or company ELS.—The Board may incorporate internal affiliated wholesale financial institution; or shall be subject to the restrictions of para- risk management models of wholesale finan- ‘‘(B) any affiliated wholesale financial in- graphs (2)(A) and (3) of this subsection. cial holding companies into its capital ade- stitution to offer or market any product or ‘‘(5) NO EFFECT ON OTHER PROVISIONS.—This quacy guidelines or rules and may take ac- service of any company whose shares are section shall not be construed as limiting count of the extent to which resources of a owned or controlled by such wholesale finan- the authority of the Board under the Inter- subsidiary depository institution may be cial holding company pursuant to such para- national Banking Act of 1978 with respect to used to service the debt or other liabilities of graphs. the regulation, supervision, or examination the wholesale financial holding company. ‘‘(d) QUALIFICATION OF FOREIGN BANK AS ‘‘(c) NONFINANCIAL ACTIVITIES AND INVEST- WHOLESALE FINANCIAL HOLDING COMPANY.— of foreign banks and their offices and affili- MENTS.— ‘‘(1) IN GENERAL.—Any foreign bank, or any ates in the United States. ‘‘(1) GRANDFATHERED ACTIVITIES.— company that owns or controls a foreign ‘‘(6) APPLICABILITY OF COMMUNITY REIN- ‘‘(A) IN GENERAL.—Notwithstanding section bank, that operates a branch, agency, or VESTMENT ACT OF 1977.—The branches in the 4(a), a company that becomes a wholesale fi- commercial lending company in the United United States of a foreign bank that is, or is nancial holding company may continue to States, including a foreign bank or company affiliated with a company that is, treated as engage, directly or indirectly, in any activ- that owns or controls a wholesale financial a wholesale financial holding company shall ity and may retain ownership and control of institution, may request a determination be subject to section 9B(b)(11) of the Federal shares of a company engaged in any activity from the Board that such bank or company Reserve Act as if the foreign bank were a if— be treated as a wholesale financial holding wholesale financial institution under such ‘‘(i) on the date of the enactment of the Fi- company other than for purposes of sub- section. The Board and the Comptroller of nancial Services Act of 1999, such wholesale section (c), subject to such conditions as the the Currency shall apply the provisions of financial holding company was lawfully en- Board considers appropriate, giving due re- sections 803(2), 804, and 807(1) of the Commu- gaged in that nonfinancial activity, held the gard to the principle of national treatment nity Reinvestment Act of 1977 to branches of shares of such company, or had entered into and equality of competitive opportunity and foreign banks which receive only such depos- a contract to acquire shares of any company the requirements imposed on domestic banks its as are permissible for receipt by a cor- engaged in such activity; and and companies. poration organized under section 25A of the ‘‘(ii) the company engaged in such activity ‘‘(2) CONDITIONS FOR TREATMENT AS A Federal Reserve Act, in the same manner continues to engage only in the same activi- WHOLESALE FINANCIAL HOLDING COMPANY.—A and to the same extent such sections apply ties that such company conducted on the foreign bank and a company that owns or to such a corporation.’’. date of the enactment of the Financial Serv- controls a foreign bank may not be treated SEC. 132. AUTHORIZATION TO RELEASE RE- ices Act of 1999, and other activities permis- as a wholesale financial holding company PORTS. sible under this Act. unless the bank and company meet and con- (a) FEDERAL RESERVE ACT.—The last sen- ‘‘(B) NO EXPANSION OF GRANDFATHERED COM- tinue to meet the following criteria: tence of the eighth undesignated paragraph MERCIAL ACTIVITIES THROUGH MERGER OR CON- ‘‘(A) NO INSURED DEPOSITS.—No deposits of section 9 of the Federal Reserve Act (12 SOLIDATION.—A wholesale financial holding held directly by a foreign bank or through an company that engages in activities or holds affiliate (other than an institution described U.S.C. 326) is amended to read as follows: shares pursuant to this paragraph, or a sub- in subparagraph (D) or (F) of section 2(c)(2)) ‘‘The Board of Governors of the Federal Re- sidiary of such wholesale financial holding are insured under the Federal Deposit Insur- serve System, at its discretion, may furnish company, may not acquire, in any merger, ance Act. reports of examination or other confidential supervisory information concerning State consolidation, or other type of business com- ‘‘(B) CAPITAL STANDARDS.—The foreign bination, assets of any other company which bank meets risk-based capital standards member banks or any other entities exam- is engaged in any activity which the Board comparable to the capital standards required ined under any other authority of the Board has not determined to be financial in nature for a wholesale financial institution, giving to any Federal or State authorities with su- or incidental to activities that are financial due regard to the principle of national treat- pervisory or regulatory authority over the in nature under section 6(c). ment and equality of competitive oppor- examined entity, to officers, directors, or re- ceivers of the examined entity, and to any ‘‘(C) LIMITATION TO SINGLE EXEMPTION.—No tunity. other person that the Board determines to be company that engages in any activity or ‘‘(C) TRANSACTION WITH AFFILIATES.— controls any shares under subsection (f) of Transactions between a branch, agency, or proper.’’. section 6 may engage in any activity or own commercial lending company subsidiary of (b) COMMODITY FUTURES TRADING COMMIS- any shares pursuant to this paragraph. the foreign bank in the United States, and SION.—The Right to Financial Privacy Act of ‘‘(2) COMMODITIES.— any securities affiliate or company in which 1978 (12 U.S.C. 3401 et seq.) is amended— ‘‘(A) IN GENERAL.—Notwithstanding section the foreign bank (or any company that owns (1) in section 1101(7) of the (12 U.S.C. 4(a), a wholesale financial holding company or controls such foreign bank) has invested, 3401(7))— July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5261

(A) by redesignating subparagraphs (G) and ‘‘(c) COMMUNITY REINVESTMENT ACT OF any reference in such sections to an insured (H) as subparagraphs (H) and (I), respec- 1977.—A national wholesale financial institu- depository institution shall be deemed to in- tively; and tion shall be subject to the Community Rein- clude a reference to a wholesale financial in- (B) by inserting after subparagraph (F) the vestment Act of 1977. stitution. following new subparagraph: (2) CLERICAL AMENDMENT.—The table of ‘‘(4) CERTAIN OTHER STATUTES APPLICA- ‘‘(G) the Commodity Futures Trading Com- sections for chapter one of title LXII of the BLE.—A wholesale financial institution shall mission; or’’; and Revised Statutes of the United States is be deemed to be a banking institution, and (2) in section 1112(e), by striking ‘‘and the amended by inserting after the item relating the Board shall be the appropriate Federal Securities and Exchange Commission’’ and to section 5136A (as added by section 121(d) of banking agency for such bank and all such inserting ‘‘, the Securities and Exchange this title) the following new item: bank’s affiliates, for purposes of the Inter- Commission, and the Commodity Futures ‘‘5136B. National wholesale financial institu- national Lending Supervision Act. Trading Commission’’. tions.’’. ‘‘(5) BANK MERGER ACT.—A wholesale finan- SEC. 133. CONFORMING AMENDMENTS. (b) WHOLESALE FINANCIAL INSTITUTIONS.— cial institution shall be subject to sections (a) BANK HOLDING COMPANY ACT OF 1956.— The Federal Reserve Act (12 U.S.C. 221 et 18(c) and 44 of the Federal Deposit Insurance (1) DEFINITIONS.—Section 2 of the Bank seq.) is amended by inserting after section Act in the same manner and to the same ex- Holding Company Act of 1956 (12 U.S.C. 1841) 9A the following new section: tent the wholesale financial institution would be subject to such sections if the insti- is amended by inserting after subsection (p) ‘‘SEC. 9B. WHOLESALE FINANCIAL INSTITUTIONS. tution were a State member insured bank or (as added by section 103(b)(1)) the following ‘‘(a) APPLICATION FOR MEMBERSHIP AS a national bank. new subsections: WHOLESALE FINANCIAL INSTITUTION.— ‘‘(6) BRANCHING.—Notwithstanding any ‘‘(q) WHOLESALE FINANCIAL INSTITUTION.— ‘‘(1) APPLICATION REQUIRED.— other provision of law, a wholesale financial The term ‘wholesale financial institution’ N GENERAL.—Any bank may apply to ‘‘(A) I institution may establish and operate a means a wholesale financial institution sub- the Board of Governors of the Federal Re- ject to section 9B of the Federal Reserve Act. branch at any location on such terms and serve System to become a State wholesale fi- conditions as established by, and with the ‘‘(r) COMMISSION.—The term ‘Commission’ nancial institution, or to the Comptroller of means the Securities and Exchange Commis- approval of— the Currency to become a national wholesale ‘‘(A) the Board, in the case of a State-char- sion. financial institution, and, as a wholesale fi- ‘‘(s) DEPOSITORY INSTITUTION.—The term tered wholesale financial institution; and nancial institution, to subscribe to the stock ‘‘(B) the Comptroller of the Currency, in ‘depository institution’— of the Federal reserve bank organized within ‘‘(1) has the meaning given to such term in the case of a national bank wholesale finan- the district where the applying bank is lo- cial institution. section 3 of the Federal Deposit Insurance cated. Act; and ‘‘(7) ACTIVITIES OF OUT-OF-STATE BRANCHES ‘‘(B) TREATMENT AS MEMBER BANK.—Any OF WHOLESALE FINANCIAL INSTITUTIONS.—A ‘‘(2) includes a wholesale financial institu- application under subparagraph (A) shall be tion.’’. State-chartered wholesale financial institu- treated as an application under, and shall be tion shall be deemed to be a State bank and (2) DEFINITION OF BANK INCLUDES WHOLE- subject to the provisions of, section 9. SALE FINANCIAL INSTITUTION.—Section 2(c)(1) an insured State bank for purposes of para- ‘‘(2) INSURANCE TERMINATION.—No bank the graphs (1), (2), and (3) of section 24(j) of the of the Bank Holding Company Act of 1956 (12 deposits of which are insured under the Fed- U.S.C. 1841(c)(1)) is amended by adding at the Federal Deposit Insurance Act. eral Deposit Insurance Act may become a ‘‘(8) DISCRIMINATION REGARDING INTEREST end the following new subparagraph: wholesale financial institution unless it has ‘‘(C) A wholesale financial institution.’’. RATES.—Section 27 of the Federal Deposit In- met all requirements under that Act for vol- surance Act shall apply to State-chartered (3) INCORPORATED DEFINITIONS.—Section untary termination of deposit insurance. wholesale financial institutions in the same 2(n) of the Bank Holding Company Act of ‘‘(b) GENERAL REQUIREMENTS APPLICABLE manner and to the same extent as such pro- 1956 (12 U.S.C. 1841(n)) is amended by insert- TO WHOLESALE FINANCIAL INSTITUTIONS.— visions apply to State member insured banks ing ‘‘ ‘insured bank’,’’ after ‘‘ ‘in danger of de- ‘‘(1) FEDERAL RESERVE ACT.—Except as oth- and any reference in such section to a State- fault’,’’. erwise provided in this section, wholesale fi- chartered insured depository institution (4) EXCEPTION TO DEPOSIT INSURANCE RE- nancial institutions shall be member banks shall be deemed to include a reference to a QUIREMENT.—Section 3(e) of the Bank Hold- and shall be subject to the provisions of this State-chartered wholesale financial institu- ing Company Act of 1956 (12 U.S.C. 1842(e)) is Act that apply to member banks to the same tion. amended by adding at the end the following: extent and in the same manner as State ‘‘(9) PREEMPTION OF STATE LAWS REQUIRING ‘‘This subsection shall not apply to a whole- member insured banks or national banks, ex- DEPOSIT INSURANCE FOR WHOLESALE FINANCIAL sale financial institution.’’. cept that a wholesale financial institution INSTITUTIONS.—The appropriate State bank- (b) FEDERAL DEPOSIT INSURANCE ACT.—Sec- may terminate membership under this Act ing authority may grant a charter to a tion 3(q)(2)(A) of the Federal Deposit Insur- only with the prior written approval of the wholesale financial institution notwith- ance Act (12 U.S.C. 1813(q)(2)(A)) is amended Board and on terms and conditions that the standing any State constitution or statute to read as follows: Board determines are appropriate to carry requiring that the institution obtain insur- ‘‘(A) any State member insured bank (ex- out the purposes of this Act. ance of its deposits and any such State con- cept a District bank) and any wholesale fi- ‘‘(2) PROMPT CORRECTIVE ACTION.—A whole- stitution or statute is hereby preempted nancial institution subject to section 9B of sale financial institution shall be deemed to solely for purposes of this paragraph. the Federal Reserve Act;’’. be an insured depository institution for pur- ‘‘(10) PARITY FOR WHOLESALE FINANCIAL IN- CHAPTER 2—WHOLESALE FINANCIAL poses of section 38 of the Federal Deposit In- STITUTIONS.—A State bank that is a whole- INSTITUTIONS surance Act except that— sale financial institution under this section SEC. 136. WHOLESALE FINANCIAL INSTITUTIONS. ‘‘(A) the relevant capital levels and capital shall have all of the rights, powers, privi- (a) NATIONAL WHOLESALE FINANCIAL INSTI- measures for each capital category shall be leges, and immunities (including those de- TUTIONS.— the levels specified by the Board for whole- rived from status as a federally chartered in- (1) IN GENERAL.—Chapter one of title LXII sale financial institutions; stitution) of and as if it were a national of the Revised Statutes of the United States ‘‘(B) subject to subparagraph (A), all ref- bank, subject to such terms and conditions (12 U.S.C. 21 et seq.) is amended by inserting erences to the appropriate Federal banking as established by the Board. after section 5136A (as added by section agency or to the Corporation in that section ‘‘(11) COMMUNITY REINVESTMENT ACT OF 121(a) of this title) the following new section: shall be deemed to be references to the 1977.—A State wholesale financial institution ‘‘SEC. 5136B. NATIONAL WHOLESALE FINANCIAL Comptroller of the Currency, in the case of a shall be subject to the Community Reinvest- INSTITUTIONS. national wholesale financial institution, and ment Act of 1977. ‘‘(a) AUTHORIZATION OF THE COMPTROLLER to the Board, in the case of all other whole- ‘‘(c) SPECIFIC REQUIREMENTS APPLICABLE TO REQUIRED.—A national bank may apply to sale financial institutions; and WHOLESALE FINANCIAL INSTITUTIONS.— the Comptroller on such forms and in accord- ‘‘(C) in the case of wholesale financial in- ‘‘(1) LIMITATIONS ON DEPOSITS.— ance with such regulations as the Comp- stitutions, the purpose of prompt corrective ‘‘(A) MINIMUM AMOUNT.— troller may prescribe, for permission to oper- action shall be to protect taxpayers and the ‘‘(i) IN GENERAL.—No wholesale financial ate as a national wholesale financial institu- financial system from the risks associated institution may receive initial deposits of tion. with the operation and activities of whole- $100,000 or less, other than on an incidental ‘‘(b) REGULATION.—A national wholesale fi- sale financial institutions. and occasional basis. nancial institution may exercise, in accord- ‘‘(3) ENFORCEMENT AUTHORITY.—Section ‘‘(ii) LIMITATION ON DEPOSITS OF LESS THAN ance with such institution’s articles of incor- 3(u), subsections (j) and (k) of section 7, sub- $100,000.—No wholesale financial institution poration and regulations issued by the sections (b) through (n), (s), (u), and (v) of may receive initial deposits of $100,000 or less Comptroller, all the powers and privileges of section 8, and section 19 of the Federal De- if such deposits constitute more than 5 per- a national bank formed in accordance with posit Insurance Act shall apply to a whole- cent of the institution’s total deposits. section 5133 of the Revised Statutes of the sale financial institution in the same man- ‘‘(B) NO DEPOSIT INSURANCE.—Except as United States, subject to section 9B of the ner and to the same extent as such provi- otherwise provided in section 8A(f) of the Federal Reserve Act and the limitations and sions apply to State member insured banks Federal Deposit Insurance Act, no deposits restrictions contained therein. or national banks, as the case may be, and held by a wholesale financial institution H5262 CONGRESSIONAL RECORD — HOUSE July 1, 1999 shall be insured deposits under the Federal count under this Act to any member bank or eral Deposit Insurance Act involving a Deposit Insurance Act. other depository institution. wholesale financial institution that is char- ‘‘(C) ADVERTISING AND DISCLOSURE.—The ‘‘(d) CAPITAL AND MANAGERIAL REQUIRE- tered as a national bank, the Board shall no- Board and the Comptroller of the Currency MENTS.— tify the Comptroller and recommend that shall prescribe jointly regulations pertaining ‘‘(1) IN GENERAL.—A wholesale financial in- the Comptroller take appropriate action. If to advertising and disclosure by wholesale fi- stitution shall be well capitalized and well the Comptroller fails to take the rec- nancial institutions to ensure that each de- managed. ommended action or to provide an accept- positor is notified that deposits at the whole- ‘‘(2) NOTICE TO COMPANY.—The Board shall able plan for addressing the concerns of the sale financial institution are not federally promptly provide notice to a company that Board before the close of the 30-day period insured or otherwise guaranteed by the controls a wholesale financial institution beginning on the date of receipt of the for- United States Government. whenever such wholesale financial institu- mal recommendation from the Board, the ‘‘(2) MINIMUM CAPITAL LEVELS APPLICABLE tion is not well capitalized or well managed. Board may take such action. TO WHOLESALE FINANCIAL INSTITUTIONS.—The ‘‘(3) AGREEMENT TO RESTORE INSTITUTION.— ‘‘(2) EXIGENT CIRCUMSTANCES.—Notwith- Board shall, by regulation, adopt capital re- Not later than 45 days after the date of re- standing paragraph (1), the Board may exer- quirements for wholesale financial ceipt of a notice under paragraph (2) (or such cise its authority without regard to the time institutions— additional period not to exceed 90 days as the period set forth in paragraph (1) where the ‘‘(A) to account for the status of wholesale Board may permit), the company shall exe- Board finds that exigent circumstances exist financial institutions as institutions that ac- cute an agreement acceptable to the Board and the Board notifies the Comptroller of the cept deposits that are not insured under the to restore the wholesale financial institution Board’s action and of the exigent cir- Federal Deposit Insurance Act; and to compliance with all of the requirements cumstances. ‘‘(B) to provide for the safe and sound oper- of paragraph (1). ‘‘(g) EXCLUSIVE JURISDICTION.—Subsections ation of the wholesale financial institution ‘‘(4) LIMITATIONS UNTIL INSTITUTION RE- (c) and (e) of section 43 of the Federal De- without undue risk to creditors or other per- STORED.—Until the wholesale financial insti- posit Insurance Act shall not apply to any sons, including Federal reserve banks, en- tution is restored to compliance with all of wholesale financial institution.’’. gaged in transactions with the bank. the requirements of paragraph (1), the Board (c) VOLUNTARY TERMINATION OF INSURED ‘‘(3) ADDITIONAL REQUIREMENTS APPLICABLE may impose such limitations on the conduct STATUS BY CERTAIN INSTITUTIONS.— TO WHOLESALE FINANCIAL INSTITUTIONS.—In or activities of the company or any affiliate (1) SECTION 8 DESIGNATIONS.—Section 8(a) of addition to any requirement otherwise appli- of the company as the Board determines to the Federal Deposit Insurance Act (12 U.S.C. cable to State member insured banks or ap- be appropriate under the circumstances. 1818(a)) is amended— plicable, under this section, to wholesale fi- ‘‘(5) FAILURE TO RESTORE.—If the company (A) by striking paragraph (1); and nancial institutions, the Board may impose, does not execute and implement an agree- (B) by redesignating paragraphs (2) by regulation or order, upon wholesale finan- ment in accordance with paragraph (3), com- through (10) as paragraphs (1) through (9), re- cial institutions— ply with any limitation imposed under para- spectively. ‘‘(A) limitations on transactions, direct or graph (4), restore the wholesale financial in- (2) VOLUNTARY TERMINATION OF INSURED indirect, with affiliates to prevent— stitution to well capitalized status not later STATUS.—The Federal Deposit Insurance Act ‘‘(i) the transfer of risk to the deposit in- than 180 days after the date of receipt by the (12 U.S.C. 1811 et seq.) is amended by insert- surance funds; or company of the notice described in para- ing after section 8 the following new section: ‘‘(ii) an affiliate from gaining access to, or graph (2), or restore the wholesale financial ‘‘SEC. 8A. VOLUNTARY TERMINATION OF STATUS the benefits of, credit from a Federal reserve institution to well managed status within AS INSURED DEPOSITORY INSTITU- bank, including overdrafts at a Federal re- such period as the Board may permit, the TION. serve bank; company shall, under such terms and condi- ‘‘(a) IN GENERAL.—Except as provided in ‘‘(B) special clearing balance requirements; tions as may be imposed by the Board sub- subsection (b), an insured State bank or a and ject to such extension of time as may be national bank may voluntarily terminate ‘‘(C) any additional requirements that the granted in the discretion of the Board, divest such bank’s status as an insured depository Board determines to be appropriate or nec- control of its subsidiary depository institu- institution in accordance with regulations of essary to— tions. the Corporation if— ‘‘(i) promote the safety and soundness of ‘‘(6) WELL MANAGED DEFINED.—For purposes ‘‘(1) the bank provides written notice of the wholesale financial institution or any in- of this subsection, the term ‘well managed’ the bank’s intent to terminate such insured sured depository institution affiliate of the has the same meaning as in section 2 of the status— wholesale financial institution; Bank Holding Company Act of 1956. ‘‘(A) to the Corporation and the Board of ‘‘(ii) prevent the transfer of risk to the de- ‘‘(e) RESOLUTION OF WHOLESALE FINANCIAL Governors of the Federal Reserve System, in posit insurance funds; or INSTITUTIONS.— the case of an insured State bank, or to the ‘‘(iii) protect creditors and other persons, ‘‘(1) CONSERVATORSHIP OR RECEIVERSHIP.— Corporation and the Comptroller of the Cur- including Federal reserve banks, engaged in ‘‘(A) APPOINTMENT.—The Board may ap- rency, in the case of an insured national transactions with the wholesale financial in- point a conservator or receiver to take pos- bank authorized to operate as a wholesale fi- stitution. session and control of a wholesale financial nancial institution, not less than 6 months ‘‘(4) EXEMPTIONS FOR WHOLESALE FINANCIAL institution to the same extent and in the before the effective date of such termination; INSTITUTIONS.—The Board may, by regulation same manner as the Comptroller of the Cur- and or order, exempt any wholesale financial in- rency may appoint a conservator or receiver ‘‘(B) to all depositors at such bank, not stitution from any provision applicable to a for a national bank. less than 6 months before the effective date member bank that is not a wholesale finan- ‘‘(B) POWERS.—The conservator or receiver of the termination of such status; and cial institution, if the Board finds that such for a wholesale financial institution shall ex- ‘‘(2) either— exemption is consistent with— ercise the same powers, functions, and du- ‘‘(A) the deposit insurance fund of which ‘‘(A) the promotion of the safety and ties, subject to the same limitations, as a such bank is a member equals or exceeds the soundness of the wholesale financial institu- conservator or receiver for a national bank. fund’s designated reserve ratio as of the date tion or any insured depository institution af- ‘‘(2) BOARD AUTHORITY.—The Board shall the bank provides a written notice under filiate of the wholesale financial institution; have the same authority with respect to any paragraph (1) and the Corporation deter- ‘‘(B) the protection of the deposit insur- conservator or receiver appointed under mines that the fund will equal or exceed the ance funds; and paragraph (1), and the wholesale financial in- applicable designated reserve ratio for the 2 ‘‘(C) the protection of creditors and other stitution for which it has been appointed, as semiannual assessment periods immediately persons, including Federal reserve banks, en- the Comptroller of the Currency has with re- following such date; or gaged in transactions with the wholesale fi- spect to a conservator or receiver for a na- ‘‘(B) the Corporation and the Board of Gov- nancial institution. tional bank and the national bank for which ernors of the Federal Reserve System, in the ‘‘(5) LIMITATION ON TRANSACTIONS BETWEEN the conservator or receiver has been ap- case of an insured State bank, or the Cor- A WHOLESALE FINANCIAL INSTITUTION AND AN pointed. poration and the Comptroller of the Cur- INSURED BANK.—For purposes of section ‘‘(3) BANKRUPTCY PROCEEDINGS.—The Comp- rency, in the case of an insured national 23A(d)(1) of the Federal Reserve Act, a troller of the Currency (in the case of a na- bank authorized to operate as a wholesale fi- wholesale financial institution that is affili- tional wholesale financial institution) or the nancial institution, has approved the termi- ated with an insured bank shall not be a Board may direct the conservator or receiver nation of the bank’s insured status and the bank. of a wholesale financial institution to file a bank pays an exit fee in accordance with ‘‘(6) NO EFFECT ON OTHER PROVISIONS.—This petition pursuant to title 11, United States subsection (e). section shall not be construed as limiting Code, in which case, title 11, United States ‘‘(b) EXCEPTION.—Subsection (a) shall not the Board’s authority over member banks or Code, shall apply to the wholesale financial apply with respect to— the authority of the Comptroller of the Cur- institution in lieu of otherwise applicable ‘‘(1) an insured savings association; or rency over national banks under any other Federal or State insolvency law. ‘‘(2) an insured branch that is required to provision of law, or to create any obligation ‘‘(f) BOARD BACKUP AUTHORITY.— be insured under subsection (a) or (b) of sec- for any Federal Reserve bank to make, in- ‘‘(1) NOTICE TO THE COMPTROLLER.—Before tion 6 of the International Banking Act of crease, renew, or extend any advance or dis- taking any action under section 8 of the Fed- 1978. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5263

‘‘(c) ELIGIBILITY FOR INSURANCE TERMI- ‘‘(1) NOTICE TO THE CORPORATION.—The no- ‘‘SUBCHAPTER V—WHOLESALE BANK NATED.—Any bank that voluntarily elects to tice required under subsection (a)(1)(A) shall LIQUIDATION terminate the bank’s insured status under be in such form as the Corporation may re- ‘‘§ 781. Definitions for subchapter subsection (a) shall not be eligible for insur- quire. ‘‘In this subchapter— ance on any deposits or any assistance au- ‘‘(2) NOTICE TO DEPOSITORS.—The notice re- ‘‘(1) the term ‘Board’ means the Board of thorized under this Act after the period spec- quired under subsection (a)(1)(B) shall be— Governors of the Federal Reserve System; ified in subsection (f)(1). ‘‘(A) sent to each depositor’s last address ‘‘(2) the term ‘depository institution’ has ‘‘(d) INSTITUTION MUST BECOME WHOLESALE of record with the bank; and the same meaning as in section 3 of the Fed- FINANCIAL INSTITUTION OR TERMINATE DE- ‘‘(B) in such manner and form as the Cor- eral Deposit Insurance Act, and includes any POSIT-TAKING ACTIVITIES.—Any depository poration finds to be necessary and appro- wholesale bank; institution which voluntarily terminates priate for the protection of depositors.’’. ‘‘(3) the term ‘national wholesale financial such institution’s status as an insured depos- (3) DEFINITION.—Section 19(b)(1)(A)(i) of the institution’ means a wholesale financial in- itory institution under this section may not, Federal Reserve Act (12 U.S.C. 461(b)(1)(A)(i)) stitution established under section 5136B of upon termination of insurance, accept any is amended by inserting ‘‘, or any wholesale the Revised Statutes of the United States; deposits unless the institution is a wholesale financial institution subject to section 9B of and financial institution subject to section 9B of this Act’’ after ‘‘such Act’’. ‘‘(4) the term ‘wholesale bank’ means a na- the Federal Reserve Act. (d) TECHNICAL AND CONFORMING AMEND- tional wholesale financial institution, a ‘‘(e) EXIT FEES.— MENTS TO THE BANKRUPTCY CODE.— wholesale financial institution established ‘‘(1) IN GENERAL.—Any bank that volun- (1) BANKRUPTCY CODE DEBTORS.—Section under section 9B of the Federal Reserve Act, tarily terminates such bank’s status as an 109(b)(2) of title 11, United States Code, is or a corporation organized under section 25A insured depository institution under this amended by striking ‘‘; or’’ and inserting the of the Federal Reserve Act. section shall pay an exit fee in an amount following: ‘‘, except that— ‘‘§ 782. Selection of trustee that the Corporation determines is sufficient ‘‘(A) a wholesale financial institution es- to account for the institution’s pro rata tablished under section 5136B of the Revised ‘‘(a) Notwithstanding any other provision share of the amount (if any) which would be Statutes of the United States or section 9B of this title, the conservator or receiver who required to restore the relevant deposit in- of the Federal Reserve Act may be a debtor files the petition shall be the trustee under surance fund to the fund’s designated reserve if a petition is filed at the direction of the this chapter, unless the Comptroller of the ratio as of the date the bank provides a writ- Comptroller of the Currency (in the case of a Currency (in the case of a national wholesale ten notice under subsection (a)(1). wholesale financial institution established financial institution for which it appointed the conservator or receiver) or the Board (in ‘‘(2) PROCEDURES.—The Corporation shall under section 5136B of the Revised Statutes prescribe, by regulation, procedures for as- of the United States) or the Board of Gov- the case of any wholesale bank for which it sessing any exit fee under this subsection. ernors of the Federal Reserve System (in the appointed the conservator or receiver) des- ignates an alternative trustee. The Comp- ‘‘(f) TEMPORARY INSURANCE OF DEPOSITS IN- case of any wholesale financial institution); troller of the Currency or the Board (as ap- SURED AS OF TERMINATION.— and plicable) may designate a successor trustee, ‘‘(1) TRANSITION PERIOD.—The insured de- ‘‘(B) a corporation organized under section if required. posits of each depositor in a State bank or a 25A of the Federal Reserve Act may be a ‘‘(b) Whenever the Comptroller of the Cur- national bank on the effective date of the debtor if a petition is filed at the direction of rency or the Board appoints or designates a voluntary termination of the bank’s insured the Board of Governors of the Federal Re- trustee, chapter 3 and sections 704 and 705 of status, less all subsequent withdrawals from serve System; or’’. this title shall apply to the Comptroller or any deposits of such depositor, shall con- (2) CHAPTER 7 DEBTORS.—Section 109(d) of the Board, as applicable, in the same way tinue to be insured for a period of not less title 11, United States Code, is amended to and to the same extent that they apply to a than 6 months and not more than 2 years, as read as follows: United States trustee. determined by the Corporation. During such ‘‘(d) Only a railroad and a person that may period, no additions to any such deposits, be a debtor under chapter 7 of this title, ex- ‘‘§ 783. Additional powers of trustee and no new deposits in the depository insti- cept that a stockbroker, a wholesale finan- ‘‘(a) The trustee under this subchapter has tution made after the effective date of such cial institution established under section power to distribute property not of the es- termination shall be insured by the Corpora- 5136B of the Revised Statutes of the United tate, including distributions to customers tion. States or section 9B of the Federal Reserve that are mandated by subchapters III and Iv ‘‘(2) TEMPORARY ASSESSMENTS; OBLIGATIONS Act, a corporation organized under section of this chapter. AND DUTIES.—During the period specified in 25A of the Federal Reserve Act, or a com- ‘‘(b) The trustee under this subchapter paragraph (1) with respect to any bank, the modity broker, may be a debtor under chap- may, after notice and a hearing— bank shall continue to pay assessments ter 11 of this title.’’. ‘‘(1) sell the wholesale bank to a depository under section 7 as if the bank were an in- (3) DEFINITION OF FINANCIAL INSTITUTION.— institution or consortium of depository in- sured depository institution. The bank shall, Section 101(22) of title 11, United States stitutions (which consortium may agree on in all other respects, be subject to the au- Code, is amended to read as follows: the allocation of the wholesale bank among thority of the Corporation and the duties ‘‘(22) ‘financial institution’ means a person the consortium); and obligations of an insured depository in- that is a commercial or savings bank, indus- ‘‘(2) merge the wholesale bank with a de- stitution under this Act during such period, trial savings bank, savings and loan associa- pository institution; and in the event that the bank is closed due tion, trust company, wholesale financial in- ‘‘(3) transfer contracts to the same extent to an inability to meet the demands of the stitution established under section 5136B of as could a receiver for a depository institu- bank’s depositors during such period, the the Revised Statutes of the United States or tion under paragraphs (9) and (10) of section Corporation shall have the same powers and section 9B of the Federal Reserve Act, or 11(e) of the Federal Deposit Insurance Act; rights with respect to such bank as in the corporation organized under section 25A of ‘‘(4) transfer assets or liabilities to a depos- case of an insured depository institution. the Federal Reserve Act and, when any such itory institution; ‘‘(g) ADVERTISEMENTS.— person is acting as agent or custodian for a ‘‘(5) transfer assets and liabilities to a ‘‘(1) IN GENERAL.—A bank that voluntarily customer in connection with a securities bridge bank as provided in paragraphs (1), terminates the bank’s insured status under contract, as defined in section 741 of this (3)(A), (5), (6), and (9) through (13), and sub- this section shall not advertise or hold itself title, such customer,’’. paragraphs (A) through (H) and (K) of para- out as having insured deposits, except that (4) SUBCHAPTER V OF CHAPTER 7.— graph (4) of section 11(n) of the Federal De- the bank may advertise the temporary insur- (A) IN GENERAL.—Section 103 of title 11, posit Insurance Act, except that— ance of deposits under subsection (f) if, in United States Code, is amended— ‘‘(A) the bridge bank shall be treated as a connection with any such advertisement, the (i) by redesignating subsections (e) through wholesale bank for the purpose of this sub- advertisement also states with equal promi- (i) as subsections (f) through (j), respec- section; and nence that additions to deposits and new de- tively; and ‘‘(B) any references in any such provision posits made after the effective date of the (ii) by inserting after subsection (d) the of law to the Federal Deposit Insurance Cor- termination are not insured. following: poration shall be construed to be references ‘‘(2) CERTIFICATES OF DEPOSIT, OBLIGATIONS, ‘‘(e) Subchapter V of chapter 7 of this title to the appointing agency and that references AND SECURITIES.—Any certificate of deposit applies only in a case under such chapter to deposit insurance shall be omitted. or other obligation or security issued by a concerning the liquidation of a wholesale fi- ‘‘(c) Any reference in this section to trans- State bank or a national bank after the ef- nancial institution established under section fers of liabilities includes a ratable transfer fective date of the voluntary termination of 5136B of the Revised Statutes of the United of liabilities within a priority class. the bank’s insured status under this section States or section 9B of the Federal Reserve ‘‘§ 784. Right to be heard shall be accompanied by a conspicuous, Act, or a corporation organized under sec- ‘‘The Comptroller of the Currency (in the prominently displayed notice that such cer- tion 25A of the Federal Reserve Act.’’. case of a national wholesale financial insti- tificate of deposit or other obligation or se- (B) WHOLESALE BANK LIQUIDATION.—Chapter tution), the Board (in the case of any whole- curity is not insured under this Act. 7 of title 11, United States Code, is amended sale bank), or a Federal Reserve bank (in the ‘‘(h) NOTICE REQUIREMENTS.— by adding at the end the following: case of a wholesale bank that is a member of H5264 CONGRESSIONAL RECORD — HOUSE July 1, 1999 that bank) may raise and may appear and be rectly or indirectly by, or is directly or indi- section 6(b)(1)(D) or receives a determination heard on any issue in a case under this sub- rectly under common control with, any bank under section 10(d)(1) of the Bank Holding chapter. or savings association (as such terms are de- Company Act of 1956, any authority con- (C) CONFORMING AMENDMENT.—The table of fined in section 3 of the Federal Deposit In- ferred by this subsection on any foreign bank sections for chapter 7 of title 11, United surance Act) and is not itself a bank or sav- or company to engage in any activity which States Code, is amended by adding at the end ings association shall not be deemed to be a the Board has determined to be permissible the following: bank or savings association for purposes of for financial holding companies under sec- the Federal Trade Commission Act or any tion 6 of such Act shall terminate imme- ‘‘SUBCHAPTER V—WHOLESALE BANK other law enforced by the Federal Trade diately. LIQUIDATION Commission. ‘‘(B) RESTRICTIONS AND REQUIREMENTS AU- ‘‘781. Definitions for subchapter. (b) SAVINGS PROVISION.—No provision of THORIZED.—If a foreign bank or company ‘‘782. Selection of trustee. this section shall be construed as restricting that engages, directly or through an affiliate ‘‘783. Additional powers of trustee. the authority of any Federal banking agency pursuant to paragraph (1), in an activity ‘‘784. Right to be heard.’’. (as defined in section 3 of the Federal De- which the Board has determined to be per- (e) RESOLUTION OF EDGE CORPORATIONS.— posit Insurance Act) under any Federal missible for financial holding companies banking law, including section 8 of the Fed- The 16th undesignated paragraph of section under section 6 of the Bank Holding Com- eral Deposit Insurance Act. 25A of the Federal Reserve Act (12 U.S.C. 624) pany Act of 1956 has not filed a declaration (c) HART–SCOTT–RODINO AMENDMENTS.— is amended to read as follows: with the Board of its status as a financial ‘‘(16) APPOINTMENT OF RECEIVER OR CONSER- (1) BANKS.—Section 7A(c)(7) of the Clayton Act (15 U.S.C. 18a(c)(7)) is amended by insert- holding company under such section or re- VATOR.— ceived a determination under section 10(d)(1) ‘‘(A) IN GENERAL.—The Board may appoint ing before the semicolon at the end the fol- lowing: ‘‘, except that a portion of a trans- by the end of the 2-year period beginning on a conservator or receiver for a corporation the date of enactment of the Financial Serv- organized under the provisions of this sec- action is not exempt under this paragraph if such portion of the transaction (A) is subject ices Act of 1999, the Board, giving due regard tion to the same extent and in the same to the principle of national treatment and manner as the Comptroller of the Currency to section 6 of the Bank Holding Company Act of 1956; and (B) does not require agency equality of competitive opportunity, may may appoint a conservator or receiver for a impose such restrictions and requirements national bank, and the conservator or re- approval under section 3 of the Bank Holding Company Act of 1956’’. on the conduct of such activities by such for- ceiver for such corporation shall exercise the eign bank or company as are comparable to (2) BANK HOLDING COMPANIES.—Section same powers, functions, and duties, subject those imposed on a financial holding com- to the same limitations, as a conservator or 7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)) is amended by inserting before the pany organized under the laws of the United receiver for a national bank. States, including a requirement to conduct ‘‘(B) EQUIVALENT AUTHORITY.—The Board semicolon at the end the following: ‘‘, except that a portion of a transaction is not exempt such activities in compliance with any pru- shall have the same authority with respect dential safeguards established under section to any conservator or receiver appointed for under this paragraph if such portion of the transaction (A) is subject to section 6 of the 114 of the Financial Services Act.’’. a corporation organized under the provisions SEC. 152. FOREIGN BANKS AND FOREIGN FINAN- of this section under this paragraph and any Bank Holding Company Act of 1956; and (B) does not require agency approval under sec- CIAL INSTITUTIONS THAT ARE such corporation as the Comptroller of the WHOLESALE FINANCIAL INSTITU- Currency has with respect to a conservator tion 4 of the Bank Holding Company Act of TIONS. or receiver of a national bank and the na- 1956’’. Section 8A of the Federal Deposit Insur- tional bank for which a conservator or re- SEC. 144. ANNUAL GAO REPORT. ance Act (as added by section 136(c)(2) of this ceiver has been appointed. (a) IN GENERAL.—By the end of the 1-year Act) is amended by adding at the end the fol- ‘‘(C) TITLE 11 PETITIONS.—The Board may period beginning on the date of the enact- lowing new subsection: ment of this Act and annually thereafter, direct the conservator or receiver of a cor- ‘‘(i) VOLUNTARY TERMINATION OF DEPOSIT the Comptroller General of the United States poration organized under the provisions of INSURANCE.—The provisions on voluntary shall submit a report to the Congress on this section to file a petition pursuant to termination of insurance in this section market concentration in the financial serv- title 11, United States Code, in which case, shall apply to an insured branch of a foreign ices industry and its impact on consumers. title 11, United States Code, shall apply to bank (including a Federal branch) in the (b) ANALYSIS.—Each report submitted the corporation in lieu of otherwise applica- under subsection (a) shall contain an anal- same manner and to the same extent as they ble Federal or State insolvency law.’’. ysis of— apply to an insured State bank or a national Subtitle E—Preservation of FTC Authority (1) the positive and negative effects of af- bank.’’. SEC. 141. AMENDMENT TO THE BANK HOLDING filiations between various types of financial SEC. 153. REPRESENTATIVE OFFICES. COMPANY ACT OF 1956 TO MODIFY companies, and of acquisitions pursuant to (a) DEFINITION OF ‘‘REPRESENTATIVE OF- NOTIFICATION AND POST-APPROVAL this Act and the amendments made by this FICE’’.—Section 1(b)(15) of the International WAITING PERIOD FOR SECTION 3 Act to other provisions of law, including any Banking Act of 1978 (12 U.S.C. 3101(15)) is TRANSACTIONS. positive or negative effects on consumers, amended by striking ‘‘State agency, or sub- Section 11(b)(1) of the Bank Holding Com- area markets, and submarkets thereof or on sidiary of a foreign bank’’ and inserting ‘‘or pany Act of 1956 (12 U.S.C. 1849(b)(1)) is registered securities brokers and dealers State agency’’. amended by inserting ‘‘and, if the trans- which have been purchased by depository in- (b) EXAMINATIONS.—Section 10(c) of the action also involves an acquisition under stitutions or depository institution holding International Banking Act of 1978 (12 U.S.C. section 4 or section 6, the Board shall also companies; 3107(c)) is amended by adding at the end the notify the Federal Trade Commission of such (2) the changes in business practices and following: ‘‘The Board may also make exami- approval’’ before the period at the end of the the effects of any such changes on the avail- nations of any affiliate of a foreign bank first sentence. ability of venture capital, consumer credit, conducting business in any State if the SEC. 142. INTERAGENCY DATA SHARING. and other financial services or products and Board deems it necessary to determine and To the extent not prohibited by other law, the availability of capital and credit for enforce compliance with this Act, the Bank the Comptroller of the Currency, the Direc- small businesses; and Holding Company Act of 1956 (12 U.S.C. 1841 tor of the Office of Thrift Supervision, the (3) the acquisition patterns among deposi- et seq.), or other applicable Federal banking Federal Deposit Insurance Corporation, and tory institutions, depository institution law.’’. the Board of Governors of the Federal Re- holding companies, securities firms, and in- SEC. 154. RECIPROCITY. serve System shall make available to the At- surance companies including acquisitions (a) NATIONAL TREATMENT REPORTS.— torney General and the Federal Trade Com- among the largest 20 percent of firms and ac- (1) REPORT REQUIRED IN THE EVENT OF CER- mission any data in the possession of any quisitions within regions or other limited TAIN ACQUISITIONS.— such banking agency that the antitrust geographical areas. (A) IN GENERAL.—Whenever a person from a agency deems necessary for antitrust review (c) SUNSET.—This section shall not apply foreign country announces its intention to of any transaction requiring notice to any after the end of the 5-year period beginning acquire or acquires a bank, a securities un- such antitrust agency or the approval of on the date of the enactment of this Act. derwriter, broker, or dealer, an investment such agency under section 3, 4, or 6 of the Subtitle F—National Treatment adviser, or insurance company that ranks Bank Holding Company Act of 1956, section SEC. 151. FOREIGN BANKS THAT ARE FINANCIAL within the top 50 firms in that line of busi- 18(c) of the Federal Deposit Insurance Act, HOLDING COMPANIES. ness in the United States, the Secretary of the National Bank Consolidation and Merger Section 8(c) of the International Banking Commerce, in the case of an insurance com- Act, section 10 of the Home Owners’ Loan Act of 1978 (12 U.S.C. 3106(c)) is amended by pany, or the Secretary of the Treasury, in Act, or the antitrust laws. adding at the end the following new para- the case of a bank, a securities underwriter, SEC. 143. CLARIFICATION OF STATUS OF SUBSIDI- graph: broker, or dealer, or an investment adviser, ARIES AND AFFILIATES. ‘‘(3) TERMINATION OF GRANDFATHERED shall, within the earlier of 6 months of such (a) CLARIFICATION OF FEDERAL TRADE COM- RIGHTS.— announcement or such acquisition and in MISSION JURISDICTION.—Any person which di- ‘‘(A) IN GENERAL.—If any foreign bank or consultation with other appropriate Federal rectly or indirectly controls, is controlled di- foreign company files a declaration under and State agencies, prepare and submit to July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5265 the Congress a report on whether a United Subtitle G—Federal Home Loan Bank System community development, or securities rep- States person would be able, de facto or de Modernization resenting a whole interest in such secured jure, to acquire an equivalent sized firm in SEC. 161. SHORT TITLE. loans, in the case of any community finan- the country in which such person from a for- This subtitle may be cited as the ‘‘Federal cial institution.’’; eign country is located. Home Loan Bank System Modernization Act (6) in paragraph (5)— (B) ANALYSIS AND RECOMMENDATIONS.—If a of 1999’’. (A) in the 2d sentence, by striking ‘‘and the report submitted under subparagraph (A) SEC. 162. DEFINITIONS. Board’’; states that the equivalent treatment re- Section 2 of the Federal Home Loan Bank (B) in the 3d sentence, by striking ‘‘Board’’ ferred to in such subparagraph, de facto and Act (12 U.S.C. 1422) is amended— and inserting ‘‘Federal home loan bank’’; de jure, is not provided in the country which (1) in paragraph (1), by striking ‘‘term and is the subject of the report, the Secretary of ‘Board’ means’’ and inserting ‘‘terms ‘Fi- (C) by striking ‘‘(5) Paragraphs (1) through Commerce or the Secretary of the Treasury, nance Board’ and ‘Board’ mean’’; (4)’’ and inserting the following: as the case may be and in consultation with (2) by striking paragraph (3) and inserting ‘‘(4) ADDITIONAL BANK AUTHORITY.—Sub- other appropriate Federal and State agen- the following: paragraphs (A) through (E) of paragraph (3)’’; cies, shall include in the report analysis and ‘‘(3) STATE.—The term ‘State’, in addition and recommendations as to how that country’s to the States of the United States, includes (7) by adding at the end the following: laws and regulations would need to be the District of Columbia, Guam, Puerto ‘‘(5) REVIEW OF CERTAIN COLLATERAL STAND- changed so that reciprocal treatment would Rico, the United States Virgin Islands, ARDS.—The Board may review the collateral exist. American Samoa, and the Commonwealth of standards applicable to each Federal home (2) REPORT REQUIRED BEFORE FINANCIAL the Northern Mariana Islands.’’; and loan bank for the classes of collateral de- SERVICES NEGOTIATIONS COMMENCE.—The Sec- (3) by adding at the end the following new scribed in subparagraphs (D) and (E) of para- retary of Commerce, with respect to insur- paragraph: graph (3), and may, if necessary for safety ance companies, and the Secretary of the ‘‘(13) COMMUNITY FINANCIAL INSTITUTION.— and soundness purposes, require an increase Treasury, with respect to banks, securities ‘‘(A) IN GENERAL.—The term ‘community in the collateral standards for any or all of underwriters, brokers, dealers, and invest- financial institution’ means a member— those classes of collateral. ment advisers, shall, not less than 6 months ‘‘(i) the deposits of which are insured under ‘‘(6) DEFINITIONS.—For purposes of this sub- before the commencement of the financial the Federal Deposit Insurance Act; and section, the terms ‘small business’, ‘agri- services negotiations of the World Trade Or- ‘‘(ii) that has, as of the date of the trans- culture’, ‘rural development’, and ‘low-in- ganization and in consultation with other action at issue, less than $500,000,000 in aver- come community development’ shall have appropriate Federal and State agencies, pre- age total assets, based on an average of total the meanings given those terms by rule or pare and submit to the Congress a report assets over the 3 years preceding that date. regulation of the Finance Board.’’. containing— ‘‘(B) ADJUSTMENTS.—The $500,000,000 limit (b) CLERICAL AMENDMENT.—The section (A) an assessment of the 30 largest finan- referred to in subparagraph (A)(ii) shall be heading for section 10 of the Federal Home cial services markets with regard to whether adjusted annually by the Finance Board, Loan Bank Act (12 U.S.C. 1430) is amended to reciprocal access is available in such mar- based on the annual percentage increase, if read as follows: kets to United States financial services pro- any, in the Consumer Price Index for all ‘‘SEC. 10. ADVANCES TO MEMBERS.’’. viders; and urban consumers, as published by the De- (c) CONFORMING AMENDMENTS RELATING TO (B) with respect to any such financial serv- partment of Labor.’’. MEMBERS WHICH ARE NOT QUALIFIED THRIFT ices markets in which reciprocal access is SEC. 163. SAVINGS ASSOCIATION MEMBERSHIP. LENDERS—The 1st of the 2 subsections des- not available to United States financial serv- Section 5(f) of the Home Owners’ Loan Act ignated as subsection (e) of section 10 of the ices providers, an analysis and recommenda- (12 U.S.C. 1464(f)) is amended to read as fol- Federal Home Loan Bank Act (12 U.S.C. tions as to what legislative, regulatory, or lows: 1430(e)(1)) is amended— enforcement changes would be required to ‘‘(f) FEDERAL HOME LOAN BANK MEMBER- (1) in the last sentence of paragraph (1), by ensure full reciprocity for such providers. SHIP.—On and after January 1, 1999, a Federal inserting ‘‘or, in the case of any community savings association may become a member of financial institution, for the purposes de- (3) PERSON OF A FOREIGN COUNTRY DE- the Federal Home Loan Bank System, and scribed in subsection (a)(2)’’ before the pe- FINED.—For purposes of this subsection, the term ‘‘person of a foreign country’’ means a shall qualify for such membership in the riod; and manner provided by the Federal Home Loan person, or a person which directly or indi- (2) in paragraph (5)(C), by inserting ‘‘except Bank Act.’’. rectly owns or controls that person, that is a that, in determining the actual thrift invest- resident of that country, is organized under SEC. 164. ADVANCES TO MEMBERS; COLLATERAL. ment percentage of any community financial the laws of that country, or has its principal (a) IN GENERAL.—Section 10(a) of the Fed- institution for purposes of this subsection, eral Home Loan Bank Act (12 U.S.C. 1430(a)) place of business in that country. the total investment of such member in is amended— loans for small business, agriculture, rural (b) PROVISIONS APPLICABLE TO SUBMIS- (1) by redesignating paragraphs (1) through development, or low-income community de- SIONS.— (4) as subparagraphs (A) through (D), respec- velopment, or securities representing a (1) NOTICE.—Before preparing any report tively, and indenting appropriately; whole interest in such loans, shall be treated required under subsection (a), the Secretary (2) by striking ‘‘(a) Each’’ and inserting the as a qualified thrift investment (as defined of Commerce or the Secretary of the Treas- following: in such section 10(m))’’ before the period. ury, as the case may be, shall publish notice ‘‘(a) IN GENERAL.— SEC. 165. ELIGIBILITY CRITERIA. that a report is in preparation and seek com- ‘‘(1) ALL ADVANCES.—Each’’; Section 4(a) of the Federal Home Loan ment from United States persons. (3) by striking the 2d sentence and insert- Bank Act (12 U.S.C. 1424(a)) is amended— (2) PRIVILEGED SUBMISSIONS.—Upon the re- ing the following: (1) in paragraph (2)(A), by inserting, quest of the submitting person, any com- ‘‘(2) PURPOSES OF ADVANCES.—A long-term ‘‘(other than a community financial institu- ments or related communications received advance may only be made for the purposes tion)’’ after ‘‘institution’’; and by the Secretary of Commerce or the Sec- of— (2) by adding at the end the following new retary of the Treasury, as the case may be, ‘‘(A) providing funds to any member for paragraph: with regard to the report shall, for the pur- residential housing finance; and ‘‘(3) LIMITED EXEMPTION FOR COMMUNITY FI- poses of section 552 of title 5, of the United ‘‘(B) providing funds to any community fi- NANCIAL INSTITUTIONS.—A community finan- States Code, be treated as commercial infor- nancial institution for small business, agri- cial institution that otherwise meets the re- mation obtained from a person that is privi- cultural, rural development, or low-income quirements of paragraph (2) may become a leged or confidential, regardless of the me- community development lending.’’; member without regard to the percentage of dium in which the information is obtained. (4) by striking ‘‘A Bank’’ and inserting the its total assets that is represented by resi- This confidential information shall be the following: dential mortgage loans, as described in sub- property of the Secretary and shall be privi- ‘‘(3) COLLATERAL.—A Bank’’; paragraph (A) of paragraph (2).’’. leged from disclosure to any other person. (5) in paragraph (3) (as so designated by SEC. 166. MANAGEMENT OF BANKS. However, this privilege shall not be con- paragraph (4) of this subsection)— (a) BOARD OF DIRECTORS.—Section 7(d) of strued as preventing access to that confiden- (A) in subparagraph (C) (as so redesignated the Federal Home Loan Bank Act (12 U.S.C. tial information by the Congress. by paragraph (1) of this subsection) by strik- 1427(d)) is amended— (3) PROHIBITION OF UNAUTHORIZED DISCLO- ing ‘‘Deposits’’ and inserting ‘‘Cash or depos- (1) by striking ‘‘(d) The term’’ and insert- SURES.—No person in possession of confiden- its’’; ing the following: tial information, provided under this section (B) in subparagraph (D) (as so redesignated ‘‘(d) TERMS OF OFFICE.—The term’’; and may disclose that information, in whole or by paragraph (1) of this subsection), by strik- (2) by striking ‘‘shall be two years’’. in part, except for disclosure made in pub- ing the 2d sentence; and (b) COMPENSATION.—Section 7(i) of the Fed- lished statistical material that does not dis- (C) by inserting after subparagraph (D) (as eral Home Loan Bank Act (12 U.S.C. 1427(i)) close, either directly or when used in con- so redesignated by paragraph (1) of this sub- is amended by striking ‘‘, subject to the ap- junction with publicly available informa- section) the following new subparagraph: proval of the board’’. tion, the confidential information of any ‘‘(E) Secured loans for small business, agri- (c) REPEAL OF SECTIONS 22A AND 27.—The person. culture, rural development, or low-income Federal Home Loan Bank Act (12 U.S.C. 1421 H5266 CONGRESSIONAL RECORD — HOUSE July 1, 1999 et seq.) is amended by striking sections 22A (A) in the 2d sentence, by striking ‘‘with ings (after deducting expenses relating to (12 U.S.C. 1442a) and 27 (12 U.S.C. 1447). the approval of the Board’’; and section 10(j) and operating expenses) to the (d) SECTION 12.—Section 12 of the Federal (B) in the 3d sentence, by striking ‘‘, sub- Treasury of the United States until the Home Loan Bank Act (12 U.S.C. 1432) is ject to the approval of the Board,’’. value of all such payments by the Federal amended— (2) SECTION 10.—Section 10 of the Federal home loan banks is equivalent to the value (1) in subsection (a)— Home Loan Bank Act (12 U.S.C. 1430) is of an annuity referred to in clause (ii). In the (A) by striking ‘‘, but, except’’ and all that amended— final year in which the Federal home loan follows through ‘‘ten years’’; (A) in subsection (c)— banks are required to make any payment to (B) by striking ‘‘subject to the approval of (i) in the 1st sentence, by striking ‘‘Board’’ the Treasury under this subparagraph, if the the Board’’ the first place that term appears; and inserting ‘‘Federal home loan bank’’; dollar amount represented by 20.75 percent of (C) by striking ‘‘and, by its Board of direc- and the net earnings of the Federal home loan tors,’’ and all that follows through ‘‘agent of (ii) by striking the 2d sentence; banks exceeds the remaining obligation of such bank,’’ and inserting ‘‘and, by the board (B) in subsection (d)— the banks to the Treasury, the Finance of directors of the bank, to prescribe, amend, (i) in the 1st sentence, by striking ‘‘and the Board shall reduce the percentage pro rata and repeal by-laws governing the manner in approval of the Board’’; and to a level sufficient to pay the remaining ob- which its affairs may be administered, con- (ii) by striking ‘‘Subject to the approval of ligation.’’. sistent with applicable laws and regulations, the Board, any’’ and inserting ‘‘Any’’; and (b) EFFECTIVE DATE.—The amendment as administered by the Finance Board. No of- (C) in subsection (j)(1)— made by subsection (a) shall become effec- ficer, employee, attorney, or agent of a Fed- (i) by striking ‘‘to subsidize the interest tive on January 1, 1999. Payments made by a eral home loan bank’’; and rate on advances’’ and inserting ‘‘to provide Federal home loan bank before that effective (D) by striking ‘‘Board of directors’’ where subsidies, including subsidized interest rates date shall be counted toward the total obli- such term appears in the penultimate sen- on advances’’; gation of that bank under section 21B(f)(2)(C) tence and inserting ‘‘board of directors’’; and (ii) by striking ‘‘Pursuant’’ and inserting of the Federal Home Loan Bank Act, as (2) in subsection (b), by striking ‘‘loans the following: amended by this section. banks’’ and inserting ‘‘loan banks’’. ‘‘(A) ESTABLISHMENT.—Pursuant’’; and (e) POWERS AND DUTIES OF FEDERAL HOUS- SEC. 168. CAPITAL STRUCTURE OF FEDERAL (iii) by adding at the end the following new HOME LOAN BANKS. ING FINANCE BOARD.— subparagraph: (1) ISSUANCE OF NOTICES OF VIOLATIONS.— Section 6 of the Federal Home Loan Bank Section 2B(a) of the Federal Home Loan ‘‘(B) NONDELEGATION OF APPROVAL AUTHOR- Act (12 U.S.C. 1426) is amended to read as fol- Bank Act (12 U.S.C. 1422b(a)) is amended by ITY.—Subject to such regulations as the Fi- lows: adding at the end the following new para- nance Board may prescribe, the board of di- ‘‘SEC. 6. CAPITAL STRUCTURE OF FEDERAL graphs: rectors of each Federal home loan bank may HOME LOAN BANKS. ‘‘(5) To issue and serve a notice of charges approve or disapprove requests from mem- ‘‘(a) REGULATIONS.— upon a Federal home loan bank or upon any bers for Affordable Housing Program sub- ‘‘(1) CAPITAL STANDARDS.—Not later than 1 executive officer or director of a Federal sidies, and may not delegate such author- year after the date of enactment of the Fi- home loan bank if, in the determination of ity.’’. nancial Services Act of 1999, the Finance the Finance Board, the bank, executive offi- (g) SECTION 16.—Section 16(a) of the Fed- Board shall issue regulations prescribing cer, or director is engaging or has engaged eral Home Loan Bank Act (12 U.S.C. 1436(a)) uniform capital standards applicable to each in, or the Finance Board has reasonable is amended— Federal home loan bank, which shall require cause to believe that the bank, executive of- (1) in the 3d sentence— each such bank to meet— ficer, or director is about to engage in, any (A) by striking ‘‘net earnings’’ and insert- ‘‘(A) the leverage requirement specified in conduct that violates any provision of this ing ‘‘previously retained earnings or current paragraph (2); and Act or any law, order, rule, or regulation or net earnings’’; and ‘‘(B) the risk-based capital requirements, any condition imposed in writing by the Fi- (B) by striking ‘‘, and then only with the in accordance with paragraph (3). nance Board in connection with the granting approval of the Federal Housing Finance ‘‘(2) LEVERAGE REQUIREMENT.— of any application or other request by the Board’’; and ‘‘(A) IN GENERAL.—The leverage require- bank, or any written agreement entered into (2) by striking the 4th sentence. ment shall require each Federal home loan by the bank with the agency, in accordance (h) SECTION 18.—Section 18(b) of the Fed- bank to maintain a minimum amount of with the procedures provided in section eral Home Loan Bank Act (12 U.S.C. 1438(b)) total capital based on the aggregate on-bal- 1371(c) of the Federal Housing Enterprises is amended by striking paragraph (4). ance sheet assets of the bank and shall be 5 Financial Safety and Soundness Act of 1992. SEC. 167. RESOLUTION FUNDING CORPORATION. percent. Such authority includes the same authority (a) IN GENERAL.—Section 21B(f)(2)(C) of the ‘‘(B) TREATMENT OF STOCK AND RETAINED to take affirmative action to correct condi- Federal Home Loan Bank Act (12 U.S.C. EARNINGS.—In determining compliance with tions resulting from violations or practices 1441b(f)(2)(C)) is amended to read as follows: the minimum leverage ratio established or to limit activities of a bank or any execu- ‘‘(C) PAYMENTS BY FEDERAL HOME LOAN under subparagraph (A), the paid-in value of tive officer or director of a bank as appro- BANKS.— the outstanding Class B stock shall be multi- priate Federal banking agencies have to take ‘‘(i) IN GENERAL.—To the extent that the plied by 1.5, the paid-in value of the out- with respect to insured depository institu- amounts available pursuant to subpara- standing Class C stock and the amount of re- tions under paragraphs (6) and (7) of section graphs (A) and (B) are insufficient to cover tained earnings shall be multiplied by 2.0, 8(b) of the Federal Deposit Insurance Act, the amount of interest payments, each Fed- and such higher amounts shall be deemed to and to have all other powers, rights, and du- eral home loan bank shall pay to the Fund- be capital for purposes of meeting the 5 per- ties to enforce this Act with respect to the ing Corporation in each calendar year, 20.75 cent minimum leverage ratio. Federal home loan banks and their executive percent of the net earnings of that bank ‘‘(3) RISK-BASED CAPITAL STANDARDS.— officers and directors as the Office of Federal (after deducting expenses relating to section ‘‘(A) IN GENERAL.—Each Federal home loan Housing Enterprise Oversight has to enforce 10(j) and operating expenses). bank shall maintain permanent capital in an the Federal Housing Enterprises Financial ‘‘(ii) ANNUAL DETERMINATION.—The Board amount that is sufficient, as determined in Safety and Soundness Act of 1992, the Fed- annually shall determine the extent to which accordance with the regulations of the Fi- eral National Mortgage Association Charter the value of the aggregate amounts paid by nance Board, to meet— Act, or the Federal Home Loan Mortgage the Federal home loan banks exceeds or falls ‘‘(i) the credit risk to which the Federal Corporation Act with respect to the Federal short of the value of an annuity of home loan bank is subject; and housing enterprises under the Federal Hous- $300,000,000 per year that commences on the ‘‘(ii) the market risk, including interest ing Enterprises Financial Safety and Sound- issuance date and ends on the final scheduled rate risk, to which the Federal home loan ness Act of 1992. maturity date of the obligations, and shall bank is subject, based on a stress test estab- ‘‘(6) To address any insufficiencies in cap- select appropriate present value factors for lished by the Finance Board that rigorously ital levels resulting from the application of making such determinations. tests for changes in market variables, in- section 5(f) of the Home Owners’ Loan Act. ‘‘(iii) PAYMENT TERM ALTERATIONS.—The cluding changes in interest rates, rate vola- ‘‘(7) To sue and be sued, by and through its Board shall extend or shorten the term of tility, and changes in the shape of the yield own attorneys.’’. the payment obligations of a Federal home curve. (2) TECHNICAL AMENDMENT.—Section 111 of loan bank under this subparagraph as nec- ‘‘(B) CONSIDERATION OF OTHER RISK-BASED Public Law 93–495 (12 U.S.C. 250) is amended essary to ensure that the value of all pay- STANDARDS.—In establishing the risk-based by striking ‘‘Federal Home Loan Bank ments made by the banks is equivalent to standard under subparagraph (A)(ii), the Fi- Board,’’ and inserting ‘‘Director of the Office the value of an annuity referred to in clause nance Board shall take due consideration of of Thrift Supervision, ‘‘the Federal Housing (ii). any risk-based capital test established pur- Finance Board,’’. ‘‘(iv) TERM BEYOND MATURITY.—If the Board suant to section 1361 of the Federal Housing (f) ELIGIBILITY TO SECURE ADVANCES.— extends the term of payments beyond the Enterprises Financial Safety and Soundness (1) SECTION 9.—Section 9 of the Federal final scheduled maturity date for the obliga- Act of 1992 (12 U.S.C. 4611) for the enterprises Home Loan Bank Act (12 U.S.C. 1429) is tions, each Federal home loan bank shall (as defined in that Act), with such modifica- amended— continue to pay 20.75 percent of its net earn- tions as the Finance Board determines to be July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5267

appropriate to reflect differences in oper- ‘‘(b) CAPITAL STRUCTURE PLAN.— ‘‘(B) INTERIM PURCHASE REQUIREMENTS.— ations between the Federal home loan banks ‘‘(1) APPROVAL OF PLANS.—Not later than The capital structure plan of a Federal home and those enterprises. 270 days after the date of publication by the loan bank may allow any member referred to ‘‘(4) OTHER REGULATORY REQUIREMENTS.— Finance Board of final regulations in accord- in subparagraph (A) that would be required The regulations issued by the Finance Board ance with subsection (a), the board of direc- by the terms of the capital structure plan to under paragraph (1) shall— tors of each Federal home loan bank shall increase its investment in the stock of the ‘‘(A) permit each Federal home loan bank submit for Finance Board approval a plan es- bank to do so in periodic installments during to issue, with such rights, terms, and pref- tablishing and implementing a capital struc- the transition period. erences, not inconsistent with this Act and ture for such bank that— ‘‘(3) DISPOSITION OF SHARES.—The capital the regulations issued hereunder, as the ‘‘(A) the board of directors determines is structure plan of a Federal home loan bank board of directors of that bank may approve, best suited for the condition and operation of shall provide for the manner of disposition of any 1 or more of— the bank and the interests of the members of any stock held by a member of that bank ‘‘(i) Class A stock, which shall be redeem- the bank; that terminates its membership or that pro- able in cash and at par 6 months following ‘‘(B) meets the requirements of subsection vides notice of its intention to withdraw submission by a member of a written notice (c); and from membership in that bank. of its intent to redeem such shares; ‘‘(C) meets the minimum capital standards ‘‘(4) CLASSES OF STOCK.— ‘‘(ii) Class B stock, which shall be redeem- and requirements established under sub- ‘‘(A) IN GENERAL.—The capital structure able in cash and at par 5 years following sub- section (a) and other regulations prescribed plan of a Federal home loan bank shall af- mission by a member of a written notice of by the Finance Board. ford each member of that bank the option of its intent to redeem such shares; and ‘‘(2) APPROVAL OF MODIFICATIONS.—The maintaining its required investment in the ‘‘(iii) Class C stock, which shall be non- board of directors of a Federal home loan bank through the purchase of any combina- redeemable; bank shall submit to the Finance Board for tion of classes of stock authorized by the ‘‘(B) provide that the stock of a Federal approval any modifications that the bank board of directors of the bank and approved home loan bank may be issued to and held by proposes to make to an approved capital by the Finance Board in accordance with its only members of the bank, and that a bank structure plan. regulations. may not issue any stock other than as pro- ‘‘(c) CONTENTS OF PLAN.—The capital struc- ‘‘(B) RIGHTS REQUIREMENT.—A Federal vided in this section; ture plan of each Federal home loan bank home loan bank shall include in its capital ‘‘(C) prescribe the manner in which stock shall contain provisions addressing each of structure plan provisions establishing terms, of a Federal home loan bank may be sold, the following: rights, and preferences, including minimum transferred, redeemed, or repurchased; and ‘‘(1) MINIMUM INVESTMENT.— investment, dividends, voting, and liquida- ‘‘(D) provide the manner of disposition of ‘‘(A) IN GENERAL.—Each capital structure tion preferences of each class of stock issued outstanding stock held by, and the liquida- plan of a Federal home loan bank shall re- by the bank, consistent with Finance Board tion of any claims of the Federal home loan quire each member of the bank to maintain regulations and market requirements. bank against, an institution that ceases to a minimum investment in the stock of the ‘‘(C) REDUCED MINIMUM INVESTMENT.—The be a member of the bank, through merger or bank, the amount of which shall be deter- capital structure plan of a Federal home otherwise, or that provides notice of inten- mined in a manner to be prescribed by the loan bank may provide for a reduced min- tion to withdraw from membership in the board of directors of each bank and to be in- imum stock investment for any member of bank. cluded as part of the plan. that bank that elects to purchase Class B, ‘‘(5) DEFINITIONS OF CAPITAL.—For purposes ‘‘(B) INVESTMENT ALTERNATIVES.— Class C, or any other class of nonredeemable of determining compliance with the capital ‘‘(i) IN GENERAL.—In establishing the min- stock, in a manner that is consistent with standards established under this imum investment required for each member meeting the minimum capital requirements subsection— under subparagraph (A), a Federal home loan of the bank, as established by the Finance ‘‘(A) permanent capital of a Federal home bank may, in its discretion, include any 1 or Board. loan bank shall include (as determined in ac- more of the requirements referred to in ‘‘(D) LIQUIDATION OF CLAIMS.—The capital cordance with generally accepted accounting clause (ii), or any other provisions approved structure plan of a Federal home loan bank principles)— by the Finance Board. shall provide for the liquidation in an or- ‘‘(i) the amounts paid for the Class C stock ‘‘(ii) AUTHORIZED REQUIREMENTS.—A re- derly manner, as determined by the bank, of and any other nonredeemable stock approved quirement is referred to in this clause if it is any claim of that bank against a member, by the Finance Board; a requirement for— including claims for any applicable prepay- ‘‘(ii) the amounts paid for the Class B ‘‘(I) a stock purchase based on a percentage ment fees or penalties resulting from prepay- stock, in an amount not to exceed 1 percent of the total assets of a member; or ment of advances prior to stated maturity. of the total assets of the bank; and ‘‘(II) a stock purchase based on a percent- ‘‘(5) LIMITED TRANSFERABILITY OF STOCK.— ‘‘(iii) the retained earnings of the bank; age of the outstanding advances from the The capital structure plan of a Federal home and bank to the member. loan bank shall— ‘‘(B) total capital of a Federal home loan ‘‘(C) MINIMUM AMOUNT.—Each capital ‘‘(A) provide that— bank shall include— structure plan of a Federal home loan bank ‘‘(i) any stock issued by that bank shall be ‘‘(i) permanent capital; shall require that the minimum stock in- available only to, held only by, and tradable ‘‘(ii) the amounts paid for the Class A vestment established for members shall be only among members of that bank and be- stock, Class B stock (excluding any amount set at a level that is sufficient for the bank tween that bank and its members; and treated as permanent capital under subpara- to meet the minimum capital requirements ‘‘(ii) a bank has no obligation to repur- graph (5)(A)(ii)), or any other class of re- established by the Finance Board under sub- chase its outstanding Class C stock but may deemable stock approved by the Finance section (a). do so, provided it is consistent with Finance Board; ‘‘(D) ADJUSTMENTS TO MINIMUM REQUIRED Board regulations and is at a price that is ‘‘(iii) consistent with generally accepted INVESTMENT.—The capital structure plan of mutually agreeable to the bank and the accounting principles, and subject to the reg- each Federal home loan bank shall impose a member; and ulation of the Finance Board, a general al- continuing obligation on the board of direc- ‘‘(B) establish standards, criteria, and re- lowance for losses, which may not include tors of the bank to review and adjust the quirements for the issuance, purchase, trans- any reserves or allowances made or held minimum investment required of each mem- fer, retirement, and redemption of stock against specific assets; and ber of that bank, as necessary to ensure that issued by that bank. ‘‘(iv) any other amounts from sources the bank remains in compliance with appli- ‘‘(6) BANK REVIEW OF PLAN.—Before filing a available to absorb losses incurred by the cable minimum capital levels established by capital structure plan with the Finance bank that the Finance Board determines by the Finance Board, and shall require each Board, each Federal home loan bank shall regulation to be appropriate to include in de- member to comply promptly with any ad- conduct a review of the plan by— termining total capital. justments to the required minimum invest- ‘‘(A) an independent certified public ac- ‘‘(6) TRANSITION PERIOD.—Notwithstanding ment. countant, to ensure, to the extent possible, any other provisions of this Act, the require- ‘‘(2) TRANSITION RULE.— that implementation of the plan would not ments relating to purchase and retention of ‘‘(A) IN GENERAL.—The capital structure result in any write-down of the redeemable capital stock of a Federal home loan bank by plan of each Federal home loan bank shall bank stock investment of its members; and any member thereof in effect on the day be- specify the date on which it shall take effect, ‘‘(B) at least 1 major credit rating agency, fore the date of enactment of the Federal and may provide for a transition period of to determine, to the extent possible, whether Home Loan Bank System Modernization Act not longer than 3 years to allow the bank to implementation of the plan would have any of 1999, shall continue in effect with respect come into compliance with the capital re- material effect on the credit ratings of the to each Federal home loan bank until the quirements prescribed under subsection (a), bank. regulations required by this subsection have and to allow any institution that was a ‘‘(d) TERMINATION OF MEMBERSHIP.— taken effect and the capital structure plan member of the bank on the date of enact- ‘‘(1) VOLUNTARY WITHDRAWAL.—Any mem- required by subsection (b) has been approved ment of the Financial Services Act of 1999, to ber may withdraw from a Federal home loan by the Finance Board and implemented by come into compliance with the minimum in- bank by providing written notice to the bank such bank. vestment required pursuant to the plan. of its intent to do so. The applicable stock H5268 CONGRESSIONAL RECORD — HOUSE July 1, 1999 redemption notice periods shall commence stock of the bank without the prior approval teller machine at which the electronic fund upon receipt of the notice by the bank. Upon of the Finance Board while such charges are transfer is initiated by the consumer; and the expiration of the applicable notice period continuing or are expected to continue. In no ‘‘(ii) ON THE SCREEN.—The notice required for each class of redeemable stock, the mem- case may a bank redeem or repurchase any under clauses (i) and (ii) of subparagraph (A) ber may surrender such stock to the bank, applicable capital stock if, following the re- with respect to any fee described in such sub- and shall be entitled to receive in cash the demption, the bank would fail to satisfy any paragraph shall appear on the screen of the par value of the stock. During the applicable minimum capital requirement. automated teller machine, or on a paper no- notice periods, the member shall be entitled ‘‘(g) REJOINING AFTER DIVESTITURE OF ALL tice issued from such machine, after the to dividends and other membership rights SHARES.— transaction is initiated and before the con- commensurate with continuing stock owner- ‘‘(1) IN GENERAL.—Except as provided in sumer is irrevocably committed to com- ship. paragraph (2), and notwithstanding any pleting the transaction. ‘‘(2) INVOLUNTARY WITHDRAWAL.— other provision of this Act, an institution ‘‘(C) PROHIBITION ON FEES NOT PROPERLY ‘‘(A) IN GENERAL.—The board of directors of that divests all shares of stock in a Federal DISCLOSED AND EXPLICITLY ASSUMED BY CON- a Federal home loan bank may terminate home loan bank may not, after such divesti- SUMER.—No fee may be imposed by any auto- the membership of any institution if, subject ture, acquire shares of any Federal home mated teller machine operator in connection to Finance Board regulations, it determines loan bank before the end of the 5-year period with any electronic fund transfer initiated that— beginning on the date of the completion of by a consumer for which a notice is required ‘‘(i) the member has failed to comply with such divestiture, unless the divestiture is a under subparagraph (A), unless— a provision of this Act or any regulation pre- consequence of a transfer of membership on ‘‘(i) the consumer receives such notice in scribed under this Act; or an uninterrupted basis between banks. accordance with subparagraph (B); and ‘‘(ii) the member has been determined to ‘‘(2) EXCEPTION FOR WITHDRAWALS FROM ‘‘(ii) the consumer elects to continue in the be insolvent, or otherwise subject to the ap- MEMBERSHIP BEFORE 1998.—Any institution manner necessary to effect the transaction pointment of a conservator, receiver, or that withdrew from membership in any Fed- after receiving such notice. other legal custodian, by a State or Federal eral home loan bank before December 31, ‘‘(D) DEFINITIONS.—For purposes of this authority with regulatory and supervisory 1997, may acquire shares of a Federal home paragraph, the following definitions shall responsibility for the member. loan bank at any time after that date, sub- apply: ‘‘(B) STOCK DISPOSITION.—An institution, ject to the approval of the Finance Board ‘‘(i) ELECTRONIC FUND TRANSFER.—The term the membership of which is terminated in and the requirements of this Act. ‘electronic fund transfer’ includes a trans- accordance with subparagraph (A)— ‘‘(h) TREATMENT OF RETAINED EARNINGS.— action which involves a balance inquiry ini- ‘‘(i) shall surrender redeemable stock to ‘‘(1) IN GENERAL.—The holders of the Class tiated by a consumer in the same manner as the Federal home loan bank, and shall re- C stock of a Federal home loan bank, and an electronic fund transfer, whether or not ceive in cash the par value of the stock, upon any other classes of nonredeemable stock ap- the consumer initiates a transfer of funds in the expiration of the applicable notice period proved by the Finance Board (to the extent the course of the transaction. under subsection (a)(4)(A); provided in the terms thereof), shall own the ‘‘(ii) AUTOMATED TELLER MACHINE OPER- ‘‘(ii) shall receive any dividends declared retained earnings, surplus, undivided profits, ATOR.—The term ‘automated teller machine on its redeemable stock, during the applica- and equity reserves, if any, of the bank. operator’ means any person who— ble notice period under subsection (a)(4)(A); ‘‘(2) NO NONREDEEMABLE CLASSES OF ‘‘(I) operates an automated teller machine and STOCK.—If a Federal home loan bank has no at which consumers initiate electronic fund ‘‘(iii) shall not be entitled to any other outstanding Class C or other such non- transfers; and rights or privileges accorded to members redeemable stock, then the holders of any ‘‘(II) is not the financial institution which after the date of the termination. other classes of stock of the bank then out- holds the account of such consumer from ‘‘(C) COMMENCEMENT OF NOTICE PERIOD.— standing shall have ownership in, and a pri- which the transfer is made. With respect to an institution, the member- vate property right in, the retained earnings, ‘‘(iii) HOST TRANSFER SERVICES.—The term ship of which is terminated in accordance surplus, undivided profits, and equity re- ‘host transfer services’ means any electronic with subparagraph (A), the applicable notice serves, if any, of the bank. fund transfer made by an automated teller period under subsection (a)(4) for each class ‘‘(3) EXCEPTION.—Except as specifically machine operator in connection with a of redeemable stock shall commence on the provided in this section or through the dec- transaction initiated by a consumer at an earlier of— laration of a dividend or a capital distribu- automated teller machine operated by such ‘‘(i) the date of such termination; or tion by a Federal home loan bank, or in the operator.’’. ‘‘(ii) the date on which the member has event of liquidation of the bank, a member provided notice of its intent to redeem such SEC. 173. DISCLOSURE OF POSSIBLE FEES TO shall have no right to withdraw or otherwise CONSUMERS WHEN ATM CARD IS stock. receive distribution of any portion of the re- ISSUED. ‘‘(3) LIQUIDATION OF INDEBTEDNESS.—Upon tained earnings of the bank. Section 905(a) of the Electronic Fund the termination of the membership of an in- ‘‘(4) LIMITATION.—A Federal home loan Transfer Act (15 U.S.C. 1693c(a)) is amended— stitution for any reason, the outstanding in- bank may not make any distribution of its (1) by striking ‘‘and’’ at the end of para- debtedness of the member to the bank shall retained earnings unless, following such dis- graph (8); be liquidated in an orderly manner, as deter- tribution, the bank would continue to meet (2) by striking the period at the end of mined by the bank and, upon the extinguish- all applicable capital requirements.’’. paragraph (9) and inserting ‘‘; and’’; and ment of all such indebtedness, the bank shall Subtitle H—ATM Fee Reform (3) by inserting after paragraph (9) the fol- return to the member all collateral pledged SEC. 171. SHORT TITLE. lowing new paragraph: to secure the indebtedness. ‘‘(10) a notice to the consumer that a fee ‘‘(e) REDEMPTION OF EXCESS STOCK.— This subtitle may be cited as the ‘‘ATM may be imposed by— ‘‘(1) IN GENERAL.—A Federal home loan Fee Reform Act of 1999’’. ‘‘(A) an automated teller machine operator bank, in its sole discretion, may redeem or SEC. 172. ELECTRONIC FUND TRANSFER FEE DIS- (as defined in section 904(d)(3)(D)(ii)) if the repurchase, as appropriate, any shares of CLOSURES AT ANY HOST ATM. consumer initiates a transfer from an auto- Class A or Class B stock issued by the bank Section 904(d) of the Electronic Fund mated teller machine which is not operated and held by a member that are in excess of Transfer Act (15 U.S.C. 1693b(d)) is amended by the person issuing the card or other the minimum stock investment required of by adding at the end the following new para- means of access; and that member. graph: ‘‘(B) any national, regional, or local net- ‘‘(2) EXCESS STOCK.—Shares of stock held ‘‘(3) FEE DISCLOSURES AT AUTOMATED TELL- work utilized to effect the transaction.’’. by a member shall not be deemed to be ‘ex- ER MACHINES.— cess stock’ for purposes of this subsection by ‘‘(A) IN GENERAL.—The regulations pre- SEC. 174. FEASIBILITY STUDY. virtue of a member’s submission of a notice scribed under paragraph (1) shall require any (a) IN GENERAL.—The Comptroller General of intent to withdraw from membership or automated teller machine operator who im- of the United States shall conduct a study of termination of its membership in any other poses a fee on any consumer for providing the feasibility of requiring, in connection manner. host transfer services to such consumer to with any electronic fund transfer initiated ‘‘(3) PRIORITY.—A Federal home loan bank provide notice in accordance with subpara- by a consumer through the use of an auto- may not redeem any excess Class B stock graph (B) to the consumer (at the time the mated teller machine— prior to the end of the 5-year notice period, service is provided) of— (1) a notice to be provided to the consumer unless the member has no Class A stock out- ‘‘(i) the fact that a fee is imposed by such before the consumer is irrevocably com- standing that could be redeemed as excess. operator for providing the service; and mitted to completing the transaction, which ‘‘(f) IMPAIRMENT OF CAPITAL.—If the Fi- ‘‘(ii) the amount of any such fee. clearly states the amount of any fee which nance Board or the board of directors of a ‘‘(B) NOTICE REQUIREMENTS.— will be imposed upon the consummation of Federal home loan bank determines that the ‘‘(i) ON THE MACHINE.—The notice required the transaction by— bank has incurred or is likely to incur losses under clause (i) of subparagraph (A) with re- (A) any automated teller machine operator that result in or are expected to result in spect to any fee described in such subpara- (as defined in section 904(d)(3)(D)(ii) of the charges against the capital of the bank, the graph shall be posted in a prominent and Electronic Fund Transfer Act) involved in bank shall not redeem or repurchase any conspicuous location on or at the automated the transaction; July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5269 (B) the financial institution holding the Subtitle J—Deposit Insurance Funds (B) in paragraph (6)(C)(i), by striking ‘‘(6) account of the consumer; SEC. 186. STUDY OF SAFETY AND SOUNDNESS OF and (7)’’ and inserting ‘‘(5), (6), and (7)’’; and (C) any national, regional, or local net- FUNDS. (C) in paragraph (6)(C), by striking clause work utilized to effect the transaction; and (a) STUDY REQUIRED.—The Board of Direc- (ii) and inserting the following: (D) any other party involved in the trans- tors of the Federal Deposit Insurance Cor- ‘‘(ii) by redesignating paragraph (8) as fer; and poration shall conduct a study of the fol- paragraph (5).’’. (2) the consumer to elect to consummate lowing issues with regard to the Bank Insur- Subtitle K—Miscellaneous Provisions the transaction after receiving the notice de- ance Fund and the Savings Association In- SEC. 191. TERMINATION OF ‘‘KNOW YOUR CUS- scribed in paragraph (1). surance Fund: TOMER’’ REGULATIONS. (b) FACTORS TO BE CONSIDERED.—In con- (1) SAFETY AND SOUNDNESS.—The safety (a) IN GENERAL.—None of the proposed reg- ducting the study required under subsection and soundness of the funds and the adequacy ulations described in subsection (b) may be (a) with regard to the notice requirement de- of the reserve requirements applicable to the published in final form and, to the extent scribed in such subsection, the Comptroller funds in light of— any such regulation has become effective be- General shall consider the following factors: (A) the size of the insured depository insti- fore the date of the enactment of this Act, (1) The availability of appropriate tech- tutions which are resulting from mergers such regulation shall cease to be effective as nology. and consolidations since the effective date of of such date. (2) Implementation and operating costs. the Riegle-Neal Interstate Banking and (b) PROPOSED REGULATIONS DESCRIBED.— (3) The competitive impact any such notice Branching Efficiency Act of 1994; and The proposed regulations referred to in sub- requirement would have on various sizes and (B) the affiliation of insured depository in- section (a) are as follows: types of institutions, if implemented. stitutions with other financial institutions (1) The regulation proposed by the Comp- (4) The period of time which would be rea- pursuant to this Act and the amendments troller of the Currency to amend part 21 of sonable for implementing any such notice re- made by this Act. title 12 of the Code of Federal Regulations, quirement. (2) CONCENTRATION LEVELS.—The con- as published in the Federal Register on De- (5) The extent to which consumers would centration levels of the funds, taking into cember 7, 1998. benefit from any such notice requirement. account the number of members of each fund (2) The regulation proposed by the Director (6) Any other factor the Comptroller Gen- and the geographic distribution of such of the Office of Thrift Supervision to amend eral determines to be appropriate in ana- members, and the extent to which either part 563 of title 12 of the Code of Federal lyzing the feasibility of imposing any such fund is exposed to higher risks due to a re- Regulations, as published in the Federal notice requirement. gional concentration of members or an insuf- Register on December 7, 1998. (c) REPORT TO THE CONGRESS.—Before the ficient membership base relative to the size (3) The regulation proposed by the Board of end of the 6-month period beginning on the of member institutions. Governors of the Federal Reserve System to date of the enactment of this Act, the Comp- (3) MERGER ISSUES.—Issues relating to the amend parts 208, 211, and 225 of title 12 of the troller General shall submit a report to the planned merger of the funds, including the Code of Federal Regulations, as published in Congress containing— cost of merging the funds and the manner in the Federal Register on December 7, 1998. (1) the findings and conclusions of the which such costs will be distributed among (4) The regulation proposed by the Federal Comptroller General in connection with the the members of the respective funds. Deposit Insurance Corporation to amend study required under subsection (a); and (b) REPORT REQUIRED.— part 326 of title 12 of the Code of Federal (2) the recommendation of the Comptroller (1) IN GENERAL.—Before the end of the 9- Regulations, as published in the Federal General with regard to the question of month period beginning on the date of the Register on December 7, 1998. whether a notice requirement described in enactment of this Act, the Board of Direc- SEC. 192. STUDY AND REPORT ON FEDERAL subsection (a) should be implemented and, if tors of the Federal Deposit Insurance Cor- ELECTRONIC FUND TRANSFERS. so, how such requirement should be imple- poration shall submit a report to the Con- (a) STUDY.—The Secretary of the Treasury mented. gress on the study conducted pursuant to shall conduct a feasibility study to subsection (a). determine— SEC. 175. NO LIABILITY IF POSTED NOTICES ARE (1) whether all electronic payments issued (2) CONTENTS OF REPORT.—The report shall DAMAGED. by Federal agencies could be routed through Section 910 of the Electronic Fund Trans- include— (A) detailed findings of the Board of Direc- the Regional Finance Centers of the Depart- fer Act (15 U.S.C 1693h) is amended by adding ment of the Treasury for verification and at the end the following new subsection: tors with regard to the issues described in subsection (a); reconciliation; ‘‘(d) EXCEPTION FOR DAMAGED NOTICES.—If (B) a description of the plans developed by (2) whether all electronic payments made the notice required to be posted pursuant to by the Federal Government could be sub- section 904(d)(3)(B)(i) by an automated teller the Board of Directors for merging the Bank Insurance Fund and the Savings Association jected to the same level of reconciliation as machine operator has been posted by such United States Treasury checks, including operator in compliance with such section Insurance Fund, including an estimate of the amount of the cost of such merger which matching each payment issued with each and the notice is subsequently removed, corresponding deposit at financial institu- damaged, or altered by any person other would be borne by Savings Association In- surance Fund members; and tions; than the operator of the automated teller (3) whether the appropriate computer secu- machine, the operator shall have no liability (C) such recommendations for legislative and administrative action as the Board of rity controls are in place in order to ensure under this section for failure to comply with the integrity of electronic payments; section 904(d)(3)(B)(i).’’. Directors determines to be necessary or ap- propriate to preserve the safety and sound- (4) the estimated costs of implementing, if Subtitle I—Direct Activities of Banks ness of the deposit insurance funds, reduce so recommended, the processes and controls the risks to such funds, provide for an effi- described in paragraphs (1), (2), and (3); and SEC. 181. AUTHORITY OF NATIONAL BANKS TO (5) a possible timetable for implementing UNDERWRITE CERTAIN MUNICIPAL cient merger of such funds, and for other BONDS. purposes. those processes if so recommended. (b) REPORT TO CONGRESS.—Not later than (c) DEFINITIONS.—For purposes of this sec- The paragraph designated the Seventh of October 1, 2000, the Secretary of the Treas- tion, the following definitions shall apply: section 5136 of the Revised Statutes of the ury shall submit a report to Congress con- (1) INSURED DEPOSITORY INSTITUTION.—The United States (12 U.S.C. 24(7)) is amended by taining the results of the study required by term ‘‘insured depository institution’’ has adding at the end the following new sen- subsection (a). tence: ‘‘In addition to the provisions in this the same meaning as in section 3(c) of the (c) DEFINITION.—For purposes of this sec- paragraph for dealing in, underwriting or Federal Deposit Insurance Act. tion, the term ‘‘electronic payment’’ means purchasing securities, the limitations and re- (2) BIF AND SAIF MEMBERS.—The terms any transfer of funds, other than a trans- strictions contained in this paragraph as to ‘‘Bank Insurance Fund member’’ and ‘‘Sav- action originated by check, draft, or similar dealing in, underwriting, and purchasing in- ings Association Insurance Fund member’’ paper instrument, which is initiated through vestment securities for the national bank’s have the same meanings as in section 7(l) of an electronic terminal, telephonic instru- own account shall not apply to obligations the Federal Deposit Insurance Act. ment, or computer or magnetic tapes so as (including limited obligation bonds, revenue SEC. 187. ELIMINATION OF SAIF AND DIF SPE- to order, instruct, or authorize a debit or bonds, and obligations that satisfy the re- CIAL RESERVES. credit to a financial account. quirements of section 142(b)(1) of the Inter- (a) SAIF SPECIAL RESERVES.—Section SEC. 193. GENERAL ACCOUNTING OFFICE STUDY nal Revenue Code of 1986) issued by or on be- 11(a)(6) of the Federal Deposit Insurance Act OF CONFLICTS OF INTEREST half of any State or political subdivision of a (12 U.S.C. 1821(a)(6)) is amended by striking (a) STUDY REQUIRED.—The Comptroller State, including any municipal corporate in- subparagraph (L). General of the United States shall conduct a strumentality of 1 or more States, or any (b) DIF SPECIAL RESERVES.—Section 2704 of study analyzing the conflict of interest faced public agency or authority of any State or the Deposit Insurance Funds Act of 1996 (12 by the Board of Governors of the Federal Re- political subdivision of a State, if the na- U.S.C. 1821 note) is amended— serve System between its role as a primary tional bank is well capitalized (as defined in (1) by striking subsection (b); and regulator of the banking industry and its section 38 of the Federal Deposit Insurance (2) in subsection (d)— role as a vendor of services to the banking Act).’’. (A) by striking paragraph (4); and financial services industry. H5270 CONGRESSIONAL RECORD — HOUSE July 1, 1999

(b) SPECIFIC CONFLICT REQUIRED TO BE AD- and subsections (b) through (n), (s), (u), and or other similar charges that may be DRESSED.—In the course of the study re- (v) of section 8 of such Act shall apply to an charged, taken, received, or reserved in a quired under subsection (a), the Comptroller uninsured State member bank in the same similar transaction under the constitution, General shall address the conflict of interest manner and to the same extent such provi- statutory, or other lows of the home State of faced by the Board of Governors of the Fed- sions apply to an insured State member bank the insured depository institution estab- eral Reserve System between the role of the and any reference in any such provision to lishing any such branch, without reference Board as a regulator of the payment system, ‘insured depository institution’ shall be to this section, as such maximum interest generally, and its participation in the pay- deemed to be a reference to ‘uninsured State rate or amount of interest may change from ment system as a competitor with private member bank’ for purposes of this para- time to time; or entities who are providing payment services. graph.’’. ‘‘(B) the maximum rate or amount of inter- (c) REPORT TO CONGRESS.—Before the end SEC. 197. CLARIFICATION OF SOURCE OF est, discount points, finance charges, or of the 1-year period beginning on the date of STRENGTH DOCTRINE. other similar charges that may be charged, the enactment of this Act, the Comptroller Section 18 of the Federal Deposit Insurance taken, received, or reserved in a similar General shall submit a report to the Con- Act (21 U.S.C. 1828) is amended by adding at transaction by an insured depository institu- gress containing the findings and conclu- the end the following new subsection: tion under the constitution, statutory, or sions of the Comptroller General in connec- ‘‘(t) LIMITATION ON CLAIMS.— other laws of the host State, without ref- tion with the study required under this sec- ‘‘(1) IN GENERAL.—Notwithstanding any erence to this section. tion, together with such recommendations other provision of law other than paragraph ‘‘(2) PREEMPTION.—The limitations estab- for such legislative or administrative actions (2), no person shall have any claim for mone- lished under paragraph (1) shall apply only in as the Comptroller General may determine tary damages or return of assets or other any State that has a constitutional provi- to be appropriate, including recommenda- property against any Federal banking agen- sion that sets a maximum lawful rate of in- tions for resolving any such conflict of inter- cy (including in its capacity as conservator terest on any contract at not more than 5 est. or receiver) relating to the transfer of percent per annum above the Federal Re- SEC. 194. STUDY OF COST OF ALL FEDERAL money, assets, or other property to increase serve Discount Rate or 90-day commercial BANKING REGULATIONS. the capital of an insured depository institu- paper in effect in the Federal Reserve Bank in the Federal Reserve District in which the (a) IN GENERAL.—In accordance with the tion by any depository institution holding State is located. finding in the Board of Governors of the Fed- company or controlling shareholder for such ‘‘(3) RULE OF CONSTRUCTION.—No provision eral Reserve System Staff Study Numbered depository institution, or any affiliate or of this subsection shall be construed as su- 171 (April, 1998) that ‘‘Further research cov- subsidiary of such depository institution, if perseding section 501 of the Depository Insti- ering more and different types of regulations at the time of the transfer— tutions Deregulation and Monetary Control and regulatory requirements is clearly need- ‘‘(A) the insured depository institution is Act of 1980. ed to make informed decisions about regula- subject to any direction issued in writing by tions’’, the Board of Governors of the Fed- a Federal banking agency to increase its cap- Subtitle L-Effective Date of Title eral Reserve System, in consultation with ital; SEC. 199. EFFECTIVE DATE. the other Federal banking agencies (as de- ‘‘(B) the depository institution is under- Except with regard to any subtitle or other fined in section 3 of the Federal Deposit In- capitalized, significantly undercapitalized, provision of this title for which a specific ef- surance Act) shall conduct a comprehensive or critically undercapitalized (as defined in fective date is provided, this title and the study of the total annual costs and benefits section 38 of this Act); and amendments made by this title shall take ef- of all Federal financial regulations and regu- ‘‘(C) for that portion of the transfer that is fect at the end of the 180-day period begin- latory requirements applicable to banks. made by an entity covered by section 5(g) of ning on the date of the enactment of this (b) REPORT REQUIRED.—Before the end of the Bank Holding Company Act of 1956 or Act. the 2-year period beginning on the date of section 45 of this Act, the Federal banking TITLE II—FUNCTIONAL REGULATION the enactment of this Act, the Board of Gov- agency has followed the procedure set forth Subtitle A—Brokers and Dealers ernors of the Federal Reserve System shall in such section. submit a comprehensive report to the Con- SEC. 201. DEFINITION OF BROKER. ‘‘(2) EXCEPTION.—No provision of this sub- Section 3(a)(4) of the Securities Exchange gress containing the findings and conclu- section shall be construed as limiting— Act of 1934 (15 U.S.C. 78c(a)(4)) is amended to sions of the Board in connection with the ‘‘(A) the right of an insured depository in- read as follows: study required under subsection (a) and such stitution, a depository institution holding ‘‘(4) BROKER.— recommendations for legislative and admin- company, or any other agency or person to ‘‘(A) IN GENERAL.—The term ‘broker’ istrative action as the Board may determine seek direct review of an order or directive means any person engaged in the business of to be appropriate. issued by a Federal banking agency under effecting transactions in securities for the SEC. 195. STUDY AND REPORT ON ADAPTING EX- this Act, the Bank Holding Company Act of account of others. ISTING LEGISLATIVE REQUIRE- 1956, the National Bank Receivership Act, MENTS TO ONLINE BANKING AND ‘‘(B) EXCEPTION FOR CERTAIN BANK ACTIVI- LENDING. the Bank Conservation Act, or the Home TIES.—A bank shall not be considered to be a (a) STUDY REQUIRED.—The Federal banking Owners’ Loan Act; broker because the bank engages in any one agencies shall conduct a study of banking ‘‘(B) the rights of any party to a contract or more of the following activities under the regulations regarding the delivery of finan- pursuant to section 11(e) of this Act; or conditions described: cial services, including those regulations ‘‘(C) the rights of any party to a contract ‘‘(i) THIRD PARTY BROKERAGE ARRANGE- that may assume that there will be person- with a depository institution holding com- MENTS.—The bank enters into a contractual to-person contact during the course of a fi- pany or a subsidiary of a depository institu- or other written arrangement with a broker nancial services transaction, and report tion holding company (other than an insured or dealer registered under this title under their recommendations on adapting those ex- depository institution).’’ which the broker or dealer offers brokerage isting requirements to online banking and SEC. 198. INTEREST RATES AND OTHER CHARGES services on or off the premises of the bank lending. AT INTERSTATE BRANCHES. if— (b) REPORT REQUIRED.—Within 1 year of the Section 44 of the Federal Deposit Insurance ‘‘(I) such broker or dealer is clearly identi- date of the enactment of this Act, the Fed- Act (12 U.S.C. 1831u) is amended— fied as the person performing the brokerage eral banking agencies shall submit a report (1) by redesignating subsection (f) as sub- services; to the Congress on the findings and conclu- section (g); and ‘‘(II) the broker or dealer performs broker- sions of the agencies with respect to the (2) by inserting after subsection (e) the fol- age services in an area that is clearly study required under subsection (a), together lowing: marked and, to the extent practicable, phys- with such recommendations for legislative ‘‘(f) APPLICABLE RATE AND OTHER CHARGE ically separate from the routine deposit-tak- or regulatory action as the agencies may de- LIMITATIONS.— ing activities of the bank; termine to be appropriate. ‘‘(1) IN GENERAL.—Except as provided for in ‘‘(III) any materials used by the bank to (c) DEFINITION.—For purposes of this sec- paragraph (3), upon the establishment of a advertise or promote generally the avail- tion, the term ‘‘Federal banking agencies’’ branch of any insured depository institution ability of brokerage services under the ar- means each Federal banking agency (as de- in a host State under this section, the max- rangement clearly indicate that the broker- fined in section 3(z) of the Federal Deposit imum interest rate or amount of interest, age services are being provided by the broker Insurance Act). discount points, finance charges, or other or dealer and not by the bank; SEC. 196. REGULATION OF UNINSURED STATE similar charges that may be charged, taken, ‘‘(IV) any materials used by the bank to MEMBER BANKS. received, or reserved from time to time in advertise or promote generally the avail- Section 9 of the Federal Reserve Act (12 any loan or discount made or upon any note, ability of brokerage services under the ar- U.S.C. 321 et seq.) is amended by adding at bill of exchange, financing transaction, or rangement are in compliance with the Fed- the end the following new paragraph: other evidence of debt by any insured deposi- eral securities laws before distribution; ‘‘(24) ENFORCEMENT AUTHORITY OVER UNIN- tory institution in such State shall be equal ‘‘(V) bank employees (other than associ- SURED STATE MEMBER BANKS.—Section 3(u) of to not more than the greater of— ated persons of a broker or dealer who are the Federal Deposit Insurance Act, sub- ‘‘(A) the maximum interest rate or amount qualified pursuant to the rules of a self-regu- sections (j) and (k) of section 7 of such Act, of interest, discount points, finance charges, latory organization) perform only clerical or July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5271 ministerial functions in connection with bro- ‘‘(aa) the bank does not solicit trans- with this Act, and engages in dealing, mar- kerage transactions including scheduling ap- actions or provide investment advice with ket making, or underwriting activities, pointments with the associated persons of a respect to the purchase or sale of securities other than with respect to exempted securi- broker or dealer, except that bank employ- in connection with the plan; and ties; and ees may forward customer funds or securities ‘‘(bb) the bank’s compensation for such ‘‘(III) effects transactions exclusively with and may describe in general terms the types plan or program consists chiefly of adminis- qualified investors. of investment vehicles available from the tration fees, or flat or capped per order proc- ‘‘(viii) SAFEKEEPING AND CUSTODY ACTIVI- bank and the broker or dealer under the ar- essing fees, or both. TIES.— rangement; ‘‘(II) DIVIDEND REINVESTMENT PLANS.—The ‘‘(I) IN GENERAL.—The bank, as part of cus- ‘‘(VI) bank employees do not receive incen- bank effects transactions, as a registered tomary banking activities— tive compensation for any brokerage trans- transfer agent (including as a registrar of ‘‘(aa) provides safekeeping or custody serv- action unless such employees are associated stocks), in the securities of an issuer as part ices with respect to securities, including the persons of a broker or dealer and are quali- of that issuer’s dividend reinvestment plan, exercise of warrants and other rights on be- fied pursuant to the rules of a self-regulatory if— half of customers; organization, except that the bank employ- ‘‘(aa) the bank does not solicit trans- ‘‘(bb) facilitates the transfer of funds or se- ees may receive compensation for the refer- actions or provide investment advice with curities, as a custodian or a clearing agency, ral of any customer if the compensation is a respect to the purchase or sale of securities in connection with the clearance and settle- nominal one-time cash fee of a fixed dollar in connection with the plan; ment of its customers’ transactions in secu- ‘‘(bb) the bank does not net shareholders’ rities; amount and the payment of the fee is not buy and sell orders, other than for programs ‘‘(cc) effects securities lending or bor- contingent on whether the referral results in for odd-lot holders or plans registered with rowing transactions with or on behalf of cus- a transaction; the Commission; and tomers as part of services provided to cus- ‘‘(VII) such services are provided by the ‘‘(cc) the bank’s compensation for such tomers pursuant to division (aa) or (bb) or broker or dealer on a basis in which all cus- plan or program consists chiefly of adminis- invests cash collateral pledged in connection tomers which receive any services are fully tration fees, or flat or capped per order proc- with such transactions; or disclosed to the broker or dealer; essing fees, or both. ‘‘(dd) holds securities pledged by a cus- ‘‘(VIII) the bank does not carry a securities ‘‘(III) ISSUER PLANS.—The bank effects tomer to another person or securities subject account of the customer except as permitted transactions, as a registered transfer agent to purchase or resale agreements involving a under clause (ii) or (viii) of this subpara- (including as a registrar of stocks), in the se- customer, or facilitates the pledging or graph; and curities of an issuer as part of that issuer’s transfer of such securities by book entry or ‘‘(IX) the bank, broker, or dealer informs plan for the purchase or sale of that issuer’s as otherwise provided under applicable law, each customer that the brokerage services shares, if— if the bank maintains records separately are provided by the broker or dealer and not ‘‘(aa) the bank does not solicit trans- identifying the securities and the customer. by the bank and that the securities are not actions or provide investment advice with ‘‘(II) EXCEPTION FOR CARRYING BROKER AC- deposits or other obligations of the bank, are respect to the purchase or sale of securities TIVITIES.—The exception to being considered not guaranteed by the bank, and are not in- in connection with the plan or program; a broker for a bank engaged in activities de- sured by the Federal Deposit Insurance Cor- ‘‘(bb) the bank does not net shareholders’ scribed in subclause (I) shall not apply if the poration. buy and sell orders, other than for programs bank, in connection with such activities, ‘‘(ii) TRUST ACTIVITIES.—The bank effects for odd-lot holders or plans registered with acts in the United States as a carrying transactions in a trustee or fiduciary capac- the Commission; and broker (as such term, and different formula- ity in its trust department, or another de- ‘‘(cc) the bank’s compensation for such tions thereof, are used in section 15(c)(3) of partment where the trust or fiduciary activ- plan or program consists chiefly of adminis- this title and the rules and regulations ity is regularly examined by bank examiners tration fees, or flat or capped per order proc- thereunder) for any broker or dealer, unless under the same standards and in the same essing fees, or both. such carrying broker activities are engaged way as such activities are examined in the ‘‘(IV) PERMISSIBLE DELIVERY OF MATE- in with respect to government securities (as trust department, and— RIALS.—The exception to being considered a defined in paragraph (42) of this subsection). ‘‘(I) is chiefly compensated for such trans- broker for a bank engaged in activities de- ‘‘(ix) EXCEPTED BANKING PRODUCTS.—The actions, consistent with fiduciary principles scribed in subclauses (I), (II), and (III) will bank effects transactions in excepted bank- and standards, on the basis of an administra- not be affected by a bank’s delivery of writ- ing products, as defined in section 206 of the tion or annual fee (payable on a monthly, ten or electronic plan materials to employ- Financial Services Act of 1999. quarterly, or other basis), a percentage of as- ees of the issuer, shareholders of the issuer, ‘‘(x) MUNICIPAL SECURITIES.—The bank ef- sets under management, or a flat or capped or members of affinity groups of the issuer, fects transactions in municipal securities. per order processing fee equal to not more so long as such materials are— ‘‘(xi) DE MINIMIS EXCEPTION.—The bank ef- than the cost incurred by the bank in con- ‘‘(aa) comparable in scope or nature to fects, other than in transactions referred to nection with executing securities trans- that permitted by the Commission as of the in clauses (i) through (x), not more than 500 actions for trustee and fiduciary customers, date of the enactment of the Financial Serv- transactions in securities in any calendar or any combination of such fees; and ices Act of 1999; or year, and such transactions are not effected ‘‘(II) does not solicit brokerage business, ‘‘(bb) otherwise permitted by the Commis- by an employee of the bank who is also an other than by advertising that it effects sion. employee of a broker or dealer. transactions in securities in conjunction ‘‘(v) SWEEP ACCOUNTS.—The bank effects ‘‘(C) BROKER DEALER EXECUTION.—The ex- with advertising its other trust activities. transactions as part of a program for the in- ception to being considered a broker for a ‘‘(iii) PERMISSIBLE SECURITIES TRANS- vestment or reinvestment of deposit funds bank engaged in activities described in ACTIONS.—The bank effects transactions in— into any no-load, open-end management in- clauses (ii), (iv), and (viii) of subparagraph ‘‘(I) commercial paper, bankers accept- vestment company registered under the In- (B) shall not apply if the activities described ances, or commercial bills; vestment Company Act of 1940 that holds in such provisions result in the trade in the ‘‘(II) exempted securities; itself out as a money market fund. United States of any security that is a pub- ‘‘(III) qualified Canadian government obli- ‘‘(vi) AFFILIATE TRANSACTIONS.—The bank licly traded security in the United States, gations as defined in section 5136 of the Re- effects transactions for the account of any unless— vised Statutes, in conformity with section affiliate (as defined in section 2 of the Bank ‘‘(i) the bank directs such trade to a reg- 15C of this title and the rules and regulations Holding Company Act of 1956) of the bank istered broker or dealer for execution; thereunder, or obligations of the North other than— ‘‘(ii) the trade is a cross trade or other sub- American Development Bank; or ‘‘(I) a registered broker or dealer; or stantially similar trade of a security that— ‘‘(IV) any standardized, credit enhanced ‘‘(II) an affiliate that is engaged in mer- ‘‘(I) is made by the bank or between the debt security issued by a foreign government chant banking, as described in section bank and an affiliated fiduciary; and pursuant to the March 1989 plan of then Sec- 6(c)(3)(H) of the Bank Holding Company Act ‘‘(II) is not in contravention of fiduciary retary of the Treasury Brady, used by such of 1956. principles established under applicable Fed- foreign government to retire outstanding ‘‘(vii) PRIVATE SECURITIES OFFERINGS.—The eral or State law; or commercial bank loans. bank— ‘‘(iii) the trade is conducted in some other ‘‘(iv) CERTAIN STOCK PURCHASE PLANS.— ‘‘(I) effects sales as part of a primary offer- manner permitted under rules, regulations, ‘‘(I) EMPLOYEE BENEFIT PLANS.—The bank ing of securities not involving a public offer- or orders as the Commission may prescribe effects transactions, as a registered transfer ing, pursuant to section 3(b), 4(2), or 4(6) of or issue. agent (including as a registrar of stocks), in the Securities Act of 1933 or the rules and ‘‘(D) FIDUCIARY CAPACITY.—For purposes of the securities of an issuer as part of any pen- regulations issued thereunder; subparagraph (B)(ii), the term ‘fiduciary ca- sion, retirement, profit-sharing, bonus, ‘‘(II) at any time after the date that is 1 pacity’ means— thrift, savings, incentive, or other similar year after the date of enactment of the Fi- ‘‘(i) in the capacity as trustee, executor, benefit plan for the employees of that issuer nancial Services Act of 1999, is not affiliated administrator, registrar of stocks and bonds, or its affiliates (as defined in section 2 of the with a broker or dealer that has been reg- transfer agent, guardian, assignee, receiver, Bank Holding Company Act of 1956), if— istered for more than 1 year in accordance or custodian under a uniform gift to minor H5272 CONGRESSIONAL RECORD — HOUSE July 1, 1999

act, or as an investment adviser if the bank rity), the transaction shall be effected with ‘‘(3) CONSIDERATIONS.—In making a deter- receives a fee for its investment advice; or through a registered broker or dealer; or mination under paragraph (2), the Commis- ‘‘(ii) in any capacity in which the bank ‘‘(II) to or from other persons, except that sion shall consider— possesses investment discretion on behalf of if the derivative instrument provides for the ‘‘(A) the nature of the new hybrid product; another; or delivery of one or more securities (other and ‘‘(iii) in any other similar capacity. than a derivative instrument or government ‘‘(B) the history, purpose, extent, and ap- ‘‘(F) EXCEPTION FOR ENTITIES SUBJECT TO security), or is a security (other than a gov- propriateness of the regulation of the new SECTION 15(e).—The term ‘broker’ does not in- ernment security), the transaction shall be hybrid product under the Federal securities clude a bank that— effected with or through a registered broker laws and under the Federal banking laws. ‘‘(i) was, immediately prior to the enact- or dealer; or ‘‘(4) CONSULTATION.—In promulgating rules ment of the Financial Services Act of 1999, ‘‘(III) to or from any person if the instru- under this subsection, the Commission shall subject to section 15(e) of this title; and ment is neither a security nor provides for consult with and consider the views of the ‘‘(ii) is subject to such restrictions and re- the delivery of one or more securities (other Board of Governors of the Federal Reserve quirements as the Commission considers ap- than a derivative instrument).’’. System regarding the nature of the new hy- propriate.’’. SEC. 203. REGISTRATION FOR SALES OF PRIVATE brid product, the history, purpose, extent, SEC. 202. DEFINITION OF DEALER. SECURITIES OFFERINGS. and appropriateness of the regulation of the Section 3(a)(5) of the Securities Exchange Section 15A of the Securities Exchange Act new product under the Federal banking laws, Act of 1934 (15 U.S.C. 78c(a)(5)) is amended to of 1934 (15 U.S.C. 78o–3) is amended by insert- and the impact of the proposed rule on the read as follows: ing after subsection (i) the following new banking industry. ‘‘(5) DEALER.— subsection: ‘‘(5) NEW HYBRID PRODUCT.—For purposes of ‘‘(A) IN GENERAL.—The term ‘dealer’ means ‘‘(j) REGISTRATION FOR SALES OF PRIVATE this subsection, the term ‘new hybrid prod- any person engaged in the business of buying SECURITIES OFFERINGS.—A registered securi- uct’ means a product that— and selling securities for such person’s own ties association shall create a limited quali- ‘‘(A) was not subjected to regulation by the account through a broker or otherwise. fication category for any associated person Commission as a security prior to the date of ‘‘(B) EXCEPTION FOR PERSON NOT ENGAGED IN of a member who effects sales as part of a enactment of this subsection; and THE BUSINESS OF DEALING.—The term ‘dealer’ primary offering of securities not involving a ‘‘(B) is not an excepted banking product, as does not include a person that buys or sells public offering, pursuant to section 3(b), 4(2), such term is defined in section 206 of the Fi- securities for such person’s own account, ei- or 4(6) of the Securities Act of 1933 and the nancial Services Act of 1999.’’. ther individually or in a fiduciary capacity, rules and regulations thereunder, and shall SEC. 206. DEFINITION OF EXCEPTED BANKING but not as a part of a regular business. deem qualified in such limited qualification PRODUCT. ‘‘(C) EXCEPTION FOR CERTAIN BANK ACTIVI- category, without testing, any bank em- (a) DEFINITION OF EXCEPTED BANKING PROD- TIES.—A bank shall not be considered to be a ployee who, in the six month period pre- UCT.—For purposes of paragraphs (4) and (5) dealer because the bank engages in any of ceding the date of enactment of this Act, en- of section 3(a) of the Securities Exchange the following activities under the conditions gaged in effecting such sales.’’. Act of 1934 (15 U.S.C. 78c(a) (4), (5)), the term described: SEC. 204. INFORMATION SHARING. ‘‘excepted banking product’’ means— ‘‘(i) PERMISSIBLE SECURITIES TRANS- Section 18 of the Federal Deposit Insurance (1) a deposit account, savings account, cer- ACTIONS.—The bank buys or sells— Act is amended by adding at the end the fol- tificate of deposit, or other deposit instru- ‘‘(I) commercial paper, bankers accept- lowing new subsection: ment issued by a bank; ances, or commercial bills; (2) a banker’s acceptance; ‘‘(t) RECORDKEEPING REQUIREMENTS.— ‘‘(II) exempted securities; (3) a letter of credit issued or loan made by ‘‘(1) REQUIREMENTS.—Each appropriate ‘‘(III) qualified Canadian government obli- a bank; Federal banking agency, after consultation gations as defined in section 5136 of the Re- (4) a debit account at a bank arising from with and consideration of the views of the vised Statutes of the United States, in con- a credit card or similar arrangement; Commission, shall establish recordkeeping formity with section 15C of this title and the (5) a participation in a loan which the bank requirements for banks relying on exceptions rules and regulations thereunder, or obliga- or an affiliate of the bank (other than a contained in paragraphs (4) and (5) of section tions of the North American Development broker or dealer) funds, participates in, or 3(a) of the Securities Exchange Act of 1934. Bank; or owns that is sold— Such recordkeeping requirements shall be ‘‘(IV) any standardized, credit enhanced (A) to qualified investors; or sufficient to demonstrate compliance with debt security issued by a foreign government (B) to other persons that— the terms of such exceptions and be designed pursuant to the March 1989 plan of then Sec- (i) have the opportunity to review and as- to facilitate compliance with such excep- retary of the Treasury Brady, used by such sess any material information, including in- tions. Each appropriate Federal banking foreign government to retire outstanding formation regarding the borrower’s credit- agency shall make any such information commercial bank loans. worthiness; and available to the Commission upon request. ‘‘(ii) INVESTMENT, TRUSTEE, AND FIDUCIARY (ii) based on such factors as financial so- ‘‘(2) DEFINITIONS.—As used in this sub- TRANSACTIONS.—The bank buys or sells secu- phistication, net worth, and knowledge and section the term ‘Commission’ means the Se- rities for investment purposes— experience in financial matters, have the ca- curities and Exchange Commission.’’. ‘‘(I) for the bank; or pability to evaluate the information avail- ‘‘(II) for accounts for which the bank acts SEC. 205. TREATMENT OF NEW HYBRID PROD- able, as determined under generally applica- as a trustee or fiduciary. UCTS. ble banking standards or guidelines; or ‘‘(iii) ASSET-BACKED TRANSACTIONS.—The Section 15 of the Securities Exchange Act (6) a derivative instrument that involves or bank engages in the issuance or sale to of 1934 (15 U.S.C. 78o) is amended by adding relates to— qualified investors, through a grantor trust at the end the following new subsection: (A) currencies, except options on cur- or other separate entity, of securities backed ‘‘(i) RULEMAKING TO EXTEND REQUIREMENTS rencies that trade on a national securities by or representing an interest in notes, TO NEW HYBRID PRODUCTS.— exchange; drafts, acceptances, loans, leases, receiv- ‘‘(1) LIMITATION.—The Commission shall (B) interest rates, except interest rate de- ables, other obligations (other than securi- not— rivative instruments that— ties of which the bank is not the issuer), or ‘‘(A) require a bank to register as a broker (i) are based on a security or a group or pools of any such obligations predominantly or dealer under this section because the bank index of securities (other than government originated by— engages in any transaction in, or buys or securities or a group or index of government ‘‘(I) the bank; sells, a new hybrid product; or securities); ‘‘(II) an affiliate of any such bank other ‘‘(B) bring an action against a bank for a (ii) provide for the delivery of one or more than a broker or dealer; or failure to comply with a requirement de- securities (other than government securi- ‘‘(III) a syndicate of banks of which the scribed in subparagraph (A); ties); or bank is a member, if the obligations or pool unless the Commission has imposed such re- (iii) trade on a national securities ex- of obligations consists of mortgage obliga- quirement by rule or regulation issued in ac- change; or tions or consumer-related receivables. cordance with this section. (C) commodities, other rates, indices, or ‘‘(iv) EXCEPTED BANKING PRODUCTS.—The ‘‘(2) CRITERIA FOR RULEMAKING.—The Com- other assets, except derivative instruments bank buys or sells excepted banking prod- mission shall not impose a requirement that— ucts, as defined in section 206 of the Finan- under paragraph (1) of this subsection with (i) are securities or that are based on a cial Services Act of 1999. respect to any new hybrid product unless the group or index of securities (other than gov- ‘‘(v) DERIVATIVE INSTRUMENTS.—The bank Commission determines that— ernment securities or a group or index of issues, buys, or sells any derivative instru- ‘‘(A) the new hybrid product is a security; government securities); ment to which the bank is a party— and (ii) provide for the delivery of one or more ‘‘(I) to or from a qualified investor, except ‘‘(B) imposing such requirement is nec- securities (other than government securi- that if the instrument provides for the deliv- essary or appropriate in the public interest ties); or ery of one or more securities (other than a and for the protection of investors, con- (iii) trade on a national securities ex- derivative instrument or government secu- sistent with the requirements of section 3(f). change. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5273

(b) CLASSIFICATION LIMITED.—Classification ‘‘(viii) any associated person of a broker or (1) by redesignating subsections (b) of a particular product as an excepted bank- dealer other than a natural person; through (e) as subsections (c) through (f), re- ing product pursuant to this section shall ‘‘(ix) any foreign bank (as defined in sec- spectively; and not be construed as finding or implying that tion 1(b)(7) of the International Banking Act (2) by inserting after subsection (a) the fol- such product is or is not a security for any of 1978); lowing new subsection: purpose under the securities laws, or is or is ‘‘(x) the government of any foreign coun- ‘‘(b) The Commission may adopt rules and not an account, agreement, contract, or try; regulations, and issue orders, consistent transaction for any purpose under the Com- ‘‘(xi) any corporation, company, or part- with the protection of investors, prescribing modity Exchange Act. nership that owns and invests on a discre- the conditions under which a bank, or an af- (c) INCORPORATED DEFINITIONS.—For pur- tionary basis, not less than $10,000,000 in in- filiated person of a bank, either of which is poses of this section— vestments; an affiliated person of a principal under- (1) the terms ‘‘bank’’, ‘‘qualified investor’’, ‘‘(xii) any natural person who owns and in- writer for, or depositor of, a registered unit and ‘‘securities laws’’ have the same mean- vests on a discretionary basis, not less than investment trust, may serve as trustee or ings given in section 3(a) of the Securities $10,000,000 in investments; custodian under subsection (a)(1).’’. (c) FIDUCIARY DUTY OF CUSTODIAN.—Sec- Exchange Act of 1934, as amended by this ‘‘(xiii) any government or political subdivi- tion 36(a) of the Investment Company Act of Act; and sion, agency, or instrumentality of a govern- 1940 (15 U.S.C. 80a–35(a)) is amended— (2) the term ‘‘government securities’’ has ment who owns and invests on a discre- (1) in paragraph (1), by striking ‘‘or’’ at the the meaning given in section 3(a)(42) of such tionary basis not less than $50,000,000 in in- end; Act (as amended by this Act), and, for pur- vestments; or poses of this section, commercial paper, (2) in paragraph (2), by striking the period ‘‘(xiv) any multinational or supranational bankers acceptances, and commercial bills at the end and inserting ‘‘; or’’; and entity or any agency or instrumentality shall be treated in the same manner as gov- (3) by inserting after paragraph (2) the fol- thereof. ernment securities. lowing: ‘‘(B) ADDITIONAL AUTHORITY.—The Commis- ‘‘(3) as custodian.’’. SEC. 207. ADDITIONAL DEFINITIONS. sion may, by rule or order, define a ‘qualified Section 3(a) of the Securities Exchange Act investor’ as any other person, taking into SEC. 212. LENDING TO AN AFFILIATED INVEST- of 1934 is amended by adding at the end the MENT COMPANY. consideration such factors as the financial following new paragraphs: Section 17(a) of the Investment Company sophistication of the person, net worth, and ‘‘(54) DERIVATIVE INSTRUMENT.— Act of 1940 (15 U.S.C. 80a–17(a)) is amended— knowledge and experience in financial mat- ‘‘(A) DEFINITION.—The term ‘derivative in- (1) by striking ‘‘or’’ at the end of paragraph ters.’’. strument’ means any individually negotiated (2); contract, agreement, warrant, note, or op- SEC. 208. GOVERNMENT SECURITIES DEFINED. (2) by striking the period at the end of tion that is based, in whole or in part, on the Section 3(a)(42) of the Securities Exchange paragraph (3) and inserting ‘‘; or’’; and value of, any interest in, or any quantitative Act of 1934 (15 U.S.C. 78c(a)(42)) is amended— (3) by adding at the end the following new measure or the occurrence of any event re- (1) by striking ‘‘or’’ at the end of subpara- paragraph: lating to, one or more commodities, securi- graph (C); ‘‘(4) to loan money or other property to ties, currencies, interest or other rates, indi- (2) by striking the period at the end of sub- such registered company, or to any company ces, or other assets, but does not include an paragraph (D) and inserting ‘‘; or’’; and controlled by such registered company, in excepted banking product, as defined in (3) by adding at the end the following new contravention of such rules, regulations, or paragraphs (1) through (5) of section 206(a) of subparagraph: orders as the Commission may prescribe or the Financial Services Act of 1999. ‘‘(E) for purposes of sections 15, 15C, and issue consistent with the protection of inves- ‘‘(B) CLASSIFICATION LIMITED.—Classifica- 17A as applied to a bank, a qualified Cana- tors.’’. tion of a particular contract as a derivative dian government obligation as defined in SEC. 213. INDEPENDENT DIRECTORS. instrument pursuant to this paragraph shall section 5136 of the Revised Statutes of the (a) IN GENERAL.—Section 2(a)(19)(A) of the not be construed as finding or implying that United States.’’. Investment Company Act of 1940 (15 U.S.C. such instrument is or is not a security for SEC. 209. EFFECTIVE DATE. 80a–2(a)(19)(A)) is amended— any purpose under the securities laws, or is This subtitle shall take effect at the end of (1) by striking clause (v) and inserting the or is not an account, agreement, contract, or the 270-day period beginning on the date of following new clause: transaction for any purpose under the Com- the enactment of this Act. ‘‘(v) any person or any affiliated person of modity Exchange Act. SEC. 210. RULE OF CONSTRUCTION. a person (other than a registered investment ‘‘(55) QUALIFIED INVESTOR.— Nothing in this Act shall supersede, affect, company) that, at any time during the 6- ‘‘(A) DEFINITION.—For purposes of this or otherwise limit the scope and applica- month period preceding the date of the de- title, the term ‘qualified investor’ means— bility of the Commodity Exchange Act (7 termination of whether that person or affili- ‘‘(i) any investment company registered U.S.C. 1 et seq.). ated person is an interested person, has exe- with the Commission under section 8 of the cuted any portfolio transactions for, engaged Investment Company Act of 1940; Subtitle B—Bank Investment Company in any principal transactions with, or dis- ‘‘(ii) any issuer eligible for an exclusion Activities tributed shares for— from the definition of investment company SEC. 211. CUSTODY OF INVESTMENT COMPANY ‘‘(I) the investment company; pursuant to section 3(c)(7) of the Investment ASSETS BY AFFILIATED BANK. ‘‘(II) any other investment company hav- Company Act of 1940; (a) MANAGEMENT COMPANIES.—Section 17(f) ing the same investment adviser as such in- ‘‘(iii) any bank (as defined in paragraph (6) of the Investment Company Act of 1940 (15 vestment company or holding itself out to of this subsection), savings association (as U.S.C. 80a–17(f)) is amended— investors as a related company for purposes defined in section 3(b) of the Federal Deposit (1) by redesignating paragraphs (1), (2), and of investment or investor services; or Insurance Act), broker, dealer, insurance (3) as subparagraphs (A), (B), and (C), respec- ‘‘(III) any account over which the invest- company (as defined in section 2(a)(13) of the tively; ment company’s investment adviser has bro- Securities Act of 1933), or business develop- (2) by striking ‘‘(f) Every registered’’ and kerage placement discretion,’’; ment company (as defined in section 2(a)(48) inserting the following: (2) by redesignating clause (vi) as clause of the Investment Company Act of 1940); ‘‘(f) CUSTODY OF SECURITIES.— (vii); and ‘‘(iv) any small business investment com- ‘‘(1) Every registered’’; (3) by inserting after clause (v) the fol- pany licensed by the United States Small (3) by redesignating the second, third, lowing new clause: Business Administration under section 301 fourth, and fifth sentences of such subsection ‘‘(vi) any person or any affiliated person of (c) or (d) of the Small Business Investment as paragraphs (2) through (5), respectively, a person (other than a registered investment Act of 1958; and indenting the left margin of such para- company) that, at any time during the 6- ‘‘(v) any State sponsored employee benefit graphs appropriately; and month period preceding the date of the de- plan, or any other employee benefit plan, (4) by adding at the end the following new termination of whether that person or affili- within the meaning of the Employee Retire- paragraph: ated person is an interested person, has ment Income Security Act of 1974, other ‘‘(6) The Commission may adopt rules and loaned money or other property to— than an individual retirement account, if the regulations, and issue orders, consistent ‘‘(I) the investment company; investment decisions are made by a plan fi- with the protection of investors, prescribing ‘‘(II) any other investment company hav- duciary, as defined in section 3(21) of that the conditions under which a bank, or an af- ing the same investment adviser as such in- Act, which is either a bank, savings and loan filiated person of a bank, either of which is vestment company or holding itself out to association, insurance company, or reg- an affiliated person, promoter, organizer, or investors as a related company for purposes istered investment adviser; sponsor of, or principal underwriter for, a of investment or investor services; or ‘‘(vi) any trust whose purchases of securi- registered management company may serve ‘‘(III) any account for which the invest- ties are directed by a person described in as custodian of that registered management ment company’s investment adviser has bor- clauses (i) through (v) of this subparagraph; company.’’. rowing authority,’’. ‘‘(vii) any market intermediary exempt (b) UNIT INVESTMENT TRUSTS.—Section 26 (b) CONFORMING AMENDMENT.—Section under section 3(c)(2) of the Investment Com- of the Investment Company Act of 1940 (15 2(a)(19)(B) of the Investment Company Act of pany Act of 1940; U.S.C. 80a–26) is amended— 1940 (15 U.S.C. 80a–2(a)(19)(B)) is amended— H5274 CONGRESSIONAL RECORD — HOUSE July 1, 1999 (1) by striking clause (v) and inserting the protection of investors, prescribing the man- ‘‘(7) The term ‘dealer’ has the same mean- following new clause: ner in which the disclosure under this para- ing given in section 3 of the Securities Ex- ‘‘(v) any person or any affiliated person of graph shall be provided. change Act of 1934, but does not include an a person (other than a registered investment ‘‘(3) DEFINITIONS.—The terms ‘insured de- insurance company or investment com- company) that, at any time during the 6- pository institution’ and ‘appropriate Fed- pany.’’. month period preceding the date of the de- eral banking agency’ have the same mean- SEC. 220. INTERAGENCY CONSULTATION. termination of whether that person or affili- ings given in section 3 of the Federal Deposit The Investment Advisers Act of 1940 (15 ated person is an interested person, has exe- Insurance Act.’’. U.S.C. 80b–1 et seq.) is amended by inserting cuted any portfolio transactions for, engaged SEC. 215. DEFINITION OF BROKER UNDER THE after section 210 the following new section: in any principal transactions with, or dis- INVESTMENT COMPANY ACT OF 1940. ‘‘SEC. 210A. CONSULTATION. tributed shares for— Section 2(a)(6) of the Investment Company ‘‘(a) EXAMINATION RESULTS AND OTHER IN- ‘‘(I) any investment company for which the Act of 1940 (15 U.S.C. 80a–2(a)(6)) is amended FORMATION.— investment adviser or principal underwriter to read as follows: ‘‘(1) The appropriate Federal banking agen- serves as such; ‘‘(6) The term ‘broker’ has the same mean- cy shall provide the Commission upon re- ‘‘(II) any investment company holding ing given in section 3 of the Securities Ex- quest the results of any examination, re- itself out to investors, for purposes of invest- change Act of 1934, except that such term ports, records, or other information to which ment or investor services, as a company re- does not include any person solely by reason such agency may have access with respect to lated to any investment company for which of the fact that such person is an under- the investment advisory activities— the investment adviser or principal under- writer for one or more investment compa- ‘‘(A) of any— writer serves as such; or nies.’’. ‘‘(i) bank holding company; ‘‘(III) any account over which the invest- SEC. 216. DEFINITION OF DEALER UNDER THE IN- ‘‘(ii) bank; or ment adviser has brokerage placement dis- VESTMENT COMPANY ACT OF 1940. ‘‘(iii) separately identifiable department or cretion,’’; Section 2(a)(11) of the Investment Com- division of a bank, (2) by redesignating clause (vi) as clause pany Act of 1940 (15 U.S.C. 80a–2(a)(11)) is that is registered under section 203 of this (vii); and amended to read as follows: title; and (3) by inserting after clause (v) the fol- ‘‘(11) The term ‘dealer’ has the same mean- ‘‘(B) in the case of a bank holding company lowing new clause: ing given in the Securities Exchange Act of or bank that has a subsidiary or a separately ‘‘(vi) any person or any affiliated person of 1934, but does not include an insurance com- identifiable department or division reg- a person (other than a registered investment pany or investment company.’’. istered under that section, of such bank or company) that, at any time during the 6- SEC. 217. REMOVAL OF THE EXCLUSION FROM bank holding company. month period preceding the date of the de- THE DEFINITION OF INVESTMENT ‘‘(2) The Commission shall provide to the termination of whether that person or affili- ADVISER FOR BANKS THAT ADVISE appropriate Federal banking agency upon re- INVESTMENT COMPANIES. ated person is an interested person, has quest the results of any examination, re- (a) INVESTMENT ADVISER.—Section loaned money or other property to— 202(a)(11)(A) of the Investment Advisers Act ports, records, or other information with re- ‘‘(I) any investment company for which the of 1940 (15 U.S.C. 80b–2(a)(11)(A)) is amended spect to the investment advisory activities investment adviser or principal underwriter by striking ‘‘investment company’’ and in- of any bank holding company, bank, or sepa- serves as such; serting ‘‘investment company, except that rately identifiable department or division of ‘‘(II) any investment company holding the term ‘investment adviser’ includes any a bank, which is registered under section 203 itself out to investors, for purposes of invest- bank or bank holding company to the extent of this title. ment or investor services, as a company re- ‘‘(b) EFFECT ON OTHER AUTHORITY.—Noth- that such bank or bank holding company lated to any investment company for which ing in this section shall limit in any respect serves or acts as an investment adviser to a the investment adviser or principal under- the authority of the appropriate Federal registered investment company, but if, in writer serves as such; or banking agency with respect to such bank the case of a bank, such services or actions ‘‘(III) any account for which the invest- holding company, bank, or department or di- are performed through a separately identifi- ment adviser has borrowing authority,’’. vision under any other provision of law. (c) AFFILIATION OF DIRECTORS.—Section able department or division, the department ‘‘(c) DEFINITION.—For purposes of this sec- 10(c) of the Investment Company Act of 1940 or division, and not the bank itself, shall be tion, the term ‘appropriate Federal banking (15 U.S.C. 80a–10(c)) is amended by striking deemed to be the investment adviser’’. agency’ shall have the same meaning given ‘‘bank, except’’ and inserting ‘‘bank (to- (b) SEPARATELY IDENTIFIABLE DEPARTMENT in section 3 of the Federal Deposit Insurance gether with its affiliates and subsidiaries) or OR DIVISION.—Section 202(a) of the Invest- Act.’’. ment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) any one bank holding company (together SEC. 221. TREATMENT OF BANK COMMON TRUST with its affiliates and subsidiaries) (as such is amended by adding at the end the fol- FUNDS. terms are defined in section 2 of the Bank lowing: (a) SECURITIES ACT OF 1933.—Section 3(a)(2) Holding Company Act of 1956), except’’. ‘‘(26) The term ‘separately identifiable de- of the Securities Act of 1933 (15 U.S.C. (d) EFFECTIVE DATE.—The amendments partment or division’ of a bank means a 77c(a)(2)) is amended by striking ‘‘or any in- made by this section shall take effect at the unit— terest or participation in any common trust end of the 1-year period beginning on the ‘‘(A) that is under the direct supervision of fund or similar fund maintained by a bank date of enactment of this subtitle. an officer or officers designated by the board exclusively for the collective investment and SEC. 214. ADDITIONAL SEC DISCLOSURE AU- of directors of the bank as responsible for reinvestment of assets contributed thereto THORITY. the day-to-day conduct of the bank’s invest- by such bank in its capacity as trustee, ex- Section 35(a) of the Investment Company ment adviser activities for one or more in- ecutor, administrator, or guardian’’ and in- Act of 1940 (15 U.S.C. 80a–34(a)) is amended to vestment companies, including the super- serting ‘‘or any interest or participation in read as follows: vision of all bank employees engaged in the any common trust fund or similar fund that ‘‘(a) MISREPRESENTATION OF GUARANTEES.— performance of such activities; and is excluded from the definition of the term ‘‘(1) IN GENERAL.—It shall be unlawful for ‘‘(B) for which all of the records relating to ‘investment company’ under section 3(c)(3) any person, issuing or selling any security of its investment adviser activities are sepa- of the Investment Company Act of 1940’’. which a registered investment company is rately maintained in or extractable from (b) SECURITIES EXCHANGE ACT OF 1934.— the issuer, to represent or imply in any man- such unit’s own facilities or the facilities of Section 3(a)(12)(A)(iii) of the Securities Ex- ner whatsoever that such security or the bank, and such records are so maintained change Act of 1934 (15 U.S.C. company— or otherwise accessible as to permit inde- 78c(a)(12)(A)(iii)) is amended to read as fol- ‘‘(A) has been guaranteed, sponsored, rec- pendent examination and enforcement by the lows: ommended, or approved by the United Commission of this Act or the Investment ‘‘(iii) any interest or participation in any States, or any agency, instrumentality or of- Company Act of 1940 and rules and regula- common trust fund or similar fund that is ficer of the United States; tions promulgated under this Act or the In- excluded from the definition of the term ‘in- ‘‘(B) has been insured by the Federal De- vestment Company Act of 1940.’’. vestment company’ under section 3(c)(3) of posit Insurance Corporation; or SEC. 218. DEFINITION OF BROKER UNDER THE the Investment Company Act of 1940;’’. ‘‘(C) is guaranteed by or is otherwise an ob- INVESTMENT ADVISERS ACT OF 1940. (c) INVESTMENT COMPANY ACT OF 1940.—Sec- ligation of any bank or insured depository Section 202(a)(3) of the Investment Advis- tion 3(c)(3) of the Investment Company Act institution. ers Act of 1940 (15 U.S.C. 80b–2(a)(3)) is of 1940 (15 U.S.C. 80a–3(c)(3)) is amended by ‘‘(2) DISCLOSURES.—Any person issuing or amended to read as follows: inserting before the period the following: ‘‘, selling the securities of a registered invest- ‘‘(3) The term ‘broker’ has the same mean- if— ment company that is advised by, or sold ing given in section 3 of the Securities Ex- ‘‘(A) such fund is employed by the bank through, a bank shall prominently disclose change Act of 1934.’’. solely as an aid to the administration of that an investment in the company is not in- SEC. 219. DEFINITION OF DEALER UNDER THE IN- trusts, estates, or other accounts created and sured by the Federal Deposit Insurance Cor- VESTMENT ADVISERS ACT OF 1940. maintained for a fiduciary purpose; poration or any other government agency. Section 202(a)(7) of the Investment Advis- ‘‘(B) except in connection with the ordi- The Commission may adopt rules and regula- ers Act of 1940 (15 U.S.C. 80b–2(a)(7)) is nary advertising of the bank’s fiduciary serv- tions, and issue orders, consistent with the amended to read as follows: ices, interests in such fund are not— July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5275 ‘‘(i) advertised; or (as defined in section 3 of the Federal De- gated by the Commission applicable to su- ‘‘(ii) offered for sale to the general public; posit Insurance Act) or a branch or agency of pervised investment bank holding compa- and a foreign bank (as such terms are defined in nies. ‘‘(C) fees and expenses charged by such section 1(b) of the International Banking Act ‘‘(B) NOTIFICATION OF STATUS AS A SUPER- fund are not in contravention of fiduciary of 1978)’’. VISED INVESTMENT BANK HOLDING COMPANY.— principles established under applicable Fed- SEC. 225. CONFORMING AMENDMENT. An investment bank holding company that eral or State law’’. Section 202 of the Investment Advisers Act elects under subparagraph (A) to become su- SEC. 222. INVESTMENT ADVISERS PROHIBITED of 1940 (15 U.S.C. 80b–2) is amended by adding pervised by the Commission shall file with FROM HAVING CONTROLLING IN- at the end the following new subsection: the Commission a written notice of intention TEREST IN REGISTERED INVEST- ‘‘(c) CONSIDERATION OF PROMOTION OF EFFI- to become supervised by the Commission in MENT COMPANY. CIENCY, COMPETITION, AND CAPITAL FORMA- such form and containing such information Section 15 of the Investment Company Act TION.—Whenever pursuant to this title the and documents concerning such investment of 1940 (15 U.S.C. 80a–15) is amended by add- Commission is engaged in rulemaking and is bank holding company as the Commission, ing at the end the following new subsection: required to consider or determine whether an by rule, may prescribe as necessary or appro- ‘‘(g) CONTROLLING INTEREST IN INVESTMENT action is necessary or appropriate in the priate in furtherance of the purposes of this COMPANY PROHIBITED.— public interest, the Commission shall also section. Unless the Commission finds that ‘‘(1) IN GENERAL.—If an investment adviser consider, in addition to the protection of in- such supervision is not necessary or appro- to a registered investment company, or an vestors, whether the action will promote ef- priate in furtherance of the purposes of this affiliated person of that investment adviser, ficiency, competition, and capital forma- section, such supervision shall become effec- holds a controlling interest in that reg- tion.’’. tive 45 days after the date of receipt of such istered investment company in a trustee or SEC. 226. CHURCH PLAN EXCLUSION. written notice by the Commission or within fiduciary capacity, such person shall— ‘‘(A) if it holds the shares in a trustee or fi- Section 3(c)(14) of the Investment Com- such shorter time period as the Commission, duciary capacity with respect to any em- pany Act of 1940 (15 U.S.C. 80a-3(c)(14)) is by rule or order, may determine. ployee benefit plan subject to the Employee amended— ‘‘(2) ELECTION NOT TO BE SUPERVISED BY THE Retirement Income Security Act of 1974, (1) by redesignating clauses (i) and (ii) of COMMISSION AS AN INVESTMENT BANK HOLDING transfer the power to vote the shares of the subparagraph (B) as subclauses (I) and (II), COMPANY.— investment company through to another per- respectively; ‘‘(A) VOLUNTARY WITHDRAWAL.—A super- son acting in a fiduciary capacity with re- (2) by redesignating subparagraphs (A) and vised investment bank holding company that spect to the plan who is not an affiliated per- (B) as clauses (i) and (ii), respectively; is supervised pursuant to paragraph (1) may, son of that investment adviser or any affili- (3) by inserting ‘‘(A)’’ after ‘‘(14)’’; and upon such terms and conditions as the Com- ated person thereof; or (4) by adding at the end the following new mission deems necessary or appropriate, ‘‘(B) if it holds the shares in a trustee or fi- subparagraph: elect not to be supervised by the Commission duciary capacity with respect to any person ‘‘(B) If a registered investment company by filing a written notice of withdrawal from or entity other than an employee benefit would be excluded from the definition of in- Commission supervision. Such notice shall plan subject to the Employee Retirement In- vestment company under this subsection but not become effective until one year after re- come Security Act of 1974— for the fact that some of the company’s as- ceipt by the Commission, or such shorter or ‘‘(i) transfer the power to vote the shares sets do not satisfy the condition of subpara- longer period as the Commission deems nec- of the investment company through to— graph (A)(ii) of this paragraph, then any in- essary or appropriate to ensure effective su- ‘‘(I) the beneficial owners of the shares; vestment adviser to the company or affili- pervision of the material risks to the super- ‘‘(II) another person acting in a fiduciary ated person of such investment adviser shall vised investment bank holding company and capacity who is not an affiliated person of not be subject to the requirements of section to the affiliated broker or dealer, or to pre- that investment adviser or any affiliated 15(g)(1)(B) with respect to shares of the in- vent evasion of the purposes of this section. person thereof; or vestment company.’’. ‘‘(B) DISCONTINUATION OF COMMISSION SU- ‘‘(III) any person authorized to receive SEC. 227. EFFECTIVE DATE. PERVISION.—If the Commission finds that any statements and information with respect to This subtitle shall take effect 90 days after supervised investment bank holding com- the trust who is not an affiliated person of the date of the enactment of this Act. pany that is supervised pursuant to para- that investment adviser or any affiliated Subtitle C—Securities and Exchange Com- graph (1) is no longer in existence or has person thereof; mission Supervision of Investment Bank ceased to be an investment bank holding ‘‘(ii) vote the shares of the investment Holding Companies company, or if the Commission finds that company held by it in the same proportion continued supervision of such a supervised SEC. 231. SUPERVISION OF INVESTMENT BANK as shares held by all other shareholders of HOLDING COMPANIES BY THE SECU- investment bank holding company is not the investment company; or RITIES AND EXCHANGE COMMIS- consistent with the purposes of this section, ‘‘(iii) vote the shares of the investment SION. the Commission may discontinue the super- company as otherwise permitted under such (a) AMENDMENT.—Section 17 of the Securi- vision pursuant to a rule or order, if any, rules, regulations, or orders as the Commis- ties Exchange Act of 1934 (15 U.S.C. 78q) is promulgated by the Commission under this sion may prescribe or issue consistent with amended— section. the protection of investors. (1) by redesignating subsection (i) as sub- ‘‘(3) SUPERVISION OF INVESTMENT BANK ‘‘(2) EXEMPTION.—Paragraph (1) shall not section (k); and HOLDING COMPANIES.— apply to any investment adviser to a reg- (2) by inserting after subsection (h) the fol- ‘‘(A) RECORDKEEPING AND REPORTING.— istered investment company, or any affili- lowing new subsection: ‘‘(i) IN GENERAL.—Every supervised invest- ated person of that investment adviser, that ‘‘(i) INVESTMENT BANK HOLDING COMPA- ment bank holding company and each affil- holds shares of the investment company in a NIES.— iate thereof shall make and keep for pre- trustee or fiduciary capacity if that reg- ‘‘(1) ELECTIVE SUPERVISION OF AN INVEST- scribed periods such records, furnish copies istered investment company consists solely MENT BANK HOLDING COMPANY NOT HAVING A thereof, and make such reports, as the Com- of assets held in such capacities. BANK OR SAVINGS ASSOCIATION AFFILIATE.— mission may require by rule, in order to keep ‘‘(3) SAFE HARBOR.—No investment adviser ‘‘(A) IN GENERAL.—An investment bank the Commission informed as to— to a registered investment company or any holding company that is not— ‘‘(I) the company’s or affiliate’s activities, affiliated person of such investment adviser ‘‘(i) an affiliate of a wholesale financial in- financial condition, policies, systems for shall be deemed to have acted unlawfully or stitution, an insured bank (other than an in- monitoring and controlling financial and to have breached a fiduciary duty under stitution described in subparagraph (D), (F), operational risks, and transactions and rela- State or Federal law solely by reason of act- or (G) of section 2(c)(2), or held under section tionships between any broker or dealer affil- ing in accordance with clause (i), (ii), or (iii) 4(f), of the Bank Holding Company Act of iate of the supervised investment bank hold- of paragraph (1)(B).’’. 1956), or a savings association; ing company; and SEC. 223. STATUTORY DISQUALIFICATION FOR ‘‘(ii) a foreign bank, foreign company, or ‘‘(II) the extent to which the company or BANK WRONGDOING. company that is described in section 8(a) of affiliate has complied with the provisions of Section 9(a) of the Investment Company the International Banking Act of 1978; or this Act and regulations prescribed and or- Act of 1940 (15 U.S.C. 80a-9(a)) is amended in ‘‘(iii) a foreign bank that controls, directly ders issued under this Act. paragraphs (1) and (2) by striking ‘‘securities or indirectly, a corporation chartered under ‘‘(ii) FORM AND CONTENTS.—Such records dealer, transfer agent,’’ and inserting ‘‘secu- section 25A of the Federal Reserve Act, and reports shall be prepared in such form rities dealer, bank, transfer agent,’’. may elect to become supervised by filing and according to such specifications (includ- SEC. 224. CONFORMING CHANGE IN DEFINITION. with the Commission a notice of intention to ing certification by an independent public Section 2(a)(5) of the Investment Company become supervised, pursuant to subpara- accountant), as the Commission may require Act of 1940 (15 U.S.C. 80a–2(a)(5)) is amended graph (B) of this paragraph. Any investment and shall be provided promptly at any time by striking ‘‘(A) a banking institution orga- bank holding company filing such a notice upon request by the Commission. Such nized under the laws of the United States’’ shall be supervised in accordance with this records and reports may include— and inserting ‘‘(A) a depository institution section and comply with the rules promul- ‘‘(I) a balance sheet and income statement; H5276 CONGRESSIONAL RECORD — HOUSE July 1, 1999 ‘‘(II) an assessment of the consolidated with the purposes of this subsection, the quired to be reported under subsection (h) or capital of the supervised investment bank Commission may adopt capital adequacy (i) or any information supplied to the Com- holding company; rules for supervised investment bank holding mission by any domestic or foreign regu- ‘‘(III) an independent auditor’s report at- companies. latory agency that relates to the financial or testing to the supervised investment bank ‘‘(B) METHOD OF CALCULATION.—In devel- operational condition of any associated per- holding company’s compliance with its in- oping rules under this paragraph: son of a broker or dealer, investment bank ternal risk management and internal control ‘‘(i) DOUBLE LEVERAGE.—The Commission holding company, or any affiliate of an in- objectives; and shall consider the use by the supervised in- vestment bank holding company. Nothing in ‘‘(IV) reports concerning the extent to vestment bank holding company of debt and this subsection shall authorize the Commis- which the company or affiliate has complied other liabilities to fund capital investments sion to withhold information from Congress, with the provisions of this title and any reg- in affiliates. or prevent the Commission from complying ulations prescribed and orders issued under ‘‘(ii) NO UNWEIGHTED CAPITAL RATIO.—The with a request for information from any this title. Commission shall not impose under this sec- other Federal department or agency or any ‘‘(B) USE OF EXISTING REPORTS.— tion a capital ratio that is not based on ap- self-regulatory organization requesting the ‘‘(i) IN GENERAL.—The Commission shall, to propriate risk-weighting considerations. information for purposes within the scope of the fullest extent possible, accept reports in ‘‘(iii) NO CAPITAL REQUIREMENT ON REGU- its jurisdiction, or complying with an order fulfillment of the requirements under this LATED ENTITIES.—The Commission shall not, of a court of the United States in an action paragraph that the supervised investment by rule, regulation, guideline, order or other- brought by the United States or the Commis- bank holding company or its affiliates have wise, impose any capital adequacy provision sion. For purposes of section 552 of title 5, been required to provide to another appro- on a nonbanking affiliate (other than a United States Code, this subsection shall be priate regulatory agency or self-regulatory broker or dealer) that is in compliance with considered a statute described in subsection organization. applicable capital requirements of another (b)(3)(B) of such section 552. In prescribing ‘‘(ii) AVAILABILITY.—A supervised invest- Federal regulatory authority or State insur- regulations to carry out the requirements of ment bank holding company or an affiliate ance authority. this subsection, the Commission shall des- of such company shall provide to the Com- ‘‘(iv) APPROPRIATE EXCLUSIONS.—The Com- ignate information described in or obtained mission, at the request of the Commission, mission shall take full account of the appli- pursuant to subparagraphs (A), (B), and (C) any report referred to in clause (i). cable capital requirements of another Fed- of subsection (i)(5) as confidential informa- ‘‘(C) EXAMINATION AUTHORITY.— eral regulatory authority or State insurance tion for purposes of section 24(b)(2) of this ‘‘(i) FOCUS OF EXAMINATION AUTHORITY.— regulator. title.’’. The Commission may make examinations of ‘‘(C) INTERNAL RISK MANAGEMENT MODELS.— (b) CONFORMING AMENDMENTS.— any supervised investment bank holding The Commission may incorporate internal (1) Section 3(a)(34) of the Securities Ex- company and any affiliate of such company risk management models into its capital change Act of 1934 (15 U.S.C. 78c(a)(34)) is in order to— adequacy rules for supervised investment amended by adding at the end the following ‘‘(I) inform the Commission regarding— bank holding companies. new subparagraph: ‘‘(aa) the nature of the operations and fi- ‘‘(5) FUNCTIONAL REGULATION OF BANKING ‘‘(H) When used with respect to an institu- nancial condition of the supervised invest- AND INSURANCE ACTIVITIES OF SUPERVISED IN- tion described in subparagraph (D), (F), or ment bank holding company and its affili- VESTMENT BANK HOLDING COMPANIES.—The (G) of section 2(c)(2), or held under section ates; Commission shall defer to— 4(f), of the Bank Holding Company Act of ‘‘(bb) the financial and operational risks ‘‘(A) the appropriate regulatory agency 1956— within the supervised investment bank hold- with regard to all interpretations of, and the ‘‘(i) the Comptroller of the Currency, in ing company that may affect any broker or enforcement of, applicable banking laws re- the case of a national bank or a bank in the dealer controlled by such supervised invest- lating to the activities, conduct, ownership, District of Columbia examined by the Comp- ment bank holding company; and and operations of banks, and institutions de- troller of the Currency; ‘‘(cc) the systems of the supervised invest- scribed in subparagraph (D), (F), and (G) of ‘‘(ii) the Board of Governors of the Federal ment bank holding company and its affili- section 2(c)(2), or held under section 4(f), of Reserve System, in the case of a State mem- ates for monitoring and controlling those the Bank Holding Company Act of 1956; and ber bank of the Federal Reserve System or risks; and ‘‘(B) the appropriate State insurance regu- any corporation chartered under section 25A ‘‘(II) monitor compliance with the provi- lators with regard to all interpretations of, of the Federal Reserve Act; sions of this subsection, provisions governing and the enforcement of, applicable State in- ‘‘(iii) the Federal Deposit Insurance Cor- transactions and relationships between any surance laws relating to the activities, con- poration, in the case of any other bank the broker or dealer affiliated with the super- duct, and operations of insurance companies deposits of which are insured in accordance vised investment bank holding company and and insurance agents. with the Federal Deposit Insurance Act; or any of the company’s other affiliates, and ‘‘(6) DEFINITIONS.—For purposes of this sub- ‘‘(iv) the Commission in the case of all applicable provisions of subchapter II of section: other such institutions.’’. chapter 53, title 31, United States Code (com- ‘‘(A) The term ‘investment bank holding (2) Section 1112(e) of the Right to Financial monly referred to as the ‘Bank Secrecy Act’) company’ means— Privacy Act of 1978 (12 U.S.C. 3412(e)) is and regulations thereunder. ‘‘(i) any person other than a natural person amended— ‘‘(ii) RESTRICTED FOCUS OF EXAMINATIONS.— that owns or controls one or more brokers or (A) by striking ‘‘this title’’ and inserting The Commission shall limit the focus and dealers; and ‘‘law’’; and scope of any examination of a supervised in- ‘‘(ii) the associated persons of the invest- (B) by inserting ‘‘, examination reports’’ vestment bank holding company to— ment bank holding company. after ‘‘financial records’’. ‘‘(I) the company; and ‘‘(B) The term ‘supervised investment bank ‘‘(II) any affiliate of the company that, be- holding company’ means any investment Subtitle D—Disclosure of Customer Costs of cause of its size, condition, or activities, the bank holding company that is supervised by Acquiring Financial Products nature or size of the transactions between the Commission pursuant to this subsection. SEC. 241. IMPROVED AND CONSISTENT DISCLO- such affiliate and any affiliated broker or ‘‘(C) The terms ‘affiliate’, ‘bank’, ‘bank SURE. dealer, or the centralization of functions holding company’, ‘company’, ‘control’, ‘sav- (a) REVISED REGULATIONS REQUIRED.— within the holding company system, could, ings association’, and ‘wholesale financial Within one year after the date of enactment in the discretion of the Commission, have a institution’ have the same meanings given in of this Act, each Federal financial regu- materially adverse effect on the operational section 2 of the Bank Holding Company Act latory authority shall prescribe rules, or re- or financial condition of the broker or deal- of 1956 (12 U.S.C. 1841). visions to its rules, to improve the accuracy, er. ‘‘(D) The term ‘insured bank’ has the same simplicity, and completeness, and to make ‘‘(iii) DEFERENCE TO OTHER EXAMINATIONS.— meaning given in section 3 of the Federal De- more consistent, the disclosure of informa- For purposes of this subparagraph, the Com- posit Insurance Act. tion by persons subject to the jurisdiction of mission shall, to the fullest extent possible, ‘‘(E) The term ‘foreign bank’ has the same such regulatory authority concerning any use the reports of examination of an institu- meaning given in section 1(b)(7) of the Inter- commissions, fees, or other costs incurred by tion described in subparagraph (D), (F), or national Banking Act of 1978. customers in the acquisition of financial (G) of section 2(c)(2), or held under section ‘‘(F) The terms ‘person associated with an products. 4(f), of the Bank Holding Company Act of investment bank holding company’ and ‘as- (b) CONSULTATION.—In prescribing rules 1956 made by the appropriate regulatory sociated person of an investment bank hold- and revisions under subsection (a), the Fed- agency, or of a licensed insurance company ing company’ mean any person directly or eral financial regulatory authorities shall made by the appropriate State insurance indirectly controlling, controlled by, or consult with each other and with appropriate regulator. under common control with, an investment State financial regulatory authorities. ‘‘(4) HOLDING COMPANY CAPITAL.— bank holding company.’’. (c) CONSIDERATION OF EXISTING DISCLO- ‘‘(A) AUTHORITY.—If the Commission finds ‘‘(j) AUTHORITY TO LIMIT DISCLOSURE OF IN- SURES.—In prescribing rules and revisions that it is necessary to adequately supervise FORMATION.—Notwithstanding any other pro- under subsection (a), the Federal financial investment bank holding companies and vision of law, the Commission shall not be regulatory authorities shall consider the suf- their broker or dealer affiliates consistent compelled to disclose any information re- ficiency and appropriateness of then existing July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5277 laws and rules applicable to persons subject in which the product is provided because the not engage in the underwriting of title insur- to their jurisdiction, and may prescribe ex- product insures, guarantees, or indemnifies ance pursuant to paragraph (1). emptions from the rules and revisions re- against liability, loss of life, loss of health, (3) INSURANCE SUBSIDIARY.—In the case of a quired by subsection (a) to the extent appro- or loss through damage to or destruction of national bank which has a subsidiary which priate in light of the objective of this section property, including, but not limited to, sur- provides insurance as principal and has no to increase the consistency of disclosure ety bonds, life insurance, health insurance, affiliate other than a subsidiary which pro- practices. title insurance, and property and casualty vides insurance as principal, the national (d) ENFORCEMENT.—Any rule prescribed by insurance (such as private passenger or com- bank may not directly engage in any activ- a Federal financial regulatory authority pur- mercial automobile, homeowners, mortgage, ity involving the underwriting of title insur- suant to this section shall, for purposes of commercial multiperil, general liability, ance. enforcement, be treated as a rule prescribed professional liability, workers’ compensa- (d) ‘‘AFFILIATE’’ AND ‘‘SUBSIDIARY’’ DE- by such regulatory authority pursuant to the tion, fire and allied lines, farm owners FINED.—For purposes of this section, the statute establishing such regulatory multiperil, aircraft, fidelity, surety, medical terms ‘‘affiliate’’ and ‘‘subsidiary’’ have the authority’s jurisdiction over the persons to malpractice, ocean marine, inland marine, same meanings as in section 2 of the Bank whom such rule applies. and boiler and machinery insurance); and Holding Company Act of 1956. (e) DEFINITION.—As used in this section, (B) is not a product or service of a bank (e) RULE OF CONSTRUCTION.—No provision the term ‘‘Federal financial regulatory au- that is— of this Act or any other Federal law shall be thority’’ means the Board of Governors of (i) a deposit product; construed as superseding or affecting a State the Federal Reserve System, the Securities (ii) a loan, discount, letter of credit, or law which was in effect before the date of the and Exchange Commission, the Comptroller other extension of credit; enactment of this Act and which prohibits of the Currency, the Federal Deposit Insur- (iii) a trust or other fiduciary service; title insurance from being offered, provided, ance Corporation, the Commodity Futures (iv) a qualified financial contract (as de- or sold in such State, or from being under- Trading Commission, and any self-regulatory fined in or determined pursuant to section written with respect to real property in such organization under the supervision of any of 11(e)(8)(D)(i) of the Federal Deposit Insur- State, by any person whatsoever. the foregoing. ance Act); or SEC. 306. EXPEDITED AND EQUALIZED DISPUTE RESOLUTION FOR FEDERAL REGU- TITLE III—INSURANCE (v) a financial guaranty, except that this subparagraph (B) shall not apply to a prod- LATORS. Subtitle A—State Regulation of Insurance uct that includes an insurance component (a) FILING IN COURT OF APPEALS.—In the case of a regulatory conflict between a State SEC. 301. STATE REGULATION OF THE BUSINESS such that if the product is offered or pro- insurance regulator and a Federal regulator OF INSURANCE. posed to be offered by the bank as principal— as to whether any product is or is not insur- The Act entitled ‘‘An Act to express the in- (I) it would be treated as a life insurance ance, as defined in section 304(c) of this Act, tent of the Congress with reference to the contract under section 7702 of the Internal or whether a State statute, regulation, regulation of the business of insurance’’ and Revenue Code of 1986; or order, or interpretation regarding any insur- approved March 9, 1945 (15 U.S.C. 1011 et (II) in the event that the product is not a ance sales or solicitation activity is properly seq.), commonly referred to as the letter of credit or other similar extension of treated as preempted under Federal law, ei- ‘‘McCarran-Ferguson Act’’ remains the law credit, a qualified financial contract, or a fi- ther regulator may seek expedited judicial of the United States. nancial guaranty, it would qualify for treat- review of such determination by the United SEC. 302. MANDATORY INSURANCE LICENSING ment for losses incurred with respect to such REQUIREMENTS. States Court of Appeals for the circuit in product under section 832(b)(5) of the Inter- which the State is located or in the United No person shall engage in the business of nal Revenue Code of 1986, if the bank were insurance in a State as principal or agent States Court of Appeals for the District of subject to tax as an insurance company Columbia Circuit by filing a petition for re- unless such person is licensed as required by under section 831 of that Code; or the appropriate insurance regulator of such view in such court. (3) any annuity contract, the income on (b) EXPEDITED REVIEW.—The United States State in accordance with the relevant State which is subject to tax treatment under sec- insurance law, subject to section 104. Court of Appeals in which a petition for re- tion 72 of the Internal Revenue Code of 1986. view is filed in accordance with subsection SEC. 303. FUNCTIONAL REGULATION OF INSUR- SEC. 305. TITLE INSURANCE ACTIVITIES OF NA- (a) shall complete all action on such peti- ANCE. TIONAL BANKS AND THEIR AFFILI- The insurance activities of any person (in- tion, including rendering a judgment, before ATES. the end of the 60-day period beginning on the cluding a national bank exercising its power (a) GENERAL PROHIBITION.—No national to act as agent under the 11th undesignated date on which such petition is filed, unless bank, and no subsidiary of a national bank, all parties to such proceeding agree to any paragraph of section 13 of the Federal Re- may engage in any activity involving the un- serve Act) shall be functionally regulated by extension of such period. derwriting or sale of title insurance. (c) SUPREME COURT REVIEW.—Any request the States, subject to section 104. (b) NONDISCRIMINATION PARITY EXCEP- for certiorari to the Supreme Court of the TION.— SEC. 304. INSURANCE UNDERWRITING IN NA- United States of any judgment of a United TIONAL BANKS. (1) IN GENERAL.—Notwithstanding any States Court of Appeals with respect to a pe- (a) IN GENERAL.—Except as provided in sec- other provision of law (including section 104 tition for review under this section shall be tion 305, a national bank and the subsidiaries of this Act), in the case of any State in filed with the Supreme Court of the United of a national bank may not provide insur- which banks organized under the laws of States as soon as practicable after such judg- ance in a State as principal except that this such State are authorized to sell title insur- ment is issued. prohibition shall not apply to authorized ance as agency, a national bank and a sub- (d) STATUTE OF LIMITATION.—No petition products. sidiary of a national bank may sell title in- may be filed under this section challenging (b) AUTHORIZED PRODUCTS.—For the pur- surance as agent in such State, but only in an order, ruling, determination, or other ac- poses of this section, a product is authorized the same manner, to the same extent, and tion of a Federal regulator or State insur- if— under the same restrictions as such State ance regulator after the later of— (1) as of January 1, 1999, the Comptroller of banks are authorized to sell title insurance (1) the end of the 12-month period begin- the Currency had determined in writing that as agent in such State. ning on the date on which the first public no- national banks may provide such product as (2) COORDINATION WITH ‘‘WILDCARD’’ PROVI- tice is made of such order, ruling, determina- principal, or national banks were in fact law- SION.—A State law which authorizes State tion or other action in its final form; or fully providing such product as principal; banks to engage in any activities in such (2) the end of the 6-month period beginning (2) no court of relevant jurisdiction had, by State in which a national bank may engage on the date on which such order, ruling, de- final judgment, overturned a determination shall not be treated as a statute which au- termination, or other action takes effect. of the Comptroller of the Currency that na- thorizes State banks to sell title insurance (e) STANDARD OF REVIEW.—The court shall tional banks may provide such product as as agent, for purposes of paragraph (1). decide a petition filed under this section principal; and (c) GRANDFATHERING WITH CONSISTENT REG- based on its review on the merits of all ques- (3) the product is not title insurance, or an ULATION.— tions presented under State and Federal law, annuity contract the income of which is sub- (1) IN GENERAL.—Except as provided in including the nature of the product or activ- ject to tax treatment under section 72 of the paragraphs (2) and (3) and notwithstanding ity and the history and purpose of its regula- Internal Revenue Code of 1986. subsections (a) and (b), a national bank, and tion under State and Federal law, without (c) DEFINITION.—For purposes of this sec- a subsidiary of a national bank, may conduct unequal deference. tion, the term ‘‘insurance’’ means— title insurance activities which such na- SEC. 307. CONSUMER PROTECTION REGULA- (1) any product regulated as insurance as tional bank or subsidiary was actively and TIONS. of January 1, 1999, in accordance with the lawfully conducting before the date of the The Federal Deposit Insurance Act (12 relevant State insurance law, in the State in enactment of this Act. U.S.C. 1811 et seq.) is amended by inserting which the product is provided; (2) INSURANCE AFFILIATE.—In the case of a after section 46 (as added by section 122(b) of (2) any product first offered after January national bank which has an affiliate which this Act) the following new section: 1, 1999, which— provides insurance as principal and is not a ‘‘SEC. 47. CONSUMER PROTECTION REGULA- (A) a State insurance regulator determines subsidiary of the bank, the national bank TIONS. shall be regulated as insurance in the State and any subsidiary of the national bank may ‘‘(a) REGULATIONS REQUIRED.— H5278 CONGRESSIONAL RECORD — HOUSE July 1, 1999

‘‘(1) IN GENERAL.—The Federal banking disclosure that is conspicuous, simple, di- ulations issued under the section, which agencies shall prescribe and publish in final rect, and readily understandable, such as the shall— form, before the end of the 1-year period be- following: ‘‘(1) establish a group within each regu- ginning on the date of the enactment of the ‘‘(i) ‘NOT FDIC–INSURED’. latory agency to receive such complaints; Financial Services Act of 1999, consumer pro- ‘‘(ii) ‘NOT GUARANTEED BY THE BANK’. ‘‘(2) develop procedures for investigating tection regulations (which the agencies ‘‘(iii) ‘MAY GO DOWN IN VALUE’. such complaints; jointly determine to be appropriate) that— ‘‘(iv) ‘NOT INSURED BY ANY GOVERN- ‘‘(3) develop procedures for informing con- ‘‘(A) apply to retail sales practices, solici- MENT AGENCY’. sumers of rights they may have in connec- tations, advertising, or offers of any insur- ‘‘(C) ADJUSTMENTS FOR ALTERNATIVE METH- tion with such complaints; and ance product by any insured depository in- ODS OF PURCHASE.—In prescribing the re- ‘‘(4) develop procedures for addressing con- stitution or wholesale financial institution quirements under subparagraphs (A) and (D), cerns raised by such complaints, as appro- or any person who is engaged in such activi- necessary adjustments shall be made for pur- priate, including procedures for the recovery ties at an office of the institution or on be- chase in person, by telephone, or by elec- of losses to the extent appropriate. half of the institution; and tronic media to provide for the most appro- ‘‘(f) EFFECT ON OTHER AUTHORITY.— ‘‘(B) are consistent with the requirements priate and complete form of disclosure and ‘‘(1) IN GENERAL.—No provision of this sec- of this Act and provide such additional pro- acknowledgments. tion shall be construed as granting, limiting, tections for consumers to whom such sales, ‘‘(D) CONSUMER ACKNOWLEDGMENT.—A re- or otherwise affecting— solicitations, advertising, or offers are di- quirement that an insured depository insti- ‘‘(A) any authority of the Securities and rected as the agency determines to be appro- tution shall require any person selling an in- Exchange Commission, any self-regulatory priate. surance product at any office of, or on behalf organization, the Municipal Securities Rule- ‘‘(2) APPLICABILITY TO SUBSIDIARIES.—The of, the institution to obtain, at the time a making Board, or the Secretary of the Treas- regulations prescribed pursuant to paragraph consumer receives the disclosures required ury under any Federal securities law; or (1) shall extend such protections to any sub- under this paragraph or at the time of the ‘‘(B) except as provided in paragraph (2), sidiaries of an insured depository institu- initial purchase by the consumer of such any authority of any State insurance com- tion, as deemed appropriate by the regu- product, an acknowledgment by such con- missioner or other State authority under lators referred to in paragraph (3), where sumer of the receipt of the disclosure re- any State law. quired under this subsection with respect to such extension is determined to be necessary ‘‘(2) COORDINATION WITH STATE LAW.— such product. to ensure the consumer protections provided ‘‘(A) IN GENERAL.—Except as provided in by this section. ‘‘(2) PROHIBITION ON MISREPRESENTATIONS.— subparagraph (B), regulations prescribed by ‘‘(3) CONSULTATION AND JOINT REGULA- A prohibition on any practice, or any adver- a Federal banking agency under this section tising, at any office of, or on behalf of, the TIONS.—The Federal banking agencies shall shall not apply to retail sales, solicitations, insured depository institution, or any sub- consult with each other and prescribe joint advertising, or offers of any insurance prod- sidiary as appropriate, which could mislead regulations pursuant to paragraph (1), after uct by any insured depository institution or any person or otherwise cause a reasonable consultation with the State insurance regu- wholesale financial institution or to any per- person to reach an erroneous belief with re- lators, as appropriate. son who is engaged in such activities at an spect to— ‘‘(b) SALES PRACTICES.—The regulations office of such institution or on behalf of the ‘‘(A) the uninsured nature of any insurance prescribed pursuant to subsection (a) shall institution, in a State where the State has in product sold, or offered for sale, by the insti- include anticoercion rules applicable to the effect statutes, regulations, orders, or inter- sale of insurance products which prohibit an tution or any subsidiary of the institution; pretations, that are inconsistent with or insured depository institution from engaging or contrary to the regulations prescribed by the in any practice that would lead a consumer ‘‘(B) in the case of a variable annuity or Federal banking agencies. to believe an extension of credit, in violation other insurance product that involves an in- ‘‘(B) PREEMPTION.—If, with respect to any of section 106(b) of the Bank Holding Com- vestment risk, the investment risk associ- provision of the regulations prescribed under pany Act Amendments of 1970, is conditional ated with any such product. this section, the Board of Governors of the upon— ‘‘(d) SEPARATION OF BANKING AND NON- Federal Reserve System, the Comptroller of ‘‘(1) the purchase of an insurance product BANKING ACTIVITIES.— the Currency, and the Board of Directors of from the institution or any of its affiliates; ‘‘(1) REGULATIONS REQUIRED.—The regula- or tions prescribed pursuant to subsection (a) the Federal Deposit Insurance Corporation ‘‘(2) an agreement by the consumer not to shall include such provisions as the Federal determine jointly that the protection af- obtain, or a prohibition on the consumer banking agencies consider appropriate to en- forded by such provision for consumers is from obtaining, an insurance product from sure that the routine acceptance of deposits greater than the protection provided by a an unaffiliated entity. is kept, to the extent practicable, physically comparable provision of the statutes, regula- ‘‘(c) DISCLOSURES AND ADVERTISING.—The segregated from insurance product activity. tions, orders, or interpretations referred to in subparagraph (A) of any State, such provi- regulations prescribed pursuant to sub- ‘‘(2) REQUIREMENTS.—Regulations pre- section (a) shall include the following provi- scribed pursuant to paragraph (1) shall in- sion of the regulations prescribed under this sions relating to disclosures and advertising clude the following: section shall supersede the comparable pro- vision of such State statute, regulation, in connection with the initial purchase of an ‘‘(A) SEPARATE SETTING.—A clear delinea- insurance product: tion of the setting in which, and the cir- order, or interpretation. ‘‘(1) DISCLOSURES.— cumstances under which, transactions in- ‘‘(h) INSURANCE PRODUCT DEFINED.—For ‘‘(A) IN GENERAL.—Requirements that the volving insurance products should be con- purposes of this section, the term ‘insurance following disclosures be made orally and in ducted in a location physically segregated product’ includes an annuity contract the in- writing before the completion of the initial from an area where retail deposits are rou- come of which is subject to tax treatment sale and, in the case of clause (iv), at the tinely accepted. under section 72 of the Internal Revenue time of application for an extension of cred- ‘‘(B) REFERRALS.—Standards which permit Code of 1986.’’. it: any person accepting deposits from the pub- SEC. 308. CERTAIN STATE AFFILIATION LAWS ‘‘(i) UNINSURED STATUS.—As appropriate, lic in an area where such transactions are PREEMPTED FOR INSURANCE COM- the product is not insured by the Federal De- routinely conducted in an insured depository PANIES AND AFFILIATES. posit Insurance Corporation, the United institution to refer a customer who seeks to Except as provided in section 104(a)(2), no States Government, or the insured deposi- purchase any insurance product to a quali- State may, by law, regulation, order, inter- tory institution. fied person who sells such product, only if pretation, or otherwise— ‘‘(ii) INVESTMENT RISK.—In the case of a the person making the referral receives no (1) prevent or significantly interfere with variable annuity or other insurance product more than a one-time nominal fee of a fixed the ability of any insurer, or any affiliate of which involves an investment risk, that dollar amount for each referral that does not an insurer (whether such affiliate is orga- there is an investment risk associated with depend on whether the referral results in a nized as a stock company, mutual holding the product, including possible loss of value. transaction. company, or otherwise), to become a finan- ‘‘(iv) COERCION.—The approval of an exten- ‘‘(C) QUALIFICATION AND LICENSING REQUIRE- cial holding company or to acquire control of sion of credit may not be conditioned on— MENTS.—Standards prohibiting any insured an insured depository institution; ‘‘(I) the purchase of an insurance product depository institution from permitting any (2) limit the amount of an insurer’s assets from the institution in which the application person to sell or offer for sale any insurance that may be invested in the voting securities for credit is pending or any of its affiliates or product in any part of any office of the insti- of an insured depository institution (or any subsidiaries; or tution, or on behalf of the institution, unless company which controls such institution), ‘‘(II) an agreement by the consumer not to such person is appropriately qualified and li- except that the laws of an insurer’s State of obtain, or a prohibition on the consumer censed. domicile may limit the amount of such in- from obtaining, an insurance product from ‘‘(e) CONSUMER GRIEVANCE PROCESS.—The vestment to an amount that is not less than an unaffiliated entity. Federal banking agencies shall jointly estab- 5 percent of the insurer’s admitted assets; or ‘‘(B) MAKING DISCLOSURE READILY UNDER- lish a consumer complaint mechanism, for (3) prevent, significantly interfere with, or STANDABLE.—Regulations prescribed under receiving and expeditiously addressing con- have the authority to review, approve, or subparagraph (A) shall encourage the use of sumer complaints alleging a violation of reg- disapprove a plan of reorganization by which July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5279 an insurer proposes to reorganize from mu- (A) is engaged in insurance activities and resident individuals and entities authorized tual form to become a stock insurer (wheth- regulated by such insurance regulator; and to sell and solicit insurance within those er as a direct or indirect subsidiary of a mu- (B) is an affiliate of an insured depository States. tual holding company or otherwise) unless institution, wholesale financial institution, (b) UNIFORMITY REQUIRED.—States shall be such State is the State of domicile of the in- or financial holding company. deemed to have established the uniformity surer. (c) CONSULTATION.—Before making any de- necessary to satisfy subsection (a)(1) if the SEC. 309. INTERAGENCY CONSULTATION. termination relating to the initial affiliation States— (1) establish uniform criteria regarding the (a) PURPOSE.—It is the intention of Con- of, or the continuing affiliation of, an in- integrity, personal qualifications, education, gress that the Board of Governors of the Fed- sured depository institution, wholesale fi- training, and experience of licensed insur- eral Reserve System, as the umbrella super- nancial institution, or financial holding ance producers, including the qualification visor for financial holding companies, and company with a company engaged in insur- and training of sales personnel in the State insurance regulators, as the func- ance activities, the appropriate Federal ascertaining the appropriateness of a par- tional regulators of companies engaged in in- banking agency shall consult with the appro- ticular insurance product for a prospective surance activities, coordinate efforts to su- priate State insurance regulator of such customer; pervise companies that control both a depos- company and take the views of such insur- (2) establish uniform continuing education itory institution and a company engaged in ance regulator into account in making such determination. requirements for licensed insurance pro- insurance activities regulated under State ducers; law. In particular, Congress believes that the (d) EFFECT ON OTHER AUTHORITY.—Nothing in this section shall limit in any respect the (3) establish uniform ethics course require- Board and the State insurance regulators ments for licensed insurance producers in should share, on a confidential basis, infor- authority of the appropriate Federal banking agency with respect to an insured depository conjunction with the continuing education mation relevant to the supervision of compa- requirements under paragraph (2); nies that control both a depository institu- institution, wholesale financial institution, or bank holding company or any affiliate (4) establish uniform criteria to ensure tion and a company engaged in insurance ac- that an insurance product, including any an- tivities, including information regarding the thereof under any provision of law. (e) CONFIDENTIALITY AND PRIVILEGE.— nuity contract, sold to a consumer is suit- financial health of the consolidated organi- (1) CONFIDENTIALITY.—The appropriate able and appropriate for the consumer based zation and information regarding trans- Federal banking agency shall not provide on financial information disclosed by the actions and relationships between insurance any information or material that is entitled consumer; and companies and affiliated depository institu- to confidential treatment under applicable (5) do not impose any requirement upon tions. The appropriate Federal banking agen- Federal banking agency regulations, or other any insurance producer to be licensed or oth- cies for depository institutions should also applicable law, to a State insurance regu- erwise qualified to do business as a non- share, on a confidential basis, information lator unless such regulator agrees to main- resident that has the effect of limiting or with the relevant State insurance regulators tain the information or material in con- conditioning that producer’s activities be- regarding transactions and relationships be- fidence and to take all reasonable steps to cause of its residence or place of operations, tween depository institutions and affiliated oppose any effort to secure disclosure of the except that counter-signature requirements companies engaged in insurance activities. information or material by the regulator. imposed on nonresident producers shall not The purpose of this section is to encourage The appropriate Federal banking agency be deemed to have the effect of limiting or this coordination and confidential sharing of shall treat as confidential any information conditioning a producer’s activities because information, and to thereby improve both or material obtained from a State insurance of its residence or place of operations under the efficiency and the quality of the super- regulator that is entitled to confidential this section. vision of financial holding companies and (c) RECIPROCITY REQUIRED.—States shall be treatment under applicable State regula- their affiliated depository institutions and deemed to have established the reciprocity tions, or other applicable law, and take all companies engaged in insurance activities. required to satisfy subsection (a)(2) if the reasonable steps to oppose any effort to se- (b) EXAMINATION RESULTS AND OTHER IN- following conditions are met: cure disclosure of the information or mate- FORMATION.— (1) ADMINISTRATIVE LICENSING PROCE- rial by the Federal banking agency. (1) INFORMATION OF THE BOARD.—Upon the DURES.—At least a majority of the States RIVILEGE.—The provision pursuant to request of the appropriate insurance regu- (2) P permit a producer that has a resident license this section of information or material by a lator of any State, the Board may provide for selling or soliciting the purchase of in- Federal banking agency or State insurance any information of the Board regarding the surance in its home State to receive a li- regulator shall not constitute a waiver of, or financial condition, risk management poli- cense to sell or solicit the purchase of insur- otherwise affect, any privilege to which the cies, and operations of any financial holding ance in such majority of States as a non- information or material is otherwise subject. company that controls a company that is en- resident to the same extent that such pro- (f) DEFINITIONS.—For purposes of this sec- gaged in insurance activities and is regu- ducer is permitted to sell or solicit the pur- tion, the following definitions shall apply: lated by such State insurance regulator, and chase of insurance in its State, if the pro- (1) APPROPRIATE FEDERAL BANKING AGENCY; regarding any transaction or relationship be- ducer’s home State also awards such licenses INSURED DEPOSITORY INSTITUTION.—The terms tween such an insurance company and any on such a reciprocal basis, without satisfying ‘‘appropriate Federal banking agency’’ and affiliated depository institution. The Board any additional requirements other than ‘‘insured depository institution’’ have the may provide any other information to the submitting— same meanings as in section 3 of the Federal appropriate State insurance regulator that (A) a request for licensure; Deposit Insurance Act. the Board believes is necessary or appro- (B) the application for licensure that the (2) BOARD; FINANCIAL HOLDING COMPANY; priate to permit the State insurance regu- producer submitted to its home State; AND WHOLESALE FINANCIAL INSTITUTION.—The lator to administer and enforce applicable (C) proof that the producer is licensed and terms ‘‘Board’’, ‘‘financial holding com- State insurance laws. in good standing in its home State; and pany’’, and ‘‘wholesale financial institution’’ (2) BANKING AGENCY INFORMATION.—Upon (D) the payment of any requisite fee to the have the same meanings as in section 2 of the request of the appropriate insurance reg- appropriate authority. the Bank Holding Company Act of 1956. ulator of any State, the appropriate Federal (2) CONTINUING EDUCATION REQUIREMENTS.— banking agency may provide any informa- SEC. 310. DEFINITION OF STATE. A majority of the States accept an insurance tion of the agency regarding any transaction For purposes of this subtitle, the term producer’s satisfaction of its home State’s or relationship between a depository institu- ‘‘State’’ means any State of the United continuing education requirements for li- tion supervised by such Federal banking States, the District of Columbia, any terri- censed insurance producers to satisfy the agency and any affiliated company that is tory of the United States, Puerto Rico, States’ own continuing education require- engaged in insurance activities regulated by Guam, American Samoa, the Trust Territory ments if the producer’s home State also rec- such State insurance regulator. The appro- of the Pacific Islands, the Virgin Islands, and ognizes the satisfaction of continuing edu- priate Federal banking agency may provide the Northern Mariana Islands. cation requirements on such a reciprocal any other information to the appropriate Subtitle B—National Association of basis. State insurance regulator that the agency Registered Agents and Brokers (3) NO LIMITING NONRESIDENT REQUIRE- believes is necessary or appropriate to per- SEC. 321. STATE FLEXIBILITY IN MULTISTATE LI- MENTS.—A majority of the States do not im- mit the State insurance regulator to admin- CENSING REFORMS. pose any requirement upon any insurance ister and enforce applicable State insurance (a) IN GENERAL.—The provisions of this producer to be licensed or otherwise quali- laws. subtitle shall take effect unless, not later fied to do business as a nonresident that has (3) STATE INSURANCE REGULATOR INFORMA- than 3 years after the date of enactment of the effect of limiting or conditioning that TION.—Upon the request of the Board or the this Act, at least a majority of the States— producer’s activities because of its residence appropriate Federal banking agency, a State (1) have enacted uniform laws and regula- or place of operations, except that insurance regulator may provide any exam- tions governing the licensure of individuals countersignature requirements imposed on ination or other reports, records, or other in- and entities authorized to sell and solicit the nonresident producers shall not be deemed to formation to which such insurance regulator purchase of insurance within the State; or have the effect of limiting or conditioning a may have access with respect to a company (2) have enacted reciprocity laws and regu- producer’s activities because of its residence which— lations governing the licensure of non- or place of operations under this section. H5280 CONGRESSIONAL RECORD — HOUSE July 1, 1999

(4) RECIPROCAL RECIPROCITY.—Each of the after in this subtitle referred to as the determine compliance with the criteria for States that satisfies paragraphs (1), (2), and ‘‘NAIC’’). membership established by the Association; (3) grants reciprocity to residents of all of SEC. 325. MEMBERSHIP. and the other States that satisfy such para- (a) ELIGIBILITY.— (2) suspend or revoke the membership of an graphs. (1) IN GENERAL.—Any State-licensed insur- insurance producer if— (d) DETERMINATION.— ance producer shall be eligible to become a (A) the producer fails to meet the applica- (1) NAIC DETERMINATION.—At the end of member in the Association. ble membership criteria of the Association; the 3-year period beginning on the date of (2) INELIGIBILITY FOR SUSPENSION OR REV- or the enactment of this Act, the National As- OCATION OF LICENSE.—Notwithstanding para- (B) the producer has been subject to dis- sociation of Insurance Commissioners shall graph (1), a State-licensed insurance pro- ciplinary action pursuant to a final adjudica- determine, in consultation with the insur- ducer shall not be eligible to become a mem- tory proceeding under the jurisdiction of a ance commissioners or chief insurance regu- ber if a State insurance regulator has sus- State insurance regulator, and the Associa- latory officials of the States, whether the pended or revoked such producer’s license in tion concludes that retention of membership uniformity or reciprocity required by sub- that State during the 3-year period preceding in the Association would not be in the public sections (b) and (c) has been achieved. the date on which such producer applies for interest. (2) JUDICIAL REVIEW.—The appropriate membership. (i) OFFICE OF CONSUMER COMPLAINTS.— United States district court shall have exclu- (3) RESUMPTION OF ELIGIBILITY.—Paragraph (1) IN GENERAL.—The Association shall es- sive jurisdiction over any challenge to the (2) shall cease to apply to any insurance pro- tablish an office of consumer complaints National Association of Insurance Commis- ducer if— that shall— sioners’ determination under this section (A) the State insurance regulator renews (A) receive and investigate complaints and such court shall apply the standards set the license of such producer in the State in from both consumers and State insurance forth in section 706 of title 5, United States which the license was suspended or revoked; regulators related to members of the Asso- Code, when reviewing any such challenge. or ciation; and (e) CONTINUED APPLICATION.—If, at any (B) the suspension or revocation is subse- (B) recommend to the Association any dis- time, the uniformity or reciprocity required quently overturned. ciplinary actions that the office considers by subsections (b) and (c) no longer exists, (b) AUTHORITY TO ESTABLISH MEMBERSHIP appropriate, to the extent that any such rec- the provisions of this subtitle shall take ef- CRITERIA.—The Association shall have the ommendation is not inconsistent with State fect 2 years after the date on which such uni- authority to establish membership criteria law. formity or reciprocity ceases to exist, unless that— (2) RECORDS AND REFERRALS.—The office of the uniformity or reciprocity required by (1) bear a reasonable relationship to the consumer complaints of the Association those provisions is satisfied before the expi- purposes for which the Association was es- shall— ration of that 2-year period. tablished; and (A) maintain records of all complaints re- (f) SAVINGS PROVISION.—No provision of (2) do not unfairly limit the access of ceived in accordance with paragraph (1) and this section shall be construed as requiring smaller agencies to the Association member- make such records available to the NAIC and that any law, regulation, provision, or action ship. to each State insurance regulator for the of any State which purports to regulate in- (c) ESTABLISHMENT OF CLASSES AND CAT- State of residence of the consumer who filed surance producers, including any such law, EGORIES.— the complaint; and regulation, provision, or action which pur- (1) CLASSES OF MEMBERSHIP.—The Associa- (B) refer, when appropriate, any such com- ports to regulate unfair trade practices or es- tion may establish separate classes of mem- plaint to any appropriate State insurance tablish consumer protections, including bership, with separate criteria, if the Asso- regulator. countersignature laws, be altered or amend- ciation reasonably determines that perform- (3) TELEPHONE AND OTHER ACCESS.—The of- ed in order to satisfy the uniformity or reci- ance of different duties requires different fice of consumer complaints shall maintain a procity required by subsections (b) and (c), levels of education, training, or experience. toll-free telephone number for the purpose of unless any such law, regulation, provision, (2) CATEGORIES.—The Association may es- this subsection and, as practicable, other al- or action is inconsistent with a specific re- tablish separate categories of membership ternative means of communication with con- quirement of any such subsection and then for individuals and for other persons. The es- sumers, such as an Internet home page. only to the extent of such inconsistency. tablishment of any such categories of mem- SEC. 326. BOARD OF DIRECTORS. (g) UNIFORM LICENSING.—Nothing in this bership shall be based either on the types of section shall be construed to require any licensing categories that exist under State (a) ESTABLISHMENT.—There is established State to adopt new or additional licensing laws or on the aggregate amount of business the board of directors of the Association requirements to achieve the uniformity nec- handled by an insurance producer. No special (hereafter in this subtitle referred to as the essary to satisfy subsection (a)(1). categories of membership, and no distinct ‘‘Board’’) for the purpose of governing and SEC. 322. NATIONAL ASSOCIATION OF REG- membership criteria, shall be established for supervising the activities of the Association ISTERED AGENTS AND BROKERS. members which are insured depository insti- and the members of the Association. (a) ESTABLISHMENT.—There is established tutions or wholesale financial institutions or (b) POWERS.—The Board shall have such the National Association of Registered for their employees, agents, or affiliates. powers and authority as may be specified in Agents and Brokers (hereafter in this sub- (d) MEMBERSHIP CRITERIA.— the bylaws of the Association. title referred to as the ‘‘Association’’). (1) IN GENERAL.—The Association may es- (c) COMPOSITION.— (b) STATUS.—The Association shall— tablish criteria for membership which shall (1) MEMBERS.—The Board shall be com- (1) be a nonprofit corporation; include standards for integrity, personal posed of 7 members appointed by the NAIC. (2) have succession until dissolved by an qualifications, education, training, and expe- (2) REQUIREMENT.—At least 4 of the mem- Act of Congress; rience. bers of the Board shall have significant expe- (3) not be an agent or instrumentality of (2) MINIMUM STANDARD.—In establishing rience with the regulation of commercial the United States Government; and criteria under paragraph (1), the Association lines of insurance in at least 1 of the 20 (4) except as otherwise provided in this shall consider the highest levels of insurance States in which the greatest total dollar Act, be subject to, and have all the powers producer qualifications established under the amount of commercial-lines insurance is conferred upon a nonprofit corporation by licensing laws of the States. placed in the United States. the District of Columbia Nonprofit Corpora- (e) EFFECT OF MEMBERSHIP.—Membership (3) INITIAL BOARD MEMBERSHIP.— tion Act (D.C. Code, sec. 29y–1001 et seq.). in the Association shall entitle the member (A) IN GENERAL.—If, by the end of the 2- SEC. 323. PURPOSE. to licensure in each State for which the year period beginning on the date of enact- The purpose of the Association shall be to member pays the requisite fees, including li- ment of this Act, the NAIC has not appointed provide a mechanism through which uniform censing fees and, where applicable, bonding the initial 7 members of the Board of the As- licensing, appointment, continuing edu- requirements, set by such State. sociation, the initial Board shall consist of cation, and other insurance producer sales (f) ANNUAL RENEWAL.—Membership in the the 7 State insurance regulators of the 7 qualification requirements and conditions Association shall be renewed on an annual States with the greatest total dollar amount can be adopted and applied on a multistate basis. of commercial-lines insurance in place as of basis, while preserving the right of States to (g) CONTINUING EDUCATION.—The Associa- the end of such period. license, supervise, and discipline insurance tion shall establish, as a condition of mem- (B) ALTERNATE COMPOSITION.—If any of the producers and to prescribe and enforce laws bership, continuing education requirements State insurance regulators described in sub- and regulations with regard to insurance-re- which shall be comparable to or greater than paragraph (A) declines to serve on the Board, lated consumer protection and unfair trade the continuing education requirements the State insurance regulator with the next practices. under the licensing laws of a majority of the greatest total dollar amount of commercial- SEC. 324. RELATIONSHIP TO THE FEDERAL GOV- States. lines insurance in place, as determined by ERNMENT. (h) SUSPENSION AND REVOCATION.—The As- the NAIC as of the end of such period, shall The Association shall be subject to the su- sociation may— serve as a member of the Board. pervision and oversight of the National Asso- (1) inspect and examine the records and of- (C) INOPERABILITY.—If fewer than 7 State ciation of Insurance Commissioners (here- fices of the members of the Association to insurance regulators accept appointment to July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5281 the Board, the Association shall be estab- otherwise permitted in accordance with this (II) not be considered to be a final action. lished without NAIC oversight pursuant to paragraph. (c) ACTION REQUIRED BY THE NAIC.—The section 332. (2) INITIAL CONSIDERATION BY THE NAIC.— NAIC may, in accordance with such rules as (d) TERMS.—The term of each director Not later than 35 days after the date of publi- the NAIC determines to be necessary or ap- shall, after the initial appointment of the cation of notice of filing of a proposal, or be- propriate to the public interest or to carry members of the Board, be for 3 years, with 1⁄3 fore the end of such longer period not to ex- out the purposes of this subtitle, require the of the directors to be appointed each year. ceed 90 days as the NAIC may designate after Association to adopt, amend, or repeal any (e) BOARD VACANCIES.—A vacancy on the such date, if the NAIC finds such longer pe- bylaw, rule or amendment of the Associa- Board shall be filled in the same manner as riod to be appropriate and sets forth its rea- tion, whenever adopted. the original appointment of the initial Board sons for so finding, or as to which the Asso- (d) DISCIPLINARY ACTION BY THE ASSOCIA- for the remainder of the term of the vacating ciation consents, the NAIC shall— TION.— member. (A) by order approve such proposed rule or (1) SPECIFICATION OF CHARGES.—In any pro- ceeding to determine whether membership (f) MEETINGS.—The Board shall meet at the amendment; or call of the chairperson, or as otherwise pro- (B) institute proceedings to determine shall be denied, suspended, revoked, or not vided by the bylaws of the Association. whether such proposed rule or amendment renewed (hereafter in this section referred to as a ‘‘disciplinary action’’), the Association SEC. 327. OFFICERS. should be modified or disapproved. (3) NAIC PROCEEDINGS.— shall bring specific charges, notify such (a) IN GENERAL.— (A) IN GENERAL.—Proceedings instituted by member of such charges, give the member an (1) POSITIONS.—The officers of the Associa- opportunity to defend against the charges, tion shall consist of a chairperson and a vice the NAIC with respect to a proposed rule or amendment pursuant to paragraph (2) shall— and keep a record. chairperson of the Board, a president, sec- (2) SUPPORTING STATEMENT.—A determina- retary, and treasurer of the Association, and (i) include notice of the grounds for dis- approval under consideration; tion to take disciplinary action shall be sup- such other officers and assistant officers as (ii) provide opportunity for hearing; and ported by a statement setting forth— may be deemed necessary. (iii) be concluded not later than 180 days (A) any act or practice in which such mem- (2) MANNER OF SELECTION.—Each officer of after the date of the Association’s filing of ber has been found to have been engaged; the Board and the Association shall be elect- such proposed rule or amendment. (B) the specific provision of this subtitle, ed or appointed at such time and in such (B) DISPOSITION OF PROPOSAL.—At the con- the rules or regulations under this subtitle, manner and for such terms not exceeding 3 clusion of any proceeding under subpara- or the rules of the Association which any years as may be prescribed in the bylaws of graph (A), the NAIC shall, by order, approve such act or practice is deemed to violate; and the Association. or disapprove the proposed rule or amend- (C) the sanction imposed and the reason for (b) CRITERIA FOR CHAIRPERSON.—Only indi- ment. such sanction. viduals who are members of the NAIC shall EVIEW OF ISCIPLINARY C (C) EXTENSION OF TIME FOR CONSIDER- (e) NAIC R D A - be eligible to serve as the chairperson of the TION.— ATION.—The NAIC may extend the time for board of directors. concluding any proceeding under subpara- (1) NOTICE TO THE NAIC.—If the Association SEC. 328. BYLAWS, RULES, AND DISCIPLINARY AC- graph (A) for— orders any disciplinary action, the Associa- TION. (i) not more than 60 days if the NAIC finds tion shall promptly notify the NAIC of such (a) ADOPTION AND AMENDMENT OF BY- good cause for such extension and sets forth action. LAWS.— its reasons for so finding; or (2) REVIEW BY THE NAIC.—Any disciplinary (1) COPY REQUIRED TO BE FILED WITH THE (ii) for such longer period as to which the action taken by the Association shall be sub- NAIC.—The board of directors of the Associa- Association consents. ject to review by the NAIC— (A) on the NAIC’s own motion; or tion shall file with the NAIC a copy of the (4) STANDARDS FOR REVIEW.— (B) upon application by any person ag- proposed bylaws or any proposed amendment (A) GROUNDS FOR APPROVAL.—The NAIC to the bylaws, accompanied by a concise gen- shall approve a proposed rule or amendment grieved by such action if such application is eral statement of the basis and purpose of if the NAIC finds that the rule or amend- filed with the NAIC not more than 30 days such proposal. ment is in the public interest and is con- after the later of— (2) EFFECTIVE DATE.—Except as provided in sistent with the purposes of this Act. (i) the date the notice was filed with the NAIC pursuant to paragraph (1); or paragraph (3), any proposed bylaw or pro- (B) APPROVAL BEFORE END OF NOTICE PE- (ii) the date the notice of the disciplinary posed amendment shall take effect— RIOD.—The NAIC shall not approve any pro- (A) 30 days after the date of the filing of a posed rule before the end of the 30-day period action was received by such aggrieved per- copy with the NAIC; beginning on the date on which the Associa- son. (f) EFFECT OF REVIEW.—The filing of an ap- (B) upon such later date as the Association tion files proposed rules or amendments in plication to the NAIC for review of a discipli- may designate; or accordance with paragraph (1), unless the nary action, or the institution of review by (C) upon such earlier date as the NAIC may NAIC finds good cause for so doing and sets the NAIC on the NAIC’s own motion, shall determine. forth the reasons for so finding. not operate as a stay of disciplinary action (3) DISAPPROVAL BY THE NAIC.—Notwith- (5) ALTERNATE PROCEDURE.— unless the NAIC otherwise orders. standing paragraph (2), a proposed bylaw or (A) IN GENERAL.—Notwithstanding any pro- (g) SCOPE OF REVIEW.— amendment shall not take effect if, after vision of this subsection other than subpara- (1) IN GENERAL.—In any proceeding to re- public notice and opportunity to participate graph (B), a proposed rule or amendment re- view such action, after notice and the oppor- in a public hearing— lating to the administration or organization tunity for hearing, the NAIC shall— (A) the NAIC disapproves such proposal as of the Association shall take effect— (A) determine whether the action should be being contrary to the public interest or con- (i) upon the date of filing with the NAIC, if taken; trary to the purposes of this subtitle and such proposed rule or amendment is des- (B) affirm, modify, or rescind the discipli- provides notice to the Association setting ignated by the Association as relating solely nary sanction; or forth the reasons for such disapproval; or to matters which the NAIC, consistent with (C) remand to the Association for further (B) the NAIC finds that such proposal in- the public interest and the purposes of this proceedings. volves a matter of such significant public in- subsection, determines by rule do not require (2) DISMISSAL OF REVIEW.—The NAIC may terest that public comment should be ob- the procedures set forth in this paragraph; or dismiss a proceeding to review disciplinary tained, in which case it may, after notifying (ii) upon such date as the NAIC shall for action if the NAIC finds that— the Association in writing of such finding, good cause determine. (A) the specific grounds on which the ac- require that the procedures set forth in sub- (B) ABROGATION BY THE NAIC.— tion is based exist in fact; section (b) be followed with respect to such (i) IN GENERAL.—At any time within 60 (B) the action is in accordance with appli- proposal, in the same manner as if such pro- days after the date of filing of any proposed cable rules and regulations; and posed bylaw change were a proposed rule rule or amendment under subparagraph (C) such rules and regulations are, and change within the meaning of such sub- (A)(i) or clause (ii) of this subparagraph, the were, applied in a manner consistent with section. NAIC may repeal such rule or amendment the purposes of this subtitle. (b) ADOPTION AND AMENDMENT OF RULES.— and require that the rule or amendment be SEC. 329. ASSESSMENTS. (1) FILING PROPOSED REGULATIONS WITH THE refiled and reviewed in accordance with this (a) INSURANCE PRODUCERS SUBJECT TO AS- NAIC.— paragraph, if the NAIC finds that such action SESSMENT.—The Association may establish (A) IN GENERAL.—The board of directors of is necessary or appropriate in the public in- such application and membership fees as the the Association shall file with the NAIC a terest, for the protection of insurance pro- Association finds necessary to cover the copy of any proposed rule or any proposed ducers or policyholders, or otherwise in fur- costs of its operations, including fees made amendment to a rule of the Association therance of the purposes of this subtitle. reimbursable to the NAIC under subsection which shall be accompanied by a concise (ii) EFFECT OF RECONSIDERATION BY THE (b), except that, in setting such fees, the As- general statement of the basis and purpose of NAIC.—Any action of the NAIC pursuant to sociation may not discriminate against such proposal. clause (i) shall— smaller insurance producers. (B) OTHER RULES AND AMENDMENTS INEFFEC- (I) not affect the validity or force of a rule (b) NAIC ASSESSMENTS.—The NAIC may as- TIVE.—No proposed rule or amendment shall change during the period such rule or amend- sess the Association for any costs that the take effect unless approved by the NAIC or ment was in effect; and NAIC incurs under this subtitle. H5282 CONGRESSIONAL RECORD — HOUSE July 1, 1999 SEC. 330. FUNCTIONS OF THE NAIC. provisions of subsection (a) take effect, the different from the authority of the Associa- (a) ADMINISTRATIVE PROCEDURE.—Deter- NAIC shall, not later than 60 days thereafter, tion under section 325. minations of the NAIC, for purposes of mak- provide a list of recommended candidates to (c) SAVINGS PROVISION.—Except as provided ing rules pursuant to section 328, shall be the President. If the NAIC fails to provide a in subsections (a) and (b), no provision of made after appropriate notice and oppor- list by that date, or if any list that is pro- this section shall be construed as altering or tunity for a hearing and for submission of vided does not include at least 14 rec- affecting the continuing effectiveness of any views of interested persons. ommended candidates or comply with the re- law, regulation, provision, or other action of (b) EXAMINATIONS AND REPORTS.— quirements of section 326(c), the President any State which purports to regulate insur- (1) EXAMINATIONS.—The NAIC may make shall, with the advice and consent of the ance producers, including any such law, reg- such examinations and inspections of the As- Senate, make the requisite appointments ulation, provision, or action which purports sociation and require the Association to fur- without considering the views of the NAIC. to regulate unfair trade practices or estab- nish to the NAIC such reports and records or (B) SUBSEQUENT APPOINTMENTS.—After the lish consumer protections, including copies thereof as the NAIC may consider nec- initial appointments, the NAIC shall provide countersignature laws. essary or appropriate in the public interest a list of at least 6 recommended candidates SEC. 334. COORDINATION WITH OTHER REGU- or to effectuate the purposes of this subtitle. for the Board to the President by January 15 LATORS. (2) REPORT BY ASSOCIATION.—As soon as of each subsequent year. If the NAIC fails to (a) COORDINATION WITH STATE INSURANCE practicable after the close of each fiscal provide a list by that date, or if any list that REGULATORS.—The Association shall have year, the Association shall submit to the is provided does not include at least 6 rec- the authority to— NAIC a written report regarding the conduct ommended candidates or comply with the re- (1) issue uniform insurance producer appli- of its business, and the exercise of the other quirements of section 326(c), the President, cations and renewal applications that may rights and powers granted by this subtitle, with the advice and consent of the Senate, be used to apply for the issuance or removal during such fiscal year. Such report shall in- shall make the requisite appointments with- of State licenses, while preserving the abil- clude financial statements setting forth the out considering the views of the NAIC. ity of each State to impose such conditions financial position of the Association at the (C) PRESIDENTIAL OVERSIGHT.— on the issuance or renewal of a license as are end of such fiscal year and the results of its (i) REMOVAL.—If the President determines consistent with section 333; operations (including the source and applica- that the Association is not acting in the in- (2) establish a central clearinghouse tion of its funds) for such fiscal year. The terests of the public, the President may re- through which members of the Association NAIC shall transmit such report to the move the entire existing Board for the re- may apply for the issuance or renewal of li- President and the Congress with such com- mainder of the term to which the members censes in multiple States; and ment thereon as the NAIC determines to be of the Board were appointed and appoint, (3) establish or utilize a national database appropriate. with the advice and consent of the Senate, for the collection of regulatory information SEC. 331. LIABILITY OF THE ASSOCIATION AND new members to fill the vacancies on the concerning the activities of insurance pro- THE DIRECTORS, OFFICERS, AND Board for the remainder of such terms. ducers. EMPLOYEES OF THE ASSOCIATION. (b) COORDINATION WITH THE NATIONAL ASSO- (ii) SUSPENSION OF RULES OR ACTIONS.—The (a) IN GENERAL.—The Association shall not CIATION OF SECURITIES DEALERS.—The Asso- President, or a person designated by the be deemed to be an insurer or insurance pro- ciation shall coordinate with the National President for such purpose, may suspend the ducer within the meaning of any State law, Association of Securities Dealers in order to effectiveness of any rule, or prohibit any ac- rule, regulation, or order regulating or tax- ease any administrative burdens that fall on tion, of the Association which the President ing insurers, insurance producers, or other persons that are members of both associa- or the designee determines is contrary to the entities engaged in the business of insurance, tions, consistent with the purposes of this public interest. including provisions imposing premium subtitle and the Federal securities laws. (c) ANNUAL REPORT.—As soon as prac- taxes, regulating insurer solvency or finan- ticable after the close of each fiscal year, the SEC. 335. JUDICIAL REVIEW. cial condition, establishing guaranty funds (a) JURISDICTION.—The appropriate United Association shall submit to the President and levying assessments, or requiring claims States district court shall have exclusive ju- and to the Congress a written report relative settlement practices. risdiction over litigation involving the Asso- to the conduct of its business, and the exer- (b) LIABILITY OF THE ASSOCIATION, ITS DI- ciation, including disputes between the Asso- cise of the other rights and powers granted RECTORS, OFFICERS, AND EMPLOYEES.—Nei- ciation and its members that arise under by this subtitle, during such fiscal year. ther the Association nor any of its directors, this subtitle. Suits brought in State court Such report shall include financial state- officers, or employees shall have any liabil- involving the Association shall be deemed to ments setting forth the financial position of ity to any person for any action taken or have arisen under Federal law and therefore omitted in good faith under or in connection the Association at the end of such fiscal year be subject to jurisdiction in the appropriate with any matter subject to this subtitle. and the results of its operations (including United States district court. SEC. 332. ELIMINATION OF NAIC OVERSIGHT. the source and application of its funds) for (b) EXHAUSTION OF REMEDIES.—An ag- (a) IN GENERAL.—The Association shall be such fiscal year. grieved person shall be required to exhaust established without NAIC oversight and the SEC. 333. RELATIONSHIP TO STATE LAW. all available administrative remedies before provisions set forth in section 324, sub- (a) PREEMPTION OF STATE LAWS.—State the Association and the NAIC before it may sections (a), (b), (c), and (e) of section 328, laws, regulations, provisions, or other ac- seek judicial review of an Association deci- and sections 329(b) and 330 of this subtitle tions purporting to regulate insurance pro- sion. shall cease to be effective if, at the end of ducers shall be preempted as provided in sub- (c) STANDARDS OF REVIEW.—The standards the 2-year period beginning on the date on section (b). set forth in section 553 of title 5, United which the provisions of this subtitle take ef- (b) PROHIBITED ACTIONS.—No State shall— States Code, shall be applied whenever a rule fect pursuant to section 321— (1) impede the activities of, take any ac- or bylaw of the Association is under judicial (1) at least a majority of the States rep- tion against, or apply any provision of law or review, and the standards set forth in section resenting at least 50 percent of the total regulation to, any insurance producer be- 554 of title 5, United States Code, shall be ap- United States commercial-lines insurance cause that insurance producer or any affil- plied whenever a disciplinary action of the premiums have not satisfied the uniformity iate plans to become, has applied to become, Association is judicially reviewed. or reciprocity requirements of subsections or is a member of the Association; SEC. 336. DEFINITIONS. (a), (b), and (c) of section 321; and (2) impose any requirement upon a member For purposes of this subtitle, the following (2) the NAIC has not approved the Associa- of the Association that it pay different fees definitions shall apply: tion’s bylaws as required by section 328 or is to be licensed or otherwise qualified to do (1) HOME STATE.—The term ‘‘home State’’ unable to operate or supervise the Associa- business in that State, including bonding re- means the State in which the insurance pro- tion, or the Association is not conducting its quirements, based on its residency; ducer maintains its principal place of resi- activities as required under this Act. (3) impose any licensing, appointment, in- dence and is licensed to act as an insurance (b) BOARD APPOINTMENTS.—If the repeals tegrity, personal or corporate qualifications, producer. required by subsection (a) are implemented, education, training, experience, residency, or (2) INSURANCE.—The term ‘‘insurance’’ the following shall apply: continuing education requirement upon a means any product, other than title insur- (1) GENERAL APPOINTMENT POWER.—The member of the Association that is different ance, defined or regulated as insurance by President, with the advice and consent of the from the criteria for membership in the As- the appropriate State insurance regulatory Senate, shall appoint the members of the As- sociation or renewal of such membership, ex- authority. sociation’s Board established under section cept that counter-signature requirements (3) INSURANCE PRODUCER.—The term ‘‘insur- 326 from lists of candidates recommended to imposed on nonresident producers shall not ance producer’’ means any insurance agent the President by the National Association of be deemed to have the effect of limiting or or broker, surplus lines broker, insurance Insurance Commissioners. conditioning a producer’s activities because consultant, limited insurance representa- (2) PROCEDURES FOR OBTAINING NATIONAL of its residence or place of operations under tive, and any other person that solicits, ne- ASSOCIATION OF INSURANCE COMMISSIONERS AP- this section; or gotiates, effects, procures, delivers, renews, POINTMENT RECOMMENDATIONS.— (4) implement the procedures of such continues or binds policies of insurance or (A) INITIAL DETERMINATION AND REC- State’s system of licensing or renewing the offers advice, counsel, opinions or services OMMENDATIONS.—After the date on which the licenses of insurance producers in a manner related to insurance. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5283

(4) STATE.—The term ‘‘State’’ includes any (3) in connection with— ‘‘(II) subject to subparagraph (C), became a State, the District of Columbia, American (A) the authorization, settlement, billing, savings and loan holding company by acquir- Samoa, Guam, Puerto Rico, and the United processing, clearing, transferring, recon- ing control of the company described in sub- States Virgin Islands. ciling, or collection of amounts charged, deb- clause (I); and (5) STATE LAW.—The term ‘‘State law’’ in- ited, or otherwise paid using a debit, credit, ‘‘(ii) continues to control the savings asso- cludes all laws, decisions, rules, regulations, or other payment card or account number, or ciation referred to in clause (i)(II) or the suc- or other State action having the effect of by other payment means; cessor to any such savings association. law, of any State. A law of the United States (B) the transfer of receivables, accounts, or ‘‘(C) NOTICE PROCESS FOR NONFINANCIAL AC- applicable only to the District of Columbia interest therein; TIVITIES BY A SUCCESSOR UNITARY HOLDING shall be treated as a State law rather than a (C) the audit of the debit, credit, or other COMPANY.— law of the United States. payment information; ‘‘(i) NOTICE REQUIRED.—Subparagraph (B) Subtitle C—Rental Car Agency Insurance (D) compliance with Federal, State, or shall not apply to any company described in Activities local law; subparagraph (B)(i)(II) which engages, di- (E) compliance with a properly authorized rectly or indirectly, in any activity other SEC. 341. STANDARD OF REGULATION FOR civil, criminal, or regulatory investigation MOTOR VEHICLE RENTALS. than activities described in clauses (i) and by Federal, State, or local authorities as (a) PROTECTION AGAINST RETROACTIVE AP- (ii) of subparagraph (A), unless— governed by the requirements of this section; PLICATION OF REGULATORY AND LEGAL AC- ‘‘(I) in addition to an application to the Di- or TION.—Except as provided in subsection (b), rector under this section to become a savings (F) fraud protection, risk control, resolv- during the 3-year period beginning on the and loan holding company, the company sub- ing customer disputes or inquiries, commu- date of the enactment of this Act, it shall be mits a notice to the Board of Governors of nicating with the person to whom the infor- a presumption that no State law imposes the Federal Reserve System of such non- mation relates, or reporting to consumer re- any licensing, appointment, or education re- financial activities in the same manner as a porting agencies. notice of nonbanking activities is filed with quirements on any person who solicits the (b) STATE ACTIONS FOR VIOLATIONS.—In ad- purchase of or sells insurance connected dition to such other remedies as are provided the Board under section 4(j) of the Bank with, and incidental to, the lease or rental of under State law, if the chief law enforcement Holding Company Act of 1956; and a motor vehicle. officer of a State, State insurance regulator, ‘‘(II) before the end of the applicable period (b) PREEMINENCE OF STATE INSURANCE or an official or agency designated by a under such section 4(j), the Board either ap- LAW.—No provision of this section shall be State, has reason to believe that any person proves or does not disapprove of the continu- construed as altering the validity, interpre- has violated or is violating this title, the ation of such activities by such company, di- tation, construction, or effect of— State may bring an action to enjoin such rectly or indirectly, after becoming a sav- (1) any State statute; violation in any appropriate United States ings and loan holding company. (2) the prospective application of any court district court or in any other court of com- ‘‘(ii) PROCEDURE.—Section 4(j) of the Bank judgment interpreting or applying any State petent jurisdiction. Holding Company Act of 1956, including the statute; or (c) EFFECTIVE DATE; SUNSET.— standards for review, shall apply to any no- (3) the prospective application of any final (1) EFFECTIVE DATE.—Except as provided in tice filed with the Board under this subpara- State regulation, order, bulletin, or other paragraph (2), subsection (a) shall take effect graph in the same manner as it applies to no- statutorily authorized interpretation or ac- on February 1, 2000. tices filed under such section.’’. tion, (2) SUNSET.—Subsection (a) shall not take (b) TECHNICAL AND CONFORMING AMEND- effect if, or shall cease to be effective on and which, by its specific terms, expressly regu- MENT.—Section 10(c)(3) of the Home Owners’ lates or exempts from regulation any person after the date on which, legislation is en- Loan Act (12 U.S.C. 1467a(c)(3)) is amended who solicits the purchase of or sells insur- acted that satisfies the requirements in sec- by striking ‘‘Notwithstanding’’ and inserting ance connected with, and incidental to, the tion 264(c)(1) of the Health Insurance Port- short-term lease or rental of a motor vehicle. ability and Accountability Act of 1996 (Pub- ‘‘Except as provided in paragraph (9) and (c) SCOPE OF APPLICATION.—This section lic Law 104–191; 110 Stat. 2033). notwithstanding’’. (d) CONSULTATION.—While subsection (a) is shall apply with respect to— (c) CONFORMING AMENDMENT.—Section (1) the lease or rental of a motor vehicle in effect, State insurance regulatory au- thorities, through the National Association 10(o)(5) of the Home Owners’ Loan Act (12 for a total period of 90 consecutive days or U.S.C. 1467a(o)(5)) is amended— less; and of Insurance Commissioners, shall consult with the Secretary of Health and Human (1) in subparagraph (E), by striking ‘‘, ex- (2) insurance which is provided in connec- Services in connection with the administra- cept subparagraph (B)’’; and tion with, and incidentally to, such lease or tion of such subsection. (2) by adding at the end the following new rental for a period of consecutive days not subparagraph: exceeding the lease or rental period. TITLE IV—UNITARY SAVINGS AND LOAN HOLDING COMPANIES ‘‘(F) In the case of a mutual holding com- (d) MOTOR VEHICLE DEFINED.—For purposes pany which is a savings and loan holding SEC. 401. PROHIBITION ON NEW UNITARY SAV- of this section, the term ‘‘motor vehicle’’ has company described in subsection (c)(3), en- the meaning given to such term in section INGS AND LOAN HOLDING COMPA- gaging in the activities permitted for finan- 13102 of title 49, United States Code. NIES. (a) IN GENERAL.—Section 10(c) of the Home cial holding companies under section 6(c) of Subtitle D—Confidentiality Owners’ Loan Act (12 U.S.C. 1467a(c)) is the Bank Holding Company Act of 1956.’’. SEC. 351. CONFIDENTIALITY OF HEALTH AND amended by adding at the end the following SEC. 402. RETENTION OF ‘‘FEDERAL’’ IN NAME OF MEDICAL INFORMATION. new paragraph: CONVERTED FEDERAL SAVINGS AS- (a) IN GENERAL.—A company which under- ‘‘(9) TERMINATION OF EXPANDED POWERS FOR SOCIATION. writes or sells annuities contracts or con- NEW UNITARY HOLDING COMPANY.— tracts insuring, guaranteeing, or indem- ‘‘(A) IN GENERAL.—Subject to subparagraph Section 2 of the Act entitled ‘‘An Act to nifying against loss, harm, damage, illness, (B) and notwithstanding paragraph (3), no enable national banking associations to in- disability, or death (other than credit-re- company may directly or indirectly, includ- crease their capital stock and to change lated insurance) and any subsidiary or affil- ing through any merger, consolidation, or their names or locations’’, approved May 1, iate thereof shall maintain a practice of pro- other type of business combination, acquire 1886 (12 U.S.C. 30), is amended by adding at tecting the confidentiality of individually control of a savings association after March the end the following new subsection: identifiable customer health and medical 4, 1999, unless the company is engaged, di- and genetic information and may disclose rectly or indirectly (including through a sub- ‘‘(d) RETENTION OF ‘FEDERAL’ IN NAME OF such information only— sidiary other than a savings association), CONVERTED FEDERAL SAVINGS ASSOCIATION.— (1) with the consent, or at the direction, of only in activities that are permitted— ‘‘(1) IN GENERAL.—Notwithstanding sub- the customer; ‘‘(i) under paragraph (1)(C) or (2); or section (a) or any other provision of law, any (2) for insurance underwriting and rein- ‘‘(ii) for financial holding companies under depository institution the charter of which suring policies, account administration, re- section 6(c) of the Bank Holding Company is converted from that of a Federal savings porting, investigating, or preventing fraud or Act of 1956. association to a national bank or a State material misrepresentation, processing pre- ‘‘(B) EXISTING UNITARY HOLDING COMPANIES bank after the date of the enactment of the mium payments, processing insurance AND THE SUCCESSORS TO SUCH COMPANIES.— Financial Services Act of 1999 may retain the claims, administering insurance benefits (in- Subparagraph (A) shall not apply, and para- term ‘Federal’ in the name of such institu- cluding utilization review activities), pro- graph (3) shall continue to apply, to a com- tion if such depository institution remains viding information to the customer’s physi- pany (or any subsidiary of such company) an insured depository institution. cian or other health care provider, partici- that— ‘‘(2) DEFINITIONS.—For purposes of this sub- pating in research projects, enabling the pur- ‘‘(i) either— section, the terms ‘depository institution’, chase, transfer, merger, or sale of any insur- ‘‘(I) acquired 1 or more savings associa- ‘insured depository institution’, ‘national ance-related business, or as otherwise re- tions described in paragraph (3) pursuant to bank’, and ‘State bank’ have the same mean- quired or specifically permitted by Federal applications at least 1 of which was filed on ings as in section 3 of the Federal Deposit In- or State law; or or before March 4, 1999; or surance Act.’’. H5284 CONGRESSIONAL RECORD — HOUSE July 1, 1999 TITLE V—PRIVACY a violation of this subtitle for any person to vestigator is not unlawful under any other Subtitle A—Privacy Policy obtain or attempt to obtain, or cause to be Federal or State law or regulation, and has SEC. 501. DEPOSITORY INSTITUTION PRIVACY disclosed or attempt to cause to be disclosed been authorized by an order or judgment of POLICIES. to any person, customer information of a fi- a court of competent jurisdiction. Section 6 of the Bank Holding Company nancial institution relating to another SEC. 522. ADMINISTRATIVE ENFORCEMENT. Act of 1956 (as added by section 103 of this person— (a) ENFORCEMENT BY FEDERAL TRADE COM- title) is amended by adding at the end the (1) by making a false, fictitious, or fraudu- MISSION.—Compliance with this subtitle shall following new subsection: lent statement or representation to an offi- be enforced by the Federal Trade Commis- ‘‘(h) DEPOSITORY INSTITUTION PRIVACY cer, employee, or agent of a financial insti- sion in the same manner and with the same POLICIES.— tution; power and authority as the Commission has ‘‘(1) DISCLOSURE REQUIRED.—In the case of (2) by making a false, fictitious, or fraudu- under the title VIII, the Fair Debt Collection any insured depository institution which be- lent statement or representation to a cus- Practices Act, to enforce compliance with comes affiliated under this section with a fi- tomer of a financial institution; or such title. (3) by providing any document to an offi- nancial holding company, the privacy policy (b) NOTICE OF ACTIONS.—The Federal Trade of such depository institution shall be clear- cer, employee, or agent of a financial insti- Commission shall— ly and conspicuously disclosed— tution, knowing that the document is forged, (1) notify the Securities and Exchange ‘‘(A) with respect to any person who be- counterfeit, lost, or stolen, was fraudulently Commission whenever the Federal Trade comes a customer of the depository institu- obtained, or contains a false, fictitious, or Commission initiates an investigation with tion any time after the depository institu- fraudulent statement or representation. respect to a financial institution subject to (b) PROHIBITION ON SOLICITATION OF A PER- tion becomes affiliated with such company, regulation by the Securities and Exchange SON TO OBTAIN CUSTOMER INFORMATION FROM to such person at the time at which the busi- Commission; FINANCIAL INSTITUTION UNDER FALSE PRE- ness relationship between the customer and (2) notify the Federal banking agency (as TENSES.—It shall be a violation of this sub- the institution is initiated; and defined in section 3(z) of the Federal Deposit title to request a person to obtain customer ‘‘(B) with respect to any person who al- Insurance Act) whenever the Commission ready is a customer of the depository insti- information of a financial institution, know- ing that the person will obtain, or attempt initiates an investigation with respect to a tution at the time the depository institution financial institution subject to regulation by becomes affiliated with such company, to to obtain, the information from the institu- tion in any manner described in subsection such Federal banking agency; and such person within a reasonable time after (3) notify the appropriate State insurance the affiliation is consummated. (a). (c) NONAPPLICABILITY TO LAW ENFORCEMENT regulator whenever the Commission initiates ‘‘(2) INFORMATION TO BE INCLUDED.—The pri- an investigation with respect to a financial vacy policy of an insured depository institu- AGENCIES.—No provision of this section shall be construed so as to prevent any action by institution subject to regulation by such reg- tion which is disclosed pursuant to para- ulator. graph (1) shall include— a law enforcement agency, or any officer, ‘‘(A) the policy of the institution with re- employee, or agent of such agency, to obtain SEC. 523. CRIMINAL PENALTY. spect to disclosing customer information to customer information of a financial institu- (a) IN GENERAL.—Whoever knowingly and third parties, other than agents of the depos- tion in connection with the performance of intentionally violates, or knowingly and in- itory institution, for marketing purposes; the official duties of the agency. tentionally attempts to violate, section 521 and (d) NONAPPLICABILITY TO FINANCIAL INSTI- shall be fined in accordance with title 18, ‘‘(B) the disclosures required under section TUTIONS IN CERTAIN CASES.—No provision of United States Code, or imprisoned for not 603(d)(2)(A)(iii) of the Fair Credit Reporting this section shall be construed so as to pre- more than 5 years, or both. Act with regard to the right of the customer, vent any financial institution, or any officer, (b) ENHANCED PENALTY FOR AGGRAVATED at any time, to direct that information re- employee, or agent of a financial institution, CASES.—Whoever violates, or attempts to ferred to in such section not be shared with from obtaining customer information of such violate, section 521 while violating another affiliates of the depository institution. financial institution in the course of— law of the United States or as part of a pat- (1) testing the security procedures or sys- ‘‘(3) APPLICABILITY.—For purposes of sec- tern of any illegal activity involving more tion 10 of the Home Owners’ Loan Act, this tems of such institution for maintaining the than $100,000 in a 12-month period shall be subsection and subsection (i) shall apply confidentiality of customer information; fined twice the amount provided in sub- with regard to a savings and loan holding (2) investigating allegations of misconduct section (b)(3) or (c)(3) (as the case may be) of company and any affiliate or insured deposi- or negligence on the part of any officer, em- section 3571 of title 18, United States Code, tory institution subsidiary of such holding ployee, or agent of the financial institution; imprisoned for not more than 10 years, or company to the same extent and in the same or both. manner this subsection and subsection (i) (3) recovering customer information of the SEC. 524. RELATION TO STATE LAWS. financial institution which was obtained or apply with respect to a financial holding (a) IN GENERAL.—This subtitle shall not be company, affiliate of a financial holding received by another person in any manner construed as superseding, altering, or affect- company, or insured depository institution described in subsection (a) or (b). ing the statutes, regulations, orders, or in- (e) NONAPPLICABILITY TO INSURANCE INSTI- subsidiary of a financial holding company.’’. terpretations in effect in any State, except TUTIONS FOR INVESTIGATION OF INSURANCE SEC. 502. STUDY OF CURRENT FINANCIAL PRI- to the extent that such statutes, regulations, FRAUD.—No provision of this section shall be VACY LAWS. orders, or interpretations are inconsistent construed so as to prevent any insurance in- (a) IN GENERAL.—The Federal banking with the provisions of this subtitle, and then stitution, or any officer, employee, or agency agencies shall conduct a study of whether ex- only to the extent of the inconsistency. of an insurance institution, from obtaining isting laws which regulate the sharing of (b) GREATER PROTECTION UNDER STATE information as part of an insurance inves- customer information by insured depository LAW.—For purposes of this section, a State tigation into criminal activity, fraud, mate- institutions with affiliates of such institu- statute, regulation, order, or interpretation rial misrepresentation, or material non- tions adequately protect the privacy rights is not inconsistent with the provisions of disclosure that is authorized for such insti- of customers of such institutions. this subtitle if the protection such statute, tution under State law, regulation, interpre- (b) REPORT.—Before the end of the 6-month regulation, order, or interpretation affords tation, or order. period beginning on the date of the enact- any person is greater than the protection (f) NONAPPLICABILITY TO CERTAIN TYPES OF ment of this Act, the Federal banking agen- provided under this subtitle as determined CUSTOMER INFORMATION OF FINANCIAL INSTI- cies shall submit a report to the Congress by the Commission, on its own motion or TUTIONS.—No provision of this section shall containing the findings and conclusions of upon the petition of any interested party. the agency with respect to the study re- be construed so as to prevent any person quired under subsection (a), together with from obtaining customer information of a fi- SEC. 525. AGENCY GUIDANCE. such recommendations for legislative or ad- nancial institution that otherwise is avail- In furtherance of the objectives of this sub- ministrative action as the agencies may de- able as a public record filed pursuant to the title, each Federal banking agency (as de- termine to be appropriate. securities laws (as defined in section 3(a)(47) fined in section 3(z) of the Federal Deposit (c) DEFINITIONS.—For purposes of this sec- of the Securities Exchange Act of 1934). Insurance Act) and the Securities and Ex- tion, the terms ‘‘affiliate’’, ‘‘Federal banking (g) NONAPPLICABILITY TO COLLECTION OF change Commission or self-regulatory orga- agency’’, and ‘‘insured depository institu- CHILD SUPPORT JUDGMENTS.—No provision of nizations, as appropriate, shall review regu- tion’’ have the meanings given to such terms this section shall be construed to prevent lations and guidelines applicable to financial in section 3 of the Federal Deposit Insurance any State-licensed private investigator, or institutions under their respective jurisdic- Act. any officer, employee, or agent of such pri- tions and shall prescribe such revisions to Subtitle B—Fraudulent Access to Financial vate investigator, from obtaining customer such regulations and guidelines as may be Information information of a financial institution, to the necessary to ensure that such financial insti- SEC. 521. PRIVACY PROTECTION FOR CUSTOMER extent reasonably necessary to collect child tutions have policies, procedures, and con- INFORMATION OF FINANCIAL INSTI- support from a person adjudged to have been trols in place to prevent the unauthorized TUTIONS. delinquent in his or her obligations by a Fed- disclosure of customer financial information (a) PROHIBITION ON OBTAINING CUSTOMER IN- eral or State court, and to the extent that and to deter and detect activities proscribed FORMATION BY FALSE PRETENSES.—It shall be such action by a State-licensed private in- under section 521. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5285 SEC. 526. REPORTS. cept those printed in House Report 106– Madam Chairman, I reserve the bal- (a) REPORT TO THE CONGRESS.—Before the 214. Each amendment may be offered ance of my time. end of the 18-month period beginning on the only in the order printed in the report, Mr. DINGELL. Madam Chairman, I date of the enactment of this Act, the Comp- troller General, in consultation with the may be offered only by a Member des- ask unanimous consent to yield the en- Federal Trade Commission, Federal banking ignated in the report, shall be consid- tirety of my time to the gentleman agencies, the Securities and Exchange Com- ered read, debatable for the time speci- from New York (Mr. LAFALCE) to dis- mission, appropriate Federal law enforce- fied in the report, equally divided and pense as he pleases. ment agencies, and appropriate State insur- controlled by the proponent and an op- The CHAIRMAN. Is there objection ance regulators, shall submit to the Congress ponent, shall not be subject to amend- to the request of the gentleman from a report on the following: ment, and shall not be subject to a de- Michigan? (1) The efficacy and adequacy of the rem- mand for division of the question. There was no objection. edies provided in this subtitle in addressing The Chairman of the Committee of Mr. LAFALCE. Madam Chairman, I attempts to obtain financial information by fraudulent means or by false pretenses. the Whole may postpone a request for a yield myself such time as I may con- (2) Any recommendations for additional recorded vote on any amendment and sume. legislative or regulatory action to address may reduce to a minimum of 5 minutes Madam Chairman, I oppose this threats to the privacy of financial informa- the time for voting on any postponed amendment on two basic grounds. tion created by attempts to obtain informa- question that immediately follows an- Number one, it is special-interest legis- tion by fraudulent means or false pretenses. other vote, provided that the time for lation. It should not be on the floor (b) ANNUAL REPORT BY ADMINISTERING voting on the first question shall be a today. AGENCIES.—The Federal Trade Commission Secondly, how can we give 10 min- and the Attorney General shall submit to minimum of 15 minutes. Congress an annual report on number and It is now in order to consider Amend- utes’ time for special-interest legisla- disposition of all enforcement actions taken ment No. 1 printed in House Report tion when we could not give 10 min- pursuant to this subtitle. 106–214. utes’ time for an insurance redlining SEC. 527. DEFINITIONS. AMENDMENT NO. 1 OFFERED BY MR. BURR OF amendment, when we could not give 10 For purposes of this subtitle, the following NORTH CAROLINA minutes’ time so that we could satisfy definitions shall apply: Mr. BURR of North Carolina. Madam the desires of those would want a basic (1) CUSTOMER.—The term ‘‘customer’’ Chairman, I offer an amendment. life-line banking, we could not give 10 means, with respect to a financial institu- The CHAIRMAN. The Clerk will des- minutes’ time to those who wanted to tion, any person (or authorized representa- ignate the amendment. tive of a person) to whom the financial insti- add to the privacy protections that we tution provides a product or service, includ- The text of the amendment is as fol- have come to consensually in the ing that of acting as a fiduciary. lows: Pryce-Oxley-Frost-Menendez-LaFalce (2) CUSTOMER INFORMATION OF A FINANCIAL Amendment No. 1 offered by Mr. BURR of amendment? INSTITUTION.—The term ‘‘customer informa- North Carolina: For those reasons, I oppose the bill. tion of a financial institution’’ means any Page 29, line 24, before the period insert ‘‘, Madam Chairman, I ask unanimous information maintained by or for a financial except this paragraph shall not apply with consent to yield the balance of my respect to a company that owns a broad- institution which is derived from the rela- time for the purpose of control to the tionship between the financial institution casting station licensed under title III of the gentleman from Texas (Mr. BENTSEN). and a customer of the financial institution Communications Act of 1934 and the shares and is identified with the customer. of which have been controlled by an insur- The CHAIRMAN. Is there objection (3) DOCUMENT.—The term ‘‘document’’ ance company since January 1, 1998’’. to the request of the gentleman from means any information in any form. The CHAIRMAN. Pursuant to House New York? (4) FINANCIAL INSTITUTION.— Resolution 235, the gentleman from There was no objection. (A) IN GENERAL.—The term ‘‘financial in- North Carolina (Mr. BURR) and the gen- Mr. BENTSEN. Madam Chairman, I stitution’’ means any institution engaged in tleman from Michigan (Mr. DINGELL) yield to the gentleman from North the business of providing financial services Carolina (Mr. WATT). to customers who maintain a credit, deposit, each will control 5 minutes. The Chair recognizes the gentleman Mr. WATT of North Carolina. Madam trust, or other financial account or relation- Chairman, I thank the gentleman for ship with the institution. from North Carolina (Mr. BURR). (B) CERTAIN FINANCIAL INSTITUTIONS SPE- Mr. BURR of North Carolina. Madam yielding. CIFICALLY INCLUDED.—The term ‘‘financial in- Chairman, I yield myself such time as Madam Chairman, I rise in support of stitution’’ includes any depository institu- I may consume. the Burr-Myrick amendment. tion (as defined in section 19(b)(1)(A) of the Madam Chairman, let me say that It is true that this amendment will Federal Reserve Act), any broker or dealer, this is a very narrow amendment for a impact on the one company in the Na- any investment adviser or investment com- unique situation. As a matter of fact, tion, because this is a unique company. pany, any insurance company, any loan or fi- this amendment only applies to the The company happens to be in the in- nance company, any credit card issuer or op- surance business and it currently hap- erator of a credit card system, and any con- Jefferson Pilot Insurance Corporation sumer reporting agency that compiles and of Greensboro, North Carolina. pens to be in the communications busi- maintains files on consumers on a nation- Their principal business is life insur- ness. wide basis (as defined in section 603(p)). ance. But in the past 40 years they The underlying bill restricts income (C) SECURITIES INSTITUTIONS.—For purposes have been in the broadcast business as from nonfinancial activities to 15 per- of subparagraph (B)— well under Raycom Sports, that great cent and limits ownership before dives- (i) the terms ‘‘broker’’ and ‘‘dealer’’ have ACC delivery system. According to the titure to 10 years. All this company is the meanings provided in section 3 of the Se- Federal Reserve, Jefferson Pilot is the asking to do is to go up to those limits curities Exchange Act of 1934 (15 U.S.C. 78c); by acquisition. They are not at those (ii) the term ‘‘investment adviser’’ has the only insurance company in the United meaning provided in section 202(a)(11) of the States in the broadcast business. limits now. Investment Advisers Act of 1940 (15 U.S.C. This amendment simply gives Jeffer- There may be other companies that 80b–2(a)); and son Pilot the option of increasing their are grandfathered under this provision (iii) the term ‘‘investment company’’ has broadcast interest in order to maxi- that are already at those limits. They the meaning provided in section 3 of the In- mize the value of their asset divesti- are not asking to go beyond those lim- vestment Company Act of 1940 (15 U.S.C. 80a– ture. They would still be required to its. They are simply asking to be able 3). stay under the 15-percent gross revenue to conduct their business within the (D) FURTHER DEFINITION BY REGULATION.— limitation and to divest any non-bank confines of the limits of divestiture The Federal Trade Commission, after con- sultation with Federal banking agencies and and financial institution assets in the and time that are applicable to other the Securities and Exchange Commission, 10-year period if they were purchased companies. may prescribe regulations clarifying or de- by a bank. I certainly think this is reasonable. scribing the types of institutions which shall The Federal Reserve and the Treas- We should not restrict companies from be treated as financial institutions for pur- ury have no objection to this amend- growing as long as they are not re- poses of this subtitle. ment. I urge my colleagues on both stricting commerce and unduly expos- The CHAIRMAN. No amendment to sides of the aisle to support this very ing financial activities to risks that that amendment shall be in order ex- common sense amendment. are not foreseen. Obviously, the risks H5286 CONGRESSIONAL RECORD — HOUSE July 1, 1999 are foreseen by this bill because the 15- (Mr. BENTSEN asked and was given Page 72, after line 13, insert the following percent, 10-year limit continues to permission to revise and extend his re- new section (and amend the table of contents apply. marks.) accordingly): Mr. BURR of North Carolina. Madam Mr. BENTSEN. Madam Chairman, SEC. 110A. STUDY OF FINANCIAL MODERNIZA- TION’S AFFECT ON THE ACCESSI- Chairman, I yield to the gentlewoman first of all, I do not have any problem BILITY OF SMALL BUSINESS AND from Charlotte, North Carolina (Mrs. with this particular company, and I do FARM LOANS. MYRICK) a member of the Committee not have any problem with the ACC, (a) STUDY.—The Secretary of the Treasury, on Rules. and I do not have any problem with in consultation with the Federal banking Mrs. MYRICK. Madam Chairman, I North Carolina. I think it is a great agencies (as defined in Section 3(z) of the Federal Deposit Insurance Act), shall con- rise in support of the amendment of State. Not as great as the State of duct a study of the extent to which credit is the gentleman from North Carolina Texas, but I think it is a pretty good being provided to and for small business and (Mr. BURR). State. But the problem I have is that farms, as a result of this Act. I would just like to reiterate what this is a specific carve-out that appar- (b) REPORT.—Before the end of the 5-year the gentleman from North Carolina ently affects one company in the period beginning on the date of the enact- ment of this Act, the Secretary, in consulta- (Mr. BURR) has already said. This United States. Now, the bill that is before us sets tion with the Federal banking agencies, shall amendment does not harm the delicate submit a report to the Congress on the study compromises of this bill. Jefferson some pretty strict rules for companies. conducted pursuant to subsection (a) and Pilot has been in the insurance busi- And we had long debates in the Com- shall include such recommendations as the ness and the communications business mittee on Banking and Financial Serv- Secretary determines to be appropriate for for 40 years. The amendment is nar- ices, and I am assuming the Committee administrative and legislative action. rowly crafted, and it maintains the 15- on Commerce as well, on the issues of The CHAIRMAN. Pursuant to House percent gross revenue limitation on banking and commerce. Resolution 235, the gentlewoman from nonfinancial activities. They also are b 1845 Illinois (Ms. SCHAKOWSKY) and a Mem- subjected to the 10-year divestiture re- ber opposed each will control 5 min- quirement. This bill also sets limits on a number utes. Madam Chairman, a vote for this of companies called unitary thrifts. The Chair recognizes the gentle- amendment is a vote for ACC basket- There are about 75 of those who be- woman from Illinois (Ms. ball. cause of the way they are valued, their SCHAKOWSKY). Mr. BENTSEN. Madam Chairman, I value is going to change because of this Ms. SCHAKOWSKY. Madam Chair- reserve the balance of my time. bill. We could not debate that on the man, I yield myself 2 minutes. Mr. BURR of North Carolina. Madam floor because apparently we are not ca- First of all, I would like to thank my Chairman, I yield myself such time as pable of doing that, but nonetheless, cosponsors, the gentlewoman from I may consume. we made those decisions, and we made California (Ms. LEE), the gentleman Madam Chairman, in most cases we strict rules. from Illinois (Mr. GUTIERREZ) and the would criticize on this House floor for I am sorry that this company is af- gentleman from North Carolina (Mr. a very specific tailored amendment for fected by it, but they are just going to WATT) for their help on this amend- a specific company. But, as has been have to make a choice under the rules ment. This amendment would call for a 5- pointed out, this is a unique company that are provided for in this bill of ei- year study of financial modernization’s because they are the only ones that ther being a broadcast company and in- effect on small business and farm lend- will get caught in the catch-22 of what surance company or an insurance com- ing. What it does is direct the U.S. we created, which was an atmosphere pany and a banking company, but they Treasury Department with Federal in the Telecommunications Act of 1996 want to have it all three ways, and bank regulators to study the effect of where we go through a different cal- they would be the only one in the this bill, and the consolidation of the culation as to how we value assets in United States that could do that. I do not think that is appropriate. That is financial services industry into large the communications business today. conglomerates that it will undoubtedly In fact, it has been official to have a not given to anybody else. For that reason, I have to oppose the encourage, on small business and farm pool of companies in a particular mar- lending and suggest legislative and reg- ket to achieve the true asset value of a amendment. I would hope that our col- leagues would oppose the amendment ulatory changes as necessary to aid communications business. As this com- small business and farm lending. pany agrees to divest themselves of the as well. Madam Chairman, I yield back the I think our first rule in this House nonfinancial assets, I think that it is balance of my time. ought to be, first we do no harm. I am only fair to look at that 1996 Act, to The CHAIRMAN. The question is on not suggesting that this bill will do look at what we are getting ready to the amendment offered by the gen- any harm to small businesses or farms, do, and to say we will allow this com- tleman from North Carolina (Mr. but we want to make sure that that is pany who is caught in the middle to, BURR). the case, because small business cer- under their divestiture of this broad- The question was taken; and the tainly does deserve our support. There cast business, to at least achieve the Chairman announced that the ayes ap- are 23 million small businesses that asset value that it is worth. peared to have it. employ 53 percent of the workforce and Unfortunately, that means that we Mr. BENTSEN. Madam Chairman, I account for 47 percent of all sales. have to create this one amendment demand a recorded vote. Sixty-seven percent of all small busi- that says, during this 10-year period, The CHAIRMAN. Pursuant to House nesses get their credit from banks, and we will allow them possibly to add a Resolution 235, further proceedings on many of these are small banks. We radio station in a market because it the amendment offered by the gen- know that smaller businesses often raises the value of the sale in that mar- tleman from North Carolina (Mr. BURR) have more difficulty in obtaining loans ket to where it should be. will be postponed. from banks. I do not think that it is out of line to It is now in order to consider amend- What we want to make sure is that allow companies, and specifically this ment No. 2 printed in House Report the result of H.R. 10 is not that we see one, who are affected by changes that 106–214. fewer loans going to small banks and we make to in fact be excluded from AMENDMENT NO. 2 OFFERED BY MS. to farmers. The data shows, as I said, the specific language that we are here SCHAKOWSKY that small businesses and farmers do to do today. Ms. SCHAKOWSKY. Madam Chair- rely on small banks for their financing I appreciate the concerns expressed man, I offer an amendment. and a world without small banks could by my dear friends on the other side. I The CHAIRMAN. The Clerk will des- negatively affect the businesses and hope that in the end they will support ignate the amendment. our national economy. this, because I believe it is the right The text of the amendment is as fol- Chairman Greenspan of the Federal thing to do. lows: Reserve acknowledged before the Com- Mr. BENTSEN. Madam Chairman, I Amendment No. 2 offered by Ms. mittee on Banking and Financial Serv- yield myself the remaining time. SCHAKOWSKY: ices during hearings on H.R. 10 that July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5287 ‘‘small bank lending is inherent in the PRIME bill and the community finan- business in the United States to serve way small business is effectively fi- cial services programs that we support the needs of their customers. nanced. If it turns out that a lot of will be helpful. The language in H.R. 10 grants the community banks would sort of fade or I know the gentlewoman supports Federal Reserve Board authority re- be absorbed into large institutions, I those efforts. I support this study. It garding the overseas operations of a would be concerned.’’ would be good to have the information foreign bank. However, it is not clear What my amendment does is ensure available so we can plot what the im- what exactly the scope of this par- that regulators and the public will pact is and the profile of the market. ticular language means and the Fed- have the necessary information to Ms. SCHAKOWSKY. Madam Chair- eral Reserve has agreed to delete the combat negative effects on small busi- man, I yield 1 minute to the gentleman words ‘‘operations of’’ to clarify that ness from this legislation. from North Carolina (Mr. WATT). the provision expressly applies to the Madam Chairman, I yield 1 minute to Mr. WATT of North Carolina. Madam foreign bank itself and not the bank’s the gentleman from New York (Mr. LA- Chairman, I thank the gentlewoman parent or sister affiliates. This clari- FALCE), the ranking member of the for yielding me this time. As a cospon- fication ensures parity with U.S. law. Committee on Banking and Financial sor of this amendment, I rise in sup- Foreign banks have a large and long- Services. port of the amendment. standing presence in New York and Mr. LAFALCE. Madam Chairman, I One of the concerns that a number of they are an important part of our econ- rise in support of the amendment of people have had about all of this con- omy in New York and throughout the the gentlewoman from Illinois. It is a solidation and the ability to merge and country. For example, many foreign very good amendment. We must always cross financial lines is the impact that banks have broker-dealers subsidiaries be concerned about the effect of any it will have on lending, particularly for that provide capital and liquidity to legislation we pass on small business minority communities, for small busi- the U.S. securities markets, serving to and on farm lending. nesses, for farms. That is why we have enhance the ability of U.S. businesses But I rise primarily to thank the been so insistent on maintaining the to raise capital. gentlewoman for being such an out- CRA provisions, and that is why I This bipartisan amendment has been standing freshman member of the think it is important for us to support cleared by the Federal Reserve Board, House Committee on Banking and Fi- this amendment, to make sure that if is supported by the Conference of State nancial Services. I know of no member there is an adverse impact that results Bank Supervisors, and similar lan- who is a greater champion of the con- from this bill, we know about it imme- guage is included in the version of fi- sumer and consumer interest, whether diately and can take whatever steps nancial modernization passed by the it has to do with redlining, whether it are appropriate and necessary to re- other body. has to do with privacy, whether it has spond to it. I urge my colleagues to adopt this to do with housing. She has been a true I want to applaud the gentlewoman amendment. champion and she is going to be a great for coming forward with this amend- Mr. LEACH. Madam Chairman, will leader in the future. ment and strongly encourage my col- the gentlewoman yield? Ms. SCHAKOWSKY. Madam Chair- leagues to support it. Ms. VELA´ ZQUEZ. I yield to the gen- man, I yield 30 seconds to the gen- The CHAIRMAN pro tempore (Mrs. tleman from Iowa. tleman from Iowa (Mr. LEACH). MYRICK). Is there any Member who is Mr. LEACH. We have carefully re- Mr. LEACH. Madam Chairman, I opposed to this amendment? viewed this amendment with the Fed- would like to echo the gentleman from If there is no opposition, the question eral Reserve Board of the United New York’s comments about the gen- is on the amendment offered by the States. It is my understanding that tlewoman. She has brought a great gentlewoman from Illinois (Ms. they have no objection to the amend- contribution to the Committee on SCHAKOWSKY). ment, that it is a very thoughtful and Banking and Financial Services. We The amendment was agreed to. reasonable approach to dealing with a are all very appreciative. The CHAIRMAN pro tempore. It is particular problem. Therefore, we have This particular amendment is com- now in order to consider amendment great respect for the gentlewoman’s ef- mon sense, it is reasonable, and the No. 3 printed in House Report 106–214. fort and support her amendment. majority has no objection whatsoever. AMENDMENT NO. 3 OFFERED BY MS. VELA´ ZQUEZ Ms. VELA´ ZQUEZ. Madam Chairman, Ms. SCHAKOWSKY. Madam Chair- Ms. VELA´ ZQUEZ. Madam Chairman, I yield back the balance of my time. man, I yield 30 seconds to the gen- I offer an amendment. The CHAIRMAN pro tempore. Is tleman from Minnesota (Mr. VENTO). The CHAIRMAN pro tempore. The there any Member who is opposed to Mr. VENTO. Madam Chairman, I Clerk will designate the amendment. this amendment? echo my colleagues’ statements about The text of the amendment is as fol- If not, the question is on the amend- the gentlewoman’s efforts as a new lows: ment offered by the gentlewoman from Member of Congress. I especially think Amendment No. 3 offered by Ms. New York (Ms. VELA´ ZQUEZ). this is important to those of us that VELA´ ZQUEZ: The amendment was agreed to. represent States that have a signifi- Page 96, line 12, strike ‘‘operations of’’. The CHAIRMAN pro tempore. It is cant rural constituency. The CHAIRMAN pro tempore. Pursu- now in order to consider amendment Minnesota, incidentally, is sort of a ant to House Resolution 235, the gen- No. 4 printed in House Report 106–214. small bank State. We have 555 banks. tlewoman from New York (Ms. AMENDMENT NO. 4 OFFERED BY MR. BARR OF Many of them serve the rural constitu- VELA´ ZQUEZ) and a Member opposed GEORGIA ents in that State. I would like to re- each will control 5 minutes. Mr. BARR of Georgia. Madam Chair- port to the House the dire problems The Chair recognizes the gentle- man, I offer an amendment. that we are facing in the western, woman from New York (Ms. The CHAIRMAN pro tempore. The north and east portions of Minnesota VELA´ ZQUEZ). Clerk will designate the amendment. with regards to the farm economy. It is Ms. VELA´ ZQUEZ. Madam Chairman, The text of the amendment is as fol- a very stressful time and a time of I yield myself such time as I may con- lows: great concern. sume. I rise in support of this bipar- Amendment No. 4 offered by Mr. BARR of Clearly, the financial engine of these tisan amendment and urge its imme- Georgia: communities are these small town diate adoption. This amendment would Page 235, after line 23, insert the following banks that continue to extend credit slightly modify section 114 to ensure new subsections: and to provide the lifeblood that they that the banking policies established (c) PREVENTION OF FUTURE PRIVACY INVA- need. A study of these as the gentle- by Congress are implemented in a fair SIONS.— woman has envisioned as well as for and consistent manner with respect to (1) IN GENERAL.—Section 5318(g) of title 31, United States Code, is amended— other small businesses which are hav- all entities, domestic and foreign, con- (A) by striking paragraph (1) and inserting ing a very difficult time in our econ- ducting a banking business in the the following new paragraph: omy and that we really want to get be- United States. The passage of this ‘‘(1) IN GENERAL.—Any financial institu- hind and support with such bills as the amendment will enable all banks doing tion, and any director, officer, employee, or H5288 CONGRESSIONAL RECORD — HOUSE July 1, 1999 agent of any financial institution, may re- cies (as defined in section 3 of the Federal Mr. LAFALCE. Madam Chairman, I port to the Secretary any transaction rel- Deposit Insurance Act) shall submit reports yield 21⁄2 of my 5 minutes to either the evant to a possible violation of a law or regu- to the Congress containing proposed legisla- gentleman from Iowa (Mr. LEACH) or lation.’’; tion to conform the penalties imposed on de- his designee. (B) in paragraph (2), by striking ‘‘sus- pository institutions (as defined in section 3 picious’’; of the Federal Deposit Insurance Act) for Mr. LEACH. Madam Chairman, I (C) in paragraph (4)(A)— violations of subchapter II of chapter 53 of would be happy to yield that time to (i) by striking ‘‘requiring’’ and inserting title 31, United States Code, to the penalties my distinguished colleague from Ar- ‘‘receiving’’; and imposed on such institutions under section 8 kansas (Mr. HUTCHINSON). (ii) by striking ‘‘suspicious transaction’’ of the Federal Deposit Insurance Act. The CHAIRMAN. Without objection, and inserting ‘‘transaction relevant to a pos- The CHAIRMAN pro tempore. Pursu- the gentleman from Arkansas (Mr. sible violation of a law or regulation’’; 1 ant to House Resolution 235, the gen- HUTCHINSON) will control 2 ⁄2 minutes. (D) in paragraph (4)(B), by striking ‘‘sus- There was no objection. picious transaction’’ and inserting ‘‘trans- tleman from Georgia (Mr. BARR) and a Mr. LAFALCE. Madam Chairman, I action relevant to a possible violation of a Member opposed each will control 5 law or regulation’’; and minutes. yield myself such time as I may con- (E) by adding at the end of paragraph (4) The Chair recognizes the gentleman sume. the following new subparagraph: from Georgia (Mr. BARR). Let me say that a number of Repub- ‘‘(D) RECORDKEEPING.—The Secretary shall Mr. BARR of Georgia. Madam Chair- licans are going to be recognized by ensure that no report filed under this para- man, I yield myself 11⁄2 minutes. me: graph is maintained by the Secretary or any Earlier this year, as a matter of fact The gentleman from Iowa (Mr. Federal or State law enforcement or super- late last year, the American people LEACH), the gentleman from Florida visory agency to whom access to the report (Mr. MCCOLLUM), the gentlewoman (or information therein) has been granted were treated to one of the most gross from New Jersey (Mrs. ROUKEMA), the after the earlier of— examples of overreaching by the Fed- ‘‘(i) the end of the 4-year period beginning eral Government, by Federal regu- gentleman from Alabama (Mr. BACH- on the date the report was received; or lators, that they had ever witnessed, US). ‘‘(ii) 60 days after the expiration of the the so-called ‘‘know your customer’’ I will only have 30 seconds for myself longest statute of limitations relating to any regulations that were proposed by the and no more than 30 seconds for anyone possible violation of a law or regulation FDIC. These proposed regulations else. identified in such report, would have required every financial in- I oppose this amendment strongly. It unless the report or information contained stitution in the country to develop a goes way beyond the repeal of Know in the report is being used in an on-going in- profile on every one of their customers Your Customer. It basically would re- vestigation of a possible violation of a law or all over the country and to determine peal provisions of the Bank Secrecy regulation identified in such report.’’. Act that have been in existence for dec- (2) CLARIFICATION OF PURPOSES OF ANTI- what the financial transaction habits ades. The FBI strongly opposes this, MONEY LAUNDERING PROGRAM.—Section of each individual customer were so 5318(h) of title 31, United States Code, is that if there was something that oc- says it cannot enforce the law, Treas- amended by adding at the end the following curred out of the ordinary, outside of ury and Justice strongly oppose it. new paragraph: that profile, the law enforcement au- Based upon my conversation with the ‘‘(3) LIMITATION.—Notwithstanding para- thorities would be notified. Thank- administration I think they would be graphs (1) and (2), the Secretary may not re- fully, the American people, through constrained to veto a bill that did not quire or encourage an insured depository in- repeal these strong law enforcement stitution or any affiliate of an insured depos- the work of this Congress, stopped the ‘‘know your customer’’ regulations provisions. itory institution to— I strongly urge the defeat of this ‘‘(A) determine the sources of funds used dead in their tracks. by any customer of the institution or affil- Well, they are back. Under the guise amendment. iate in any transaction; of the Bank Secrecy Act, which has Madam Chairman, I reserve the bal- ‘‘(B) assess the purpose of any transaction some very laudable, important provi- ance of my time. or seek from the customer an explanation for sions in it, the suspicious activity re- Mr. HUTCHINSON. Madam Chair- the transaction; ports require, in essence, ‘‘know your man, I yield 11⁄2 minutes to the gen- ‘‘(C) determine what transactions are nor- tleman from Florida (Mr. MCCOLLUM) mal or expected for a customer; customer’’ regulations mandated on the banks. who has been such a leader on this ‘‘(D) monitor customer body language or issue. behavior; The amendment proposed by the gen- ‘‘(E) monitor customer transactions and tleman from California, the gentleman (Mr. MCCOLLUM asked and was compare them to historical patterns; or from Texas and myself today simply given permission to revise and extend ‘‘(F) report to the Secretary transactions removes the mandatory nature of the his remarks.) that do not conform to a customer’s histor- suspicious activity reports which in es- Mr. McCOLLUM. Madam Chairman, I ical transaction patterns. sence are ‘‘know your customer’’ regu- thank the gentleman for yielding this (3) CLERICAL AMENDMENTS.— lations. We do not remove the impor- time to me. I just want to say with all (A) The subsection heading for section due respect to my colleagues who are 5318(g) is amended to read as follows: tant tool that law enforcement has in working with financial institutions to promoting this amendment this is far ‘‘(g) REPORTING POSSIBLE VIOLATIONS OF beyond a Know Your Customer amend- LAWS AND REGULATIONS.—’’. disclose to the government suspicious (B) The paragraph heading for section activity. We simply tell the govern- ment. I am opposed to that too, just 5318(g)(4) of title 31, United States Code, is ment that the millions upon millions like everybody, I suspect, here is. That amended to read as follows: of reports that they have accumulated was a horrible idea the Treasury had, ‘‘(4) SINGLE DESIGNEE FOR REPORTING by requirement over the years and and I am very glad to see that it has TRANSACTIONS RELEVANT TO A POSSIBLE VIO- have never used and which are rarely disappeared. LATION OF LAW OR REGULATION.—’’. used shall no longer be required. But what we are doing in this amend- (d) INCREASE IN TRIGGER AMOUNT FOR CASH ment, if it is passed, it actually guts TRANSACTION REPORTS.— b 1900 existing money laundering laws. It (1) DOMESTIC.—Section 5313(a) of title 31, United States Code, is amended by adding at Madam Chairman, I reserve the bal- would set the drug war back by some the end the following new sentence: ‘‘In no ance of my time. estimates that I suspect is true, maybe event may the Secretary require reports Mr. LAFALCE. Madam Chairman, I 20 years. What it really would do would under this section for transactions involving rise in opposition to the amendment of- be to allow drug kingpins to launder less than $25,000.’’. fered by the gentleman from Georgia money undetected. The current laws (2) IMPORTING AND EXPORTING.—Section (Mr. BARR). say that one has to have a currency 5316(a) is amended by striking ‘‘$10,000’’ each Mr. HUTCHINSON. Madam Chair- transaction report if they go to the place such term appears and inserting man, I rise in opposition as well. Is bank and take cash of $10,000 or more ‘‘$25,000’’. (e) AGENCY REPORTS ON RECONCILING PEN- there any provision to split the time? and deposit it in order for us to have ALTY AMOUNTS.—Before the end of the 1-year The CHAIRMAN. By unanimous con- the notice that we need to have of that period beginning on the date of the enact- sent each gentleman could split the transaction so that law enforcement ment of this Act, the Federal banking agen- time if so desired. can get ahold of these drug kingpins July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5289 and can have a chain and prove the evi- (Mr. DINGELL asked and was given pact on the ability of law enforcement dence. permission to revise and extend his re- agencies nationwide to effectively in- What the gentleman from Georgia marks.) vestigate and prosecute cases involving (Mr. BARR) and the gentleman from Mr. DINGELL. Madam Chairman, I money laundering, fraud, and other fi- Texas (Mr. PAUL) are offering here thank my good friend and colleague for nancial crimes. If this amendment had would increase that amount to $25,000. yielding me this time. been in effect in 1997, it would have There are lots of what we call smurfing Madam Chairman, I know the au- stopped 2,536 Federal investigations re- transactions for far less than $25,000, thors of this amendment are Members sulting in convictions for financial in- and, in addition, the most visceral of great decency and goodness, and I stitution fraud matters. thing in here, this amendment would think they are accomplishing some- And finally, what does the FBI say actually eliminate the requirement thing that they really do not want. about this? A vote for this amendment that banks report suspected illegal ac- This is opposed by the Department of will send a signal to criminal organiza- tivity, eliminate the requirement. It is Justice, the FBI, the Department of tions worldwide that the U.S. is a all volunteer in the parts of the bank. Treasury. money laundering haven. The Treasury Department could no Banks have been involved in money Clearly this is a no vote. longer in their law enforcement hat or laundering, too, I would remind my Madam Chairman, I include for the RECORD the following letter: in their regulatory hat require banks colleagues, and when we make the ac- to report suspected illegal activity of INTERNATIONAL ASSOCIATION tion of the bank voluntary with regard OF CHIEFS OF POLICE, any sort, not just money laundering, to reporting, we subject ourselves to a Alexandria, VA, July 1, 1999. but any sort. real probability that the banks are Hon. DENNIS HASTERT, I think that the gentleman from simply not going to report. The money Speaker, House of Representatives, Georgia (Mr. BARR) and the gentleman launderers, the Cali Cartel, the drug Washington, DC. from Texas (Mr. PAUL) and the gen- merchants and the Mafia will love this DEAR MR. SPEAKER: On behalf of the Inter- tleman from California (Mr. CAMPBELL) national Association of Chiefs of Police amendment. (IACP), I am writing to express our profound have gone further than they may have If my colleagues like that, if they intended. This is no time to retreat on concern over the Barr/Paul/Campbell Amend- want crime, this is a good amendment ment to H.R. 10, the Financial Services Act. the effort on the war against drugs or to support; if my colleagues want to This amendment will have a significant det- the financial fraud and the money clean up the situation, I would urge rimental impact on the ability of law en- laundering, and that is what this them to oppose the amendment. forcement agencies to effectively investigate amendment does. Mr. HUTCHINSON. Madam Chair- and prosecute cases involving money laun- So in the strongest terms I urge this man, I yield such time as she may con- dering, fraud and other financial crimes. I amendment to be defeated. urge you to oppose this amendment. sume to the gentlewoman from New Mr. BARR of Georgia. Madam Chair- The Barr/Paul/Campbell amendment, by Jersey (Mrs. ROUKEMA). man, I yield 1 minute to the distin- eliminating the requirement that financial (Mrs. ROUKEMA asked and was institutions file Suspicious Activity Reports guished gentleman from Texas (Mr. given permission to revise and extend (SARs), will deprive law enforcement of an PAUL). invaluable investigative tool which, accord- (Mr. PAUL asked and was given per- her remarks.) Mrs. ROUKEMA. Madam Chairman, I ing to the FBI, was used in 98% of the cases mission to revise and extend his re- filed by its Fraud Investigation Squad in marks.) rise in strong opposition to this posi- 1998. These 1998 investigations resulted in Mr. PAUL. Madam Chairman, I tion, and it is an open invitation to the convictions of more than 2600 individuals thank the gentleman from Georgia drug dealers, and that is why, as has and the restoration of more than $490 million (Mr. BARR) for yielding this time to been stated, every law enforcement and to the victims of fraud. me. every banking group is opposed to it. In addition, by elevating the threshold Madam Chairman, if my colleagues I rise in strong opposition. limit of the Currency Transaction Report This amendment guts our money laundering (CTR) from $10,000 to $25,000, the Barr/Paul/ are opposed to Know Your Customer Campbell amendment would severely under- regulations they must support this laws and helps drug dealers. I oppose strong- mine the anti-drug efforts of law enforce- amendment because this does away ly. What we have learned through hearings is ment agencies. Since there are few legiti- with Know Your Customer regulations, that we need to tighten up, not loosen. mate cash transactions exceeding the $10,000 the profiling of every single customer 1. Making suspicious activity reports vol- limit, the CTR often provides law enforce- in this country. This notion that it is untary plays into the hands of the drug deal- ment with valuable information on the going to ruin law enforcement is just ers. This will only make money laundering money laundering operations of drug dealers. easier. Raising the CTR threshold to $25,000 will not valid. There is estimated $100 mil- only assist criminals in their efforts to hide lion cost for one conviction by the re- 2. Raising the cash transaction reporting their illegal profits. ports that are sent in, and this does not level to $25,000 from $10,000 is not justified. Once again, I urge you to protect the abil- prohibit the banks from sending in re- How many legitimate cash transactions are ity of law enforcement to combat fraud, ports. If there is a suspicious char- there over $10,000? money laundering and financial crimes by acter, they can still do this. 3. Purging Suspicious Activities Report opposing the Barr/Paul/Campbell amendment So it will not hinder law enforce- (SAR) records after 4 years would undermine to H.R. 10. crime fighting efforts. Thank you for your attention in this mat- ment. ter. What it does, Madam Chairman: It Money laundering involves complex financial Sincerely, protects the consumer, it protects the transactions. Law enforcement sometimes RONALD S. NEUBAUER, citizen, it protects the right of all needs several years to put together cases. President. Americans. We cannot rationalize and This will hurt. Mr. BARR of Georgia. Madam Chair- justify the abuse of liberty for the pre- The Banking agencies oppose Barr/Camp- man, I yield 1 minute to the distin- tense that on occasion we might catch bell. guished gentleman from California a criminal. But the fact that it could Law enforcement uniformly opposes Barr/ (Mr. CAMPBELL). cost $100 million per conviction is sort Campbell. (Mr. CAMPBELL asked and was of what I would call overkill. N.J. Governor Whitman opposes Barr/ given permission to revise and extend What we must do is protect the Campbell. his remarks.) American citizen. Law enforcement The ABA Fraud Prevention Oversight Coun- Mr. CAMPBELL. Madam Chairman, will not be hindered. If my colleagues cil opposes Barr/Campbell. the cost to every bank that has to com- are opposed to Know Your Customer Mr. HUTCHINSON. Madam Chair- ply is huge, but the cost of individual regulation, they must vote for this man, I yield 30 seconds to the gen- liberty is much more important. What amendment. tleman from Alabama (Mr. BACHUS). business does the Federal Government Mr. LAFALCE. Madam Chairman, I Mr. BACHUS. Madam Chairman, I have ordering a bank to tell them yield 30 seconds to the gentleman from like to quote from the President of the about my bank account? Michigan (Mr. DINGELL), the distin- Organization of Police Chiefs of the What we are dealing with today is a guished past and future chairman of United States. He says this amendment function of invasion of individual lib- the Committee on Commerce. will have a significant detrimental im- erty in the guise of law enforcement. H5290 CONGRESSIONAL RECORD — HOUSE July 1, 1999 This argument that we will lose so (Mr. OXLEY asked and was given those that would support their ability many prosecutions is absurd. The num- permission to revise and extend his re- to launder money. ber of $25,000 does not even adjust for marks.) Mr. LAFALCE. Madam Chairman, I inflation from the original $10,000 es- Mr. OXLEY. Madam Chairman, I rise yield myself such time as I may con- tablished in 1970. So when we hear in opposition to the amendment. It is sume. these arguments that we will suddenly antilaw enforcement, and I plan to vote Again I strongly oppose this, but I be a haven for money laundering, rec- no on the amendment. want to point out to those who have ognize that we are not even adjusting Mr. BARR of Georgia. Madam Chair- not spoken that we have had individ- for inflation from the $10,000 require- man, I yield myself such time as I may uals from the Republican party and the ment established in 1970 to a $25,000 re- consume. Democratic party strongly oppose this quirement today. It ought to be $40,000 Madam Chairman, just a little over a from the right, from the left, the gen- if we adjusted for inflation. week ago we heard that the sky was tleman from Arkansas (Mr. HUTCH- But let us say that just for a moment going to fall if asset forfeiture laws of INSON), the gentleman from Florida there may be one prosecution that does this country were brought in line with (Mr. MCCOLLUM), the gentleman from not happen, but in return, in return, we normal standards of fairness, due proc- Alabama (Mr. BACHUS), the gentleman do not have the Federal Government ess and other constitutional safe- from Iowa (Mr. LEACH), the gentle- ordering banks to profile me, to find guards. Today we hear that the sky woman from New Jersey (Mrs. ROU- out what my activities are when I de- will fall if we simply require law en- KEMA). On the Democratic side, my col- part from normal activity, to define forcement to do its job and not man- leagues heard from the gentlewoman what is normal activity, to condemn date that banks do its job for them. from California (Ms. WATERS), the gen- me if I do not behave in a normal man- The fact that there have been tens of tleman from Minnesota (Mr. VENTO), ner. For that price of freedom I think millions of suspicious activity reports the gentleman from Michigan (Mr. DIN- we are sacrificing very, very little, if filed and virtually no prosecutions ini- GELL). The administration believes anything, on law enforcement. tiated based on those suspicious activ- that this would shred their ability to I conclude by saying if we were to re- ity reports clearly illustrates that enforce antimoney laundering and peal the Fourth Amendment, if we what we are hearing today is hyperbole bank secrecy provisions. were to repeal the Fifth Amendment, based on the unwillingness of law en- b 1915 we could improve law enforcement, but forcement to make any changes what- it would not be worth it. soever in the way they are accustomed I strongly urge everyone to defeat Mr. LAFALCE. Madam Chairman, I to operating. this amendment. I am sorry that it was yield 30 seconds to the distinguished If my colleagues are opposed to Know permitted. We could have used this 10 gentleman from Minnesota (Mr. Your Customer, then they must be op- minutes to discuss something like red- VENTO). posed to these provisions of the sus- lining, something that would have Mr. VENTO. Madam Chairman, I rise picious activity report requirement brought about bipartisan support. in strong opposition to this amend- which does not gut the Bank Secrecy Mrs. MALONEY of New York. Madam ment. This is really a privacy gone Act. This amendment addresses just Chairman, I am certainly sympathetic to the crazy. It would gut the Bank Secrecy one small portion of the Bank Secrecy privacy concerns being raised during this de- Act and the provisions dealing with the Act. It is simply one of a number of bate. And I voted for the amendment during suspicious activities reports as well as tools that are provided for law enforce- the Banking Committee mark-up of H.R. 10 the cash transaction reports. It is ment under the Bank Secrecy Act. It is which eliminated the newly proposed ``Know under the guise of privacy, a 30-year not an essential tool. It takes nothing Your Customer'' rules. law that has been effective in terms of This amendment, however, will seriously away from law enforcement that it protecting and help us deal with the curtail the efforts of law enforcement in curb- might otherwise get through legiti- emerging types of networks of crime ing fraud and stopping drug traffickers. mate law enforcement means. All, vir- that exist in our society. Just raising The Bank Secrecy Act requires certain tually all, money laundering cases of the cash transaction itself, we should forms . . . the Suspicious Activities Report any significance are prosecuted, inves- subject this to deliberate hearings and and the Currency Transactions Report to be tigated and convictions obtained there- considerations, and I do not think that filed when certain triggers are met. This on not based on mandated secrecy re- we should shove it out under the basis amendment would make this system voluntary ports, but on other provisions of the of the unpopularity of Know Your Cus- . . . not basing these reports on any of the Bank Secrecy Act and other provisions tomer, which, in fact, this bill has triggers which may be hit, and probably result- of the money laundering statutes. stopped in its tracks. ing in banks becoming the favored launderers To say that law enforcement will be Mr. HUTCHINSON. Madam Chair- of fraudulent funds and drug money. man, I yield 30 seconds to the distin- gutted by this amendment is a red her- Yet these reports have been crucial to un- guished chairman from Iowa (Mr. ring. If colleagues oppose Know Your covering all sorts of fraud and drug rings. In LEACH). Customer, then they must support the New York City last year, the FBI's office re- (Mr. LEACH asked and was given per- Barr-Paul-Campbell amendment. ceived a Suspicious Activity Report which indi- Mr. LAFALCE. Madam Chairman, I mission to revise and extend his re- cated that a former vice president of a large yield 30 seconds to the gentlewoman marks.) bank had embezzled funds. The investigation from California (Ms. WATERS). Mr. LEACH. Madam Chairman, first discovered that the embezzlement reached Ms. WATERS. Madam Chairman, let me just stress section 191 of this bill $20 million. repeals the Know Your Customer regu- what a contradiction for so-called law Another New York City case in July 1997 lation. Secondly, the committee would and order Members of this House to be used these reports to uncover a fraudulent be happy to deal with further modifica- advocating this amendment. The Paul- loan scheme worth $20 million in losses to tions in this area. But thirdly, it has to Barr-Campbell amendment should be area banks. These cases most likely would be understood by everybody here that entitled: The Drug Dealers’ Improve- not have been discovered without the triggers money laundering is the Achilles heel ment Act of 1999 because the amend- in the Bank Secrecy Act. of drug traffickers, and many are able ment will increase the ability of drug Join with the Justice Department, the Treas- to separate themselves from their ille- dealers to launder drug profits. ury Department and the Customs Service in gal activities, but they cannot from There are few legitimate cash trans- helping law enforcement fight fraud and the their money, and just like Al Capone actions in excess of $10,000. It is un- drug trade. was convicted for tax evasion, drug usual to have someone walking around This amendment is anti-law enforcement. traffickers today are convicted more with $25,000 of cash in their wallet or Oppose this amendment. than anything else of money laun- their purse. Therefore, it is inappro- The CHAIRMAN. The question is on dering. To throw this out would be an priate to raise the reporting require- the amendment offered by the gen- absolute assault on law enforcement. ment to $25,000. It indeed guts the Bank tleman from Georgia (Mr. BARR). We must not allow it to happen. Secrecy Act. The question was taken; and the Madam Chairman, I yield to the gen- I would ask every Member of this Chairman announced that the noes ap- tleman from Ohio (Mr. OXLEY). House to say no to the dope dealers and peared to have it. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5291 Mr. BARR of Georgia. Madam Chair- ‘‘(B) with the approval of the Board and the Florida International Bankers As- man, I demand a recorded vote. the relevant licensing authority (the Comp- sociation and Conference of State Bank The CHAIRMAN. Pursuant to House troller in the case of a Federal branch or the Supervisors. This amendment has been Resolution 235, further proceedings on appropriate State supervisor in the case of a fully vetted with the Federal Reserve State branch), upgrade an agency, or a the amendment offered by the gen- branch of the type referred to in subpara- Board, and they have indicated that tleman from Georgia (Mr. BARR) will be graph (A)(ii), located in a State outside the they have no objection to it. postponed. foreign bank’s home State, into a Federal or Madam Chairman, I reserve the bal- The CHAIRMAN. The Committee will State branch if— ance of my time. rise informally. ‘‘(i) the establishment and operation of Mr. FRANK of Massachusetts. The Speaker pro tempore (Mr. LEWIS such branch is permitted by such State; and Madam Chairman, I rise in opposition of Kentucky) assumed the chair. ‘‘(ii) such agency or branch— to the amendment. ‘‘(I) was in operation in such State on the f The CHAIRMAN. The gentleman day before September 29, 1994; or from Massachusetts (Mr. FRANK) is rec- MESSAGE FROM THE SENATE ‘‘(II) has been in operation in such State ognized for 5 minutes. for a period of time that meets the State’s A message from the Senate by Mr. Mr. FRANK of Massachusetts. minimum age requirement permitted under Madam Chairman, I yield myself such Lundregan, one of its clerks, an- section 44(a)(5) of the Federal Deposit Insur- nounced that the Senate agrees to the ance Act.’’. time as I may consume. Madam Chairman, I should note that report of the Committee of Conference The CHAIRMAN. Pursuant to House on the disagreeing votes of the two under the rules someone is entitled to Resolution 235, the gentleman from 5 minutes in opposition. I would de- Houses on the amendment of the Sen- Florida (Mr. FOLEY) and a Member op- ate to the bill (H.R. 775) ‘‘An Act to es- scribe myself for these purposes as posed each will control 5 minutes. leaning against but open to persuasion, tablish certain procedures for civil ac- The Chair recognizes the gentleman tions brought for damages relating to I would reassure my friend, the gen- from Florida (Mr. FOLEY). tleman from Florida (Mr. FOLEY). I am the failure of any device or system to Mr. FOLEY. Madam Chairman, I process or otherwise deal with the not firmly committed on the subject. yield myself such time as I may con- I was interested in what the gen- transition from the year 1999 to the sume. tleman said and will listen some more, year 2000, and for other purposes.’’. Madam Chairman, the amendment I but I also wanted to use this occasion The message also announced that the am offering today is a States’ rights to address the general bill, Madam Senate has passed a concurrent resolu- issue. It is noncontroversial, we hope, Chairman. It is a somewhat constricted tion of the following title in which con- an amendment that will fix an anom- debate situation. currence of the House is requested: aly in Federal interstate banking laws. What I wanted to do was to explain S. Con. Res. 43. Concurrent resolution pro- It will also help the flow of trade from why I would be voting against this bill, viding for a conditional adjournment or re- the U.S. to countries all over the although I think on the subjects that it cess of the Senate and a conditional adjourn- world. deals with it does a good job. That is, ment of the House of Representatives. This amendment would allow foreign I think this is a bill which suffers from The SPEAKER pro tempore. The banks currently operating in the incompleteness. Committee will resume its sitting. United States to expand their oper- I think with regard to the regulation f ations as was intended by the Riegle- of the financial services industry, this FINANCIAL SERVICES ACT OF 1999 Neal Banking and Branching Act by al- is as good a product as we can expect lowing agencies to upgrade to from a broad representative body. I The Committee resumed its sitting. branches. think the Committee on Banking and The CHAIRMAN. It is now in order to In 1994, when the Riegle-Neal Inter- Financial Services on both sides consider amendment No. 5 printed in state Banking and Branching bill was worked seriously and well under the House Report 106–214. passed. Congress sought to allow for- leadership of the chairman and the AMENDMENT NO. 5 OFFERED BY MR. FOLEY eign banks to open additional branches ranking member. Mr. FOLEY. Madam Chairman, I just like domestic banks. This amend- The problem is, in my mind, it car- offer amendment No. 5. ment would conform with the intent of ries out a pattern that is too much The CHAIRMAN. The Clerk will des- the original act. present in America today and that I ignate the amendment. Unfortunately, not one foreign bank think threatens great harm even as it The text of the amendment is as fol- has been able to open additional makes some specific progress, and that lows: branches under the Riegle-Neal Federal is a pattern in which we do a good job Amendment No. 5 offered by Mr. FOLEY: law provision. While the intention of of fostering conditions in which the Page 244, after line 18, insert the following the act was to allow expansion of for- capitalist system can flourish. It is in new section (and amend the table of contents eign banks, the provision in current our interest that the capitalist system accordingly): law has proved to be unworkable. flourish. SEC. 198A. INTERSTATE BRANCHES AND AGEN- This amendment would allow foreign Capitalism clearly has established CIES OF FOREIGN BANKS. bank agencies to upgrade to a branch Section 5(a)(7) of the International Bank- itself as the superior way for a society ing Act of 1978 (12 U.S.C. 3103(a)(7)), is with the approval of the appropriate to generate wealth, and the generation amended to read as follows: chartering agency, the OCC or the of wealth is very important. It is im- ‘‘(7) ADDITIONAL AUTHORITY FOR INTERSTATE State bank supervisor, and the Federal portant in and of itself because it pro- BRANCHES AND AGENCIES OF FOREIGN BANKS, Reserve Board. vides resources for individuals to enjoy UPGRADES OF CERTAIN FOREIGN BANK AGENCIES In order to accomplish this upgrade, themselves, and it is important as a AND BRANCHES.—Notwithstanding paragraphs the agency would have to meet the way to provide the resources which (1) and (2), a foreign bank may— State’s minimum age requirement for help us deal with other problems. ‘‘(A) with the approval of the Board and entry, just like domestic banks. In ad- On the other hand, we have learned the Comptroller of the Currency, establish and operate a Federal branch or Federal dition, the agency must meet the re- that capitalism, as great an engine as agency or, with the approval of the Board quirements for consolidated home it is in generating wealth, can have and the appropriate State bank supervisor, a country supervision. some downsides. In particular, the era State branch or State agency in any State This change in Federal law that I am of capitalism in which we now are, a outside the foreign bank’s home State if— proposing today is a States’ rights kind of globally competitive world, is ‘‘(i) the establishment and operation of amendment. If passed, it would remove one where increased wealth is unfortu- such branch or agency is permitted by the a Federal limitation that interferes nately accompanied by increased in- State in which the branch or agency is to be with State law. equality in many cases and by an un- established, and The amendment is supported by the ‘‘(ii) in the case of a Federal or State dermining of society’s capacity to deal branch, the branch receives only such depos- Florida Banking Department, the New with some of the social problems that its as would be permitted for a corporation York Banking Department, the Texas the market does not take care of. organized under section 25A of the Federal Banking Department and the Cali- This bill should have been an oppor- Reserve Act (12 U.S.C. 611 et seq.), or fornia Banking Department, as well as tunity to deal with both aspects of H5292 CONGRESSIONAL RECORD — HOUSE July 1, 1999 that. It is a good piece of legislation services, but I will not be part of a con- The CHAIRMAN. The question is on for setting forth the conditions for the ditioned pattern of helping people the amendment offered by the gen- financial services industry, central to make more money and not worry about tleman from Florida (Mr. FOLEY). capitalism. It is a good situation in those who might be left behind in that The amendment was agreed to. which the intermediation function of very process. The CHAIRMAN. It is now in order to the financial services industry can go With that, I would reassure again my consider amendment No. 6 printed in forward. friend, the gentleman from Florida House Report 106–214. We understand that, in and of itself, (Mr. FOLEY), that I am open to persua- AMENDMENT NO. 6 OFFERED BY MS. SLAUGHTER. that is going to leave us some prob- sion Ms. SLAUGHTER. Madam Chairman, lems. In particular, I regret terribly Madam Chairman, I reserve the bal- I offer amendment No. 6. the refusal of the majority to let us ance of my time. The CHAIRMAN. The Clerk will des- deal seriously with the amendment of- Mr. FOLEY. Madam Chairman, I ignate the amendment. fered by the gentlewoman from Cali- yield myself such time as I may con- The text of the amendment is as fol- fornia, which would have tried to deal sume. lows: Madam Chairman, I believe I have with those geographic areas that are Amendment No. 6 offered by Ms. Slaugh- just been given a reprieve from the ter: left behind. gentleman from Massachusetts (Mr. Page 244, after line 18, insert the following I do not think we adequately deal FRANK). I did not hear an objection to new section: with privacy. In fact, in some ways we my amendment. I feel it is a very good SEC. 198A. FAIR TREATMENT OF WOMEN BY FI- may be making it worse. That is, un- amendment. NANCIAL ADVISERS. fortunately, a kind of paradigm we are (a) FINDINGS.—The Congress finds as fol- Mr. LEACH. Madam Chairman, will lows: following too frequently. We go for- the gentleman yield? ward and we provide the conditions and (1) Women’s stature in society has risen Mr. FOLEY. I yield to the gentleman considerably, as they are now able to vote, improve the conditions for wealth to be from Iowa. own property, and pursue independent ca- generated, and I am for that. I would Mr. LEACH. Madam Chairman, let reers, and are granted equal protection under vote for this bill if we were talking me say, in hopes that the gentleman the law. simply about these conditions and no from Massachusetts (Mr. FRANK) can (2) Women are at least as fiscally respon- other were relevant, but to do that still be persuaded to this amendment, I sible as men, and more than half of all while at the same time we refuse to ad- would inform the gentleman that the women have sole responsibility for balancing dress the serious problems of poverty the family checkbook and paying the bills. Federal Reserve has no objection to it. (3) Estate planners, trust officers, invest- in inner cities, and obviously this is Mr. FRANK of Massachusetts. ment advisers, and other financial planners not a bill in and of itself to alleviate Madam Chairman, will the gentleman and advisers still encourage the unjust and poverty, but it does seem reasonable to yield? outdated practice of leaving assets in trust me to say to the large financial insti- Mr. FOLEY. I yield to the gentleman for the category of wives and daughters, tutions they are getting a pretty good from Massachusetts. along with senile parents, minors, and men- set of conditions here. We are respond- Mr. FRANK of Massachusetts. When tally incompetent children. ing to their needs. Can they not make the gentleman tells me the Federal Re- (4) Estate planners, trust officers, invest- serve has no objection, is he trying to ment advisers, and other financial planners a little extra effort in the course of and advisers still use sales themes and tac- this to help the people who are being get me to be for it or against? Mr. LEACH. Madam Chairman, will tics detrimental to women by stereotyping left behind? Can they not help the con- women as uncomfortable handling money sumers? the gentleman yield? and needing protection from their own pos- I understand if we leave it entirely to Mr. FOLEY. I yield to the gentleman sible errors of judgment and ‘‘fortune hunt- the market they would not want to do from Iowa. ers’’. Mr. LEACH. Madam Chairman, fair that. That is why we ought to be cou- (b) SENSE OF THE CONGRESS.—It is the sense enough. of the Congress that estate planners, trust pling market-enhancing legislation In addition, the New York Banking officers, investment advisers, and other fi- like this with some reasonable condi- Department, the Texas Banking De- nancial planners and advisers should— tions that say they are going to make partment, the California Banking De- (1) eliminate examples in their training more money out of this, and that is a partment and the Conference of State materials which portray women as incapable good thing because that is how our so- Bank Supervisors are leaning in this and foolish; and ciety will prosper. But can they not (2) develop fairer and more balanced pres- direction. So I believe it is a very entations that eliminate outmoded and take a little bit of the extra money thoughtful, very professional amend- that they are making out of this and stereotypical examples which lead clients to ment, and I certainly want to com- take actions that are financially detrimental worry about the poor, worry about geo- pliment the gentleman for bringing it to their wives and daughters. graphically underserved areas, worry forth, and I am just hopeful for getting The CHAIRMAN. Pursuant to House about consumer protection? Can they unanimity. Resolution 235, the gentlewoman from not do a little more on privacy? Can Mr. FRANK of Massachusetts. New York (Ms. SLAUGHTER) and a Mem- they not maybe restrict a little bit the Madam Chairman, I yield myself such ber opposed each will control 5 min- extra money they are going to make so time as I may consume. utes. people’s legitimate privacy concerns Madam Chairman, let me say that I The Chair recognizes the gentle- can be addressed? have been persuaded, and I will support woman from New York (Ms. SLAUGH- That is the tragedy of this bill. It is this amendment. When the gentleman TER). a good bill in what it does, but it is a mentioned the Texas Banking Depart- Ms. SLAUGHTER. Madam Chairman, bad bill in what it does not do. ment, my colleague from Texas urged I yield myself such time as I may con- While in other circumstances I might me on. sume. have felt, well, that is the best we can I will say, as we improve this bill and Madam Chairman, I am offering this do, it has unfortunately become too its specific impact on the financial noncontroversial amendment to ex- common in our society. services industry, I regret even more press the sense of Congress that finan- I will say I am affected on this by our collective unwillingness to do more cial advisors should treat women fairly what is going on in my own State than we are doing and to do, in fact, in drafting wills and trusts. Specifi- where two of the largest banks are what we could easily do to help those cally, financial planners should be merging and are not, in my judgment, who are being left behind. It is an inap- urged to modify their training mate- willing to do enough to share the bene- propriate continuation of a pattern of rials to eliminate examples that por- fits of their merger with people who helping the wealthy and the powerful, tray women as incapable and foolish are not doing so well. and we all benefit to some extent from and should develop fairer and more bal- So I congratulate the work that the that, but ignoring the other end of the anced presentations to clients that leaders of the Committee on Banking society. eliminate outmoded and stereotypical and Financial Services and others have Mr. FOLEY. Madam Chairman, I examples. These stereotypical exam- done on the banking provisions that move adoption of the amendment and I ples lead clients to place more finan- deal specifically with the financial yield back the balance of my time. cial restrictions on female heirs. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5293

In the past year, I have learned that directed that her estate be directed from New York (Mr. LAFALCE), we are estate planners and financial advisors into five equal parts for her children, pleased to receive the gentlewoman’s still encourage the unjust practice of then set up an individual trust for each amendment. leaving assets in trust for senile par- of her daughters, and directed that her Ms. SLAUGHTER. I thank the gen- ents, minors, mentally incompetent sons be given their money outright. tlemen very much. children and all wives and daughters. At the time the will was drawn up, The CHAIRMAN. All time has ex- Women were ostensibly included to she was 28 years old and her sisters pired. protect them from the perceived inabil- were in their twenties. Her brothers, The question is on the amendment ity to manage money. However, in re- who were deemed apparently capable of offered by the gentlewoman from New searching this issue, I found the real handling their inheritance outright, York (Ms. SLAUGHTER). reason to include wives and daughters were 21 and 14. The amendment was agreed to. in this list has little to do with protec- The trust set out for Kappie Spencer The CHAIRMAN. It is now in order to tion. The financial advisors are simply and her sisters for their ‘‘protection’’ consider amendment No. 7 printed in selling a product. provided for them to receive the annual House Report 106–214. By adding women to this list, finan- interest on the assets. Her mother’s AMENDMENT NO. 7 OFFERED BY MR. COOK cial advisors have substantially in- will contained provisions for with- Mr. COOK. Mr. Chairman, I offer an creased their sales base, which, of drawing the principal only for the amendment. course, increases their own income and health, support, and proper care of her The CHAIRMAN. The Clerk will des- bottom line. daughters and their children, and they ignate the amendment. Financial planners sell a trust on could only touch the principal for these The text of the amendment is as fol- several arguments. First, they try to very limited reasons if they had ex- lows: sell a trust based on protection; in hausted every other source of income Amendment No. 7 offered by Mr. COOK: other words, the inexperience of the available to them. Page 311, strike line 4 and all that follows through page 312, line 16 and insert the fol- woman. Or they try to sell a trust Surely we would all agree that these lowing new section (and amend the table of based on tax advantages which do not restrictions are deeply unfair and con- contents accordingly): seem to be as important for sons. descending to all women. SEC. 241. STUDY OF LIMITING THROUGH REGU- A sure sales pitch is suggesting to a This amendment is an important step LATION FEES ASSOCIATED WITH husband that in the event of his wife’s forward to ensure a woman’s financial PROVIDING FINANCIAL PRODUCTS. remarriage a trust would prevent some well-being. Because women live longer Not later than 1 year after the date of en- other man from enjoying his hard- than men, they need to support them- actment of this Act, the Comptroller General of the United States shall submit a report to earned assets. These things which have selves longer, but they also earn less the Congress regarding the consequences of worked so well in the past are alive and than men, wait longer to start saving limiting, through regulation, commissions, healthy today and always to the det- for retirement, put aside less money, fees, or other costs incurred by customers in riment of women. and take fewer of the risks that the acquisition of financial products. As I found out, this is not just a relic produce greater returns. The CHAIRMAN. Pursuant to House from the 1950s. An article in a monthly Husbands, however well-intentioned, Resolution 235, the gentleman from publication from August, 1998, includes then aggravate the situation by trying Utah (Mr. COOK) and a Member opposed an example of how clients should pro- to shield their wives from any deci- each will control 5 minutes. tect their financially irresponsible sions regarding money by setting up a Mr. DINGELL. Madam Chairman, I daughter and her equally financially ir- trust arrangement, giving a banker, a rise in opposition to the amendment. responsible spouse without disinher- lawyer, or an accountant control of the The CHAIRMAN. The gentleman iting them. purse strings. This may be good busi- from Michigan (Mr. DINGELL) will be b 1930 ness for the financial planner, but it is recognized for 5 minutes. offensive to keep the spouse in the The Chair recognizes the gentleman The article’s author, a financial plan- dark about finances. from Utah (Mr. COOK). ner, advises the clients to devise a With more women handling the Mr. COOK. Madam Chairman, I yield trust for the daughter to prevent credi- checkbook and finances in their fami- myself such time as I may consume. tors from accessing the principal. The lies, these outdated selling tactics by Madam Chairman, I want to thank financial planners sell the trust by say- financial planners have to be exposed the Committee on Rules for allowing ing it will serve as a deterrent to keep for the patronizing practices which me to offer this amendment, which the daughter’s inheritance out of the they clearly are. While we cannot man- would replace the existing section 241 spendthrift son-in-law’s hands. No such date society’s attitudes, we should en- with a provision requiring the General restrictions are proposed for any son courage a rethinking of these financial Accounting Office to study the con- who might have a spendthrift wife. practices. sequences of limiting, through regula- A specific example from the financial I ask my friends on both sides of the tion, commissions, fees, or other costs planner further illustrates my point on aisle to support this amendment, and I incurred by customers in the acquisi- the selling tactics currently used. thank the gentleman for accepting this tion of financial products. The financial planners publication amendment. Through this study, Congress could said, ‘‘Mr. Smith loves his wife, but he Mr. LEACH. Madam Chairman, will determine the potential negative ef- does not love the way she handles the gentlewoman yield? fects of the regulation of commissions money. He knows she is a big spender, Ms. SLAUGHTER. I yield to the gen- and fees before directing regulators to and he realizes that he never had the tleman from Iowa. impose such rules. time or patience to teach her how to Mr. LEACH. Madam Chairman, we Currently section 241 of H.R. 10 would deal with financial matters . . . Mr. are very happy to accept this amend- mandate that financial regulators im- Smith wants a wall built around the ment. I would say it is brought to the pose rules requiring the disclosure of assets he leaves behind. The wall is de- Congress in a very thoughtful way by commissions, fees, or other costs in- signed to protect Mrs. Smith from her- one of the most respected members of curred by customers in the acquisition self. It is a wall that will keep con men this body. I think that reflects on the of financial products. In my view, this and well-intended amateur financial amendment itself. could be tantamount to price controls, advisers out, and if Mrs. Smith remar- Ms. SLAUGHTER. I thank the chair- and really has no place in financial ries, her new husband cannot touch the man very much. modernization. money in the trust, nor will he get any Mr. VENTO. Madam Chairman, will The provision in the bill is currently should he outlive her, unless she puts the gentlewoman yield? a solution in search of a problem. The instructions to that effect in her will.’’ Ms. SLAUGHTER. I yield to the gen- question of the effectiveness of dis- These unfair practices were brought tleman from Minnesota. closing fees and commissions in pro- to my attention by a woman from Flor- Mr. VENTO. Madam Chairman, I tecting customers is really untested. ida who was herself negatively affected would say that I certainly rise in sup- There is little indication that dis- by these practices. Her mother’s will port, and in the absence the gentleman closing fees and commissions beyond H5294 CONGRESSIONAL RECORD — HOUSE July 1, 1999 the extensive disclosure that is cur- with a GAO study, a red herring rate Mr. DINGELL. Madam Chairman, I rently required would significantly regulation that nobody wants or seeks. yield myself such time as I may con- benefit customers. We do not seek to regulate rates. sume. Such a requirement could even have This bill is already a bust for con- Madam Chairman, what we are talk- unanticipated negative consequences. sumers. We are functioning under a gag ing about here is a banking system and Disclosure of fees and commissions rule. But this amendment simply strips a financial system that is going to be could stifle competition or threaten fi- the consumers of banking and other fi- fair and open. The gentleman, I am nancial innovation or market liquidity. nancial services of one more right, and sure, will recall that this amendment Furthermore, the fee disclosure pro- that is a right to know what the was adopted unanimously, unani- vision is vaguely worded. The term charges are being assessed against mously by the House last year. This is ‘‘other costs incurred by customers’’ them by the banks and other financial not something that has been snuck up could be expansively and inappropri- institutions, and in a sense it signifi- into the proceedings in some curious ately interpreted to include, for exam- cantly changes existing law. fashion, it was in the bill last year. It ple, markups on securities trans- Madam Chairman, I reserve the bal- was adopted overwhelmingly in the actions, which have been specifically ance of my time. Committee on Commerce. excluded from the bill’s language. Mr. COOK. Madam Chairman, I yield It simply says, disclose. Tell the Markups are of a very different nature 30 seconds to my colleague, the gen- truth. There is nothing wrong with than fees and commissions, but it could tleman from Texas (Mr. BENTSEN). that. be wrongly swept into any rules result- (Mr. BENTSEN asked and was given Madam Chairman, I yield back the ing from the bill. permission to revise and extend his re- balance of my time, with an expression The fee disclosure proposal con- marks.) of respect and affection for my col- tradicts a policy of regulatory reform. Mr. BENTSEN. Madam Chairman, I league on the other side. This proposal would impose significant thank the gentleman for yielding time Mr. COOK. Madam Chairman, I yield new compliance burdens for those af- to me. myself the balance of my time. fected. This proposal runs counter to I rise in support of the amendment. Madam Chairman, I thank the gen- streamlining regulation, which is the This is what the Committee on Bank- tleman. I very much appreciate that. I purpose of this carefully crafted bipar- ing and Financial Services adopted. As just want to quickly say that the fee tisan legislation. the gentleman mentioned, the regu- The SEC and other financial regu- disclosure proposal does contradict, I latory authorities already have the au- think, a policy of regulatory reform, lators already have the full authority thority to impose this. We are telling to require that fees and commissions and this proposal would impose, I them to do this, rather than waiting to be disclosed. Indeed, in many cases, think, significant new compliance bur- see what the complications would be. dens for those affected. I think it does such disclosure is already mandated. We are seeing increasing trans- No regulator has suggested that they run counter to deregulation, which I parency in the financial services mar- think has been a hallmark of this Con- need additional authority in this area. ket. I think it would be a mistake for Forcing regulators to broaden fee dis- gress. us to congressionally impose this with- I urge my colleagues’ support. closure regulations represents congres- out getting a study on it first. I com- sional micro-management of the regu- Madam Chairman, I yield back the mend the gentleman for his amend- balance of my time. latory process. ment, and I rise in support of it. The financial services industry is ar- The CHAIRMAN. The question is on Mr. DINGELL. Madam Chairman, I guably the most competitive in our the amendment offered by the gen- yield 30 seconds to my good friend, the economy, and is expected to become in- tleman from Utah (Mr. COOK). gentleman from New York (Mr. LA- creasingly more competitive with pas- The question was taken; and the FALCE) sage of H.R. 10. Before we mandate ad- Chairman announced that the noes ap- Mr. LAFALCE. Madam Chairman, I ditional government regulation, we peared to have it. realize there was a discrepancy on this Mr. COOK. Madam Chairman, I de- should be sure it will not jeopardize issue between the approach taken by this growing financial market. mand a recorded vote, and pending the gentleman from Michigan (Mr. DIN- I urge all my colleagues to support that, I make the point of order that a GELL) and the Committee on Banking this amendment. quorum is not present. Madam Chairman, I reserve the bal- and Financial Services, but my per- The CHAIRMAN. Pursuant to House ance of my time. sonal preference would be to obtain the Resolution 235, further proceedings on Mr. DINGELL. Madam Chairman, I language that is in the print before us the amendment offered by the gen- yield myself 3 minutes. right now. tleman from Utah (Mr. COOK) will be (Mr. DINGELL asked and was given I believe in disclosure, and I do not postponed. permission to revise and extend his re- favor the amendment offered by the The point of no quorum is considered marks.) gentleman from Utah (Mr. COOK). I as- withdrawn. Mr. DINGELL. Madam Chairman, sociate myself with the remarks of the It is now in order to consider amend- with all respect to the author of this gentleman from Michigan (Mr. DIN- ment No. 8 printed in House Report amendment, the amendment would GELL). 106–214. Mr. COOK. Madam Chairman, I yield keep consumers in the dark, and finan- AMENDMENT NO. 8 OFFERED BY MRS. ROUKEMA myself such time as I may consume. cial providers would enjoy it mightily. Mrs. ROUKEMA. Madam Chairman, I Section 241 of H.R. 10 includes a non- Madam Chairman, I would like to re- offer an amendment. controversial and commonsense provi- mind the gentleman from Michigan The CHAIRMAN. The Clerk will des- sion that passed the House last year in and the gentleman from New York that ignate the amendment. similar legislation. It requires all fi- basically my amendment restores the The text of the amendment is as fol- nancial services regulatory agencies to Committee on Banking and Financial lows: prescribe or revise rules to improve the Services language that I think was bro- disclosure of commissions, fees, and kered in a bipartisan agreement be- Amendment No. 8 offered by Mrs. ROU- tween myself and the gentleman from KEMA: other costs incurred by consumers in Page 312, after line 16, insert the following the purchase of financial products. Vermont (Mr. SANDERS). new subtitle (and amend the table of con- This section does not regulate or It was, of course, changed in the tents accordingly): Committee on Commerce, and I very limit fees. That would be done by the Subtitle E—Banks and Bank Holding market. Section 241 merely requires much respect their opinions, but felt Companies disclosure so consumers can compari- that this was kind of agreed to back in SEC. 251. CONSULTATION. son shop on the basis of understandable the Committee on Banking and Finan- (a) IN GENERAL.—The Securities and Ex- and accurate disclosure. This helps cial Services. I just wanted to make change Commission shall consult and coordi- both competition and consumers. that point. nate comments with the appropriate Federal The amendment would delete this Madam Chairman, I reserve the bal- banking agency before taking any action or disclosure requirement and replace it ance of my time. rendering any opinion with respect to the July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5295 manner in which any insured depository in- tiple number of assurances from the would honest reporting and accounting stitution or depository institution holding SEC that they will work with the under the jurisdiction of regulators company reports loan loss reserves in its fi- banking agencies. Yet that guidance who treat everybody the same way be nancial statement, including the amount of that we have given them has never bettered by permitting the banks to any such loan loss reserve. (b) DEFINITIONS.—For purposes of sub- been followed. The type of prior con- achieve separate different special and section (a), the terms ‘‘insured depository in- sultation coordination with the bank- probably more favorable treatment? stitution’’, ‘‘depository institution holding ing agencies that are absolutely essen- Madam Chairman, I reserve the bal- company’’, and ‘‘appropriate Federal bank- tial here have not been done. ance of my time. ing agency’’ have the same meaning as in I think we have to make it clear that Mrs. ROUKEMA. Madam Chairman, I section 3 of the Federal Deposit Insurance we are not going to stand for this whip- yield 15 seconds to the gentleman from Act. sawing back and forth and we will have Iowa (Mr. LEACH), the chairman of the The CHAIRMAN. Pursuant to House a clear definition of responsibility. Committee on Banking and Financial Resolution 235, the gentlewoman from Madam Chairman, I reserve the bal- Services. New Jersey (Mrs. ROUKEMA) and a ance of my time. Mr. LEACH. Madam Chairman, I Member opposed each will control 5 Mr. DINGELL. Madam Chairman, I would just like to say that I think the minutes. yield myself 3 minutes. amendment that the gentlewoman Mr. DINGELL. I rise in opposition to (Mr. DINGELL asked and was given from New Jersey (Mrs. ROUKEMA) has the amendment, Madam Chairman. permission to revise and extend his re- brought is a very thoughtful and rea- The CHAIRMAN. The gentleman marks.) sonable amendment and that it de- from Michigan (Mr. DINGELL) will be Mr. DINGELL. Madam Chairman, I serves to be added to this bill. recognized for 5 minutes in opposition begin by expressing great respect and I recognize that what the gentleman to the amendment. affection to the gentlewoman from New from Michigan (Mr. DINGELL) says has The Chair recognizes the gentle- Jersey (Mrs. ROUKEMA). I would like to a basis in good thought, but I think woman from New Jersey (Mrs. ROU- read the essential part of the language this is a true improvement. KEMA). of the amendment. It says ‘‘The Securi- Mrs. ROUKEMA. Madam Chairman, I yield 1 minute to the gentleman from Mrs. ROUKEMA. Madam Chairman, I ties and Exchange Commission shall Florida (Mr. MCCOLLUM), a senior yield myself 2 minutes and 40 seconds. consult and coordinate comments with member from the committee. Madam Chairman, this issue is very the appropriate Federal banking agen- (Mr. MCCOLLUM asked and was straightforward and it is very clear. cy before taking any action or ren- Members do not have to know anything given permission to revise and extend dering any opinion’’. his remarks.) about loan loss reserves or about ac- Now, that is pretty broad authority. counting to understand this amend- Mr. MCCOLLUM. Madam Chairman, I It makes essentially the SEC, by the want to strongly support this amend- ment. requirement for coordinating, subser- Quite simply, the amendment re- ment of the gentlewoman from New vient with regard to all of the matters quires the regulators, that is, the SEC Jersey (Mrs. ROUKEMA). I think that, under its jurisdiction in dealing with and the Federal banking agencies, to with all due respect to the gentleman the banking regulators. For example, communicate and coordinate before from Michigan (Mr. DINGELL), banks they could be compelled to address taking any action. are different from other corporations questions of behaviors of bank on ac- I must stress, there is misinforma- for good reason. Banks involve safety counting and accounting principles. tion out there. I must stress, it does and soundness issues. We do not want a What the amendment really has in not establish a different accounting bank to fail. practical effect is the ability for the system or anything that is bank- Banks make loans. That is their busi- SEC to be prevented from imposing the friendly in this rule. It does not lower ness. When they make loans, they need same honest financial reporting it re- accounting standards. It keeps the loan loss reserves in order to have the quires from other companies. I think same accounting gap standards. padding to assure that they do not fail. It does not eliminate, and this is the we should ask the question why should That is a business that is best under- most important thing, it does not the banks not play by the same rules stood by banking regulators. eliminate the SEC’s statutory author- that everybody else plays by? Yes, the Securities and Exchange We have got a lot of troubles with ac- ity under the law to set accounting Commission should regulate the cor- counting and with misapplication of standards for these publicly-held com- porate functions of a bank like it does sound accounting principles. I think we panies, but it does require regulators, any other corporation, except that it ought to take a look at the require- including the SEC, to communicate needs to be aware more than appar- ments now, which are generally accept- and coordinate. ently it has been lately of the concerns This is extremely important because ed accounting principles, GAP, as op- we all have if we have failures, bank- it has meant that over time, and par- posed to RAP. ruptcies, defaults that could occur in a ticularly within this last year in the Accounting trickery can afford enor- down and weak economy. Sun Trust case, which I will not go mous savings to wrongdoers. It can be We have been blessed by a strong one into the details of, there was quite a sanctified by banking regulators as it right now. We do not want to see banks bit of disagreement here, but it turned has been in the past. It can cost tax- put in jeopardy. We do not want to see out that the SEC, when it took its ac- payers billions of dollars again, as it our deposits in banks put in jeopardy tion against Sun Trust, had had no did in the 1980s when banking regu- by the potential of their failure if their consultation with the Fed, who is the lators permitted the use of regulatory loans go south and they do not have functional regulator. accounting, which enabled the banks to enough loan loss reserves. It seems very clear that, unfortu- then phony up their goodwill and to Let us do what the gentlewoman is nately, because of lack of clarification look solid and solvent where, in fact, asking. The gentlewoman from New in the law about the requirements for they were not. Jersey (Mrs. ROUKEMA) is simply ask- coordination, the banks are being sub- Bank regulators have said in the ing that bank regulators coordinate jected to a kind of regulatory whipsaw. hearings before the Committee on with the SEC anytime loan loss re- That is what this amendment is de- Banking and Financial Services, they serves are involved. That is what signed to deal with. Bank regulators do not need this authority. The amend- should be passed. That is this amend- are required by Federal law to apply ment is unnecessary. ment. Vote yes. gap or stricter standards to the banks. The question then is, why would we Mr. DINGELL. Madam Chairman, I treat banks differently than others in reserve the balance of my time. b 1945 terms of the reporting which they must Mrs. ROUKEMA. Madam Chairman, I We are not loosening that in any make to the regulatory agencies and to yield 30 seconds to the gentleman from way. We are applying those same statu- the shareholders and stockholders in Minnesota (Mr. VENTO), the ranking tory requirements. their periodic reports? Who then but member of the Subcommittee on Fi- I had a hearing on June 16 on this the banks would want to evade the re- nancial Institutions and Consumer subject, and we have received a mul- sponsibility of telling the truth? How Credit. H5296 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Mr. VENTO. Madam Chairman, I rise Alabama (Mr. BACHUS), a member of of the Securities and Exchange Commission in support of the amendment. This does the committee. (SEC) the following letter detailing my con- not change the Federal accounting (Mr. BACHUS asked and was given cerns with the loan loss reserve issue: standard board or the principles. It permission to revise and extend his re- NOVEMBER 9, 1998. does not change the accounting rules marks.) In re inquiry by the SEC into Sun Trust’s ac- or the standards. It simply says that, Mr. BACHUS. Madam Chairman, we counting practices. when one is going to apply them, that have five agencies that regulate the Hon. ARTHUR LEVITT, Jr., one has to have coordination. banks, including the OTS, the FDIC, Chairman, Securities and Exchange Commis- The primary regulators here, after the Federal Reserve, the Comptroller sion, Washington, DC. all, of banks are the Federal Deposit of the Currency, and the SEC. They all DEAR CHAIRMAN LEVITT: It has come to my Insurance Corporation, the Comp- got together said we have overlapping attention that the Securities and Exchange Commission (SEC) has begun an inquiry into troller of the Currency, the State Reg- jurisdiction. That is causing concerns. the accounting practices of Sun Trust Bank. ulatory Authorities. The fact is the Some warned we need to coordinate The $60.7 billion-asset Sun Trust Bank, based bank should not be pulled in two direc- our efforts. in Atlanta, announced the SEC has opened tions at once. The SEC simply does not, has not an inquiry examining its policies for loan- The fact is most of these are guide- done that. They have questioned the loss reserves as part of a review of the pend- lines. They claim that they are cooper- other organizations, their interpreta- ing acquisition of Crestar Financial Corpora- ating with the regulators. In fact, of tions on what are the loan loss reserve tion. course, they keep going and circum- requirements. They do not have the ex- It is my understanding that a bank’s loan loss reserve is arrived at by evaluating prior venting them around. The fact is that perience these other regulators have loan loss expectations and future loan loss the instance that is brought up here with the banks. Someone has to take expectations. In addition, a loan loss reserve actually reduced the amount of loan the lead. is a subjective matter which is determined loss reserves. It took money out of the The bottom line, the SEC cannot every quarter by a bank’s management, its bank. We need those loan loss reserves. come in here like a bull in a China shop board of Directors, and the banks principal We need safety and soundness. We need and overrule these other banks on their regulator as to the adequacy of the level at this amendment. auditing practices and on their reserve any given time. Banking experts believe the SEC’s actions are the first time the Commis- I want to rise in support of Mrs. ROUKEMA's practices. This is a great amendment. Madam Chairman, I would like to thank the sion has judged a bank’s reserve to be too amendment which will require the Securities large. With a fluctuating economy it would and Exchange Commission to consult and co- gentlewoman from New Jersey for all of her be imprudent to expect institutions to oper- ordinate with the appropriate Federal banking hard work on this legislation and her efforts on ate in a manner in which they maintain only agency on the issue of loan loss reserves be- this amendment. I would also like to discuss a marginal reserves. fore issuing any comments, taking any action, related accounting matter. As a member of the House of Representa- or rendering any opinion on the level of an in- I have been informed by a constituent that tives Banking and Financial Institutions stitution's loan loss reserves. the Federal Accounting Standards Board Committee, I am concerned about the SEC’s This amendment will ensure that the SEC (FASB) may propose a rule eliminating an ac- review of SunTrust’s accounting practices. cannot take significant actions that could have counting practice known as ``pooling''. I would like to review the SEC’s decision with someone from your staff. I would there- a critical or negative impact upon the ade- Pooling is an accounting method used when fore appreciate someone contacting my quacy of capital that a bank has without com- two companies merge to become one. Banking Legislative Assistant, Sarah Du- municating with the proper banking regulator. In a pooling, the acquiring and acquired mont, at (202) 225–2944, to schedule a meeting This amendment should help ensure that companies simply combine their financial to discuss this issue further. FDIC insured institutions will not be caught flat statements. With warm regards, I am, footed when the inevitable downward tick of I believe it is important that this issue be Very truly yours, the business cycle hits. discussed publicly before any final rule is im- BOB BARR, Bank regulators have been strongly stress- plemented. Member of Congress. ing that better attention be paid to credit qual- In addition, it is my understanding that in the In addition, my staff met with the SEC, and ity in their portfolios. The regulators have been past the Federal Accounting Standards Board it was determined a hearing should be held to asking banks to have proper reserves. The has not always sought adequate input from discuss this very important issue. Therefore, I amendment will have the positive impact of the accounting or banking communities on contacted the Chairman of the Banking Com- assuring that the SEC cannot act unilaterally proposed changes in regulations. mittee at the start of the 106th Congress to re- to lower important loan loss reserves without I appreciate the Chairwoman's efforts on the quest a hearing. consulting with those responsible to assure pending amendment. I would appreciate it if January 20, 1999. that the banks are operating in a safe and she would keep this in mind when the con- In Re loan loss reserve hearing. sound manner. ference committee meets so that we include Hon. JAMES A. LEACH, The amendment does not change account- language either in this bill or future legislation Chairman, Committee on Banking and Finan- ing standards. It does not alter FASB interpre- to ensure that this process is an open and fair cial Services, House of Representatives, tations. It does not eliminate SEC authority. It one. Rayburn House Office Building, Wash- ington, DC. is a simple and fair amendment that requires I thank the gentlewoman for her time and DEAR MR. CHAIRMAN: As the 106th Congress regulatory discourse. attention to this matter. begins, and the Banking and Financial Serv- When I asked the SEC witness at our Fi- Mrs. ROUKEMA. Madam Chairman, I ices Committee begins to formulate its agen- nancial Institutions and Consumer Credit Sub- yield such time as he may consume to da for the upcoming session, I wanted to committee what the SEC's relationship would the gentleman from Georgia (Mr. take this opportunity to outline a proposed be with the banking regulators in the instance BARR). hearing for the Banking Committee to con- of a challenge or an issue with regards to an (Mr. BARR of Georgia asked and was sider. institution's loan loss reserves, the response given permission to revise and extend In September 1998, the Securities and Ex- change Commission (SEC) found that some was there was a hope to continue conferring his remarks.) Mr. BARR of Georgia. Madam Chair- banks been aggressively reserving for future with the bank regulators. This amendment loan losses which the Commission argued should do the trick. man, I rise in support of the amend- made it difficult for investors to understand I thank the gentlewoman, Chairwoman ROU- ment offered by the gentlewoman from the real profit picture of these banks. In the KEMA, for bringing this amendment for the con- New Jersey. past, bank regulators often scrutinized sideration of the House and ask my col- Madam Chairman, I appreciate the chair- banks for under-reserving. leagues to support it. woman of the Subcommittee of the Financial With a fluctuating economy, many experts The CHAIRMAN. As a member of the Institutions and Consumer Credit, MARGE agree it is inadvisable to expect institutions to operate in a manner in which they main- reporting committee controlling time ROUKEMA, for following my lead and bringing tain only marginal reserves. However, the in opposition to the amendment, the this issue to the attention of the House of SEC’s recent inquiry into the ‘‘excess’’ re- gentleman from Michigan (Mr. DIN- Representatives today. This amendment serves at some banks is the first time the GELL) will have the right to close. comes about from my initial letter to the Secu- Commission has judged a bank’s reserve to Mrs. ROUKEMA. Madam Chairman, I rities and Exchange Commission (SEC) in No- be too large. The SEC puts forth the novel yield 30 seconds to the gentleman from vember 1998. Last fall, I wrote the Chairman arguments that banks which over-reserve for July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5297 future loan-losses make it difficult for inves- process and controversies on setting the ade- it is obvious the SEC's mandate does not re- tors to understand the true profit picture. quate loan loss reserve amounts. flect common sense or the well-being of the This increased scrutiny of banks’ earnings As I made you aware of my concerns when American people. That should alarm everyone. management has sent mixed signals to the the SEC's conducted a 2-month review proc- banking community. It is my understanding The financial security and lifetime savings of a loan loss reserve is a subjective matter ess of a bank in my congressional district, this millions of Americans depends on the ability of which is determined every quarter by a bank was penalized and required to restate its banks to establish and follow safe, sound and bank’s management, its Board of Directors, earnings by $100 million. During the investiga- reasonable lending practices. Maintaining ade- and the banks principal regulator as to the tion, the SEC began to question the ``exces- quate and realistic loan loss reserves is a key adequacy of the level at any given time. sive'' reserves at predominately conservative part of this process. Any concerns the SEC Under the scenario not advocated by the banks. This finding sent a ripple effect across has with the market value of financial institu- SEC, banks are now faced with a highly un- the financial services community. In my opin- tions must be reasonable, based on common certain and arbitrary regulatory environ- ion, the SEC has over-stepped its authority by ment. sense, and arrived at in conjunction with the A hearing to clarify the past and approach- attempting to coerce banks into adopting less banks and bank deregulators. Moreover, these ing loan-loss reserve levels would serve a conservative lending practices. loan loss reserve guidelines must not be al- beneficial purpose to clarify regulatory ef- What the SEC may discourage as ``aggres- lowed to become the tail wagging the regu- forts of the SEC and its effects on current sively'' reserving, the bank regulators and oth- latory dog; seen as more important than the banking regulatory procedures. ers may support as ``conservatively reserving. goal of protecting basic fiscal soundness of I will look forward to hearing from you There is broad agreement among the industry our banks. Hopefully, the SEC will end its ef- with regard to this proposed hearing. that an accurate earnings picture is vital for forts to force hanks to drop conservative lend- With warm regards, I am, out financial institutions to operate success- Very truly yours, ing policies, at least without clear congres- fully. I am not aware of any complaints filed by BOB BARR, sional action. Member of Congress. bank analysts alleging dishonest or misleading CONGRESS OF THE UNITED STATES, financial reports. Moreover, the bank regu- In addition, on February 11, 1999, I sent a Washington, DC, February 11, 1999. lators reviewed banks records and found they In re loan reserve hearing. followup letter to Chairman LEACH, expressing complied with all current laws and regulations. the urgency of this issue and the concern this Hon. JAMES A. LEACH, When it became clear to me the SEC was act- Chairman, Committee on Banking and Finan- uncertainty would have on the banking com- ing without the support of the appropriate cial Services, House of Representatives, munity. I emphasized a hearing would bring banking regulators, I wrote to Chairman Rayburn House Office Building, Wash- clarity to an issue that is confusing and dan- ington, DC. LEACH, asking hearings be held to look into gerous to the health of the banking industry. DEAR MR. CHAIRMAN: I wanted to express the SEC's finding that some banks had been my appreciation to both you and Chair- FEBRUARY 11, 1999. improperly reserving for future loan losses. In re loan loss reserve hearing. woman Roukema for your commitment to It seems clear the SEC has engaged in pursue the issue of loan loss reserve limits, Hon. JAMES A. LEACH, heavy-handed tactics, resulting in at least one and the Security and Exchange Commis- Chairman, Committee on Banking and Finan- bank (SunTrust) restating its earnings from sion’s regulation of those limits in the Com- cial Services, House of Representatives, mittee this session. Rayburn House Office Building, Wash- 1994 to 1996; thereby cutting its reserves by As you know, in September 1998, the Secu- ington, DC. $100 million. The SEC's inquiry into the ``ex- rities and Exchange Commission (SEC) found DEAR MR. CHAIRMAN: I wanted to express cess'' reserves at some banks is the first time that some banks had been aggressively re- my appreciation to both you and Chair- in recent history the Commission has judged a serving for future loan losses, which the woman Roukema for your commitment to bank's reserve to be too large, and argued Commission argued made it difficult for in- pursue the issue of loan loss reserve limits, that over-reserving for future loan losses vestors to understand the real profit picture and the Security and Exchange Commis- makes it difficult for investors to understand of these banks. In the past, bank regulators sion’s regulation of these limits in the Com- the true profit picture. were often scrutinized banks for under-re- mittee this session. serving. As you know, in September 1998, the Secu- Madam Chairman, as you and I were told Banks are highly regulated and closely su- rities and Exchange Commission (SEC) found back in March during the mark-up of H.R. 10, pervised by regulatory agencies familiarly that some banks had been aggressively re- the SEC and bank regulators have been work- with the individual banks they regulate and serving for future loan losses, which the ing together to publish a joint clarification on the credit quality of their loan portfolios. It Commission argued made it difficult for in- banks' loan loss reserves. This clarification is inefficient, unreasonable, and inappro- vestors to understand the real profit picture was to include the methodology and account- priate for the SEC to exert discretion over a of these banks. In the past, bank regulators ing rules as well as documentation and disclo- bank’s credit philosophy, which could result were often scrutinized banks for under-re- sure requirements to help guide banks. How- in banks lowering the level of reserves they serving. put aside to protect against credit losses. Banks are highly regulated and closely su- ever, that clarification never reached a con- With a fluctuating economy, to undertake pervised by regulatory agencies familiar sensus. such actions or implement policies discour- with the individual banks they regulate and On its own initiative, the SEC pushed for the ages banks from conservatively reserving for the credit quality of their loan portfolios. It recent issuance of the Financial Accounting loan losses. Such a policy by the SEC could is inefficient, unreasonable, and inappro- Standards Board (FASB) clarifying rule on in fact be detrimental to the health of our fi- priate for the SEC to exert discretion over a Statements No. 5, Accounting for Contin- nancial industry. bank’s credit philosophy, which could result gencies, and No. 114, Accounting by Creditors This action taken by the SEC now places in banks lowering the level of reserves they for Impairment of a Loan, published on April our banks in a highly uncertain and arbi- put aside to protect against credit losses. 12, 1999. The FASB clarification was meant to trary regulatory environment. A hearing to With a fluctuating economy, to undertake clarify the past and approaching loan-loss re- such actions or implement policies discour- help guide the Generally Accepted Accounting serve levels would clarify regulatory efforts ages banks from conservatively reserving for Principles (GAAP). Instead, the rule seems to by the SEC, and its effects on current bank- loan losses. Such a policy by the SEC could have left banks in a state of confusion. This is ing regulatory procedures. in fact be detrimental to the health of our fi- distressing. With warm regards, I am, nancial industry. This present confusion over excessive re- Very truly yours, This action taken by the SEC now places serve amounts creates a disincentive for BOB BARR, our banks in a highly uncertain and arbi- banks to maintain the necessary protection Member of Congress. trary regulatory environment. A hearing to against today's fluctuating economy. Unfortu- clarify the past and approaching loan-loss re- CONGRESS OF THE UNITED STATES, serve levels would clarify regulatory efforts nately, banks are receiving conflicting signals Washington, DC, January 20, 1999. of the SEC, and its effects on current bank- concerning loan loss withholdings by two dif- In re loan loss reserve hearing. ing regulatory procedures. fering interest groups: the SEC and the bank With warm regards, I am, regulators. Hon. JAMES A. LEACH, Very truly yours, Aren't we supposed to learn from our mis- Chairman, Committee on Banking and Finan- BOB BARR, takes? One need only look to the Savings and cial Services, House of Representatives, Member of Congress. Loan debacle in the 1980's to understand the Rayburn House Office Building, Wash- ington DC. On June 16, 1999, Chairwoman ROUKEMA urgent need to create a clear and concise, DEAR MR. CHAIRMAN: As the 106th Congress held a hearing per my request. Again, I thank uniform standard regarding loan loss reserves. begins, and the Banking and Financial Serv- you, the Chairwoman, for promptly responding The safety and soundness of our banking in- ices Committee begins to formulate its agen- to my request for a hearing to determine the dustry is vitally important to our economy and da for the upcoming session, I wanted to H5298 CONGRESSIONAL RECORD — HOUSE July 1, 1999 take this opportunity to outline a proposed And what I have proposed here, Mr. Chair- minutes ago that agreement has been com- hearing for the Banking Committee to con- man, is a very simple, straightforward pletely reached by all parties, including the sider. amendment that simply requires that within SEC, and that the final agreement is being In September 1998, the Securities and Ex- 60 days after the enactment of this Act the faxed. change Commission (SEC) found that some SEC and the federal banking agencies will Now, it is my understanding that accom- banks had been aggressively reserving for fu- consult with each other concerning these plishes completely what Mr. BARR and I have ture loan losses which the Commission ar- matters of future loan loss reserves, so that been trying to do here. So I would say that gued made it difficult for investors to under- we don’t have a patchwork lack of policy in pending receipt of that final agreement, I stand the real profit picture of these banks, this regard. don’t know whether there is any point to In the past, bank regulators often scruti- Moreover, Mr. Chairman, at subparagraph passing this legislation, this amendment or nized banks for under-reserving. B, I provide that pursuant to and as a result not, or whether we should reserve judgment With a fluctuating economy, many experts of these negotiations the SEC and the bank- until Mr. BARR, I, and other staff and the agree it is inadvisable to expect institutions ing agencies submit a report to the Congress Chairman go over it, because I believe it has to operate in a manner in which they main- reflecting the results of their consultation, accomplished our purpose. Certainly the questions that I’ve asked all tain only marginal reserves. However, the so that we can have, and so that the banking have been answered at least on the phone SEC’s recent inquiry into the ‘‘excess’’ re- industry knows where they stand. and in the first draft. So we are waiting mo- serves at some banks is the first time the I think this is very, very prudent and a mentarily for that final draft to be here. Commission has judged a bank’s reserve to good management too, Mr. Chairman, and Mr. BACHUS. Would the Chairwoman yield? be too large. The SEC puts forth the novel will avoid the disruptions that certainly will Mrs. ROUKEMA. Yes. Yes, I yield to my argument that banks which over-reserve for occur if the SEC is allowed to unilaterally, friend. future loan-losses make it difficult for inves- without consulting with the banking agen- Mr. BARR. If we could procedurally, Mr. tors to understand the true profit picture. cies, force banks after the fact to lower their Chairman, I would have no objection to with- This increased scrutiny of banks’ earnings loan loss reserves. holding the amendment at this time so long management has sent mixed signals to the This is not, as far as I can tell, Mr. Chair- as we will have an opportunity before a final banking community. It is my understanding man, an instance in which Sun Trust had voting on H.R. 10 in this committee, to res- a loan loss reserve is a subjective matter done anything wrong. As a matter of fact, urrect it if it becomes necessary. Or if not, which is determined every quarter by a they were being very, very prudent in setting we could incorporate the agreement that we bank’s management, its Board of Directors, their future loan loss reserves. hope has been reached and reflects our views and the bank’s principal regulator as to the So I would urge other members to adopt in the final product. adequacy of the level at any given time. this very reasonable approach which hope- The CHAIRMAN. Let me just respond Under the scenario not advocated by the fully will avoid further disruptions. It will generally—— SEC, banks are now faced with a highly un- impose no significant cost on anybody but Mrs. ROUKEMA. If that is possible that certain and arbitrary regulatory environ- hopefully will avoid significant costs in the would certainly be a sensible way, I would ment. future by forcing the SEC to work with the think, of approaching the subject. Because it A hearing to clarify the past and approach- federal banking agencies as opposed to pos- is something that we do want to see is cor- ing loan-loss reserve levels would serve a sibly adverse to them. rected in this legislation, if need be. beneficial purpose to clarify regulatory ef- I understand that the SEC is interested in The CHAIRMAN. Well, if the gentlelady forts of the SEC and its effects on current working something out on this, Mr. Chair- would yield, let me say to both her and Mr. banking regulatory procedures man, but I don’t think that obviates the need BARR that this is a very extraordinary sub- I will look forward to hearing from you for this amendment at this time. If in fact, ject matter and it is one that would neces- with regard to the proposed hearing. something is worked out then that will be sitate Congressional intervention if the var- With warm regards, I am, just fine. ious regulators did not come to mutual un- Very truly yours, But I do think that it is important for this derstanding. I appreciate the offer of the gentleman, Mr. BOB BARR, committee at this time and for the full BARR. I think it is the most appropriate Member of Congress. House in taking up consideration of H.R. 10 offer, and that is to withdraw the amend- to tell the SEC, if you are going to take this ment at the moment and then to review MARKUP OF H.R. 10, THE FINANCIAL SERVICES sort of action which is something that is ACT OF 1999, WEDNESDAY, MARCH 10, 1999, what has occurred. very novel, at least do so in consultation And in that event let me say, the amend- HOUSE OF REPRESENTATIVES, COMMITTEE ON with the federal banking agencies. BANKING AND FINANCIAL SERVICES, WASH- ment is withdrawn and the Chair would ask So that the banks know where things stand unanimous consent to return to the subject INGTON, DC. and if they do have to change their policies matter in the event that Mrs. ROUKEMA and The CHAIRMAN. The Clerk will call up the at least they know in advance as opposed to Mr. BARR are dissatisfied in a fundamental amendment. coming in—the SEC that is—coming in after way with what is apparently proceeding Ms. COLE. Amendment offered by Mr. Barr. the fact and forcing them to expend very sig- today in the Executive Branch. Page 96 after line—— nificant sums of money and causing disrup- Without objection so ordered. The subject The CHAIRMAN. Without objection, the tions to shareholders and to the banking matter is reserved and the amendment is amendment will be considered as read and community. withdrawn. Are there further amendments to Mr. Barr is recognized. I would urge adoption of the amendment. Title I? Mr. BARR. Thank you, Mr. Chairman. Mr. The CHAIRMAN. Mrs. Roukema. Mrs. ROUKEMA. Thank you, Mr. Chairman. Chairman, this amendment provides for at Mrs. ROUKEMA. Mr. Chairman, may I be Ms. WATERS. Mr. Chairman. least a partial redress for a problem that has recognized out of my own time? The CHAIRMAN. I said to Mrs. WATERS that arisen last fall in which the Securities and The CHAIRMAN. Yes, you are. I would recognize her next. Exchange Commission, in not consulting Mrs. ROUKEMA. Thank you. Thank you, Mr. Ms. WATERS. Yes, thank you very much, with federal banking agencies, took action Chairman. I apologize to you and all the Mr. Chairman. This is really offered by Mr. against a major bank—in this case, Sun members of the committee, and now espe- GUTIERREZ. I and Ms. SCHAKOWSKY have sup- Trust—forcing it to lower its loan loss re- cially to Mr. BARR because I have arrived so ported and co-sponsored this with him. He serves after it had already set those, by $100 late here. had to leave so he asked me to take it up. So million. Believe it or not because of weather condi- the amendment is at the desk. As far as I know, Mr. Chairman, this is the tions I have been traveling since 7 o’clock Mrs. ROUKEMA. Madam Chairman, I first instance in which the SEC or any fed- yesterday morning to get back here to Wash- yield such time as she may consume to ington. And you might not believe that, but eral agency has taken against a bank for the gentlewoman from New York (Mrs. being perhaps, too conservative in seeking to that was the fact, and I apologize for being protect its customers, its shareholders, late but it couldn’t be helped. God wasn’t KELLY) from the committee. against possible problems in the future econ- working with me today. (Mrs. KELLY asked and was given omy. Now, Mr. BARR and I have been working on permission to revise and extend her re- If in fact, we are witnessing here some ac- this. I think we have had consistent opinions marks.) tion or policy on the part of the SEC that is on this problem of loan loss reserves, and I Mrs. KELLY. Madam Chairman, I going to create uncertainty with regard to believe he and I have the same amendment rise in support of the amendment. banks being able to establish proper and con- that was put forth. I thank my good friend from New Jersey for servative reserves for future loan losses, However, I have been working with the yielding me time. then I think at least it ought to be some- SEC and the other regulators on this and I Madam Chairman, I rise in strong support of thing that is done in consultation with the have just learned moments before I entered this amendment. This loan loss reserve issue here that aside from it being imminent banking agencies, the federal banking agen- is creating a great deal of confusion for banks cies. where we had a draft of the agreement that I have been looking at this and appreciate the SEC and the regulators are working on that are publicly traded on an exchange or very much the very strong support and ac- the same things that Mr. BARR and I had market. This situation where they are torn be- tive involvement of Chairwoman Marge Rou- been trying to get agreement on, I have just tween directions from their primary bank regu- kema in this regard as well. been informed not more than two or three lator and the SEC need not happen if proper July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5299 communications are established between the have this done. The only good-hearted amount, disclosure and documentation of the regulators. In this caseÐthe proper loan loss folks who want to do it is the bankers. allowance for credit losses. The Agencies reserves needed by the banksÐcommunica- The bankers simply do not want to tell now announce additional measures designed to address this continued uncertainty. These tion was clearly lacking. This language does the people all the things they should. measures are consistent with the Agencies’ not stop the SEC from doing anything, it sim- They want to be able to get things mutual objective of, and focus on, addressing ply requires them to communicate as they cooked around the way they might like prospectively, where feasible, issues related should have been doing all along. to have them done. to improving the documentation, disclosure, We held a hearing on this loan loss reserve I would also inform my colleagues and reporting of loan loss allowances of fi- issue in our Financial Institutions Sub- that there is something else. This is nancial institutions. The Agencies are establishing a Joint committee on June 16. The message we going to impose interminable amounts Working Group, comprised of policy rep- heard from all parties involved was that better of delay on banks in getting decisions resentatives from each of the Agencies, to communication is necessary. I hope all of my on matters important to them which gain a better understanding of the proce- colleagues on both sides of the aisle will join are charged to the SEC because of the dures and processes, including ‘‘sound prac- us in support of this common sense amend- immense amount of coordination, the tices,’’ used generally by banking organiza- ment. immense amount of time, the immense tions to determine the allowance for credit Mrs. ROUKEMA. Madam Chairman, I amount of effort, and the immense losses. An important aspect of the Joint yield such time as he may consume to Working Group’s activities will be to receive amount of action that will be required input from representatives of the banking in- the gentleman from New York (Mr. LA- by both the SEC and by the bank regu- dustry and the accounting profession on FALCE), the ranking member. lators. these matters, and will not involve joint ex- (Mr. LAFALCE asked and was given If my colleagues want to waste time, aminations of institutions. The common permission to revise and extend his re- hurt banking, hurt consumers, and see base of knowledge that results will facilitate marks.) to it that the people do not receive an the joint and individual efforts of the Agen- Mr. LAFALCE. Madam Chairman, I honest picture of events going on in cies to provide improved guidance on appro- rise in support of the amendment. the bank, this is the amendment for priate procedures, documentation, and dis- Mrs. ROUKEMA. Madam Chairman, I closures to the banking industry. This will them. If, however, my colleagues want assist the banking community in complying yield such time as he may consume to to continue a system which works gen- with GAAP and will improve comparability the gentleman from Texas (Mr. BENT- erally well and which causes no prob- among financial statements of depository SEN), also a member of the committee. lem and which the bank regulators and other lending institutions. The Joint (Mr. BENTSEN asked and was given seek no change, then vote with me. Working Group will also share information permission to revise and extend his re- Vote against the amendment. and insights concerning issues of mutual marks.) Madam Chairman, I include for the concern that may arise. Mr. BENTSEN. Madam Chairman, I Using information gathered through the RECORD the Joint Release that I re- Joint Working Group and from representa- rise in support of the amendment. ferred to as follows: tives of the accounting profession and the Mrs. ROUKEMA. Madam Chairman, I SECURITIES AND EXCHANGE COMMIS- banking industry, the Agencies will work to- yield myself such time as I may con- SION, FEDERAL DEPOSIT INSUR- gether to issue parallel guidance, on a timely sume. ANCE CORPORATION, FEDERAL RE- basis, and within a year on the first two Madam Chairman, I want to again SERVE BOARD, OFFICE OF COMP- items listed below, in the following key stress there is no change in GAP, no TROLLER OF THE CURRENCY, OF- areas regarding credit loss allowances: change in the accounting standards or FICE OF THRIFT SUPERVISION, Appropriate Methodologies and Supporting Documentation.—The Agencies intend to the statutory requirements and the Washington, DC, March 10, 1999. JOINT PRESS RELEASE issue guidance that will suggest procedures statutory authority of the SEC. It sim- and processes necessary for a reasoned as- ply requires absolute coordination and The Securities and Exchange Commission, sessment of losses inherent in a portfolio and conferring. Federal Deposit Insurance Corporation, Fed- discuss ways to ensure that documentation Mr. DINGELL. Madam Chairman, I eral Reserve Board, Office of Comptroller of supports the reported allowance. the Currency, and Office of Thrift Super- Enhanced Disclosures.—This guidance will yield myself such time as I may con- vision have jointly issued the attached letter sume. address appropriate disclosures of allowances to financial institutions on the allowance for for credit losses and the credit quality of in- Madam Chairman, let me read the loan losses. stitutions’ portfolios by identifying key language of the amendment again so Attachment: areas for enhanced disclosures, including the everybody understands what we are JOINT INTERAGENCY LETTER TO FINANCIAL need for institutions to disclose changes in talking about. It says, ‘‘The Securities INSTITUTIONS risk factor and asset quality that affect al- and Exchange Commission shall con- Last November, the Securities and Ex- lowances for credit losses. The enhanced dis- closures would contribute to better under- sult and coordinate comments with the change Commission, Federal Deposit Insur- standing by investors and the public of the appropriate Federal banking agency ance Corporation, Federal Reserve Board, Of- risk profile of banking institutions and im- fice of Comptroller of the Currency, and Of- before taking any action or rendering prove market discipline. any opinion.’’ fice of Thrift Supervision (the Agencies) The Agencies will work together to encour- That makes the SEC subject to the issued a Joint Interagency Statement in age and support the Financial Accounting bank regulators in matters in which it which they reaffirmed the importance of Standards Board’s process of providing addi- credible financial statements and meaning- has traditionally acted under its pow- tional guidance regarding accounting for al- ful disclosure to investors and to a safe and lowances for loan losses. The Agencies em- ers given it by the Congress of the sound financial system. The Joint Inter- United States. Never before has it been phasize that GAAP requires that manage- agency Statement underscored the require- ment’s determination be based on a com- subject to the jurisdiction of the bank ment that depository institutions record and prehensive, adequately documented, and con- regulators. report their allowance for loan and lease sistently applied analysis of the particular Now, the bank regulators said they losses in accordance with generally accepted institution’s exposures, the effects of its did not need this authority. As a mat- accounting principles (GAAP). We stress and lending and collection policies, and its own ter of fact, the joint guidance issued in continue to emphasize the importance of de- loss experience under comparable conditions. pository institutions having prudent, con- In addition, the Agencies will support and March of this year by the SEC and by servative, but not excessive, loan loss allow- the bank regulators reaffirmed the im- encourage the task force of the American In- ances that fall within an acceptable range of stitute of Certified Public Accountants portance of credible financial state- estimated losses. We recognize that today in- (AICPA) that is developing more specific ments and meaningful disclosure to in- stability in certain global markets, for ex- guidance on the accounting for allowances vestors to a safe and sound financial ample is likely to increase loss inherent in for credit losses and the techniques of meas- system. affected institutions’ portfolios and con- uring the credit loss inherent in a portfolio The joint interagency letter reaf- sequently require higher allowances for cred- at a particular date. In particular, the firms the policy set by Congress that it losses than were appropriate in more sta- AICPA task force will focus on providing the banks should follow GAP when re- ble times. guidance on how best to distinguish prob- Despite the issuance of the November able-losses inherent in the portfolio as of the cording and reporting loan locations. Joint Interagency Statement, there is con- balance sheet date—the guidepost agreed to I would simply advise my colleagues, tinued uncertainty among financial institu- by the Agencies for reporting allowances in there is no reason to do this. The bank tions as to the expectations of the banking accordance with GAAP—from possible or fu- regulators do not seek the authority to and securities regulators on the appropriate ture losses not inherent in the balance sheet H5300 CONGRESSIONAL RECORD — HOUSE July 1, 1999 as of that date. Additionally, the Agencies The question was taken; and the Hoyer Ney Spence will ask the AICPA task force to consider re- Chairman announced that the noes ap- Hulshof Northup Spratt cently developed portfolio credit risk meas- Hunter Norwood Stenholm peared to have it. Hyde Ose Strickland urement and management techniques that Mrs. ROUKEMA. Madam Chairman, I Isakson Oxley Stump are consistent with GAAP as part of this ef- demand a recorded vote. Istook Packard Stupak fort. The AICPA project already has been Jefferson Paul Sununu initiated and will include representatives The CHAIRMAN. Pursuant to House Jenkins Payne Sweeney from the accounting profession and the Resolution 235, further proceedings on John Pease Talent banking industry, as well as observers from the amendment offered by the gentle- Johnson (CT) Peterson (MN) Tancredo the SEC and the banking agencies. Johnson, E. B. Peterson (PA) Tauscher woman from New Jersey (Mrs. ROU- Jones (NC) Pickering Tauzin Senior staff of the Agencies will continue KEMA) will be postponed. Kasich Pitts Taylor (MS) to meet to discuss banking industry account- SEQUENTIAL VOTES POSTPONED IN COMMITTEE Kelly Pombo Taylor (NC) ing and financial disclosure policy issues of Kildee Portman Terry OF THE WHOLE interest that affect the transparency of fi- King (NY) Price (NC) Thomas nancial reporting and bank safety and sound- The CHAIRMAN. Pursuant to House Kingston Pryce (OH) Thompson (CA) ness. These discussions will address progress Resolution 235, proceedings will now Kleczka Quinn Thompson (MS) in the application of accounting and disclo- resume on those amendments on which Knollenberg Radanovich Thornberry LaHood Ramstad Thune sure standards by banking institutions, in- further proceedings were postponed in Largent Reynolds Thurman cluding those impacting the allowance for the following order: Amendment No. 1 Latham Rogan Toomey credit losses, with particular focus on re- offered by the gentleman from North LaTourette Rogers Towns cently identified issues and trends. The Lazio Rohrabacher Traficant Carolina (Mr. BURR), amendment No. 4 meetings also will be used to coordinate Lewis (CA) Ros-Lehtinen Udall (CO) projects of the Agencies in areas of mutual offered by the gentleman from Georgia Lewis (GA) Rothman Vitter interest. The first of these meetings was held (Mr. BARR), amendment No. 7 offered Lewis (KY) Rush Walden by the gentleman from Utah (Mr. Linder Salmon Walsh on January 27. LoBiondo Sanford Wamp The Agencies believe that the actions an- COOK), and amendment No. 8 offered by Lucas (KY) Sawyer Watkins nounced above will promote a better and the gentlewoman from New Jersey Lucas (OK) Saxton Watt (NC) clearer understanding among financial insti- (Mrs. ROUKEMA). Manzullo Schaffer Watts (OK) tutions of the appropriate procedures and The Chair will reduce to 5 minutes McCollum Scott Weiner processes for determining credit losses in ac- McCrery Sensenbrenner Weldon (FL) the time for any electronic vote after McHugh Sessions Weldon (PA) cordance with GAAP. The Agencies intend the first vote in this series. McInnis Shadegg Weller that these steps will enhance the trans- McIntosh Shaw Whitfield parency of financial information and im- AMENDMENT NO. 1 OFFERED BY MR. BURR OF McIntyre Shays Wicker prove market discipline, consistent with NORTH CAROLINA McKeon Sherwood Wilson safety and soundness objectives. In recogni- The CHAIRMAN. The pending busi- Meek (FL) Shimkus Wise tion of the specialized regulatory nature of ness is the demand for a recorded vote Metcalf Shows Wolf the banking industry and in order to resolve Miller (FL) Shuster Wynn on the amendment No. 1 offered by the Minge Simpson Young (AK) ongoing uncertainties in the industry, with gentleman from North Carolina (Mr. Morella Skelton Young (FL) the announcement of these initiatives, the BURR) on which further proceedings Myrick Smith (TX) Agencies’ focus, in so far as feasible, will be Nethercutt Souder on enhancing allowance practices going for- were postponed and on which the ayes ward. prevailed by voice vote. NOES—189 The Clerk will redesignate the Ackerman Ford Maloney (NY) To: Washington, Consuela. amendment. Allen Frank (MA) Markey Andrews Frelinghuysen Martinez Subject: More on loan loss. The Clerk redesignated the amend- Baldacci Frost Mascara Re: the transcript I just sent you—I know a ment. Baldwin Gejdenson Matsui few of the bank regulators kind of waf- Becerra Gephardt McCarthy (MO) RECORDED VOTE fled or ducked a little on the answer to Bentsen Gilchrest McCarthy (NY) ‘‘do we need regulation?’’ but NONE of The CHAIRMAN. A recorded vote has Bereuter Gilman McDermott them said anything close to ‘‘yes.’’ been demanded. Berkley Gonzalez McGovern Also, below is an excerpt from the appen- A recorded vote was ordered. Berman Gordon McKinney Berry Green (WI) McNulty dix to the OCC’s written testimony for the The vote was taken by electronic de- Blagojevich Gutierrez Meehan loan loss hearing (also on the H. Banking vice, and there were—ayes 238, noes 189, Blumenauer Hall (OH) Meeks (NY) website): not voting 7, as follows: Bonior Hefley Menendez Question 4. Please discuss whether the SEC Bono Hill (IN) Mica [Roll No. 268] has consulted with and coordinated its com- Boyd Hill (MT) Millender- ments on loan loss reserves with the Federal AYES—238 Brady (PA) Hinchey McDonald Brown (OH) Hinojosa Miller, Gary Reserve and other federal banking regu- Abercrombie Calvert Dunn Campbell Hoeffel Miller, George Aderholt Camp Edwards lators. Please discuss whether you believe Capps Hoekstra Mink Archer Canady Ehrlich consultation between the SEC and the regu- Capuano Holden Moakley Armey Cannon Emerson lators prior to the SEC issuing loan loss re- Cardin Holt Mollohan Bachus Castle Etheridge serve comments would be workable and Carson Hooley Moore Baird Chabot Everett Clement Hostettler Moran (KS) whether prior consultation would promote a Baker Chambliss Ewing Condit Hutchinson Moran (VA) more consistent approach to GAAP. Ballenger Chenoweth Fletcher Conyers Inslee Murtha Barcia Clay Fowler Answer 4. Although SEC staff occasionally Costello Jackson (IL) Nadler Barr Clayton Franks (NJ) consult with the OCC’s Chief Accountant’s Coyne Jackson-Lee Napolitano Barrett (NE) Clyburn Gallegly staff on accounting issues, the SEC has not Crowley (TX) Neal Barrett (WI) Coble Gekas generally done so on issues involving com- Cummings Johnson, Sam Nussle Bartlett Coburn Gibbons Danner Jones (OH) Oberstar ments for a specific registrant, particularly Barton Collins Gillmor Davis (IL) Kanjorski Obey regarding the registrant’s loan loss reserve. Bass Combest Goode DeFazio Kaptur Olver The OCC believes that such consultation Bateman Cook Goodlatte DeGette Kennedy Ortiz Biggert Cooksey Goodling would promote a more consistent approach DeLauro Kilpatrick Owens Bilbray Cox Goss to GAAP. However, because of examination Deutsch Kind (WI) Pallone Bilirakis Cramer Graham timing and other logistical issues, such con- Dicks Klink Pascrell Bishop Crane Granger sultation, if practiced for all filings, might Dingell Kolbe Pastor Bliley Cubin Greenwood Doggett Kucinich Petri detract from the SEC’s ability to ensure that Blunt Cunningham Gutknecht Dooley Kuykendall Phelps registrants receive timely reviews of their Boehlert Davis (FL) Hall (TX) Doyle LaFalce Pickett statements. A more efficient approach would Boehner Davis (VA) Hansen Ehlers Lampson Pomeroy Bonilla Deal Hastings (FL) be for the SEC to consult with bank regu- Engel Lantos Porter Boswell Delahunt Hastings (WA) lators on filings where it has significant English Larson Rahall Boucher DeLay Hayes questions pertaining to a registrant’s loan Eshoo Leach Rangel Brady (TX) DeMint Hayworth loss reserve. Evans Lee Regula Brown (FL) Diaz-Balart Herger Farr Levin Reyes Bryant Dickey Hilleary The CHAIRMAN. The question is on Fattah Lofgren Riley Burr Dixon Hilliard the amendment offered by the gentle- Filner Lowey Rivers Burton Doolittle Hobson Foley Luther Rodriguez woman from New Jersey (Mrs. ROU- Buyer Dreier Horn Forbes Maloney (CT) Roemer KEMA). Callahan Duncan Houghton July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5301 Roukema Sisisky Turner Hilleary Myrick Sessions Portman Shaw Thurman Roybal-Allard Skeen Udall (NM) Hoekstra Nethercutt Sherwood Price (NC) Shays Tierney Royce Slaughter Upton Hostettler Ney Shuster Pryce (OH) Sherman Towns Ryan (WI) Smith (MI) Velazquez Hulshof Norwood Skeen Quinn Shimkus Traficant Ryun (KS) Smith (NJ) Vento Hunter Ose Smith (MI) Rahall Shows Turner Sabo Smith (WA) Visclosky Istook Packard Smith (NJ) Ramstad Simpson Udall (CO) Sanchez Snyder Waters Jenkins Paul Spence Rangel Sisisky Udall (NM) Sanders Stabenow Waxman Johnson, Sam Pease Stearns Regula Skelton Upton Sandlin Stark Wexler Jones (NC) Peterson (MN) Stump Reyes Slaughter Velazquez Scarborough Stearns Weygand Kingston Pickering Sununu Rodriguez Smith (TX) Vento Schakowsky Tanner Woolsey Largent Pickett Tancredo Roemer Smith (WA) Visclosky Serrano Tiahrt Wu LaTourette Pitts Taylor (MS) Rogan Snyder Vitter Sherman Tierney Lewis (CA) Pombo Taylor (NC) Rogers Souder Walsh Lewis (KY) Radanovich Thornberry Ros-Lehtinen Spratt Waters NOT VOTING—7 Linder Reynolds Tiahrt Rothman Stabenow Watt (NC) Borski Ganske Pelosi Lucas (OK) Riley Toomey Roukema Stark Waxman Brown (CA) Green (TX) Manzullo Rivers Walden Roybal-Allard Stenholm Weiner Fossella Lipinski McInnis Rohrabacher Wamp Rush Strickland Weldon (PA) McIntyre Royce Watkins Sabo Stupak Wexler b McKeon Ryan (WI) Watts (OK) Salmon Sweeney Weygand 2025 Metcalf Ryun (KS) Weldon (FL) Sanchez Talent Whitfield Messrs. DAVIS of Illinois, NUSSLE, Miller, Gary Sanford Weller Sanders Tanner Wilson Miller, George Scarborough Wicker Sandlin Tauscher Wise OBERSTAR, RILEY, DEUTSCH, and Mink Schaffer Woolsey Sawyer Tauzin Wolf TIAHRT changed their vote from Moran (KS) Sensenbrenner Young (AK) Saxton Terry Wu ‘‘aye’’ to ‘‘no.’’ Schakowsky Thomas Wynn NOES—299 Scott Thompson (CA) Young (FL) Mrs. THURMAN, Ms. EDDIE BER- Serrano Thompson (MS) NICE JOHNSON of Texas, and Messrs. Abercrombie Dingell Klink Shadegg Thune ABERCROMBIE, SHADEGG, HILL- Ackerman Dixon Knollenberg Allen Doggett Kolbe NOT VOTING—6 IARD, DIXON, UDALL of Colorado, and Andrews Dooley Kucinich Borski Fossella Lipinski LAZIO changed their vote from ‘‘no’’ Bachus Doyle Kuykendall Brown (CA) Green (TX) Pelosi to ‘‘aye.’’ Baird Dunn LaFalce Baker Edwards LaHood b 2033 So the amendment was agreed to. Baldacci Ehlers Lampson The result of the vote was announced Baldwin Emerson Lantos Mr. NADLER changed his vote from as above recorded. Ballenger Engel Larson ‘‘aye’’ to ‘‘no.’’ Barrett (NE) Eshoo Latham ANNOUNCEMENT BY THE CHAIRMAN Barrett (WI) Etheridge Lazio Mr. TAYLOR of Mississippi changed The CHAIRMAN. Pursuant to House Bass Evans Leach his vote from ‘‘no’’ to ‘‘aye.’’ Resolution 235, the Chair announces Bateman Ewing Lee So the amendment was rejected. Becerra Farr Levin that it will reduce to a minimum of 5 Bentsen Fattah Lewis (GA) The result of the vote was announced minutes the period of time within Bereuter Filner LoBiondo as above recorded. which a vote by electronic device will Berkley Foley Lofgren AMENDMENT NO. 7 OFFERED BY MR. COOK be taken on each amendment on which Berman Forbes Lowey Berry Ford Lucas (KY) The CHAIRMAN. The pending busi- the Chair has postponed further pro- Biggert Fowler Luther ness is the demand for a recorded vote ceedings. Bilbray Frank (MA) Maloney (CT) on the amendment No. 7 offered by the Bilirakis Franks (NJ) Maloney (NY) AMENDMENT NO. 4 OFFERED BY MR. BARR OF Bishop Frelinghuysen Markey gentleman from Utah (Mr. COOK) on GEORGIA Blagojevich Frost Martinez which further proceedings were post- The CHAIRMAN. The pending busi- Bliley Ganske Mascara poned and on which the noes prevailed ness is the demand for a recorded vote Blumenauer Gejdenson Matsui by voice vote. Boehlert Gephardt McCarthy (MO) on the amendment No. 4 offered by the Bonior Gilchrest McCarthy (NY) The Clerk will redesignate the gentleman from Georgia (Mr. BARR) on Boswell Gilman McCollum amendment. which further proceedings were post- Boucher Gonzalez McCrery The Clerk redesignated the amend- poned and on which the noes prevailed Boyd Gordon McDermott Brady (PA) Granger McGovern ment. by voice vote. Brown (FL) Greenwood McHugh RECORDED VOTE The Clerk will redesignate the Brown (OH) Gutierrez McIntosh The CHAIRMAN. A recorded vote has amendment. Bryant Hall (OH) McKinney Burton Hansen McNulty been demanded. The Clerk redesignated the amend- Calvert Hastings (FL) Meehan A recorded vote was ordered. ment. Canady Hill (IN) Meek (FL) The CHAIRMAN. This will be a 5- RECORDED VOTE Cannon Hilliard Meeks (NY) Capps Hinchey Menendez minute vote. The CHAIRMAN. A recorded vote has Capuano Hinojosa Mica The vote was taken by electronic de- been demanded. Cardin Hobson Millender- vice, and there were—ayes 114, noes 313, A recorded vote was ordered. Carson Hoeffel McDonald not voting 7, as follows: Castle Holden Miller (FL) The CHAIRMAN. This will be a 5- Chambliss Holt Minge [Roll No. 270] minute vote. Clay Hooley Moakley AYES—114 The vote was taken by electronic de- Clayton Horn Mollohan Aderholt Cunningham Herger vice, and there were—ayes 129, noes 299, Clyburn Houghton Moore Condit Hoyer Moran (VA) Archer Davis (VA) Hill (MT) not voting 6, as follows: Conyers Hutchinson Morella Armey DeLay Hilleary [Roll No. 269] Cooksey Hyde Murtha Bachus DeMint Hoekstra Costello Inslee Nadler Baker Diaz-Balart Horn AYES—129 Cox Isakson Napolitano Barr Dreier Hostettler Aderholt Chenoweth Gallegly Coyne Jackson (IL) Neal Bartlett Duncan Hutchinson Archer Clement Gekas Cramer Jackson-Lee Northup Bentsen Dunn Isakson Armey Coble Gibbons Crowley (TX) Nussle Biggert Engel Jenkins Barcia Coburn Gillmor Cummings Jefferson Oberstar Blunt English Kingston Barr Collins Goode Cunningham John Obey Boehner Everett Kuykendall Bartlett Combest Goodlatte Danner Johnson (CT) Olver Bonilla Fletcher Latham Barton Cook Goodling Davis (FL) Johnson, E. B. Ortiz Boswell Gibbons Leach Blunt Crane Goss Davis (IL) Jones (OH) Owens Burton Gilchrest Lewis (KY) Boehner Cubin Graham Davis (VA) Kanjorski Oxley Buyer Goodling Linder Bonilla Deal Green (WI) DeFazio Kaptur Pallone Callahan Goss Maloney (NY) Bono DeMint Gutknecht DeGette Kasich Pascrell Cannon Greenwood McCollum Brady (TX) Doolittle Hall (TX) Delahunt Kelly Pastor Chambliss Gutknecht McCrery Burr Dreier Hastings (WA) DeLauro Kennedy Payne Coburn Hall (TX) McGovern Buyer Duncan Hayes DeLay Kildee Peterson (PA) Collins Hansen McInnis Callahan Ehrlich Hayworth Deutsch Kilpatrick Petri Cook Hastings (WA) McIntosh Camp English Hefley Diaz-Balart Kind (WI) Phelps Cramer Hayes McKeon Campbell Everett Herger Dickey King (NY) Pomeroy Crane Hayworth McNulty Chabot Fletcher Hill (MT) Dicks Kleczka Porter Cubin Hefley Metcalf H5302 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Miller, Gary Ryan (WI) Sununu Sawyer Stabenow Visclosky Dunn Kolbe Reynolds Morella Ryun (KS) Sweeney Saxton Stark Vitter Edwards Kucinich Riley Myrick Salmon Tancredo Schaffer Stenholm Walsh Ehlers Kuykendall Rodriguez Nadler Sanford Taylor (NC) Schakowsky Strickland Wamp Ehrlich LaFalce Roemer Nethercutt Scarborough Terry Scott Stupak Waters Emerson LaHood Rogan Norwood Sessions Thornberry Sensenbrenner Talent Watkins English Lampson Rogers Nussle Shadegg Thune Serrano Tanner Watt (NC) Eshoo Lantos Rohrabacher Ose Shuster Tiahrt Shaw Tauscher Watts (OK) Etheridge Largent Ros-Lehtinen Packard Simpson Toomey Shays Tauzin Waxman Evans Latham Rothman Paul Slaughter Upton Sherman Taylor (MS) Weiner Everett LaTourette Roukema Peterson (MN) Smith (MI) Walden Sherwood Thomas Weldon (PA) Ewing Lazio Roybal-Allard Riley Spence Weldon (FL) Shimkus Thompson (CA) Wexler Farr Leach Royce Rogers Stearns Weller Shows Thompson (MS) Weygand Fattah Lee Ryan (WI) Royce Stump Wicker Sisisky Thurman Whitfield Filner Levin Ryun (KS) Skeen Tierney Wilson Fletcher Lewis (CA) Sabo NOES—313 Skelton Towns Wise Foley Lewis (GA) Salmon Smith (NJ) Traficant Wolf Forbes Lewis (KY) Sanders Abercrombie Evans Lofgren Smith (TX) Turner Woolsey Ford Linder Sandlin Ackerman Ewing Lowey Smith (WA) Udall (CO) Wu Fowler LoBiondo Sanford Allen Farr Lucas (KY) Snyder Udall (NM) Wynn Frank (MA) Lofgren Sawyer Andrews Fattah Lucas (OK) Souder Velazquez Young (AK) Franks (NJ) Lowey Saxton Baird Filner Luther Spratt Vento Young (FL) Frelinghuysen Lucas (KY) Scarborough Baldacci Foley Maloney (CT) Frost Lucas (OK) Schaffer Baldwin Forbes Manzullo NOT VOTING—7 Gallegly Maloney (CT) Schakowsky Ballenger Ford Markey Borski Fossella Pelosi Ganske Maloney (NY) Scott Barcia Fowler Martinez Brown (CA) Green (TX) Gejdenson Manzullo Sensenbrenner Barrett (NE) Frank (MA) Mascara Chenoweth Lipinski Gekas Mascara Serrano Barrett (WI) Franks (NJ) Matsui Gephardt Matsui Sessions Barton Frelinghuysen McCarthy (MO) b Gibbons McCarthy (NY) Shadegg Bass Frost McCarthy (NY) 2040 Gilchrest McCollum Shaw Bateman Gallegly McDermott So the amendment was rejected. Gillmor McCrery Shays Becerra Ganske McHugh Gilman McDermott Sherman Bereuter Gejdenson McIntyre The result of the vote was announced Gonzalez McGovern Sherwood Berkley Gekas McKinney as above recorded. Goode McHugh Shimkus Berman Gephardt Meehan AMENDMENT NO. 8 OFFERED BY MRS. ROUKEMA Goodlatte McInnis Shows Berry Gillmor Meek (FL) Goodling McIntosh Shuster Bilbray Gilman Meeks (NY) The CHAIRMAN. The pending busi- Gordon McIntyre Simpson Bilirakis Gonzalez Menendez ness is the demand for a recorded vote Goss McKeon Sisisky Bishop Goode Mica on the amendment No. 8 offered by the Graham McNulty Skeen Blagojevich Goodlatte Millender- Granger Meehan Skelton Bliley Gordon McDonald gentlewoman from New Jersey (Mrs. Green (WI) Meek (FL) Slaughter Blumenauer Graham Miller (FL) ROUKEMA) on which further pro- Greenwood Meeks (NY) Smith (MI) Boehlert Granger Miller, George ceedings were postponed and on which Gutierrez Menendez Smith (NJ) Bonior Green (WI) Minge the noes prevailed by voice vote. Gutknecht Metcalf Smith (TX) Bono Gutierrez Mink Hall (OH) Mica Smith (WA) Boucher Hall (OH) Moakley The Clerk will redesignate the Hall (TX) Millender- Snyder Boyd Hastings (FL) Mollohan amendment. Hansen McDonald Souder Brady (PA) Hill (IN) Moore The Clerk redesignated the amend- Hastings (FL) Miller (FL) Spence Brady (TX) Hilliard Moran (KS) Hastings (WA) Miller, Gary Spratt Brown (FL) Hinchey Moran (VA) ment. Hayes Miller, George Stabenow Brown (OH) Hinojosa Murtha RECORDED VOTE Hayworth Minge Stearns Bryant Hobson Napolitano The CHAIRMAN. A recorded vote has Hefley Mink Stenholm Burr Hoeffel Neal Herger Moakley Strickland Calvert Holden Ney been demanded. Hill (IN) Mollohan Stump Camp Holt Northup A recorded vote was ordered. Hilleary Moore Stupak Campbell Hooley Oberstar The CHAIRMAN. This will be a 5- Hilliard Moran (KS) Sununu Canady Houghton Obey Hinchey Moran (VA) Sweeney Capps Hoyer Olver minute vote. Hinojosa Morella Talent Capuano Hulshof Ortiz The vote was taken by electronic de- Hobson Murtha Tancredo Cardin Hunter Owens vice, and there were—ayes 407, noes 20, Hoeffel Myrick Tanner Carson Hyde Oxley not voting 7, as follows: Hoekstra Nadler Tauscher Castle Inslee Pallone Holden Napolitano Tauzin Chabot Istook Pascrell [Roll No. 271] Holt Neal Taylor (MS) Clay Jackson (IL) Pastor AYES—407 Hooley Nethercutt Taylor (NC) Clayton Jackson-Lee Payne Horn Ney Terry Clement (TX) Pease Abercrombie Boehlert Coburn Hostettler Northup Thomas Clyburn Jefferson Peterson (PA) Ackerman Boehner Collins Houghton Norwood Thompson (CA) Coble John Petri Aderholt Bonilla Combest Hoyer Nussle Thompson (MS) Combest Johnson (CT) Phelps Allen Bonior Condit Hulshof Oberstar Thornberry Condit Johnson, E. B. Pickering Andrews Bono Conyers Hunter Obey Thune Conyers Johnson, Sam Pickett Archer Boswell Cook Hutchinson Olver Thurman Cooksey Jones (NC) Pitts Armey Boucher Cooksey Hyde Ortiz Tiahrt Costello Jones (OH) Pombo Bachus Boyd Costello Inslee Ose Tierney Cox Kanjorski Pomeroy Baird Brady (PA) Cox Isakson Owens Toomey Coyne Kaptur Porter Baker Brady (TX) Coyne Istook Oxley Traficant Crowley Kasich Portman Baldacci Brown (FL) Cramer Jackson (IL) Packard Turner Cummings Kelly Price (NC) Baldwin Brown (OH) Crane Jackson-Lee Pascrell Udall (CO) Danner Kennedy Pryce (OH) Ballenger Bryant Crowley (TX) Paul Udall (NM) Davis (FL) Kildee Quinn Barcia Burr Cubin Jefferson Payne Upton Davis (IL) Kilpatrick Radanovich Barr Burton Cummings Jenkins Pease Velazquez Deal Kind (WI) Rahall Barrett (NE) Buyer Cunningham John Peterson (MN) Vento DeFazio King (NY) Ramstad Barrett (WI) Callahan Danner Johnson (CT) Peterson (PA) Visclosky DeGette Kleczka Rangel Bartlett Calvert Davis (FL) Johnson, E. B. Petri Vitter Delahunt Klink Regula Barton Camp Davis (IL) Johnson, Sam Phelps Walden DeLauro Knollenberg Reyes Bass Campbell Davis (VA) Jones (NC) Pickering Walsh Deutsch Kolbe Reynolds Bateman Canady Deal Jones (OH) Pickett Wamp Dickey Kucinich Rivers Becerra Cannon DeFazio Kanjorski Pitts Waters Dicks LaFalce Rodriguez Bentsen Capps Delahunt Kaptur Pombo Watkins Dingell LaHood Roemer Bereuter Capuano DeLauro Kasich Pomeroy Watt (NC) Dixon Lampson Rogan Berkley Cardin DeLay Kelly Porter Watts (OK) Doggett Lantos Rohrabacher Berman Carson DeMint Kennedy Portman Waxman Dooley Largent Ros-Lehtinen Berry Castle Dickey Kildee Price (NC) Weiner Doolittle Larson Rothman Biggert Chabot Dicks Kilpatrick Pryce (OH) Weldon (FL) Doyle LaTourette Roukema Bilbray Chambliss Dixon Kind (WI) Quinn Weldon (PA) Edwards Lazio Roybal-Allard Bilirakis Chenoweth Doggett King (NY) Radanovich Weller Ehlers Lee Rush Bishop Clay Dooley Kingston Rahall Wexler Ehrlich Levin Sabo Blagojevich Clayton Doolittle Kleczka Ramstad Weygand Emerson Lewis (CA) Sanchez Bliley Clement Doyle Klink Regula Whitfield Eshoo Lewis (GA) Sanders Blumenauer Clyburn Dreier Knollenberg Reyes Wicker Etheridge LoBiondo Sandlin Blunt Coble Duncan July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5303 Wilson Woolsey Young (FL) that bank will require them as a condi- tially coercive influence over their cus- Wise Wu Wolf Young (AK) tion of getting the loan to use other tomers. services that are being brought into H.R. 10, this bill, substantially erodes NOES—20 this umbrella such as requiring them the States’ supervision over insurance DeGette Markey Rivers to purchase insurance from a sub- sales. In fact, it defers to the Comp- Deutsch Martinez Rush troller of the Currency with regard to Dingell McCarthy (MO) Sanchez sidiary of the bank or an affiliate of Engel McKinney Stark the bank, and of course that would be the sale of insurance by national Hill (MT) Pallone Towns extremely unfair and put the customer banks. And there is great concern on Larson Pastor Wynn at a disadvantage and would put the fi- my part and others about this bill for Luther Rangel nancial institution at a substantial ad- that reason, and it is my hope that we NOT VOTING—7 vantage if they could require as a con- will go beyond this amendment in con- Borski Fossella Pelosi dition of getting a loan that insurance ference to deal with this. Brown (CA) Green (TX) be bought from one of the affiliated But it is extremely important, I Diaz-Balart Lipinski companies. think, that the House tonight assert b 2048 So in the Committee on Banking and the concept that lenders cannot exert Mr. LUTHER changed his vote from Financial Services I offered this this influence, tying sales of other ‘‘aye’’ to ‘‘no.’’ amendment. It passed overwhelmingly services in order to influence a loan. So the amendment was agreed to. in the Committee on Banking and Fi- Today in every State in the union that The result of the vote was announced nancial Services, and for some reason conduct is assured through the actions as above recorded. when the bill was re-printed, it was not of insurance commissioners and state The CHAIRMAN. It is now in order to there. So I offered the amendment be- legislators. Unfortunately this law, consider Amendment No. 9 printed in fore the Committee on Rules to get H.R. 10 if it passes, will preempt that House Report 106–214. this reinstated. making that authority void. I think it is important for Members AMENDMENT NO. 9 OFFERED BY MR. WATT OF Let me be clear that this does not NORTH CAROLINA prohibit a bank from requiring insur- in the Chamber then tonight to say Mr. WATT of North Carolina. Madam ance to be purchased in connection that no consumer who is applying for a Chairman, I offer an amendment. with a loan, because many loans are loan or any form of credit should mis- The CHAIRMAN. The Clerk will des- securitized with life insurance or other takenly believe that their purchase of ignate the amendment. kinds of insurance, title insurance. insurance, or any other service for that The text of the amendment is as fol- What it says is that that lender cannot matter, from that lender will enhance lows: require that the customer obtain that their ability to get that loan and that insurance from one of its affiliates, and credit. Amendment No. 9 offered by Mr. WATT of North Carolina: it should be clear that the customer is I have a similar provision in this bill Page 325, line 25, strike the ‘‘or’’ after the free to go to an unaffiliated company with regard to the conduct of the activ- semicolon. to obtain insurance if in fact that in- ity of title insurance, however it goes Page 326, line 4, strike the period and in- surance is required as a condition of substantially further. It reasserts the sert ‘‘; or’’. the loan. State authority over the conduct of Page 326, after line 4, insert the following Let me make one other quick point. title insurance sales activity. new subparagraph: This amendment becomes even more Again, I hope that the conferees will ‘‘(C) in the case of an institution or sub- important in light of all of the discus- find a better solution than just this sidiary at which insurance products are sold amendment, but I think it is essential or offered for sale, the fact that— sions about privacy because if there is ‘‘(i) the approval of an extension of credit to be a sharing of information among tonight that the House make clear that to a customer by the institution or sub- affiliates, one of the things that will be we want these protections for con- sidiary may not be conditioned on the pur- able to be shared is the expiration sumers in its place. chase of an insurance product by such cus- dates on insurance policies, and that in I would like to just speak briefly to tomer from the institution or subsidiary; and of itself is likely to put a sub- the bill. I hope tonight that we will and sidiary insurance company at an ad- have an overwhelming support for this ‘‘(ii) the customer is free to purchase the vantage because they may know when bill. I have some concerns about the insurance product from another source.’’. an insurance policy is expiring. All the State regulation of insurance and the The CHAIRMAN. Pursuant to House more reason we need to make it abso- structure of these new financial insti- Resolution 235, the gentleman from lutely explicitly clear that no cus- tutions, but it is essential that we North Carolina (Mr. WATT) and a Mem- tomer can be required to purchase in- modernize our financial institutions. ber opposed each will control 5 min- surance from a subsidiary or affiliate We have a trade surplus in services utes. of the lending company as a condition and substantially a consequence of our Mr. HILL of Montana. Madam Chair- for getting the loan. competitiveness in financial services, man, I claim the time on the other Madam Chairman, I reserve the bal- and if we want to maintain the jobs side. ance of my time. and the opportunities, the investment The CHAIRMAN. Is the gentleman in Mr. HILL of Montana. Madam Chair- in our economy and the growth, then opposition? man, I yield myself 3 minutes. we need to have institutions that are Mr. HILL of Montana. I am momen- (Mr. HILL of Montana asked and was competitive internationally. tarily leaning against this amendment, given permission to revise and extend Madam Chairman, I would urge all however I am persuadable. his remarks.) my colleagues to support this bill and The CHAIRMAN. The gentleman Mr. HILL of Montana. Madam Chair- to support this amendment. from Montana will be recognized for 5 man, I first want to join with the Madam Chairman, I reserve the bal- minutes. chairman to state that I do support the ance of my time. Mr. WATT of North Carolina. Madam amendment and compliment the gen- Mr. WATT of North Carolina. Madam Chairman, I yield myself 3 minutes. tleman from North Carolina (Mr. Chairman, I yield 1 minute to the gen- Madam Chairman, this amendment is WATT) for bringing it forward. This bill tleman from New York (Mr. LAFALCE). noncontroversial, I believe, and I hope is going to create new financial institu- Mr. LAFALCE. Madam Chairman, I that there is no opposition to it. tions, allow them to provide new serv- rise in support of the amendment, and In this day in which we are moving ices which will hopefully lower the cost I thank the gentleman from North toward allowing banks and insurance to consumers and create greater com- Carolina for offering it. companies and securities companies to petition, and in the end the consumers This provision was included within come together into one corporation, are going to benefit that. the product produced by the Com- the concern that I hear more often But there is a serious concern, and mittee on Banking and Financial Serv- than any other concern as I talk to that has to do with lending institutions ices as were a number of other impor- constituents is a concern that when who have the ability to exert undue in- tant consumer protection provisions. they go to borrow money from a bank, fluence, some would say even poten- The Committee on Rules permitted H5304 CONGRESSIONAL RECORD — HOUSE July 1, 1999 this amendment to be offered; that is Mr. HILL of Montana. Madam Chair- ‘‘(D) Attempting to cause or cause damage good. They could have permitted the man, I yield myself such time as I may to property so as to intimidate or attempt to other consumer protection provisions consume. control the behavior of another person. Madam Chairman, I think what is Page 336, after line 13, insert the following that were included in the banking bill new subtitle (and redesignate subsequent to come before the floor also; most im- important for all the Members in the subtitles and amend the table of contents ac- portantly, the one prohibiting red- Chamber to understand is that, with- cordingly): lining by insurance companies that out this amendment, H.R. 10, in es- Subtitle B—Redomestication of Mutual would affiliate with banks. They sence, creates a void with regard to the Insurers should not have permitted an amend- regulation of insurance with regard to SEC. 311. GENERAL APPLICATION. ment on an insurance provision on this activity, the potential course of This subtitle shall only apply to a mutual which there was never a hearing allow- sale of insurance or other services to insurance company in a State which has not ing the redomestication of mutual in- loan customers of lending institutions. enacted a law which expressly establishes surance companies in order to rip off So I would urge all of my colleagues reasonable terms and conditions for a mu- the policyholders in order to satisfy to support this amendment. tual insurance company domiciled in such the greed of the officers and directors Madam Chairman, I yield back the State to reorganize into a mutual holding company. of those mutual insurance companies. balance of my time. Support the Watt amendment. The CHAIRMAN. The question is on SEC. 312. REDOMESTICATION OF MUTUAL INSUR- the amendment offered by the gen- ERS. Strongly oppose the Bliley amendment. (a) REDOMESTICATION.—A mutual insurer Mr. HILL of Montana. Madam Chair- tleman from North Carolina (Mr. organized under the laws of any State may man, I yield 1 minute to the gentleman WATT). transfer its domicile to a transferee domicile from Iowa (Mr. LEACH), chairman of The amendment was agreed to. as a step in a reorganization in which, pursu- the Committee on Banking and Finan- The CHAIRMAN. It is now in order to ant to the laws of the transferee domicile cial Services. consider amendment No. 10 printed in and consistent with the standards in sub- Mr. LEACH. Madam Chairman, I House Report 106–214. section (f), the mutual insurer becomes a AMENDMENT NO. 10 OFFERED BY MR. BLILEY stock insurer that is a direct or indirect sub- thank the gentleman for yielding this sidiary of a mutual holding company. time to me, and I would like to address Mr. BLILEY. Madam Chairman, I offer an amendment. (b) RESULTING DOMICILE.—Upon complying briefly the Watt amendment. This is an with the applicable law of the transferee The CHAIRMAN. The Clerk will des- extraordinarily thoughtful amendment domicile governing transfers of domicile and brought by one of the most thoughtful ignate the amendment. completion of a transfer pursuant to this The text of the amendment is as fol- Members of our body. Indeed, as chair- section, the mutual insurer shall cease to be lows: man of the committee, I would like to a domestic insurer in the transferor domicile say as strongly as I can I know of no Amendment No. 10 offered by Mr. BLILEY: and, as a continuation of its corporate exist- Page 327, after line 16, insert the following ence, shall be a domestic insurer of the more constructively involved member subsection (and redesignate subsequent sub- transferee domicile. of the Committee on Banking and Fi- sections accordingly): (c) LICENSES PRESERVED.—The certificate nancial Services or of this Congress ‘‘(e) DOMESTIC VIOLENCE DISCRIMINATION of authority, agents’ appointments and li- than the gentleman from North Caro- PROHIBITION.— censes, rates, approvals and other items that lina (Mr. WATT), and I would urge sup- ‘‘(1) IN GENERAL.—In the case of an appli- a licensed State allows and that are in exist- port of this amendment. It makes good cant for, or an insured under, any insurance ence immediately prior to the date that a re- product described in paragraph (2), the sta- common sense. domesticating insurer transfers its domicile tus of the applicant or insured as a victim of pursuant to this subtitle shall continue in b 2100 domestic violence, or as a provider of serv- full force and effect upon transfer, if the in- ices to victims of domestic violence, shall Mr. WATT of North Carolina. Madam surer remains duly qualified to transact the not be considered as a criterion in any deci- business of insurance in such licensed State. Chairman, I yield 1 minute to the gen- sion with regard to insurance underwriting, (d) EFFECTIVENESS OF OUTSTANDING POLI- tlewoman from Ohio (Mrs. JONES). pricing, renewal, or scope of coverage of in- CIES AND CONTRACTS.— Mrs. JONES of Ohio. Madam Chair- surance policies, or payment of insurance (1) IN GENERAL.—All outstanding insurance man, I would say to the gentleman claims, except as required or expressly per- policies and annuities contracts of a re- from Iowa (Mr. LEACH) and the gen- mitted under State law. domesticating insurer shall remain in full tleman from North Carolina (Mr. ‘‘(2) SCOPE OF APPLICATION.—The prohibi- force and effect and need not be endorsed as tion contained in paragraph (1) shall apply to WATT), the sponsor of this amendment, to the new domicile of the insurer, unless so any insurance product which is sold or of- I stood here, having been a freshman ordered by the State insurance regulator of a fered for sale, as principal, agent, or broker, licensed State, and then only in the case of member of the Committee on Banking by any insured depository institution or outstanding policies and contracts whose and Financial Services, going through wholesale financial institution or any person owners reside in such licensed State. H.R. 10, and wondered what was in it who is engaged in such activities at an office (2) FORMS.— for the consumer. of the institution or on behalf of the institu- (A) Applicable State law may require a re- Under financial modernization, a tion. domesticating insurer to file new policy bank can become an insurance com- ‘‘(3) SENSE OF THE CONGRESS.—It is the forms with the State insurance regulator of pany; an insurance company could be- sense of the Congress that, by the end of the a licensed State on or before the effective come a bank? What would happen to 30-month period beginning on the date of the date of the transfer. enactment of this Act, the States should (B) Notwithstanding subparagraph (A), a the consumer? enact prohibitions against discrimination redomesticating insurer may use existing Thank God, thanks to the leadership with respect to insurance products that are policy forms with appropriate endorsements of our ranking member and the gen- at least as strict as the prohibitions con- to reflect the new domicile of the redomes- tleman from North Carolina (Mr. tained in paragraph (1). ticating insurer until the new policy forms WATT) and other members of the com- ‘‘(4) DOMESTIC VIOLENCE DEFINED.—For pur- are approved for use by the State insurance mittee, there were consumer protec- poses of this subsection, the term ‘domestic regulator of such licensed State. tion provisions like this one that said violence’ means the occurrence of 1 or more (e) NOTICE.—A redomesticating insurer that even if I get a loan from bank A, of the following acts by a current or former shall give notice of the proposed transfer to family member, household member, intimate the State insurance regulator of each li- I do not have to get my insurance from partner, or caretaker: censed State and shall file promptly any re- bank A. ‘‘(A) Attempting to cause or causing or sulting amendments to corporate documents So all the little old women walking threatening another person physical harm, required to be filed by a foreign licensed mu- into banks could say, someone is look- severe emotional distress, psychological tual insurer with the insurance regulator of ing out for me. trauma, rape, or sexual assault. each such licensed State. I am pleased to stand here in favor, ‘‘(B) Engaging in a course of conduct or re- (f) PROCEDURAL REQUIREMENTS.—No mu- Madam Chairman, of this amendment. peatedly committing acts toward another tual insurer may redomesticate to another I stand here in support of this amend- person, including following the person with- State and reorganize into a mutual holding out proper authority, under circumstances company pursuant to this section unless the ment believing it will help H.R. 10 get that place the person in reasonable fear of State insurance regulator of the transferee closer to the bill that came out of the bodily injury or physical harm. domicile determines that the plan of reorga- Committee on Banking and Financial ‘‘(C) Subjecting another person to false im- nization of the insurer includes the following Services. prisonment. requirements: July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5305

(1) APPROVAL BY BOARD OF DIRECTORS AND tion, or functional equivalent thereof, of a person or circumstances, is held invalid, the POLICYHOLDERS.—The reorganization is ap- State other than a transferee domicile may remainder of the section, and the application proved by at least a majority of the board of treat a redomesticating or redomesticated of such provision to other persons or cir- directors of the mutual insurer and at least insurer or any affiliate thereof any dif- cumstances, shall not be affected thereby. a majority of the policyholders who vote ferently than an insurer operating in that SEC. 315. DEFINITIONS. after notice, disclosure of the reorganization State that is not a redomesticating or re- For purposes of this subtitle, the following and the effects of the transaction on policy- domesticated insurer. definitions shall apply: (c) LAWS PROHIBITING OPERATIONS.—If any holder contractual rights, and reasonable op- (1) COURT OF COMPETENT JURISDICTION.—The licensed State fails to issue, delays the portunity to vote, in accordance with such term ‘‘court of competent jurisdiction’’ issuance of, or seeks to revoke an original or notice, disclosure, and voting procedures as means a court authorized pursuant to sec- renewal certificate of authority of a re- are approved by the State insurance regu- tion 314(a) to adjudicate litigation arising lator of the transferee domicile. domesticated insurer immediately following redomestication, except on grounds and in a under this subtitle. (2) CONTINUED VOTING CONTROL BY POLICY- (2) DOMICILE.—The term ‘‘domicile’’ means HOLDERS; REVIEW OF PUBLIC STOCK OFFER- manner consistent with its past practices re- garding the issuance of certificates of au- the State in which an insurer is incor- ING.—After the consummation of a reorga- porated, chartered, or organized. nization, the policyholders of the reorga- thority to foreign insurers that are not re- domesticating, then the redomesticating in- (3) INSURANCE LICENSEE.—The term ‘‘insur- nized insurer shall have the same voting ance licensee’’ means any person holding a rights with respect to the mutual holding surer shall be exempt from any State law of the licensed State to the extent that such license under State law to act as insurance company as they had before the reorganiza- agent, subagent, broker, or consultant. tion with respect to the mutual insurer. State law or the operation of such State law (4) INSTITUTION.—The term ‘‘institution’’ With respect to an initial public offering of would make unlawful, or regulate, directly means a corporation, joint stock company, stock, the offering shall be conducted in or indirectly, the operation of the redomes- limited liability company, limited liability compliance with applicable securities laws ticated insurer, except that such licensed partnership, association, trust, partnership, and in a manner approved by the State in- State may require the redomesticated in- or any similar entity. surance regulator of the transferee domicile. surer to— (5) LICENSED STATE.—The term ‘‘licensed (3) AWARD OF STOCK OR GRANT OF OPTIONS (1) comply with the unfair claim settle- State’’ means any State, the District of Co- TO OFFICERS AND DIRECTORS.—For a period of ment practices law of the licensed State; lumbia, American Samoa, Guam, Puerto 6 months after completion of an initial pub- (2) pay, on a nondiscriminatory basis, ap- Rico, or the United States Virgin Islands in lic offering, neither a stock holding company plicable premium and other taxes which are nor the converted insurer shall award any levied on licensed insurers or policyholders which the redomesticating insurer has a cer- stock options or stock grants to persons who under the laws of the licensed State; tificate of authority in effect immediately are elected officers or directors of the mu- (3) register with and designate the State prior to the redomestication. tual holding company, the stock holding insurance regulator as its agent solely for (6) MUTUAL INSURER.—The term ‘‘mutual company, or the converted insurer, except the purpose of receiving service of legal doc- insurer’’ means a mutual insurer organized with respect to any such awards or options uments or process; under the laws of any State. to which a person is entitled as a policy- (4) submit to an examination by the State (7) PERSON.—The term ‘‘person’’ means an holder and as approved by the State insur- insurance regulator in any licensed state in individual, institution, government or gov- ance regulator of the transferee domicile. which the redomesticated insurer is doing ernmental agency, State or political subdivi- (4) CONTRACTUAL RIGHTS.—Upon reorga- business to determine the insurer’s financial sion of a State, public corporation, board, as- nization into a mutual holding company, the condition, if— sociation, estate, trustee, or fiduciary, or contractual rights of the policyholders are (A) the State insurance regulator of the other similar entity. preserved. transferee domicile has not begun an exam- (8) POLICYHOLDER.—The term ‘‘policy- (5) FAIR AND EQUITABLE TREATMENT OF POL- ination of the redomesticated insurer and holder’’ means the owner of a policy issued ICYHOLDERS.—The reorganization is approved has not scheduled such an examination to by a mutual insurer, except that, with re- as fair and equitable to the policyholders by begin before the end of the 1-year period be- spect to voting rights, the term means a the insurance regulator of the transferee ginning on the date of the redomestication; member of a mutual insurer or mutual hold- domicile. and ing company granted the right to vote, as de- termined under applicable State law. SEC. 313. EFFECT ON STATE LAWS RESTRICTING (B) any such examination is coordinated to REDOMESTICATION. avoid unjustified duplication and repetition; (9) REDOMESTICATED INSURER.—The term (a) IN GENERAL.—Unless otherwise per- (5) comply with a lawful order issued in— ‘‘redomesticated insurer’’ means a mutual mitted by this subtitle, State laws of any (A) a delinquency proceeding commenced insurer that has redomesticated pursuant to transferor domicile that conflict with the by the State insurance regulator of any li- this subtitle. purposes and intent of this subtitle are pre- censed State if there has been a judicial find- (10) REDOMESTICATING INSURER.—The term empted, including but not limited to— ing of financial impairment under paragraph ‘‘redomesticating insurer’’ means a mutual (1) any law that has the purpose or effect (7); or insurer that is redomesticating pursuant to of impeding the activities of, taking any ac- (B) a voluntary dissolution proceeding; this subtitle. tion against, or applying any provision of (6) comply with any State law regarding (11) REDOMESTICATION OR TRANSFER.—The law or regulation to, any insurer or an affil- deceptive, false, or fraudulent acts or prac- terms ‘‘redomestication’’ and ‘‘transfer’’ iate of such insurer because that insurer or tices, except that if the licensed State seeks mean the transfer of the domicile of a mu- any affiliate plans to redomesticate, or has an injunction regarding the conduct de- tual insurer from one State to another State redomesticated, pursuant to this subtitle; scribed in this paragraph, such injunction pursuant to this subtitle. (2) any law that has the purpose or effect must be obtained from a court of competent (12) STATE INSURANCE REGULATOR.—The of impeding the activities of, taking action jurisdiction as provided in section 314(a); term ‘‘State insurance regulator’’ means the against, or applying any provision of law or (7) comply with an injunction issued by a principal insurance regulatory authority of a regulation to, any insured or any insurance court of competent jurisdiction, upon a peti- State, the District of Columbia, American licensee or other intermediary because such tion by the State insurance regulator alleg- Samoa, Guam, Puerto Rico, or the United person has procured insurance from or placed ing that the redomesticating insurer is in States Virgin Islands. insurance with any insurer or affiliate of hazardous financial condition or is finan- (13) STATE LAW.—The term ‘‘State law’’ such insurer that plans to redomesticate, or cially impaired; means the statutes of any State, the District has redomesticated, pursuant to this sub- (8) participate in any insurance insolvency of Columbia, American Samoa, Guam, Puer- title, but only to the extent that such law guaranty association on the same basis as to Rico, or the United States Virgin Islands would treat such insured licensee or other any other insurer licensed in the licensed and any regulation, order, or requirement intermediary differently than if the person State; and prescribed pursuant to any such statute. procured insurance from, or placed insurance (9) require a person acting, or offering to (14) TRANSFEREE DOMICILE.—The term with, an insured licensee or other inter- act, as an insurance licensee for a redomes- ‘‘transferee domicile’’ means the State to mediary which had not redomesticated; ticated insurer in the licensed State to ob- which a mutual insurer is redomesticating (3) any law that has the purpose or effect tain a license from that State, except that pursuant to this subtitle. of terminating, because of the redomestica- such State may not impose any qualification (15) TRANSFEROR DOMICILE.—The term tion of a mutual insurer pursuant to this or requirement that discriminates against a ‘‘transferor domicile’’ means the State from subtitle, any certificate of authority, agent nonresident insurance licensee. which a mutual insurer is redomesticating appointment or license, rate approval, or SEC. 314. OTHER PROVISIONS. pursuant to this subtitle. other approval, of any State insurance regu- (a) JUDICIAL REVIEW.—The appropriate SEC. 316. EFFECTIVE DATE. lator or other State authority in existence United States district court shall have exclu- This subtitle shall take effect on the date immediately prior to the redomestication in sive jurisdiction over litigation arising of the enactment of this Act. any State other than the transferee domi- under this section involving any redomes- cile. ticating or redomesticated insurer. PARLIAMENTARY INQUIRY (b) DIFFERENTIAL TREATMENT PROHIB- (b) SEVERABILITY.—If any provision of this Mr. VENTO. Madam Chairman, par- ITED.—No State law, regulation, interpreta- section, or the application thereof to any liamentary inquiry. H5306 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Madam Chairman, is it possible to Moore Roybal-Allard Taylor (MS) Wicker Wolf Young (FL) Moran (VA) Rush Thompson (CA) Wilson Wynn have this amendment divided by unani- Murtha Sabo Thompson (MS) Wise Young (AK) mous consent? Nadler Sanchez Thurman The CHAIRMAN. Under the rule, the Napolitano Sanders Tierney NOT VOTING—23 amendment is not divisible; and the Neal Sandlin Towns Baldacci Doyle Nussle Oberstar Schakowsky Turner Barton Fossella Pelosi Committee cannot alter that feature of Obey Scott Udall (CO) Borski Green (TX) Pombo the rule. Olver Serrano Udall (NM) Brown (CA) Gutierrez Porter Mr. VENTO. Even though these are Ortiz Sherman Velazquez Clay Holden Radanovich separate topics, completely separate Owens Shows Vento Combest Lipinski Rogan Pallone Slaughter Visclosky Dicks Menendez Sawyer topics, in the amendment? Pascrell Smith (WA) Waters Dooley Miller, Gary The CHAIRMAN. It is not in order Payne Snyder Watt (NC) b 2124 under the rule, even by unanimous con- Peterson (MN) Spratt Waxman Pomeroy Stabenow Weiner Mrs. MYRICK, Mr. GUTKNECHT, Mr. sent. Price (NC) Stark Wexler Mr. LAFALCE. Even though it is not Rangel Stenholm Weygand GREENWOOD, and Mrs. MORELLA in order under the rule that we oppose, Reyes Strickland Woolsey changed their vote from ‘‘aye’’ to ‘‘no.’’ Rivers Stupak Wu Mr. HOEFFEL, Mr. DAVIS of Illi- could we not divide it if there were Rodriguez Tanner unanimous consent? Roemer Tauscher nois, Ms. SANCHEZ, and Ms. The CHAIRMAN. The Committee of MCKINNEY changed their vote from the Whole cannot change the rule. NOES—232 ‘‘no’’ to ‘‘aye.’’ Mr. LAFALCE. Could we have unani- Aderholt Gilchrest Oxley So the motion to rise was rejected. mous consent to rise and then ask Archer Gillmor Packard The result of the vote was announced Armey Gilman Pastor as above recorded. unanimous consent to go into the full Bachus Goode Paul House and then request a division of Baker Goodlatte Pease The CHAIRMAN. Pursuant to House this amendment into two parts? Ballenger Goodling Peterson (PA) Resolution 235, the gentleman from Mr. BLILEY. I object. Barr Goss Petri Virginia (Mr. BLILEY) and a Member Barrett (NE) Graham Phelps opposed each will control 5 minutes. The CHAIRMAN. No request has been Bartlett Granger Pickering made. Bass Green (WI) Pickett Mr. LAFALCE. Madam Chairman, I Bateman Greenwood Pitts am opposed to the amendment. MOTION OFFERED BY MR. LAFALCE Bereuter Gutknecht Portman The CHAIRMAN. The gentleman Mr. LAFALCE. Madam Chairman, I Biggert Hall (TX) Pryce (OH) A ALCE Bilbray Hansen Quinn from New York (Mr. L F ) will be move that the Committee do now rise recognized to control the time in oppo- for the purpose aforestated. Bilirakis Hastings (WA) Rahall Bliley Hayes Ramstad sition. The CHAIRMAN. The question is on Blunt Hayworth Regula The Chair recognizes the gentleman Boehlert Hefley Reynolds the motion offered by the gentleman from Virginia (Mr. BLILEY). from New York (Mr. LAFALCE). Boehner Herger Riley Bonilla Hill (MT) Rogers Mr. BLILEY. Madam Chairman, I The question was taken, and the Bono Hilleary Rohrabacher yield myself 11⁄2 minutes. Chairman announced that the noes ap- Boswell Hobson Ros-Lehtinen Madam Chairman, this amendment is peared to have it. Brady (TX) Hoekstra Rothman Bryant Horn Roukema simple and straightforward. It does RECORDED VOTE Burr Hostettler Royce only two things. First, it prohibits Mr. LAFALCE. Madam Chairman, I Burton Houghton Ryan (WI) banks from discriminating against vic- demand a recorded vote. Buyer Hulshof Ryun (KS) Callahan Hunter Salmon tims of domestic violence and insur- A recorded vote was ordered. Calvert Hutchinson Sanford ance sales. The vote was taken by electronic de- Camp Hyde Saxton The majority of States already have vice, and there were—ayes 179, noes 232, Campbell Isakson Scarborough laws preventing discrimination against Canady Istook Schaffer not voting 23, as follows: Cannon Jenkins Sensenbrenner victims of domestic violence. However, [Roll No. 272] Castle Johnson (CT) Sessions H.R. 10 would allow Federal banking Chabot Johnson, Sam Shadegg regulators to preempt a number of AYES—179 Chambliss Jones (NC) Shaw Abercrombie DeGette Kaptur Chenoweth Kasich Shays State consumer protection laws, and in Ackerman Delahunt Kennedy Coble Kelly Sherwood addition, a few States have not yet Allen DeLauro Kildee Coburn King (NY) Shimkus acted on this issue. Andrews Deutsch Kilpatrick Collins Kingston Shuster This amendment would not preempt Baird Dixon Kind (WI) Cook Kleczka Simpson Baldwin Doggett Klink Cooksey Knollenberg Sisisky State laws, but ensures where no pro- Barcia Edwards Kucinich Costello Kolbe Skeen tections for domestic violence victims Barrett (WI) Engel LaFalce Cox Kuykendall Skelton existed or where the banking regu- Becerra Eshoo Lampson Crane LaHood Smith (MI) Bentsen Etheridge Lantos Cubin Largent Smith (NJ) lators were trying to preempt such Berkley Evans Larson Cunningham Latham Smith (TX) laws, the domestic violence victims Berman Farr Lee Davis (VA) LaTourette Souder will be protected. Berry Fattah Levin Deal Lazio Spence Second, the bill would allow mutual Bishop Filner Lewis (GA) DeLay Leach Stearns Blagojevich Frank (MA) Lofgren DeMint Lewis (CA) Stump insurance companies to redomesticate Blumenauer Frost Lowey Diaz-Balart Lewis (KY) Sununu and reorganize into a mutual holding Bonior Gejdenson Lucas (KY) Dickey Linder Sweeney company or into a stock company. Boucher Gephardt Luther Dingell LoBiondo Talent Without the redomestication provision, Boyd Gonzalez Maloney (CT) Doolittle Lucas (OK) Tancredo Brady (PA) Gordon Maloney (NY) Dreier Manzullo Tauzin mutual insurance companies will be Brown (FL) Hall (OH) Markey Duncan McCollum Taylor (NC) placed at a severe disadvantage in rais- Brown (OH) Hastings (FL) Martinez Dunn McCrery Terry ing capital and competing with other Capps Hill (IN) Mascara Ehlers McHugh Thomas Capuano Hilliard Matsui Ehrlich McInnis Thornberry financial holding companies. Cardin Hinchey McCarthy (MO) Emerson McIntosh Thune It only takes effect in States that Carson Hinojosa McCarthy (NY) English McKeon Tiahrt have not enacted laws governing mu- Clayton Hoeffel McDermott Everett Metcalf Toomey tual holding companies, and it requires Clement Holt McGovern Ewing Mica Traficant Clyburn Hooley McIntyre Fletcher Miller (FL) Upton approval from the insurance regulator Condit Hoyer McKinney Foley Miller, George Vitter that the company has met numerous Conyers Inslee McNulty Forbes Minge Walden specific consumer protections. Coyne Jackson (IL) Meehan Ford Moran (KS) Walsh 1 Cramer Jackson-Lee Meek (FL) Fowler Morella Wamp Madam Chairman, I yield 1 ⁄2 minutes Crowley (TX) Meeks (NY) Franks (NJ) Myrick Watkins to the gentlewoman from Colorado (Ms. Cummings Jefferson Millender- Frelinghuysen Nethercutt Watts (OK) DEGETTE). Danner John McDonald Gallegly Ney Weldon (FL) Ms. DEGETTE. Madam Chairman, I Davis (FL) Johnson, E. B. Mink Ganske Northup Weldon (PA) Davis (IL) Jones (OH) Moakley Gekas Norwood Weller rise in reluctant support of the Bliley DeFazio Kanjorski Mollohan Gibbons Ose Whitfield amendment. I guess I am pleased, if a July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5307 little bit puzzled, that this amendment The gentleman from Virginia said, The gentleman from Virginia is not has been coupled, the domestic vio- well, if the State has got a mutual saying they should be able to lence amendment has been coupled holding company provision, it does not demutualize, he is saying they should with redomestication of mutual insur- apply. Well, New York does not. Massa- be able to do it without sharing with ers. I think the only two things that chusetts does not. Countless other the policyholders what they pledged to are the same in these concepts are the States do not. The gentleman would the policyholders they would do when word ‘‘domestic.’’ override theirs. they sold them the policy. That is so b 2130 The gentleman said, well, the State hard to defend that he is literally hid- insurance regulator has to approve. ing behind battered women. But the reason I support this amend- Not of the host States, just of the Why are these together? Domestic vi- ment is because it is extremely impor- States they want to go to. They will olence and redomestication? I am sur- tant to millions of domestic violence pick the worst State in the Union, they prised the gentleman does not have in victims around this country, many of will go to that State, and, of course, there housebreaking one’s dog for do- them women who have been discrimi- the insurance regulator will permit it. mestic animals because that is all it nated against, unbelievably, in insur- They will do anything to get a domes- has got in common. ance company underwriting and in tic, a mutual insurance company to re- The gentleman has something so bad claims processing and in rates. locate so long as they can satisfy the it cannot stand on its own. He is asking We have a woman in Colorado, for ex- officers and directors. to give permission to the mutual insur- ample, whose husband tried to murder There is no good reason for it. There ance companies. What the gentle- her by burning down their house. She has been no hearing on it. It has abso- woman from New York (Mrs. KELLY) was almost killed, but she survived. lutely no relationship to financial serv- said is completely irrelevant. No one is When the insurance company got the ices modernization. It has absolutely trying to stop them from claim, they only paid 50 percent be- no relationship to affiliation. What is demutualizing. cause they said she was 50 percent re- this? It is a pay off to the mutual in- They now have to, in certain States, sponsible for the house burning down surance industry. No more. No less. demutualize in accordance with the because she was a domestic violence Mr. BLILEY. Madam Chairman, I rules of that State where they were victim. yield 1 minute to the gentlewoman chartered and in accordance with what I am disappointed, frankly, that the from New York (Mrs. KELLY). they promise the policyholders. This is Committee on Rules did not make in Mrs. KELLY. Madam Chairman, I a license for them to avoid States order my amendment with the gen- rise today in support of the amendment rights, break the rules that they have tleman from Ohio (Mr. Oxley), a stand of the gentleman from Virginia (Mr. for policyholders, and the gentleman alone amendment, which was unani- BLILEY) to put this redomestication shamefully does it by hiding behind the mously supported in the Committee on provision back in this legislation. This victims of domestic violence. Commerce, which passed this House is a technical issue, and I think I want Mr. BLILEY. Madam Chairman, I last year as part of the House bill, and to try to clarify what this amendment yield the balance of my time to the went on to the Senate. I am saddened seeks to do. gentleman from New York (Mr. that that was not done in its own right. Mutual insurance companies are es- TOWNS). But, frankly, it was not. So, to me, it sentially cooperatives and they have (Mr. TOWNS asked and was given is important for the millions of domes- no stockholders, only policy holders. A permission to revise and extend his re- tic violence victims to pass this mutual company may own the stock of marks.) amendment. the subsidiary, but, having no share- Mr. TOWNS. Madam Chairman, let Mr. LAFALCE. Madam Chairman, I holders, it is confined to lower subsidi- me say that, first of all, the argument yield myself 2 minutes. aries if they want to diversify. is the Committee on Rules. My col- Madam Chairman, this amendment is This structure imposes serious limi- leagues point to the fact that the Com- a travesty and should be opposed. It is tations on the ability of a mutual com- mittee on Rules did it again. That is absolutely outrageous that the Com- pany to make significant acquisitions what they are really saying. But I do mittee on Rules has permitted the in order to stay competitive. In addi- not think that my colleagues should combination of prohibitions against tion, a mutual insurer cannot sell forget about what we are dealing with discrimination because of domestic vi- stock, thereby limiting its ability to here. We are talking about two things, olence with redomestication of mutual raise capital to diversify. domestic violence and redomestication. insurance companies. Taken together, these factors place I think that these issues are very, very My colleagues would get 100 percent mutual insurers at a substantial dis- important. of this body to vote for the prohibition advantage in an affiliated environment Also, I want to talk about the fact with respect to domestic violence, and such as H.R. 10 allows for. that insurance, the last time I heard, they know that. No one should vote for While State laws generally permit in- was under the jurisdiction of the Com- the redomestication of mutual insur- surers to move their base, States are mittee on Commerce. I mean, unless ance company, and that is the only capable of imposing significant prac- something changed over the last 24 reason the gentleman from Virginia tical barriers to redomestication. I do hours, the Committee on Commerce (Mr. BLILEY) has combined them, be- not believe that a mutual insurer’s had jurisdiction over insurance. So, cause no one would vote for his amend- ability to participate fully in an affili- therefore, I think that the Committee ment if it were standing by itself. ated financial services environment on Commerce here really has a lot to Why? Because greed is involved. should depend solely on the State say about this issue. Greed on the part of the officers and di- where they are based. I think that the other thing that I rectors of the mutual insurance compa- It is for these reasons I believe we would like to just sort of talk about, nies. should support this amendment. mutual insurance companies would be Why? Because theft is involved. Theft Mr. LAFALCE. Madam Chairman, I placed at a severe disadvantage in is involved of the ownership right of, yield 1 minute to the gentleman from terms of raising capital. I think that not millions, but tens of millions of Massachusetts (Mr. FRANK). capital is very, very important. This policy holders, women and men and Mr. FRANK of Massachusetts. amendment corrects that. I think that children, et cetera. One is stealing Madam Chairman, this is the most we need to make certain that that is their rights by this Federal law. shameful abuse of the democratic proc- done. I think that is important that we Why? Because this is an anti-States ess I have ever seen. My colleagues do that. rights amendment. That is why the Na- have an effort not to stop the insur- Let me say to my colleagues that I tional Conference of State Legislatures ance company from demutualizing, but think this is a good amendment, and I have said, do not pass this amendment. simply to require them to abide by the urge support of it. We recognize the provisions of domes- State law where they were chartered Mr. LaFALCE. Madam Chairman, I tic violence. We love those. But we do and their contract with their policy yield 1 minute to the gentleman from not want you to infringe on our rights. holders. North Carolina (Mr. WATT). H5308 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Mr. WATT of North Carolina. Madam The CHAIRMAN. The Clerk will des- a financial institution nonpublic personal in- Chairman, I rise in opposition to par- ignate the amendment. formation under this section shall not, di- ticularly the last part of this amend- The text of the amendment is as fol- rectly or through an affiliate of such receiv- ment. It really is a real disservice to lows: ing third party, disclose such information to mutual policyholders, who are owners any other person that is a nonaffiliated third Amendment No. 11 offered by Mr. OXLEY: party of both the financial institution and of the insurance company. To allow an Page 378, beginning on line 16, strike sub- such receiving third party, unless such dis- insurance company to take the assets title A of title V and insert the following closure would be lawful if made directly to (and conform the table of contents accord- and convert to a stock company puts such other person by the financial institu- ingly): those policyholders at a real disadvan- tion. tage. Subtitle A—Disclosure of Nonpublic Personal Information (d) LIMITATIONS ON THE SHARING OF AC- Now, I had some experience with COUNT NUMBER INFORMATION FOR MARKETING SEC. 501. PROTECTION OF NONPUBLIC PER- this. The last case that I ever handled PURPOSES.—A financial institution shall not SONAL INFORMATION. in the practice of law was one of these disclose an account number or similar form (a) PRIVACY OBLIGATION POLICY.—It is the cases where a mutual company, with- of access number or access code for a credit policy of the Congress that each financial in- card account, deposit account, or trans- out the authorization of the insureds, stitution has an affirmative and continuing action account of a consumer to any non- tried to do this very thing. They ended obligation to respect the privacy of its cus- affiliated third party for use in tele- up understating the value of the assets. tomers and to protect the security and con- marketing, direct mail marketing, or other They were not going to give the insur- fidentiality of those customers’ nonpublic marketing through electronic mail to the ance policyholders one dime until we personal information. consumer. got involved, and they ended up paying (b) FINANCIAL INSTITUTIONS SAFEGUARDS.— them millions of dollars. In furtherance of the policy in subsection (a), (e) GENERAL EXCEPTIONS.—Subsections (a) I think this is a bad idea, and we each agency or authority described in sec- and (b) shall not prohibit the disclosure of should vote against this amendment. tion 505(a) shall establish appropriate stand- nonpublic personal information— ards for the financial institutions subject to (1) as necessary to effect, administer, or Mr. LAFALCE. Madam Chairman, I their jurisdiction relating to administrative, enforce a transaction requested or author- yield 1 minute to the gentleman from technical, and physical safeguards— ized by the consumer, or in connection Wisconsin (Mr. BARRETT) for closure. (1) to insure the security and confiden- with— Mr. BARRETT of Wisconsin. Madam tiality of customer records and information; (A) servicing or processing a financial Chairman, the States rights, States (2) to protect against any anticipated product or service requested or authorized by rights, States rights. Where are they? threats or hazards to the security or integ- the consumer; Where are the States rights? rity of such records; and (B) maintaining or servicing the con- We have got all these elected officials (3) to protect against unauthorized access sumer’s account with the financial institu- at the State level, and we do not trust to or use of such records or information tion; or which could result in substantial harm or in- (C) a proposed or actual securitization, sec- them. Because if they refuse to pass a convenience to any customer. ondary market sale (including sales of serv- law that the mutual insurance compa- SEC. 502. OBLIGATIONS WITH RESPECT TO DIS- icing rights), or similar transaction related nies like, we are going to just allow CLOSURES OF PERSONAL INFORMA- to a transaction of the consumer; them to pack up and move out of TION. (2) with the consent or at the direction of State. (a) NOTICE REQUIREMENTS.—Except as oth- the consumer; This is the most hypocritical amend- erwise provided in this subtitle, a financial (3) to protect the confidentiality or secu- ment for advocates of States rights institution may not, directly or through any rity of its records pertaining to the con- that I have seen in this Chamber. How affiliate, disclose to a nonaffiliated third sumer, the service or product, or the trans- party any nonpublic personal information, action therein, or to protect against or pre- anybody can vote for this amendment unless such financial institution provides or vent actual or potential fraud, unauthorized and claim they are in favor of States has provided to the consumer a notice that transactions, claims, or other liability, for rights defies logic. complies with section 503(b). required institutional risk control, or for re- It is a rip-off. It is a rip-off to share- (b) OPT OUT.— solving customer disputes or inquiries, or to holders and for stockholders and mu- (1) IN GENERAL.—A financial institution persons holding a beneficial interest relating tual insurance policyholders who may not disclose nonpublic personal infor- to the consumer, or to persons acting in a fi- bought those policies because they mation to nonaffiliated third parties duciary capacity on behalf of the consumer; would be owners of that company. It unless— (4) to provide information to insurance rips them off. It is wrong, wrong, (A) such financial institution clearly and rate advisory organizations, guaranty funds conspicuously discloses to the consumer, in or agencies, applicable rating agencies of the wrong. writing or in electronic form (or other form financial institution, persons assessing the It is unfortunate that it is being hid- permitted by the regulations prescribed institution’s compliance with industry den behind battered women. That is under section 504), that such information standards, and the institution’s attorneys, disgusting. This amendment should be may be disclosed to such third parties; accountants, and auditors; voted down. We should do it right, pro- (B) the consumer is given the opportunity, (5) to the extent specifically permitted or vide protection for the battered before the time that such information is ini- required under other provisions of law and in women, and not allow this dangerous tially disclosed, to direct that such informa- accordance with the Right to Financial Pri- rip-off. tion not be disclosed to such third parties; vacy Act of 1978, to law enforcement agen- and cies (including a Federal functional regu- The CHAIRMAN. All time for debate (C) the consumer is given an explanation of lator, a State insurance authority, or the on this amendment has expired. how the consumer can exercise that non- Federal Trade Commission), self-regulatory The question is on the amendment disclosure option. organizations, or for an investigation on a offered by the gentleman from Virginia (2) EXCEPTION.—This subsection shall not matter related to public safety; (Mr. BLILEY). prevent a financial institution from pro- (6) to a consumer reporting agency in ac- The question was taken; and the viding nonpublic personal information to a cordance with the Fair Credit Reporting Act, Chairman announced that the noes ap- nonaffiliated third party to perform services or in accordance with interpretations of such peared to have it. or functions on behalf of the financial insti- Act by the Board of Governors of the Federal Mr. BLILEY. Madam Chairman, I de- tution, including marketing of the financial Reserve System or the Federal Trade Com- mand a recorded vote. institution’s own products or services or fi- mission, including interpretations published nancial products or services offered pursuant as commentary (16 C.F.R. 601-622); The CHAIRMAN. Pursuant to House to joint agreements between two or more fi- (7) in connection with a proposed or actual Resolution 235, further proceedings on nancial institutions that comply with the re- sale, merger, transfer, or exchange of all or the amendment offered by the gen- quirements imposed by the regulations pre- a portion of a business or operating unit if tleman from Virginia will be post- scribed under section 504, if the financial in- the disclosure of nonpublic personal informa- poned. stitution fully discloses the providing of tion concerns solely consumers of such busi- It is now in order to consider amend- such information and enters into a contrac- ness or unit; or ment No. 11 printed in House Report tual agreement with the third party that re- (8) to comply with Federal, State, or local 106–214. quires the third party to maintain the con- laws, rules, and other applicable legal re- fidentiality of such information. quirements; to comply with a properly au- AMENDMENT NO. 11 OFFERED BY MR. OXLEY (c) LIMITS ON REUSE OF INFORMATION.—Ex- thorized civil, criminal, or regulatory inves- Mr. OXLEY. Mr. Chairman, I offer an cept as otherwise provided in this subtitle, a tigation or subpoena by Federal, State, or amendment. nonaffiliated third party that receives from local authorities; or to respond to judicial July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5309 process or government regulatory authori- (other than Federal branches, Federal agen- the Federal Deposit Insurance Act shall have ties having jurisdiction over the financial in- cies, and insured State branches of foreign the meaning given to them in section 1(b) of stitution for examination, compliance, or banks), commercial lending companies the International Banking Act of 1978. other purposes as authorized by law. owned or controlled by foreign banks, orga- SEC. 506. FAIR CREDIT REPORTING ACT AMEND- SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY nizations operating under section 25 or 25A MENT. POLICY. of the Federal Reserve Act, bank holding (a) AMENDMENT.—Section 621 of the Fair (a) DISCLOSURE REQUIRED.—A financial in- companies and their nonbank subsidiaries or Credit Reporting Act (15 U.S.C. 1681s) is stitution shall clearly and conspicuously dis- affiliates (except broker-dealers, affiliates amended— close to each consumer, at the time of estab- providing insurance, investment companies, (1) in subsection (d), by striking everything lishing the customer relationship with the and investment advisers), by the Board of following the end of the second sentence; and consumer and not less than annually, in Governors of the Federal Reserve System; (2) by striking subsection ‘‘(e)’’ and insert- writing or in electronic form (or other form (C) banks insured by the Federal Deposit ing in lieu thereof the following: permitted by the regulations prescribed Insurance Corporation (other than members ‘‘(e) REGULATORY AUTHORITY.— under section 504), its policies and practices of the Federal Reserve System), insured ‘‘(1) The Federal banking agencies referred with respect to protecting the nonpublic per- State branches of foreign banks, and any to in paragraphs (1) and (2) of subsection (b) sonal information of consumers in accord- subsidiaries of such entities, by the Board of shall jointly prescribe such regulations as ance with the rules prescribed under section Directors of the Federal Deposit Insurance necessary to carry out the purposes of this 504. Corporation; and Act with respect to any persons identified (b) INFORMATION TO BE INCLUDED.—The dis- (D) savings association the deposits of under paragraphs (1) and (2) of subsection (b), closure required by subsection (a) shall which are insured by the Federal Deposit In- or to the holding companies and affiliates of include— surance Corporation, and any subsidiaries of such persons. (1) the policy and practices of the institu- such a savings association, by the Director ‘‘(2) The Administrator of the National tion with respect to disclosing nonpublic per- of the Office of Thrift Supervision. Credit Union Administration shall prescribe sonal information to nonaffiliated third par- (2) Under the Federal Credit Union Act, by such regulations as necessary to carry out ties, other than agents of the institution, the Administrator of the National Credit the purposes of this Act with respect to any consistent with section 502 of this subtitle, Union Administration with respect to any persons identified under paragraph (3) of sub- and including— Federal or state chartered credit union, and section (b).’’. (A) the categories of persons to whom the any subsidiaries of such an entity. (b) CONFORMING AMENDMENT.—Section information is or may be disclosed, other (3) Under the Farm Credit Act of 1971, by 621(a) of the Fair Credit Reporting Act (15 than the persons to whom the information the Farm Credit Administration with respect U.S.C. 1681s(a)) is amended by striking para- may be provided pursuant to section 502(e); to the Federal Agricultural Mortgage Cor- graph (4). and poration, any Federal land bank, Federal land bank association, Federal intermediate SEC. 507. RELATION TO OTHER PROVISIONS. (B) the practices and policies of the insti- This subtitle shall not apply to any infor- tution with respect to disclosing of non- credit bank, or production credit associa- tion. mation to which subtitle D of title III ap- public personal information of persons who plies. have ceased to be customers of the financial (4) Under the Securities Exchange Act of 1934, by the Securities and Exchange Com- SEC. 508. STUDY OF INFORMATION SHARING institution; AMONG FINANCIAL AFFILIATES. (2) the categories of nonpublic personal in- mission with respect to any broker-dealer. (5) Under the Investment Company Act of (a) IN GENERAL.—The Secretary of the formation that are collected by the financial 1940, by the Securities and Exchange Com- Treasury, in conjunction with the Federal institution; mission with respect to investment compa- functional regulators and the Federal Trade (3) the policies that the institution main- nies. Commission, shall conduct a study of infor- tains to protect the confidentiality and secu- (6) Under the Investment Advisers Act of mation sharing practices among financial in- rity of nonpublic personal information in ac- 1940, by the Securities and Exchange Com- stitutions and their affiliates. Such study cordance with section 501; and mission with respect to investment advisers shall include— (4) the disclosures required, if any, under registered with the Commission under such (1) the purposes for the sharing of confiden- section 603(d)(2)(A)(iii) of the Fair Credit Re- Act. tial customer information with affiliates or porting Act. (7) Under Federal Housing Enterprises Fi- with nonaffiliated third parties; SEC. 504. RULEMAKING. nancial Safety and Soundness Act of 1992 (12 (2) the extent and adequacy of security (a) REGULATORY AUTHORITY.—The Federal U. S. C. 4501 et seq.), by the Office of Federal protections for such information; banking agencies, the National Credit Union Housing Enterprise Oversight with respect to (3) the potential risks for customer privacy Association, the Secretary of the Treasury, the Federal National Mortgage Association of such sharing of information; and the Securities and Exchange Commis- and the Federal Home Loan Mortgage Cor- (4) the potential benefits for financial in- sion, shall jointly prescribe, after consulta- poration. stitutions and affiliates of such sharing of tion with the Federal Trade Commission, (8) Under the Federal Home Loan Bank information; and representatives of State insurance au- Act, by the Federal Housing Finance Board (5) the potential benefits for customers of thorities designated by the National Associa- with respect to Federal home loan banks. such sharing of information; tion of Insurance Commissioners, such regu- (9) Under State insurance law, in the case (6) the adequacy of existing laws to protect lations as may be necessary to carry out the of any person engaged in providing insur- customer privacy; purposes of this subtitle. Such regulations ance, by the State insurance authority of the (7) the adequacy of financial institution shall be prescribed in accordance with appli- State in which the person is domiciled, sub- privacy policy and privacy rights disclosure cable requirements of the title 5, United ject to section 104 of this Act. under existing law; States Code, and shall be issued in final form (10) Under the Federal Trade Commission (8) the feasibility of different approaches, within 6 months after the date of enactment Act, by the Federal Trade Commission for including opt-out and opt-in, to permit cus- of this Act. any other financial institution that is not tomers to direct that confidential informa- (b) AUTHORITY TO GRANT EXCEPTIONS.—The subject to the jurisdiction of any agency or tion not be shared with affiliates and non- regulations prescribed under subsection (a) authority under paragraphs (1) through (9) of affiliated third parties; and may include such additional exceptions to this subsection. (9) the feasibility of restricting sharing of subsections (a) and (b) of section 502 as are (b) ENFORCEMENT OF SECTION 501.— information for specific uses or of permitting deemed consistent with the purposes of this (1) IN GENERAL.—Except as provided in customers to direct the uses for which infor- subtitle. paragraph (2), the agencies and authorities mation may be shared. SEC. 505. ENFORCEMENT. described in subsection (a) shall implement (b) CONSULTATION.—The Secretary shall (a) IN GENERAL.—This subtitle and the the standards prescribed under section 501(b) consult with representatives of State insur- rules prescribed thereunder shall be enforced in the same manner, to the extent prac- ance authorities designated by the National by the Federal functional regulators, the ticable, as standards prescribed pursuant to Association of Insurance Commissioners, and State insurance authorities, and the Federal subsection (a) of section 39 of the Federal De- also with financial services industry, con- Trade Commission with respect to financial posit Insurance Act are implemented pursu- sumer organizations and privacy groups, and institutions subject to their jurisdiction ant to such section. other representatives of the general public, under applicable law, as follows: (2) EXCEPTION.—The agencies and authori- in formulating and conducting the study re- (1) Under section 8 of the Federal Deposit ties described in paragraphs (4), (5), (6), (9), quired by subsection (a). Insurance Act, in the case of— and (10) of subsection (a) shall implement (c) REPORT.—Before the end of the 6-month (A) national banks, Federal branches and the standards prescribed under section 501(b) period beginning on the date of the enact- Federal agencies of foreign banks, and any by rule with respect to the financial institu- ment of this Act, the Secretary shall submit subsidiaries of such entities, by the Office of tions subject to their respective jurisdictions a report to the Congress containing the find- the Comptroller of the Currency; under subsection (a). ings and conclusions of the study required (B) member banks of the Federal Reserve (c) DEFINITIONS.—The terms used in sub- under subsection (a), together with such rec- System (other than national banks), section (a)(1) that are not defined in this sub- ommendations for legislative or administra- branches and agencies of foreign banks title or otherwise defined in section 3(s) of tive action as may be appropriate. H5310 CONGRESSIONAL RECORD — HOUSE July 1, 1999 SEC. 509. DEFINITIONS. (B) the disclosure is required, or is one of some of the scare stories my colleagues As used in this subtitle: the lawful or appropriate methods, to en- are going to hear from the gentleman (1) FEDERAL BANKING AGENCY.—The term force the rights of the financial institution from Massachusetts (Mr. MARKEY). ‘‘Federal banking agency’’ has the meanings or of other persons engaged in carrying out Basically, it means more choice of given to such terms in section 3 of the Fed- the financial transaction, or providing the services and products, varied for the eral Deposit Insurance Act. product or service; (C) the disclosure is required, or is a usual, consumer, the joint ventures and, yes, (2) FEDERAL FUNCTIONAL REGULATOR.—The the responsible sharing of consumer in- term ‘‘Federal functional regulator’’ appropriate, or acceptable method, for insur- means— ance underwriting at the consumer’s request formation taking place in the market (A) the Board of Governors of the Federal or for reinsurance purposes, or for any of the today. Reserve System; following purposes as they relate to a con- The reality is, the integrated prod- (B) the Office of the Comptroller of the sumer’s insurance: account administration, ucts and services today’s consumer ex- Currency; reporting, investigating, or preventing fraud pects from his or her financial institu- (C) the Board of Directors of the Federal or material misrepresentation, processing tions require information sharing, es- Deposit Insurance Corporation; premium payments, processing insurance pecially among affiliates. After all, in (D) the Director of the Office of Thrift Su- claims, administering insurance benefits (in- the eyes of the consumer, what are af- pervision; cluding utilization review activities), par- ticipating in research projects, or as other- filiates other than different depart- (E) the National Credit Union Administra- ments of the same company that they tion Board; wise required or specifically permitted by (F) the Farm Credit Administration; and Federal or State law; or are dealing with. (G) the Securities and Exchange Commis- (D) the disclosure is required, or is a usual, One can bet, for example, that if a sion. appropriate or acceptable method, in connec- consumer in Ohio, for example, has a (3) FINANCIAL INSTITUTION.—The term ‘‘fi- tion with— relationship with bank one and is ap- nancial institution’’ means any institution (i) the authorization, settlement, billing, plying for a preapproved mortgage the business of which is engaging in financial processing, clearing, transferring, recon- loan, he expects them to know when he activities or activities that are incidental to ciling, or collection of amounts charged, deb- calls that he has a savings account, a ited, or otherwise paid using a debit, credit financial activities, as described in section checking account, a car loan, and a CD 6(c) of the Bank Holding Company Act of or other payment card, check, or account number, or by other payment means; with them. The last thing he wants is 1956. more government regulation and more (4) NONPUBLIC PERSONAL INFORMATION.— (ii) the transfer of receivables, accounts or (A) The term ‘‘nonpublic personal informa- interests therein; or forms to fill out when he is dealing tion’’ means personally identifiable financial (iii) the audit of debit, credit or other pay- with his own company. information— ment information. The amendment I offer today with (i) provided by a consumer to a financial (8) STATE INSURANCE AUTHORITY.—The term the gentlewoman from Ohio (Ms. institution; ‘‘State insurance authority’’ means, in the PRYCE) and the gentlewoman from New (ii) resulting from any transaction with case of any person engaged in providing in- Jersey (Mrs. ROUKEMA) takes a more the consumer or the service performed for surance, the State insurance authority of realistic, more free market, more con- the State in which the person is domiciled. the consumer; or sumer friendly approach to the issue of (iii) otherwise obtained by the financial in- (9) CONSUMER.—The term ‘‘consumer’’ means an individual who obtains, from a fi- privacy. stitution. The amendment, I want to make this (B) Such term does not include publicly nancial institution, financial products or available information, as such term is de- services which are to be used primarily for very clear, requires mandatory disclo- fined by the regulations prescribed under personal, family, or household purposes, and sure for the first time of financial in- section 504. also means the legal representative of such stitutions’ privacy policy in clear and (C) Notwithstanding subparagraph (B), an individual. conspicuous language. The amendment such term shall include any list, description, (10) JOINT AGREEMENT.—The term ‘‘joint provides an opt-out provision, enabling or other grouping of consumers (and publicly agreement’’ means a formal written contract consumers who so choose not to have available information pertaining to them) pursuant to which two or more financial in- their confidential financial informa- stitutions jointly offer, endorse, or sponsor a that is derived using any personally identifi- tion disclosed to unaffiliated third par- able information other than publicly avail- financial product or service, and any pay- ments between the parties are based on busi- ties. able information. It includes a prohibition on the shar- (5) NONAFFILIATED THIRD PARTIES.—The ness or profit generated. term ‘‘nonaffiliated third parties’’ means SEC. 510. EFFECTIVE DATE. ing of consumer account numbers to any entity that is not an affiliate of, or re- This subtitle shall take effect 6 months third parties in connection with the lated by common ownership or affiliated by after the date on which the rules under sec- marketing of products, thus addressing corporate control with, the financial institu- tion 503 are promulgated, except— concerns regarding third-party tele- tion, but does not include a joint employee (1) to the extent that a later date is speci- marketing. of such institution. fied in such rules; and The amendment requires the finan- (6) AFFILIATE.—The term ‘‘affiliate’’ means (2) that section 506 shall be effective upon cial institution regulators to set and any company that controls, is controlled by, enactment. enforce standards for the security of or is under common control with another The CHAIRMAN. Pursuant to House confidential information. An amend- company. Resolution 235, the gentleman from ment requires the Secretary of Treas- (7) NECESSARY TO EFFECT, ADMINISTER, OR Ohio (Mr. OXLEY) and a Member op- ENFORCE.—The term ‘‘as necessary to effect, ury to do a comprehensive study on administer or enforce the transaction’’ posed each will control 15 minutes. privacy issues as it relates to affiliate means— Mr. MARKEY. Madam Chairman, I structure. (A) the disclosure is required, or is a usual, rise to request control of the time in I would point out to the Members appropriate or acceptable method, to carry opposition to the amendment. this issue of information sharing with- out the transaction or the product or service The CHAIRMAN. Is the gentleman in affiliates has had no hearing whatso- business of which the transaction is a part, opposed to the amendment? ever, the Committee on Banking and and record or service or maintain the con- Mr. MARKEY. I am in momentary Financial Services or in the Committee sumer’s account in the ordinary course of opposition to the amendment. providing the financial service or financial on Commerce. This would require a product, or to administer or service benefits The CHAIRMAN. The gentleman study by the Treasury Department to or claims relating to the transaction or the from Ohio (Mr. OXLEY) and the gen- find out exactly where the pressure product or service business of which it is a tleman from Massachusetts (Mr. MAR- points are. part, and includes— KEY) each will control 15 minutes. Madam Chairman, these are strong, (i) providing the consumer or the con- The Chair recognizes the gentleman new protections for consumer privacy, sumer’s agent or broker with a confirmation, from Ohio (Mr. OXLEY). unheard of before. It takes a huge step statement, or other record of the trans- Mr. OXLEY. Madam Chairman, I in providing the kind of privacy for action, or information on the status or value yield myself 3 minutes. consumers and, at the same time, at of the financial service or financial product; Madam Chairman, I want to talk and the same time, allowing the effi- (ii) the accrual or recognition of incentives about what the brave new world of fi- ciencies of the marketplace to work so or bonuses associated with the transaction nancial services marketplace is going effectively. that are provided by the financial institution to look like and what it is going to We trust consumers to make those or any other party; look like realistically as opposed to kinds of choices when they are dealing July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5311 with their financial services company. in the world. That is the loophole. We tires, along with the jeans, along with If they do not like that privacy policy have no privacy. everything else. I thought this is amaz- or they think that they are having So the Oxley amendment is a good ing. What convenience. And great their information passed on, they can step forward but with a big loophole prices, too. simply change companies and vote left that the recommittal motion is If we adopt this bill tonight, without with their feet. going to give every Member out here a the extreme provisions that the gen- b 2145 chance to vote in a substantive way tleman from Massachusetts (Mr. MAR- for, as they will for the health care KEY) proposes, we can have the same That is what this amendment does. provision that the gentleman from thing in financial services. We can go We trust the consumer. We think this California (Mr. CONDIT) wants and the to one location and we can buy insur- is the best approach to privacy. I would redlining provision that the gentle- ance, we can invest in stocks, we can ask support of the Oxley amendment. woman from Texas (Ms. JACKSON-LEE) manage our retirement fund, all with Madam Chairman, I reserve the bal- wants. the ease of dealing with one person and ance of my time. But the key here is to understand one institution. Mr. MARKEY. Madam Chairman, I that at least on this Oxley amendment, What about the small town bank? yield myself such time as I may con- while it is a good step forward, there is The guy who runs the small town bank, sume. another big vote coming up in about 15 he is the loan officer, he is the chief ex- Madam Chairman, maybe there are minutes after that, and this is just a ecutive officer. He opens up in the Members in this institution and maybe preview of coming attractions that we morning; he closes at night. He sells in- there are Americans who do not share are going to try to give our colleagues surance. If we took the Markey posi- the same concerns I have about my fi- during the course of this debate on tion with technology, that guy would nancial privacy. When I go to the ATM Oxley. have to have some type of surgery to machine in this building, I go over and Madam Chairman, I reserve the bal- split his head because he could not talk I punch in my four numbers, and then, ance of my time. to the customer about two products. It as the machine spits out the hundred Mr. OXLEY. Madam Chairman, I would be prohibited because he would dollars, I pocket that and out spits a yield 2 minutes to the gentleman from be sharing information improperly. receipt. The receipt tells me what my Louisiana (Mr. BAKER), a member of balance is. Please, this is a good product. It is the Committee on Banking and Finan- the right approach. It is the right time. Now, I do not know about the other cial Services and a subcommittee Mr. MARKEY. Madam Chairman, I people in this Chamber, but I hide that chair. yield 3 minutes to the gentleman from sheet from the intern or the page who Mr. BAKER. Madam Chairman, I New York (Mr. LAFALCE), the ranking is standing right behind me, because I thank the gentleman for yielding me member of the Committee on Banking do not want them to know what my this time. balance is. Madam Chairman, if we listened to and Financial Services. Now, maybe I am different from the previous speaker’s concerns about (Mr. LAFALCE asked and was given other people in this room. As a matter security and privacy in today’s world, permission to revise and extend his re- of fact, I do not even throw away that with computers on everyone’s desk at marks.) slip in the bucket that is right there. I home, computers across this Nation in Mr. LAFALCE. Madam Chairman, I walk 10 buckets away, or I pocket it business at this moment exchanging rise in support of this amendment. because I do not want anyone to know billions of pieces of information, we And, first of all, I want to give special what my balance is. should be extremely concerned about thanks to two members from my staff, Now, the Oxley amendment makes privacy. I would merely point out, if Dean Sagar and Tricia Hasten, who some progress because it gives an op- AL GORE had not invented the Internet worked so hard on this; Kirsten John- portunity for a consumer to block the to begin with, we would not be having son from the staff of the gentleman sale of that information to an unaffili- this problem tonight. from Minnesota (Mr. VENTO); Kristi ated company. That is progress. How- But let us get to the current state of from the staff of the gentleman from ever, it does not stop within a bank law. The fact is, if we do not adopt this Texas (Mr. FROST); and so many other holding company, if our checking amendment and approve this bill there people, the gentlewoman from Ohio records or any of our banking records is no privacy constraints not only on (Ms. PRYCE) and her staff, et cetera; are now affiliated with a new broker- financial institutions but on free enter- the gentleman from Iowa (Mr. LEACH) age or a new insurance or a new tele- prise institutions outside the financial and his staff. marketing firm, because in fact the marketplace. This is a significant advancement bank holding company can now be af- Let us talk about the amendment. with respect to privacy. There is no filiated with a telemarketer. Or, look- What does it do? It says, if someone is question about it. The gentleman from ing earlier at the Burr amendment, outside the bank, we can no longer give Massachusetts (Mr. MARKEY) had two perhaps television stations. Perhaps it them proprietary private information options, to offer an amendment as a will be CNBC. Perhaps it will be the of those customers, which does not be- substitute for this, and I think this Drudge Report. They can be affiliated long to them. We cannot sell it to would have been preferable if we had to with anything, anything, potentially. them, we cannot give it to them, we choose between the two; or to offer an Well, we do not get any protection be- cannot do anything with it because amendment that would augment this. cause they can share the information that is prohibited by this law. First In his motion to recommit he will offer with anyone they affiliate with. time ever. Federal law prohibits the an amendment that will augment this; So the Oxley amendment does take a use of proprietary financial institution and, therefore, we could have the best step forward, yes. Yes, indeed. But only information to third parties. This is a of both worlds. So I advise my col- when we reach, only when we reach the major step forward. leagues of that. recommittal motion, which is coming This kind of reminds me like my first Now, what is good about this? What up in about 15 or 20 minutes, will we experience in one of those big grocery is excellent about this? Well, first of get a chance to close the big loophole. stores. As I walked down the aisle I all, it creates for the very first time an The big loophole. And all I ask of my saw jeans for 12 bucks. First time in affirmative and continuing obligation, colleagues is that while, in fact, the my life. That was a big deal. I walked a duty on the part of financial institu- Oxley amendment shuts down sale to around the corner, and I saw tires for tions to protect customer information. robbers, that is burglars, those outside four-wheelers. My goodness, how did That does not exist under current law. the bank holding company, it does not they get here? I went around the next I introduced this bill in the last Con- do anything about electronic corner, and I ran into one of these nice gress. We were unable to get it. We did embezzlers inside the bank holding ladies, and she had these little bitty not even get it in the Committee on company marketing it, not just to its wieners they only give out one at a Banking and Financial Services’ prod- affiliates, but they can market it be- time. But they were selling those little uct. We have it in this amendment. cause they are affiliates to anyone else wieners in the store, along with the This is terrific. H5312 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Further, not only do we create an ob- tect your privacy. Can you imagine protection, and they have said that if ligation, we give the financial regu- that? That is wrong. It is un-American, we do this, the financial system would lators the ability to articulate stand- it is anti-consumer, and it has to stop. collapse, there is simply no way that ards that the financial institutions The privacy amendment being offered the banking system could accommo- must meet in order to fulfill that obli- here tonight is a historic precedent to date this reasonable consumer protec- gation. This, too, is terrific. I thank put an end to that. tion. my staff. We have opt-out language Now, many of my friends on the Well, guess what? In Minnesota yes- that was contained in the amendment other side of the aisle say it is not per- terday, a major U.S. bank got caught of the gentleman from Ohio (Mr. fect or complete enough, but, Madam with its hand in the cookie jar. They GILLMOR). Chairman, for the first time ever we were, in fact, giving away consumer I introduced a bill to fulfill the chal- will be saying that each financial insti- private financial information. It was lenge that the Comptroller of the Cur- tution has a legal obligation to protect being used to telemarket to consumers. rency gave when he gave his speech the privacy and confidentiality of its And when they were caught by the talking about seamy financial institu- customers. And for the first time ever Minnesota attorney general, they said, tion practices. To fulfill the challenge we will be saying that every financial mea culpa, you got us. We give up. But of the lawsuit brought by the Attorney institution must adhere to strict do my colleagues know what they General from Minnesota, the bill would standards to ensure the security and agreed to? They agreed to a Minnesota have been not just an opt-out or an confidentiality of customer records. consent decree, to a judicial order pro- opt-in but an actual prohibition. We And for the first time ever we will re- hibiting sharing with their affiliate have that in this amendment. quire every institution to fully disclose and their third parties because they We have a prohibition on the disclo- to a customer up front what their pri- knew that this could be done. sure of account numbers. We prohibit vacy policy is. And perhaps most im- I am here to say, if it is good enough financial institutions from sharing portantly, for the first time ever we for the good folks in Minnesota, it is with unaffiliated parties any credit will require that financial institutions good enough for everybody across card savings and transaction account give their customers a right to just say America and the U.S. Congress ought numbers or other means of access to no to the sharing of what most Ameri- to be just as progressive and just as ef- such accounts for purposes of mar- cans hold very, very dear: private in- fective as the Minnesota attorney gen- keting to the consumer, including tele- formation about themselves and their eral and we ought to make sure that marketing, including direct mail, and families. affiliates are covered just as well. That including E-mail marketing. Madam Chairman, make no mistake, is why we have got to pass this motion We have a prohibition on third party this is a landmark privacy legislation to recommit. Before I sit, we have talked a lot resale of private information. We pro- which was drafted in a bipartisan fash- about privacy. I want to commend the hibit unaffiliated third parties that re- ion. And given that current law gives work of the gentleman from Iowa ceive confidential customer informa- our constituents no protection whatso- (Chairman LEACH) and the gentleman tion from a financial institution from ever, and given that our colleagues in from New York (Mr. LAFALCE) on this reselling or sharing this information the other body have no privacy protec- program. We have made some advance- with any other unaffiliated parties. tion in their banking bill whatsoever, ment. But we will be sorely, sorely Let us not look a gift horse in the and given that last year’s version of mouth. This is a terrific amendment. feeling bad when our consumers look this very bill had no privacy protec- back to tonight and say to me and the We would not have gotten here without tions whatsoever, while customers are gentleman from Massachusetts (Mr. the gentleman from Washington (Mr. growing more and more troubled by MARKEY) and the rest of us, why did we INSLEE), we would not have gotten here random telemarketing and junk mail, not take care of the affiliates at the without the gentleman from Massachu- it is critical we adopt this amendment. same time we took care of the third setts (Mr. MARKEY), and I thank them Privacy is a very personal thing. parties? for that. Let us accept this and then let Americans feel very strongly about It is our chance to do it tonight. Pass us go forward. protecting it. Let us heed the voice of the motion to recommit and finish the Mr. OXLEY. Madam Chairman, I America. I urge adoption of the amend- job. yield 3 minutes to the gentlewoman ment. Mr. OXLEY. Madam Chairman, I am from Ohio (Ms. PRYCE), who has done Mr. MARKEY. Madam Chairman, I pleased to yield 2 minutes to the gen- such a wonderful job in leading us in yield 3 minutes to the gentleman from tlewoman from New Jersey (Mrs. ROU- this effort on privacy. Washington (Mr. INSLEE). KEMA) who has taken great leadership Ms. PRYCE of Ohio. Madam Chair- Mr. INSLEE. Madam Chairman, the on this issue and who is the Sub- man, I thank my friend for yielding previous speaker, the gentlewoman committee Chair on Financial Institu- this time. from Ohio (Ms. PRYCE), is entirely cor- tions and Consumer Credit. Madam Chairman, let me ask my col- rect. Americans are sick and tired of (Mrs. ROUKEMA asked and was leagues if they are tired of their phone having their personal financial infor- given permission to revise and extend ringing in the middle of dinner only to mation, their credit cards, their sav- her remarks.) be solicited for lawn care service. Are ings account information given away Mrs. ROUKEMA. Madam Chairman, I they tired of getting so much junk to telemarketers and getting those ob- thank my colleague the gentleman mail that they have to empty their noxious calls during dinner time. from Ohio (Mr. OXLEY) for yielding me trash twice as often as they used to? b the time. Are they tired of their teenagers being 2200 Madam Chairman, I have got to say solicited for a new credit card every She is right. But they are just as that I am really very pleased by this other week? Are they tired of won- tired of getting those calls from the af- debate thus far. I appreciate every- dering who in the world is giving out filiates of banks as they are from third thing that the gentleman from New their addresses and phone numbers to parties of banks. York (Mr. LAFALCE) has said. I think these strangers? Well, I am, and I am That is why it is imperative to aug- that is very constructive. And cer- mad as heck about it. ment the Oxley amendment by the mo- tainly I want to commend the gen- So today I am taking the floor to tion to recommit to make sure that tleman from Ohio (Mr. OXLEY) and the issue a public service warning to all of Americans have the right to stop not gentlewoman from Ohio (Ms. PRYCE) our constituents: ‘‘Mr. and Mrs. Amer- only third parties but affiliates from and I think she and the gentleman ica, your personal financial informa- making those calls and violating their from New York (Mr. LAFALCE) have tion may be disclosed by your bank to privacy. greatly strengthened the whole argu- any Tom, Dick and Harry without your Now, if I can share with Members ment for this by saying this gives us knowledge and without your consent.’’ something I learned yesterday and I more privacy than under any law that That is right, America, in all the think it is important in this debate. we have ever had. years of banking law in this country The members of the industry have ob- This is a giant step in the right direc- there are no laws on the book to pro- jected to affiliate coverage of this vital tion. But I must also say that it is July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5313 more than just a start. It is not the and insurance companies should be in- fer of that information is both wide- whole thing, but it is much more than surance companies and brokers should spread and it is growing. And the sim- just a start. It is literally a foundation be brokers. That was the good ol’ days ple reason is the astonishing growth in for whatever we might do in the future. of the 1980s, not the 1940s or 1950s. technology today and information But it is a wonderful foundation, a Well, tonight we have before us a gathering and the human benefits the strong foundation. mega-financial service reform bill that, tremendous benefits we get from that I want to say that, as the Chair- according to those that support it, is also carry with them unprecedented woman of the Subcommittee on Finan- going to allow companies to operate threats to personal privacy and per- cial Institutions and Consumer Credit, through hundreds of subsidiaries and sonal privacy need protection because some weeks ago before this privacy affiliates, hundreds. it is an important part of individual thing erupted, really I had set privacy The question that I ask this body and freedom. hearings for July 21 and 22 with the the country is: If we are concerned I urge support of the amendment. recognition that there are some com- about the selling and sharing of infor- Mr. MARKEY. Madam Chairman, I plexities that are here that we will mation to third parties, should we not yield such time as he may consume to have to deal with. be just as concerned about the selling, the gentleman from Texas (Mr. FROST). The gentleman from Ohio (Mr. sharing, transmitting, or accessing (Mr. FROST asked and was given per- OXLEY) pointed out that there is a re- that information inside of these affili- mission to revise and extend his re- port that we are going to be looking for ates if there are going to be dozens or marks.) as part of this amendment. But I want hundreds of these affiliates? Mr. FROST. Madam Chairman, I rise to point out to my colleagues that I think that what the gentleman in support of the Oxley amendment. there are complexities to privacy and from Ohio (Mr. OXLEY) and the gentle- Mr. MARKEY. Madam Chairman, I accountability here that have not been woman from Ohio (Ms. PRYCE) have yield such time as he may consume to completely thought through. done is a step in the right direction. the gentleman from Minnesota (Mr. For example, some may be concerned But it is only a step. Until we solve the VENTO). about the exceptions included in this riddle of handling information within (Mr. VENTO asked and was given bill. But, in my opinion, these excep- the affiliates structure, we do not have permission to revise and extend his re- tions are included to ensure that every- privacy. We do not have privacy. marks.) day transactions like mortgage serv- So I will vote for the amendment be- Madam Chairman, I rise in support of the icing, securitization of mortgages, cause it is a step in the right direction, comprehensive privacy amendment. I believe printing of checks can continue under but I will vote against final passage that this amendment improves the bill by pro- our new financial system. But there until we get this issue settled. It is not viding consumers with new important safe- are also exceptions that allow our law going to go away. We need to address guards for their financial privacy. enforcement officials to conduct im- it. Public concerns about personal information portant investigations relating to pub- The debate this evening on the floor privacy are growing. Seemingly each week, lic safety. is good. I commend the gentleman there are new reports of stolen identities, sell- This is just another way of saying from Massachusetts (Mr. MARKEY) and ing of consumer financial data, ``cookies'' on that this is a wonderful foundation, the gentleman from New York (Mr. LA- Internet sites, hijacked ATM cards and num- more than a small step, in the right di- FALCE) and the gentleman from Ohio bers. Both the Banking Committee and the rection. It is a giant step. But we have (Mr. LEACH) and the gentleman from Commerce Committee, for the first time, ad- more to do, and this puts us on the Ohio (Mr. OXLEY) and the gentlewoman dressed consumer privacy in H.R. 10. During right direction. from Ohio (Ms. PRYCE) and others for the Banking Committee debate on this issue, Mr. MARKEY. Madam Chairman, bringing the debate to the country. But I stated that the issue of privacy is even big- could the Chair tell me how much time the ultimate solution is not Oxley- ger than the financial services modernization is remaining. Pryce. We need to go further. bill. While it is appropriate to insure that ade- The CHAIRMAN. The gentleman Mr. OXLEY. Madam Chairman, I am quate privacy safeguards are in place to pro- from Massachusetts (Mr. MARKEY) has pleased to yield 1 minute to the gen- tect consumer privacy in the new financial 51⁄2 minutes remaining. The gentleman tleman from Ohio (Mr. GILLMOR) who marketplace, this legislation is not the vehicle from Ohio (Mr. OXLEY) has 5 minutes has been one of the leaders on the Com- to address an all embracing comprehensive remaining. mittee on Commerce on the banking privacy legislation. This bill will not stop iden- Mr. MARKEY. Madam Chairman, I provisions, as well as the privacy provi- tity theft. It will not stop the stealing of Social yield 2 minutes to the gentleman from sions. Security numbers nor the filing of false tax re- Texas (Mr. BARTON). (Mr. GILLMOR asked and was given turns. H.R. 10 will not stop the selling of driv- (Mr. BARTON of Texas asked and permission to revise and extend his re- er's license information or the selling of its lists was given permission to revise and ex- marks.) or attaching cookies to visitors to web sites. tend his remarks.) Mr. GILLMOR. Madam Chairman, I Nor will this bill stop the diversion of an indi- Mr. BARTON of Texas. Madam Chair- want to commend the chairman for his vidual's mail nor the stealing of credit card and man, I want to rise to commend the leadership on the privacy issue. This ATM numbers. Those issues are left for an- distinguished subcommittee chairman amendment is an important step in other day and future action. for what he has done but to condemn protecting individual privacy. It pro- H.R. 10 should contain a privacy protection him for not going as far as he should. tects it by regulating the disclosure component as it relates to financial institutions. The bill as reported out of the Com- and the sharing of consumer informa- That component should not just be a rhetorical mittee on Banking and Financial Serv- tion by financial institutions. statement, it must be a workable safeguard for ices had no privacy protection at all. It contains a number of the elements consumers. The financial privacy protection The bill that was reported out of the that were in an amendment that I of- amendment pending before the Committee is Committee on Commerce had privacy fered in the Committee on Commerce, better than the Banking and Commerce Com- provisions that the gentleman from and the Committee on Commerce did mittee alternatives. It is a good, workable Massachusetts (Mr. MARKEY) offered adopt those provisions but it is not in product that will serve our constituents well. that some people thought was too in- the version before us. The Financial Privacy Protection amendment flexible. Consumers feel they have lost con- reinforces the opt-out for third party informa- I supported the gentleman from Mas- trol over how their financial informa- tion sharingÐa key consumer concern. More sachusetts (Mr. MARKEY). I worked tion is being collected, how it is being importantly, the amendment puts in place with him and his staff to come up with distributed by institutions having strong affirmative provisions of law that pro- a modified Markey-Barton-Dingell-Ins- nothing to do with the financial rela- vide absolute protections and benefits for con- lee-Eshoo et al. amendment that we of- tions they have with those providers. sumers. fered to the Committee on Rules that Personal information is much more Those provisions include: was not ruled in order. accessible now, even without the per- Affirmative privacy responsibility and pol- I remember the old days when we son whose privacy is invaded knowing icy.ÐBanks, insurance companies, credit thought that banks should be banks it is being invaded. The sale and trans- unions, security firms, mutual funds, thrifts and H5314 CONGRESSIONAL RECORD — HOUSE July 1, 1999 other financial institutions will be required by opt-out are to date not dissuaded by the prob- brokerage affiliate, they do not want law to be respect for consumer's financial pri- lems. Consumer privacy is not insured and them to hand it over to the insurance vacy and to have a privacy policy that meets consumer services are reduced. Unified state- affiliate, they cannot say no. They federal standards to protect the security and ments cannot be issued and something as have no right to say no under the Re- confidentiality of the customers personal infor- simple as calling to get an account balance publican bill. mation. will become a bureaucratic nightmare. The In the recommital motion, each Prohibition on sharing account numbers.Ð only thing that an affiliate opt-out amendment Member is going to be given an oppor- Consumer account numbers cannot be shared accomplishes is to require financial institutions tunity to say to every American, I for the purposes of third party marketing. This to restructure themselves to conform to the think you should have the right to say protection applies to all consumers and re- cookie cutter mold developed by Congress. no. I do not want any of my children’s quires no action on their part. A law that requires consumer action is ap- privacy compromised. I do not want Workable ``Opt-Out'' on third party informa- propriate but third party and affiliate ``opt-out'' my family’s privacy compromised. I do tion sharing.ÐConsumers can ``opt-out'' of is hardly the last word in consumer rights. The not want the medical secret of my fam- sharing of information with third parties in a fact is that a number of consumers have such ily out on the street just because it workable fashion that protects consumers' pri- a right today under FCRA or institution poli- happens to be a bank holding company vacy while allowing the processing of services cies. Even with that authority, only a small that owns the insurance policy, the they request. fraction of individuals, less than 1 percent, ex- checks, or the brokerage account and Effective regulatory authority.ÐRegulatory ercise that option. Consumer choice is nice they have a marketing affiliate that and enforcement authority is provided to the but what does it really accomplishÐwhat is sells my privacy like it is a commodity specific regulators of each type of financial in- the bottom line. to hundreds of companies that are stitutions. These regulators can best do the Another deficiency of the alternative pro- dying to find out everything that is job instead of the alternative single regulator posal is the regulator. That approach gives en- going on within my State. who is understaffed and supports privacy forcement authority to the Federal Trade Com- So we are going to give everyone an ``self-regulation'' for the industry it is currently mission as opposed to the appropriate regu- opportunity in that recommital mo- charged to regulate. lator for each financial institution. This is the tion, and we are going to throw in the Prohibits repackaging of consumer informa- same regulator who testified last year before Lee redlining as well as the third little tion.ÐConsumer information remains pro- the House Commerce Subcommittee on Tele- provision. That is only going to be a 5- tected. It cannot be resold or shared by third communications on Internet privacy. At that minute debate altogether. But when parties or profiled or repackaged to avoid pri- time, FTC Chairman Pitofsky testified that: my colleagues vote on it, they are vacy protections. ``The Commission believes that self-regulation going on record on those issues. Be- Consumer disclosure.ÐConsumers must be is preferred to a detailed legislative mandate cause if it is successful, it goes into the notified of the financial institutions' privacy pol- . . .'' We should not turn over such an impor- bill immediately, and we are voting final passage. And if my colleagues icy at the time that they open an account and tant enforcement authority to such a reluctant vote no, this bill is leaving here with at least annually thereafter. regulator. These common sense, workable provisions Madam Chairman, I urge my Colleagues to every one on record against medical will be added to the substantial protections al- support the pending amendment. If we are to privacy and against the financial pri- ready included in H.R. 10 that prohibit obtain- pass financial modernization, strong consumer vacy provision that ensures that the bank holding company and its tele- ing customer information through false pre- privacy protection must be a cornerstone of marketing subsidiary, its affiliate, can- tenses and disclosing a consumer's health that proposal. The pending amendment helps not just take all their secrets and sell and medical information. us to achieve that goal. In addition, the legislation clearly defines Mr. MARKEY. Madam Chairman, I them to the rest of the world and make what is ``publicly available information''. This yield myself the balance of the time. millions of dollars. Yes, they call it a synergy, by the definition is designed to insure that non-public Madam Chairman, the Oxley amend- way, a synergy. But we are trying to information is not disseminated through a pub- ment is a good step forward. We will take the sin out of the synergy. We are lic information loophole. Under the amend- concede that. But it has huge loopholes trying to make sure that they get the ment, which I helped to draft, publicly avail- in the law that it does not close. benefits of all these products, they can able information is intended to include infor- As soon as we finish this debate on the Oxley amendment, we are going to say yes if they want them, but they mation such as: can say no as well. That is what this is Public records from country or municipal have an opportunity to vote on a all about. It does not stop any bank recommital motion. Within that sources, such as tax assessors' offices, re- from trying to get them to buy these recommital motion, each Member out corders of deeds, tax collectors, planning de- products. What it says is they have a here on the floor will have a straight partments and court systems; right to say, no, I do not want this. I shot to vote on the provisions that the Public records from state sources, such as want the checking account, that is it. Committee on Rules did not give the planning agencies, secretaries of state, rev- Please do not sell the rest of the mate- Members a chance to vote on. enue agencies, departments of motor vehicles, rial to anyone else. They will have a chance to vote on state courts, departments of education, depart- So the Oxley amendment is some- ments of forestry, environmental reporting the Condit amendment. The gentleman thing that should be supported. I think agencies and employment security agencies; from California (Mr. CONDIT) and the we will all support it unanimously on Public records from federal sources, such gentleman from California (Mr. WAX- this side. But the big vote is coming up as federal courts, the IRS, FEMA, the USGS, MAN) have a proposal that will close all in about 10 more minutes. FCC, FAA, U.S. Post Office and Census Bu- the medical loopholes. It will ensure Mr. OXLEY. Madam Chairman, I am reau; and that your medical information cannot pleased to yield 1 minute to the gentle- Public information from Journals, news- be given away. It will guarantee that woman from Oregon (Ms. HOOLEY). papers and other publications. the exceptions that are inside of this Ms. HOOLEY of Oregon. Madam I do not take a back seat to any Member bill that swallow the rule do not allow Chairman, I thank the gentleman for when it comes to consumer rights and con- for families across this country to have yielding me the time. sumer privacy. I have worked to protect con- their medical information sold and Madam Chairman, I am pleased to sumer privacy through laws like Truth in Lend- bought as though it was just an ordi- support this amendment. It has a ing, Fair Credit Reporting Act and the Elec- nary commodity. strong bipartisan protection for con- tronic Fund Transfer Act. I also introduced one Every Member on the floor in the sumers. I know there is some honest of the first proposals to protect a consumer's recommital motion will also be put on disagreement between my colleagues privacy on the Internet, the Consumer Internet substantive record on the issue of fi- on this very important issue of pri- Privacy Protection Act. nancial privacy within the holding vacy. But what I would like to do is During the Banking Committee mark-up, I company. That is, if they have all of urge my colleagues to look at what is introduced an amendment that would have their checks inside of a bank right now in this amendment, not what is miss- provided an annual opt-out on affiliate sharing. and they do not want them to give it ing. I withdrew that amendment because I realized over to a telemarketing affiliate, they My constituents of my district have that it was unworkable. Other advocates of the do not want them to give it over to the told me time and time again that they July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5315 do not want their names and perma- the Oxley amendment, for the first mation is especially sensitive and should be nent information sold to companies time we are requiring financial serv- kept as confidential as possible. they have never heard of. If we pass ices organizations to actually have a These are common sense provisions that this Oxley amendment, consumers will privacy policy. It has to be printed, it protect Americans who are sincerely con- be able to tell their banks; no, I do not has to be explained to the customer, cerned about privacy. These days, many com- want my name sold; no, I do not want the customer has an opportunity to un- panies have access to information about our you to share information with third derstand exactly what that privacy spending and saving habits because of lax pri- parties. policy is. It never happened before vacy laws that only make consumers vulner- Madam Chairman, this amendment until this amendment becomes law. able. However, I am looking forward to ensur- takes us much further than I ever Secondly, now that the consumer ing greater consumer protection as it relates to dreamt that we would go in strength- who is working with this affiliate com- privacy issuesÐincluding medical records pri- ening current laws creating new and ef- pany understands that policy, he may vacyÐas this legislation moves to conference. fective protections for consumers on or may not decide to continue to do I am concerned that this amendment will privacy. Most of all, it has meaningful business with that company. If he is so allow financial institutions to share consumer enforcement language. I urge its pas- concerned that the company he is deal- information through their affiliates without re- sage. ing with is going to be selling that in- striction. However, this amendment is an im- b 2215 formation or leaking that information portant first step to ensuring a marginal level Mr. OXLEY. Madam Chairman, I to other parts of the affiliate, he is of privacy for consumers.I support the provi- yield 2 minutes to the gentleman from going to vote with his feet, he is going sions in this amendment and I urge my col- to act like an educated consumer, to leagues to vote for its passage. California (Mr. DREIER), the chairman Mrs. MALONEY of New York. Madam of the Committee on Rules. quote a famous line from Sy Syms. He (Mr. DREIER asked and was given is going to be an educated consumer, Chairman, last year H.R. 10 passed this permission to revise and extend his re- and he is going to go someplace else Chamber by one vote. In that version of Fi- marks.) where his privacy is going to be pro- nancial Modernization, there were no privacy Mr. DREIER. Madam Chairman, I tected. That is the marketplace work- provisions. This year things have changed. rise in strong support of this amend- ing very effectively, I would say to my There are privacy provisions in the base text ment. I would like to begin by not only friend from Massachusetts, not some and there is this amendment which, if adopt- congratulating the gentleman from statute that ties up these financial in- ed, will make this one of the strongest privacy Ohio (Mr. OXLEY) but, of course, my stitutions, costs them millions and bills to involve the financial services industry. colleague on the second row here who millions of dollars which is going to be I would like to thank all of the members who worked long and hard as a member of passed on to the consumer ultimately have worked on crafting this amendment, in- the Committee on Rules and, yes, I and is going to be less and less effi- cluding Representatives FROST, LAFALCE, want to even congratulate, we have cient. PRYCE, and OXLEY. A few days ago I sub- once again made this a bipartisan ef- This is the product that was worked mitted to this informal privacy working group a fort, when I heard the word ‘‘terrific’’ on in a bipartisan way. I ask the Mem- suggested amendment. My proposal would used three times by my friend the gen- bers to support the amendment. make certain that if an affiliate in a holding tleman from New York (Mr. LAFALCE), Ms. JACKSON-LEE of Texas. Madam company were sold to another entity, only the and I know that we will see very broad Chairman, I rise in support of the Oxley/Pryce/ information about their own customers could bipartisan support for what is I think a Roukema amendment because it requires fi- be transferred. No information about cus- very important measure. nancial institutions to respect the privacy of its tomers in the original holding company are al- We are all appalled at the thought of customers. This is a basic consumer protec- lowed to be shared with the sold entity's new telemarketers getting access to infor- tion and I urge my colleagues to support this affiliates unless they were already a customer. mation. We all want to do everything amendment. This is an important privacy protection and I that we can to stop that. In fact, the The provisions of this amendment include was pleased that the authors agreed to add it base text of this bill has the strongest basic consumer privacy protections. It requires into this amendment. consumer privacy protection we have an ``affirmative and continuing obligation'' to Perhaps the most important part of this ever had. But guess what? This amend- protect customer's personal information. amendment are the strong disclosure provi- ment, that we are all going to be, I This amendment requires regulatory stand- sions. This bill requires financial institutions to hope, overwhelmingly supporting based ards to insure security and confidentiality of annually disclose to their customers their poli- on the statements that I have been customer records to protect against unauthor- cies practices for collecting and protecting the hearing, will be even tougher. The fact ized access and use. With recent advances in customer's private information. Financial Mod- of the matter is this is a very balanced technology, there is the possibility that a com- ernization means more choices for consumers, compromise. Why? Because privacy is a puter hacker can break into a bank's computer and part of that choice should include the pri- first priority. That is what it is that system and access personal account informa- vacy policies of the firm which is trying to at- the American people want. But there tion. tract their business. If a customer is are some other demands that they This amendment requires that consumers unsatisfied with a privacy policy of a firm, they have. They also demand low cost and be given the opportunity to opt-out of the dis- can choose another. But this form of competi- integrated financial products and serv- closure of their private information with unaffili- tion only works with strong disclosure require- ices, they demand on-line banking and ated third parties. It also prohibits unaffiliated ments. brokerage services, and they demand third parties that receive confidential customer This amendment will also prohibit financial protection against financial fraud. information from sharing that information with institutions from reselling a consumer's private Quite frankly to meet these demands, any other unaffiliated parties. information to a third party and will prohibit all of these demands, affiliates have to Another important provision in this amend- them also from sharing a customer's account be able to share some information. ment requires that all financial institutions dis- numbers in order to market to that customer. That is why I am convinced that this close their policies and practices for collecting This should prevent many of those unwanted now bipartisan effort which has seen customer information. All customers should telemarketing calls resulting from a relation- many Members involved is in fact the have notice of these policies in advance. ship with a bank or other financial firm. balance that is needed for us to deal Customers should also have advance There are still some problems with the base with the issue of privacy as well as knowledge of policies that protect their con- text, including the problems with the privacy of meeting consumer demands. fidential information and the policies that pre- medical information. But I am pleased with the I encourage my colleagues to support vent that information from being shared with colloquy between Mr. GANSKE and Mr. LA- it. unaffiliated parties. Advance knowledge of FALCE and I am confident that these issues Mr. OXLEY. Madam Chairman, I these policies not only protect the consumer, will be worked out in conference. yield myself the balance of my time. but it also protects the financial institution. These are the best privacy provisions to The CHAIRMAN. The gentleman This amendment prohibits financial institu- ever appear in a draft of H.R. 10 and I am from Ohio is recognized for 1 minute. tions from sharing credit card, savings and supportive of this effort. To be sure, during Mr. OXLEY. Madam Chairman, let transaction account numbers for purposes of this debate many good issues have been me reiterate to the Members. Under marketing to the consumer. This account infor- raised about these privacy issues. Chairman H5316 CONGRESSIONAL RECORD — HOUSE July 1, 1999

LEACH has announced hearings on privacy for Herger Miller (FL) Sherman Rodriguez Snyder Velazquez Hill (MT) Miller, Gary Sherwood Roemer Spratt Vento the end of July and I am sure the Banking Hilleary Moran (KS) Shimkus Rothman Stabenow Visclosky Committee will continue to examine the issue Hobson Myrick Shows Roybal-Allard Stark Walsh and consider appropriate legislation. Hoekstra Nethercutt Shuster Rush Stenholm Waters The CHAIRMAN. The question is on Horn Ney Simpson Ryun (KS) Stupak Watt (NC) Hostettler Northup Sisisky Sabo Sweeney Waxman the amendment offered by the gen- Houghton Norwood Skeen Sanchez Tanner Weiner tleman from Ohio (Mr. OXLEY). Hulshof Ose Smith (MI) Sanders Tauscher Weldon (FL) The question was taken; and the Hunter Oxley Smith (NJ) Sandlin Taylor (MS) Wexler Hutchinson Packard Smith (TX) Sawyer Thompson (CA) Weygand Chairman announced that the ayes ap- Hyde Pallone Souder Schakowsky Thompson (MS) Wise peared to have it. Inslee Pease Spence Scott Thurman Woolsey Mr. OXLEY. Madam Chairman, I de- Isakson Peterson (PA) Stearns Serrano Tierney Wu mand a recorded vote. Istook Petri Strickland Skelton Turner Wynn Jenkins Pickering Stump Slaughter Udall (CO) The CHAIRMAN. Pursuant to House John Pickett Sununu Smith (WA) Udall (NM) Resolution 235, further proceedings on Johnson (CT) Pitts Talent NOT VOTING—5 the amendment offered by the gen- Johnson, Sam Pombo Tancredo Kasich Porter Tauzin Brown (CA) Green (TX) Pelosi XLEY tleman from Ohio (Mr. O ) will be Kelly Portman Taylor (NC) Fossella Lipinski postponed. Kildee Pryce (OH) Terry Thomas b SEQUENTIAL VOTES POSTPONED IN COMMITTEE King (NY) Quinn 2240 Kingston Radanovich Thornberry OF THE WHOLE Knollenberg Ramstad Thune Messrs. MOAKLEY, MCHUGH and The CHAIRMAN. Pursuant to House Kuykendall Regula Tiahrt JONES of North Carolina changed Resolution 235, proceedings will now LaHood Reynolds Toomey their vote from ‘‘aye’’ to ‘‘no.’’ Largent Riley Towns resume on those amendments on which Latham Rogan Traficant Messrs. DAVIS of Florida, VITTER, further proceedings were postponed in LaTourette Rogers Upton BROWN of Ohio and DEUTSCH the following order: Amendment No. 10 Lazio Rohrabacher Vitter changed their vote from ‘‘no’’ to ‘‘aye.’’ offered by the gentleman from Virginia Lewis (CA) Ros-Lehtinen Walden So the amendment was agreed to. Lewis (KY) Roukema Wamp (Mr. BLILEY); amendment No. 11 offered Linder Royce Watkins The result of the vote was announced by the gentleman from Ohio (Mr. LoBiondo Ryan (WI) Watts (OK) as above recorded. Lucas (KY) Salmon Weldon (PA) OXLEY). ANNOUNCEMENT BY THE CHAIRMAN Lucas (OK) Sanford Weller The Chair will reduce to 5 minutes Maloney (CT) Saxton Whitfield The CHAIRMAN. Pursuant to House the time for the second electronic vote McCollum Scarborough Wicker Resolution 235, the Chair announces in this series. McCrery Schaffer Wilson that she will reduce to a minimum of 5 McInnis Sensenbrenner Wolf AMENDMENT NO. 10 OFFERED BY MR. BLILEY McIntosh Sessions Young (AK) minutes the period of time within The CHAIRMAN. The pending busi- McIntyre Shadegg Young (FL) which a vote by electronic device will ness is the demand for a recorded vote McKeon Shaw be taken on the additional amendment on the amendment offered by the gen- Metcalf Shays on which the Chair has postponed fur- tleman from Virginia (Mr. BLILEY) on NOES—203 ther proceedings. which further proceedings were post- Abercrombie Etheridge Lowey AMENDMENT NO. 11 OFFERED BY MR. OXLEY poned and on which the noes prevailed Ackerman Evans Luther The CHAIRMAN. The pending busi- by voice vote. Allen Farr Maloney (NY) ness is the demand for a recorded vote The Clerk will redesignate the Andrews Fattah Manzullo Baird Filner Markey on Amendment No. 11 offered by the amendment. Baldacci Foley Martinez gentleman from Ohio (Mr. OXLEY) on The Clerk redesignated the amend- Baldwin Ford Mascara which further proceedings were post- ment. Barcia Frank (MA) Matsui Barrett (WI) Frost McCarthy (MO) poned and on which the ayes prevailed RECORDED VOTE Becerra Gejdenson McCarthy (NY) by voice vote. The CHAIRMAN. A recorded vote has Bentsen Gephardt McDermott The Clerk will designate the amend- been demanded. Bereuter Gibbons McGovern ment. Berkley Gilchrest McHugh A recorded vote was ordered. Berman Gilman McKinney The Clerk designated the amend- The vote was taken by electronic de- Berry Gonzalez McNulty ment. Biggert Gordon Meehan vice, and there were—ayes 226, noes 203, RECORDED VOTE Bishop Gutierrez Meek (FL) not voting 5, as follows: Blagojevich Hastings (FL) Meeks (NY) The CHAIRMAN. A recorded vote has [Roll No. 273] Blumenauer Hill (IN) Menendez been demanded. Boehlert Hilliard Mica A recorded vote was ordered. AYES—226 Bonior Hinchey Millender- Aderholt Cannon Ehlers Borski Hinojosa McDonald The CHAIRMAN. This will be a 5- Archer Capps Ehrlich Boswell Hoeffel Miller, George minute vote. Armey Castle Emerson Boyd Holden Minge The vote was taken by electronic de- Bachus Chabot English Brady (PA) Holt Mink Baker Chambliss Everett Brown (FL) Hooley Moakley vice, and there were—ayes 427, noes 1, Ballenger Coble Ewing Capuano Hoyer Mollohan not voting 6, as follows: Barr Coburn Fletcher Cardin Jackson (IL) Moore [Roll No. 274] Barrett (NE) Collins Forbes Carson Jackson-Lee Moran (VA) Bartlett Combest Fowler Chenoweth (TX) Morella AYES—427 Barton Cook Franks (NJ) Clay Jefferson Murtha Abercrombie Becerra Boucher Bass Cooksey Frelinghuysen Clayton Johnson, E. B. Nadler Ackerman Bentsen Boyd Bateman Cox Gallegly Clement Jones (NC) Napolitano Aderholt Bereuter Brady (PA) Bilbray Cramer Ganske Clyburn Jones (OH) Neal Allen Berkley Brady (TX) Bilirakis Crane Gekas Condit Kanjorski Nussle Andrews Berman Brown (FL) Bliley Cubin Gillmor Conyers Kaptur Oberstar Archer Berry Brown (OH) Blunt Cunningham Goode Costello Kennedy Obey Armey Biggert Bryant Boehner Danner Goodlatte Coyne Kilpatrick Olver Bachus Bilbray Burr Bonilla Davis (FL) Goodling Crowley Kind (WI) Ortiz Baird Bilirakis Burton Bono Davis (VA) Goss Cummings Kleczka Owens Baker Bishop Buyer Boucher Deal Graham Davis (IL) Klink Pascrell Baldacci Blagojevich Callahan Brady (TX) DeGette Granger DeFazio Kolbe Pastor Baldwin Bliley Calvert Brown (OH) DeLay Green (WI) Delahunt Kucinich Paul Ballenger Blumenauer Camp Bryant DeMint Greenwood DeLauro LaFalce Payne Barcia Blunt Campbell Burr Deutsch Gutknecht Dicks Lampson Peterson (MN) Barr Boehlert Canady Burton Diaz-Balart Hall (OH) Dixon Lantos Phelps Barrett (NE) Boehner Cannon Buyer Dickey Hall (TX) Doggett Larson Pomeroy Barrett (WI) Bonilla Capps Callahan Dingell Hansen Dooley Leach Price (NC) Bartlett Bonior Capuano Calvert Doolittle Hastings (WA) Doyle Lee Rahall Barton Bono Cardin Camp Dreier Hayes Edwards Levin Rangel Bass Borski Carson Campbell Duncan Hayworth Engel Lewis (GA) Reyes Bateman Boswell Castle Canady Dunn Hefley Eshoo Lofgren Rivers July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5317 Chabot Hefley Mica Skelton Tauzin Walden Page 9, after line 19, insert the following Chambliss Herger Millender- Slaughter Taylor (MS) Wamp new subparagraph (and redesignate the sub- Chenoweth Hill (IN) McDonald Smith (MI) Taylor (NC) Waters sequent subparagraph accordingly): Clay Hill (MT) Miller (FL) Smith (NJ) Terry Watkins ‘‘(D) In the case of any bank holding com- Clayton Hilleary Miller, Gary Smith (TX) Thomas Watt (NC) Clement Hilliard Miller, George Smith (WA) Thompson (CA) Watts (OK) pany which underwrites or sells, or any affil- Clyburn Hinchey Minge Snyder Thompson (MS) Waxman iate of which underwrites or sells, annuities Coble Hinojosa Mink Souder Thornberry Weiner contracts or contracts insuring, guaran- Coburn Hobson Moakley Spence Thune Weldon (FL) teeing, or indemnifying against loss, harm, Collins Hoeffel Mollohan Spratt Thurman Weldon (PA) damage, illness, disability, or death— Combest Hoekstra Moore Stabenow Tiahrt Weller ‘‘(i) the company or affiliate has not been Condit Holden Moran (KS) Stark Tierney Wexler adjudicated in any Federal court, and has Conyers Holt Moran (VA) Stearns Toomey Weygand not entered into a consent decree filed in a Stenholm Towns Whitfield Cook Hooley Morella Federal court or into a settlement agree- Cooksey Horn Murtha Strickland Traficant Wicker Costello Hostettler Myrick Stump Turner Wilson ment, premised upon a violation of the Fair Cox Houghton Nadler Stupak Udall (CO) Wise Housing Act for the activities described in Coyne Hoyer Napolitano Sununu Udall (NM) Wolf this subparagraph; Cramer Hulshof Neal Sweeney Upton Woolsey ‘‘(ii) if such company or affiliate has en- Crane Hunter Nethercutt Talent Velazquez Wu tered into any such consent decree or settle- Crowley Hutchinson Ney Tancredo Vento Wynn ment agreement, the company or the affil- Cubin Hyde Northup Tanner Visclosky Young (AK) Tauscher Vitter Young (FL) iate is not in violation of the decree or set- Cummings Inslee Norwood tlement agreement as determined by a court Cunningham Isakson Nussle NOES—1 of competent jurisdiction or the agency with Danner Istook Oberstar Davis (FL) Jackson (IL) Obey Paul which the decree or agreement was entered into; or Davis (IL) Jackson-Lee Olver NOT VOTING—6 Davis (VA) (TX) Ortiz ‘‘(iii) the company has been exempted from Deal Jefferson Ose Brown (CA) Green (TX) Pelosi the requirements of clauses (i) and (ii) by the DeFazio Jenkins Owens Fossella Lipinski Walsh Board under paragraph (4). DeGette John Oxley b 2249 Page 9, line 24, strike ‘‘and (C)’’ and insert Delahunt Johnson (CT) Packard ‘‘(C), and (D)’’. DeLauro Johnson, E. B. Pallone So the amendment was agreed to. Page 10, line 15, strike ‘‘(1)(D)’’ and insert DeLay Johnson, Sam Pascrell The result of the vote was announced ‘‘(1)(E)’’. DeMint Jones (NC) Pastor as above recorded. Page 11, after line 4, insert the following Deutsch Jones (OH) Payne new paragraph: Diaz-Balart Kanjorski Pease The CHAIRMAN. Under the rule, the ‘‘(4) VIOLATIONS OF THE FAIR HOUSING ACT.— Dickey Kaptur Peterson (MN) Committee rises. The Board may, on a case-by-case basis, ex- Dicks Kasich Peterson (PA) Accordingly, the Committee rose; Dingell Kelly Petri empt a bank holding company from meeting Dixon Kennedy Phelps and the Speaker having resumed the the requirements of clauses (i) and (ii) of Doggett Kildee Pickering chair, Mrs. EMERSON, Chairman of the paragraph (1)(D). Dooley Kilpatrick Pickett Committee of the Whole House on the Page 25, line 2, strike ‘‘or (C)’’ and insert Doolittle Kind (WI) Pitts State of the Union, reported that that ‘‘(C), or (D)’’. Doyle King (NY) Pombo Committee, having had under consider- Page 26, line 18, strike ‘‘(B) or (C)’’ and in- Dreier Kingston Pomeroy sert ‘‘(B), (C), or (D)’’. Duncan Kleczka Porter ation the bill (H.R. 10) to enhance com- Page 84, line 18, strike ‘‘(1)(D)’’ and insert Dunn Klink Portman petition in the financial services indus- ‘‘(1)(E)’’. Edwards Knollenberg Price (NC) Page 184, line 17, strike ‘‘(1)(D)’’ and insert Ehlers Kolbe Pryce (OH) try by providing a prudential frame- work for the affiliation of banks, secu- ‘‘(1)(E)’’. Ehrlich Kucinich Quinn Page 370, beginning on line 20, strike sub- Emerson Kuykendall Radanovich rities firms, and other financial service title D of title III through page 373, line 17 Engel LaFalce Rahall providers, and for other purposes, pur- English LaHood Ramstad (and conform the table of contents accord- Eshoo Lampson Rangel suant to House Resolution 235, she re- ingly). Etheridge Lantos Regula ported the bill back to the House with Strike title V and insert the following (and Evans Largent Reyes an amendment adopted by the Com- conform the table of contents accordingly): Everett Larson Reynolds mittee of the Whole. TITLE V—PRIVACY OF CONSUMER Ewing Latham Riley INFORMATION Farr LaTourette Rivers The SPEAKER. Under the rule, the Fattah Lazio Rodriguez previous question is ordered. Subtitle A—Disclosure of Nonpublic Personal Filner Leach Roemer Is a separate vote demanded on any Information Fletcher Lee Rogan amendment to the amendment in the SEC. 501. PROTECTION OF NONPUBLIC PER- Foley Levin Rogers SONAL INFORMATION. Forbes Lewis (CA) Rohrabacher nature of a substitute adopted by the (a) PRIVACY OBLIGATION POLICY.—It is the Ford Lewis (GA) Ros-Lehtinen Committee of the Whole? If not, the policy of the Congress that each financial in- Fowler Lewis (KY) Rothman question is on the amendment. Frank (MA) Linder Roukema stitution has an affirmative and continuing Franks (NJ) LoBiondo Roybal-Allard The amendment was agreed to. obligation to respect the privacy of its cus- Frelinghuysen Lofgren Royce The SPEAKER. The question is on tomers and to protect the security and con- Frost Lowey Rush the engrossment and the third reading fidentiality of those customers’ nonpublic Gallegly Lucas (KY) Ryan (WI) of the bill. personal information. Ganske Lucas (OK) Ryun (KS) (b) FINANCIAL INSTITUTIONS SAFEGUARDS.— Gejdenson Luther Sabo The bill was ordered to be engrossed In furtherance of the policy in subsection (a), Gekas Maloney (CT) Salmon and read a third time, and was read the each Federal functional regulator shall es- Gephardt Maloney (NY) Sanchez third time. tablish appropriate standards for the finan- Gibbons Manzullo Sanders Gilchrest Markey Sandlin MOTION TO RECOMMIT OFFERED BY MR. MARKEY cial institutions subject to their jurisdiction, Gillmor Martinez Sanford Mr. MARKEY. Mr. Speaker, I offer a and the Commission shall establish such standards for any financial institutions not Gilman Mascara Sawyer motion to recommit with instructions. Gonzalez Matsui Saxton subject to such jurisdiction, relating to ad- Goode McCarthy (MO) Scarborough The SPEAKER. Is the gentleman ministrative, technical, and physical Goodlatte McCarthy (NY) Schaffer from Massachusetts opposed to the safeguards— Goodling McCollum Schakowsky bill? (1) to insure the security and confiden- Gordon McCrery Scott tiality of customer records and information; Goss McDermott Sensenbrenner Mr. MARKEY. Yes, I am opposed to Graham McGovern Serrano the bill in its current form, Mr. Speak- (2) to protect against any anticipated Granger McHugh Sessions er. threats or hazards to the security or integ- Green (WI) McInnis Shadegg The SPEAKER. The Clerk will report rity of such records; and Greenwood McIntosh Shaw (3) to protect against unauthorized access Gutierrez McIntyre Shays the motion to recommit. to or use of such records or information Gutknecht McKeon Sherman The Clerk read as follows: which could result in substantial harm or in- Hall (OH) McKinney Sherwood Mr. MARKEY of Massachusetts moves to re- convenience to any customer. Hall (TX) McNulty Shimkus commit the bill H.R. 10 to the Committee on Hansen Meehan Shows SEC. 502. OBLIGATIONS WITH RESPECT TO PER- Hastings (FL) Meek (FL) Shuster Banking and Financial Services with in- SONAL INFORMATION. Hastings (WA) Meeks (NY) Simpson structions to report the same to the House (a) GENERAL REQUIREMENTS.—Except as Hayes Menendez Sisisky forthwith with the following amendments: otherwise provided in this subtitle, a finan- Hayworth Metcalf Skeen cial institution may not, directly or through H5318 CONGRESSIONAL RECORD — HOUSE July 1, 1999 any affiliate, disclose or make an unrelated affiliates or other persons by the financial form shall specifically identify the rights the use of any nonpublic personal information institution— institution affords consumers to grant or collected by the financial institution in con- (1) as necessary to effect, administer, or deny consent to (1) the disclosing of non- nection with any transaction with a con- enforce the transaction or a related trans- public personal information for any purpose sumer in any financial product or any finan- action; other than as required in order to effect, ad- cial service, unless— (2) with the consent or at the direction of minister, or enforce the consumer’s trans- (1) such financial institution provides or the consumer; action, or (2) the making of an unrelated use has provided to the consumer a notice that (3) as necessary to protect the confiden- of such information. complies with section 503 and the rules tiality or security of its records pertaining (c) ADDITIONAL CONTENTS OF RULES; EX- thereunder; and to the consumer, the financial service or fi- EMPTIVE RULES.—The Commission shall, by (2) such financial institution maintains nancial product, or the transaction therein; rule after consultation with the functional procedures to protect the confidentiality and (4) as necessary to take precautions regulators, and may by order— security of nonpublic personal information. against liability or to protect against or pre- (1) specify the disclosures and uses of infor- (b) OPT-OUT REQUIRED FOR INFORMATION vent actual or potential fraud, unauthorized mation which, for purposes of this subtitle TRANSFERS.— transactions, claims, or other liability; and the rules prescribed thereunder, may be (1) OPPORTUNITY TO OBJECT REQUIRED.—The (5) as necessary to respond to judicial proc- treated as necessary to effect, administer, or Commission shall by rule prohibit a finan- ess; enforce a consumer’s transaction with re- cial institution from making available any (6) to the extent permitted or required spect to a variety of financial services and fi- nonpublic personal information to any affil- under other provisions of law and in accord- nancial products; iate of the institution, or to any other per- ance with the Right to Financial Privacy (2) specify timing requirements with re- son that is not an affiliate of the institution, Act of 1974, to provide information to law en- spect to notices to new and existing cus- unless the consumer to whom the informa- forcement agencies (including a functional tomers, which shall not require notices more tion pertains— regulator, a State insurance authority, or frequently than annually unless there has (A) is given the opportunity in accordance the Commission) or for an investigation on a been a change in the information required to with such rule to object to the transfer of matter related to public safety; be disclosed pursuant to subsection (a); and such information; and (7) to a consumer reporting agency in ac- (3) provide, consistent with the purposes of (B) does not object, or withdraws the objec- cordance with title VI of the Consumer Cred- this subtitle, exemptions or temporary waiv- tion. it Protection Act; ers to, or delayed effective dates for, any re- (2) FLEXIBILITY OF FORM.—A financial insti- (8) in executing a sale or exchange whereby quirement of this subtitle or the rules pre- tution may, in complying with paragraph (1), the financial institution transfers to another scribed thereunder. present the opportunity to object in a man- financial institution or other person the (d) EXEMPTIVE RULES TO PERMIT EFFICIENT ner that permits the consumer to object— business unit or operation, or substantially DATA STORAGE AND RETRIEVAL.—The exemp- (A)(i) with respect to both affiliates and all the assets of the business unit or oper- tive rules prescribed by the Commission pur- nonaffiliated persons; ation, with which the customer’s trans- suant to subsection (c)(3) shall include such (ii) separately with respect to affiliates actions were effected; or rules as may be necessary to permit finan- generally and nonaffiliated persons gen- (9) in connection with a proposed or actual cial institutions and their affiliates to estab- erally; or securitization, secondary market sale or lish and maintain efficient systems to col- (iii) separately with respect to specified af- similar commercial transaction; lect and access nonpublic personal informa- filiates and nonaffiliated persons; and (10) for reinsurance purposes. tion in shared or networked data storage and (B) separately with respect to specified fi- SEC. 503. NOTICE CONCERNING DISCLOSING IN- retrieval facilities that are implemented in a nancial and nonfinancial products and serv- FORMATION. manner consistent with the requirements of ices that may be offered to the consumer. (a) RULE REQUIRED.—The Commission sections 501 and 502. (c) ACCESS TO AND CORRECTION OF INFORMA- shall, after consultation with the Federal (e) RULEMAKING DEADLINE.—The Commis- TION VENDED TO THIRD PARTIES.— functional regulators and one or more rep- sion shall initially prescribe the rules re- (1) RULE REQUIRED.—The Commission shall resentatives of State insurance regulators, quired by this section within one year after by rule require a financial institution that, prescribe rules in accordance with this sec- the date of enactment of this Act. Such for any consideration, makes available non- tion to prohibit unfair and deceptive acts rules, and any revisions of such rules, shall public personal information collected by the and practices in connection with the dis- be prescribed in accordance with section 553 financial institution in connection with any closing of nonpublic personal information or of title 5, United States Code. with making unrelated uses of such informa- transaction with a consumer in any financial SEC. 504. ENFORCEMENT. tion. Such rules shall require any financial product or any financial service to any per- institution, through the use of a form that (a) IN GENERAL.—Except as provided in sub- son or entity other than an employee or complies with the rules prescribed under sub- section (d), this subtitle and the rules pre- agent of such institution, an affiliate of such section (b), to clearly and conspicuously dis- scribed thereunder shall be enforced by the institution, or an employee or agent of such close to the consumer— Federal Trade Commission under the Federal affiliate, to afford that consumer— (1) the categories of nonpublic personal in- Trade Commission Act (15 U.S.C. 41 et seq.). (A) the opportunity to examine, upon re- formation that are collected by the financial (b) ACTIONS BY THE COMMISSION.—The Fed- quest, the nonpublic personal information institution; eral Trade Commission shall prevent any that was so made available; and (2) the practices and policies of the finan- person from violating this subtitle and the (B) the opportunity to dispute the accu- cial institution with respect to disclosing rules prescribed thereunder in the same man- racy of any of such information, and to nonpublic personal information, or making ner, by the same means, and with the same present evidence thereon. unrelated uses of such information, jurisdiction, powers, and duties as though all (2) EXCEPTION FOR PROPRIETARY INFORMA- including— applicable terms and provisions of the Fed- TION.—The rule required by paragraph (1) (A) the categories of persons to whom the eral Trade Commission Act (15 U.S.C. 41 et shall not require a financial institution to information is or may be disclosed or who seq.) were incorporated into and made a part afford a customer who requests access to the may be permitted to make unrelated uses of of this subtitle, except that notwithstanding nonpublic personal information that was such information, other than the persons to section 5(a)(2) of such Act (15 U.S.C. 45(a)(2)) made available the opportunity to examine whom the information must be provided to the Commission shall, for purposes of this or dispute any data obtained by any analysis effect, administer, or enforce the trans- title, have jurisdiction with respect to or evaluation performed using such informa- action; and banks, savings and loan institutions, and tion, or to examine or dispute the method- (B) the practices and policies of the insti- Federal credit unions. Any person who vio- ology of such analysis or evaluation. tution with respect to disclosing or making lates this subtitle or the rules prescribed (d) LIMITATIONS ON THE SHARING OF AC- unrelated uses of nonpublic personal infor- thereunder shall be subject to the penalties COUNT NUMBER INFORMATION FOR MARKETING mation of persons who have ceased to be cus- and entitled to the privileges and immuni- PURPOSES.—A financial institution shall not tomers of the financial institution; and ties provided in the Federal Trade Commis- disclose an account number or similar form (3) the policies that the institution main- sion Act in the same manner, by the same of access number or access code for a credit tains to protect the confidentiality and secu- means, and with the same jurisdiction, card account, deposit account, or trans- rity of nonpublic personal information. power, and duties as though all applicable action account of a consumer to any non- (b) DESIGN OF NOTICE REQUIREMENTS.—In terms and provisions of the Federal Trade affiliated third party for use in tele- prescribing the form of a notice for purposes Commission Act were incorporated into and marketing, direct mail marketing, or other of subsection (a), the Commission shall en- made a part of this subtitle. marketing through electronic mail to the sure that consumers are readily able to com- (c) TREATMENT OF RULES.—A rule issued by consumer. pare differences in the measures that the fi- the Commission under this title shall be (e) GENERAL EXCEPTIONS.—Subsections (a) nancial institution takes, and the policies treated as a rule issued under section and (b) shall not prohibit the disclosing of that the institution has established, to pro- 18(a)(1)(B) of the Federal Trade Commission nonpublic personal information, the making tect the consumer’s privacy as compared to Act (15 U.S.C. 57a(a)(1)(B)). of an unrelated use of such information, or the measures taken and the policies estab- (d) REGULATIONS PRESCRIBED UNDER SEC- the making available of such information to lished by other financial institutions. Such TION501.—The regulations prescribed under July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5319 section 501 by the Federal functional regu- ‘‘(2) The Administrator of the National collected by the financial institution in con- lators shall be enforced by the Federal func- Credit Union Administration shall prescribe nection with any transaction with a con- tional regulators with respect to financial such regulations as necessary to carry out sumer in any financial product or any finan- institutions subject to their jurisdiction the purposes of this Act with respect to any cial service, means any use other than a use under applicable law, as follows: persons identified under paragraph (3) of sub- that is necessary to effect, administer, or en- (1) Under section 8 of the Federal Deposit section (b).’’. force such transaction. Insurance Act, in the case of— (b) CONFORMING AMENDMENTS.—Section 621 (7) AFFILIATE.—The term ‘‘affiliate’’ means (A) national banks, Federal branches and of the Fair Credit Reporting Act (15 U.S.C. any company that controls, is controlled by, Federal agencies of foreign banks, and any 1681s) is further amended— or is under common control with another subsidiaries of such entities, by the Office of (1) by striking paragraph (4) of subsection company. the Comptroller of the Currency; (a); and (8) NECESSARY TO EFFECT, ADMINISTER, OR (B) member banks of the Federal Reserve (2) in subsection (b)— ENFORCE.—The disclosing or use of nonpublic System (other than national banks), (A) by inserting ‘‘and bank holding compa- personal information shall be treated— branches and agencies of foreign banks nies, and subsidiaries of bank holding compa- (A) as necessary to effect or administer a (other than Federal branches, Federal agen- nies other than depository institutions,’’ transaction with a consumer if the disclosing cies, and insured State branches of foreign after ‘‘Federal Reserve Act,’’ in paragraph or use is required, or is one of the usual and banks), commercial lending companies (1)(B); and accepted methods, to carry out the trans- owned or controlled by foreign banks, orga- (B) by inserting ‘‘, and savings and loan action and record and maintain the cus- nizations operating under section 25 or 25A holding companies and subsidiaries of sav- tomer’s account in the ordinary course of of the Federal Reserve Act, bank holding ings and loan holding companies’’ after ‘‘In- providing the financial service or financial companies and their nonbank subsidiaries or surance Corporation’’ in paragraph (2). product, and includes— affiliates (except broker-dealers, affiliates SEC. 506. DEFINITIONS. (i) providing the consumer with a con- providing insurance, investment companies, As used in this subtitle: firmation, statement, or other record of the and investment advisers), by the Board of (1) COMMISSION.—The term ‘‘Commission’’ transaction, or information on the status or Governors of the Federal Reserve System; means the Federal Trade Commission. value of the financial service or financial (C) banks insured by the Federal Deposit (2) FEDERAL FUNCTIONAL REGULATOR.—The product; and Insurance Corporation (other than members term ‘‘Federal functional regulator’’ (ii) the accrual or recognition of incentives of the Federal Reserve System), insured means— or bonuses associated with the transaction State branches of foreign banks, and any (A) the Board of Governors of the Federal that are provided by the financial institution subsidiaries of such entities, by the Board of Reserve System; or any other party; Directors of the Federal Deposit Insurance (B) the Office of the Comptroller of the (B) as necessary to enforce a transaction Corporation; and Currency; with a consumer if the disclosing or use is (C) the Board of Directors of the Federal (D) savings association the deposits of required, or is one of the lawful methods, to Deposit Insurance Corporation; which are insured by the Federal Deposit In- enforce the rights of the financial institution (D) the Director of the Office of Thrift Su- surance Corporation, and any subsidiaries of or of other persons engaged in carrying out pervision; the financial transaction, or providing the fi- such a savings association, by the Director (E) the National Credit Union Administra- nancial product or financial service; and of the Office of Thrift Supervision. tion Board; (C) as necessary to effect, administer, or (2) Under the Federal Credit Union Act, by (F) the Farm Credit Administration; and enforce a transaction with a consumer if the the Administrator of the National Credit (G) the Securities and Exchange Commis- disclosure is made in connection with— Union Administration with respect to any sion. (i) the authorization, settlement, billing, Federal or state chartered credit union, and (3) FINANCIAL INSTITUTION.—The term ‘‘fi- processing, clearing, transferring, recon- any subsidiaries of such an entity. nancial institution’’ means any institution ciling, or collection of amounts charged, deb- (3) Under the Farm Credit Act of 1971, by the business of which is engaging in financial ited, or otherwise paid using a debit, credit the Farm Credit Administration with respect activities or activities that are incidental to or other payment card or account number, or to the Federal Agricultural Mortgage Cor- financial activities, as determined under sec- by other payment means; poration, any Federal land bank, Federal tion 6(c) of the Bank Holding Company Act (ii) the transfer of receivables, accounts or land bank association, Federal intermediate of 1956. Such term, when used in connection interests therein; or credit bank, or production credit associa- with a transaction for a consumer, means (iii) the audit of debit, credit or other pay- tion. only the financial institution with which the ment information. (4) Under the Securities Exchange Act of consumer expects to conduct such trans- The Commission shall, consistent with the 1934, by the Securities and Exchange Com- action and does not include any affiliate, purposes of this subtitle, prescribe by rule mission with respect to any broker-dealer. subsidiary, or contractually-related party of actions that shall, in a variety of financial (5) Under the Investment Company Act of that financial institution, even if such affil- services, and with respect to a variety of fi- 1940, by the Securities and Exchange Com- iate, subsidiary, or party is also a financial nancial products, be treated as necessary to mission with respect to investment compa- institution and participates in the effecting, effect, administer, or enforce a financial nies. administering, or enforcing such trans- transaction. (6) Under the Investment Advisers Act of action. (9) FINANCIAL SERVICES; FINANCIAL PROD- 1940, by the Securities and Exchange Com- (4) NONPUBLIC PERSONAL INFORMATION.— UCTS; TRANSACTION; RELATED TRANSACTION.— mission with respect to investment advisers (A) The term ‘‘nonpublic personal informa- The Commission shall, consistent with the registered with the Commission under such tion’’ means personally identifiable financial purposes of this subtitle, prescribe by rule Act. information— definitions of the terms ‘‘financial services’’, (7) Under Federal Housing Enterprises Fi- (i) provided by a consumer to a financial ‘‘financial products’’, ‘‘transaction’’, ‘‘re- nancial Safety and Soundness Act of 1992 (12 institution; lated transaction’’, and ‘‘unrelated third U. S. C. 4501 et seq.), by the Office of Federal (ii) resulting from any transaction with party’’ for purposes of this subtitle. Housing Enterprise Oversight with respect to the consumer or the service performed for SEC. 507. EFFECTIVE DATE. the Federal National Mortgage Association the consumer; or This subtitle shall take effect one year and the Federal Home Loan Mortgage Cor- (iii) otherwise obtained by the financial in- after the date on which the Commission pre- poration. stitution. scribes in final form the rules required by (8) Under the Federal Home Loan Bank (B) Such term does not include publicly section 503(a), except to the extent that a Act, by the Federal Housing Finance Board available information, as such term is de- later date is specified in such rules. with respect to Federal home loan banks. fined by the regulations prescribed under Subtitle B—Fraudulent Access to Financial SEC. 505. FAIR CREDIT REPORTING ACT AMEND- section 504. Information MENT. (C) Notwithstanding subparagraph (B), SEC. 521. PRIVACY PROTECTION FOR CUSTOMER (a) AMENDMENT.—Section 621 of the Fair such term shall include any list, description, INFORMATION OF FINANCIAL INSTI- Credit Reporting Act (15 U.S.C. 1681s) is or other grouping of consumers (and publicly TUTIONS. amended— available information pertaining to them) (a) PROHIBITION ON OBTAINING CUSTOMER IN- (1) in subsection (d), by striking everything that is derived using any personally identifi- FORMATION BY FALSE PRETENSES.—It shall be following the end of the second sentence; and able information other than publicly avail- a violation of this subtitle for any person to (2) by striking subsection ‘‘(e)’’ and insert- able information. obtain or attempt to obtain, or cause to be ing in lieu thereof the following: (5) DIRECTORY INFORMATION.—The term disclosed or attempt to cause to be disclosed ‘‘(e) REGULATORY AUTHORITY.— ‘‘publicly available directory information’’ to any person, customer information of a fi- ‘‘(1) The Federal banking agencies referred means subscriber list information required nancial institution relating to another to in paragraphs (1) and (2) of subsection (b) to be made available for publication pursu- person— shall jointly prescribe such regulations as ant to section 222(e) of the Communications (1) by making a false, fictitious, or fraudu- necessary to carry out the purposes of this Act of 1934 (47 U.S.C. 222(3)). lent statement or representation to an offi- Act with respect to any persons identified (6) UNRELATED USE.—The term ‘‘unrelated cer, employee, or agent of a financial insti- under paragraphs (1) and (2) of subsection (b). use’’, when used with respect to information tution; H5320 CONGRESSIONAL RECORD — HOUSE July 1, 1999 (2) by making a false, fictitious, or fraudu- financial institution subject to regulation by SEC. 527. DEFINITIONS. lent statement or representation to a cus- such Federal banking agency; and For purposes of this subtitle, the following tomer of a financial institution; or (3) notify the appropriate State insurance definitions shall apply: (3) by providing any document to an offi- regulator whenever the Commission initiates (1) CUSTOMER.—The term ‘‘customer’’ cer, employee, or agent of a financial insti- an investigation with respect to a financial means, with respect to a financial institu- tution, knowing that the document is forged, institution subject to regulation by such reg- tion, any person (or authorized representa- counterfeit, lost, or stolen, was fraudulently ulator. tive of a person) to whom the financial insti- obtained, or contains a false, fictitious, or SEC. 523. CRIMINAL PENALTY. tution provides a product or service, includ- fraudulent statement or representation. (a) IN GENERAL.—Whoever knowingly and ing that of acting as a fiduciary. (b) PROHIBITION ON SOLICITATION OF A PER- intentionally violates, or knowingly and in- (2) CUSTOMER INFORMATION OF A FINANCIAL SON TO OBTAIN CUSTOMER INFORMATION FROM tentionally attempts to violate, section 521 INSTITUTION.—The term ‘‘customer informa- FINANCIAL INSTITUTION UNDER FALSE PRE- shall be fined in accordance with title 18, tion of a financial institution’’ means any TENSES.—It shall be a violation of this sub- United States Code, or imprisoned for not information maintained by or for a financial title to request a person to obtain customer more than 5 years, or both. institution which is derived from the rela- information of a financial institution, know- (b) ENHANCED PENALTY FOR AGGRAVATED tionship between the financial institution ing that the person will obtain, or attempt CASES.—Whoever violates, or attempts to and a customer of the financial institution to obtain, the information from the institu- violate, section 521 while violating another and is identified with the customer. tion in any manner described in subsection law of the United States or as part of a pat- (3) DOCUMENT.—The term ‘‘document’’ (a). tern of any illegal activity involving more means any information in any form. (c) NONAPPLICABILITY TO LAW ENFORCEMENT than $100,000 in a 12-month period shall be (4) FINANCIAL INSTITUTION.— AGENCIES.—No provision of this section shall fined twice the amount provided in sub- (A) IN GENERAL.—The term ‘‘financial in- be construed so as to prevent any action by section (b)(3) or (c)(3) (as the case may be) of stitution’’ means any institution engaged in a law enforcement agency, or any officer, section 3571 of title 18, United States Code, the business of providing financial services employee, or agent of such agency, to obtain imprisoned for not more than 10 years, or to customers who maintain a credit, deposit, customer information of a financial institu- both. trust, or other financial account or relation- tion in connection with the performance of SEC. 524. RELATION TO STATE LAWS. ship with the institution. the official duties of the agency. (a) IN GENERAL.—This subtitle shall not be (B) CERTAIN FINANCIAL INSTITUTIONS SPE- (d) NONAPPLICABILITY TO FINANCIAL INSTI- construed as superseding, altering, or affect- CIFICALLY INCLUDED.—The term ‘‘financial in- TUTIONS IN CERTAIN CASES.—No provision of ing the statutes, regulations, orders, or in- stitution’’ includes any depository institu- this section shall be construed so as to pre- terpretations in effect in any State, except tion (as defined in section 19(b)(1)(A) of the vent any financial institution, or any officer, to the extent that such statutes, regulations, Federal Reserve Act), any broker or dealer, employee, or agent of a financial institution, orders, or interpretations are inconsistent any investment adviser or investment com- from obtaining customer information of such with the provisions of this subtitle, and then pany, any insurance company, any loan or fi- financial institution in the course of— only to the extent of the inconsistency. nance company, any credit card issuer or op- (1) testing the security procedures or sys- (b) GREATER PROTECTION UNDER STATE erator of a credit card system, and any con- tems of such institution for maintaining the LAW.—For purposes of this section, a State sumer reporting agency that compiles and confidentiality of customer information; statute, regulation, order, or interpretation maintains files on consumers on a nation- (2) investigating allegations of misconduct is not inconsistent with the provisions of wide basis (as defined in section 603(p)). or negligence on the part of any officer, em- this subtitle if the protection such statute, (C) SECURITIES INSTITUTIONS.—For purposes ployee, or agent of the financial institution; regulation, order, or interpretation affords of subparagraph (B)— or any person is greater than the protection (i) the terms ‘‘broker’’ and ‘‘dealer’’ have (3) recovering customer information of the provided under this subtitle as determined the meanings provided in section 3 of the Se- financial institution which was obtained or by the Commission, on its own motion or curities Exchange Act of 1934 (15 U.S.C. 78c); received by another person in any manner upon the petition of any interested party. (ii) the term ‘‘investment adviser’’ has the described in subsection (a) or (b). SEC. 525. AGENCY GUIDANCE. meaning provided in section 202(a)(11) of the (e) NONAPPLICABILITY TO INSURANCE INSTI- In furtherance of the objectives of this sub- Investment Advisers Act of 1940 (15 U.S.C. TUTIONS FOR INVESTIGATION OF INSURANCE title, each Federal banking agency (as de- 80b–2(a)); and FRAUD.—No provision of this section shall be fined in section 3(z) of the Federal Deposit (iii) the term ‘‘investment company’’ has construed so as to prevent any insurance in- Insurance Act) and the Securities and Ex- the meaning provided in section 3 of the In- stitution, or any officer, employee, or agency change Commission or self-regulatory orga- vestment Company Act of 1940 (15 U.S.C. 80a– of an insurance institution, from obtaining nizations, as appropriate, shall review regu- 3). information as part of an insurance inves- lations and guidelines applicable to financial (D) FURTHER DEFINITION BY REGULATION.— tigation into criminal activity, fraud, mate- institutions under their respective jurisdic- The Federal Trade Commission, after con- rial misrepresentation, or material non- tions and shall prescribe such revisions to sultation with Federal banking agencies and disclosure that is authorized for such insti- such regulations and guidelines as may be the Securities and Exchange Commission, tution under State law, regulation, interpre- necessary to ensure that such financial insti- may prescribe regulations clarifying or de- tation, or order. tutions have policies, procedures, and con- scribing the types of institutions which shall (f) NONAPPLICABILITY TO CERTAIN TYPES OF trols in place to prevent the unauthorized be treated as financial institutions for pur- CUSTOMER INFORMATION OF FINANCIAL INSTI- disclosure of customer financial information poses of this subtitle. TUTIONS.—No provision of this section shall and to deter and detect activities proscribed Mr. MARKEY (during the reading). be construed so as to prevent any person under section 521. Mr. Speaker, I ask unanimous consent from obtaining customer information of a fi- SEC. 526. REPORTS. that the motion to recommit be consid- nancial institution that otherwise is avail- (a) REPORT TO THE CONGRESS.—Before the able as a public record filed pursuant to the ered as read and printed in the RECORD. end of the 18-month period beginning on the The SPEAKER. Is there objection to securities laws (as defined in section 3(a)(47) date of the enactment of this Act, the Comp- of the Securities Exchange Act of 1934). troller General, in consultation with the the request of the gentleman from Mas- SEC. 522. ADMINISTRATIVE ENFORCEMENT. Federal Trade Commission, Federal banking sachusetts? (a) ENFORCEMENT BY FEDERAL TRADE COM- agencies, the Securities and Exchange Com- There was no objection. MISSION.—Compliance with this subtitle shall mission, appropriate Federal law enforce- The SPEAKER. The gentleman from be enforced by the Federal Trade Commis- ment agencies, and appropriate State insur- Massachusetts (Mr. MARKEY) is recog- sion in the same manner and with the same ance regulators, shall submit to the Congress nized for 5 minutes. power and authority as the Commission has a report on the following: Mr. MARKEY. Mr. Speaker, the re- under the title VIII, the Fair Debt Collection (1) The efficacy and adequacy of the rem- committal motion that we are going to Practices Act, to enforce compliance with edies provided in this subtitle in addressing such title. attempts to obtain financial information by vote upon in 10 minutes will contain (b) NOTICE OF ACTIONS.—The Federal Trade fraudulent means or by false pretenses. three elements. It will contain the Commission shall— (2) Any recommendations for additional amendment of the gentlewoman from (1) notify the Securities and Exchange legislative or regulatory action to address California (Ms. LEE) on insurance red- Commission whenever the Federal Trade threats to the privacy of financial informa- lining, which she won in the Com- Commission initiates an investigation with tion created by attempts to obtain informa- mittee on Banking and Financial Serv- respect to a financial institution subject to tion by fraudulent means or false pretenses. ices, but the Committee on Rules regulation by the Securities and Exchange (b) ANNUAL REPORT BY ADMINISTERING would not put in order. It will include Commission; AGENCIES.—The Federal Trade Commission (2) notify the Federal banking agency (as and the Attorney General shall submit to the amendment of the gentleman from defined in section 3(z) of the Federal Deposit Congress an annual report on number and California (Mr. CONDIT) and the gen- Insurance Act) whenever the Commission disposition of all enforcement actions taken tleman from California (Mr. WAXMAN), initiates an investigation with respect to a pursuant to this subtitle. which ensures that full medical privacy July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5321 protections are guaranteed. They are The Committee on Rules, by whatever When Members vote for recommital, not in this bill; and third, that the fi- unDemocratic means they used in a it goes straight into the bill, it is part nancial privacy amendment, which I blatant, arrogant misuse of their of it, and then we vote final passage. If won in the Committee on Commerce, power, deleted this important, agreed- Members vote no, they are voting not but not put in order out here, is also upon amendment. This overt violation to put it in the bill right now. voted upon. of the legislative process is outrageous Recommital does not go back to the Remember, in the Oxley amendment, and really should be illegal. It is an ex- committee, it just goes right to that telemarketing is prohibited by unaffili- ample of governmental lawlessness. desk and into the bill immediately. ated companies of a bank holding com- Let us restore some integrity to this This is a straight substance vote. pany but telemarketing of the finan- process and vote for this motion to re- Please, vote for the recommital mo- cial data is not stopped inside the bank commit tion, and Members have made this a holding company. Mr. MARKEY. Mr. Speaker, I yield to good financial services modernization We are going to prohibit that tonight the gentleman from California (Mr. bill for the banks and for the American in the recommittal motion. CONDIT). people. Mr. Speaker, I yield to the gentleman Mr. CONDIT. Mr. Speaker, I rise in Mr. LEACH. Mr. Speaker, I rise in from New York (Mr. LAFALCE). support of the recommittal motion and opposition to the motion. Mr. LAFALCE. Mr. Speaker, when I am opposed to H.R. 10. Let me simply The SPEAKER. The gentleman from appeared before the Committee on just say the reason that I oppose H.R. Iowa (Mr. LEACH) is recognized for 5 Rules yesterday, I said there were a 10 and support the motion to recommit minutes. number of corrections or amendments is section 351. Mr. LEACH. First, Mr. Speaker, let that should be offered. First of all, I This section of the bill should have me express my appreciation for the said please restore a provision that the been deleted. The privacy part related thoughtfulness of the concerns of the Committee on Banking and Financial to medical records is inadequate. It proponents of this motion. Services adopted or at least allow us to does not have consumer consent. The At the risk of presumption, I would offer it as an amendment. That dealt definition of the consent under this stress that the majority and the minor- with a prohibition against redlining section on page 371 is too vague. The ity are not as far apart as the rhetoric against an insurance company when health research part of the bill creates might lead a listener to this debate to the insurance company wants to affil- loopholes for drug companies and mar- expect. iate with a bank. That is in the Mar- keting firms. Patients rights, they sim- There are two principal aspects to key motion to recommit. ply do not exist; no access to a person’s the amendment. One relates to the Lee I also said I was very troubled by the own health records. A person cannot amendment on redlining, which some Ganske amendment because although even get their own records and have of us on this side differ with, and oth- it is extremely well intentioned, the control over them. There is no redress ers, like myself, find quite reasonable. exceptions to it one could drive a Mack if a person’s privacy is violated; no re- The other relates to privacy. Here I truck through it right now, and it strictions on third party entities from would simply note that the bill before might be construed as preempting the disclosing personal information to us represents the greatest expansion of ability to articulate through regula- marketing firms or other parties. privacy rights in modern day finance. tion more broad sweeping privacy pro- We ought to do this right on behalf of Indeed, it represents, in the words of tections. the American people. the gentlewoman from Oregon (Ms. Also, at that time, the Markey It is important that we do this bill HOOLEY), a movement far further than amendment would have been a sub- H.R. 10, but it is not more important she would have ever have dreamed. stitute for the excellent privacy provi- than us protecting people’s privacy. In the words of the gentleman from sions that have been worked out in a That should be our main thrust in this Massachusetts (Mr. MARKEY), it is a bipartisan fashion. I can support the bill is to make sure that the people of good step forward. Actually, it is not bill but the bill would be improved tre- this country can count on us to protect one but a number of steps forward. Let mendously by the motion to recommit. their privacy. me mention six. Mr. MARKEY. Mr. Speaker, I yield to Mr. MARKEY. Mr. Speaker, this is a One, there is a mandatory disclosure the gentlewoman from California (Ms. pure substance vote. These are the by financial institutions of privacy LEE). votes the bankers did not want to be policies. Ms. LEE. Mr. Speaker, I thank my taken. The reason they did not want Two, there are consumer opt-out colleague, the gentleman from Massa- them to be taken is because they are so choices to prevent the sale of confiden- chusetts (Mr. MARKEY) for yielding and hard. Yes, we are going to offer full tial information to unaffiliated third for his consistent hard work on behalf medical privacy protection to all of parties. of our consumers. people’s records. Three, there is a medical opt-in Mr. Speaker, I wanted to support a choice to prevent the transfer of a con- b reasonable financial services mod- 2300 sumer’s medical information without ernization bill and I worked very hard This is a straight up-or-down sub- the consumer’s consent. with my colleagues to include impor- stantive vote. Yes, we are going to give Four, there is a prohibition on disclo- tant consumer protections and privacy full financial protection. It does not sure of consumer account numbers to measures as this bill moved to the make any difference whether it is some third party telemarketers. floor. Unfortunately, however, the Re- third party or the bank themselves, we Five, there are new privacy enforce- publicans refused to accept these have a right to say no. If we want all of ment mechanisms for financial institu- amendments, and made matters worse these services from this new financial tion regulators. by wiping out an adopted anti-redling structure, we can take advantage of Six, there is a prohibition on pretext provision to require the insurance in- them, but we might be part of the 10 calling. This is a policy where individ- dustry to comply with the Fair Hous- percent or 20 percent or 30 percent, in uals can call up an institution and ing Act and not discriminate against the same way that we have an unlisted claim they are someone else and get the poor, minorities and people who phone number, we just might not want their information, and now that is out- live in neighborhoods redlined by the anyone telemarketing to us, even from lawed. insurance industry. our bank, going through all of our To object to this bill on final passage We have not allowed banks to dis- checks. Just say no. will be to vote against these privacy criminate. Why should we allow the in- Thirdly, the point of the gentle- protections. Indeed, the biggest privacy surance industry to discriminate? woman from California (Ms. LEE) on vote of all our careers in the United We did not adopt this amendment to the insurance industry, why should it States Congress will be on final pas- stall this bill as one of my Republican be any different on redlining? Why sage of this bill. Let me repeat, the big- colleagues accused me of earlier. We should not her community and all the gest privacy vote of all our careers in adopted this amendment to provide poorer communities of the country Congress will be on final passage of equal opportunity for all Americans. have those kinds of protections? this bill. H5322 CONGRESSIONAL RECORD — HOUSE July 1, 1999 Now, what is the amendment before There was no objection. Bilirakis Hall (TX) Pickering Bliley Hansen Pickett us? Basically, the amendment before us The question is on the motion to re- Blunt Hastert Pitts subtracts one feature of the bill and commit. Boehlert Hastings (WA) Pombo adds another. What it subtracts is the The question was taken; and the Boehner Hayes Porter provision of the gentleman from Iowa Bonilla Hayworth Portman Speaker announced that the noes ap- Bono Hefley Pryce (OH) (Mr. GANSKE) which imposes important peared to have it. Boucher Herger Quinn new protections for health and medical Mr. MARKEY. Mr. Speaker, on that I Brady (TX) Hill (MT) Radanovich privacy. I have never known a more demand the yeas and nays. Bryant Hilleary Ramstad Burr Hobson Regula misunderstood provision, so let me The yeas and nays were ordered. Burton Hoekstra Reynolds stress what the Ganske provision does. The SPEAKER. Pursuant to clause 9 Buyer Horn Riley It imposes a broad prohibition on the of rule XX, the Chair will reduce to 5 Callahan Hostettler Rogers disclosure by an insurance company or Calvert Houghton Rohrabacher minutes the minimum time for any Camp Hulshof Ros-Lehtinen its affiliates of individually identifi- electronic vote on the question of pas- Campbell Hunter Roukema able health, medical, and genetic infor- sage. Canady Hutchinson Royce mation, unless the customer expressly The vote was taken by electronic de- Cannon Hyde Ryan (WI) consents to such disclosure. Castle Isakson Ryun (KS) vice, and there were—yeas 198, nays Chabot Istook Salmon If Members strip this provision of 232, not voting 5, as follows: Chambliss Jenkins Sanford H.R. 10 from the bill, they are leaving Chenoweth Johnson (CT) Saxton [Roll No. 275] customers of financial companies with- Coble Johnson, Sam Scarborough YEAS—198 Coburn Jones (NC) Schaffer out any medical privacy protections, Collins Kasich Sensenbrenner Abercrombie Hall (OH) Obey thereby leading to precisely the kinds Combest Kelly Sessions Ackerman Hastings (FL) Olver Cook King (NY) Shadegg of privacy umbrages that the oppo- Allen Hill (IN) Ortiz Cooksey Kingston Shaw nents of the language claim they want Andrews Hilliard Owens Cox Knollenberg Shays Baird Hinchey Pallone to prevent. Cramer Kolbe Sherwood Baldacci Hinojosa Pascrell In this regard, I would stress again Crane Kuykendall Shimkus Baldwin Hoeffel Pastor Cubin LaHood Shuster that there is no intent in this bill to Barcia Holden Payne Cunningham Largent Simpson Barrett (WI) Holt Phelps preempt executive branch actions or Davis (VA) Latham Skeen Becerra Hooley Pomeroy jeopardize any confidences associated Deal LaTourette Smith (MI) Bentsen Hoyer Price (NC) DeLay Lazio Smith (NJ) with doctor-patient relationships, nor Berkley Inslee Rahall DeMint Leach Smith (TX) the privacy protections currently af- Berman Jackson (IL) Rangel Diaz-Balart Lewis (CA) Souder Berry Jackson-Lee Reyes forded any medical records. Dickey Lewis (KY) Spence Bishop (TX) Rivers Indeed, the intent is to strengthen Dooley Linder Stearns Blagojevich Jefferson Rodriguez Doolittle LoBiondo Stump these protections. To the degree that Blumenauer John Roemer Dreier Lucas (KY) Sununu more precision in this area is required, Bonior Johnson, E.B. Rogan Duncan Lucas (OK) Sweeney Borski Jones (OH) Rothman this gentleman is prepared to work in Dunn Maloney (CT) Talent Boswell Kanjorski Roybal-Allard conference to ensure that that occurs. Ehlers Manzullo Tancredo Boyd Kaptur Rush Ehrlich McCollum Tauzin What is it that this amendment adds? Brady (PA) Kennedy Sabo Emerson McCrery Taylor (NC) Brown (FL) Kildee Sanchez It adds a restriction on the ability of English McHugh Terry Brown (OH) Kilpatrick Sanders financial institutions to share con- Everett McInnis Thomas Capps Kind (WI) Sandlin Ewing McIntosh Thornberry sumer information with affiliates that Capuano Kleczka Sawyer Fletcher McKeon Thune are all part of the same financial orga- Cardin Klink Schakowsky Foley Metcalf Tiahrt Carson Kucinich Scott nization. Forbes Mica Toomey Clay LaFalce Serrano Unfortunately, there is some ques- Fowler Miller (FL) Upton Clayton Lampson Sherman Franks (NJ) Miller, Gary Vitter tion whether this proposed restriction Clement Lantos Shows Frelinghuysen Mollohan Walden on affiliate information-sharing might Clyburn Larson Sisisky Gallegly Moran (KS) Walsh Condit Lee Skelton needlessly and dramatically increase Ganske Morella Wamp Conyers Levin Slaughter Gekas Myrick Watkins costs for consumers and financial insti- Costello Lewis (GA) Smith (WA) Gibbons Nethercutt Watts (OK) tutions, reduce consumer convenience, Coyne Lofgren Snyder Gilchrest Ney Weldon (FL) Crowley Lowey Spratt impair fraud detection and prevention, Gillmor Northup Weldon (PA) Cummings Luther Stabenow and deny consumers new cost-effective Gilman Norwood Weller Danner Maloney (NY) Stark Goode Nussle Whitfield products. Davis (FL) Markey Stenholm Goodlatte Ose Wicker It is the intention of the various Davis (IL) Martinez Strickland Goodling Oxley Wilson DeFazio Mascara Stupak committees of jurisdiction, including Goss Packard Wise DeGette Matsui Tanner the Committee on Banking and Finan- Graham Paul Wolf Delahunt McCarthy (MO) Tauscher Granger Pease Young (AK) cial Services, to hold hearings on this DeLauro McCarthy (NY) Taylor (MS) Green (WI) Peterson (MN) Young (FL) Deutsch McDermott Thompson (CA) issue in the near future. This Member Greenwood Peterson (PA) Dicks McGovern Thompson (MS) has an open mind. The concerns I raise Gutknecht Petri are questions without definitive an- Dingell McIntyre Thurman Dixon McKinney Tierney NOT VOTING—5 swers. Doggett McNulty Towns Doyle Meehan Traficant Brown (CA) Green (TX) Pelosi Accordingly, at this time, I would Fossella Lipinski urge caution, and only ask that Mem- Edwards Meek (FL) Turner Engel Meeks (NY) Udall (CO) bers recognize the historical nature of Eshoo Menendez Udall (NM) b 2323 the extraordinary expansion of privacy Etheridge Millender- Velazquez protection contained in this bill. Evans McDonald Vento So the motion to recommit was re- In conclusion, I urge an enthusiastic Farr Miller, George Visclosky jected. Fattah Minge Waters The result of the vote was announced yes vote on final passage, again, final Filner Mink Watt (NC) passage on the greatest privacy expan- Ford Moakley Waxman as above recorded. sion in the history of American fi- Frank (MA) Moore Weiner The SPEAKER. The question is on Frost Moran (VA) Wexler the passage of the bill. nance, and a preliminary no vote on Gejdenson Murtha Weygand the Markey motion to recommit until Gephardt Nadler Woolsey The question was taken; and the the consequences of his approach re- Gonzalez Napolitano Wu Speaker announced that the ayes ap- Gordon Neal Wynn peared to have it. ceive careful scrutiny in the hearings Gutierrez Oberstar process. RECORDED VOTE I thank all, friend and foe, for their NAYS—232 Mr. LEACH. Mr. Speaker, I demand a courtesies. Aderholt Ballenger Bass recorded vote. The SPEAKER. Without objection, Archer Barr Bateman A recorded vote was ordered. Armey Barrett (NE) Bereuter the previous question is ordered on the Bachus Bartlett Biggert The SPEAKER. This will be a 5- motion to recommit. Baker Barton Bilbray minute vote. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5323 The vote was taken by electronic de- Shadegg Strickland Visclosky S. CON. RES. 43 Shaw Stump Vitter Resolved by the Senate (the House of Rep- vice, and there were—ayes 343, noes 86, Shays Sununu Walden not voting 6, as follows: Sherman Sweeney Walsh resentatives concurring), That when the Sen- ate recesses or adjourns at the close of busi- [Roll No. 276] Sherwood Talent Wamp Shimkus Tanner Watkins ness on Thursday, July 1, 1999, Friday, July AYES—343 Shows Tauscher Watt (NC) 2, 1999, or Saturday, July 3, 1999, on a motion Shuster Tauzin Watts (OK) offered pursuant to this concurrent resolu- Ackerman Ewing Lucas (KY) Simpson Taylor (NC) Weiner tion by its Majority Leader or his designee, Aderholt Fletcher Lucas (OK) Sisisky Terry Weldon (FL) it stand recessed or adjourned until noon on Allen Foley Maloney (CT) Skeen Thomas Weldon (PA) Andrews Forbes Maloney (NY) Monday, July 12, 1999, or until such time on Skelton Thompson (CA) Weller that day as may be specified by its Majority Armey Ford Manzullo Slaughter Thompson (MS) Wexler Bachus Fowler Mascara Smith (MI) Thune Weygand Leader or his designee in the motion to re- Baird Franks (NJ) Matsui Smith (NJ) Tiahrt Whitfield cess or adjourn, or until noon on the second Baker Frelinghuysen McCarthy (NY) Smith (TX) Toomey Wicker day after Members are notified to reassemble Baldacci Frost McCollum Smith (WA) Towns Wilson pursuant to section 2 of this concurrent reso- Ballenger Gallegly McCrery Snyder Traficant Wise lution, whichever occurs first; and that when Barcia Ganske McGovern Souder Udall (CO) Wolf the House adjourns on the legislative day of Barr Gekas McHugh Spence Udall (NM) Wu Thursday, July 1, 1999, or Friday, July 2, Barrett (NE) Gephardt McInnis Spratt Upton Wynn Bartlett Gibbons McIntosh 1999, on a motion offered pursuant to this Stabenow Velazquez Young (AK) concurrent resolution by its Majority Leader Bass Gilchrest McIntyre Stearns Vento Young (FL) Bateman Gillmor McKeon or his designee, it stand adjourned until 12:30 Becerra Gilman McNulty NOES—86 p.m. on Monday, July 12, 1999, for morning- Bentsen Gonzalez Meek (FL) Abercrombie Fattah Mink hour debate, or until noon on the second day Bereuter Goode Meeks (NY) Baldwin Filner Moran (KS) after Members are notified to reassemble Berkley Goodlatte Menendez Barrett (WI) Frank (MA) Nadler pursuant to section 2 of this concurrent reso- Berman Goodling Metcalf Barton Gejdenson Obey lution, whichever occurs first. Berry Gordon Millender- Bonilla Granger Olver SEC. 2. The Majority Leader of the Senate Biggert Goss McDonald Brady (PA) Hefley Ortiz Bilbray Graham Miller (FL) and the Speaker of the House, acting jointly Brady (TX) Hilliard Paul after consultation with the Minority Leader Bilirakis Green (WI) Miller, Gary Brown (OH) Hinchey Payne Bishop Greenwood Minge Campbell Hoekstra Peterson (MN) of the Senate and the Minority Leader of the Blagojevich Gutierrez Moakley Capps Inslee Phelps House, shall notify the Members of the Sen- Bliley Gutknecht Mollohan Capuano Jackson (IL) Rivers ate and House, respectively, to reassemble Blumenauer Hall (OH) Moore Chenoweth Kaptur Rodriguez whenever, in their opinion, the public inter- Blunt Hall (TX) Moran (VA) Clay Kleczka Roybal-Allard est shall warrant it. Boehlert Hansen Morella Coburn Kucinich Sanders The Senate concurrent resolution Boehner Hastert Murtha Combest LaHood Schakowsky Bonior Hastings (FL) Myrick Condit Lampson Serrano was concurred in. Bono Hastings (WA) Napolitano Conyers Lantos Stark A motion to reconsider was laid on Borski Hayes Neal Costello Lee Stenholm the table. Boswell Hayworth Nethercutt Coyne Lewis (GA) Stupak The SPEAKER. Without objection, Boucher Herger Ney Cummings Lofgren Tancredo Boyd Hill (IN) Northup DeFazio Luther Taylor (MS) House Resolution 236 is laid on the Brown (FL) Hill (MT) Norwood DeGette Markey Thornberry table. Bryant Hilleary Nussle Delahunt Martinez Thurman There was no objection. Burr Hinojosa Oberstar DeLauro McCarthy (MO) Tierney f Burton Hobson Ose Dingell McDermott Turner Buyer Hoeffel Owens Edwards McKinney Waters Callahan Holden Oxley Eshoo Meehan Waxman AUTHORIZING SPEAKER, MAJOR- Calvert Holt Packard Evans Mica Woolsey ITY LEADER AND MINORITY Camp Hooley Pallone Farr Miller, George LEADER TO ACCEPT RESIGNA- Canady Horn Pascrell Cannon Hostettler Pastor NOT VOTING—6 TIONS AND TO MAKE APPOINT- Cardin Houghton Pease Archer Fossella Lipinski MENTS NOT WITHSTANDING AD- Carson Hoyer Peterson (PA) Brown (CA) Green (TX) Pelosi JOURNMENT Castle Hulshof Petri Chabot Hunter Pickering b 2332 Mr. REYNOLDS. Mr. Speaker, I ask Chambliss Hutchinson Pickett So the bill was passed. unanimous consent that notwith- Clayton Hyde Pitts standing any adjournment of the House Clement Isakson Pombo The result of the vote was announced Clyburn Istook Pomeroy as above recorded. until Monday, July 12, 1999, the Speak- Coble Jackson-Lee Porter A motion to reconsider was laid on er, majority leader, and minority lead- Collins (TX) Portman the table. er be authorized to accept resignations Cook Jefferson Price (NC) f and to make appointments authorized Cooksey Jenkins Pryce (OH) Cox John Quinn GENERAL LEAVE by law or by the House. Cramer Johnson (CT) Radanovich The SPEAKER. Is there objection to Crane Johnson, E. B. Rahall Mr. REYNOLDS. Mr. Speaker, I ask the request of the gentleman from New Crowley Johnson, Sam Ramstad unanimous consent that all Members York? Cubin Jones (NC) Rangel may have 5 legislative days within There was no objection. Cunningham Jones (OH) Regula which to revise and extend their re- Danner Kanjorski Reyes f Davis (FL) Kasich Reynolds marks and to include extraneous mate- Davis (IL) Kelly Riley rial on H.R. 10. DISPENSING WITH CALENDAR Davis (VA) Kennedy Roemer The SPEAKER. Is there objection to WEDNESDAY BUSINESS ON Deal Kildee Rogan the request of the gentleman from New DeLay Kilpatrick Rogers WEDNESDAY, JULY 14, 1999 DeMint Kind (WI) Rohrabacher York? Mr. REYNOLDS. Mr. Speaker, I ask There was no objection. Deutsch King (NY) Ros-Lehtinen unanimous consent that the business Diaz-Balart Kingston Rothman f Dickey Klink Roukema in order under the Calendar Wednesday Dicks Knollenberg Royce PROVIDING FOR CONDITIONAL AD- rule be dispensed with on Wednesday, Dixon Kolbe Rush JOURNMENT OF THE SENATE July 14, 1999. Doggett Kuykendall Ryan (WI) AND HOUSE The SPEAKER. Is there objection to Dooley LaFalce Ryun (KS) Doolittle Largent Sabo Mr. REYNOLDS. Mr. Speaker, I call the request of the gentleman from New Doyle Larson Salmon from the Speaker’s table the Senate York? Dreier Latham Sanchez concurrent resolution (S. Con. Res. 43) There was no objection. Duncan LaTourette Sandlin f Dunn Lazio Sanford providing for conditional adjournment Ehlers Leach Sawyer or recess of the Senate and a condi- Ehrlich Levin Saxton tional adjournment of the House of REMOVAL OF NAME OF MEMBER Emerson Lewis (CA) Scarborough Representatives, and ask for its imme- AS COSPONSOR OF H.R. 1300 Engel Lewis (KY) Schaffer Mr. FROST. Mr. Speaker, I ask unan- English Linder Scott diate consideration. Etheridge LoBiondo Sensenbrenner The Clerk read the Senate concur- imous consent that my name be re- Everett Lowey Sessions rent resolution, as follows: moved as a cosponsor of H.R. 1300. H5324 CONGRESSIONAL RECORD — HOUSE July 1, 1999 The SPEAKER. Is there objection to as Michael earned his bachelor's degree in pay and benefits in the hope that these the request of the gentleman from philosophy from UNC in 1969. After his grad- measures will help stem the hemor- Texas? uation, he went on to great success, rising rhage of high quality people from the There was no objection. from a teaching post at Harvard University to force and ease recruitment of some new f the Presidency of Vermont's Bennington Col- high quality people. Pay table reform APPOINTMENT OF HON. THOMAS lege at the young age of 36. Hooker then in particular is designed to encourage M. DAVIS TO ACT AS SPEAKER spent six years leading the University of Mary- the best of the best, the people whose PRO TEMPORE TO SIGN EN- land-Baltimore County and another three work has led to rapid promotion, to ROLLED BILLS AND JOINT RESO- years as the president of the University of stay in the service for a full career. But LUTIONS UNTIL JULY 12, 1999 Massachusetts system before returning to service members are not leaving the North Carolina to lead his alma matter into the force simply or mainly because they The SPEAKER laid before the House 21st century. the following communication: are not being paid enough. Nobody f makes the armed forces a career be- WASHINGTON, DC, July 1, 1999. SPECIAL ORDERS cause of the financial rewards. Rather, I hereby appoint the Honorable THOMAS M. The SPEAKER pro tempore (Mr. too many good people are leaving be- DAVIS to act as Speaker pro tempore to sign OSE). Under the Speaker’s announced cause we are wearing them out. enrolled bills and joint resolutions through policy of January 6, 1999, and under a Let me emphasize that point again, July 12, 1999. previous order of the House, the fol- J. DENNIS HASTERT, Mr. Speaker, we are wearing them out. Speaker of the House of Representatives. lowing Members will be recognized for While it is not true of all parts of the The SPEAKER. Without objection, 5 minutes each. force, for too many service members the appointment is accepted. f and too many key military specialties, There was no objection. The SPEAKER pro tempore. Under a their lives have become a never-ending f previous order of the House, the gentle- and often unpredictable cycle of stand- RECOGNIZING LATE UNC-CHAPEL woman from Connecticut (Mrs. JOHN- ups and stand-downs; of preparation for HILL CHANCELLOR MICHAEL SON) is recognized for 5 minutes. exercises, exercises and recovery from (Mrs. JOHNSON of Connecticut ad- HOOKER exercises; of preparation for deploy- dressed the House. Her remarks will ment abroad, deployment in often (Mr. ETHERIDGE asked and was appear hereafter in the Extensions of tense missions overseas, and of recov- given permission to address the House Remarks.) ery from deployment; of temporary for 1 minute and to revise and extend f his remarks.) duty assignments to fill out units en- Mr. ETHERIDGE. Mr. Speaker, I rise WE ARE WEARING THEM OUT: gaged in exercises or in missions today to honor the memory of Michael WHY WE NEED TO INCREASE abroad, or of working doubly hard at Hooker, the Chancellor of the Univer- ARMY TROOP STRENGTH home to take up the slack caused by sity of North Carolina. This Nation has The SPEAKER pro tempore. Under a the loss of people on temporary duty lost a great educator, and I have lost a previous order of the House, the gen- assignments, and on and on. Unless we good friend. tleman from Missouri (Mr. SKELTON) is take steps to reduce the number of Chancellor Hooker passed away Tues- recognized for 5 minutes. days many service members spend day in the midst of his own service to Mr. SKELTON. Mr. Speaker, this away from home, unless we ease the in- the public after a courageous battle year, at the urging of the Joint Chiefs tensity and constancy of periods of with cancer. He was just 53 years of of Staff and other senior military lead- overwork, unless we improve the pre- age. Our prayers go out to his family. ers, Congress has taken some critically dictability of periods away from home, In his 4 years at UNC, Chancellor important steps to improve military unless we do all of these things, the Hooker established a reputation as a pay and benefits. Both the House and extra pay and benefits we are providing driven leader with a firm vision for the Senate have now approved versions will have but little effect in preserving North Carolina’s future. He was com- of the Fiscal Year 2000 Defense Author- a high quality, well-trained, ready mitted to making UNC the best public ization Bill that provide higher than military force. university in the Nation. Hooker requested pay raises for service per- earned the respect of students, faculty All of the military services suffer sonnel and reforms the pay table to from the problem of overwork to one and the citizens of North Carolina with better reward personnel who have per- his confidence and enthusiasm. Chan- degree or another. And all of the serv- formed particularly well and that re- ices are taking steps to try to ease the cellor Hooker forged a strong bond peal reductions in military retirement with many students by meeting them workload. Today, however, I want to benefits enacted in 1986. talk in particular about the state of on their own turf. He was a regular at Although there remain minor dif- the Army, where I believe the under- UNC’s dining halls and recreation cen- ferences between the two chambers on ters and even was spotted crowd surf- some details, service members can be lying problems are most deep-rooted ing in the student section during a assured that these much needed and and where measures to ameliorate the UNC basketball game against their much deserved improvements in pay problem will have to be most far reach- rival Duke University. and benefits are on the way. ing. Mr. Speaker, as the former super- I hope that the fine young men and To put it bluntly, the Army today is intendent of my State and as the fa- women who serve in our Nation’s mili- too small. It is not big enough to carry ther of a UNC graduate, I know first- tary will see this as evidence that we out all of the responsibilities assigned hand what an outstanding man Michael appreciate what they are doing, that to it without wearing out too many of Hooker was. I worked with him on we are aware of how hard they are its best people. We need a bigger Army. many projects. His vision and leader- working, and that we understand, to How much bigger? I will not at this ship will have a lasting impact on both some degree at least, the tremendous time venture to say. I do not know the University and the citizens of personal sacrifices we ask them to whether we need 5,000 more people in North Carolina for years to come. Rest make for our country. the Army or 20,000 or 40,000. But I know in peace, Michael Hooker. b we need more. For the record, in testi- He is survived by his wife, Carmen; his 2340 Having addressed pay and benefits, it mony before the House Committee on daughter, Alexandra; his mother Christine Armed Services in January 1996, Lieu- Hooker; and two stepdaughters, Jennifer and is now time for the leaders in the mili- tenant General Ted Stroup, who was Cyndi Buell. Our prayers go out to his family. tary services and for the Congress to Michael Hooker grew up in the coal country consider other critical steps to ease the then the Army personnel chief, said the of Southwestern Virginia, where he quickly burdens of military service. First and Army should be at 520,000 active duty leaned the value of education. Michael once foremost in my mind is the need to troops, which is 40,000 more than is cur- said that his parents decided to have only one stop imposing dreadfully excessive day- rently authorized. child to better commit their attention to his to-day demands on large parts of the I believe as well that we cannot af- education. His parents' commitment paid off, force. The Congress is approving better ford to follow through on measures to July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5325 reduce further the size of the Army Na- jobs, headquarters staff, training, medical, and could threaten our security. Our engagement tional Guard and Reserve components. other support positionsÐyou will come up with provides stability in a world more globally de- They, like the active Army, have been a requirement for about 540,000 full time uni- pendent than at any time in history. The reduced enough. Instead of shrinking formed personnel. As I said, the Army actually world's stability affects our stability. It is simply them further, we need to work on has an authorized end-strength of 480,000, in America's interests to shape the peace. measures to improve the way in which which is 60,000 troops, or about 11 percent, The post-Cold War era is a period in which reserve components can help, even below the level need to fully man the organi- forces have been required to prepare for more than they have, to ease the zational structure. major theater wars and also to participate in strains on the active part of the force. During the Cold War, and to some degree To his credit, the new Chief of Staff even today, it made sense to fall somewhat recurring peacekeeping operations, to main- of the Army, General Eric Shinseki, short of filling all the Army's positions. As the tain a constant, active forward presence, and has begun already to raise the issue of Defense Department has said in its annual to engage in an extraordinarily broad range of personnel levels. In his confirmation ``Manpower Requirements Report,'' exercises and other activities, with long-time hearing before the Senate Armed Serv- During peacetime, it is neither necessary allies and former foes, as part of a policy of ices Committee 3 weeks ago, General nor desirable to fill all positions in all units. international engagement. Senior Army offi- Shinseki opened the door to a discus- Some units may not be staffed at all, due to cers have said that this so-called ``peacetime'' sion of troop levels, saying, ‘‘It would a lack of funding or because we can fill them has actually been as demanding for the force in an expeditious manner following mobiliza- as a major theater war would be. There is, of be a bit premature for me to tell you tion. Some units may be staffed with a com- that raising the end strength right now course, one big differenceÐunlike a war, the bination of active and reserve people. As a current demands never go away. There is the is the right call. But I think it is a le- unit is tasked to perform more in peacetime, gitimate concern.’’ He clarified that the proportion of full-time people, whether strong possibility that if we continue with the comment a bit more last week in his active, reserve, or civilian, may be expected high operational tempo, and I foresee no let- first press conference as Chief of Staff to increase. up, we will truly end up with a hollow Army. when he said that he suspects the This explains the underlying premise of the A policy of not fully manning later deploying Army will decide it needs more troops manning policies of the Army, and, to differing units and of not fully manning many critical after it completes its current review of degrees, of the other services. In peacetime, support functions would make sense if peace- Army requirements, called ‘‘Total units deployed on missions and units des- time were actually peaceful, such as during Army Analysis—2007,’’ over the next ignated to deploy early in a conflict, are main- the 1920s and 1930s. But such a policy does few months. tained at full or close-to-full manning levels, not make sense when a wartime level of de- While I look forward to the results of ``TAA± while units designated to deploy later and mand is constantly being imposed on precisely 07,'' for me the question is not whether the many support activities are maintained at the forces that are deliberately being under- Army should pursue an increase of some sig- lower levels. In the event of a conflict, critical manned on the assumption that they can be nificant magnitude in its personnel strengthÐ needs can be filled by reassigning people built up in the event of a crisis. The effects of the question is how much and how fast. And within the force or by tapping other sources of this policy have been very deterimental for I think the sooner the Army leadership begins personnelÐincluding recent retirees who still large parts of the Army. Last year and this, to make the case for a necessary increase, have an obligation or members of the indi- subcommittees of the House Armed Services the better Congress will be prepared to ad- vidual ready reserve, IRR, which is mainly Committee held a number of hearings to ex- dress it, and, more importantly, the sooner the composed of people who have not reenlisted plore the impact of the demanding post-Cold troops will feel that some relief is coming. To after completing their contractual tours of duty, War pace of operations on personnel readi- explain my reasoning, I want to walk through, but who also have a period of obligation re- ness in different servicesÐincluding hearings step by step, how shortfalls in Army personnel maining. in Norfolk, in Naples Italy, and in San Diego. levels have developed in the post-Cold War This system makes sense if you are pre- Last year, at the request of the Committee, period and how they have affected the people paring for an all-out war with the Soviet Union the General Accounting Office also surveyed in the service. and its allies, as in the Cold War, or for two personnel readiness in later-deploying active To begin with, like the other services, the major theater wars, as planners initially as- Army divisions. Army has drawn down force levels substan- sumed in the post-Cold War era. If the pros- While I won't go into great detail on what we tially since the end of the Cold War. At the pect of a major conflict arises, then you do learned from these investigations, I will high- end of fiscal year 1987, the Army had 780,000 whatever it takes to get the force fully pre- light a few points that illustrate what I see to active duty troops. At the end of fiscal year paredÐyou take people out of the training be the general situation. First of all, the Army, 1999, the Army's authorized end-strength will system and put them into combat units; you as I said earlier, has followed a policy of most be down to 480,000 troops, which is 38% less. mobilize reserve units and assign some per- fully manning early deploying divisions, while In fact, the Army is actually falling consider- sonnel to active units to fill them out; you call later-deploying units and many support units ably short of its authorized troop levelÐas of back recent retirees and members of the indi- are less fully manned. The problem is that April 30 of this year, there were 469,314 ac- vidual ready reserve as needed to fill critical later-deploying units, by definition, are the tive duty troops in the service. positions. The fully manned Army organization units expected to be available for contingency The Army's cut in end-strength is roughly is really a wartime organization, which is not operations, such as those in Somalia, Haiti, commensurate with cuts in the size of the necessary to maintain in peacetime. Bosnia, the Persian Gulf, and now Kosovo. In force structure, that is, in the number of units In the post-Cold War period, however, we particular, later-deploying Army units include in the force. Over the last 12 years, the Army have found that peacetime is not what it used brigades deployed in Europe, where forces has come down from 18 active divisions to 10, to be. It is not a period in which the ArmyÐ are expected not only to deploy to Bosnia and which is a reduction of 44%. The number of or the other servicesÐcan focus simply on elsewhere, but also to be actively involved in brigades has come down somewhat less, be- preparing for the most demanding conflicts in engagement exercises with allies and others cause almost all Army divisions are now whol- the future. The world is a dangerous placeÐ in the region. ly filled with active duty units rather than some now. Iraq and North Korea have simmered, being filled with round-out units from the Na- threatening to flare into regional crises. India When a Europe-based brigade sends part of tional Guard, as in the past. and Pakistan have tested nuclear weapons its force into Bosnia, the units being deployed As it has turned out, however, simply shrink- and are currently engaged in a territorial dis- there have to be fully manned to carry out the ing Cold War troop levels in proportion to cuts pute. Peace in Bosnia and Kosovo confound a mission. But this will further deplete a brigade in the Cold War force structure has not been neat, easy solution. Terrorism still rears its that to begin with is manned at only 90% of appropriate in coping with post-Cold War de- ugly head. Since the end of the Cold War, our total authorized strength. The problems be- mands on the force. The root cause of the military has responded to an average of one come particularly acute because troop short- problem is that the Army has deliberately crises or contingency a month, a pace of oper- ages are never evenly distributed. So if there maintainedÐin the post Cold-War environment ations 300% greater than during the Cold War. is an Army-wide shortage at certain grades or as it did during the Cold WarÐa somewhat Some may argue that we should simply de- in certain specialties, later-deploying units will larger force structure than it has people to fill. crease our pace of operations. They would be be even shorter in those positions. Spending If you take a table or organization for the en- wrong. The United States must remain en- part of the force on a mission can virtually tire active duty Army today, and count up all gaged in the world. Our global engagement strip the remainder of the unit of key per- the jobs in the organizationÐincluding combat prevents the growth of malevolent powers that sonnel. And because there is an Army-wide H5326 CONGRESSIONAL RECORD — HOUSE July 1, 1999 policy of not fully manning certain support po- ployed in Europe, more isolated and less seri- able. To say that the mission is ``high risk'' is sitions, including positions as important to mis- ous problems in some other later-deploying di- to say at the very least that the Army would sion support as intelligence and communica- visions, and generally good personnel levels in suffer unacceptably high casualties in the tions, shortages in some areas leave some early-deploying divisions. Here are a few ex- event of a conflict. Just as importantly, in my units with virtually no capability on hand. cerpts: view, it is to say that the units involved are not The General Accounting Office survey I re- 1st Infantry Division (Germany) able to attain the standards which the service ferred to gave some dramatic examples of the The Division is 94% assigned strength and has established. For the professional men and effect: 88% available strength and 86% deployable women who serve in the force, this is a terribly At the 3rd Brigade of the 1st Armored Divi- strength. Available senior grade is 88%. They frustrating situation. It is reflected in com- sion, only 16 of 116 M1A1 tanks had full have a shortage of 436 NCOs, 73% of their plaints that units sent for exercises to the crews and were qualified, and in one of the required Majors and 84% of required Cap- Army's combat training centers in California, Brigade's two armor battalions, 14 of 58 tanks tains, which continue to cause junior leaders Louisiana, and Germany are not as capable had no crewmembers assigned because the to fill vacant positions. as they used to be because shortages have personnel were deployed to Bosnia. In addi- The Division remains critical in maintenance limited the extent and quality of preparatory tion, at the Division's engineer brigade in Ger- supervisors, to include Aviation maintenance training at their home bases. It is reflected in many, 11 of 24 bridge teams had no per- warrant examiners . . . which remain at 0% the difficulty the service has had in retaining sonnel assigned. fill. its most highly skilled and accomplished per- [C]aptains and majors are in short supply The Division's MI Military Intelligence bat- sonnel. It is reflected, as well, in evidence of Army-wide due to drawdown initiatives under- talion is below for the eleventh consecutive increasing strains on military families caused taken in recent years. The five later-deploying month and without extensive augmentation is by frequent and unplanned deployments and divisions had only 91 percent and 78 percent not capable of performing sustained combat excessive workloads when people are at of the captains and majors authorized, respec- operations. home. tively, but 138 percent of the lieutenants au- 1st Armored Division (Germany) [Which will Mr. Speaker, the Army has tried valiantly to thorized. The result is that unit commanders take on the KFOR mission in Kosovo] adjust to the demands of the post-Cold War must fill leadership positions in many units [Due to] shortages of soldiers in critical divi- environment by managing shortfalls in per- with less experienced officers than Army doc- sion competencies resulting from deployment sonnel as best it could. The leadership of the trine requires. For example, in the 1st Brigade on contingency operations, the division cannot Army has tried to ensure that first-to-fight units of the 1st Infantry division, 65 percent of the deploy to meet assigned . . . missions without have what they need, and, for the rest, they key staff positions designated to be filled by augmentation and training time. have demonstrated remarkable creativity and captains were actually filled by lieutenants or Personnel trained in critical division com- flexibility in allocating personnel to fill urgent captains that were not graduates of the Ad- petencies are deployed on contingency oper- requirements created by contingency oper- vanced Course. ations. These training issues make the division There is also a significant shortage of the ations and other demands. They have done a unable to function effectively for division level NCOs in the later-deploying divisions. Again, good job. The U.S. Army remains the best in operations without extensive assistance. within the 1st Brigade, 226, or 17 percent of the world, and perhaps, the best Army ever in The continued downward trend in NCO the 1,450, total NCO authorizations, were not this country or elsewhere. When called upon strength (85%, short 724 NCOs) hinders the filled at the time of our visit. to perform difficult and demanding missions, [T]o deploy an 800-soldier task force [to division's ability to provide adequate super- the Army has responded magnificently. Bosnia] last year, the Commander of the 3rd vision and training. But this has come at a price. The continued Brigade Combat Team had to reassign 63 sol- 4th Infantry Division (Fort Hood, Texas and high pace of operations, the continued turbu- diers within the brigade to serve in infantry Fort Carson, Colorado) lence in the force, the continued need to as- squads of the deploying unit, strip non- The division remains at borderline . . . Sen- sign hundreds and even thousands of people deploying infantry and armor units of mainte- ior grade shortages continue to be primary to temporary duty, the need for others to work nance personnel, and reassign NCOs and concern. The [overall] personnel strength per- harder to make up for shortfallsÐall of this is support personnel to the task force from centages continue to mask critical shortages. eroding the readiness of the force. The Army throughout the brigade. These actions were Captains and Majors are short . .. needs to work with Congress beginning today detrimental to the readiness of the non- NCOs are short . . . [by] 450. to fix the problem. We need to add enough deploying units. For example, gunnery exer- 10th Infantry Division [Which is preparing to personnel to the force to meet the demands of cises for two armor battalions had to be can- deploy to Bosnia] the post-Cold War world without wearing out celed and 43 of 116 tank crews became un- The division's aggregate strength and infan- so many of the wonderful men and women on qualified on the weapon system. try squad manning are at the highest levels in whom our security depends. We are wearing Mr. Speaker, I know that other Members of over 18 months and continue to improve. . . . them out, Mr. Speaker. It is up to Congress to the House have gone on their own fact-finding NCO shortages were the primary reason for correct the problem. trips to Europe, and almost everyone comes .. . failure. f The shortage of field artillery NCOs . . . is back with the same storyÐthat Army per- RETIREMENT SECURITY sonnel would talk their ears off about shortfalls placing junior soldiers into critical positions in personnel and the killing effect this has on that require a greater experience base to ef- The SPEAKER pro tempore (Mr. the day-to-day operational tempo. These con- fectively lead gun crews. Of the 44 howitzers OSE). Under a previous order of the cerns come not mainly from forces actually authorized, all are combat capable, but only House, the gentleman from Ohio (Mr. deployed on missions, but from forces left be- 22 are fully manned and qualified. PORTMAN) is recognized for 5 minutes. hind to take up the slack. I am here to tell you [We] project [that] some subordinate units Mr. PORTMAN. Mr. Speaker, I rise that these are not just a few isolated casesÐ preparing to deploy will improve and units re- tonight to talk about retirement secu- they reflect a very wide-spread situation in maining on Fort Drum will decrease their over- rity. This Congress and the administra- later-deploying Army units, because there just all C [readiness] ratings. tion have I think appropriately made are not enough people to go around given the Mr. Speaker, the shortages in personnel in preserving Social Security a top pri- operational requirements. later deploying units and in many support po- ority for this year. But as this chart To test that proposition, I asked the Army sitions is, in my view, seriously damaging the demonstrates, it is not enough to sim- Legislative Liaison office to provide me with a overall readiness of the Army. General ply preserve Social Security. Our pub- rundown of the current personnel situation in Shinseki essentially acknowledged that in his lic Social Security system is only one each of the 10 active divisions. They did a confirmation hearing. The Army, he said, is part of our overall retirement security good job of itÐin particular I want to thank Lt. currently able to meet its primary strategic programs in this country. Specifically, Col. Joe Guzowski and Lt. Col. Craig Deare mandate, which is to be prepared to prevail in I believe strongly that we need to take for putting together very useful, well organized two nearly simultaneous major theater wars. steps this year to significantly increase data very quickly. I am afraid I may have con- But the requirement to prevail in the second the availability of secure retirement tributed a bit to the overwork problem I'm dis- theater, he warned, could be accomplished savings by strengthening the private cussing here today, but, as usual, they came only with ``high risk.'' side, particularly the employer-pro- through. In the vernacular of the military in the vided pension side of our retirement The information they collected shows espe- 1990s, Mr. Speaker, this is a carefully crafted system. This is a crucial issue for all cially severe personnel shortfalls in units de- way of saying that the situation is not accept- Americans but particularly for baby July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5327 boomers who are nearing retirement. the nonprofit and public sector have Mr. Speaker, Michael Hooker had an The problem we face is significant. discouraged the growth of pension abiding love for Carolina. When he Only about half of American workers plans. For small businesses in par- came to Chapel Hill to serve as Chan- have any kind of pension at all. This ticular, the costs, the burdens and the cellor in 1995, he was returning to his would include a 401(k), a traditional de- liabilities associated with pensions are school to which he had first come as a fined benefit plan, a profit-sharing plan the main reason that companies are young man from the mountains of and so on. About 80 percent of workers not offering these plans. This legisla- southwest Virginia and which he al- who are employed in smaller businesses tion takes steps to cut the unnecessary ways felt had opened up the wider that cannot afford because of the com- red tape that I think has put a real world to him. He graduated from Caro- plexities of the current rules to offer stranglehold on our pension system. lina in 1969, the first member of his plans do not have a plan, so about 20 Who are these changes going to ben- family to graduate from college. He percent have a pension plan. Studies efit the most? They benefit everybody. had a degree in philosophy. After earn- show us that baby boomers right now That is what is great about them. If we ing graduate degrees in philosophy, he are only saving about 40 percent of look at this chart, it will show us that taught at Harvard, he held posts at what they will need for their retire- at least 70 percent of current pension Johns Hopkins University and then ment needs. Finally, the personal sav- recipients, those who are retired and served as president of Bennington Col- ings rate in our country is at historic receiving pensions, make incomes of lege in Vermont, the University of lows. In fact, the Commerce Depart- $50,000 or less. So this is something Maryland Baltimore County and the ment tells us that last month, the sav- that is really going to help the people five campus University of Massachu- ings rate in the United States was who need the help the most. The next setts system. But Michael Hooker always wanted minus 1.2 percent. Historically low. chart will show us that among those to return to Carolina. He brought to This is all the funds that are being people who are involved in pensions saved in this country for retirement the job of Chancellor a spirit of innova- who are getting pension benefits right tion, seeking to build on the traditions and other needs. now, 77 percent are middle and lower So how can people help themselves? of America’s oldest public university. income workers. Again, by taking ac- He believed that education is our How can people save more for their re- tions today to expand our pension sav- tirement? We have got a plan to do greatest engine of opportunity, and he ings, we are going to help the people reached out to the entire State to that. I have introduced a piece of legis- who need the most help in saving for lation with the gentleman from Mary- share his belief. His administration’s their retirement. theme was: ‘‘For the people,’’ and he land (Mr. CARDIN) which increases that This is a chance for this Congress to crisscrossed North Carolina visiting third leg of retirement security, which help all Americans do what people every county to promote his vision and is again the private employer-based want to do, which is to provide for a re- to renew the university’s connection to pension system, 401(k)s, 457s, 403(b) tirement that is secure, to have in- the State. plans, defined benefit plans, profit- creasing independence in retirement, When students came to Chapel Hill, sharing plans and so on. The legisla- to have more dignity in retirement. they knew they would be taught in a tion is comprehensive and it is de- Imagine the impact we could have in way that prepared them for the chal- signed to correct all the deficiencies we this country if the 60 million Ameri- lenges of the 21st century. Hooker said, see in our current system but, simply cans who currently do not have retire- and I am quoting: put, it lets workers save more for their ment savings through a pension of In the 21st century the only thing own retirement. It makes it less costly their own would be able to get that that will secure competitive advantage and burdensome for employers, par- kind of retirement security. Again, So- for our regional, State and national ticularly small employers, to establish cial Security reform is very important. economies is the extent to which we new pension plans or to improve their I support preserving the Social Secu- have developed, nutured, fostered, cul- own plans they have already got. rity system. But this is an opportunity tivated, and deployed brain power. Finally, we modernize the pension this Congress ought to take today and Students will remember his active laws to make them more in tune with ought to pass this year to enable all involvement in making their education the current mobile workforce of the Americans to have dignity and inde- reflect those values. He emphasized the 21st century. How do we do this? We in- pendence and security in retirement. need for increased access to computers crease contribution limits. For in- and technology, made this a priority f stance, 401(k) contribution limits are for UNC students, and he recruited and increased from $10,000 per year to b 2350 supported teachers who were willing to $15,000 per year, allowing workers to cross disciplinary boundaries and to in- save more for their own retirement. We TRIBUTE TO CHANCELLOR MI- novate in their teaching methods. have catch-up contributions, allowing CHAEL HOOKER OF THE UNIVER- North Carolinians who knew Michael any worker age 50 or over to put an ad- SITY OF NORTH CAROLINA AT Hooker will remember his energy for ditional $5,000 aside for retirement. CHAPEL HILL innovation and for effective teaching, This will be particularly good for The SPEAKER pro tempore (Mr. his belief in the promise of a great pub- women who have been out of the work- OSE). Under a previous order of the lic university and his passion for lead- force raising kids and then come back House, the gentleman from North Caro- ing Carolina into the next century. into the workforce and want to build lina (Mr. PRICE) is recognized for 5 min- My wife and I are sad for the loss suf- up a nest egg for their retirement. We utes. fered by Michael’s wife, Carmen, their drastically increase portability, allow- Mr. PRICE of North Carolina. Mr. family and our entire community. I ing people to roll over their pension Speaker, this week the University of deeply regret that Michael will not be savings from job to job, whether they North Carolina at Chapel Hill lost a with us to see his bold vision unfold. are in the private sector, the govern- bold leader when its eighth chancellor, However, I am comforted in the knowl- ment sector or the nonprofit sector. Michael Hooker, died from complica- edge that so many people are prepared These are long overdue changes that tions of cancer. Memorial services will to carry that vision forward, embrac- are absolutely necessary again to re- be held at 11 o’clock tomorrow morning ing the traditions that shaped Carolina spond to the much more mobile work- on the UNC Chapel Hill campus. and its late chancellor and shepherding force of the next century. We also During a short 4-year tenure Chan- the spirit of inventiveness and boldness lower the vesting requirement for cellor Hooker brought a great vision to that Michael Hooker embodied. matching employer contributions from the university, constantly pushing f 5 years where it is now to 3 years to Carolina with the declared goal of The SPEAKER pro tempore. Under a give more Americans the ability to get making it the greatest public univer- previous order of the House, the gen- involved in pension plans. sity in the Nation. His legacy will live tleman from Wisconsin (Mr. GREEN) is Finally, we cut red tape. The increas- in the university community and be- recognized for 5 minutes. ing complexities of the laws governing yond, wherever the impact of his en- (Mr. GREEN of Wisconsin addressed pensions, both in the private sector and thusiasm and his leadership were felt. the House. His remarks will appear H5328 CONGRESSIONAL RECORD — HOUSE July 1, 1999 hereafter in the Extensions of Re- plish the task of reducing the size and without it, believe it or not. We can marks.) scope of government. There seems to be live without this. f a commitment to that philosophy, but I want to enter into the RECORD, if I The SPEAKER pro tempore. Under a it does not work. could, Mr. Speaker, the comments here previous order of the House, the gen- Mr. Speaker, one reason it does not from the Americans for Tax Reform work is because we do not put a con- and other organizations that have sup- tleman from California (Mr. FILNER) is straint on the life blood of these legis- recognized for 5 minutes. ported the bill, and I ask my colleagues lative bodies, and that life blood, I re- to do so. It is enough. (Mr. FILNER addressed the House. peat, are the tax dollars that we ex- AMERICANS FOR TAX REFORM, His remarks will appear hereafter in tract in the population. Well, this does Washington, DC, July 1, 1999. the Extensions of Remarks.) begin to put that constraint on that Hon. TOM TANCREDO, f life blood flow, and it does begin to re- Washington, DC. DEAR REPRESENTATIVE TANCREDO: On be- The SPEAKER pro tempore. Under a duce the size and scope of government half of its 90,000 members and its 3,000 state previous order of the House, the gen- and its intervention into our lives and local taxpayer groups across the nation, tleman from Pennsylvania (Mr. PETER- which has grown far too great. Americans for Tax Reform strongly supports SON) is recognized for 5 minutes. Mr. Speaker, at 40 percent of the in- your ‘‘Top Ten Terrible Tax Act of 1999.’’ (Mr. PETERSON addressed the come of a family, I repeat 40 percent, As you already know, American families and 20 percent of our gross domestic already pay on average almost forty percent House. His remarks will appear here- of their income on taxes, be it federal, state, after in the Extensions of Remarks.) product it is too much. Something has to give, and if we just simply reduce or local. That is more than food, shelter, and f clothing combined. the rate of taxation, it is far too easy The Top Ten Terrible Tax Act of 1999 The SPEAKER pro tempore. Under a to come back within a year or 2 years previous order of the House, the gentle- would eliminate excessive taxes and provide and simply increase it again. That is every American with tangible tax relief. By woman from the District of Columbia easy to do. But it is very difficult to uprooting the death and gift taxes, the tele- (Ms. NORTON) is recognized for 5 min- actually come back and replace a tax phone universal service charge, the 3% tele- utes. that has been eliminated. phone excise tax, the marriage penalty tax, (Ms. NORTON addressed the House. Mr. Speaker, that is why we have the capital gains tax, the excise tax on vac- Her remarks will appear hereafter in identified 10 taxes that are legitimate cines, the excise tax on sport fishing equip- the Extensions of Remarks.) targets for us to attack as being able ment, the 1993 income tax increase on social to be eliminated, gone, erased from the security benefits, the double taxation on in- f terest and dividends, and the 1993 motor fuel books, not there any more: ENOUGH IS ENOUGH tax increase, taxpayers will be able to im- The estate tax, estate and gift tax, prove their quality of life and save more for The SPEAKER pro tempore. Under a more commonly and appropriately re- education and retirement. previous order of the House, the gen- ferred to as the death tax; it is cur- I thank you for your leadership in taking tleman from Colorado (Mr. TANCREDO) rently as high as 55 percent, and we a step in the right direction to providing fun- is recognized for 5 minutes. want to phase that out over a 10 year damental tax reform. Sincerely, Mr. TANCREDO. Mr. Speaker, we period and completely repeal it by De- GROVER G. NORQUIST. often hear people stand up in front of cember 1, 2099. The E-rate universal this microphone and start out by say- tax; that is a euphemism, E-rate is a CONGRESS SHOULD REFORM DEATH TAXES ing, ‘‘It is about,’’ when they are going euphemism, for a tax. It is a tax that At a Denver Business Journal Family Busi- to talk about what it is about. Well, in has been put on phone bills that did not ness conference earlier this year, Coors fact in this body it is about taxes. No even come through this body as an ac- Brewing President Peter Coors made an in- matter what else we say, no matter tual tax bill. It is a special friend, a teresting point about estate taxes. what else we do here, it is about taxes. special sort of tax of the Vice Presi- These so-called death taxes make it much dent. It is oftentimes referred to as the harder for corporations to pass ownership It is the life blood that drives every down from one generation to the next. They other thing we do in this body, and the Gore tax, and appropriately so. Next is the excise tax on telephones speed the demise of local businesses and the extent to which we can defend our rise of cookie-cutter consolidations because country and incarcerate criminals and and other communication services. My the consolidators are able to use stock and carry out all the other essential func- friends, this is the 3 percent tax that cash to buy out family businesses and ad- tions of government depends upon our was put on telephones when they were dress the inheritance tax issue. ability to extract money from the pop- a luxury item in 1898 in order to fund Congress is likely to take up the inherit- ulation and pay for those services. the Spanish-American war. Let me tell ance tax issue in the next session. Maybe they should hear from Peter Coors and peo- But when is enough enough? Is it my colleagues it is over, the war is over, and we do not need this tax any ple like him. enough, Mr. Speaker, to take 40 per- f cent of the income of the average fam- more. ily in America today for taxes? Is it The marriage penalty tax discrep- DECLARATION OF INDEPENDENCE enough to take 20 percent of the gross ancy in the Tax Code that results in a FOR THE RECORD higher tax burden for married couples; domestic product of this country every The SPEAKER pro tempore. Under a year now in taxes? Is that enough, Mr. let us get rid of it. The capital gains tax, currently up to previous order of the House, the gen- Speaker? I suggest it is not only 20 percent of gain would be phased out tleman from Colorado (Mr. SCHAFFER) enough, I suggest it is far too much. over a 10 year period. Let us get rid of is recognized for 1 minute. That is why today I have introduced Mr. SCHAFFER. Mr. Speaker, the it. the bill that we refer to here as the 10 The excise tax on vaccines, on vac- House will adjourn in approximately 1 top terrible tax act. This is a bill to ac- cines. Do you hear me? Seventy-five minute. In Washington, D.C., the Na- tually eliminate, not just reduce cer- cents per dose imposed on certain vac- tion’s Capital, 12 o’clock is midnight, is tain taxes, but actually eliminate cer- cines sold in the United States; this the time for us to finish. It would be, I tain taxes so that they cannot grow should be repealed by January 1, 2000. think the House would be in remiss, if back again. We want to pull them up Why are we taxing vaccines, let me we were not to reflect upon the occa- by their roots. ask. sion for our recess over the next week. Mr. Speaker, this is the only way Excise tax on sport fishing equip- A remarkable story, 223 years in the that we can actually begin to reduce ment. making, the founding of our Nation, the size and scope of government. We The 1993 income tax increase on So- our Declaration of Independence, the talk about that here on this floor, and cial Security benefits. 4th of July, recalls the memory and the we talk about it in legislative bodies The double tax on interest and divi- scene of those brave individuals in all over this country, reducing the size dends. Philadelphia who declared our inde- and scope of government. How many The 1993 increase in motor fuels tax. pendence. times have we heard that phrase? And Mr. Speaker, all these should be I do not know, Mr. Speaker, that the yet nothing seems to actually accom- gone, and they can be. We can live Declaration of Independence has ever July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5329 been entered into our RECORD, but I He has refused for a long time, after such He has excited domestic insurrections would ask now that the Declaration be dissolutions, to cause others to be elected; amongst us, and has endeavoured to bring on added to the CONGRESSIONAL RECORD: whereby the Legislative powers, incapable of the inhabitants of our frontiers, the merci- Annihilation, have returned to the People at less Indian Savages, whose known rule of THE DECLARATION OF INDEPENDENCE—A large for their exercise; the State remaining warfare, is an undistinguished destruction of TRANSCRIPTION—IN CONGRESS, JULY 4, 1776 in the mean time exposed to all the dangers all ages, sexes and conditions. THE UNANIMOUS DECLARATION OF THE of invasion from without, and convulsions In every stage of these Oppressions We THIRTEEN UNITED STATES OF AMERICA within. have Petitioned for Redress in the most When in the Course of human events, it be- He has endeavored to prevent the popu- humble terms: Our repeated Petitions have comes necessary for one people to dissolve lation of these States; for that purpose ob- been answered only by repeated injury. A the political bands which have connected structing the Laws for Naturalization of For- Prince whose character is thus marked by them with another, and to assume among eigners; refusing to pass others to encourage every act which may define a Tyrant, is the powers of the earth, the separate and their migrations hither, and raising the con- unfit to be the ruler of a free people. equal station to which the Laws of Nature ditions of new Appropriations of Lands. Nor have We been wanting in attentions to and of Nature’s God entitle them, a decent He has obstructed the Administration of our British brethren. We have warned them respect to the opinions of mankind requires Justice, by refusing his Assent to Laws for from time to time of attempts by their legis- that they should declare the causes which establishing Judiciary powers. lature to extend an unwarrantable jurisdic- impel them to the separation. He has made Judges dependent on his Will tion over us. We have reminded them of the We hold these truths to be self-evident, alone, for the tenure of their offices, and the circumstances of our emigration and settle- that all men are created equal, that they are amount and payment of their salaries. ment here. We have appealed to their native endowed by their Creator with certain He has erected a multitude of New Offices, justice and magnanimity, and we have con- unalienable Rights, that among these are and sent hither swarms of Officers to harrass jured them by the ties of our common kin- Life, Liberty and the pursuit of Happiness.— our people, and eat out their substance. dred to disavow these usurpations, which, That to secure these rights, Governments He has kept among us, in times of peace, would inevitably interrupt our connections are instituted among Men, deriving their Standing Armies without the Consent of our and correspondence. They too have been deaf just powers from the consent of the gov- legislatures. to the voice of justice and of consanguinity. erned,—That whenever any Form of Govern- He has affected the render the Military We must, therefore, acquiesce in the neces- ment becomes destructive of these ends, it is independent of and superior to the Civil sity, which denounces our Separation, and the Right of the People to alter or to abolish power. hold them, as we hold the rest of mankind, it, and to institute new Government, laying He has combined with others to subject us Enemies in War, in Peace Friends. its foundation on such principles and orga- to a jurisdiction foreign to our constitution, nizing its powers in such form, as to them and unacknowledged by our laws; giving his We, therefore, the Representatives of the shall seem most likely to effect their Safety Assent to their Acts of pretended Legisla- united States of America, in General Con- and Happiness. Prudence, indeed, will dictate tion: gress, Assembled, appealing to the Supreme that Governments long established should For Quartering large bodies of armed Judge of the world for the rectitude of our not be changed for light and transient troops among us: intentions, do, in the Name, and by Author- causes; and accordingly all experience hath For protecting them, by a mock Trial, ity of the good People of these Colonies, sol- shewn, that mankind are more disposed to from punishment for any Murders which emnly publish and declare, That these suffer, while evils are sufferable, than to they should commit on the Inhabitants of United Colonies are, and of Right ought to be right themselves by abolishing the forms to these States: Free and Independent States; that they are which they are accustomed. But when a long For cutting off our Trade with all parts of Absolved from all Allegiance to the British train of abuses and usurpations, pursuing in- the world: Crown, and that all political connection be- variably the same Object evinces a design to For imposing Taxes on us without our Con- tween them and the State of Great Britain, reduce them under absolute Despotism, it is sent: is and ought to be totally dissolved; and that their right, it is their duty, to throw off such For depriving us in many cases, of the ben- as Free and Independent States, they have Government, and to provide new Guards for efits of Trial by Jury: full Power to levy War, conclude Peace, con- their future security.—Such has been the pa- For transporting us beyond Seas to be tract Alliances, establish Commerce, and to tient sufferance of these Colonies; and such tried for pretended offences do all other Acts and Things which Inde- is now the necessity which constrains them For abolishing the free System of English pendent States may of right do. And for the to alter their former Systems of Govern- Laws in a neighbouring Province, estab- support of this Declaration, with a firm reli- ment. The history of the present King of lishing therein an Arbitrary government, ance on the protection of divine Providence, Great Britain is a history of repeated inju- and enlarging its Boundaries so as to render we mutually pledge to each other our Lives, ries and usurpations, all having in direct ob- it at once an example and fit instrument for our Fortunes and our sacred Honor. ject the establishment of an absolute Tyr- introducing the same absolute rule into The 56-signatures on the Declaration ap- anny over these States. To prove this, let these Colonies: pear in the positions indicated: For taking away our Charters, abolishing Facts be submitted to a candid world. [COLUMN 1] He has refused his Assent to Laws, the our most valuable Laws, and altering fun- most wholesome and necessary for the public damentally the Forms of our Governments: Georgia: Button Gwinnett, Lyman Hall, good. For suspending our own Legislatures, and George Walton. He has forbidden in Governors to pass Laws declaring themselves invested with power to [COLUMN 2] of immediate and pressing importance, un- legislate for us in all cases whatsoever. less suspended in their operation till his As- He has abdicated Government here, by de- North Carolina: William Hooper, Joseph sent should be obtained; and when so sus- claring us out of his Protection and waging Hewes, John Penn. pended, he has utterly neglected to attend to War against us. South Carolina: Edward Rutledge, Thomas them. He has plundered our seas, ravaged our Heyward, Jr., Thomas Lynch, Jr., Arthur He has refused to pass other Laws for the Coasts, burnt our towns, and destroyed the Middleton. accommodation of large districts of people, lives of our people. [COLUMN 3] unless those people would relinquish the He is at this time transporting large Ar- right of Representation in the Legislature, a mies of foreign Mercenaries to compleat the Massachusetts: John Hancock. right inestimable to them and formidable to works of death, desolation and tyranny, al- Maryland: Samuel Chase, William Paca, tyrants only. ready begun with circumstances of Cruelty & Thomas Stone, Charles Carroll of Carrollton. He has called together legislative bodies at perfidy scarcely paralleled in the most bar- Virginia: George Wythe, Richard Henry place unusual, uncomfortable, and distant barous ages, and totally unworthy the Head Lee, Thomas Jefferson, Benjamin Harrison, from the depository of the public Records, of a civilized nation. Thomas Nelson, Jr., Francis Lightfoot Lee, for the sole purpose of fatiguing them into He has constrained our fellow Citizens Carter Braxton. compliance with his measures. taken Captive on the high Seas to bear Arms He has dissolved Representative Houses re- against their Country, to become the execu- [COLUMN 4] peatedly, for opposing with manly firmness tioners of their friends and Brethren, or to Pennsylvania: Robert Morris, Benjamin his invasions on the rights of the people. fall themselves by their Hands. rush, Benjamin Franklin, John Morton, H5330 CONGRESSIONAL RECORD — HOUSE July 1, 1999 George Clymer, James Smith, George Tay- day, July 12, 1999, at 12:30 p.m. for cation, transmitting the Department’s final lor, James Wilson, George Ross. morning-hour debates. rule—William D. Ford Federal Direct Loan Delaware: Caesar Rodney, George Read, f Program (RIN: 1840–AC57) received June 7, Thomas McKean. 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the [COLUMN 5] EXECUTIVE COMMUNICATIONS, Committee on Education and the Workforce. ETC. 2828. A letter from the Acting Assistant New York: William Floyd, Philip Living- General Counsel for Regulatory Law, Depart- ston, Francis Lewis, Lewis Morris. Under clause 8 of rule XII, executive ment of Energy, transmitting the Depart- New Jersey: Richard Stockton, John communications were taken from the ment’s final rule—Alternative Fuel Trans- Witherspoon, Francis Hopkinson, John Hart, Speaker’s table and referred as follows: portation Program; Biodiesel Fuel Use Cred- Abraham Clark. 2817. A letter from the Acting Executive it [Docket No. EE-RM–99–BIOD] (RIN: 1904– [COLUMN 6] Director, Commodity Futures Trading Com- AB–00) received June 1, 1999, pursuant to 5 New Hampshire: Josiah Bartlett, William mission, transmitting the Commission’s U.S.C. 801(a)(1)(A); to the Committee on Whipple. final rule—Recordkeeping—received June 4, Commerce. Massachusetts: Samuel Adams, John 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the 2829. A letter from the Executive Director, Adams, Robert Treat Paine, Elbridge Gerry. Committee on Agriculture. Committee For Purchase From People Who Rhode Island: Stephen Hopkins, William 2818. A letter from the Acting Executive Are Blind Or Severely Disabled, transmitting Ellery. Director, Commodity Futures Trading Com- the Committee’s final rule—Procurement Connecticut: Roger Sherman, Samuel Hun- mission, transmitting the Commission’s List Additions and Deletions—received June tington, William Williams, Oliver Wolcott. final rule—Economic and Public Interest Re- 7, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to New Hampshire: Matthew Thornton. quirements for Contract Market Designa- the Committee on Government Reform. 2830. A letter from the General Counsel, f tion—received June 4, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Ag- Federal Retirement Thrift Investment LEAVE OF ABSENCE riculture. Board, transmitting the Board’s final rule— 2819. A letter from the Acting Executive Expansion and Continuation of Thrift Sav- By unanimous consent, leave of ab- Director, Commodity Futures Trading Com- ings Plan Eligibility; Death Benefits; Meth- sence was granted to: mission, transmitting the Commission’s ods of Withdrawing Funds from the Thrift Mr. FOSSELLA (at the request of final rule—Representations and Disclosures Savings Plan; and Miscellaneous Regulations Mr. ARMEY) for today and tomorrow on Required by Certain IBs, CPOs and CTAs— —received June 7, 1999, pursuant to 5 U.S.C. account of traveling abroad with a USO received June 3, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the Committee on Govern- tour in support of American troops 801(a)(1)(A); to the Committee on Agri- ment Reform. 2831. A letter from the Director, Fish and serving overseas. culture. 2820. A letter from the Under Secretary, Wildlife Service, Department of the Interior, f Rural Development, Department of Agri- transmitting the Department’s final rule— SPECIAL ORDERS GRANTED culture, transmitting the Department’s final Endangered and Threatened Wildlife and rule—Community Programs Guaranteed Plants; Determination of Endangered Status By unanimous consent, permission to Loans (RIN: 0575–AC17) received May 20, 1999, for the Plant Eriogonum apricum (inclusive address the House, following the legis- pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- of vars. apricum and prostratum) (Ione lative program and any special orders mittee on Agriculture. Buckwheat) and Threatened Status for the heretofore entered, was granted to: 2821. A letter from the Manager, Federal Plant Arctostaphylos myrtifolia (Ione (The following Members (at the re- Crop Insurance Corporation, Department of Manzanita) (RIN: 1018–AE25) received May 21, Agriculture, transmitting the Department’s 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the quest of Mr. MCNULTY) to revise and final rule—Group Risk Plan of Insurance Committee on Resources. extend their remarks and include ex- (RIN: 0563–AB06) received June 14, 1999, pur- 2832. A letter from the Assistant Secretary traneous material:) suant to 5 U.S.C. 801(a)(1)(A); to the Com- for Fish and Wildlife and Parks, Department Mr. SKELTON, for 5 minutes, today. mittee on Agriculture. of the Interior, transmitting the Depart- Mr. PRICE of North Carolina, for 5 2822. A letter from the Administrator, Ag- ment’s final rule—Migratory Bird Hunting; minutes, today. ricultural Marketing Service, Department of Withdrawal of Regulations Designed to Re- duce the Mid-Continent Light Goose Popu- Mr. FILNER, for 5 minutes, today. Agriculture, transmitting the Department’s final rule—Program to Assess Organic Certi- lation (RIN: 1018–AF05) received June 14, Ms. NORTON, for 5 minutes, today. fying Agencies [Docket Number LS–99–04] 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the Mr. PALLONE, for 5 minutes, today. (RIN: 0581–AB58) received June 14, 1999, pur- Committee on Resources. Ms. JACKSON-LEE of Texas, for 5 min- suant to 5 U.S.C. 801(a)(1)(A); to the Com- 2833. A letter from the General Counsel, utes, today. mittee on Agriculture. Department of Commerce, transmitting a (The following Members (at the re- 2823. A letter from the General Counsel, draft of proposed legislation which would re- quest of Mr. SCHAFFER) to revise and Department of the Treasury, transmitting a authorize and amend the National Marine extend their remarks and include ex- draft of proposed legislation to authorize the Sanctuaries Act; to the Committee on Re- sources. traneous material:) transfer of certain resources to the Enhanced Structural Adjustment Facility/Heavily In- 2834. A letter from the Acting Director, Of- Mrs. JOHNSON of Connecticut, for 5 debted Poor Countries Trust Fund; to the fice of Sustainable Fisheries, National Ma- minutes, today. Committee on Banking and Financial Serv- rine Fisheries Service, National Oceanic and Mr. PORTMAN, for 5 minutes, today. ices. Atmospheric Administration, transmitting Mr. GREEN of Wisconsin, for 5 min- 2824. A letter from the General Counsel, the Administration’s final rule—Fisheries of utes, today. Federal Emergency Management Agency, the Exclusive Economic Zone Off Alaska; Mr. PETERSON of Pennsylvania, for 5 transmitting the Agency’s final rule—Na- Bycatch Rate Standards for the Second Half minutes, today. tional Flood Insurance Program (NFIP); De- of 1999 [Docket No. 961107312–7021–02; I.D. termining the Write-Your-Own Expense Al- 052499E] received June 7, 1999, pursuant to 5 Mr. TANCREDO, for 5 minutes, today. lowance (RIN: 3067–AC92) received June 4, U.S.C. 801(a)(1)(A); to the Committee on Re- Mr. SCHAFFER, for 5 minutes, today. 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the sources. f Committee on Banking and Financial Serv- 2835. A letter from the Acting Director, Of- ices. fice of Sustainable Fisheries, National Ma- ADJOURNMENT 2825. A letter from the General Counsel, rine Fisheries Service, National Oceanic and Mr. SCHAFFER. Mr. Speaker, pursu- National Credit Union Administration, Atmospheric Administration, transmitting ant to Senate Concurrent Resolution transmitting the Administration’s final the Administration’s final rule—Fisheries of the Exclusive Economic Zone Off Alaska; 43, I move that the House do now ad- rule—Share Insurance and Appendix—re- ceived June 14, 1999, pursuant to 5 U.S.C. Deep-water Species Fishery by Vessels using journ. 801(a)(1)(A); to the Committee on Banking Trawl Gear in the Gulf of Alaska [Docket The motion was agreed to. and Financial Services. No. 990304062–9062–01; I.D. 0423699A] received The SPEAKER pro tempore. Pursu- 2826. A letter from the Assistant General June 7, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); ant to the provisions of Senate Concur- Counsel for Regulations, Department of Edu- to the Committee on Resources. rent Resolution 43, 106th Congress, the cation, transmitting the Department’s final 2836. A letter from the Director, Office of House stands adjourned until 12:30 p.m. rule—Special Education—Training and Infor- Sustainable Fisheries, National Marine Fish- on Monday, July 12, 1999, for morning- mation for Parents of Children with Disabil- eries Service, National Oceanic and Atmos- ities—received June 7, 1999, pursuant to 5 pheric Administration, transmitting the Ad- hour debates. U.S.C. 801(a)(1)(A); to the Committee on Edu- ministration’s final rule—Fisheries of the Thereupon (at 12 o’clock midnight), cation and the Workforce. Exclusive Economic Zone Off Alaska; Pol- pursuant to Senate Concurrent Resolu- 2827. A letter from the Assistant General lock in Statistical Area 630 [Docket No. tion 43, the House adjourned until Mon- Counsel for Regulations, Department of Edu- 990304062–9062–01; I.D. 060899C] received June July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5331 14, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the 2856. A letter from the Assistant Secretary the Committee on Resources. Committee on Transportation and Infra- for Legislative Affairs, Department of State, 2837. A letter from the Acting Director, Of- structure. transmitting a draft of proposed legislation fice of Sustainable Fisheries, National Ma- 2847. A letter from the Program Analyst, entitled ‘‘Intercountry Adoption Act’’; joint- rine Fisheries Service, National Oceanic and Office of the Chief Counsel, Department of ly to the Committees on International Rela- Atmospheric Administration, transmitting Transportation, transmitting the Depart- tions, the Judiciary, Education and the the Administration’s final rule—Fisheries off ment’s final rule—Airworthiness Directives; Workforce, and Ways and Means. West Coast States and in the Western Pa- Raytheon Aircraft Company Beech Models 45 2857. A letter from the Director, Office of cific; Pacific Coast Groundfish Fishery; (YT–34), A45 (T–34A, B–45), and D45 (T–34B) Management and Budget, transmitting a Whiting Closure for the Mothership Sector Airplanes [Docket No. 99–CE–22–AD; Amend- draft of proposed legislation which would im- [Docket No. 981231333–9127–03; I.D. 052799E] ment 39–11193; AD 99–12–02] (RIN: 2120–AA64) plement proposals in the President’s FY 2000 received June 14, 1999, pursuant to 5 U.S.C. received June 14, 1999, pursuant to 5 U.S.C. Budget to offset discretionary spending; 801(a)(1)(A); to the Committee on Resources. 801(a)(1)(A); to the Committee on Transpor- jointly to the Committees on Agriculture, 2838. A letter from the Acting Director, Of- tation and Infrastructure. Commerce, Resources, Transportation and fice of Sustainable Fisheries, National Ma- 2848. A letter from the Program Analyst, Infrastructure, Education and the Work- rine Fisheries Service, National Oceanic and Office of the Chief Counsel, Department of force, and Ways and Means. Atmospheric Administration, transmitting Transportation, transmitting the Depart- f the Administration’s final rule—Fisheries of ment’s final rule—Airworthiness Directives; the Exclusive Economic Zone Off Alaska; Pa- Boeing Model 737–200C Series Airplanes REPORTS OF COMMITTEES ON cific Cod in the Western Regulatory Area in [Docket No. 98–NM–273–AD; Amendment 39– PUBLIC BILLS AND RESOLUTIONS the Gulf of Alaska [Docket No. 990304062– 11192; AD 99–12–08] (RIN: 2120–AA64) received 9062–01; I.D. 060499C] received June 14, 1999, June 14, 1999, pursuant to 5 U.S.C. Under clause 2 of rule XIII, reports of pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- 801(a)(1)(A); to the Committee on Transpor- committees were delivered to the Clerk mittee on Resources. tation and Infrastructure. for printing and reference to the proper 2839. A letter from the Acting Assistant 2849. A letter from the Program Analyst, calendar, as follows: Attorney General, Department of Justice, Office of the Chief Counsel, Department of Mr. COBLE: Committee on Judiciary. H.R. transmitting a draft of proposed legislation Transportation, transmitting the Depart- 1761. A bill to amend provisions of title 17, to amend the Foreign Agents Registration ment’s final rule—Airworthiness Directives; United States Code; with an amendment Act of 1938; to the Committee on the Judici- Raytheon Aircraft Company Model 1900D (Rept. 106–216). Referred to the Committee of ary. Airplanes [Docket No. 98–CE–127–AD; Amend- the Whole House on the State of the Union. 2840. A letter from the Acting Assistant ment 39–11191; AD 99–12–07] (RIN: 2120–AA64) Mr. YOUNG of Florida: Committee on Ap- Attorney General, Department of Justice, received June 14, 1999, pursuant to 5 U.S.C. propriations. Report on the Revised Sub- transmitting a draft of proposed legislation 801(a)(1)(A); to the Committee on Transpor- allocation of Budget Allocations for Fiscal regarding the detention of criminal aliens; tation and Infrastructure. Year 2000 (Rept. 106–217). Referred to the to the Committee on the Judiciary. 2850. A letter from the Program Analyst, 2841. A letter from the Rules Adminis- Office of the Chief Counsel, Department of Committee of the Whole House on the State trator, Federal Bureau of Prisons, Depart- Transportation, transmitting the Depart- of the Union. ment of Justice, transmitting the Depart- ment’s final rule—Airworthiness Directives; Mr. YOUNG of Alaska: Committee on Re- ment’s final rule—Correspondence: Return The New Piper Aircraft, Inc. Models PA–31, sources. H.R. 1413. A bill to reauthorize and Address [BOP–1073–F] (RIN: 1120–AA69) re- PA–31–300, PA–31–325, PA–31–350, and PA–31P– amend the Coastal Barrier Resources Act; ceived June 14, 1999, pursuant to 5 U.S.C. 350 Airplanes [Docket No. 97–CE–32–AD; with an amendment (Rept. 106–218). Referred 801(a)(1)(A); to the Committee on the Judici- Amendment 39–11189; AD 99–12–05] (RIN: 2120– to the Committee of the Whole House on the ary. AA64) received June 14, 1999, pursuant to 5 State of the Union. 2842. A letter from the Rules Adminis- U.S.C. 801(a)(1)(A); to the Committee on Mr. CANADY: Committee on the Judici- trator, Federal Bureau of Prisons, Depart- Transportation and Infrastructure. ary. H.R. 1691. A bill to protect religious lib- ment of Justice, transmitting the Depart- 2851. A letter from the Chief, Office of Reg- erty; with an amendment (Rept. 106–219). Re- ment’s final rule—Federal Prison Industries ulations and Administrative Law, USCG, De- ferred to the Committee of the Whole House (FPI) Inmate Work Programs: Eligibility partment of Transportation, transmitting on the State of the Union. [BOP–1062–F] (RAN: 1120–AA57) received June the Department’s final rule—Alternate Com- Mr. BLILEY: Committee on Commerce. 14, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to pliance Program; Incorporations by Ref- H.R. 1180. A bill to amend the Social Secu- the Committee on the Judiciary. erence [USCG–1999–5004] (RIN: 2115–AF74) re- rity Act to expand the availability of health 2843. A letter from the Chief Financial Offi- ceived June 14, 1999, pursuant to 5 U.S.C. care coverage for working individuals with cer, Department of State, transmitting the 801(a)(1)(A); to the Committee on Transpor- disabilities, to establish a Ticket to Work Department’s final rule—Visas: Documenta- tation and Infrastructure. and Self-Sufficiency Program in the Social tion of Nonimmigrants—Passport and Visa 2852. A letter from the Program Analyst, Security Administration to provide such in- Waivers; Deletion of Obsolete Visa Proce- Office of the Chief Counsel, Department of dividuals with meaningful opportunities to dures and other Minor Corrections [Public Transportation, transmitting the Depart- work, and for other purposes; (Rept. 106–220 Notice 3048] received May 19, 1999, pursuant ment’s final rule—Airworthiness Directives; Pt. 1). Ordered to be printed. to 5 U.S.C. 801(a)(1)(A); to the Committee on AlliedSignal Inc. VN 411B Very High Fre- f the Judiciary. quency (VHF) Navigation Receivers [Docket 2844. A letter from the Program Analyst, No. 95–CE–91–AD; Amendment 39–11190; AD PUBLIC BILLS AND RESOLUTIONS Office of the Chief Counsel, Department of 99–12–06] (RIN: 2120–AA64) received June 14, Under clause 2 of rule XII, public Transportation, transmitting the Depart- 1999, pursuant to 5 U.S.C. 801(a)(1)(A); to the bills and resolutions were introduced ment’s final rule—Amendment of VOR Fed- Committee on Transportation and Infra- and severally referred, as follows: eral Airways; Kahului, HI [Airspace Docket structure. No. 97–AWP–35] (RIN: 2120–AA66) received 2853. A letter from the Program Analyst, By Mr. SENSENBRENNER (for him- June 4, 1999, pursuant to 5 U.S.C. 801(a)(1)(A); Office of the Chief Counsel, Department of self, Mr. GORDON, and Mrs. MORELLA): to the Committee on Transportation and In- Transportation, transmitting the Depart- H.R. 2413. A bill to amend the National In- frastructure. ment’s final rule—Flight Crewmember stitute of Standards and Technology Act to 2845. A letter from the Program Analyst, Flight Time Limitations and Rest Require- enhance the ability of the National Institute Office of the Chief Counsel, Department of ments—received June 14, 1999, pursuant to 5 of Standards and Technology to improve Transportation, transmitting the Depart- U.S.C. 801(a)(1)(A); to the Committee on computer security, and for other purposes; to ment’s final rule—Airworthiness Directives; Transportation and Infrastructure. the Committee on Science. McDonnell Douglas Model DC–9 and C–9 2854. A letter from the General Counsel, By Mr. TANCREDO (for himself, Mr. (Military) Series Airplanes [Docket No. 98– Department of Defense, transmitting a draft SCHAFFER, Mr. BURTON of Indiana, NM–110–AD; Amendment 39–11177; AD 99–08– of proposed legislation relating to the man- and Mr. BARR of Georgia): 05 R1] (RIN: 2120–AA64) received June 4, 1999, agement of non-excess property in the De- H.R. 2414. A bill to amend the Internal Rev- pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- partment of Defense; jointly to the Commit- enue Code of 1986 to eliminate certain par- mittee on Transportation and Infrastruc- tees on Armed Services and Government Re- ticularly unfair tax provisions, and for other ture. form. purposes; to the Committee on Ways and 2846. A letter from the Program Analyst, 2855. A letter from the Secretary of Com- Means, and in addition to the Committee on Office of the Chief Counsel, Department of merce, Secretary of Health and Human Serv- Commerce, for a period to be subsequently Transportation, transmitting the Depart- ices, transmitting a draft of proposed legisla- determined by the Speaker, in each case for ment’s final rule—Airworthiness Directives; tion entitled ‘‘Voluntary Seafood Inspection consideration of such provisions as fall with- International Aero Engines AG V2500–A1 and Performance Based Organization Act of in the jurisdiction of the committee con- V2500–A5 Series Turbofan Engines [Docket 1999’’; jointly to the Committees on Agri- cerned. No. 99–NE–37–AD; Amendment 39–11194; AD culture, Commerce, Resources, and Govern- By Mr. SMITH of New Jersey (for him- 99–13–01] (RIN: 2120–AA64) received June 14, ment Reform. self and Ms. MCKINNEY): H5332 CONGRESSIONAL RECORD — HOUSE July 1, 1999 H.R. 2415. A bill to enhance security of Foreign Assistance Act of 1961; to the Com- H.R. 2430. A bill to amend the Internal Rev- United States missions and personnel over- mittee on International Relations. enue Code of 1986 to provide tax treatment seas, to authorize appropriations for the De- By Mr. CAMP (for himself and Mr. for foreign investment through a United partment of State for fiscal year 2000, and for NEAL of Massachusetts): States regulated investment company com- other purposes; to the Committee on Inter- H.R. 2423. A bill to amend the Internal Rev- parable to the tax treatment for direct for- national Relations. enue Code of 1986 to repeal the motor fuel ex- eign investment and investment through a By Mr. WELLER (for himself and Ms. cise taxes on intercity buses; to the Com- foreign mutual fund; to the Committee on DUNN): mittee on Ways and Means. Ways and Means. H.R. 2416. A bill to amend the Internal Rev- By Mr. JACKSON of Illinois (for him- By Mr. CRANE (for himself, Mrs. JOHN- enue Code of 1986 to provide incentives for self, Mr. CAMPBELL, Mr. FRANK of SON of Connecticut, Mr. RAMSTAD, the construction of public schools; to the Massachusetts, Mrs. MALONEY of New Mr. WELLER, Mr. PORTMAN, and Mr. Committee on Ways and Means. York, Mr. TRAFICANT, Mr. FROST, Ms. SAM JOHNSON of Texas): By Mr. BARCIA (for himself and Mr. LEE, Ms. SCHAKOWSKY, Ms. PELOSI, H.R. 2431. A bill to amend the Internal Rev- WU): Mr. LANTOS, Mr. DEFAZIO, Mrs. CLAY- enue Code of 1986 to permit the consolidation H.R. 2417. A bill to establish an educational TON, Mrs. MINK of Hawaii, Mr. CLAY, of life insurance companies with other com- technology extension service at colleges and Mr. CUMMINGS, Mr. GEJDENSON, Mr. panies; to the Committee on Ways and universities; to the Committee on Science, BROWN of California, Mr. OWENS, Mr. Means. and in addition to the Committee on Edu- HILLIARD, Mr. BRADY of Pennsyl- By Mr. FILNER (for himself, Ms. cation and the Workforce, for a period to be vania, Ms. KILPATRICK, Mr. MCKINNEY, and Mr. MATSUI): subsequently determined by the Speaker, in RODRIGUEZ, Mr. PASTOR, Mrs. H.R. 2432. A bill to prohibit insurers from each case for consideration of such provi- CHRISTENSEN, and Ms. MCKINNEY): canceling or refusing to renew fire insurance sions as fall within the jurisdiction of the H.R. 2424. A bill to require the Board of policies covering houses of worship and re- committee concerned. Governors of the Federal Reserve System to lated support structures, and for other pur- By Mr. BILIRAKIS (for himself, Mr. post on its premises notices to employees re- poses; to the Committee on Commerce, and GREEN of Texas, and Mr. PALLONE): garding the applicable provisions of title VII in addition to the Committee on the Judici- H.R. 2418. A bill to amend the Public of the Civil Rights Act of 1964; to the Com- ary, for a period to be subsequently deter- Health Service Act to revise and extend pro- mittee on Banking and Financial Services, mined by the Speaker, in each case for con- grams relating to organ procurement and and in addition to the Committees on Edu- sideration of such provisions as fall within transplantation; to the Committee on Com- cation and the Workforce, and Government the jurisdiction of the committee concerned. merce. Reform, for a period to be subsequently de- By Mr. GOODE (for himself, Mr. SISI- By Mr. BILIRAKIS (for himself, Mr. termined by the Speaker, in each case for SKY, Mr. CONDIT, Mr. CRAMER, Mr. DEUTSCH, Mr. LATOURETTE, Mr. TAU- consideration of such provisions as fall with- MORAN of Virginia, and Mr. SHOWS): ZIN, Ms. BROWN of Florida, Mr. in the jurisdiction of the committee con- H.R. 2433. A bill to amend the Internal Rev- GREENWOOD, Mr. TOWNS, Mr. MCCOL- cerned. enue Code of 1986 to allow individuals to des- LUM, Mr. CANADY of Florida, Mr. By Mr. FARR of California (for him- ignate any portion of a refund for use by the GILCHREST, Mr. KOLBE, Mr. BASS, self, Mr. GREENWOOD, Ms. WOOLSEY, Secretary of Health and Human Services in Mrs. FOWLER, Mr. WALDEN of Oregon, Mr. GILCHREST, Mr. BLUMENAUER, providing catastrophic health coverage to in- and Mr. STEARNS): Mrs. CAPPS, Mrs. JOHNSON of Con- dividuals who do not otherwise have health H.R. 2419. A bill to amend title XVIII of the necticut, Mrs. MORELLA, Mr. KEN- coverage; to the Committee on Ways and Social Security Act to reflect original Con- NEDY of Rhode Island, Ms. PELOSI, Means, and in addition to the Committee on gressional intent by requiring that the new Mr. GEORGE MILLER of California, Mr. Commerce, for a period to be subsequently risk adjustment methodology for ABERCROMBIE, Mr. OLVER, Mrs. determined by the Speaker, in each case for Medicare+Choice payment rates be imple- TAUSCHER, Mr. DEFAZIO, Mr. consideration of such provisions as fall with- mented in a budget neutral manner, and for PALLONE, Mr. DELAHUNT, Mr. THOMP- in the jurisdiction of the committee con- other purposes; to the Committee on Ways SON of California, Mr. ROMERO- cerned. and Means, and in addition to the Committee BARCELO, Mrs. MINK of Hawaii, Ms. By Mr. GOODLING (for himself, Mr. on Commerce, for a period to be subse- ESHOO, Mr. FALEOMAVAEGA, Mr. BALLENGER, Mr. BOEHNER, Mr. HOEK- quently determined by the Speaker, in each GUTIERREZ, Mr. UNDERWOOD, Mr. LAN- STRA, Mr. SAM JOHNSON of Texas, Mr. case for consideration of such provisions as TOS, Mr. ORTIZ, Mr. PICKETT, Mr. TALENT, Mr. GREENWOOD, Mr. fall within the jurisdiction of the committee BILBRAY, Mr. MEEHAN, Mr. MARKEY, GRAHAM, Mr. SOUDER, Mr. MCINTOSH, concerned. Mr. BAIRD, Ms. HOOLEY of Oregon, Mr. NORWOOD, Mr. SCHAFFER, Mr. By Mr. TAUZIN (for himself, Mr. DIN- Mr. HOUGHTON, Mrs. KELLY, Ms. DEAL of Georgia, Mr. HILLEARY, Mr. GELL, Mr. OXLEY, Mr. BONIOR, Mr. LOFGREN, Ms. WATERS, Mr. KASICH, SALMON, Mr. TANCREDO, Mr. FLETCH- LEWIS of Georgia, Mr. DEAL of Geor- Mr. HOYER, Mr. MORAN of Virginia, ER, Mr. DEMINT, and Mr. ISAKSON): gia, Mr. GRAHAM, Mr. BOUCHER, Mr. and Ms. SCHAKOWSKY): H.R. 2434. A bill to require labor organiza- RUSH, Mr. SHIMKUS, Mr. NORWOOD, H.R. 2425. A bill to establish the Commis- tions to secure prior, voluntary, written au- Mr. SESSIONS, Mr. FOSSELLA, Mr. sion on Ocean Policy, and for other purposes; thorization as a condition of using any por- DICKS, Mr. BARCIA, Mr. HILL of Mon- to the Committee on Resources. tion of dues or fees for activities not nec- tana, Mr. BLUNT, Mr. HAYES, Mr. By Mr. COSTELLO: essary to performing duties relating to the WYNN, Mr. BARTON of Texas, Mr. H.R. 2426. A bill to require truth-in-budg- representation of employees in dealing with ETHERIDGE, Mr. TERRY, Mr. GREEN- eting with respect to the on-budget trust the employer on labor-management issues, WOOD, Mr. GANSKE, Mr. BURR of North funds; to the Committee on the Budget, and and for other purposes; to the Committee on Carolina, Mr. GILLMOR, Mr. BRYANT, in addition to the Committee on Rules, for a Education and the Workforce. Mr. SHADEGG, Mr. BONILLA, Mr. REY- period to be subsequently determined by the By Mr. GOODLING: NOLDS, Mr. SWEENEY, and Mrs. Speaker, in each case for consideration of H.R. 2435. A bill to expand the boundaries MYRICK): such provisions as fall within the jurisdic- of the Gettysburg National Military Park to H.R. 2420. A bill to deregulate the Internet tion of the committee concerned. include the Wills House, and for other pur- and high speed data services, and for other By Mr. COX: poses; to the Committee on Resources. purposes; to the Committee on Commerce. H.R. 2427. A bill to amend the Clean Air By Mr. GRAHAM (for himself, Mr. By Mr. BLAGOJEVICH (for himself, Act to remove a provision limiting States to SMITH of New Jersey, and Mr. CANADY Mr. WAXMAN, and Ms. NORTON): proportionately less assistance than their re- of Florida): H.R. 2421. A bill to amend chapter 44 of spective populations and tax payments to H.R. 2436. A bill to amend title 18, United title 18, United States Code, to regulate the the Federal government; to the Committee States Code, and the Uniform Code of Mili- sale and manufacture of certain armor pierc- on Commerce. tary Justice to protect unborn children from ing ammunition and armor piercing incen- By Mr. COYNE (for himself and Mr. assault and murder, and for other purposes; diary ammunition, and to regulate laser HOLDEN): to the Committee on the Judiciary, and in sights under the National Firearms Act; to H.R. 2428. A bill to suspend temporarily the addition to the Committee on Armed Serv- the Committee on the Judiciary, and in addi- duty on 11–Aminoundecanoic acid; to the ices, for a period to be subsequently deter- tion to the Committee on Ways and Means, Committee on Ways and Means. mined by the Speaker, in each case for con- for a period to be subsequently determined By Mr. CRANE (for himself, Mr. MAT- sideration of such provisions as fall within by the Speaker, in each case for consider- SUI, Mr. HAYWORTH, and Mr. WAT- the jurisdiction of the committee concerned. ation of such provisions as fall within the ju- KINS): By Mr. JONES of North Carolina: risdiction of the committee concerned. H.R. 2429. A bill to amend the Internal Rev- H.R. 2437. A bill to provide an exception By Mr. BURTON of Indiana (for himself enue Code of 1986 to establish a 5-year recov- from the enforcement of an accessibility and Mr. GILMAN): ery period for petroleum storage facilities; construction requirement of the Fair Hous- H.R. 2422. A bill to provide for the deter- to the Committee on Ways and Means. ing Act for certain buildings constructed in mination that Cuba is a major drug-transit By Mr. CRANE (for himself, Ms. DUNN, compliance with a local building code; to the country for purposes of section 490(h) of the and Mr. MCDERMOTT): Committee on the Judiciary. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5333

By Mr. KLINK: Texas, Mr. RUSH, Mrs. CLAYTON, Mr. preference because of the naturalization of a H.R. 2438. A bill to require specific Con- SHOWS, Ms. EDDIE BERNICE JOHNSON parent or spouse; to the Committee on the gressional authorization for the Secretary of of Texas, Mr. MEEKS of New York, Judiciary. the Interior to authorize construction of any Mr. BROWN of California, Ms. ROYBAL- By Mr. NORWOOD (for himself, Ms. visitor’s center or museum in the proximity ALLARD, Ms. SCHAKOWSKY, Mr. BENT- DEGETTE, Ms. SCHAKOWSKY, Mr. of or within the boundaries of Gettysburg SEN, and Ms. JACKSON-LEE of Texas): ENGLISH, Ms. RIVERS, Mr. POMBO, Mr. National Military Park; to the Committee H.R. 2444. A bill to provide for an interim MCINTOSH, Mr. SHOWS, Mr. REGULA, on Resources. census of Americans abroad, the data from Mr. BARR of Georgia, Mr. CHAMBLISS, By Mr. KUCINICH: which shall be used in deciding whether to Mr. LINDER, Mr. KINGSTON, Mr. COL- H.R. 2439. A bill to ensure the efficient al- count such individuals in future decennial LINS, Mr. ISAKSON, Mr. DEAL of Geor- location of telephone numbers; to the Com- censuses; to the Committee on Government gia, and Mr. GRAHAM): mittee on Commerce. Reform. H.R. 2449. A bill to amend the Federal By Mr. LAZIO: By Mrs. MALONEY of New York (for Water Pollution Control Act relating to Fed- H.R. 2440. A bill to provide for commemo- herself, Mr. GILMAN, Mr. ENGEL, Mr. eral facilities pollution control; to the Com- ration of the victory of freedom in the Cold TOWNS, Mrs. MCCARTHY of New York, mittee on Transportation and Infrastruc- War; to the Committee on Armed Services. Mr. MCNULTY, Mr. NADLER, Mr. ture. By Mr. LAZIO (for himself, Mr. REY- SERRANO, Mr. MENENDEZ, Mr. ACKER- By Mr. OBERSTAR (for himself, Mr. NOLDS, Mr. TOWNS, Mr. COOK, Mr. MAN, and Mr. HINCHEY): WISE, Mr. TRAFICANT, Mr. DEFAZIO, FORBES, Mr. BILBRAY, Mr. LARGENT, H.R. 2445. A bill to amend the Employee Ms. NORTON, and Ms. MILLENDER- Mrs. KELLY, Mr. BAKER, Mr. Retirement Income Security Act of 1974, MCDONALD): SWEENEY, Mr. ENGEL, Mr. CROWLEY, Public Health Service Act, and the Internal H.R. 2450. A bill to reform the safety prac- Mr. SESSIONS, Mr. BARTON of Texas, Revenue Code of 1986 to clarify the applica- tices of the railroad industry, to prevent Mr. SCHAFFER, Mr. DEAL of Georgia, tion of the mental health parity provisions railroad fatalities, injuries, and hazardous Mr. RILEY, Mr. GILLMOR, Mrs. to annual and lifetime visit or benefit limits, materials releases, and for other purposes; to MALONEY of New York, Mr. BRYANT, as well as dollar limits; to the Committee on the Committee on Transportation and Infra- Mr. DELAY, Mr. SHAYS, Mr. MEEKS of Commerce, and in addition to the Commit- structure. New York, Mr. PALLONE, Mr. BURR of tees on Education and the Workforce, and By Mr. RAMSTAD: North Carolina, Mr. ARMEY, Mr. TAU- Ways and Means, for a period to be subse- H.R. 2451. A bill to amend the Internal Rev- ZIN, and Mr. HALL of Texas): quently determined by the Speaker, in each enue Code of 1986 to classify certain fran- H.R. 2441. A bill to amend the Securities case for consideration of such provisions as chise operation property as 15-year depre- Exchange Act of 1934 to reduce fees on secu- fall within the jurisdiction of the committee ciable property; to the Committee on Ways rities transactions; to the Committee on concerned. and Means. Commerce. By Mr. MATSUI (for himself, Mr. By Mr. ROYCE (for himself, Mr. KA- By Mr. LAZIO (for himself, Mr. ENGEL, DOGGETT, Mr. BLUMENAUER, Mr. GEP- SICH, Mr. TIAHRT, Mr. SANFORD, Mr. Mrs. MORELLA, Ms. PELOSI, Mr. HARDT, Mr. BONIOR, Mr. RANGEL, Mr. PAUL, Mr. SUNUNU, Mr. ROHR- BAKER, Mr. BERMAN, Mr. BOEHLERT, COYNE, Mr. LEVIN, Mr. CARDIN, Mr. ABACHER, Mr. HOSTETTLER, Mr. Mr. BRADY of Pennsylvania, Mr. LEWIS of Georgia, Mr. NEAL of Massa- RADANOVICH, Mr. COBURN, Mr. DOO- CAMPBELL, Mr. CROWLEY, Ms. chusetts, Mr. JEFFERSON, Mrs. THUR- LITTLE, Mr. EHRLICH, Mr. LARGENT, DELAURO, Mr. FORBES, Mr. FOSSELLA, MAN, Mr. BECERRA, Mr. ALLEN, Ms. Mr. PITTS, and Mr. SALMON): Mr. FRANKS of New Jersey, Mr. BALDWIN, Mr. BARRETT of Wisconsin, H.R. 2452. A bill to dismantle the Depart- GEJDENSON, Mr. GONZALEZ, Mr. Mr. BERMAN, Ms. BROWN of Florida, ment of Commerce; to the Committee on GUTIERREZ, Mr. HINCHEY, Mrs. KELLY, Mr. BROWN of California, Mr. BROWN Commerce, and in addition to the Commit- Ms. KILPATRICK, Mr. KING, Mr. LA- of Ohio, Mrs. CAPPS, Ms. CARSON, tees on Transportation and Infrastructure, FALCE, Mr. LAMPSON, Mr. LIPINSKI, Mrs. CHRISTENSEN, Mr. CUMMINGS, Banking and Financial Services, Inter- Mr. LOBIONDO, Ms. LOFGREN, Mrs. Ms. DEGETTE, Ms. DELAURO, Mr. national Relations, Armed Services, Ways MCCARTHY of New York, Mr. DIXON, Mr. DOOLEY of California, Mr. and Means, Government Reform, the Judici- MCDERMOTT, Mr. MCGOVERN, Mr. DOYLE, Mr. FARR of California, Mr. ary, Science, and Resources, for a period to MCNULTY, Mr. MALONEY of Con- FATTAH, Mr. FROST, Mr. HINCHEY, Mr. be subsequently determined by the Speaker, necticut, Mrs. MALONEY of New York, HOEFFEL, Mr. HOLT, Mr. LARSON, Mr. in each case for consideration of such provi- Mr. MARTINEZ, Mr. MASCARA, Ms. MALONEY of Connecticut, Mr. MEE- sions as fall within the jurisdiction of the MCKINNEY, Mr. GEORGE MILLER of HAN, Mr. MENENDEZ, Ms. MILLENDER- committee concerned. California, Mr. NADLER, Mr. OLVER, MCDONALD, Mr. GEORGE MILLER of By Mr. SAXTON (for himself and Mr. Mr. OWENS, Mr. PASCRELL, Mr. California, Mrs. NAPOLITANO, Ms. ARMEY): PALLONE, Mr. ROTHMAN, Mr. TOWNS, NORTON, Ms. PELOSI, Mr. SERRANO, H.R. 2453. A bill to require certain condi- Mr. TRAFICANT, Mr. UNDERWOOD, Mr. Ms. SCHAKOWSKY, Mr. THOMPSON of tions to be met before the International WU, Mr. FARR of California, Mr. Mississippi, Mr. TIERNEY, Mrs. JONES Monetary Fund may sell gold; to the Com- BROWN of California, Mr. WEXLER, of Ohio, Mr. UDALL of Colorado, Mr. mittee on Banking and Financial Services. Ms. BERKLEY, Mr. NEAL of Massachu- UDALL of New Mexico, Mr. WAXMAN, By Mr. SAXTON (for himself, Mr. setts, Mr. MATSUI, Mr. BLAGOJEVICH, Mr. WEYGAND, and Ms. WOOLSEY): YOUNG of Alaska, Mr. DINGELL, Mr. Mr. GILMAN, Mr. WAXMAN, Mr. DOYLE, H.R. 2446. A bill to amend the Internal Rev- CHAMBLISS, Mr. PETERSON of Min- Mrs. LOWEY, Mr. SMITH of New Jer- enue Code of 1986 to allow a credit against nesota, Mr. PICKERING, Mr. HUNTER, sey, Mr. WEINER, Mr. STUPAK, Mrs. income tax to holders of Better America Mr. CUNNINGHAM, and Mr. TANNER): MINK of Hawaii, Mr. DEUTSCH, and BONDs; to the Committee on Ways and H.R. 2454. A bill to assure the long-term Mr. ACKERMAN): Means. conservation of mid-continent light geese H.R. 2442. A bill to provide for the prepara- By Mr. MCDERMOTT (for himself, Ms. and the biological diversity of the ecosystem tion of a Government report detailing injus- DUNN, Mr. INSLEE, Mrs. THURMAN, Mr. upon which many North American migratory tices suffered by Italian Americans during STARK, Mr. DICKS, and Mr. SMITH of birds depend, by directing the Secretary of World War II, and a formal acknowledge- Washington): the Interior to implement rules to reduce the ment of such injustices by the President; to H.R. 2447. A bill to amend title XVIII of the overabundant population of mid-continent the Committee on the Judiciary. Social Security Act to include in the cal- light geese; to the Committee on Resources. By Mrs. LOWEY (for herself, Mrs. culation of MedicareChoice payment rates By Mr. SHAYS (for himself, Mr. HILL- MCCARTHY of New York, Ms. under the Medicare program the costs attrib- IARD, Mr. LATOURETTE, and Mr. DELAURO, Ms. JACKSON-LEE of Texas, utable to medical services furnished to Medi- MCHUGH): Ms. SCHAKOWSKY, Mrs. MALONEY of care-eligible beneficiaries by medical facili- H.R. 2455. A bill to establish Federal pen- New York, Mrs. NAPOLITANO, Ms. ties of the Department of Veterans Affairs alties for prohibited uses and disclosures of CARSON, Ms. NORTON, Ms. WOOLSEY, and the Department of Defense; to the Com- individually identifiable health information, Ms. LOFGREN, Ms. MILLENDER- mittee on Ways and Means, and in addition to establish a right in an individual to in- MCDONALD, Ms. LEE, Ms. EDDIE BER- to the Committee on Commerce, for a period spect and copy their own health information, NICE JOHNSON of Texas, Mrs. MINK of to be subsequently determined by the Speak- and for other purposes; to the Committee on Hawaii, and Mr. WEINER): er, in each case for consideration of such pro- Commerce, and in addition to the Commit- H.R. 2443. A bill to amend chapter 44 of visions as fall within the jurisdiction of the tees on Ways and Means, and Government title 18, United States Code, relating to the committee concerned. Reform, for a period to be subsequently de- regulation of firearms dealers, and for other By Mrs. MINK of Hawaii: termined by the Speaker, in each case for purposes; to the Committee on the Judici- H.R. 2448. A bill to amend the Immigration consideration of such provisions as fall with- ary. and Nationality Act to assure that immi- in the jurisdiction of the committee con- By Mrs. MALONEY of New York (for grants do not have to wait longer for an im- cerned. herself, Ms. PELOSI, Mr. UNDERWOOD, migrant visa as a result of a reclassification By Mr. SIMPSON (for himself, Mr. Mr. FILNER, Mr. OLVER, Mr. GREEN of from family second preference to family first WALDEN of Oregon, Mr. HASTINGS of H5334 CONGRESSIONAL RECORD — HOUSE July 1, 1999

Washington, Mrs. CHENOWETH, Mr. gress to General Wesley Clark and to provide of Ohio, Mr. RADANOVICH, Mr. ROHR- SKEEN, and Mr. POMBO): for the production of bronze duplicates of ABACHER, Mr. ROGAN, Mr. SCAR- H.R. 2456. A bill to preserve the authority such medal for sale to the public; to the BOROUGH, Mr. SCHAFFER, Mr. SES- of the States over waters within their bound- Committee on Banking and Financial Serv- SIONS, Mr. SHADEGG, Mr. SKEEN, Mr. aries, to delegate the authority of the Con- ices. SMITH of Texas, Mr. SMITH of Michi- gress to the States to regulate water, and for By Mr. TAYLOR of Mississippi (for gan, Mr. SUNUNU, Mr. TANCREDO, Mr. other purposes; to the Committee on the Ju- himself, Mr. SHOWS, Mr. THOMPSON of TAUZIN, Mr. TAYLOR of North Caro- diciary, and in addition to the Committee on Mississippi, Mr. WAMP, Mr. PICK- lina, Mr. THORNBERRY, Mr. TIAHRT, Resources, for a period to be subsequently ERING, and Mr. WICKER): Mr. UPTON, Mr. WAMP, Mr. WATTS of determined by the Speaker, in each case for H.R. 2460. A bill to designate the United Oklahoma, and Mr. WICKER): consideration of such provisions as fall with- States Post Office located at 125 Border Ave- H. Con. Res. 148. Concurrent resolution ex- in the jurisdiction of the committee con- nue West in Wiggins, Mississippi, as the ‘‘Jay pressing the sense of the Congress that the cerned. Hanna ‘Dizzy’ Dean Post Office’’; to the Internal Revenue Code of 1986 must be re- By Ms. SLAUGHTER (for herself, Mrs. Committee on Government Reform. placed with a new, low, single-rate system LOWEY, Mr. ABERCROMBIE, Mr. ACKER- By Mr. TRAFICANT: that is simple and fair, allowing the Internal MAN, Mr. BOUCHER, Mr. DELAHUNT, H.R. 2461. A bill to amend the Federal Elec- Revenue Service, as we know it, to be abol- Ms. DELAURO, Mr. FROST, Mr. GREEN tion Campaign Act of 1971 to permit a cor- ished; to the Committee on Ways and Means. of Texas, Mr. HINCHEY, Ms. poration or labor organization to expend or By Ms. STABENOW: MILLENDER-MCDONALD, Mr. MORAN of donate funds for staging public debates be- H. Con. Res. 149. Concurrent resolution ex- Virginia, Ms. NORTON, Mr. REGULA, tween presidential candidates only if the or- pressing the sense of Congress that access to Mr. ROMERO-BARCELO, Mr. SANDERS, ganization staging the debate invites each affordable prescription drugs is critical to Mr. SANDLIN, and Mr. SERRANO): candidate who is eligible for matching pay- the quality of life of older Americans and H.R. 2457. A bill to prohibit health insur- ments from the Presidential Election Cam- ance and employment discrimination against that coverage for prescription drugs should paign Fund and qualified for the ballot in a be included in the Medicare Program as soon individuals and their family members on the number of States such that the candidate is basis of predictive genetic information or ge- as possible, and for other purposes; to the eligible to receive the minimum number of Committee on Ways and Means, and in addi- netic services; to the Committee on Com- electoral votes necessary for election; to the merce, and in addition to the Committees on tion to the Committee on Commerce, for a Committee on House Administration. period to be subsequently determined by the Ways and Means, and Education and the By Mr. UNDERWOOD (for himself, Mr. Workforce, for a period to be subsequently Speaker, in each case for consideration of YOUNG of Alaska, and Mr. GEORGE determined by the Speaker, in each case for such provisions as fall within the jurisdic- MILLER of California): tion of the committee concerned. consideration of such provisions as fall with- H.R. 2462. A bill to amend the Organic Act By Mr. STEARNS: in the jurisdiction of the committee con- of Guam, and for other purposes; to the Com- H. Con. Res. 150. Concurrent resolution to cerned. mittee on Resources. require the posting of the Ten Command- By Mr. STARK (for himself and Mr. By Mr. WATKINS (for himself and Mr. MARKEY): ments in the House and Senate chambers; to HINCHEY): the Committee on House Administration. H.R. 2458. A bill to amend the Internal Rev- H.R. 2463. A bill to amend section 2007 of enue Code of 1986 to provide a refundable By Mr. BLILEY (for himself and Mr. the Social Security Act to provide grant caregivers tax credit; to the Committee on OBERSTAR): funding for additional Empowerment Zones, Ways and Means. H. Res. 238. A resolution permitting pay- Enterprise Communities, and Strategic By Mrs. TAUSCHER (for herself, Mr. ments to be made by employing authorities Planning Communities, and for other pur- BONIOR, Mr. EDWARDS, Mr. FROST, of the House of Representatives to reimburse poses; to the Committee on Ways and Means. Mr. HOYER, Mr. KENNEDY of Rhode Is- Members, officers, and employees for quali- By Mr. WATKINS (for himself, Mr. land, Mr. LARSON, Mr. MALONEY of fied adoption expenses; to the Committee on MATSUI, Mr. CRANE, Mr. HERGER, and Connecticut, Mr. ORTIZ, Mr. PICKETT, House Administration. Mr. TRAFICANT): Mr. SISISKY, Mr. SKELTON, Mr. H.R. 2464. A bill to amend the Internal Rev- By Mr. GARY MILLER of California SPRATT, Mr. KING, Mr. THOMPSON of enue Code of 1986 to provide that certain (for himself, Mr. PITTS, Mr. HUTCH- California, Mr. STENHOLM, Mr. JOHN, amounts received by electric energy, gas, or INSON, Mr. SCHAFFER, Mr. PICKERING, Mr. BOSWELL, Mr. ETHERIDGE, Ms. steam utilities shall be excluded from gross Mr. DELAY, Mr. ADERHOLT, Mr. DELAURO, Mrs. THURMAN, Mr. income as contributions to capital; to the GOODE, Mr. WATTS of Oklahoma, Mr. CRAMER, Mr. DAVIS of Florida, Ms. Committee on Ways and Means. DEMINT, and Mr. ENGLISH): PRYCE of Ohio, Mr. MARKEY, Mr. By Mr. MICA (for himself, Mr. TRAFI- H. Res. 239. A resolution expressing the MOAKLEY, Mr. NEAL of Massachu- CANT, Mr. GILMAN, Mr. MCCOLLUM, sense of the House of Representatives with setts, Mr. ALLEN, Mr. MOORE, Mr. Mr. PORTMAN, Mr. SESSIONS, Mr. regard to obscenity and sexual TAYLOR of Mississippi, Mr. HINCHEY, SOUDER, Mr. BARR of Georgia, Mr. objectification in the United States; to the Mr. HOLDEN, Mr. KLECZKA, Mr. LAN- PITTS, Mr. STEARNS, Mr. KINGSTON, Committee on the Judiciary. TOS, Mr. WYNN, Mr. CLYBURN, Mr. and Mr. OSE): By Mr. RANGEL: LEWIS of Georgia, Mr. RANGEL, Mr. H.J. Res. 61. A joint resolution calling H. Res. 240. A resolution providing for con- TANNER, Mr. CLEMENT, Mr. GORDON, upon the Government of Mexico to under- sideration of the bill (H.R. 1660) to amend the Mr. WU, Mr. CLAY, Mr. HINOJOSA, Mr. take greater and more effective counterdrug Internal Revenue Code of 1986 to expand the FORD, Mr. EVANS, Mr. PAYNE, Ms. measures, and for other purposes; to the incentives for the construction and renova- JACKSON-LEE of Texas, Mr. ROEMER, Committee on International Relations. tion of public schools and to provide tax in- Mr. OBEY, Mr. CAPUANO, Mr. HILL- By Mr. BONILLA (for himself, Mr. centives for corporations to participate in IARD, Mr. VENTO, Mr. RODRIGUEZ, Mr. ADERHOLT, Mr. ARMEY, Mr. BAKER, cooperative agreements with public schools LUCAS of Kentucky, Mr. MATSUI, Mr. Mr. BARR of Georgia, Mr. BARTON of in distressed areas; to the Committee on DIXON, Mr. TURNER, Mr. SANDLIN, Mr. LUNT OEHNER Rules. KIND, Mr. ROTHMAN, Mr. OBERSTAR, Texas, Mr. B , Mr. B , Mr. Mr. HASTINGS of Florida, Mr. ENGEL, BRADY of Texas, Mr. BRYANT, Mr. f Mr. MEEKS of New York, Mr. LEVIN, BURTON of Indiana, Mr. BUYER, Mr. Mr. HILL of Indiana, Mr. BALDACCI, CALLAHAN, Mr. CALVERT, Mr. CAMP- ADDITIONAL SPONSORS BELL, Mr. CANADY of Florida, Mr. Mr. HOEFFEL, Mr. UDALL of New Mex- Under clause 7 of rule XII, sponsors ico, Mr. UDALL of Colorado, Mr. CANNON, Mr. CHAMBLISS, Mrs. CHENOWETH, Mr. COBURN, Mr. COL- were added to public bills and resolu- WEYGAND, Mr. KLINK, Mr. STUPAK, tions as follows: Mr. FATTAH, Mr. BRADY of Pennsyl- LINS, Mr. COMBEST, Mr. COX, Mrs. vania, Mr. MENENDEZ, Mr. GUTIER- CUBIN, Mr. CUNNINGHAM, Mr. DEAL of H.R. 8: Mr. BARTLETT of Maryland, Mr. REZ, Mr. DICKS, Ms. VELAZQUEZ, Mr. Georgia, Mr. DICKEY, Mr. DOOLITTLE, BARR of Georgia, Mr. RYAN of Wisconsin, Mr. MCNULTY, Mr. BERRY, Mr. BISHOP, Mr. EHLERS, Mrs. EMERSON, Mr. SHADEGG, Mr. GILMAN, Mr. HORN, Mr. OXLEY, Mr. INSLEE, Mr. SCOTT, Ms. HOOLEY of FORBES, Mr. GRAHAM, Ms. GRANGER, Mr. NORWOOD, Mrs. ROUKEMA, Mrs. KELLY, Oregon, Mr. WATT of North Carolina, Mr. HASTINGS of Washington, Mr. Mr. KLINK, Mr. SMITH of Texas, Mr. KING, Mr. Mrs. CLAYTON, Mr. MORAN of Vir- HEFLEY, Mr. HOSTETTLER, Mr. HUTCH- ISTOOK, and Mr. WELDON of Pennsylvania. ginia, Mr. DOOLEY of California, Mr. INSON, Mr. ISTOOK, Mr. SAM JOHNSON H.R. 21: Mr. MCINTYRE. SMITH of Washington, Mr. CONDIT, of Texas, Mr. KINGSTON, Mr. H.R. 25: Mr. SAXTON. Mr. PHELPS, Mrs. LOWEY, Mr. CARDIN, KNOLLENBERG, Mr. LATHAM, Mr. LIN- H.R. 73: Mr. PETERSON of Minnesota and Mr. BOYD, Mr. WEXLER, Mr. WEINER, DER, Mr. LUCAS of Oklahoma, Mr. Mr. BARTLETT of Maryland. Mr. LAMPSON, Mr. ANDREWS, Mr. BAR- MCINTOSH, Mr. METCALF, Mr. GARY H.R. 110: Mr. WEXLER. RETT of Wisconsin, Mr. GEPHARDT, MILLER of California, Mrs. MYRICK, H.R. 125: Mr. WYNN. and Mr. BENTSEN): Mr. NETHERCUTT, Mrs. NORTHUP, Mr. H.R. 175: Mr. SHERWOOD, Mr. BONIOR, Mr. H.R. 2459. A bill to authorize the President NORWOOD, Mr. PACKARD, Mr. PAUL, BLUNT, Mr. LATOURETTE, Mr. GOODE, and Ms. to award a gold medal on behalf of the Con- Mr. PICKERING, Mr. POMBO, Ms. PRYCE BROWN of Florida. July 1, 1999 CONGRESSIONAL RECORD — HOUSE H5335

H.R. 202: Mr. CAMPBELL and Mr. MCINTOSH. H.R. 1070: Mr. WELLER. H.R. 1477: Mr. CRAMER and Mr. ROTHMAN. H.R. 254: Mr. LEWIS of California. H.R. 1082: Mrs. BIGGERT. H.R. 1495: Mr. OLVER. H.R. 265: Mr. FOLEY. H.R. 1083: Mr. SAM JOHNSON of Texas, Mr. H.R. 1505: Mr. MCINTOSH and Mr. EHRLICH. H.R. 306: Mr. MOLLOHAN. SIMPSON, Mr. KUYKENDALL, and Mr. TAUZIN. H.R. 1507: Mr. STARK. H.R. 329: Mr. PASTOR and Mr. WAXMAN. H.R. 1093: Mr. MOAKLEY, Mr. UDALL of Col- H.R. 1511: Mr. BACHUS. H.R. 347: Mr. PICKETT and Mr. SIMPSON. orado, Mr. THOMPSON of Mississippi, Ms. H.R. 1544: Mr. SANDLIN. H.R. 355: Mr. OXLEY. DANNER, Mr. MEEKS OF NEW YORK, Mr. NAD- H.R. 1547: Mr. SHOWS, Mr. CUNNINGHAM, Mr. H.R. 371: Mr. SAWYER, Mr. MCNULTY, Ms. LER, Mr. MOORE, Mr. KANJORSKI, and Ms. BARCIA, Mr. SMITH of Washington, and Mr. STABENOW, Mr. PITTS, Mr. CAPUANO, Mr. VELA´ ZQUEZ. RAHALL. FORBES, and Mrs. JONES of Ohio. H.R. 1102: Mr. LATOURETTE, Mr. KANJORSKI, H.R. 1579: Mr. OXLEY, Mr. MANZULLO, Mr. H.R. 383: Mr. TAYLOR of North Carolina and Mr. PICKETT, Mr. DICKS, and Ms. BERKLEY. SAWYER, Mr. CRAMER, Mr. CUNNINGHAM, Mr. Mr. SHAYS. H.R. 1108: Mr. DAVIS of Illinois. SISISKY, Mr. DICKS, Mr. DIAZ-BALART, Mrs. H.R. 393: Mr. BONIOR and Mr. DAVIS of Illi- H.R. 1112: Mr. DAVIS of Illinois. EMERSON, Mr. SCHAFER, and Mr. PICKETT. nois. H.R. 1115: Mr. SAWYER, Mr. THOMPSON of H.R. 1592: Mrs. CHENOWETH. H.R. 405: Mr. BAKER and Mr. KINGSTON. Mississippi, Mr. SHAW, Mrs. MEEK of Florida, H.R. 1594: Mr. ORTIZ, Mr. REYES, Mr. H.R. 406: Mr. RYAN of Wisconsin. and Mr. SAXTON. HINOJOSA, Mr. RODRIGUEZ, Ms. SANCHEZ, Mr. H.R. 453: Mrs. LOWEY, Mr. ACKERMAN, Mr. H.R. 1122: Mr. SHAW, Mr. PACKARD, Mr. SERRANO, Mr. MALONEY of Connecticut, Mr. FARR of California, Mr. BOEHNER, Mr. CAS- DOYLE, Mr. HYDE, Mr. CAMPBELL, Mr. OBER- MASCARA, Mr. RAHALL, Mr. KILDEE, and Mr. TLE, and Mr. WU. STAR, Mr. PAUL, Mr. BASS, Mr. MOAKLEY, Mr. VENTO. H.R. 475: Mr. FILNER. DEAL of Georgia, Mr. NUSSLE, Ms. LOFGREN, H.R. 1598: Mr. MCCRERY and Mr. SHAYS. H.R. 530: Mr. KOLBE. Mr. ISAKSON, Mr. DEMINT, and Mr. PETERSON H.R. 1599: Mr. MCINTOSH. H.R. 557: Mrs. KELLY and Mr. VISCLOSKY. of Minnesota. H.R. 1601: Mr. EVANS, Ms. NORTON, Mr. H.R. 568: Mr. BROWN of California. H.R. 1123: Ms. LEE. DEAL of Georgia, Mr. ADERHOLT, Mr. LUTHER, H.R. 580: Mr. PORTMAN. H.R. 1142: Mr. CUNNINGHAM, Mr. TANCREDO, and Mr. MARKEY. H.R. 583: Mr. WU and Mr. GONZALEZ. Mr. BALLENGER, Mr. LUCAS of Oklahoma, Mr. H.R. 1621: Mr. BOUCHER. H.R. 605: Mr. MCINTOSH. GARY MILLER of California, Mr. HUNTER, Mr. H.R. 1624: Ms. ROYBAL-ALLARD, Ms. H.R. 612: Mr. COSTELLO and Mr. CONYERS. HAYES, Mr. MCINNIS, Mr. SOUDER, Mr. PACK- VELA´ ZQUEZ, Mr. FROST, Mr. PASTOR, Mr. H.R. 615: Mr. WELLER and Mr. BALLENGER. ARD, and Mr. SWEENEY. KUCINICH, Mr. MARTINEZ, and Mr. WEYGAND. H.R. 616: Mr. WELLER. H.R. 1168: Mr. SHOWS. H.R. 1630: Mr. DINGELL. H.R. 637: Mr. TOWNS. H.R. 1172: Mr. HALL of Ohio, Mr. BOUCHER, H.R. 1644: Mr. PICKETT. H.R. 692: Mr. SANFORD. Mr. DOYLE, Mr. DOOLEY of California, Mr. H.R. 1645: Mr. DAVIS of Illinois. H.R. 701: Mr. SAWYER, Mr. ACKERMAN, Mr. ROGERS, Mr. CAPUANO, Mr. MCNULTY, Mr. H.R. 1646: Mr. SANDLIN. SKELTON, Mr. MOLLOHAN, Ms. STABENOW, and ROGAN, Mr. CUMMINGS, Mr. MOLLOHAN, Mr. H.R. 1682: Mr. CROWLEY, Mr. HOLT, Ms. Mr. GREEN of Texas. ACKERMAN, Mr. FLETCHER, Mr. MATSUI, Mr. HOOLEY of Oregon, Mr. FROST, and Mr. H.R. 710: Mr. RYAN of Wisconsin, Mr. RAMSTAD, Mr. GREENWOOD, and Ms. BALDWIN. MORAN of Virginia. DELAY, Mr. THOMPSON of California, and Mr. H.R. 1180: Mr. KING, Mr. PHELPS, and Mr. H.R. 1685: Mr. MEEHAN, Mr. SKEEN, Mr. RAHALL. GIBBONS. DICKS, Mr. RODRIGUEZ, Mr. THORNBERRY, Mr. H.R. 716: Mr. TALENT. H.R. 1187: Mr. WEXLER and Mr. BLUNT. CAPUANO, Mr. TALENT, Mr. OLVER, and Mr. H.R. 721: Ms. BALDWIN, Mr. BARRETT of H.R. 1194: Mr. GEJDENSON and Mr. WATKINS. MCGOVERN. Wisconsin, and Ms. MCCARTHY of Missouri. H.R. 1221: Mr. DEUTSCH and Mrs. MCCARTHY H.R. 1693: Mr. PALLONE and Mr. BENTSEN. H.R. 728: Mr. NORWOOD, Mr. BEREUTER, and of New York. H.R. 1736: Mr. VENTO. Mrs. EMERSON. H.R. 1248: Mr. REYES and Mr. DEUTSCH. H.R. 1750: Ms. HOOLEY of Oregon. H.R. 731: Mr. VENTO. H.R. 1261: Mr. GRAHAM and Mr. ISAKSON. H.R. 1760: Mr. MORAN of Kansas and Mr. H.R. 735: Mr. TAUZIN. H.R. 1291: Mr. ROGERS and Mr. HYDE. BALDACCI. H.R. 736: Mr. BARTLETT of Maryland. H.R. 1300: Mr. HOUGHTON, Mr. SAXTON, Mr. H.R. 1776: Mr. HAYWORTH, Mr. HOLDEN, Mr. H.R. 750: Mr. GILMAN. LAZIO, and Mr. UPTON. HOUGHTON, Mr. WAMP, Mr. HERGER, Mr. REY- H.R. 765: Mr. DEAL of Georgia. H.R. 1301: Mr. LAZIO, Mr. JENKINS, Mr. NOLDS, Mr. PASTOR, Mr. HAYES, Mr. DAVIS of H.R. 773: Mr. STRICKLAND. MURTHA, Mr. BEREUTER, Mr. LEACH, Mr. Illinois, Mr. RYAN of Wisconsin, Mr. PETRI, H.R. 783: Mr. PASTOR. PHELPS, and Mr. COSTELLO. Mrs. JOHNSON of Connecticut, and Mr. H.R. 784: Mr. TANCREDO. H.R. 1303: Mr. THORNBERRY and Mr. BOU- KUYKENDALL. H.R. 789: Mrs. THURMAN, Mr. HOLDEN, and CHER. H.R. 1777: Mr. BALDACCI and Ms. BERKLEY. Mr. GREEN of Texas. H.R. 1304: Mr. KIND, Ms. KAPTUR, and Mr. H.R. 1788: Mr. BOYD, Mr. FOLEY, Mrs. THUR- H.R. 804: Mr. ROGAN. WICKER. MAN, and Mr. MCINTOSH. H.R. 809: Mr. MARTINEZ. H.R. 1310: Mrs. NORTHUP, Mr. CLAY, Mr. RO- H.R. 1810: Mr. EWING, Mr. EVANS, and Mr. H.R. 827: Mrs. THURMAN, Mr. SANDLIN, and MERO-BARCELO, Mr. FARR of California, Mrs. PHELPS. Mr. GONZALEZ. JOHNSON of Connecticut, Ms. DUNN, Mr. H.R. 1811: Mr. FRANK of Massachusetts. H.R. 828: Mr. DAVIS of Illinois. HOUGHTON, Mr. LEACH, Mr. SOUDER, Mrs. H.R. 1812: Mr. TANCREDO. H.R. 844: Mr. LOBIONDO, Mr. PALLONE, Mr. EMERSON, Mr. SMITH of Michigan, Mr. FOLEY, H.R. 1816: Mr. MATSUI, Mrs. MINK of Ha- CHABOT, Mr. MANZULLO, Mr. SANDLIN, Mrs. Mr. CALLAHAN, and Mr. VENTO. waii, Mr. FROST, Mr. GREEN of Texas, Mr. EMERSON, Mr. WALSH, Mr. GREEN of Wis- H.R. 1311: Mr. GALLEGLY, Mr. EVANS, Mr. SERRANO, and Mr. ROMERO-BARCELO. consin, Mr. NUSSLE, Mr. HOLT, Mr. WAMP, OLVER, Mr. LIPINSKI, Mr. EWING, Mr. BACHUS, H.R. 1821: Mr. CLYBURN, Ms. MCKINNEY, Ms. Mr. REYNOLDS, Mr. PACKARD, Mr. EHRLICH, Mr. LAHOOD, Mrs. JOHNSON of Connecticut, JACKSON-LEE of Texas, Mr. FARR of Cali- Mr. LAZIO, Mr. DAVIS of Virginia, and Mr. Mr. HYDE, Mr. LEACH, Mr. MANZULLO, Mr. fornia, Ms. NORTON, Mr. BISHOP, Mr. WYNN, BENTSEN. COSTELLO, Mr. DAVIS of Illinois, Mr. HOUGH- Ms. BALDWIN, Mr. TRAFICANT, Ms. WOOLSEY, H.R. 846: Mr. BONIOR and Mr. BERRY. TON, Mr. WALSH, Mrs. MORELLA, Mr. PICKETT, Ms. MILLENDER-MCDONALD, Mrs. H.R. 864: Mr. WATTS of Oklahoma, Mr. Mr. BLAGOJEVICH, Mrs. BIGGERT, Mr. BOYD, CHRISTENSEN, and Ms. SCHAKOWSKY. LARGENT, Mr. LATOURETTE, Mr. HASTINGS of Mr. MCHUGH, Mr. COYNE, Mr. WELLER, Mr. H.R. 1827: Mr. SAM JOHNSON of Texas, Mr. Washington, Mr. HALL of Ohio, Mr. SHER- BENTSEN, Mr. FRANK of Massachusetts, and KNOLLENBERG, Mr. GILMAN, Mr. RYAN of Wis- WOOD, Mrs. CUBIN, Mr. WYNN, and Mr. TAU- Mr. VENTO. consin, and Mr. METCALF. ZIN. H.R. 1322: Mr. WYNN. H.R. 1839: Mr. FILNER. H.R. 865: Mr. CANADY of Florida, Mr. H.R. 1333: Mr. HOUGHTON, Mr. MARTINEZ, H.R. 1840: Mr. WICKER. BILBRAY, and Mr. BUYER. Mr. THOMPSON of Mississippi, Mrs. MEEK of H.R. 1849: Mr. BERMAN. H.R. 896: Mr. DUNCAN. Florida, and Mr. CAPUANO. H.R. 1862: Mr. MCCARTHY of New York. H.R. 903: Mr. HILL of Indiana and Mr. H.R. 1336: Mr. CAMPBELL. H.R. 1863: Mr. WALDEN of Oregon. GEJDENSON. H.R. 1337: Mr. HUNTER and Mr. RYAN of H.R. 1868: Mr. KIND and Mr. TANNER. H.R. 904: Mr. WU. Wisconsin. H.R. 1884: Mr. CLAY. H.R. 922: Mr. SHOWS and Mr. EWING. H.R. 1334: Mr. KINGSTON. H.R. 1885: Ms. KILPATRICK, Mr. KUCINICH, H.R. 933: Mr. SHERMAN. H.R. 1354: Mr. HILL of Montana, Mr. BUR- Mr. ALLEN, Mr. HINCHEY, and Mr. DEFAZIO. H.R. 953: Ms. SANCHEZ. TON of Indiana, Mr. NUSSLE, and Mr. RYAN of H.R. 1899: Mr. INSLEE, Mr. OWENS, Mr. H.R. 961: Mr. KUCINICH, Mr. MASCARA, and Wisconsin. KING, Ms. HOOLEY of Oregon, Mr. UDALL of Ms. KAPTUR. H.R. 1355: Mr. PALLONE. New Mexico, Mr. SANDLIN, and Mr. SERRANO. H.R. 976: Mr. BAIRD and Mr. GREEN of H.R. 1356: Mr. GUTIERREZ and Mr. GREEN- H.R. 1916: Mr. STENHOLM, Mr. BENTSEN, Mr. Texas. WOOD. GREEN of Texas, Mr. EDWARDS, Ms. EDDIE H.R. 987: Mr. SPENCE and Mr. THORNBERRY. H.R. 1358: Mr. WATKINS and Mr. GILMAN. BERNICE JOHNSON of Texas, Mr. HINOJOSA, H.R. 1001: Mr. RANGEL. H.R. 1360: Mr. HOBSON. Mr. GONZALEZ, Mr. ORTIZ, Mr. COLLINS, Mr. H.R. 1032: Mr. BLILEY. H.R. 1388: Mr. DELAHUNT and Mr. OLVER. YOUNG of Alaska, Mr. GEORGE MILLER of H.R. 1044: Mr. PETERSON of Pennsylvania. H.R. 1392: Mr. SANDLIN and Mr. FROST. California, Mr. UDALL of New Mexico, Mr. H.R. 1054: Mr. FORBES. H.R. 1443: Mr. WATT of North Carolina. JOHN, and Mr. BOYD. H5336 CONGRESSIONAL RECORD — HOUSE July 1, 1999

H.R. 1932: Mr. SWEENEY. H.R. 2245: Mr. TERRY, Mr. RYAN of Wis- H. Con. Res. 121: Mr. SMITH of New Jersey H.R. 1935: Mr. WYNN, Mr. GUTIERREZ, Ms. consin, Mr. TANCREDO, Mrs. BIGGERT, Mr. and Mr. WOLF. LOFGREN, and Ms. BALDWIN. DEMINT, Mr. FLETCHER, Mr. GREEN of Wis- H. Con. Res. 124: Mr. GREEN of Texas, Mr. H.R. 1939. Mr. BONIOR, Mr. LANTOS, Mr. consin, Mr. HAYES, Mr. ISAKSON, Mr. CAPUANO, and Mr. RANGEL. LATHAM, Mr. MCGOVERN, Mr. DAVIS of Illi- KUYKENDALL, Mr. SIMPSON, Mr. SWEENY, Mr. H. Con. Res. 128: Mr. LATOURETTE and Mr. nois, and Mrs. THURMAN. VITTER, Mr. TOOMEY, Mr. WALDEN of Oregon, BENTSEN. H.R. 1966: Mrs. THURMAN. Mr. REYNOLDS, Mr. SHERWOOD, and Mr. OSE. H. Con. Res. 129: Mr. SHOWS, Mr. MAN- H.R. 1975: Mr. SANDLIN. H.R. 2246: Mr. MOORE, Mr. BAKER, and Mr. ZULLO, Mr. DAVIS of Illinois, Ms. NORTON, and H.R. 1976: Mr. BOEHLERT, Mr. GILMAN, and BALDACCI. Mr. ARCHER. Mr. HORN. H.R. 2247: Mr. ENGLISH. H. Con. Res. 134: Ms. LOFGREN. H.R. 1977: Mr. MORAN of Kansas. H.R. 2252: Mr. THORNBERRY. H. Con. Res. 140: Mr. GEJDENSON, Mr. H.R. 1983: Ms. KAPTUR. H.R. 2260: Mr. OXLEY, Mr. WOLF, Mr. TOWNS, Ms. MILLENDER-MCDONALD, Mr. SAN- H.R. 1992: Mr. CRAMER, Mr. BURR of North MCINNIS, Mr. LIPINSKI, Mr. PEASE, Mr. RYUN FORD, Mr. ENGEL, and Mr. PAYNE. Carolina, Mr. KILDEE, and Mr. WICKER. of Kansas, Mr. JENKINS, Mr. HILL of Mon- H. Con. Res. 141: Mr. LAMPSON, Mr. H.R. 1994: Mr. RYAN of Wisconsin. tana, Mr. COSTELLO, Mr. SUNUNU, Mr. CAMP, HINOJOSA, Ms. EDDIE BERNICE JOHNSON of H.R. 1995: Mr. PETERSON of Pennsylvania, Mr. MASCARA, Mr. WICKER, Mr. WATKINS, Mr. Texas, Mr. BECERRA, Mr. OWENS, Ms. Mr. BALLENGER, Mr. ROYCE, Mrs. MYRICK, FORBES, Mr. HALL of Ohio, Mr. PETRI, Mr. SCHAKOWSKY, Mrs. MEEK of Florida, Mr. BAR- Mr. SOUDER, Mr. PETRI, Mr. UPTON, Mr. MCINTOSH, Mr. TAYLOR of North Carolina, RETT of Wisconsin, Mr. GEJDENSON, Mr. EHLERS, Mr. HALL of Texas, Mr. GREENWOOD, and Mr. CHAMBLISS. PASCRELL, Ms. DELAURO, Mr. BRADY of Penn- Mrs. ROUKEMA, Mr. RADANOVICH, and Mr. H.R. 2282: Mr. GREEN of Wisconsin, Mr. sylvania, Mrs. CHRISTENSEN, Mr. BROWN of HERGER. PAUL, Mr. ROEMER, Mr. PICKETT, and Mrs. California, Mr. DEUTSCH, Mr. HUTCHINSON, H.R. 1996: Mrs. MEEK of Florida, Mr. MEE- KELLY. Ms. BERKLEY, and Mr. WAXMAN. HAN, Mr. DAVIS of Illinois, Mr. BONIOR, Mr. H.R. 2283: Mr. PETERSON of Minnesota. H. Con. Res. 145: Mrs. THURMAN, Mr. GUTIERREZ, and Mr. ENGLISH. H.R. 2287: Ms. SCHAKOWSKY and Ms. WOOL- ENGLISH, and Mr. WAXMAN. H.R. 1998: Mr. LUTHER. SEY. H. Con. Res. 147: Mr. CUMMINGS. H.R. 1999: Mr. SABO. H.R. 2300: Mr. LUCAS of Oklahoma, Mrs. H. Res. 89: Ms. NORTON, Mr. ADERHOLT, and H.R. 2000: Mr. PASTOR, Mr. JEFFERSON, Mr. WILSON, Mr. THORNBERRY, and Mr. WICKER. Mr. WU. FOLEY, Mr. INSLEE, Mr. WU, Mr. ISAKSON, and H.R. 2303: Mr. COYNE and Mr. HYDE. H. Res. 107: Mr. DIXON, Mr. STARK, and Mr. Ms. WOOLSEY. H.R. 2305: Mr. MEEKS of New York. MEEHAN. H.R. 2004: Mr. TANCREDO. H.R. 2306: Mrs. THURMAN. H. Res. 164: Mr. BERRY, Mr. MINGE, and Mr. H.R. 2018: Mr. RAMSTAD. H.R. 2308: Mr. MANZULLO, Mr. WATKINS, Mr. ANDLIN H.R. 2028: Mr. MANZULLO. S . ENGLISH, Ms. DUNN, Mr. HULSHOF, and Mr. H.R. 2030: Mr. CAMP. H. Res. 203: Mr. WELDON of Pennsylvania, HERGER. H.R. 2031: Mr. BALDACCI, Mr. LUCAS of Mr. METCALF, Mr. WYNN, Mr. FRANK of Mas- H.R. 2337: Ms. LOFGREN. Oklahoma, Mr. BOYD, Mr. GRAHAM, Mr. sachusetts, Mr. ROMERO-BARCELO, Mrs. H.R. 2344: Mr. PRICE of North Carolina. HOEKSTRA, Mr. LIPINSKI, and Mr. BONIOR. CAPPS, Mr. TIAHRT, Mr. BARCIA, Mr. LAHOOD, H.R. 2345: Ms. WOOLSEY. H.R. 2039: Mr. KUCINICH. Mr. FRANKS of New Jersey, Mr. HALL of Ohio, H.R. 2056: Mr. TOWNS. H.R. 2372: Mr. SCARBOROUGH and Mr. PETRI. Mr. GILMAN, Mr. MCNULTY, Mr. CASTLE, Mr. H.R. 2088: Mr. FLETCHER. H.R. 2377: Mr. BRADY of Pennsylvania and LOBIONDO, Mr. HOLDEN, Mr. GALLEGLY, Mr. H.R. 2102: Mr. FOLEY, Mr. MOAKLEY, Ms. Mr. FATTAH. SCHAFFER, and Mr. GREEN of Texas. DUNN, and Mrs. EMERSON. H.R. 2381: Mr. NORWOOD. f H.R. 2116: Mr. MCINTOSH. H.R. 2389: Mr. GOODLATTE, Mr. STUPAK, Mr. H.R. 2125: Mr. BLAGOJEVICH, Mr. WYNN, Ms. RADANOVICH, Mr. SHOWS, Mrs. CHENOWETH, ROS-LEHTINEN, Mr. DIAZ-BALART, Mrs. Mr. OBERSTAR, Mr. NETHERCUTT, Mr. TAYLOR DELETIONS OF SPONSORS FROM MALONEY of New York, Mr. WEXLER, and Mr. of North Carolina, and Mr. WALDEN of Or- PUBLIC BILLS AND RESOLUTIONS egon. MATSUI. Under clause 7 of rule XII, sponsors H.R. 2136: Mrs. THURMAN. H.J. Res. 55: Mr. DUNCAN, Mr. HUNTER, Mr. H.R. 2137: Ms. DUNN. HOEKSTRA, Mr. HILL of Montana, Mr. SCHAF- were deleted from public bills and reso- H.R. 2138: Ms. DUNN. FER, and Mr. BARTON of Texas. lutions as follows: H.R. 2139: Mr. MCCRERY. H. Con. Res. 57: Mr. PICKETT. H.R. 1300: Mr. FROST. H.R. 2166: Mr. MARTINEZ, Mr. PRICE of H. Con. Res. 60: Mr. WYNN, Mr. BURTON of North Carolina, and Ms. SCHAKOWSKY. Indiana, Mr. PORTER, Mr. ROYCE, and Mr. f H.R. 2193: Mr. THOMPSON of Mississippi, Mr. HALL of Ohio. KUCINICH, and Mr. RUSH. H. Con. Res. 62: Mr. MINGE and Mr. KLECZ- DISCHARGE PETITIONS H.R. 2202: Mrs. TAUSCHER, Mr. INSLEE, Mr. KA. Under clause 2 of rule XV, the fol- SNYDER, Ms. SANCHEZ, and Ms. PELOSI. H. Con. Res. 64: Mr. SESSIONS. H.R. 2221: Mr. COBURN. H. Con. Res. 100: Mr. FRANK of Massachu- lowing discharge petitions were filed: H.R. 2227: Mr. KLECZKA. setts, Mr. MARTINEZ, Mr. FILNER, Mr. ROGAN, Petition 3, June 23, 1999, by Mr. DINGELL H.R. 2241: Mr. CLAY, Ms. DANNER, and Mr. Mr. VISCLOSKY, and Mr. WAXMAN. on House Resolution 197, was signed by the MCCOLLUM. H. Con. Res. 116: Mr. PASTOR. following Member: Robert C. Scott. E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 106 CONGRESS, FIRST SESSION

Vol. 145 WASHINGTON, THURSDAY, JULY 1, 1999 No. 96 Senate The Senate met at 9:30 a.m. and was SCHEDULE order. But Rev. Kenneth Lyons helped called to order by the President pro Mr. ABRAHAM. Mr. President, on be- still the troubled waters. He is pastor tempore [Mr. THURMOND]. half of the majority leader this morn- of Greater New Bethel Baptist Church The PRESIDENT pro tempore. We ing, I make the following announce- where James Byrd’s family worshipped have a guest Chaplain today, Rev. Ken- ment to the Senate: every Sunday. neth Lyons, Greater New Bethel Bap- This morning the Senate will debate Pastor Lyons spoke fearlessly to peo- tist Church, Jasper, TX. He is a guest cloture on the motion to proceed to S. ple of all races. He said, ‘‘This must of Senator HUTCHISON. 557 for 1 hour, to be followed by a clo- have been a divine wake-up call to the We are glad to have you with us. ture vote at 10:30 a.m. If cloture is in- consciences of men. You can’t fight fire with fire.’’ He urged not vengeance but PRAYER voked, the leader will file a cloture mo- tion on the pending amendment to S. harmony and peace. The guest Chaplain, Rev. Kenneth Reverend Lyons’ wise leadership per- Lyons, offered the following prayer: 557, the Social Security lockbox legis- lation, and that cloture vote will occur sonified Abraham Lincoln’s call to the Our Father, Your name be exalted ‘‘better angels of our nature.’’ He above every name. Welcome in the at 10:30 a.m. on Friday, July 16. Fol- helped unite the people of Jasper, TX, name of Your Son, Jesus. We thank lowing that action, Senator SPECTER in their commitment to equality and You for Your infinite love. You have will be recognized as if in morning justice, to rise above hatred and de- looked beyond our faults as a govern- business for up to 30 minutes. spair. ment and a people and allowed us to The Senate will then resume consid- Millions of Americans watched that enjoy the blessing of freedom, spir- eration of the Treasury-Postal appro- small town of Jasper, TX, as it came itually and physically. priations bill, with the hope of com- Dear God, guide the minds of these pleting the bill during today’s session together because of Reverend Lyons’ Your ministers in the government of of the Senate. Under a previous unani- plea for redemption and healing. Be- our country. Keep them ever mindful mous consent agreement, all amend- cause of his faith and eloquence, we are that they are instruments in Your ments must be offered by 11:30 a.m. better people. service and for Your people, so that today. It may also be the intention of RESPONSE IN JASPER, TEXAS their lives may be peaceful in the the leader to debate and vote on the There are other heroes in Jasper, TX, world. Y2K conference report and to begin and it was one of the great moments of Lord, keep these Senators of this consideration of any other appropria- my life to be able to go to Pastor body and their families under Your tions bills cleared for action. There- Lyons’ church and attend the burial wing. Grant them courage and boldness fore, Senators can expect votes ceremony for James Byrd, Jr., and to in this period of the history of our Na- throughout the day. meet the kind of people who make this tion. Amen. The PRESIDING OFFICER (Mr. country what it is. I met James Byrd, f CRAPO). The Senator from Texas is rec- Sr., and Mrs. Byrd, Renee Mullins, James Byrd, Jr.’s daughter, and his PLEDGE OF ALLEGIANCE ognized. f son. I met people who had just endured The PRESIDENT pro tempore. Sen- something that none of us ever want to ator HUTCHISON is designated to lead REVEREND KENNETH LYONS have any of our family or friends ever the Senate in the Pledge of Allegiance. Mrs. HUTCHISON. Mr. President, I endure. James Byrd, Sr., was saying: The Honorable KAY BAILEY wish to make a comment about Rev- There is no hate here; there is love in HUTCHISON, a Senator from the State of erend Lyons, who just opened our Sen- this family. Texas, led the Pledge of Allegiance, as ate session with a prayer, because he is That was the beginning of the heal- follows: a very special person to me and to the ing process not only in Jasper, TX, but I pledge allegiance to the Flag of the State of Texas and really to all Ameri- a model for America—when something United States of America, and to the Repub- lic for which it stands, one nation under God, cans. we cannot possibly understand hap- indivisible, with liberty and justice for all. A little over a year ago, a heinous pens, someone steps forward and says f crime was committed in the small we can’t let this tear all of us down. town of Jasper, TX, when James Byrd, James Byrd, Sr., started that process. RECOGNITION OF THE ACTING Jr., was brutally murdered simply be- I want to talk about Billy Rowles, MAJORITY LEADER cause of his race, dragged to death by the Jasper County sheriff, who did not The PRESIDENT pro tempore. The three men in a pickup truck. The let one minute pass when he got that able acting majority leader is recog- senseless killing riveted the Nation and call on that fateful Sunday morning nized. many feared the outbreak of civil dis- and he heard the beginning of what was

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

S7973

. S7974 CONGRESSIONAL RECORD — SENATE July 1, 1999 going to be a nightmare for his town. port my son and I love my son and I al- been put in danger of being raided. The Billy Rowles started making calls, and ways will, Mr. King said, but he said I House voted 416 to 12 to pass their own he said: This is not going to stand. We understand how James Byrd, Sr. and version of a lockbox, a version that we are going to have justice in Jasper his family feel and my heart goes out could not consider in this body. The County. We are going to have justice to them. President himself has endorsed the idea from what I am hearing over the phone James Byrd, Sr. reached back to of a lockbox and stated that Social Se- on Sunday morning. And because of Ronald King and he said: I understand curity taxes should be saved for Social Billy Rowles’ leadership, justice is on your pain. This is not your fault, and Security. Yesterday, the Democratic its way. we will be strong together. leader indicated the Democrats would The mayor of Jasper is R.C. Horn. He Ronald King is a hero, too, because not block this motion to proceed. So I was right there on the phone talking to what Pastor Lyons and the city of Jas- see this as a positive. Pastor Lyons, making calls to all of per and all of those I have mentioned What I have to say is very simple. It the clergy in Jasper, TX, that Sunday have done for our country is to show us is clear that Americans, regardless of morning, setting the tone for what that the spiritual community can where they might live, believe their would be the message: That this com- make a difference by preaching love Social Security dollars ought to be munity is not a bad community and I when there is a lot of opportunity for used for Social Security. I cannot want every one of you in your pulpits hate, and how that divine love can imagine there is a Member of the Sen- on Sunday morning to say this is a keep a community together, can make ate who does not hear that message community of love. Mayor Horn was us remember our strengths in this when talking to seniors in their States one of those people who started the country, and not dwell on the weak- or, for that matter, when talking to healing process. nesses. anyone who is paying payroll taxes. Guy James Gray, the district attor- I applaud Jasper, TX, and these lead- The American people are frustrated ney of Jasper County, was not going to ers and Pastor Lyons, whom we have when they hear that money they send let anything slip by. He was going to heard today; James Byrd, Sr. and his here for Social Security is being spent make sure the people who perpetrated family; and Ronald King, for showing on other programs. To some extent, this heinous crime would come to jus- us that this is a great country and we this was justified during the period in tice. Of the three people who have been are going to take a terrible tragedy which we were running budget deficits. accused, thanks to the good work of and we are going to make this country But today we are not. Today we are Guy James Gray, one has been con- stronger, as I believe it is today, be- running surpluses. The latest news is victed. cause of a very small group of people good news. It seems to me it even fur- And there is Walter Diggles, the ex- who didn’t need national advisers to ther justifies creating a lockbox to ecutive director of the Deep East Texas tell them what was right. In fact, they make sure none of these Social Secu- Council of Governments, always there have shown us what is right about our rity dollars are any longer spent on behind the scenes, trying to help in country. anything except Social Security. The this first week when all of the atten- Thank you, Mr. President. only way to do it, in my view, is to tion was focused on Jasper, TX. Jasper, f pass legislation such as S. 557, such as TX, had never had the attention of the the proposal that will be before us world focused on it. RESERVATION OF LEADER TIME today. But because of Walter Diggles, Billy The PRESIDING OFFICER. Under So I ask my colleagues to not only Rowles, and Guy James Gray and give us the chance to move forward on Mayor Horn and the James Byrd, Jr. the previous order, the leadership time is reserved. this legislation but to work together to family, these people were able to with- craft a proposal as soon as we possibly stand all the television cameras and all f can so we can be sure these Social Se- the people who came from outside to GUIDANCE FOR THE DESIGNATION curity dollars do not get spent on other give them advice they did not really OF EMERGENCIES AS A PART OF programs. It is a very attractive thing, need because they knew what was the THE BUDGET PROCESS—Motion to to talk of new programs, of expanding right thing to do. They knew that to Proceed existing programs, and so on, because keep their community together they today we are in a period of economic were going to have to talk about love, CLOTURE MOTION prosperity and we are running sur- not hate. They did not need anybody The PRESIDING OFFICER. There pluses. But we should take this oppor- coming in from outside to tell them will now be 1 hour for debate prior to tunity, in my view, to at least fence off that because they were speaking from cloture vote on the motion to proceed. the Social Security surplus so it can- the heart. They didn’t have focus The time will be equally divided be- not be used for other programs. I am groups and they didn’t have advisers tween the two leaders. hopeful today we can take an impor- and psychiatrists. They did not need The Senator from Michigan. tant step toward that end so I can go organizers and spinmeisters because Mr. ABRAHAM. Mr. President, I back to Michigan and tell the people in they were doing it from the heart. And yield myself such time as I may need my State their Social Security payroll they have created a model that every to make an initial statement. Then we tax dollars are going to be protected. community will follow if it wants to will have speakers on our side and That is what I want to do. I suspect keep a community together after a ter- work with the Democratic side to work that is what a lot of other Members of rible tragedy. out the remainder of the time. the Chamber want to do. I want to add one more to this list Today is the 73rd day since we began I am hopeful that after today, once because I have never seen anything the process of trying to move forward we get through the recess period, we like what happened in the trial of the with a Social Security lockbox. I will move expeditiously to finish the first of those accused of this murder. think, from every indication, we fi- job. Social Security dollars ought to be There you saw the father of the ac- nally will begin to make some progress spent on Social Security. We should cused, named Ronald King, sitting in this morning. I hope this will be a move as quickly as possible to make the courtroom every day, absolutely rapid process from this point forward, that the case. So I am very optimistic, devastated by what his son was accused that things will not be delayed much if we are successful with the cloture of doing. This father, who adopted this longer, and we can quickly come to vote today, we can move in that direc- boy to give him a chance in life, sat in some type of agreement for orderly tion. that courtroom in support of his son, consideration of this proposal. I yield the floor. but devastated at what he was hearing It is vitally important we not delay The PRESIDING OFFICER. Who in the courtroom. Mr. King came out of any longer. Since we introduced this yields time? The Senator from that courthouse every day, and he said: amendment on April 20, the following Michigan. I don’t blame the Byrd family for any has taken place: $22.2 billion more of Mr. ABRAHAM. Mr. President, I bad feelings that they would have, and the Social Security surplus or almost yield such time as he may need to the I apologize to the Byrd family. I sup- 20 percent of this year’s surplus has Senator from Missouri. July 1, 1999 CONGRESSIONAL RECORD — SENATE S7975 The PRESIDING OFFICER. The Sen- ture, a lockbox, something that keeps that is why we are sent here—over- ator from Missouri is recognized. us from making these expenditures. whelmingly passed H.R. 1259, Congress- Mr. ASHCROFT. Mr. President, I For the past 6 months, this Congress man HERGER’S measure to protect the thank the Senator from Michigan for has been devoted to protecting all the surpluses. The vote in that case, as I his outstanding leadership on this Social Security surplus. In January, have already mentioned, was 416–12. issue. congressional Republicans began work- That means for every 100 votes in favor Today the Senate will vote for the ing to ensure that Congress would pro- of the measure, there were only 3 votes fifth time to stop filibusters on legisla- tect every penny of the surplus. In against the measure. Mr. President, 100 tion to protect Social Security trust March, Senator DOMENICI and I intro- to 3 is a pretty strong margin. That is funds. It is time for us to stop, to end duced S. 502, called the Protect Social a bipartisan consensus. This reflects the delay. It is time for us to align our- Security Benefits Act, which would the will of the people. selves with the American people who have instituted a point of order pre- On June 10, Democrats in the Senate overwhelmingly want us to protect the venting Congress from spending any blocked the Herger measure. They money they put into the Social Secu- Social Security dollars for non-Social voted against moving even to consider rity trust fund and to reserve it for So- Security purposes. it. cial Security payments. We should pass What does a point of order mean? A It is time we stop this kind of par- this bill so protecting Social Security point of order means that if there is a liamentary maneuver. We all know will be the law of the land. It is time to point of order and someone tries to do what the will of the American people build a tough law, a firewall if you will, it, the Chair, the Presiding Officer, can is. We know what the clear statement between politicians’ desires to spend say it is out of order. Most Americans of the President of the United States and the Social Security trust fund. have been part of some kind of meeting is. We know what we have done on five There is no addiction more pervasive somewhere when someone brought previous occasions, refusing to discuss in this city than the spending of something up that was out of order. it. Today we should vote to move for- money. It is a tough habit to break, The gavel goes down, and the person ward on this issue. but we are in a position to do so. We presiding over the meeting says: We The lockbox will accomplish an im- are in a position to say we can manage are not going to discuss that; that is portant goal: Protect Social Security our affairs without this money; let us not a part of what we do. There is a taxes. It will reserve those taxes for make a commitment forever to break point of order against it. It is out of Social Security, and Social Security this habit of spending the Social Secu- order, and you move on to something alone, so that when someday those who rity trust funds. else. need Social Security want to call on President Clinton’s proposed budget That is the way we propose to treat this Government for the payment of in January would have spent $158 bil- proposals that will spend the Social Se- their benefit, the Government will be lion in Social Security surplus over the curity surplus. We will simply say: We stronger, having less debt, having more next 5 years out of the trust fund, but, don’t do that; it is against our rules; it discipline, having a greater capacity to thank goodness, this last week Presi- is out of order, we will move on to meet its obligations and to honor the dent Clinton announced that he does something else. That was S. 502. commitments made under Social not want to do that. That concept is no Then in April, together with Senator Security. longer his plan. Instead of spending DOMENICI, the Senate passed a budget Those who say they want to protect that $158 billion over 5 years in other resolution that did not spend any of Social Security should join us in our projects, he said he wants to reserve it the Social Security surpluses for the efforts to save every dime—no, let me for Social Security—every penny for next decade. Included in the resolution correct that—every penny, every cent Social Security. ‘‘Social Security taxes was language endorsing the idea of of this money for Social Security’s fu- should be saved for Social Security, locking away the Social Security sur- ture beneficiaries. This lockbox is a period.’’ pluses, sort of a rules of the Senate way to make this happen. What a tremendous concept. It is one lockbox but not a statutory lockbox. A Congress has been moving to create a which we have been working on and we statutory lockbox, of course, would Social Security lockbox this entire have been working to pass. The Presi- bind the House, the Senate, and the year. President Clinton has now stated dent has announced his support for it. President. This language passed the he agrees with us, and I welcome the It is a general concept which the House Senate with unanimous approval. support of the President and Senate of Representatives has supported. In its Also in April, Senators ABRAHAM, Democrats in finishing the Nation’s recent vote a couple weeks ago, the DOMENICI, and I offered the Social Se- business in supporting the toughest House voted 416–12. curity lockbox amendment which possible lockbox measure, one that pro- We look for bipartisan things to do in would have added executive respon- tects not 20 percent, not 40 percent, not this city, things that unite us instead sibilities to the congressional require- 60 percent, not 80 percent, not 99 per- of divide us, things that mobilize the ment to protect the Social Security cent, but 100 percent of the Social American people, things that find com- surpluses. By ‘‘executive responsibil- Security surpluses, protects them so mon objectives and common ground. ities,’’ we were really saying the Presi- they are available to meet the respon- Here is an item the American people dent had to submit a budget that did sibilities of the Social Security sys- overwhelmingly endorse. Here is an not invade the Social Security surplus tem. item on which the House of Represent- as part of the President’s plan. Mr. President, I yield the floor and atives really reflects the American The Senate has voted on the Abra- reserve the remainder of the time of people, 416–12. That is an overwhelming ham-Domenici-Ashcroft plan three those in support of the motion. vote. And the President of the United times so far, and I believe we will agree The PRESIDING OFFICER. Who States endorses the lockbox. to the motion to proceed today. But yields time? What is interesting is that the Presi- until today, the Senate has filibus- Mr. LAUTENBERG. Mr. President, I dent’s endorsement is of the lockbox. tered, has said we will not go there. yield 5 minutes to the Senator from He just did not say we should not spend Frankly, the President of the United North Dakota. Social Security as a general concept or States wants to go there, the American The PRESIDING OFFICER. The Sen- a general idea or a principle by which people want to go there. The President ator from North Dakota is recognized we operate Government. When we talk had the courage to reverse his position, for 5 minutes. about a lockbox, we are talking about first saying, ‘‘I want to spend some of Mr. DORGAN. Mr. President, I do not institutionalizing the prohibition, not that money,’’ then saying, ‘‘No, we oppose the motion to proceed. I expect just saying this is something we hope should reserve every cent for Social Se- the Senate will perhaps vote unani- to do in future years. By saying we curity, period.’’ mously to proceed on this issue, but I want to build a lockbox, we have to On May 26, the House of Representa- do want to give some historic perspec- build a structure for protecting Social tives, reflecting, I believe, the people of tive to this issue of a lockbox. Security, and that is something the America—and that is really what we I proposed a lockbox amendment in President has said he wants—a struc- are supposed to do in many respects; 1983. I offered an amendment the day S7976 CONGRESSIONAL RECORD — SENATE July 1, 1999 when the Ways and Means Committee checks. It is called Social Security whether we should proceed. Let’s pro- passed the Social Security reform dedicated taxes. It goes into a dedi- ceed. I expect the motion to proceed package in 1983. I said: If we do not put cated fund and ought not be available will carry, perhaps unanimously. We this extra Social Security money away, under any circumstances for any other will have a debate on the lockbox issue. it will be used as part of the operating purposes. That is the point we made on But my point is, let us not debate budget and it will not be saved. My the constitutional amendment to bal- that in isolation. Let us debate it with amendment lost in the Ways and ance the budget. the eye on this ball: That we need to Means Committee in 1983. So this is I have some charts here, that I will extend the life of Social Security and not a new idea. not use, that describe what was told to extend the life of Medicare, even as we One of the interesting things about us during that debate: Gee, you’re do what we should have done long ago; this debate is, it was not too many standing up talking about gimmicks. and that is, make certain that no So- years ago that we debated a constitu- Of course you have to use the Social cial Security revenues are used for any tional amendment to balance the budg- Security money as part of the regular purpose other than the solvency of the et in the Senate. I voted against that, budget in order to balance the budget. Social Security system itself. That is and the constitutional amendment lost You can’t balance the budget without what workers expect. That is the basis by one vote. I went through some very using Social Security money. on which money is taken from their interesting times politically back History, of course, shows that was paychecks and put into a dedicated tax home and across the country because I nonsense. But here we are, and the fund. That is what senior citizens ex- cast a vote that defeated the constitu- question is the lockbox. We ought to pect from this program, which was a tional amendment to balance the budg- have a lockbox. We ought to do several solemn promise made to them many et. things at the same time, however. Be- decades ago. One of the points I continued to cause I worry. I see this week Reuters I thank the Senator from New Jersey make in the Senate as we debated has a press story: ‘‘How Republicans for the time. I look forward to the de- that—and I was accused of talking Propose $1 trillion in tax cuts.’’ If you bate following the motion to proceed. about gimmicks and using gimmicks at do a lockbox on Social Security reve- Mr. LAUTENBERG addressed the that point—was the constitutional nues only and then say, all right, now Chair. amendment to balance the budget was we have locked away Social Security The PRESIDING OFFICER (Mr. written in a way that said all revenue revenues only, and we propose $1 tril- GRAMS). The Senator from New Jersey. that comes into the Federal Govern- lion in tax cuts, the question in two Mr. LAUTENBERG. I yield myself ment shall be considered revenue for areas is: What have you done to extend such time as is necessary to make the purposes of the budget. There was the life of Social Security? And what some remarks. no distinction between Social Security have you done in this fiscal policy to Mr. President, I say thank you to the moneys and other moneys; it is all op- extend the life of Medicare? distinguished Senator from North Da- erating budget revenue. To the extent Unfortunately, the answer in both kota because he kind of hit the nail on we require a balanced budget, it means cases could be, you have done nothing the head. Let’s get on with this debate. we can use the Social Security money to save for Medicare; and while you That is the question. And whether or as ordinary revenue and then we can might have given $1 trillion in tax not we disguise it in terms of votes to claim we balanced the budget. I said cuts, you may have done nothing to ex- the public at large—and cloture votes that is writing in the Constitution the tend, even by 1 year, the Social Secu- and things of that nature may seem invitation to continue doing what we rity program. rather arcane to the public—the main have been doing, which is looting So- So let us do a couple of things. Let us thing is to get on with the discussion. cial Security. do—together—a lockbox. I support What I heard in response was no. that. I was ridiculed for it back in the I am supporting the cloture vote on There were three stages of denial: constitutional amendment debate, but the motion to proceed to S. 557, which First, we deny we are looting Social I have always supported it. I supported is the legislation to reform the budget Security. That was the first stage of it going back to 1983 when I offered the rules governing emergency spending. I denial. amendment to do it in the House Ways am going to support cloture on the mo- The second was: Well, even though and Means Committee. But let us not tion to move ahead with this—we call we deny it, if, in fact, we are doing it, just do the lockbox. Let’s do the it a motion to proceed—to get on with we promise to quit. lockbox the right way. Secondly, let us the debate, not only because I support And the third stage of denial was: We make sure that some of the additional the underlying legislation, which insist we are not doing it, but if we are revenue that is available extends the amends the rules governing emergency doing it, we promise to quit. And if we life of Medicare and extends the life of spending but, more importantly, be- can’t quit it, we will at least taper off. Social Security. I ask unanimous con- cause like most, if not all, Democrats, Those were the three stages of denial sent for 2 additional minutes. I strongly support the establishment of in the Senate. The PRESIDING OFFICER. Without a Social Security and Medicare Because those of us who said, we will objection, it is so ordered. lockbox. It is time for a real debate to not write into the Constitution an Mr. DORGAN. This would provide a occur on a lockbox. And I look forward amendment that permits forever the guarantee that the revenue stream for to that debate. use of Social Security trust funds as Social Security is available only for Democrats have long argued that part of the operating budget, we were Social Security; that is, the tax money protecting Social Security and Medi- told: Well, would it be all right if we that is available for it goes only into care should be Congress’ top priority. said we will keep using the Social Se- the Social Security trust fund and can We believe that strongly. We simply curity trust funds for the next 12 be used only for that purpose. must prepare our country for the im- years? I said: No, that would not be all But it would do two other things as pending retirement of the baby right. So that was the debate back a well. It would say, let us use some ad- boomers. We ought to do it now, par- few years ago. ditional resources not just for a $1 tril- ticularly since we are going through Now we come to a debate today, and lion tax cut but also to extend the life this incredible prosperity, a prosperity the folks who then called our position of Social Security and the life of Medi- never before seen in this country. on Social Security revenues a gimmick care. Doing both of these things, I To help achieve that goal, Senator are now proposing a lockbox. I say, I think, will give the American people CONRAD and I proposed our own version think we should have a lockbox. But I the reassurance that both of these pro- of a Social Security and Medicare do not think you ought to do a lockbox grams, which have been so important lockbox. It is a lockbox that reserves in isolation. I think you should have a in the lives of so many Americans in the surpluses for both Social Security lockbox with respect to the Social Se- this country, will be available for and Medicare—reserves them; you can- curity revenues so they cannot be used many years to come. not touch them—without creating the for ordinary operating revenue. That I do not think, as I said when I start- threat of what is now proposed, which money is taken from workers’ pay- ed, there will be a debate here on could be a Government-wide default. July 1, 1999 CONGRESSIONAL RECORD — SENATE S7977 Our lockbox has much stricter enforce- That is what we are debating. We stead of four? It is a ment than the weak one that was ap- ought not to be talking about process. mischaracterization. Who is trying to proved by the House of Representa- We ought to be talking about what are kid whom? This goes beyond petty. It tives. the promises that we are trying to ful- really is unfair and pathetic. Early this week, President Clinton fill. I hope we are going to stop these po- also proposed to establish a Social Se- One is that Social Security will be litical games. Then let us sit down on curity and Medicare lockbox. His pro- there when you get there and you want a bipartisan basis and do the work of posal not only would prevent Congress it and you need it. Two is that Medi- the people. Let us develop a real from spending Social Security sur- care is there to help protect the health lockbox that makes sense to both of us, pluses in any year, but it would extend of an aging population. a consensus view, and one that really the solvency of the trust fund to the I expect there is going to be a very protects Social Security and Medicare. year 2053. strong vote on this side of the aisle in I yield the floor. Although all of the details of the support of moving to proceed to that The PRESIDING OFFICER. Who President’s plan have not been worked debate. Unfortunately, what we have yields time? The Senator from Pennsylvania. out yet, I strongly support his general heard is that the majority will then Mr. SANTORUM. Mr. President, I approach. I am hopeful it can win with file cloture on the bill itself. Another ask the Senator from Michigan for 5 bipartisan support. We would like to explanation. Cloture means to shut minutes. see it that way. down the debate, not permit the Demo- Mr. ABRAHAM. Mr. President, I The distinguished Senator from crats to add amendments, not to per- yield such time as the Senator from Michigan, Senator ABRAHAM, and Sen- mit the American public to hear the Pennsylvania would like. ator DOMENICI have proposed a dif- full discussion. That is the issue—con- The PRESIDING OFFICER. Without ferent version of a lockbox which has tinuing to block our ability to offer objection, the Senator from Pennsyl- been offered as an amendment to the any open, new ideas to their original vania is recognized for 5 minutes. previous bill S. 557. Unfortunately, proposal. Mr. SANTORUM. Mr. President, I their lockbox is seriously openable. In Well, if that is true, it is outrageous. have to comment on the statement of fact, as Treasury Secretary Rubin has It is the kind of political game that has the Senator from New Jersey. written, instead of protecting Social been played on this floor on this issue One of the more vexing problems we Security benefits, their lockbox actu- from day 1. Apparently the majority have in political debate in America is ally would threaten benefits. That is isn’t as anxious to get a Social Secu- who is telling the truth. What I am because it could trigger a Government- rity lockbox as they pretend to be. going to tell you is 180 degrees from wide default based on factors beyond They just want to force the Democrats what the Senator from New Jersey just Congress’ control. to cast votes against cloture, against said. What he repeatedly said is true is, Such a default would make it impos- continuing the debate, against permit- in fact, not true. sible to pay Social Security benefits. ting the debate. What the Senator from New Jersey They can call it what they will— Well, Democrats have to oppose clo- said is that the Democrats would not lockbox, cash drawer, whatever—but it ture, if we are being blocked from of- be able to offer amendments on the So- will still impair the possibility, at fering amendments. That doesn’t mean cial Security lockbox as a result of the some point, to pay the Social Security we are being obstructive. It doesn’t cloture votes that were taken on April benefits. The issue before the Senate mean we are filibustering the bill. We 22, April 30, and June 15. That is not today isn’t whether we are for or just have to protect our rights and the true. against the Abraham-Domenici citizens’ rights as we see them. Let me state that again, emphati- lockbox. It is not whether we are for or What the Republicans want to do is cally, to the Senator from New Jersey against the Democratic lockbox. The force us to cast these cloture votes and and to the American public: What the issue is whether we should proceed to a then claim that we are filibustering Senator from New Jersey just said, debate about lockbox legislation at all. the lockbox. It is wrong, and they are which is that Democrats were blocked I believe we should. It should be an aware of it. They want to shut us out from offering amendments on the issue open debate. Senators should have the of the debate. We represent a signifi- of a Social Security lockbox, is not right to offer amendments, but we cant part of the American public. true. So the entire speech we just should go ahead and get that debate Whether they voted for us or they heard was, in fact, a statement which underway. didn’t, we represent them. had no basis in fact. That is true. In the past, the majority has tried to This isn’t just playing politics. It is The Senator from New Jersey could stifle that debate and to push through unfair, and it is especially unbecoming have opposed cloture and offered all their own version of a lockbox without of a party that is in the majority and the amendments he wanted on the So- cial Security lockbox. We could have giving the Democrats and the Amer- purportedly running Government. They had hours, days of debate on a Social ican people an opportunity to present should be spending their time getting Security lockbox. We wanted to have and to consider amendments. We legislation passed, not just forcing those kinds of debates. They refused. Democrats have rightly resisted that. Democrats to walk the line, to cast Mr. LAUTENBERG. Will the Senator We cannot be gagged, and we will not votes that they can later misrepresent yield for a question? be locked out of the legislative process, for political gain. Mr. SANTORUM. I am happy to yield especially on an issue as important as President Clinton has reached out his for a question. protecting Social Security. hand with a proposal that obviously Mr. LAUTENBERG. Isn’t it so that Having said that, nobody should lays the groundwork for a bipartisan the tree—I don’t want to use arcane doubt the commitment of Senate deal. He is known to include Repub- language; I always try to get away Democrats to support a Social Security licans in discussions about things. I from that so the public understands and Medicare lockbox. I take a mo- serve on the Budget Committee. I am what we are talking about. Weren’t we ment here to identify what a lockbox is the senior Democrat. This is the third blocked from amendments by virtue of to represent: a place you can’t invade President with whom I have served. I the fact that the amendment tree was for any other reason except to make have never seen a President more anx- filled by the Republicans? sure that Social Security is there for ious to discuss his ideas on legislation Mr. SANTORUM. The April 22 vote the longest period of time available for with the other side than President was a vote on cloture on the first-de- those who are paying into this system, Clinton. gree amendment. The tree was not the money to pay those benefits is He said he is willing to compromise filled. It was a first-degree amendment going to be there. on tax cuts. He said he wants to work vote on cloture, No. 1. We wanted a Another major concern of the Amer- with the Congress. What is the re- vote on that particular amendment, ican public, the elderly public particu- sponse from the majority? Partisan yes. larly, is Medicare. Will it run out of politics. You have to ask why. Do they After that amendment would have funds before the 50-year-old is there to really think it makes any difference passed or failed, you were then avail- have his or her health care protected? whether there are five cloture votes in- able to offer all the amendments you S7978 CONGRESSIONAL RECORD — SENATE July 1, 1999 wanted on Social Security. You could focus in on what I think is one of the onds are remaining on the Democrat have offered your own Social Security most important things—not just for side. lockbox. You could have taken the Social Security but important things Mr. DOMENICI. Will the Senator Abraham bill and changed the wording for the long-term fiscal future of this yield me 4 minutes? in it, and we could have had a vote on country, this government; that is, put- Mr. ABRAHAM. I yield the Senator that, but you did not want to do that. ting in place a provision that says if as much time as he needs. You did not want to have that debate. you are going to spend more money on Mr. DOMENICI. Mr. President, please You refused us even getting into a new government programs, or even if tell me when I have used 4 minutes. vote. All we wanted to do with these they are going to spend money on tax I say to the President of the United cloture motions was to say: Give us a cuts, you are not going to spend it on States: Thank you very much, Mr. clean vote on this particular proposal. Social Security unless you stand up be- President. You have agreed with us on After that, you are free to amend it. fore this Senate and before the Amer- one of the most important issues con- You are free to offer your own; you can ican public and say: We are going to fronting the senior citizens of this Na- do whatever you want. You can offer a take Social Security dollars. We be- tion. In your budget and your rec- Medicare lockbox. You can do whatever lieve it is more important to do tax ommendations in the past, during this you want. Just give us a vote on our cuts. We believe it is more important fiscal year, you suggested that only 62 proposal and then you are welcome to to do funding for education or funding percent of the Social Security trust do whatever else you want. You said for defense than it is to provide money fund be saved and put in a trust fund emphatically, unanimously, three for Social Security. and stay there for senior citizens for times: No. That is the vote we are looking for. their Social Security. We suggested in Mr. LAUTENBERG. I ask the Sen- That is the vote of accountability that our budget resolution that anything ator, if he will indulge another ques- we want every Member of the Senate to short of 100 percent was not right. tion, was the tree filled with second-de- have to cast. That is the fiscal dis- After weeks of debate in this body, gree amendments? cipline, when people have to make that without an opportunity to get a vote Mr. SANTORUM. That was not the choice, and it is clear to everybody on an amendment that would have said statement of the Senator from New what the choice is. We have lots of that and would have locked it tightly Jersey. He made the statement that he points of order and procedural things, in place, the President of the United could not offer amendments. The an- but then everybody sort of walks out of States announced that there are more swer is, he could have offered amend- the room and spins it their way. In this resources available because the sur- ments. case, with the lockbox vote, where it pluses are bigger and decided that he What we wanted was a vote on the says you have to vote on a motion that agreed with the Republicans that 100 Abraham-Domenici bill. After that says we will spend Social Security percent of the Social Security trust vote, he was free to amend that pro- money for X or Y or Z, you have to tell fund should be set aside for Social Se- posal. He was free to offer his own pro- the American people that you believe curity purposes. posal. There could have been a full and that is a higher priority than Social Now the time has come for the Sen- open debate on Social Security Security. ate to do that. This is not an issue of lockbox, after he gave us a vote on our We have no such vote today. But if Medicare. This is an issue of the Social amendment. we pass a lockbox, then the American Security trust fund being available for I don’t think that is an unreasonable public will know what your choices no purpose other than Social Security. thing to ask. are. There may be a situation where we In the meantime, it is used to reduce Mr. LAUTENBERG. Well, I thank the need to spend Social Security money. the national debt. That is the program, Senator from Pennsylvania for the Frankly, I can’t think of one, but there that is the plan, that is the safest and courtesy. But the fact of the matter is may be one—an emergency, a true fairest thing for seniors across this that there was an obstruction to us of- emergency, where our national secu- land. fering amendments until the Repub- rity is at risk. There may be a situa- Pretty soon, we are going to find out licans were certain that they had their tion where we want to spend Social Se- whether that is really the issue or amendment considered in its raw form. curity dollars, but it has to be voted whether there is another issue, and Frankly, to me, that was blocking on. That is the most important thing. that other issue is, even if you have Democrats from having it. That is what the other side never want- done that and set it aside and locked it Mr. SANTORUM. All I say to the ed to have happen. away, should there be a tax cut? It Senator from New Jersey is that all we I thank the President for breaking would appear that for some reason, the asked for is to give us a clean up-or- the logjam over there. The House President of the United States and down vote on our amendment. After Democrats did a pretty good job; they maybe a majority of the Democrats in that amendment, you could have passed a Social Security lockbox bill. the Senate don’t want to let the Amer- amended that thing, you could have of- But it was the folks on the other side ican people have a refund of the taxes fered your own, done anything you who stood as the dam to this current they have overpaid. And now we learn wanted. All we wanted to make sure of that was flowing through the Congress. from both auditing or accounting enti- was that we had a clean vote on our I thank the President for getting the ties, the President’s and ours, that that amendment to start this debate, and beavers to work, getting them out of surplus is even bigger than we thought. after that, you could have done any- the way and making sure we can have That is aside from the Social Security thing you wanted. a full, fair, and open debate—as we trust fund—in addition to it, without By the way, if you look at the state- could have three or four times previous touching it. ment you just read into the RECORD, to this. We could have had a full, fair, The issue, then, is what kind of gim- you said exactly the opposite of what I open debate in the Senate about a very mick are we going to use to eat up that just said. You said you could not have important issue, yes, for Social Secu- surplus so there is no money available offered amendments when, in fact, you rity but just as important to the fiscal to give back to the American people? could have. You still had the right to, discipline of the U.S. Government in That is the issue. The issue will be and you chose not to because you the future. couched as if we should put $350 billion didn’t want to enter into this debate. I thank the Senator from Michigan of this non-Social Security surplus in a We see a wonderful willingness on the and the Senator from New Mexico, Mr. Medicare trust fund. But the Presi- part of the Democrats now, after the ABRAHAM and Mr. DOMENICI, for their dent’s own proposals belie the neces- President joined our side in saying we excellent work on this issue. sity for that and just give it a birth— want a lockbox, to open up and debate Mr. DOMENICI. Mr. President, how you open it up and you can see it for this and offer amendments, when you much time do the Republicans have what it is, an effort to deny the Amer- had the very same opportunity four left? ican people a tax cut because, lo and times to do the same thing. The PRESIDING OFFICER. Nine behold, the President said we can re- I welcome that. I welcome that we minutes 18 seconds are remaining on form Medicare. We can actually put in are going to have an opportunity to the Republican side; 12 minutes 12 sec- place prescription drugs. And what is July 1, 1999 CONGRESSIONAL RECORD — SENATE S7979 the price tag? Let’s just agree that the The PRESIDING OFFICER. Objec- it. I am glad to know there is a pro- President has a good number—how tion is heard. gram out there for those who aren’t about that, I say to Senator ABRA- Mr. DOMENICI. I yield the floor. physically able to deal with life’s daily HAM—$46 billion, not $396 billion; $46 If the Senator has a little time later, pressures, and when they run into med- billion is what he says we need during I would be glad to use another minute. ical problems, health care is going to the next decade to provide prescription Thank you. be there. That is the way it ought to drugs, which he deems to be good for The PRESIDING OFFICER. Who be. the senior citizens of America. He is yields time? With all of that, and all of the criti- crossing this land and saying: I am for The Republicans control 2 minutes 54 cism of President Clinton, the fact is prescription drugs. seconds. The Democrats have 12 min- that he is the leader in the country We are for prescription drugs. In fact, utes 12 seconds. who saw us stop the hemorrhaging of we are so pleased that the President The question from the Chair is, Who incredibly increasing debt that was has acknowledged exactly that situa- yields time? falling upon not just the present gen- tion that we are almost prepared to If neither side yields time, the time eration but future generations. say—as soon as we run some numbers will be charged equally to both sides. I used to hear the cries: We are sad- —that we can do better than you have Mr. ABRAHAM. Mr. President, I sug- dling our children and our grand- done in terms of prescription drugs for gest the absence of a quorum, and I ask children with debt. Now we want to pay senior citizens who need prescription unanimous consent that the time not it off. They say: Well, paying off debt, drug assistance. be counted to either side. what does it mean? It means an awful But let’s remember, he says we need The PRESIDING OFFICER. Without lot. The fact of the matter is that it $46 billion. We are going to hear some objection, it is so ordered. provides the kind of things that fami- arguments about the lockbox, saying The clerk will call the roll. lies try to provide; and that is security let’s have another lockbox for Medi- The legislative assistant proceeded for the future—reserves—so that when care and let’s take a bunch of the to call the roll. you have something you either need or money that the taxpayers ought to get Mr. LAUTENBERG. Mr. President, I want, you have some means to do it. and put it over there in a trust fund ask unanimous consent that the order That is what we are talking about under the rubric that it will help get for the quorum call be rescinded. here. We want to preserve, and we want rid of the deficit, that it will bring The PRESIDING OFFICER. Without to increase, the solvency of Medicare down the deficit of the United States, objection, it is so ordered. to make sure it is there for a longer pe- the overall debt—even though the Mr. LAUTENBERG. Mr. President, I riod of time. We want to extend Medi- three major accounting entities that yield myself such time as I may use. care to 2025 and have Social Security have testified said it will be the same Mr. President, we are going through retirement benefits available until thing whether you put it in there or an exercise about what is being charac- 2053, with a pledge from the White not. It has no impact because at some terized by the Democrats and what is House and from this President to try to point you have to pay off those IOUs, being characterized by the Republicans reform the process to extend it even and that means a tax increase. as an imperfect lockbox situation—a further. That is what we are discussing. Now, this is rather complicated, but lockbox recommendation. Despite the cries and the pleas—‘‘to the truth of the matter is—listen up, I want to try to get this debate on tell the truth,’’ is what I heard. I don’t seniors—we are going to provide a pre- this subject itself instead of the proc- usually use that kind of terminology, scription drug benefit as good as the ess. The fact of the matter is that if we because not telling the truth suggests President’s or better. Let’s focus on try to define what constitutes a some kind of a character flaw. The that. That is what we are going to do. lockbox—we heard the Senator from truth in many times is as observed by Indeed, we are going to put every nick- North Dakota earlier talking about his the person speaking. But the real judg- el—I remind everybody it takes $120 effort to identify a lockbox going back ment comes from the others who hear billion more for the trust fund to get to 1982 or 1983, in that period. Lockbox it. The truth of the matter is that we all it is entitled to, according to CBO. terminology was used way before it are trying our darndest—each side of We are going to put more than $1.8 tril- was discussed on this floor. It is a com- the aisle—in this particular construc- lion in. We are going to put $1.9 trillion mon expression in terms of banking tion of how they see us, we being able in that trust fund. and financial programs. to provide the kind of security that our In summary, we are making some What we are talking about, very sim- people want. We on this side of the headway. It is slow and tedious. ply, is whether or not we put enough aisle think it ought to be done by not I assume that today all Members on money away to say to the American only preserving all of the Social Secu- the other side of the aisle are going to public, when it is your time to retire— rity surpluses but by paying down the vote for cloture on the motion to pro- talking to those who now are, let’s say, debt and increasing reserves available ceed. I believe that is the case. It will in their twenties, maybe in their to put into that Social Security trust be 100 to nothing, as if they have teens—Social Security will be there for fund to extend it slightly even further. agreed to a lockbox. Actually, that is a you when it is your time to use that That is what we want to do. wasted vote, if there are going to be benefit. All of the gimmicks that are used, all 100. They are just deciding they all That is the discussion that goes on. of the ploys that the majority has used want to go home and say: We are for The other program—Medicare, which characteristically to try to stop the the lockbox also. is directly linked to the Social Secu- Democrats from offering amendments, Mr. President, I ask unanimous con- rity program—health care for the el- from making this debate available to sent that we vitiate the yeas and nays derly, for seniors, is the biggest worry the public—that is the way it goes. We on the lockbox motion to proceed—— among our population. People identify have never seen the kind of a period Mr. LAUTENBERG. We object. it as their concern about being locked where so many cloture votes are or- Mr. DOMENICI. May I finish? I out of health care—not knowing what dered at the same time that a bill is wasn’t finished. conditions might arise that will absorb sent up to the desk to be considered. Mr. LAUTENBERG. I am sorry. all of their savings, all of their re- Almost immediately, in so many cases, Please continue. sources. With the good science that has it is followed by a cloture vote before Mr. DOMENICI. May I finish my con- been developed over the years, we have there is any debate. The cries of a fili- sent request? I would like to make sure had far better health than we thought buster are hollow cries, because no fili- it makes some sense. we might have, looking back some buster has had a chance to get under- I ask unanimous consent that we dis- years. way. There hasn’t been any chance to pense with that vote and that we pro- I know that when I was in the Army talk at all. Shut it down. Use the clo- ceed to substitute for that a motion as during World War II, I never dreamed ture vote technique. if cloture was before us on the actual that at this stage of my life I would be The public shouldn’t perhaps be de- lockbox amendment. hard at work trying to do the things ceived by what they hear about how Mr. LAUTENBERG. I object. that I do, and feeling pretty good about anxious the Republicans are to get on S7980 CONGRESSIONAL RECORD — SENATE July 1, 1999 with the work of the people when they been trying to achieve for 73 days, and CALL OF THE ROLL refuse to allow reasonable debate on that is simply to get a vote on a The PRESIDING OFFICER. By unan- the subject. There are ways to do it: lockbox, which was brought as an imous consent, the quorum call is Fill up the amendment tree, that stops amendment by the Republicans. We waived. it; invoke cloture, that stops it; or put will still get that vote; we will keep VOTE in quorum calls, or have majority votes fighting until we do. The PRESIDING OFFICER. The on things that stop the process. I yield the floor. question is, Is it the sense of the Sen- The question is simply, Do we want Mr. LAUTENBERG. I yield back the ate that debate on the motion to pro- to extend Social Security solvency? I remaining time. ceed to S. 557, a bill to provide guid- think that answer has to be yes. Do we Mr. ABRAHAM. How much time do ance for the designation of emergencies want to extend the Medicare solvency? we have? as part of the budget process, shall be I think that answer has to be yes. The PRESIDING OFFICER. The Re- brought to a close? The yeas and nays Let the American people decide. publicans have 1 minute 16 seconds. are required under the rules. The clerk When do they decide? They decide in Mr. ABRAHAM. I yield that time to will call the roll. November 2000 whether or not they pre- the Senator from New Mexico. The legislative assistant called the fer one method or the other. We ought Mr. DOMENICI. Mr. President, this is roll. to be plain spoken about what it is we not an issue of what kind of economic The PRESIDING OFFICER (Mr. game plan we have had for the last 5 or are trying to do and not shut off the GREGG). Are there any other Senators debate and not say that the Democrats 6 years. We all understand that hard- in the Chamber desiring to vote? could have offered amendments. They working Americans are making this The result was announced— yeas 99, couldn’t have, not at that time. They economy hum. Investors who have be- nays 1, as follows: could have in due time—after every- come more enlightened and entre- [Rollcall Vote No. 193 Leg.] thing was signed, sealed, and delivered. preneurs who are taking more risks YEAS—99 have caused a great American recov- It is a backhanded way of operating. Abraham Enzi Lott I hope we will move on to the debate ery, sustained in a manner we have Akaka Feingold Lugar of the lockbox legislation. Let the pub- never expected. Allard Feinstein Mack The issue is, when we collect more Ashcroft Fitzgerald McCain lic hear it. Take the time necessary to taxes, and we exceed expectations—in Baucus Frist McConnell have a full airing. Let either side Bayh Gorton Mikulski fact, not just by a few hundred million, amend it and get on with serving the Bennett Graham Moynihan but actually approaching $1 trillion— Biden Gramm Murkowski people’s needs. Bingaman Grams Murray How much time remains on both should we wait for the Government to spend it or should we give some of it Bond Grassley Nickles sides? Boxer Gregg Reed The PRESIDING OFFICER. The Sen- back to the American taxpayer? Breaux Hagel Reid Actually, the Social Security trust Brownback Harkin Robb ator has control of 3 minutes 20 sec- fund can be saved. Medicare with pre- Bryan Hatch Roberts onds; the Republicans have 2 minutes Bunning Helms Rockefeller scription drugs can be reformed and 54 seconds. Burns Hollings Santorum fixed so we have prescription drugs, Mr. LAUTENBERG. I yield the floor. Byrd Hutchinson Sarbanes Campbell Hutchison Schumer Mr. ABRAHAM. Mr. President, I and there is still a large amount of money left over. What should we do Chafee Inhofe Sessions yield myself 1 minute 30 seconds. Cleland Inouye Shelby We are here today to try to put in with it? Invent some way to set it Cochran Jeffords Smith (NH) motion a process that will save the So- aside? If we do that, it will be spent. Collins Johnson Smith (OR) Let’s give some of it back to the Amer- Conrad Kennedy Snowe cial Security trust fund surpluses for Coverdell Kerrey Specter Social Security. The Republicans have ican people. That is why the lockbox is Craig Kerry Stevens been trying to simply get a vote on our important. It says what is left over Crapo Kohl Thomas Daschle Kyl Thompson proposal for over 70 days. does not belong to Social Security; it belongs to the American people. Use it DeWine Landrieu Thurmond The entire parliamentary effort that Dodd Lautenberg Torricelli has been described has been aimed at prudently, Congress, and give back Domenici Leahy Voinovich simply getting us a chance to have a some of it. Dorgan Levin Warner It appears there is a war with that Durbin Lieberman Wellstone vote on what was our original amend- side of the aisle against giving any- Edwards Lincoln Wyden ment to a different bill. The notion thing back to the American people The PRESIDING OFFICER. On this that getting cloture on that amend- from these kinds of surpluses. I believe vote, the yeas are 99, the nays are 1. ment would somehow stifle opportuni- we will win that war. We relish it. We Three-fifths of the Senators duly cho- ties for others to bring amendments is are ready to go. That will be the issue sen and sworn having voted in the af- not the way this system works. I think the next couple of months. firmative, the motion is agreed to. everybody should understand that. Our I yield the floor. f goal is to get a vote on the amendment we wanted. That is perfectly consistent CLOTURE MOTION GUIDANCE FOR THE DESIGNATION The PRESIDING OFFICER. All time with what people on all sides always OF EMERGENCIES AS A PART OF has expired. Under the previous order, try to do. It was a simple effort. THE BUDGET PROCESS—RE- pursuant to rule XXII, the Chair lays Let’s not get caught up in the par- SUMED before the Senate the pending cloture liamentary discussions. The bottom motion, which the clerk will report. The PRESIDING OFFICER. The line is we are still trying to create a The assistant legislative clerk read clerk will report. lockbox for the American people who as follows: The assistant legislative clerk read send payroll taxes to Washington so CLOTURE MOTION as follows: they can be assured those dollars go to We, the undersigned Senators, in accord- A bill (S. 557) to provide guidance for the Social Security. That is what we are ance with the provisions of rule XXII of the designation of emergencies as a part of the fighting for. This debate is no more Standing Rules of the Senate, do hereby budget process. complicated than that. move to bring to a close debate on the mo- Pending: We have heard claims people want a tion to proceed to Calendar No. 89, S. 557, a Lott (for Abraham) amendment No. 254, to weaker lockbox, a harder lockbox. bill to provide guidance for the designation preserve and protect the surpluses of the so- Let’s go forward with it. Let’s pass this of emergencies as a part of the budget proc- cial security trust funds by reaffirming the motion. Let’s vote for cloture today. ess: exclusion of receipts and disbursement from Give Members a chance to have a vote Trent Lott, Spencer Abraham, Jim the budget, by setting a limit on the debt on our plan. If others want to offer Inhofe, Kay Bailey Hutchison, Pete held by the public, and by amending the Con- Domenici, Paul Coverdell, Wayne Al- gressional Budget Act of 1974 to provide a their plans, there will be opportunities lard, Jesse Helms, Larry E. Craig, Mike process to reduce the limit on the debt held for that. Crapo, Chuck Hagel, Mike DeWine, Mi- by the public. I don’t think there should be any ab- chael H. Enzi, Judd Gregg, Tim Hutch- Abraham Amendment No. 255 (to Amend- sence of clarity as to what we have inson, and Craig Thomas. ment No. 254), in the nature of a substitute. July 1, 1999 CONGRESSIONAL RECORD — SENATE S7981 Lott motion to recommit the bill to the the Treasury-Postal appropriations bill The PRESIDING OFFICER. Without Committee on Governmental Affairs, with and that the amendment be laid aside. objection, it is so ordered. instructions and report back forthwith. The PRESIDING OFFICER. Is there (See Exhibit 1.) Lott amendment No. 296 (to the instruc- objection? Mr. SPECTER. This list contains, I tions of the Lott motion to recommit), to Without objection, it is so ordered. am advised, some 280 products which provide for Social Security surplus preserva- tion and debt reduction. NOMINATION OF LAWRENCE SUMMERS AND are dumped in the United States where Lott amendment No. 297 (to Amendment PRIVATE RIGHT OF ACTION our dumping laws, simply stated, are No. 296), in the nature of a substitute. Mr. SPECTER. Mr. President, I had not enforced. Mr. LOTT addressed the Chair. asked for a reservation of some 30 min- There is a groundswell in America The PRESIDING OFFICER. The ma- utes to speak on the pending nomina- today protesting the failure to enforce jority leader. tion of Mr. Larry Summers for the po- the antidumping laws. Dumping is a sition of Secretary of the Treasury. situation where, for example, steel CLOTURE MOTION In considering the nomination of Mr. Mr. LOTT. Mr. President, I send a coming from Russia will be sold cheap- Summers for the position of Secretary er in the United States than it is being cloture motion to the desk to the pend- of the Treasury, I have reviewed the ing amendment. sold in Russia. That is flatly against many facets of the work of that par- the laws of the United States. It is flat- The PRESIDING OFFICER. The clo- ticular office and have focused with ture motion having been presented ly against international trade laws. particularity, at this time, on the ad- The United States has laws against under rule XXII, the Chair directs the ministration’s policy on nonenforce- clerk to read the motion. that kind of dumping. But they are, ment of the antidumping laws. I had simply stated, ignored. The assistant legislative clerk read met with Mr. Summers on Friday, as follows: The groundswell of opposition to June 18th, and told him at that time dumping is reflected in the very strong CLOTURE MOTION that I was giving consideration to a vote in the House of Representatives We the undersigned Senators, in accord- protest vote against his nomination be- on the so-called steel quota bill; 289 ance with the provisions of rule XXII of the cause of the administration’s failure to Standing Rules of the Senate, do hereby Members of the House voting in favor enforce the antidumping laws after of it, 141 in opposition, more than move to bring to a close debate on the pend- having discussed with him his own ing amendment No. 297 to Calendar No. 89, S. enough votes to override a veto. 557, a bill to provide guidance for the des- views. When the issue came to the Senate ignation of emergencies as a part of the Since that time I have decided to di- last week, there was considerable spec- budget process: rect my efforts, instead, to try to put ulation as to whether there would be 67 Trent Lott, Pete Domenici, Rod Grams, together a coalition of Members of votes to override a veto and whether Michael Crapo, Bill Frist, Michael Congress, both in the House and the there would be an excess of 60 votes for Enzi, Ben Nighthorse Campbell, Judd Senate, to find a remedy where a pri- Gregg, Strom Thurmond, Chuck Hagel, cloture. Then, as a result of some very vate right of action could be used to intense, last-minute lobbying by the Thad Cochran, Rick Santorum, Paul enforce the antidumping laws. administration, a great many Senators Coverdell, James Inhofe, Bob Smith, This is a subject that has been of changed their votes, reversed their an- Wayne Allard. great concern to me during my entire CALL OF THE ROLL tenure in the Senate, having intro- nounced intentions, and we had 42 Mr. LOTT. For the information of all duced a variety of bills—which I shall votes in favor of the steel quota bill. Senators, under the previous order, discuss in due course—going back as Even so, it was a large vote in the Sen- this cloture vote will occur on Friday, early as 1982. ate—considering all the cir- July 16, at 10:30 a.m. I ask unanimous In the course of a number of legisla- cumstances—because of the very consent that the mandatory quorum tive proposals, I have had cosponsor- strong public policy against quotas, re- under rule XXII be waived. And I ask ship from a wide variety of my Senate membering the problems in the Smoot- consent the bill be placed back on the colleagues, including then-Senator Hawley era. I think the effort at the calendar. GORE, Senators THURMOND, BYRD, quota bill was really to attract the at- The PRESIDING OFFICER. Without HELMS, COCHRAN, HATCH, INOUYE, MUR- tention of the administration, to show objection, it is so ordered. KOWSKI, KENNEDY, LEVIN, SANTORUM, how serious the problem was. Mr. LOTT. Let me emphasize to all MIKULSKI, and SESSIONS. In my capacity as chairman of the Senators to double-check and recheck The problem of dumping is an ex- steel caucus, I have convened a number their calendars—there will be a vote on traordinarily acute problem in Amer- of meetings of our caucus. I have met Friday morning, the 16th, at 10:30—so ica today. It has come into very sharp with Treasury Secretary Rubin and that everybody will know they will be focus with what has been happening in Commerce Secretary Daley and Trade expected to be present and voting at the steel industry, which has been deci- Representative Barshefsky. We have that time. mated over the past two decades. made the case of the need for enforce- I yield the floor. Steel, two decades ago—in 1979—had ment of our trade laws. While not ex- The PRESIDING OFFICER. Under employees numbering approximately actly a deaf ear, there was certainly the previous order, the Senator from 500,000. Today, we have about a third of little by way of any positive response. Pennsylvania has 30 minutes. that number. In the course of the past I had an opportunity to talk person- The Senator from Pennsylvania. several months, some 10,000 steel- ally with the President during a long Mr. SPECTER. Mr. President, I workers have lost their jobs because of plane ride from Andrews to Tel Aviv thank the Chair. dumping from many foreign importers. last December. The plane ride was Mr. REED addressed the Chair. But in reviewing the issue of dumping, more than 10 hours, an opportunity to The PRESIDING OFFICER. The Sen- I have found that it is extraordinarily talk about a great many subjects. I dis- ator from Rhode Island. widespread. cussed with the President the very se- Mr. REED. Will the Senator from Here is a partial list of the products rious problems with the steel industry. Pennsylvania yield for a few seconds which are dumped in the United States, He was sympathetic but nothing really for a unanimous consent request? in addition to steel: wheat, hogs, lamb, has come from the administration to Mr. SPECTER. I agree to yield for 15 cotton, sugar, orange juice, rasp- deal effectively with the problem of seconds, which the Senator asked for, berries, flowers, salmon, mushrooms, dumping. for a unanimous consent request. paper clips, pencils, garlic, brake ro- The fact of life is, where it comes to f tors, telephone systems, brass, pasta, considerations of foreign policy or de- picture tubes, rubber, industrial belts. fense policy, American industry is tra- TREASURY AND GENERAL GOV- And the series goes on and on. ditionally sacrificed and the anti- ERNMENT APPROPRIATIONS ACT, I ask unanimous consent that at the dumping laws are not enforced. 2000 conclusion of my remarks, the anti- This is an issue which has concerned AMENDMENT NO. 1193 dumping duty orders in effect as of me, as a Pennsylvania Senator, since Mr. REED. I ask unanimous consent March 1, 1999, be printed in the CON- 1981 when I took my oath of office. In to send an amendment to the desk to GRESSIONAL RECORD. 1984, there was a favorable ruling by S7982 CONGRESSIONAL RECORD — SENATE July 1, 1999 the International Trade Commission products from Russia were 7,296 metric about the very substantial trade, the supporting the steel industry. It was tons in April 1999, and almost 41,000 lower prices to consumers, and noted then up to the President, President metric tons the following month of that in an era where there is over- Ronald Reagan, to determine whether May, an increase of more than 450 per- capacity around the world and there is or not that International Trade Com- cent. a world depression, the United States mission ruling would stand. My then So we have seen the problem aggra- is an obvious target for this dumping, colleague, Senator John Heinz—the vated. The steel companies have to the benefit of our consumers. But late Senator Heinz, who we all miss so brought seven antidumping cases with that is not an adequate answer. That is very much—and I made the rounds of the Department of Commerce. Six of not an adequate answer when thou- key administration officials. Then-Sec- those have been subjected to suspen- sands of steelworkers are laid off, or retary of Commerce Malcolm Baldrige sion agreements by the Department of when the farmers are having a disas- was in favor of upholding the Inter- Commerce. When a complaint is trous economic time, when the Con- national Trade Commission order. brought, the Department of Commerce gress has to appropriate billions of dol- Then-Trade Representative Bill Brock has the authority to end the complaint lars in farm relief because of the dump- was in favor of upholding the Inter- with a suspension agreement. ing of wheat, the dumping of hogs, and national Trade Commission order. I had an opportunity to talk at some dumping of lamb. Then-Senator Heinz and I met with length just yesterday to Secretary of I recall as a teenager working in the Secretary of State George Shultz, sepa- Commerce Daley to try to get an up- wheat fields in Kansas before moving rately with Secretary of Defense date on enforcement of the anti- to Pennsylvania. I grew up in a small Caspar Weinberger, and were told in no dumping laws, and more particularly, community, Russell, KS, in the heart uncertain terms by the Secretary of the enforcement of the antidumping of America’s breadbasket, the heart of State that our foreign policy was such laws with regard to steel. Secretary America’s wheat basket. The wheat that the ITC decision had to be re- Daley, at least to my way of thinking, that has been dumped on the American versed by the President. That was Sec- was not at all on target with what the markets has had a tremendously dev- retary Shultz’ recommendation. Sec- Department of Commerce is doing. astating effect on the American farm retary of Defense Weinberger said I confronted him with the specifics community, as so much of the other about the same thing, that defense pol- on the suspension agreement that the dumping of the commodities I have icy required the ITC ruling be over- Department of Commerce entered into noted. turned, which the President had the with Russia on February 22 of this There is a remedy that would provide right to do. So, in fact, in September of year. That agreement permits unfair a private right of action to go to court, 1984, President Reagan did overturn the traders to avoid liability for millions where the courts would be concerned International Trade Commission rul- of dollars in penalties due on steel with what the law is against dumping ing. That was just symptomatic and dumped since November of 1998. The and would be concerned with what the characteristic of what had happened terms of the suspension agreement re- evidence is—strong evidence to prove with respect to dumping and the harm sult in imports rising to a level of that dumping exists. Then the court, of lost jobs to the industry. 750,000 metric tons per year and further under the legislation I have introduced, Since the early 1980s, the steel indus- displace very substantial domestic pro- would enter what is called an ‘‘equi- try has poured $50 billion of capital duction. With respect to the proposed table order,’’ to assess a duty or a tar- into modernization efforts and has Brazilian antidumping suspension iff that is consistent with GATT, based pared the payrolls, as I noted earlier, agreement, the fixed exchange rate upon the difference between what the from about 500,000 to about a third of locks in unrealistic low prices without goods ought to sell for and the price at that. There is no way that the Amer- allowing for future changes in the ex- which they are dumped. ican steel industry can compete with change rate. On another proposed Bra- There is, obviously, concern by the dumped steel; where Russians or Bra- zilian countervailing suspension agree- administration about the use of the zilians or others are prepared to steal— ment, it is 37 percent above the court system when the administration dumping is a form of stealing, spelled prelevel crisis. wants to have the power to make deci- different from steel—the product. So here we have efforts made under sions as the administration chooses. There is no way the American steel in- section 201, where the President has But when the administration acts in dustry can compete with dumping. the right to rescind the remedy. That the interest of foreign policy, or in the On June 18 of this year, the Wash- is consistently done. Here we have interest of defense policy, to the preju- ington Post contained a notation that these countervailing duty cases dice of so many workers in America Secretary of Commerce Daley had de- brought, where the Department of who are not getting justice, that sim- clared the steel crisis was over. Out- Commerce has the authority to enter ply is not right. raged by that conclusion, 12 chief exec- into a suspension agreement to the det- The equity action would not submit utive officers of American steel compa- riment of the American steel industry. the case to a jury. Rather, it is decided nies wrote to Secretary William Daley, That is consistently done. on traditional principles of the law of in part as follows: The remedy which I suggest on pend- equity by a judge alone. It is possible The steel crisis is still very much with us. ing legislation is to provide for a pri- to have a temporary restraining order Cold rolled imports are up dramatically, 24 vate right of action so the injured par- issued on the basis of affidavits sub- percent above the level for the first 4 months mitted. It is not a complicated matter of last year. Imports of cut-to-length plate ties—whether they are the steel- are up dramatically, 25 percent year-to-year workers who have been demonstrating to prove dumping. A judge then has the in for this period. The prices remain ex- and protesting in Washington, D.C. in authority, under the Federal Rules of tremely depressed. Operating rates have major rallies or whether it would be Civil Procedure, to issue what is called plunged from 93 percent to 80 percent on an the steel companies who have written an ex parte order just on the applica- annualized basis. to administration officials—the injured tion of one party—without even the A 10 percent change in operating parties would have an opportunity to other party being present—where the rates equals about $5 billion in rev- go into Federal court to get justice. affidavits are sufficient. The duty then enue, so that decrease would be in the You have the trade laws of the arises for the court to have a hearing $7 to $8 billion range in decreased rev- United States which prohibit dumping; within 5 days on a preliminary injunc- enue. you have the international trade laws, tion. Then these equity matters can be Within the next week, after the let- which prohibit dumping. The laws pro- tried in a matter of a few days, or a ter of June 18 to Secretary Daley from hibiting dumping are entirely con- couple of weeks at the outside. the steel executives, the statistics re- sistent with GATT, our international When some administration officials leased by the Department of Commerce trade agreements. But those anti- have complained that court cases take showed a tremendous additional surge. dumping laws are, simply stated, not a very long time, it simply is not true. From April to May, imports went up by enforced. Where a court of equity issues an almost 700,000 metric tons, more than In my discussions with Secretary order, that order stays in effect even 30 percent. Imports of cold-rolled steel Daley yesterday, he raised the question when an appeal is taken, unless there July 1, 1999 CONGRESSIONAL RECORD — SENATE S7983 is an issuance of a supersedeas. To get jobs on the administration’s conclusion It may be that if we mobilized a a supersedeas, there has to be a bond that it is more important to have a group of Senators to vote against the posted in twice the amount of the dam- solid economy in Russia and not to nomination of Mr. Summers, or if I ages. The fact is that once these en- have instability with Boris Yeltsin voted against the nomination of Mr. forcement actions would be taken, the than it is to lose thousands of jobs of Summers, it would attract more atten- dumpers would find it more expensive the steelworkers. When wheat, or tion than a 22-minute floor statement. to violate the law than to comply with lambs, or hogs, or orange juice, is But after having considered the matter the law. This would be a remedy that dumped, there again, the avalanche of for the intervening almost 2 weeks would have a very profound effect. those cases is beyond the capacity of since I met with Mr. Summers, I This is not an idea I have proposed the administration to handle. thought that it would be not fair to for the first time in the legislation There is a solid precedent in our legal him. He has an excellent record, a good filed this year. During the 97th Con- procedures for private rights of action. academic record, and a strong record in gress, I introduced Senate bill 2167. In We have the antitrust laws that are en- the Department of the Treasury. But the 98th Congress, I introduced similar forced by private parties, who are au- when I discussed with him the enforce- legislation under the number of Senate thorized under Federal statutes to get ment of the antidumping laws, I did bill 418. In the 99th Congress, it was S. not only damages, but treble damages, not find the concerns that I thought 236. In the 100th Congress, it was S. 361. three times the damages. You have the the Secretary of the Treasury-Des- securities laws of the United States In the 102d Congress, it was S. 2508. In ignate ought to have. But we have that are enforced by private rights of the 103d Congress, it was S. 332. On agreed to talk further. March 3 of this year, I introduced the action. The Securities and Exchange Com- Yesterday, when I talked to Sec- pending legislation as Senate bill 528. retary of Commerce Daley, again I did Votes have been held, with one vote mission simply can’t handle all of the enforcement of our securities laws, just not find the kind of sensitivity or con- as close as 51–47, losing on an effort to as the Department of Justice and the cerns that I thought the Secretary of attach that as an amendment. One of Federal Trade Commission cannot han- Commerce ought to have. the bills was reported unanimously out dle all of the antitrust laws. This has of the Judiciary Committee and, as When I reviewed the suspension been a subject of deep concern to me, noted before, a considerable group of agreements that Secretary Daley’s De- since my days as a law student when I colleagues have sponsored one or more partment entered into, I thought that wrote an extensive article in the Yale of these bills: then-Senator GORE, Sen- they were prejudicial to the interests Law Journal, appearing in 1955, on pri- ators THURMOND, BYRD, COCHRAN, of the American steel industry. But in vate rights of action. It was directed at HELMS, INOUYE, MURKOWSKI, HATCH, America, we have had so many illustra- the criminal process, but the analogies tions where the legislative bodies don’t KENNEDY, LEVIN, SANTORUM, MIKULSKI, are the same. If we enact legislation and SESSIONS have all been supportive act, or where the executive branches that enables the steelworkers, or the don’t act but where the courts do. It is of this legislation. steel companies, or the farmers, or the I must say that the hearings in the nothing like life tenure for a Federal wheat companies, or the electronics in- Finance Committee have not produced judge and the dispassionate application dustry, or the telephone industry, or a consideration of this legislation in a of the rule of law but, rather, the facts the long list of industries that have to the case. But were that to be done, markup. So it is my intention to find a been victimized by dumping to go into it is not a matter of protectionism. It vehicle on which to offer this legisla- court, the judge will not look at what is a matter of enforcing the basic rule tion, some other bill that comes to the is our foreign policy or what is our de- of free trade. floor. In discussions with many col- fense policy, but will see the U.S. law leagues, there is very considerable in- that prohibits dumping, and will ana- Anytime someone takes up the cudg- terest in many quarters because when lyze the GATT provisions which au- el to complain about what is happening the matter is discussed, so many of my thorize the enforcement of anti- for failure to enforce antidumping fellow Senators say, well, that is a dumping laws. laws, the financial publications are al- wheat issue that prejudices the farmers The legislation calls for these actions ways saying that is a cry for protec- of my State; or that is a hog issue or a to be brought in the U.S. International tionism. But the fact is that it is not lamb issue that prejudices the farmers Court of Trade in New York City. protectionism. It is enforcing the basic of my State; or with the enormous list So this is not a matter of the steel- tenet of free trade, which means no of products involved, so many jobs are workers going to a friendly judge in dumping. If you have dumping you do being taken. Pittsburgh, or the wheat farmers going not have free trade. So the essence of the issue is: What to a friendly judge in Wichita, but it will happen on enforcement of anti- We are going to continue to work will be handled by the International with the coalition of Senators. We will dumping laws in America? The bitter Court of Trade which sits in New York not use this occasion to protest the ad- fact of life is that administrations that City and has the expertise and the de- ministration’s failure to enforce the are both Republican and Democrat tachment to look at the law—to look antidumping laws by a protest vote have not been interested or diligent in at the facts—and to do justice. But jus- against Mr. Summers but to try to enforcing our antidumping laws. In- tice is not being done in America today bring a coalition together, and perhaps stead, they have preferred to bend to where you have the failure of the ad- even to persuade the new Secretary of the interests of the foreign policy con- ministration to enforce these laws. siderations, or defense policy. When During the almost two decades that I Treasury, the existing Secretary of Russia dumps in the United States— have served in the Senate, it has been Commerce, and perhaps even the Presi- and Russia’s economy is in a precar- the same whether the administration dent, that justice and fairness and eq- ious shape—the administration enters was of one party or the other, and that uity requires enforcement through the into a suspension agreement badly it is easy to slough off the loss of jobs judicial process, which is the only way prejudicing the American steel indus- and the loss of American industry. But to get appropriate relief. try, causing the loss of thousands of that, simply stated, is not fair. I thank the Chair.

EXHIBIT NO. 1

ANTIDUMPING DUTY ORDERS IN EFFECT ON MARCH 1, 1999 [Duty orders revoked by Sunset Review remain in effect until Jan. 1, 2000]

D Case No. and country Product I

A–357–007 Argentina ...... Carbon steel wire rod ...... 1 A–357–405 Argentina ...... Barbed wire and barbless wire strand ...... 1 A–357–802 Argentina ...... L–WR welded carbon steel pipe and tube ...... 0 A–357–804 Argentina ...... Silicon metal ...... 0 S7984 CONGRESSIONAL RECORD — SENATE July 1, 1999 ANTIDUMPING DUTY ORDERS IN EFFECT ON MARCH 1, 1999—Continued [Duty orders revoked by Sunset Review remain in effect until Jan. 1, 2000]

D Case No. and country Product I

A–357–809 Argentina ...... Line and pressure pipe ...... 0 A–357–810 Argentina ...... Oil country tubular goods ...... 0 A–831–801 Armenia ...... Solid urea ...... 0 A–602–803 Australia ...... Corrosion-resistant carbon steel flat products ...... 0 A–832–801 Azerbaijan ...... Solid urea ...... 0 A–538–802 Bangladesh ...... Cotton shop towels ...... 0 A–822–801 Belarus ...... Solid urea ...... 0 A–423–077 Belgium ...... Sugar ...... 0 A–423–602 Belgium ...... Industrial phosphoric acid ...... 1 A–423–805 Belgium ...... Cut-to-length carbon steel plate ...... 0 A–351–503 Brazil ...... Iron construction castings ...... 0 A–351–505 Brazil ...... Malleable cast iron pipe fittings ...... 0 A–351–602 Brazil ...... Carbon steel butt-weld pipe fittings ...... 0 A–351–603 Brazil ...... Brass sheet and strip ...... 0 A–351–605 Brazil ...... Frozen concentrated orange juice ...... 0 A–351–804 Brazil ...... Industrial nitrocellulose ...... 1 A–351–806 Brazil ...... Silicon metal ...... 0 A–351–809 Brazil ...... Circular welded non-alloy steel pipe ...... 1 A–351–811 Brazil ...... Hot rolled lead/bismuth carbon steel products ...... 0 A–351–817 Brazil ...... Cut-to-length carbon steel plate ...... 0 A–351–819 Brazil ...... Stainless steel wire rod ...... 0 A–351–820 Brazil ...... Ferrosilicon ...... 0 A–351–824 Brazil ...... Silicomanganese ...... 1 A–351–825 Brazil ...... Stainless steel bar ...... 0 A–351–826 Brazil ...... Line and pressure pipe ...... 0 A–122–047 Canada ...... Elemental sulphur ...... 0 A–122–085 Canada ...... Suger and syrup ...... 0 A–122–401 Canada ...... Red raspberries ...... 0 A–122–503 Canada ...... Iron construction castings ...... 0 A–122–506 Canada ...... Oil country tubular goods ...... 0 A–122–601 Canada ...... Brass sheet and strip ...... 0 A–122–605 Canada ...... Color picture tubes ...... 1 A–122–804 Canada ...... New steel rails ...... 1 A–122–814 Canada ...... Pure and alloy magnesium ...... 1 A–122–822 Canada ...... Corrosion-resistant carbon steel flat products ...... 0 A–122–823 Canada ...... Cut-to-length carbon steel plate ...... 0 A–337–602 Chile ...... Fresh cut flowers ...... 0 A–337–803 Chile ...... Fresh Atlantic salmon ...... 0 A–337–804 Chile ...... Preserved mushrooms ...... 0 A–570–001 China PRC ...... Potassium permanganate ...... 0 A–570–002 China PRC ...... Chloropicrin ...... 0 A–570–003 China PRC ...... Cotton shop towels ...... 0 A–570–007 China PRC ...... Barium chloride ...... 1 A–570–101 China PRC ...... Greig polyester cotton print cloth ...... 0 A–570–501 China PRC ...... Natural bristle paint brushes and brush heads ...... 0 A–570–502 China PRC ...... Iron construction castings ...... 0 A–570–504 China PRC ...... Petroleum wax candles ...... 0 A–570–506 China PRC ...... Porcelain-on-steel cooking ware ...... 1 A–570–601 China PRC ...... Tapered roller bearings ...... 0 A–570–802 China PRC ...... Industrial nitrocellulose ...... 1 A–570–803 China PRC ...... Heavy forged hand tools, w/wo handles ...... 0 A–570–804 China PRC ...... Sparklers ...... 0 A–570–805 China PRC ...... Sulfur chemicals (sodium thiosulfate) ...... 0 A–570–806 China PRC ...... Silicon metal ...... 0 A–570–808 China PRC ...... Chrome-plated lug nuts ...... 1 A–570–811 China PRC ...... Tungsten ore concentrates ...... 0 A–570–814 China PRC ...... Carbon steel butt-weld pipe fittings ...... 0 A–570–815 China PRC ...... Sulfanilic acid ...... 1 A–570–819 China PRC ...... Ferrosilicon ...... 0 A–570–820 China PRC ...... Compact ductile iron waterworks fittings ...... 0 A–570–822 China PRC ...... Helical spring lock washers ...... 1 A–570–825 China PRC ...... Serbacic acid ...... 0 A–570–826 China PRC ...... Paper clips ...... 1 A–570–827 China PRC ...... Pencils, cased ...... 1 A–570–828 China PRC ...... Silicomanganese ...... 1 A–570–830 China PRC ...... Coumarin ...... 0 A–570–831 China PRC ...... Garlic, fresh ...... 0 A–570–832 China PRC ...... Pure magnesium ...... 0 A–570–835 China PRC ...... Furfuryl alcohol ...... 0 A–570–836 China PRC ...... Glycine ...... 0 A–570–840 China PRC ...... Manganese metal ...... 1 A–570–842 China PRC ...... Polyvinyl alcohol ...... 0 A–570–844 China PRC ...... Melamine institutional dinnerware ...... 0 A–570–846 China PRC ...... Brake rotors ...... 0 A–570–847 China PRC ...... Persulfates ...... 0 A–570–848 China PRC ...... Freshwater crawfish tailmeat ...... 1 A–583–008 China Taiwan ...... Small diam. welded carbon steel pipe and tube ...... 0 A–583–080 China Taiwan ...... Carbon steel plate ...... 1 A–583–505 China Taiwan ...... Oil country tubular goods ...... 0 A–583–507 China Taiwan ...... Malleable cast iron pipe fittings ...... 0 A–583–508 China Taiwan ...... Porcelain-on-steel cooking ware ...... 1 A–583–603 China Taiwan ...... Top-of-the-stove stnls steel cooking ware ...... 0 A–583–605 China Taiwan ...... Carbon steel butt-weld pipe fittings ...... 0 A–583–803 China Taiwan ...... Light-walled rect. welded carbon steel pipe and tube ...... 0 A–583–806 China Taiwan ...... Telephone systems and subassemblies thereof ...... 0 A–583–810 China Taiwan ...... Chrome-plated lug nuts ...... 1 A–583–814 China Taiwan ...... Circular welded non-alloy steel pipe ...... 1 A–583–815 China Taiwan ...... Welded ASTM A–312 stainless steel pipe ...... 1 A–583–816 China Taiwan ...... Stainless steel butt-weld pipe fittings ...... 0 A–583–820 China Taiwan ...... Helical spring lock washers ...... 1 A–583–821 China Taiwan ...... Stainless steel flanges ...... 0 A–583–824 China Taiwan ...... Polyvinyl alcohol ...... 0 A–583–825 China Taiwan ...... Melamine institutional dinnerware ...... 0 A–583–826 China Taiwan ...... Collated roofing nails ...... 1 A–583–827 China Taiwan ...... Static random access memory ...... 0 A–583–828 China Taiwan ...... Stainless steel wire rod ...... 0 A–301–602 Colombia ...... Fresh cut flowers ...... 0 A–331–602 Ecuador ...... Fresh cut flowers ...... 0 A–447–801 Estonia ...... Solid urea ...... 0 A–405–802 Finland ...... Cut-to-length carbon steel plate ...... 0 A–427–001 France ...... Sorbitol ...... 0 A–427–009 France ...... Industrial nitrocellulose ...... 0 A–427–078 France ...... Sugar ...... 0 A–427–098 France ...... Anhydrous sodium metasilicate ...... 0 A–427–602 France ...... Brass sheet and strip ...... 0 A–427–801 France ...... Antifriction bearings ...... 0 A–427–804 France ...... Hol rolled lead/bismuth carbon steel products ...... 0 A–427–808 France ...... Corrosion-resistant carbon steel flat products ...... 0 A–427–811 France ...... Stainless steel wire rod ...... 0 July 1, 1999 CONGRESSIONAL RECORD — SENATE S7985 ANTIDUMPING DUTY ORDERS IN EFFECT ON MARCH 1, 1999—Continued [Duty orders revoked by Sunset Review remain in effect until Jan. 1, 2000]

D Case No. and country Product I

A–427–812 France ...... Calcium aluminate cement and cement clinker ...... 0 A–100–001 General Issues ...... Antifriction bearings ...... 0 A–100–003 General Issues ...... Carbon steel flat products (filed 30-Jun-92) ...... 0 A–833–801 Georgia ...... Solid urea ...... 0 A–428–811 Germany United ...... Hot rolled lead/bismuth carbon steel products ...... 0 A–428–814 Germany United ...... Cold-rolled carbon steel flat products ...... 0 A–428–815 Germany United ...... Corrosion-resistant carbon steel flat products ...... 0 A–428–816 Germany United ...... Cut-to-length carbon steel plate ...... 0 A–428–820 Germany United ...... Seamless line and pressure pipe ...... 0 A–428–821 Germany United ...... Large newspaper printing pressure and components ...... 0 A–428–082 Germany West ...... Sugar ...... 0 A–428–602 Germany West ...... Brass sheet and strip ...... 0 A–428–801 Germany West ...... Antifriction bearings ...... 0 A–428–802 Germany West ...... Industrial belts ...... 0 A–428–803 Germany West ...... Industrial nitrocellulose ...... 1 A–428–807 Germany West ...... Sulfur chemicals ...... 0 A–428–801 Greece ...... Electrolytic manganese dioxide ...... 0 A–437–601 Hungary ...... Tapered roller bearing ...... 0 A–533–502 India ...... Welded carbon steel pipes and tubes ...... 0 A–533–806 India ...... Sulfanilic acid ...... 0 A–533–809 India ...... Stainless steel flanges ...... 0 A–533–810 India ...... Stainless steel bar ...... 0 A–533–813 India ...... Preserved mushrooms ...... 0 A–560–801 Indonesia ...... Melamine institutional dinnerware preserved mushrooms ...... 0 A–560–802 Indonesia ...... A–507–502 Iran ...... In shell pistachios ...... 1 A–508–602 Israel ...... Oil country tubular goods ...... 0 A–508–604 Israel ...... Industrial phosphoric acid ...... 1 A–475–059 Italy ...... Pressure sensitive plastic tape ...... 0 A–475–401 Italy ...... Brass fire protection products ...... 0 A–475–601 Italy ...... Brass sheet and strip ...... 0 A–475–703 Italy ...... Granular polytetrafluoroethylene resin ...... 1 A–475–801 Italy ...... Antifriction bearings ...... 0 A–475–802 Italy ...... Industrial belts ...... 0 A–475–811 Italy ...... Grain-oriented electrical steel ...... 0 A–475–814 Italy ...... Seamless line and pressure pipe ...... 0 A–475–816 Italy ...... Oil country tubular goods ...... 0 A–475–818 Italy ...... Pasta, certain ...... 0 A–475–820 Italy ...... Stainless steel wire rod ...... 0 A–588–028 Japan ...... Roller chain other than bicycle ...... 0 A–588–041 Japan ...... Methionine, synthetic ...... 0 A–588–045 Japan ...... Steel wire rope ...... 0 A–588–054 Japan ...... Tapered roller bearing, under 4′′ ...... 1 A–588–056 Japan ...... Melamine in crystal form ...... 1 A–588–068 Japan ...... P.C. steel wire strand ...... 1 A–588–401 Japan ...... Calcium hypochlorite ...... 0 A–588–405 Japan ...... Cellular mobile telephones and subassemblies ...... 1 A–588–602 Japan ...... Carbon steel butt-weld pipe fittings ...... 0 A–588–604 Japan ...... Tapered roller bearings, over 4′′ ...... 0 A–588–605 Japan ...... Malleable cast iron pipe fittings ...... 0 A–588–609 Japan ...... Color picture tubes ...... 1 A–588–702 Japan ...... Stainless steel butt-weld pipe fittings ...... 0 A–588–703 Japan ...... Internal combustion and forklift trucks ...... 0 A–588–704 Japan ...... Brass sheet and strip ...... 0 A–588–706 Japan ...... Nitrile rubber ...... 0 A–588–707 Japan ...... Granular polytetrafluoroethylene resin ...... 1 A–588–802 Japan ...... 3.5′′ microdisks and media therefor ...... 0 A–588–804 Japan ...... Antifriction bearings ...... 0 A–588–806 Japan ...... Electrolytic manganese dioxide ...... 0 A–588–807 Japan ...... Industrial belts ...... 0 A–588–809 Japan ...... Telephone systems and subassemblies thereof ...... 0 A–588–810 Japan ...... Mechanical transfer presses ...... 0 A–588–811 Japan ...... Drafting machines and parts thereof ...... 0 A–588–812 Japan ...... Industrial nitrocellulose ...... 1 A–588–813 Japan ...... Multiangle laser light scattering instr ...... 0 A–588–815 Japan ...... Gray Portland cement and cement clinker ...... 0 A–588–816 Japan ...... Benzyl P-Hydroxybenzoate (Benzyl paraben) ...... 0 A–588–823 Japan ...... Prof electric cutting/sanding/grinding tools ...... 0 A–588–826 Japan ...... Corrosion-resistant carbon steel flat products ...... 0 A–588–829 Japan ...... Defrost timers ...... 0 A–588–831 Japan ...... Grain-oriented electrical steel ...... 0 A–588–833 Japan ...... Stainless steel bar ...... 0 A–588–835 Japan ...... Oil country tubular goods ...... 0 A–588–836 Japan ...... Polyvinyl alcohol ...... 0 A–588–837 Japan ...... Large newspaper printing presses and components ...... 0 A–588–838 Japan ...... Clad steel plate ...... 0 A–588–840 Japan ...... Gas Turbo compressors ...... 0 A–588–843 Japan ...... Stainless steel wire rod ...... 0 A–834–801 Kazakhstan ...... Solid Urea ...... 0 A–834–804 Kazakhstan ...... Ferrosilicon ...... 0 A–779–602 Kenya ...... Fresh cut flowers ...... 0 A–580–507 Korea South ...... Malleable cast iron pipe fittings ...... 0 A–580–601 Korea South ...... Top-of-the-stove stnls steel cooking ware ...... 0 A–580–603 Korea South ...... Brass sheet and strip ...... 0 A–580–605 Korea South ...... Color Picture tubes ...... 1 A–580–803 Korea South ...... Telephone systems and subassemblies thereof ...... 0 A–580–805 Korea South ...... Industrial nitrocellulose ...... 1 A–580–807 Korea South ...... Polyethlene terephthalate (pet) film ...... 0 A–580–809 Korea South ...... Circular welded non-alloy steel pipe ...... 1 A–580–810 Korea South ...... Welded ASTM A–312 stainless steel pipe ...... 1 A–580–811 Korea South ...... Carbon steel wire rope ...... 0 A–580–812 Korea South ...... Drams of 1 MEGABIT and above ...... 0 A–580–813 Korea South ...... Stainless steel butt-weld pipe fittings ...... 0 A–580–815 Korea South ...... Cold-rolled carbon steel flat products ...... 0 A–580–816 Korea South ...... Corrosion-resistant carbon steel flat products ...... 0 A–580–825 Korea South ...... Old country tubular goods ...... 0 A–580–829 Korea South ...... Stainless steel wire rod ...... 0 A–835–801 Kyrgyzstan ...... Solid urea ...... 0 A–449–801 Latvia ...... Solid urea ...... 0 A–451–801 Lithuania ...... solid urea ...... 0 A–557–805 Malaysia ...... Extruded rubber thread ...... 0 A–201–504 Mexico ...... Porcelain-on-steel cooking ware ...... 1 A–201–601 Mexico ...... Fresh cut flowers ...... 0 A–201–802 Mexico ...... Gray Portland cement and cement clinker ...... 1 A–201–805 Mexico ...... Circular welded non-alloy steel pipe ...... 1 A–201–806 Mexico ...... Carbon steel wire rope ...... 0 A–201–809 Mexico ...... Cut-to-length carbon steel plate ...... 0 A–201–817 Mexico ...... Oil country tubular goods ...... 0 A–841–801 Moldova ...... Solid urea ...... 0 S7986 CONGRESSIONAL RECORD — SENATE July 1, 1999 ANTIDUMPING DUTY ORDERS IN EFFECT ON MARCH 1, 1999—Continued [Duty orders revoked by Sunset Review remain in effect until Jan. 1, 2000]

D Case No. and country Product I

A–421–701 Netherlands ...... Brass sheet and strip ...... 0 A–421–804 Netherlands ...... Cold-rolled carbon steel flat products ...... 0 A–421–805 Netherlands ...... Aramid fiber of PPD–T ...... 0 A–614–502 New Zealand ...... Low fuming brazing copper wire and rod ...... 0 A–614–801 New Zealand ...... Fresh kiwifruit ...... 0 A–403–801 Norway ...... Fresh and chilled Atlantic salmon ...... 0 A–455–802 Poland ...... Cut-to-length carbon steel plate ...... 0 A–485–601 Romania ...... Urea ...... 0 A–485–602 Romania ...... Tapered roller bearings ...... 0 A–485–801 Romania ...... Antifriction bearings ...... 0 A–485–803 Romania ...... Cut-to-length carbon steel plate ...... 0 A–821–801 Russia ...... Solid urea ...... 0 A–821–804 Russia ...... Ferrosilicon ...... 0 A–821–805 Russia ...... Pure magnesium ...... 0 A–821–807 Russia ...... Ferrovanadium and nitrided vanadium ...... 0 A–559–502 Singapore ...... Small diameter standard and rectangular pipe and tube ...... 1 A–559–601 Singapore ...... Color picture tubes ...... 1 A–559–801 Singapore ...... Antifriction bearings ...... 0 A–559–802 Singapore ...... Industrial belts ...... 0 A–791–502 South Africa ...... Low fuming brazing copper wire and rod ...... 0 A–791–802 South Africa ...... Furfuryl alcohol ...... 0 A–469–007 Spain ...... Potassium permanganate ...... 0 A–469–803 Spain ...... Cut-to-length carbon steel plate ...... 0 A–469–805 Spain ...... Stainless steel bar ...... 0 A–469–807 Spain ...... Stainless steel wire rod ...... 0 A–401–040 Sweden ...... Stainless steel plate ...... 0 A–401–601 Sweden ...... Brass sheet and strip ...... 0 A–401–603 Sweden ...... Stainless steel hollow products ...... 1 A–401–801 Sweden ...... Antifriction bearings ...... 0 A–401–805 Sweden ...... Cut-to-length carbon steel plate ...... 0 A–401–806 Sweden ...... stainless steel wire rod ...... 0 A–842–801 Tajikistan ...... Solid urea ...... 0 A–549–502 Thailand ...... Welded carbon steel pipes and tubes ...... 0 A–549–601 Thailand ...... Malleable cast iron pipe fittings ...... 0 A–549–807 Thailand ...... Carbon steel butt-weld pipe fittings ...... 0 A–549–812 Thailand ...... Furfuryl alcohol ...... 0 A–549–813 Thailand ...... Canned pineapple fruit ...... 0 A–489–501 Turkey ...... Welded carbon steel pipe and tube ...... 0 A–489–602 Turkey ...... Aspirin ...... 1 A–489–805 Turkey ...... Pasta, certain ...... 0 A–489–807 Turkey ...... Rebar steel ...... 0 A–843–801 Turkmenistan ...... Solid urea ...... 0 A–823–801 Ukraine ...... Solid urea ...... 0 A–823–802 Ukraine ...... Uranium ...... 1 A–823–804 Ukraine ...... Ferrosilicon ...... 0 A–823–806 Ukraine ...... Pure magnesium ...... 0 A–412–801 United Kingdom ...... Antifriction bearings ...... 0 A–412–803 United Kingdom ...... Industrial nitrocellulose ...... 1 A–412–805 United Kingdom ...... Sulfur chemicals ...... 0 A–412–810 United Kingdom ...... Hot rolled lead/bismuth carbon steel products ...... 0 A–412–814 United Kingdom ...... Cut-to-length carbon steel plate ...... 0 A–461–008 USSR ...... Titanium sponge ...... 1 A–461–601 USSR ...... Solid urea ...... 0 A–844–801 Uzbekistan ...... Solid urea ...... 0 A–307–805 Venezuela ...... Circular welded non-alloy steel pipe ...... 1 A–307–807 Venezuela ...... Ferrosilicon ...... 0 A–479–801 Yugoslavia ...... Industrial nitrocellulose ...... 1

EXTENSION OF TIME FOR FILING important issue for the Senator from other matters to attend to—is that I AMENDMENTS Pennsylvania. Pennsylvania’s economy happen to be a strong supporter of Mr. SPECTER. Mr. President, I have depends on many sectors. But steel is a Larry Summers as a candidate for the been asked to request on behalf of the very important one. And the trade Secretary of the Treasury position. leader that the deadline for failing issue is extremely important. He is a very fine individual who I first-degree amendments on the Treas- Mr. SPECTER. Mr. President, I think will do a tremendous job. First of ury-Postal appropriations bill be ex- thank my distinguished colleague from all, he will be listening to people such tended until noon. Connecticut for those comments. I dare as our distinguished colleague from The PRESIDING OFFICER. Is there say that if we polled all of our col- Pennsylvania, and I hope the colleague objection? leagues, the other 98, there would not of the Senator from Pennsylvania, the Without objection, it is so ordered. be a Senator who would not have prob- Senator from Connecticut, on these The Senator from Connecticut. lems in his own State on dumping. matters. I am sure he will do that. I f Some may object saying that they do know that he will do that. not want to have anything to impede But, obviously more importantly, we PRIVILEGE OF THE FLOOR the flow of commerce, but there are need not just good listening but also a Mr. DODD. Mr. President, I ask unan- some limits. willingness to make the fight as only imous consent for Ellen Gadbois, a Fel- When it comes to the law, I know my can be done at the executive branch low in Senator KENNEDY’s office, be al- colleague from Connecticut is as con- level. We in Congress can pass amend- lowed floor privileges for 1 day. cerned about the rule of law as I am. If ments and bills to try to do it. But in The PRESIDING OFFICER. Without we want to eliminate the antidumping the area of trade —I know that my col- objection, it is so ordered. provisions, I will keep quiet. But when league from Pennsylvania will agree— f the law prohibits dumping and there is the executive branch is really where so much of it to the prejudice of so the influence is most felt through the NOMINATION OF LARRY SUMMERS many people—talk about victims’ Office of the President, the Secretary Mr. DODD. Mr. President, I want to rights—this is an injustice that is of Treasury, the Secretary of Com- say to my colleague from Pennsyl- being perpetrated day in and day out. merce, and the Secretary of State, vania, who just addressed the issue of If it goes to court, justice will be done. where they raise these issues at that Treasury and the issue of steel, that I Mr. DODD. I thank my colleague. Ev- level. That is where we have the most supported the proposal last week of eryone faces these dumping issues. We success, I think, at least historically, Senator ROCKEFELLER and felt as are a very open society. That is one of in dealing with the kind of issues that though that was a strong message that our strengths. But there are limits. he has addressed this morning. we needed to be sending. We didn’t pre- The only thing I would say—again, I I am confident that Larry Summers vail in that particular issue. It is an don’t want to tie us up because we have is going to be a very strong advocate July 1, 1999 CONGRESSIONAL RECORD — SENATE S7987 on behalf of our country and its needs cerns at the Federal Courthouse at 40 Centre AMENDMENT NO. 1202 and its sectors that the Senator from Street in New York, New York are allevi- (Purpose: To request the United States Post- Pennsylvania has talked about. ated. al Service to issue a commemorative post- I just didn’t want the moment to pass Campbell/Dorgan amendment No. 1192, to age stamp honoring the 100th anniversary without expressing my support for this provide for an increase in certain Federal of the founding of the Veterans of Foreign Wars of the United States) very fine individual, whom I have come buildings funds. Ms. COLLINS. Mr. President, I have to know and respect immensely over The PRESIDING OFFICER. Who an amendment at the desk. I ask for its the last number of years. He has yields time? The Senator from Colo- immediate consideration. worked with Rubin in Treasury. rado. The PRESIDING OFFICER. The Mr. SPECTER. Mr. President, just Mr. CAMPBELL. Mr. President, pur- clerk will report. one further comment. Some of our suant to the consent agreement of last The legislative clerk read as follows: most worthwhile floor discussions is night, I send the following amendments The Senator from Maine [Ms. COLLINS], for when there is an exchange of ideas. So to the desk for consideration and ask herself, Mr. CAMPBELL, Mr. DORGAN and Mr. often comments go from protection of they be set aside. GREGG, proposes an amendment numbered speech out into a vacuum. Like the old The PRESIDING OFFICER. Without 1202. saying about college lectures in class- objection, it is so ordered. Ms. COLLINS. Mr. President, I ask es, it goes from the notes of the pro- unanimous consent that reading of the fessor to the notes of the student with- AMENDMENTS NO. 1194 THROUGH NO. 1204 amendment be dispensed with. out passing through the head of either. Mr. CAMPBELL. Mr. President, I The PRESIDING OFFICER. Without But when you have a discussion, it may would like at least to give the names of objection, it is so ordered. be a little more informative. The exec- the amendments: Senator WARNER, The amendment is as follows: utive branch is where it ought to start. amendment on professional liability On page 98, insert between lines 4 and 5 the But if there is not relief from the exec- insurance for Federal employees; for following: utive branch, then I look to the judi- Senator KYL, $50 million for Customs SEC. 636. (a) Congress finds that— (1) the Veterans of Foreign Wars of the cial branch. Service; another one for Senator KYL, United States (in this section referred to as The one conclusive item that I will sense of the Senate for funding for the note, because I don’t want to take the ‘‘VFW’’), which was formed by veterans Customs Service; one for Senator JEF- of the Spanish-American War and the Phil- more than another 45 seconds, is in the FORDS on child care centers in Federal ippine Insurrection to help secure rights and enforcement of the civil rights laws. facilities; one for Senator ENZI, the benefits for their service, will be celebrating We could never have gotten desegrega- high-intensity drug trafficking areas; its 100th anniversary in 1999; tion in America if it was left up to the Senator GRASSLEY, funding for the Cus- (2) members of the VFW have fought, bled, Congress or to the State legislatures or toms Service; Senator DEWINE, abor- and died in every war, conflict, police action, to the Presidents and the Governors tion services in Federal health plans; and military intervention in which the United States has engaged during this cen- nibbling at the edges a little bit. But Senators LOTT and DASCHLE, convey- when the case went to court, justice tury; ance of the land to Columbia Hospital (3) over its history, the VFW has ably rep- was done. for Women; Senator COLLINS, Veterans resented the interests of veterans in Con- Mr. DODD. The Senator from Penn- of Foreign Wars Stamp; Senator gress and State Legislatures across the Na- sylvania is absolutely correct. We need DEWINE, funding for the Customs Serv- tion and established a network of trained to have that judicial branch if we are ice; and Senator HUTCHISON of Texas, service officers who, at no charge, have going to really make the laws work ul- $50 million for the Customs Service. helped millions of veterans and their depend- ents to secure the education, disability com- timately. I appreciate that point. It is With that, I yield to my colleague. one well taken. pensation, pension, and health care benefits I agree with his point as well that if The PRESIDING OFFICER. The they are rightfully entitled to receive as a result of the military service performed by you are going to have antidumping amendments will be numbered and set aside. those veterans: laws on the books, enforcing them is (4) the VFW has also been deeply involved the only way to live up to our obliga- AMENDMENT NO. 1191, WITHDRAWN in national education projects, awarding tions. The PRESIDING OFFICER. The Sen- nearly $2,700,000 in scholarships annually, as I appreciate his comments. ator from North Dakota. well as countless community projects initi- (The remarks of Mr. DODD pertaining ated by its 10,000 posts; and Mr. DORGAN. On behalf of Senator to the introduction of legislation are (5) the United States Postal Service has MOYNIHAN, I ask unanimous consent to issued commemorative postage stamps hon- located in today’s RECORD under be allowed to withdraw amendment oring the VFW’s 50th and 75th anniversaries, ‘‘Statements on Introduced Bills and 1191. respectively. Joint Resolutions.’’) (b) Therefore, it is the sense of the Senate f The PRESIDING OFFICER. Without that the United States Postal Service is en- objection, it is so ordered. The amend- couraged to issue a commemorative postage TREASURY AND GENERAL GOV- ment is withdrawn. stamp in honor of the 100th anniversary of ERNMENT APPROPRIATIONS ACT, the founding of the Veterans of Foreign Wars AMENDMENTS NO. 1189 THROUGH NO. 1214 2000—RESUMED—Continued of the United States. Mr. DORGAN. Mr. President, I send a The PRESIDING OFFICER. The Ms. COLLINS. On behalf of Senators group of amendments to the desk pur- clerk will report the pending bill. CAMPBELL, DORGAN, GREGG, and myself, suant to the unanimous consent agree- The assistant legislative clerk read I am pleased to offer a sense-of-the- ment to have them offered by 12 as follows: Senate amendment urging the U.S. o’clock. I will read their names: an A bill (S. 1282) making appropriations for Postal Service to issue a commemora- amendment by Senator REID; amend- the Treasury Department, the United States tive postage stamp honoring the 100th Postal Service, the Executive Office of the ment by Senator BAUCUS, amendments anniversary of the founding of the Vet- President, and certain Independent Agencies, by Senators SCHUMER, MOYNIHAN, HAR- erans of Foreign Wars of the United for the fiscal year ending September 30, 2000, KIN; another from Senators SCHUMER, States. and for other purposes. LANDRIEU, WELLSTONE, TORRICELLI, and The VFW will be celebrating its cen- Pending: LAUTENBERG. tennial in September of this year. This Dorgan (for Moynihan) amendment No. I ask they be set aside. sense-of-the-Senate resolution is simi- 1189, to ensure the expeditious construction The PRESIDING OFFICER. The lar to legislation I introduced earlier of a new United States Mission to the United amendments are set aside. this year which had been cosponsored Nations. by 59 of our colleagues. Dorgan (for Moynihan) amendment No. The Senator from Colorado. I ask unanimous consent that list of 1190, to ensure that the General Services Ad- Mr. CAMPBELL. I now yield to my ministration has adequate funds available cosponsors be printed in the RECORD. colleague, Senator COLLINS. for programmatic needs. There being no objection, the 71st Dorgan (for Moynihan) amendment No. The PRESIDING OFFICER. The Sen- was ordered to be printed in the 1191, to ensure that health and safety con- ator from Maine is recognized. RECORD, as follows: S7988 CONGRESSIONAL RECORD — SENATE July 1, 1999 S. CON. RES. #12—COSPONSORS (59) VFW posts in Maine to which over The PRESIDING OFFICER. Without Senator Inouye, Daniel K.—02/22/99. 16,000 veterans belong. objection, the amendment is agreed to. Senator Roth, William V., Jr.—02/22/99. Those small groups of veterans who The amendment (No. 1202) was agreed Senator Jeffords, James M.—02/22/99. organized in 1899 have today grown to to. Senator Torricelli, Robert G.—02/22/99. over 2 million strong. During that Ms. COLLINS. I thank my colleagues Senator DeWine, Michael—02/22/99. time, VFW members have fought in for their support and cooperation. Senator Voinovich, George V.—02/22/99. every war, conflict, and military inter- Senator Helms, Jesse—02/22/99. Mr. CAMPBELL. Mr. President, see- Senator Cleland, Max—02/22/99. vention in which the United States has ing no other Senators on the floor, I Senator Daschle, Thomas A.—02/22/99. been engaged during this century. announce we would like to have them Senator Abraham, Spencer—02/22/99. As we near the start of a new millen- come down and offer their amend- Senator Allard, Wayne—02/22/99. nium, the VFW’s members continue to ments. We will be happily expecting Senator Brownback, Sam—02/22/99. live by the organization’s creed of them. Senator Chafee, John H.—02/22/99. ‘‘Honor the dead by helping the liv- I suggest the absence of a quorum. Senator Dodd, Christopher J.—02/22/99. ing.’’ They do so by representing the The PRESIDING OFFICER. The Senator Enzi, Michael B.—02/22/99. interests of veterans across the nation Senator Fitzgerald, Peter G.—02/22/99. clerk will call the roll. through an established network of The legislative assistant proceeded Senator Gramm, Phil—02/22/99. trained service officers who, at no Senator Landrieu, Mary L.—02/22/99. to call the roll. Senator Thurmond, Strom—02/22/99. charge, help millions of veterans and Mr. DORGAN. Mr. President, I ask Senator Specter, Arlen—02/22/99. their dependents secure the edu- unanimous consent that the order for Senator Durbin, Richard J.—02/22/99. cational benefits, disability compensa- the quorum call be rescinded. Senator Hagel, Chuck—02/22/99. tion, pension, and health care services The PRESIDING OFFICER. Without Senator Inhofe, James M.—02/22/99. to which they are rightfully entitled as objection, it is so ordered. Senator Biden, Joseph R., Jr.—02/22/99. a result of their distinguished service Mr. DORGAN. Mr. President, I will Senator Lott, Trent—02/22/99. to our country. ask that a letter from Barry McCaf- Senator Sessions, Jeff—02/22/99. This service also extends beyond vet- Senator Snowe, Olympia J.—02/22/99. frey, Director of the Office of National erans. The VFW’s Community Service Drug Control Policy, be printed in the Senator Hatch, Orrin G.—02/22/99. Program, through members in its 10,000 Senator Lincoln, Blanche—02/22/99. RECORD. General McCaffrey has written Senator Lugar, Richard G.—04/14/99. posts, serves communities, states, and to me and, I am sure, the chairman of Senator Nickles, Don—02/22/99. the nation. During the past program the subcommittee because he is con- year, for example, the VFW, working Senator Frist, Bill—02/22/99. cerned about the funding level for the Senator Rockefeller, John D., IV—02/22/99. side by side with its Ladies Auxiliary, National Youth Antidrug Media Cam- Senator Kerry, John F.—02/22/99. contributed nearly 13 million hours of paign. Senator Coverdell, Paul—02/22/99. volunteer service and donated nearly As we indicated yesterday, that cam- Senator Shelby, Richard C.—02/22/99. $55 million to a variety of community paign will be funded in the sub- Senator Robb, Charles S.—02/22/99. projects. In addition, the VFW helps Senator Conrad, Kent—02/22/99. committee mark at $145.5 million. That young men and women attend college Senator Grassley, Charles E.—02/22/99. is about $49 million below the adminis- by providing more than $2.6 million in Senator Akaka, Daniel K.—02/22/99. tration’s request. Senator Baucus, Max—02/22/99. scholarships annually. Mr. President, this Sunday, on the General McCaffrey has a number of Senator Bryan, Richard H.—02/22/99. observations about that and makes the Senator Craig, Larry E.—02/22/99. Fourth of July, we will celebrate the Senator Domenici, Pete V.—02/22/99. 223rd anniversary of the founding of point in his letter that he hopes, in Senator Feingold, Russell, D.—02/22/99. the United States of America. I can this process between the Senate and Senator Gorton, Slade—02/22/99. think of no more appropriate time to the House, somehow those funds might Senator Gregg, Judd—02/22/99. honor the brave men and women who, be restored to full funding at the Presi- Senator Stevens, Ted—02/22/99. while far from home, sacrificed so dent’s request. Senator Wellstone, Paul D.—02/22/99. I ask unanimous consent that his let- Senator Ashcroft, John—02/22/99. much that the dreams of our founding fathers might become, and remain, a ter be printed in the RECORD. Senator Warner, John W.—02/22/99. There being no objection, the letter Senator Reid, Harry M.—02/22/99. reality. By urging the U.S. Postal Senator Boxer, Barbara—02/22/99. Service to issue a commemorative was ordered to be printed in the Senator Grams, Rod—02/22/99. stamp honoring the VFW’s 100th anni- RECORD, as follows: Senator Kennedy, Edward M.—02/22/99. versary, as was done for its 50th and EXECUTIVE OFFICE OF THE PRESI- Senator Lautenberg, Frank R.—02/22/99. 75th anniversaries, the Senate can take DENT, OFFICE OF NATIONAL DRUG Senator Wyden, Ron—02/22/99. a small step toward remembering their CONTROL POLICY, Senator Crapo, Michael D.—02/22/99. service and showing our deep apprecia- Washington, DC, June 30, 1999. Senator Murray, Patty—04/14/99. Hon. BYRON L. DORGAN, tion for their unwavering commitment Ms. COLLINS. Mr. President, as a U.S. Senate, to our country, both in peacetime and member of the VFW Ladies Auxiliary Washington, DC. in times of conflict. DEAR SENATOR DORGAN The purpose of this post in Caribou, ME, and as the daugh- I thank the distinguished Senator ter of a World War II veteran who was letter is to bring to your attention a precar- from Colorado and the distinguished ious funding recommendation for the FY 2000 wounded twice in combat, I am hon- Senator from North Dakota for work- appropriation for the National Youth Anti- ored to lead the charge for this worth- ing with me on this amendment. It is Drug Media Campaign. This drug-prevention while legislation. my understanding the amendment has initiative is the centerpiece of the national The Veterans of Foreign Wars traces been cleared and that it is acceptable effort to educate America’s sixty-eight mil- its roots back to 1899, when veterans of to the committee. lion children and adolescents about the risks the Spanish-American War and the associated with illegal drugs. Thanks to the The PRESIDING OFFICER. The Sen- Congress’ full support of the campaign over Philippine Insurrection returned home ator from Colorado. and banded together to establish a the past two years, we have succeeded in Mr. CAMPBELL. As a life member of harnessing the full power of modern media— handful of local organizations intended the VFW myself, and a sponsor of this from television to the Internet to sports to help secure medical care and pen- amendment, I think it is an important marketing—to provide accurate and effective sions for their military service. These statement to make, as my friend said, anti-drug information to children, adoles- original foreign service organizations as we move to the Fourth of July cents, parents, and other adult influences. gradually grew in number and influ- weekend. I am happy to accept this We are pleased with the results obtained ence and in 1914 came to be known col- amendment. since the campaign was launched eighteen months ago. lectively as the Veterans of Foreign I yield to Senator DORGAN. Wars of the United States. Mr. DORGAN. I think it is a good The campaign’s messages are being heard. 95 percent of our youth target audience is re- Mr. President, it was several years amendment. I have asked consent to be ceiving an average of 6.8 messages a week. later, on June 24, 1921, when the VFW’s added as a cosponsor. I am happy to Among African American youth, we are chapter in my home State of Maine support the efforts of the Senator from doing even better—reaching 95 percent of the was chartered. Today, there are 84 Maine, and we have no objection. young people 7.8 times per week, 94 percent July 1, 1999 CONGRESSIONAL RECORD — SENATE S7989 of Hispanic youth are receiving messages in people on whose behalf we have offered known as part of square numbered 25, as laid Spanish 4.8 times per week. these amendments to come to the floor down and distinguished on the plat or plan of Our children are becoming more aware of and begin debating them. said city as follows: beginning for the same the risks and dangers of drugs. Teens are in- Mr. CAMPBELL. I suggest the ab- at the northeast corner of the square being dicating in response to surveys that cam- the corner formed by the intersection of the paign ads are providing them new informa- sence of a quorum. west line of Twenty-fourth Street North- tion, increasing their awareness of the dan- The PRESIDING OFFICER. The west, with the south line of north M Street gers associated with drugs, and making them clerk will call the roll. Northwest and running thence south with less likely to try or use drugs. Parents state The legislative assistant proceeded the line of said Twenty-fourth Street North- that the ads are providing new information to call the roll. west for the distance of two hundred and and making them aware of the effects of Mr. CAMPBELL. Mr. President, I ask thirty-one feet ten inches, thence running drugs on their children. unanimous consent that the order for west and parallel with said M Street North- The private sector is matching the federal the quorum call be rescinded. west for the distance of two hundred and government’s investment. Over the past The PRESIDING OFFICER (Mr. thirty feet six inches and running thence year, corporate America has provided $217 north and parallel with the line of said FITZGERALD). Without objection, it is million in pro-bono advertising and in-kind Twenty-fourth Street Northwest for the dis- contributions. In the past twelve months, so ordered. tance of two hundred and thirty-one feet ten the campaign has generated 47,000 public AMENDMENT NO. 1201 inches to the line of said M Street Northwest service announcements and resulted in thir- (Purpose: To authorize the conveyance to and running thence east with the line of said ty-two network television shows including the Columbia Hospital for Women of a cer- M Street Northwest to the place of beginning anti-drug messages. tain parcel of land in the District of Co- two hundred and thirty feet and six inches The Senate Appropriations Committee has lumbia) together with all the improvements, ways, recommended that the media campaign be Mr. CAMPBELL. Mr. President, I call easements, rights, privileges, and appur- funded at 25 percent below our request in FY up the Lott-Daschle amendment No. tenances to the same belonging or in any- 2000—$145.5 million, $49.5 million below the wise appertaining. administration’s request. This funding level 1201, the conveyance of land to the Co- (c) DATE OF CONVEYANCE.— would not allow the campaign to reach ado- lumbia Hospital for Women, and ask (1) DATE.—The date of the conveyance of lescents and parents with the message fre- for its immediate consideration. property required under subsection (a) shall quency required to fundamentally change at- The PRESIDING OFFICER. The be the date upon which the Administrator titudes towards illegal drugs and, eventu- clerk will report. receives from Columbia Hospital written no- ally, reduce drug use by vulnerable adoles- The legislative clerk read as follows: tice of its exercise of the purchase option cents and teens. The Committee’s additional The Senator from Colorado [Mr. granted by this section, which notice shall recommendation that $49 million of proposed CAMPBELL] for Mr. LOTT, for himself and Mr. be accompanied by the first of 30 equal in- FY 2000 funds not be available to the Cam- DASCHLE, proposes an amendment numbered stallment payments of $869,000 toward the paign until the final day of the fiscal year 1201. total purchase price of $14,000,000, plus ac- would result in a de facto 48 percent cut in crued interest. campaign funds. Mr. CAMPBELL. Mr. President, I ask (2) DEADLINE FOR CONVEYANCE OF PROP- Now is not the time to make cuts in the unanimous consent reading of the ERTY.—Written notification and payment of Media Campaign. We are at a critical junc- amendment be dispensed with. the first installment payment from Colum- ture in time. Drug use by our teens sky- The PRESIDING OFFICER. Without bia Hospital under paragraph (1) shall be in- rocketed between 1992 and 1996 as risk per- objection, it is so ordered. effective, and the purchase option granted ception declined. In the past two years, the The amendment is as follows: Columbia Hospital under this section shall Monitoring the Future survey and the Na- lapse, if that written notification and in- tional Household Survey of Drug Abuse sug- At the appropriate place, insert the fol- stallment payment are not received by the gest that our children are becoming more lowing: Administrator before the date which is 1 aware of the risks posed by illegal drugs and SEC. ll. CONVEYANCE OF LAND TO THE COLUM- year after the date of enactment of this sec- that adolescent drug use rates are declining. BIA HOSPITAL FOR WOMEN. tion. This campaign can be a catalyst for lower (a) ADMINISTRATOR OF GENERAL SERV- (3) QUITCLAIM DEED.—Any conveyance of drug use rates by our children. ICES..—Subject to subsection (f) and such property to Columbia Hospital under this We need your leadership to ensure that the terms and conditions as the Administrator of section shall be by quitclaim deed. full Senate restores funding to the requested General Services (in this section referred to amount of $195 million in FY 2000 for the Na- as the ‘‘Administrator’’) shall require in ac- (d) CONVEYANCE TERMS.— tional Youth Anti-Drug Media Campaign. cordance with this section, the Adminis- (1) IN GENERAL.—The conveyance of prop- This is a sound investment in the well being trator shall convey to the Columbia Hospital erty required under subsection (a) shall be of our sixty-eight million young people. for Women (formerly Columbia Hospital for consistent with the terms and conditions set Women and Lying-In Asylum; in this section forth in this section and such other terms Mr. DORGAN. Mr. President, also, to referred to as ‘‘Columbia Hospital’’), located and conditions as the Administrator deems add to the comments made by Senator in Washington, District of Columbia, for to be in the interest of the United States, CAMPBELL, I believe we had something $14,000,000 plus accrued interest to be paid in including— in the neighborhood of 20 amendments accordance with the terms set forth in sub- (A) the provision for the prepayment of the that were filed. The unanimous consent section (d), all right, title, and interest of full purchase price if mutually acceptable to agreement required that amendments the United States in and to those pieces or the parties; be filed by noon today. This sub- parcels of land in the District of Columbia, (B) restrictions on the use of the described committee on appropriations has now, described in subsection (b), together with all land for use of the purposes set out in sub- improvements thereon and appurtenances section (a); I believe, close to 20 amendments, per- thereto. The purpose of this conveyance is to (C) the conditions under which the de- haps 21 amendments, that have been enable the expansion by Columbia Hospital scribed land or interests therein may be sold, filed. It is, I know, the intention and of its Ambulatory Care Center, Betty Ford assigned, or otherwise conveyed in order to the interest of the leadership—the ma- Breast Center, and the Columbia Hospital facilitate financing to fulfill its intended jority leader and Senator DASCHLE as Center for Teen Health and Reproductive use; and well—to move ahead and finish this bill Toxicology Center. (D) the consequences in the event of de- and finish some other business today. (b) PROPERTY DESCRIPTION.— fault by Columbia Hospital for failing to pay My hope is that Members who have (1) IN GENERAL.—The land referred to in all installments payments toward the total subsection (a) was conveyed to the United purchase price when due, including revision offered amendments—in fact, all the States of America by deed dated May 2, 1888, of the described property to the United amendments have been filed on behalf from David Fergusson, widower, recorded in States. of other Senators by Senator CAMPBELL liber 1314, folio 102, of the land records of the (2) PAYMENT OF PURCHASE PRICE.—Columbia and myself. I hope very much that District of Columbia, and is that portion of Hospital shall pay the total purchase price of those who asked us to file an amend- square numbered 25 in the city of Wash- $14,000,000, plus accrued interest over the ment on their behalf will come now to ington in the District of Columbia which was term at a rate of 4.5 percent annually, in the floor and offer those amendments not previously conveyed to such hospital by equal installments of $869,000, for 29 years so we can proceed to get through this the Act of June 28, 1952 (66 Stat. 287; chapter following the date of conveyance of the prop- 486). erty and receipt of the initial installment of piece of legislation. (2) PARTICULAR DESCRIPTION.—The property $869,000 by the Administrator under sub- Of the 20 amendments, some likely is more particularly described as square 25, section (c)(1). Unless the full purchase price, will be worked out, some will perhaps lot 803, or as follows: all that piece or parcel plus accrued interest, is prepaid, the total need votes. Senator CAMPBELL is abso- of land situated and lying in the city of amount paid for the property after 30 years lutely correct, this is the right time for Washington in the District of Columbia and will be $26,070,000. S7990 CONGRESSIONAL RECORD — SENATE July 1, 1999 (e) TREATMENT OF AMOUNTS RECEIVED.— The PRESIDING OFFICER. Without qualify for locality pay, you have to Amounts received by the United States as objection, it is so ordered. The amend- have at least 2,000 workers in a county payments under this section shall be paid ments will be numbered and laid aside. and that county has to be contiguous into the fund established by section 210(f) of Mr. DORGAN. Mr. President, I sug- to another locality area. This is a map the Federal Property and Administrative of New England and parts of New York. Services Act of 1949 (40 U.S.C. 490(f)), and gest the absence of a quorum. may be expended by the Administrator for The PRESIDING OFFICER. The Because of the high cost of labor in real property management and related ac- clerk will call the roll. Boston and in these major areas, such tivities not otherwise provided for, without The legislative assistant proceeded as New York City and Hartford, CT, be- further authorization. to call the roll. cause of the concentration of workers, (f) REVERSIONARY INTEREST.— Mr. REED. Mr. President, I ask unan- these areas in blue represent locality (1) IN GENERAL.—The property conveyed imous consent that the order for the pay areas. However, Rhode Island has under subsection (a) shall revert to the quorum call be rescinded. been, in a sense, discriminated against United States, together with any improve- The PRESIDING OFFICER. Without because, for one thing, the managers of ments thereon— this program have stopped the locality (A) 1 year from the date on which Colum- objection, it is so ordered. line about 41⁄2 miles from the border, in bia Hospital defaults in paying to the United AMENDMENT NO. 1193 some cases. In a county in which we States an annual installment payment of (Purpose: To enable the State of Rhode Is- $869,000, when due; or land to meet the criteria for recommenda- have 3,500 workers—we have enough (B) immediately upon any attempt by Co- tion as an Area of Application to the Bos- workers in Newport County, but we are lumbia Hospital to assign, sell, or convey the ton-Worcester-Lawrence; Massachusetts, not contiguous to a locality pay area. described property before the United States New Hampshire, Maine, and Connecticut In northern Rhode Island, we don’t has received full purchase price, plus accrued Federal locality pay area) have 2,000 people in a certain county, interest. Mr. REED. Mr. President, I ask that but we are contiguous to another area. The Columbia Hospital shall execute and my amendment to the bill be called up So the combination of these rules of provide to the Administrator such written at this time. It has already been laid numbers of Federal employees and instruments and assurances as the Adminis- down. being contiguous to a high locality pay trator may reasonably request to protect the area works to the detriment of Rhode interests of the United States under this sub- The PRESIDING OFFICER. The clerk will report. Island. section. Let me suggest something else that (2) RELEASE OF REVERSIONARY INTEREST.— The assistant legislative clerk read The Administrator may release, upon re- as follows: also I think is unique in the situation of Rhode Island. We, I think unlike quest, any restriction imposed on the use of The Senator from Rhode Island [Mr. REED], every other State in the U.S., do not described property for the purposes of para- for himself and Mr. CHAFEE, proposes an graph (1), and release any reversionary inter- amendment numbered 1193. have county governments. We don’t op- est of the United States in the property con- erate anything on a county basis. Mr. REED. Mr. President, I ask unan- veyed under this subsection only upon re- Rhode Island is the smallest State in ceipt by the United States of full payment of imous consent that reading of the the Union, roughly 70 miles long and 35 the purchase price specified under subsection amendment be dispensed with. miles wide. The concept of county is (d)(2). The PRESIDING OFFICER. Without something that really is not apropos. (3) PROPERTY RETURNED TO THE GENERAL objection, it is so ordered. When you look at some of the larger SERVICES ADMINISTRATION.—Any property The amendment is as follows: that reverts to the United States under this States in the country where counties On page 98, insert between lines 4 and 5 the are of sufficient size, where they easily subsection shall be under the jurisdiction, following: custody and control of the General Services accommodate several thousand work- SEC. 636. Section 5304 of title 5, United ers, then it makes a difference but not Administration shall be available for use or States Code, is amended by adding at the end disposition by the Administrator in accord- the following: in Rhode Island. ance with applicable Federal law. ‘‘(j) For purposes of this section, the 5 The proposal that Senator CHAFEE Mr. CAMPBELL. This amendment counties of the State of Rhode Island (in- and I have developed is quite simple; has been cleared on both sides of the cluding Providence, Bristol, Newport, Kent, that is, to consider the entire State of aisle, and we are ready to adopt it. I and Washington counties) shall be considered Rhode Island as a county. Frankly, in ask unanimous consent the amendment as 1 county, adjacent to the Boston-Worces- the context of the United States, it is be agreed to. ter-Lawrence; Massachusetts, New Hamp- about the size of many counties. If we shire, Maine, and Connecticut locality pay had that change in the law, we would The PRESIDING OFFICER. Without area and the Hartford, Connecticut locality objection, the amendment is agreed to. have a situation where our workers in pay area.’’. Rhode Island—we have approximately The amendment (No. 1201) was agreed Mr. REED. Mr. President, this to. 6,000 Federal employees —would, in amendment I am offering, on behalf of fact, be in an area contiguous to local- Mr. CAMPBELL. I suggest the ab- myself and Senator CHAFEE, deals with sence of a quorum. ity pay zones and would qualify for the a problem that is particular to Rhode extra pay. What does this mean in the The PRESIDING OFFICER. The Island. The problem involves what is clerk will call the roll. paychecks of our workers? Essentially, known as locality pay. That is the dif- what they are seeing is 3.45 percent less The legislative assistant proceeded ferential pay that Federal employees in their 1999 paychecks than people to call the roll. are given because of higher costs in the doing the same jobs in New London, Mr. DORGAN. Mr. President, I ask area in which they live and work. Es- CT, and in Boston, MA. In fact, Boston unanimous consent that the order for sentially it is a comparison between is about 40 miles from Providence. So the quorum call be rescinded. the labor cost in the private sector and we have this awkward situation. In The PRESIDING OFFICER. Without the Federal sector. If there are higher fact, we have people who live in Rhode objection, it is so ordered. private labor costs, there is a differen- Island and work in Boston for the Fed- AMENDMENTS NOS. 1215, 1216, AND 1217 tial added to the paycheck of the Fed- eral Government and get paid higher Mr. DORGAN. Mr. President, I have eral employee in the particular area. than their neighbors who live in Rhode three amendments, two of which were The problem with Rhode Island is, Island and work in Providence, RI. So to be offered by Senator GRAHAM and because of the complicated rules of al- this situation is both unfair and, I one to be offered by Senator COCHRAN. location, my entire State is excluded think, unfortunate. The amendments were left in the from locality pay. So Federal workers Our amendment would correct that Cloakrooms on a timely basis but were who work in Rhode Island do not re- situation and it would do so in a way not part of the submissions that Sen- ceive locality pay, even though their which, I think, would not do great ator CAMPBELL and I offered before the fellow workers, in some cases just a damage to the overall structure of lo- 12 noon deadline. Senator CAMPBELL few miles away, in Massachusetts or cality pay throughout the United and I ask consent that these three Connecticut, receive this differential States. After all, we are talking really amendments be considered timely filed locality pay. about a unique situation—the smallest and offered. Now, the reason the rules disadvan- State in the country, which has no ef- I send the amendments to the desk. tage Rhode Island is, essentially, to fective counties in it as a measure of July 1, 1999 CONGRESSIONAL RECORD — SENATE S7991 any governmental type of activity. So fellow in my office, be permitted floor consin, Arizona and a number of other I suggest very strongly that we ap- privileges during the pendency of this States as they told about what they proach this with a legislative solution. bill and during the morning business learned when they took the classes. It I must thank both the subcommittee time. was very encouraging to hear how chairman, Senator CAMPBELL of Colo- The PRESIDING OFFICER. Without some of these kids actually turned rado, and also the chairman of the au- objection, it is so ordered. their lives around because of this train- thorizing committee, Senator THOMP- (The remarks of Mr. BINGAMAN per- ing. SON. We have been talking with both taining to the introduction of S. 1315 For the second year in a row, the ad- individuals and they have been most are located in today’s RECORD under ministration is requesting only $10 mil- helpful, as have their staffs. They have ‘‘Statements on Introduced Bills and lion for grants for the GREAT pro- suggested that we can probably, with Joint Resolutions.’’) gram. Last year, Congress felt that their assistance, make more progress Mr. BINGAMAN. Mr. President, I ap- wasn’t enough to fund the many re- by simply today discussing and describ- preciate the time provided by the man- quests for help from State and local ing the issue and then relying upon our agers. law enforcement and provided $13 mil- mutual efforts to try to derive some I yield the floor, and I suggest the ab- lion for GREAT grants. $10 million still type of administrative solution to this sence of a quorum. isn’t enough. issue. The PRESIDING OFFICER. The We are asking again in this bill to Let me say one other thing that clerk will call the roll. provide $13 million. I urge my col- makes this a very compelling problem The assistant legislative clerk pro- leagues to support the effort of the to us. This is not simply going out and ceeded to call the roll. committee to again provide $13 million saying I want to have my workers Mr. CAMPBELL. Mr. President, I ask for grants to State and local law en- treated the same way their brethren unanimous consent that the order for forcement for this worthwhile and ef- and sisters are treated just 30 miles the quorum call be rescinded. fective program. away; there is something else here. We The PRESIDING OFFICER. Without The other section of the bill I would find it, in certain cases, difficult to re- objection, it is so ordered. like to mention for the knowledge of cruit Federal workers to come into the Mr. CAMPBELL. Mr. President, my colleagues is what is called the Na- Rhode Island area because if they have while we are waiting for Senators to tional Center for Missing and Exploited a choice between going to Boston or to come to the floor with amendments, I Children. parts of Connecticut, or parts of Long would like to speak to two sections of This center was created in 1984, and Island, NY, in the same region, they the Treasury and general government is dedicated to finding every missing will choose these other regions because appropriations bill that are, I believe, child and helping to prevent the abduc- they will automatically get a 3, 4, 5 of great importance. tion and sexual exploitation of all chil- percent pay increase, simply by choos- The first is called the GREAT Pro- dren. Sadly, we are not 100 percent success- ing to work in Boston rather than gram—the Gang Resistance Education ful. Every year thousands of children working in Providence. and Training, or GREAT Program. This are put at risk. In fact, every day in We have, in the past, tried to recruit is a program that is administered by the United States 2,300 children are re- individuals to come into our FBI and the Bureau of Alcohol, Tobacco and ported missing to different law enforce- our Secret Service office, and many, Firearms, in partnership with State many qualified people have said: I ment agencies. and local law enforcement. The National Center for Missing and would love to work there. The chal- Unfortunately, gang activity has in- lenges are there, the career potential is Exploited Children works closely with creased in our country in recent years, three entities under the jurisdiction of there, but the problem is, how can I as the Chair well knows. turn to my family and say I am going this bill—the Customs Service, the ATF has developed a program to give Postal Inspection Service, and the Se- to take a 3, 4, 5 percent pay cut? our children the tools they need to be This really affects our ability to re- cret Service. I think it is important for able to resist the temptation to belong cruit those individuals that we need— my colleagues to be aware of the con- to a gang. as anyplace needs—to effectively run tributions of these different agencies. The GREAT program is only seven In 1987, the Customs Service was the our Federal agencies. So both Senator years old, but has already grown from CHAFEE and I are concerned about and first Federal law enforcement agency a pilot program in Arizona to class- to agree to be the contact point for tips committed to this issue. First, we rec- rooms all over the United States—and ognize that this is something that, and leads from the toll-free Child Por- in Puerto Rico, Canada, and overseas nography Tipline. Under direction pro- with the cooperation and the help of military bases. ATF estimates that the Appropriations Committee and vided by the committee, support for about 1.7 million students have re- the Tipline will continue in the fiscal Senator CAMPBELL, and the authorizing ceived GREAT training. committee with Senator THOMPSON, year 2000. This funding will be used for GREAT was designed to provide gang promotional brochures, public service and their ranking members, we hope prevention and anti-violence instruc- we can make progress on the adminis- announcements, and a campaign to tion to children in a classroom setting. educate teenage girls about the risks trative front. ATF trains local law enforcement offi- At this time, unless the Senator from they may encounter and the ways to cers to teach these classes, and pro- Colorado has comments, I ask unani- stay safer from crime. vides grants to their offices to help pay mous consent to withdraw the amend- In March of last year, the Customs for their time. ment. Service and the National Center for The PRESIDING OFFICER (Mr. Needless to say, working policemen Missing and Exploited Children in classrooms do a lot to dispel the BUNNING). The Senator has that right. launched the new CyberTipline to The amendment is withdrawn. sometimes erroneous myths that chil- allow parents to report incidents of Mr. REED. Mr. President, I yield the dren have about working policemen. suspicious or illegal internet activity. floor. This program is having a positive ef- For the benefit of my computer lit- Mr. BINGAMAN addressed the Chair. fect on student activities and behav- erate friends, that internet address is The PRESIDING OFFICER. The Sen- iors, and is deterring them from in- ‘‘www.missingkids.com/cybertip.’’ ator from New Mexico is recognized. volvement in gangs. A side benefit is The U.S. Postal Inspection Service Mr. BINGAMAN. Mr. President, I ask that the graduates seem to be doing a and the National Center for Missing unanimous consent that I be allowed to better job of communicating with their and Exploited Children have a long- speak as in morning business for up to parents and teachers, and getting bet- standing relationship in combating 8 minutes. ter grades. child pornography and sexual exploi- The PRESIDING OFFICER. Without Last year the Subcommittee on tation of children. For over ten years, objection, it is so ordered. Treasury and General Government held information developed from the Child PRIVILEGE OF THE FLOOR a hearing on the GREAT Program. The Pornography Tipline has been provided Mr. BINGAMAN. Mr. President, I ask highlight of the morning was listening to the Postal Inspection Service for in- unanimous consent that Dan Alpert, a to the students from Colorado, Wis- vestigative purposes. In addition, the S7992 CONGRESSIONAL RECORD — SENATE July 1, 1999 Center has provided technical assist- On page 53, line 3, strike ‘‘$624,896,000’’ and there was a 2-minute delay for every ance when needed for specific inves- insert ‘‘$590,100,000’’. car going through the border check- tigations. The Postal Inspection Serv- On page 58, line 8, strike ‘‘$120,198,000’’ and point—a 2-minute delay. Just think ice has provided continuing assistance insert ‘‘$109,344,000’’. what that would mean with the large On page 62, line 26, strike ‘‘$27,422,000’’ and to the Center through training, devel- insert ‘‘$25,805,000’’. number of people who wanted to cross opment of publications, and outreach into the United States from Canada programs. Mr. KYL. Mr. President, this is one each day. In late 1996, a cooperative agreement of the amendments which was offered The reason I had to chuckle a little with the Secret Service Forensic Serv- during the subcommittee markup but bit is, if we are successful, if we do get ices Division resulted in the creation of which we did not pursue because we some additional agents, and the chair- the Exploited Child Unit. This unit fo- had not identified offsets for the addi- man of the subcommittee is successful cuses on combating child molestation, tional $50 million being requested, and in protecting what we have, our goal, pornography, and prostitution. They we wanted an opportunity to try to stated by the Finance Committee, is to raise public awareness about the prob- work it out before the bill came before get to the point where we will only lem of pedophilia and focus educational the Senate. have a 20-minute delay per car at the efforts on child safety on the internet. We have not really worked out all of Arizona border or at the Mexican- This bill today gives ample oppor- the details of this. Therefore, I am in- United States border. tunity to provide funding for both of formed by the chairman of the sub- A 20-minute delay every time you these programs. This particular pro- committee he may not be able to sup- want to cross the border becomes oner- gram will provide $2 million for foren- port this amendment at this time. ous, particularly to people who live in sic support of investigations and $1.996 It is my intention to at least begin the border communities and who every million for the exploited child unit. the process on behalf of myself and day cross the border for business or for This money will be well spent. Senator HUTCHISON, who hopefully will family or pleasure reasons. There are I know my colleagues will be willing be present shortly, so we can begin the literally hundreds and thousands of to support this. discussion as to how to find a way to people who do that every day. This I yield the floor, and I suggest the ab- fund some additional Customs inspec- does not speak of the commercial traf- sence of a quorum. tors, particularly to be deployed on the fic, which I will talk about in just a The PRESIDING OFFICER. The southwest border. moment. clerk will call the roll. Before I describe the problem and the The point is, we are trying to get to The legislative assistant proceeded reason for this, I commend the chair- a point where it only takes you 20 min- to call the roll. man and the ranking member of the utes to come into the United States or Mr. KYL. Mr. President, I ask unani- subcommittee for a really heroic effort to go into Mexico. But we are talking mous consent that the order for the to save existing Customs inspectors. specifically about coming into the quorum call be rescinded. What had happened is, the way the United States. That is a very onerous The PRESIDING OFFICER. Without administration’s budget had been pre- situation when you are trying to pro- objection, it is so ordered. pared, it was going to fund existing mote commerce as well as more tour- Mr. KYL. Mr. President, I ask of you, agents out of a fee structure that never ists coming to the United States, as or the distinguished chairman of the had any chance of being passed by the well as families. So this is not some- Treasury and General Government Ap- Congress or implemented into law. Had thing that is a luxury but something I propriations Subcommittee, what the not the chairman and ranking member think everyone would recognize is very process is to call up one of the amend- acted quickly to find other sources of important. ments that has been laid down, specifi- funding, we would have lost 617 exist- I will talk about some of the numbers cally No. 1195? Do I need to ask unani- ing Customs inspectors, but they were because I think it is very instructive. mous consent to set aside the pending able to find that money elsewhere. The traffic congestion at any of our business? What is appropriate? As a result, those positions have been border crossing points into Mexico— The PRESIDING OFFICER. The Sen- saved at least for now. Where that you just have to be there to see it. The ator has the right to call up his amend- leaves us is exactly even, with no in- number of commercial trucks, for ex- ment. crease in Customs officers, despite the ample, that cross the border annually AMENDMENT NO. 1195 huge increases in the number of people in my State of Arizona increased from (Purpose: To increase by $50,000,000 funding and the amount of commercial traffic 287,000 in 1994 to 347,000 in 1998. We do for United States Customs Service for sala- crossing our border, particularly in the not have the personnel to keep up with ries and expenses to hire 500 new inspectors Southwest. that congestion. to stop the flow of illegal drugs into the What that means is we are just lit- For example, in San Luis, AZ, which United States and facilitate legitimate erally dead in the water despite the ef- depends very heavily on cross-border cross-border trade and commerce) forts of the subcommittee chairman, trade, you can easily wait 3 hours to Mr. KYL. Mr. President, I call up Senator CAMPBELL. cross. That is not unheard of at all, to amendment No. 1195, dealing with the That is why we wanted to find an ad- sit there for 3 hours waiting to cross appropriation of additional funding for ditional $50 million to hire 500 agents— into the United States. This is during 617 Customs inspectors. only 500 agents—for next year to help times when it is very critical, particu- The PRESIDING OFFICER. The with this problem. larly for produce. Much of the commer- clerk will report the amendment. Let me describe a little bit the prob- cial traffic that comes from Mexico to The legislative clerk read as follows: lem on the Southwest border. As you the United States is produce. It does The Senator from Arizona [Mr. KYL], for know, we passed NAFTA. NAFTA has not do any good for that produce to be himself, Mrs. HUTCHISON, Mrs. FEINSTEIN, Mr. enabled us to dramatically increase sitting out there for 3 hours in the very ABRAHAM, Mr. GRAHAM, and Mr. GRAMM, pro- poses an amendment numbered 1195. commercial traffic between Mexico and warm sun south of Yuma, AZ, waiting the border, our four border States of to come in through the border crossing. The amendment is as follows: the United States. But even without I ask my colleagues, if they had to On page 13, line 24, strike ‘‘$1,670,747,000’’ NAFTA, we would still have an in- wait 3 hours every time they wanted to and insert ‘‘$1,720,747,000’’. crease in commercial traffic as well as get someplace on Capitol Hill, how On page 15, line 6, before the period, the daily traffic between the commu- long they would stand for it. Obvi- insert the following: ‘‘: Provided fur- nities south of the border and the ously, not very long. ther, That $50,000,000 shall be available American cities on our side. We just don’t have enough Customs until expended to hire, train, provide I was somewhat amused that my col- inspectors, however, to staff that San equipment for, and deploy 500 new Cus- league from Michigan, Senator ABRA- Luis port even to stay open during toms inspectors.’’ On page 49, line 13, strike ‘‘$38,175,000’’ and HAM, was very concerned about the sit- some key hours. I point out, the com- insert ‘‘$36,500,000’’. uation on the Canadian border near De- mercial point is closed on Saturdays. On page 50, line 1, strike ‘‘$23,681,000’’ and troit. He was lamenting the fact we So we are only talking about general insert ‘‘$22,586,000’’. could end up with a situation where business hours. July 1, 1999 CONGRESSIONAL RECORD — SENATE S7993 In effect, what ends up happening is, wait times there to better fight the very difficult in a tough budget envi- you get cancellations or reroutes hun- war on drugs and to enhance commerce ronment to find the money to do it. dreds of miles away to other ports to 20 minutes per vehicle. What I have tried to point out is that when you have these kinds of long When we can’t even provide the fund- we have to set priorities. If you look at delays. The number of inspectors at ing to get the wait times down to 20 all of the other parts of the budget, I this particular port of San Luis has in- minutes per vehicle, we are derelict in can’t find hardly any area in this par- creased. Do you want to know by how our duty; we are failing in our respon- ticular budget that, in my view, has a much it has increased? One inspector sibility; and the responsibility is on higher priority than protecting our over the last 5 years. That is all. It the Congress of the United States. kids from drugs, than protecting our went from 51 to 52. Obviously, we are That is why Senator HUTCHISON and I border from people who are literally in- not keeping up with the traffic. have introduced this amendment to vading our country with illegal sub- The same is true of the port of add $50 million for 500 inspectors. We stances to do detriment to our citizens. Nogales, which is the largest port in may take one item out to make it $49 What is more important in this budget Arizona. There the fresh produce indus- million so that the offsets we have pro- than that? try is very big, both import and export. vided would be more easily supportable I, literally, challenge my colleagues It is over $1.5 billion a year. It is now by our colleagues, but this is an in- who will oppose our amendment, de- the fifth busiest port on our Southwest crease of merely 500 agents with this fending appropriations that are in this border. But the Nogales port does not $50 million. That is what it costs to get mark for their particular area of inter- have enough inspectors. The number of the equipment and the training and get est, because we have had to provide $50 inspectors there actually decreased this number of Customs inspectors ac- million in offsets in order to fund this last year by seven. tually on line at one of our ports of $50 million for increased Customs According to the Fresh Produce As- entry. agents, I challenge my colleagues to sociation of America, there have been The amendment, as I said, will actu- come to the floor and be willing to ex- occasions, even during the low-produce ally permit the deployment of these plain why what they are trying to pro- season, where 6-mile truck backups agents during the next year to one of tect in this budget is of a higher pri- have occurred down in Mexico. Just these points of entry where they are ority than stopping drugs at our bor- think about that for a moment—6 needed for the Southwest border. der. I will be very curious to see how miles of trucks waiting to clear Cus- Just to focus a little bit more on the many of our colleagues are willing to toms. It is not at all uncommon for the specific need with respect to commerce come and vote against our amendment truckers to come to the border and lit- there, should my colleagues be inter- because it is taking funding out of erally have to wait overnight before ested, the number of trucks crossing something that is important to them, they can find a slot the next day to the U.S. border annually has increased to explain to us why that is more im- cross into the United States. And we from 7.5 million in 1994 to over 10 mil- portant than this. I am sorry to present that challenge are trying to encourage trade? lion in 1998. That is a 40-percent in- We understand that trade benefits crease. More than 372 million people as directly as I am. I think if we are people on both sides of the border. Ob- crossed either the United States-Mex- going to be serious about this problem, viously, we are not doing our part when ico or United States-Canadian border rather than just talk about it, we have the produce from Mexico cannot come in the last fiscal year. to address this in a very serious way into the United States because we do But even with this huge increase in that makes tough choices, that not have enough inspectors. the crossings, of both individuals and prioritizes. We can’t just say, well, it is The lack of personnel on our borders commercial traffic, the number of Cus- hard to do, and, therefore, we will try is also a very serious problem with re- toms inspectors and the canine en- to do it next year. That is why we are spect to the interdiction of illegal forcement officers—that is an impor- so insistent on trying to accomplish drugs and other contraband. As we all tant part of this, too—has only in- this now. There is much more I could say about know, the Customs inspectors are real- creased by 540 people between 1994 and this particular problem at this time. ly our first line of defense there. I have 1998. That is simply not enough to keep Senator KAY BAILEY HUTCHISON is been on the border where you have up with the commercial traffic, let going to speak to this amendment as these huge, long lines of traffic. Every- alone the missing of opportunities to well. Perhaps the chairman of the sub- body is anxious to get through, and you seize illegal drugs. committee would like to address the Of the 3,400-plus pounds of illegal her- just have a few ports with a few inspec- issue now; I am not certain. Perhaps I oin seized last year, Customs seized tors there struggling mightily to deter- could make that opportunity available, mine whether or not there may be 2,700 pounds. Of the 1.76 million pounds should the subcommittee chairman some illegal drugs or contraband. We of marijuana seized, Customs seized wish to avail himself of it. have given them some good high-tech just under 1 million pounds. And of the If not, I am happy to speak to the equipment they can use, but it still re- roughly 265,000 pounds of cocaine seized issue more. quires manpower. Every week, they are last year, Customs seized 148,000 Let me stop at this point and see if able to stop some kind of traffic in pounds. Members might have any other con- which smuggling is going on, but they Clearly, this is where the first line of versation on this amendment. do not begin to catch even a fairly sig- defense is in our war on drugs. I know The PRESIDING OFFICER. The Sen- nificant percentage of it. my colleagues and I love to stand here ator from Colorado. Just to give you an idea what they and talk about how we need to get Mr. CAMPBELL. Mr. President, I have been able to accomplish, between tougher in the war on drugs. This is thank my friend from Arizona for 1994 and 1998 heroin seizures have gone our chance. The first line of defense in bringing this to the attention of the up by 2,078 percent, marijuana seizures the war on drugs in the United States Senate. I certainly understand and up 80 percent. It is clear that more Cus- is at the point of entry where people sympathize with him. My State borders toms inspectors are needed to keep up attempt to bring this illegal contra- his, and I spend a good deal of time in with these increasing percentages of band into our country and, because we Arizona. I am fully aware of the prob- attempts to smuggle drugs and other are unwilling to fund the number of lem we have with our borders. They are contraband into our country. customs inspectors required, we don’t like a sieve, very frankly. As I mentioned a moment ago, the have enough people on the border to I wish we could have found the addi- Finance Committee marked up its check every vehicle and, therefore, to tional $50 million he asked for, but, as version of the Customs reauthorization find and to stop these kinds of illegal he has already mentioned, we did have bill not too long ago. In it, they ap- drugs coming into our country. some budget constraints. We simply proved legislation that Senators I know the chairman of the sub- could not find it. DOMENICI, GRAMM, HUTCHISON, and committee has talked a lot about the Let me tell my colleagues from MCCAIN, and I and other border Sen- need to meet this need. I don’t think where the Senator from Arizona would ators introduced, to increase the Cus- there are any of us who don’t appre- take the money to offset the $50 mil- toms personnel in order to reduce the ciate what we have to try to do. It is lion additional money he would like to S7994 CONGRESSIONAL RECORD — SENATE July 1, 1999 put in this account. He would take annualization for fiscal year 1999. This ities. This administration has refused $1,675,000 from the Federal Election will allow Treasury to annualize the to set a priority of protecting our bor- Commission. He would take $1,095,000 cost of these border-related positions. ders from illegal immigration and ille- from the Federal Labor Relations Au- In addition, there is $1.29 million in- gal drugs coming in. The fact is, they thority. He would take $34,786,000 from cluded to cover the cost for the manda- asked for no new Border Patrol agents the GSA. These are repairs and alter- tory workload increases during peak this year, even though Congress has al- ations that are badly needed for Fed- processing hours for the new crossings, located 1,000 new Border Patrol agents eral buildings across the country. He including staffing and the dedicated every year for 5 years starting 2 years would take $10,854,000 from the GSA commuter lane in El Paso, TX. ago. policy and operations account, and The committee has also included new They didn’t even hire the allocation $1,617,000 from the Merit Systems Pro- funding for the Customs Integrity in this year’s budget. We authorized tection Board. Awareness Program at $4.3 million, so and paid for 1,000 Border Patrol agents I will talk for a few minutes about the total cost of the effort is now $18 in this year’s budget, and this adminis- what we have done. First of all, in this million. That is $6 million in the base tration has only been able to hire 200 bill the committee has provided $1.67 and $4.3 million for this year for poly- to 400 agents. Since we lose so many, billion in funding for fiscal year 2000 graphs and $8 million for agent inspec- we are worse off than we were when we for the Customs Service. This level is tor relocations. started this fiscal year. $263 million more than was requested I wish we could have done more. Very Now we come to Customs agents who by the administration and provides for simply, as everybody in this body are, once again, on the front line, par- maintaining current levels of funding knows, we were up against budget con- ticularly for illegal drugs because they and other related costs as well as non- straints. We simply did not have the are the ones responsible for searching related labor issues associated with the money to fund all the things that we trucks and cars that come in through increase of inflation, with the excep- would like to. the border. Once again, we have a re- tion of the fiscal year 1999 pay raise I yield the floor. Senator REID addressed the Chair. quest from the President for zero new component. The PRESIDING OFFICER. The Sen- Customs agents. The Customs Office The committee has provided new ator from Nevada. itself asked for 617 new Customs funding for the Customs integrity Mr. REID. Mr. President, I know the agents. Look at what these Customs awareness effort, totaling $4.3 million. Senator from Texas is here to debate agents are doing. More than $10 billion In addition, the committee provided an the Kyl-Hutchison amendment. I think in drugs flow across the U.S.-Mexico additional $2.5 million for the estab- that is appropriate. I want to respond border each year. Last year, the Cus- lishment of an assistant commissioner briefly to Senator KYL’s statement. toms Service seized 995,000 pounds of for training, which will provide in-serv- We are working under some very dif- marijuana, 148,000 pounds of cocaine, ice training and professional develop- ficult budget constraints. There is a and 3,500 pounds of heroin. ment of Customs personnel. There have budget that is affecting the work we do We are talking about not fully fund- been news reports about the breaches on the floor that I didn’t support. It ing new agents, to not give these peo- of integrity within the Customs Serv- was a budget that was given to us and ple on the front line the help they need ice. These programs are in response to passed by the majority. There are all in stopping the flow of illegal drugs those issues. This funding will assist kinds of problems we have with domes- into our country. In Loredo, TX, the the Customs Service in improving their tic discretionary spending, including biggest commercial port of entry on hiring methodologies, ensuring that more Customs agents. I would love to our southern border, there were over 1 applicants are of the highest quality. have more Customs agents. We need million truck crossings last year. In addition, the funding will improve them very badly in Las Vegas, the There are routine waits of 4 to 6 hours. the recruitment and redesign of the most rapidly growing area in the whole At El Paso’s Bridge of the Americas, hiring process as well as support exist- country. the hours of operation are from 6 a.m. ing personnel. Remember, we, on this side of the to 5 p.m., but because the Customs The committee has continued level aisle, did not vote for that budget. The Service can’t afford to pay overtime, funding for the Customs Service child budget we are working under is the they have to close at 4 so that they will pornography efforts. The committee budget that was given to us by the ma- be able to actually finish the people in has been very pleased by the Customs jority. With all of our domestic discre- the pipeline by 5. Trucks entering an Service’s efforts, given the limited re- tionary programs, we have a lot of import lot after 4 have to wait until 6 sources dedicated to that program. The problems, not the least of which is Cus- the next morning just to have their committee has also provided $19 mil- toms agents. documentation cleared. This is hurting lion in funding for items associated I hope the American public is aware not only our ability to curb illegal with technology and staffing along the of the fact that veterans’ benefits, as a traffic, but it is also hurting trade and Southwest border, to which the Sen- result of the budget we have, are being free trade and ratcheting up the cost of ator alluded. stripped significantly. I hope there will goods coming in from the border. So it Last year, as part of the fiscal year be an effort made to have more money is very important that we look at Cus- 1999 emergency drug supplemental placed in the allocations to allow more toms agents as the front line for get- funding, this committee provided an appropriate and fair spending for do- ting illegal drugs stopped at our coun- additional $80 million for nonintrusive mestic discretionary programs in all of try’s borders. inspection equipment on top of the our appropriations bills. DEA Administrator, Tom Con- $40.6 million for a variety of tech- Mrs. HUTCHISON addressed the stantine, was before the Commerce, nologies for the Southwest border. This Chair. State, Justice Subcommittee this past funding provided for the purchase of a The PRESIDING OFFICER. The Sen- March, and he said: mobile truck X-ray system, railcar in- ator from Texas. The vast majority of drugs available in the spection systems, gamma ray inspec- Mrs. HUTCHISON. Mr. President, I United States originate overseas. The inter- tion systems, and higher energy, heavy hope we will be able to allocate the $50 national drug trade is controlled by a small pallet X-ray systems. Of the $276 mil- million in the Kyl-Hutchison amend- number of high echelon drug lords, who re- lion of funds provided in that emer- ment for the hiring of new Customs side in Colombia and Mexico. Most Ameri- gency supplemental, the Customs Serv- agents. cans are unaware of the vast damage that ice has not yet obligated all those We have a terrible situation. I under- has been caused to their communities by funds. In fact, as of today, there is $143 stand the position of Senator CAMP- international drug trafficking syndicates, most recently by organized crime groups million that has not been spent in the BELL and Senator REID in having to al- headquartered in Mexico. At the current account. locate this money. I think they have time, these traffickers pose the greatest In addition, there is sufficient fund- done a yeoman’s job working within threat to communities around the United ing to cover the costs of the the budget constraints. States. Their impact is no longer limited to annualization of Operation Hardline The fact of the matter is, in any cities and towns along the Southwest border; and GATEWAY, as well as equipment budget, any family has to set prior- traffickers from Mexico are now routinely July 1, 1999 CONGRESSIONAL RECORD — SENATE S7995 operating in the Midwest, the Southeast, the some of it is for equipment, but cer- to get additional money just to save Northwest, and, increasingly, in the north- tainly some of that could be trans- the status quo. eastern portion of the United States. ferred within the Department to areas But I think the second point we are We need to have as a priority stop- that need it. We have done the best we making is also valid; that is, pre- ping illegal drugs coming through our can. serving the status quo isn’t good borders. And if the administration con- Mrs. HUTCHISON. If the Senator will enough. We need to try to find a source tinues to ask for zero new border patrol yield, I was thinking as we were talk- to at least find another $50 million for agents and zero new Customs agents, ing about this, and as the Senator was these additional Customs inspectors to we are not going to be able to win the making his point, perhaps we could at least try to keep pace with what is war on drugs. We cannot do it. look for offsets within Customs’ budg- going on at our borders. Senator KYL and I didn’t choose to go et, as well as some of these other areas. I ask the chairman, if there is no fur- in and take from other parts of the We would like to pass the amendment, ther discussion, we could simply defer budget; that was our only option. When but we also would like to maybe look a vote on this until afterwards. It is the President comes in with a budget for other ways that Senator KYL and I my understanding there will be a vote that asks for no new Customs agents, could set priorities within the Customs on the Lautenberg amendment in we could do nothing but try to find off- Department budget and maybe work roughly 90 minutes or so. Perhaps we sets in order to maintain the integrity something out that would not hurt an- can simply conclude this conversation of the budget. So we went for adminis- other agency as much but we now and schedule any vote imme- trative costs that were increases in reprioritize within the budget. diately after that. spending over last year. It wasn’t our Mr. CAMPBELL. We will be happy to Mr. CAMPBELL. Mr. President, I choice to do this, but the difference be- work with the Senator from Texas and move to table the Kyl amendment and tween having increases in the GSA Senator KYL. If we can find the offsets ask for the yeas and nays. I further ask budget or increases in Customs agents within Customs’ budget, we would be that the vote on the Kyl amendment who are going to be on the front line delighted to work with the Senator. take place immediately after the vote stopping illegal drugs from coming Mr. KYL addressed the Chair. into our country, and to ease the flow The PRESIDING OFFICER. The Sen- on the Lautenberg amendment, No. of trade into our country, it seems to ator from Arizona. 1214, which we expect to take place me, is pretty clear. Mr. KYL. Mr. President, I just want- later this afternoon. So I hope that we can make this a ed to address a comment to the chair- However, I will be happy to work priority. I look forward to working man of the subcommittee, Senator with my colleague, and if we can find a with Senator CAMPBELL and Senator CAMPBELL. I made the point when I solution or a way to offset the money REID in the conference committee to first began to speak that without his in the Customs’ budget, at that time I try to mitigate the impact of any cuts efforts, we would not have been able to will ask to vitiate this motion to table. that would be made in other budgets. I save existing Customs inspectors. I The PRESIDING OFFICER (Mr. understand their position and having misspoke and understated the nature VOINOVICH). Without objection, it is so to defend this bill. They had hard of the problem and, therefore, the sig- ordered. choices to make. But we can’t choose nificance of what Senator CAMPBELL Is there a sufficient second? to walk away from law enforcement on was able to accomplish. I think in the There is a sufficient second. our borders. This is a Federal responsi- way I stated it, I said there were 617 ad- The yeas and nays were ordered. bility. We can’t fill in with local law ditional inspectors that were at risk. Mr. CAMPBELL. Mr. President, I enforcement officers. They don’t have Actually, I think the number is closer have a unanimous consent request. I the capability to stem the flow of ille- to 5,000. ask unanimous consent that the time gal drugs into our country. Had Senator CAMPBELL and the other prior to the motion to table amend- So I hope our colleagues will support leadership of the subcommittee not ment No. 1214, the Lautenberg amend- the Kyl-Hutchison amendment. We will gotten to the problem to find an addi- ment, be limited to 90 minutes to be do everything we can to mitigate the tional $312 million, as he pointed out, equally divided in the usual form, and cuts that we are making in other areas, all 5,000 of those existing inspectors that no other amendments be in order but it has to be our priority to get con- would have been at risk because they to the amendment prior to the motion trol of our sovereign borders, to keep were being funded by a source which to table. illegal drugs from going into Cleve- was not ever going to materialize and, The PRESIDING OFFICER. Is there land, OH, or from going into Tacoma, in fact, which has not materialized. So objection? WA, or Wilmington, DE, because that in announcing the chairman’s suc- is where these drugs end up; they don’t cesses, I actually understated the na- Without objection, it is so ordered. stay on the border. They infiltrate our ture of what he was able to accomplish. Mr. CAMPBELL. I thank the Presi- country, and we must stop it. This is Senator HUTCHISON and I, therefore, dent. one of the ways we are going to try to take nothing away from the chairman I yield the floor. do that. of the committee, who has had to The PRESIDING OFFICER. The Sen- I yield the floor. scramble very hard to try to help find ator from Hawaii. Mr. CAMPBELL addressed the Chair. a solution to this problem of Customs Mr. AKAKA. Mr. President, I thank The PRESIDING OFFICER. The Sen- agents at our borders. the manager of the bill for allowing me ator from Colorado is recognized. We have expressed, I think, in the to do this. Mr. CAMPBELL. Mr. President, I strongest terms that we can, our appre- I ask unanimous consent to speak for have to tell you, I have no quarrel with ciation for that. The chairman doesn’t about 6 minutes to introduce a bill. my colleagues from Texas and Arizona have to remind us of the hard work The PRESIDING OFFICER. Without in my efforts and interests in reducing that he has put into that. We simply objection, it is so ordered. the use of drugs in America, since I are of the view that we have to find a helped write this bill and I have been way to do more than tread water to The Senator from Hawaii is recog- on the forefront of trying to reduce stay even because, as both of us have nized. drugs and putting money where it is pointed out, the traffic at the border is Mr. AKAKA. I thank the Chair. most needed. But I remind my friend not staying even. The drug smugglers’ (The remarks of Mr. AKAKA per- from Texas that, in fact, in this bill we efforts to bring more contraband into taining to the introduction of S. 1317 put in $263 million over the administra- the country is not staying even. We are located in today’s RECORD under tion’s request. In addition, as I have al- have to try to keep up. The modest in- ‘‘Statements on Introduced Bills and ready said, of the $276 million of funds crease we are talking about is an effort Joint Resolutions.’’) provided in the emergency supplement, to try to keep up with the nature of the Mr. CAMPBELL. Mr. President, we which was signed into law on May 31 of problem that we have. have an agreement worked out on two this year, Customs has still not spent Point No. 1, the chairman is abso- amendments dealing with child care $143 million of that money. I know lutely correct. They fought very hard centers and Federal activities. S7996 CONGRESSIONAL RECORD — SENATE July 1, 1999 AMENDMENT NO. 1197 eral day care facility that their child is ple when it comes to providing safe (Purpose: To ensure the safety and avail- safe—because we have enacted uniform child care. It should not be turn an ap- ability of child care centers in Federal fa- safety standards for these child care athetic shoulder from meeting such cilities) facilities. standards simply because state and Mr. CAMPBELL. I ask the Jeffords We also must make efforts to ensure local regulations do not apply to them. amendment No. 1197 be called up. that child care is made available to As Congress and the administration The PRESIDING OFFICER. The every Federal employee regardless of turn their spotlight on our nation’s clerk will report. their income. Now, more than ever, child care system, we must first get The assistant legislative clerk read Federal employees are struggling to our own house in order. We must safe- as follows: balance work and family obligations. guard and protect the children receiv- The Senator from Colorado [Mr. CAMP- They are also struggling to pay for the ing services in child care centers BELL], for Mr. JEFFORDS and Ms. LANDRIEU, proposes an amendment numbered 1197. cost of child care. Currently, the cost housed in federal facilities. Our em- of quality child care services ranges ployees should not be denied some as- (The text of the amendment is print- from $3,000 to more than $10,000, de- surance that the centers in which they ed in today’s RECORD under ‘‘Amend- pending on where a person lives. In my ments Submitted.’’) place their children are accountable for Mr. ROBB. Mr. President, I’m pleased State, this care ranges from $3,000 to meeting basic health and safety stand- to join Senators JEFFORDS and $6,000. Unfortunately, many families in ards. This amendment will require all LANDRIEU as a cosponsor of this amend- Louisiana cannot afford this cost. In ment that helps address an issue affect- fact, there are over 500,000 children child care services located in federal ing many lower pay-grade federal em- throughout Louisiana whose families facilities to meet, at the very least, the ployees with young children: affordable earn under $27,000. same level of health and safety stand- child care. Often there are facilities One of the first steps that the Fed- ards required of other child care cen- available to fill this need, but the costs eral Government can and should take ters in the same geographical area. puts this option beyond the reach of is to provide a model for other employ- That sounds like common sense, but as these families. This amendment ad- ers to follow, so more individuals will we all know too well, common sense is dresses this concern by allowing the have greater access to affordable and not always reflected in the law. use of appropriated funds to help these quality child care. Moreover, if the It should also be made clear that families. Though I am concerned that Federal Government is to remain a state and local standards should be a the House may be uncomfortable with credible provider of child care services, floor for basic health and safety, and the overall scope of this amendment, I Congress must enact this important not a ceiling. The role of the Federal look forward to working with Senators amendment. I look forward to working Government—and, I believe, of the JEFFORDS and LANDRIEU to make sure my colleagues in the House and Senate United States Congress in particular— this measure or a reasonable com- to ensure adoption of this legislation in is to constantly strive to do better and promise is acceptable to both the the conference report. to lead by example. Federal facilities House and the Senate. Mr. JEFFORDS. Mr. President, this should always try to provide the high- Ms. LANDRIEU. Mr. President, I rise amendment will go a long way toward est quality of care. The GSA has re- to reiterate the importance of an ensuring the safety and healthy devel- quired national accreditation in GSA- amendment that we agreed to earlier opment of children of federal employ- owned and leased facilities for years, today by unanimous consent. This ees who are cared for in federally spon- and the majority of child care centers amendment offered by Senator JEF- sored or operated child care centers. in GSA facilities are either in compli- FORDS and myself will increase the The Senate passed this amendment last ance with those accreditation stand- availability, safety, and quality of Fed- year on the Treasury-Postal appropria- ards or are strenuously working to get eral child care. tions bill by unanimous consent. Un- there. This is high quality of care to- I firmly believe that the Federal fortunately, it was dropped during the wards which we should strive for in all Government should serve as a model last few hours of the conference. So I of our Federal child care facilities. for other employers to implement child am back again this year. Federal child care should mean some- care services in this country. These In 1987, Congress passed the Trible thing more than simply location on a services must be affordable, safe, and amendment which permitted executive, Federal facility. The Federal Govern- be provided in an atmosphere that sup- legislative, and judicial branch agen- ment has an obligation to provide safe ports healthy development and growth cies to utilize a portion of federally care for its employees, and it has a re- of children. We have already made owned or leased space for the provision sponsibility for making sure that those much progress within the Department of child care services for federal em- standards are monitored and enforced. of Defense with the enactment of legis- ployees. The General Services Adminis- Some Federal employees receive this lation that ensures quality, safe and af- tration (GSA) was given the authority guarantee. Many do not. We can and fordable child care to defense employ- to provide guidance, assistance, and must do better. ees. The DoD program is now consid- oversight to federal agencies for the I urge my colleagues to support this ered one of the finest in the world. It is development of child care centers. In amendment. now time to take this exemplary model the decade since the Trible amendment Mr. CAMPBELL. I ask the amend- and expand it to all Federal agencies. was passed, hundreds of federal facili- ment be accepted. The executive branch of Government ties throughout the nation have estab- The PRESIDING OFFICER. The has responsibility for over 1,000 child lished onsite child care centers which question is on agreeing to the amend- care centers—788 through the military, are a tremendous help to our employ- ment. 109 through the General Services Ad- ees. The amendment (No. 1197) was agreed ministration, and 127 through other As you know, Federal property is ex- to. Federal departments. Over 215,000 chil- empt from state and local laws, regula- AMENDMENT NO. 1211 WITHDRAWN dren are being provided child care tions, and oversight. What this means Mr. CAMPBELL. I call up amend- through these various Federal pro- for child care centers on that property ment No. 1211 by Ms. LANDRIEU, and I grams. are not subject to even the most mini- ask that it be withdrawn. Unfortunately, almost 1/3 of Federal mal health and safety standards. Even The PRESIDING OFFICER. Without employees with young children may the most basic state and local health objection, the amendment is with- not have access to any Federal child and safety requirements do not apply drawn. care services. We need to ensure all to child care centers Federal facilities. The amendment (No. 1211) was with- children of Federal employees, not just I find this very troubling, and I think drawn. those under the Department of De- we sell our federal employees a bill of UNANIMOUS CONSENT AGREEMENT—EXECUTIVE fense, have access to high quality and goods when federally owned leased CALENDAR affordable child care. child care cannot guarantee that their Mr. CAMPBELL. Mr. President, as in Every parent should know that when children are in safe facilities. The Fed- executive session, I ask unanimous they drop their children off at a Fed- eral Government should set the exam- consent immediately following the July 1, 1999 CONGRESSIONAL RECORD — SENATE S7997 vote in relation to the Kyl-Hutchison (2) in section 103(a)(1)(H), by inserting after In advocating for this amendment, amendment on the Treasury-Postal ap- ‘‘antidrug messages’’ the following: ‘‘and our voices are not alone. Surgeon Gen- propriations bill, the Senate imme- messages discouraging underage alcohol con- eral David Satcher recently wrote a diately proceed to a vote on the con- sumption,’’. letter to General McCaffrey: firmation of the nomination of Law- Mr. LAUTENBERG. This amendment I want to recommend that you include ad- rence Summers to be Secretary of the is being offered on behalf of myself, vertisements addressing underage drinking Treasury, Executive Calendar No. 95. Senator BYRD, Senator HUTCHISON, in the paid portion of ONDCP’s media cam- The PRESIDING OFFICER. Without Senator HOLLINGS, Senator JOHNSON, paign. objection, it is so ordered. and Senator HARKIN. This amendment Surgeon General Satcher also stated: Mr. CAMPBELL. I now ask unani- would require the drug czar’s office to It is time to more effectively address the mous consent it be in order to ask for include messages in his current media drug that children and teens tell us is their the yeas and nays on the nomination. campaign to discourage children from greatest concern and the drug we know is The PRESIDING OFFICER. Is there a engaging in underage alcohol consump- most likely to result in their injury or sufficient second? tion. death. There is a sufficient second. Running ads on national TV espous- In addition to support from the Sur- The yeas and nays were ordered. ing the evil of drug use without even geon General, we have bipartisan sup- AMENDMENT NO. 1214 mentioning alcohol sends the wrong port in the House. This same amend- (Purpose: To provide for the inclusion of al- message to America’s children. It is ment was already added to the House cohol abuse by minors in the national anti- the equivalent of telling kids, ‘‘Say version of the Treasury-Postal appro- drug media campaign for youth) ‘no’ to drugs, but this Bud’s for you.’’ priations bill by Congresswoman ROY- Mr. LAUTENBERG. Mr. President, I The fact is, consuming alcohol is ille- BAL-ALLARD from California and Con- call up amendment No. 1214, which has gal in all 50 States if you are under the gressman WOLF from Virginia. been sent to the desk. age of 21. Among America’s youth, un- Editorials have also been written The PRESIDING OFFICER. The derage alcohol consumption is just as across this country supporting our po- clerk will report. big of a problem as drug use. sition. Editorials have appeared in the The assistant legislative clerk read The facts are revealing. For those Washington Post, the New York Times, as follows: who are not aware of the danger, alco- Christian Science Monitor, and the Los The Senator from New Jersey [Mr. LAU- hol kills six times more children ages Angeles Times, among other news- TENBERG], for himself, and Mrs. HUTCHISON, 12–20 than all other illegal drugs com- papers. Mr. BYRD, Mr. HOLLINGS, Mr. HARKIN, and bined. It was a surprise to me, and I Mr. JOHNSON, proposes an amendment num- This effort on behalf of our children bered 1214. suspect it is a surprise to millions of is further supported by more than 80 Mr. LAUTENBERG. I ask unanimous other Americans. organizations, including Mothers Underage alcohol consumption and consent that reading of the amendment Against Drunk Driving, the American its devastating effects on children be dispensed with. Medical Association, the American The PRESIDING OFFICER. Without paint a daunting picture. According to Academy of Pediatrics, the American objection, it is so ordered. the Department of Health and Human Public Health Association, the Center The amendment is as follows: Services, the average age at which for Science in the Public Interest, and At the appropriate place, insert the fol- children start drinking is 13. Even the Crime Prevention Council. lowing: worse, the research shows that children The Senate has not been silent on the SEC. ll. INCLUSION OF ALCOHOL ABUSE BY MI- who drink at the age of 13 have a 47- issue of underage drinking in the past, NORS IN NATIONAL ANTI-DRUG percent chance of becoming alcohol-de- and we should not stand mute now. We MEDIA CAMPAIGN. pendent; if they wait until they are 21 have made clear on at least three occa- (a) IN GENERAL.—The Omnibus Consoli- to begin drinking, they have only a 10- dated and Emergency Supplemental Appro- sions that it is the law of the land to priations Act, 1999 (Public Law 105–277) is percent chance of becoming dependent. prohibit the use of alcohol by those amended— In all, there are nearly 4 million under the age of 21. (1) in section 101(h) of division A (the young people in this country who suf- I am proud to have been the author Treasury Department Appropriations Act, fer from alcohol dependence. They ac- of the 1984 law that made 21 the drink- 1999), in title III under the heading ‘‘FEDERAL count for one-fifth of all alcohol-de- ing age in all 50 States. As a matter of DRUG CONTROL PROGRAMS—SPECIAL FOR- pendent Americans. fact, I had an argument with a couple FEITURE FUND (INCLUDING TRANSFER OF The bottom line is that we dare not of my children who were less than 21 at FUNDS)’’, by inserting ‘‘(including the use of turn a blind eye when an opportunity the time. We had a long discussion. alcohol by individuals who have not attained comes along to address this problem. 21 years of age)’’ after ‘‘drug use among They said it might cut into their fun, young Americans’’; The drug czar’s media campaign is that their proms. (b) OFFICE OF NATIONAL DRUG CONTROL opportunity. But I looked at the statistics and saw POLICY REAUTHORIZATION ACT OF 1998.—Sec- Drug czar Gen. Barry McCaffrey has how many lives we could save. In the tion 704(b) of the Office of National Drug said: almost 16 years that law has been on Control Policy Reauthorization Act of 1998 [T]he most dangerous drug in America the books, we have saved 15,000 kids (title VII of division C of the Omnibus Con- today is still alcohol. from dying on the highways. solidated and Emergency Supplemental Ap- Gen. McCaffrey has also said: propriations Act, 1999 (Public Law 105–277)) is Later, in 1995, Senator BYRD led the amended— [Alcohol is] the biggest drug abuse problem charge on ‘‘zero tolerance’’ for under- (1) in paragraph (14), by striking ‘‘and’’ for adolescents, and it’s linked to the use of age alcohol consumption by writing after the semicolon; other, illegal drugs. the law that says if you are under 21, a (2) in paragraph (15), by striking the period Statistics support what General .02 blood-alcohol level is legally drunk. and inserting ‘‘; and’’, and by adding at the McCaffrey has been saying. According Our amendment is not prescriptive. end the following: to the Center on Addiction and Sub- It would not tell the drug czar which ‘‘(16) shall conduct a national media cam- stance Abuse at Columbia University, types of alcohol ads or precisely how paign in accordance with the Drug-Free young people who drink alcohol are 7.5 Media Campaign Act of 1998 (including with many alcohol ads would be run. But it respect to the use of alcohol by individuals times more likely to use any illegal would require the drug czar to include who have not attained 21 years of age).’’. drug and 50 times more likely to use the underage alcohol consumption (c) DRUG-FREE MEDIA CAMPAIGN ACT OF cocaine than young people who never message in its media campaign. And it 1998.—The Drug-Free Media Campaign Act of drink alcohol. In other words, alcohol would give General McCaffrey the au- 1998 (subtitle A of title I of division D of the is a gateway drug. Too often it leads to thority to do so, authority he has Omnibus Consolidated and Emergency Sup- the use of marijuana, cocaine, and her- claimed he currently lacks. plemental Appropriations Act, 1999 (Public oin by children. Since that is true, in- We want to send a strong message to Law 105–277)) is amended— (1) in section 102(a), by inserting before the cluding ads addressing underage alco- America’s youth that neither underage period the following: ‘‘, and use of alcohol by hol consumption in the media cam- alcohol consumption nor drug use is individuals in the United States who have paign would benefit the campaign and acceptable. We do not want to say not attained 21 years of age’’; and increase its overall effectiveness. there is a preference of one over the S7998 CONGRESSIONAL RECORD — SENATE July 1, 1999 other. We do not want to do that by children is born with some degree of devastation it inflicts. But I want to being silent on alcohol. fetal alcohol syndrome as opposed to respond specifically to the question the Mr. President, the only successful the national average of 1 out of 500. Senator from Colorado raises about di- path to winning the war on drugs is the I am concerned, but the question for lution of message. We think that when one paved by preventing underage this body is not whether we want to re- a campaign is directed toward young drinking. If we cannot muster the po- duce the use of alcohol by youngsters. people and it says ‘‘Say no to drugs,’’ litical will to tell our children that un- Of course all of us want to do that. The the omission of alcohol sends the derage drinking is wrong, we will never question here is whether the ONDCP is wrong message. That’s like saying, win the war on drugs. the right vehicle or not. My view is it ‘‘Drugs are bad for you, but alcohol is We must not accept underage drink- is the wrong vehicle. not so bad.’’ ing as a so-called rite of passage be- I have been the chairman of this So when we look at the statistics, cause it is a passage directly to illegal committee since the inception of this and we see alcohol kills six times as drugs such as marijuana, cocaine, and media campaign, when Senator KOHL many young people ages 12 to 20 than heroin; and it is a passage to a life of was the ranking minority, and this all of the illegal drugs combined, that alcohol dependency. project is something the committee tells us that the media campaign can- What we have heard from colleagues originally had a great deal of difficulty not deliver a thorough message unless who are not supporting us is that drugs in doing, because we wanted to make it includes alcohol. Without including are illegal. But so is drinking under the sure we got the best use of taxpayers’ alcohol, the media campaign is a mere age of 21. money when we set this up. I believe wink at underage drinking. Tobacco is a legal product, but we this amendment would simply dilute The drug czar is going to have $1 bil- have worked hard to try to stop young that mission. The committee did not lion, we hope, over the next 5 years to people from starting to smoke because provide as much as we would want this deliver a message. Mr. President, $1 we know eventually it often leads to year. In fact, we are putting in $50 mil- billion is a lot of money. So if the respiratory failure, lung cancer, and lion less this year than we did for the media campaign says ‘‘Say no to other diseases, as well as premature ONDCP last year. I believe the inclu- drugs,’’ and it also says ‘‘Say no to al- death. sion of an anti-alcohol campaign would cohol,’’ I see nothing wrong with that. So I hope our colleagues will support simply decrease the funds available for And if there are ads portraying the this amendment. It is time to make the antidrug campaign more than we horrific things that illegal drugs can do young people aware of the facts. Under- want to. The House, in my opinion, to kids, there should be ads portraying age drinking is not acceptable. It leads made a mistake when they pursued the same horrific things that alcohol to addiction, and nothing is more pain- this action. can do to kids. ful to a parent than to see an addicted I also tell you we are, in my view, in- With the budget surpluses we have, child. creasing the jurisdiction of the Office we will keep on looking for additional We ought not to be deterred by any of National Drug Control Policy with- funding for this campaign. One of the arguments that suggest that adding al- out legislative authority to do so. This things that touches everybody in this cohol to the media campaign might de- is the wrong vehicle, as I mentioned, Chamber, regardless of party, is inter- tract from the message about drugs. and I am seriously concerned that the est in children, interest in protecting What is the difference? Addiction is ad- precedent it would set would cause us a them from violence, interest in pro- diction is addiction. We do not want to great deal of controversy, maybe open tecting them from disease, and interest lose our kids. We do not want them to a Pandora’s box of other amendments in protecting them from addiction. So I lose control, and we do not want them to broaden the ONDCP into areas it think it is quite appropriate we com- should not be. to lose their lives. bine the message on addiction to in- This amendment expands ONDCP’s Mr. President, I yield the floor. clude all of the products that would be The PRESIDING OFFICER. Who jurisdiction into alcohol prevention. As I mentioned, they do not have a statu- addictive, including alcohol. yields time? With that, I yield the floor. tory mandate to do that. There are Mr. CAMPBELL. Mr. President, be- The PRESIDING OFFICER. Who other agencies, such as the Center of fore I speak to the Lautenberg amend- yields time? Substance Abuse Prevention, that are ment, I ask unanimous consent to cor- Mr. LAUTENBERG. I yield to the better equipped to handle this kind of rect the RECORD. On several occasions Senator from West Virginia 15 minutes. in earlier debate I referred to the Kyl campaign. When we originally put the The PRESIDING OFFICER. The Sen- money into this campaign a few years amendment No. 1195 as the Kyl amend- ator from West Virginia. ment. I ask unanimous consent to cor- ago, we wanted to make sure we could Mr. BYRD. Mr. President, I thank rect that title to the Kyl-Hutchison measure the effects. So there was a the very distinguished Senator from GAO study authorized, a 5-year study amendment. New Jersey, Mr. LAUTENBERG. I com- to review the media campaign and give The PRESIDING OFFICER. Without pliment him on the battle he has been the results to our committee about the objection, it is so ordered. waging, and successfully, might I add. I ongoing effects, to see if we, in fact, Mr. CAMPBELL. Mr. President, I ap- am sorry he has elected not to return were reducing the use of alcohol con- preciate the comments of my friend to this body. I wish he would change sumption by youngsters as a result of from New Jersey. I came from an alco- his mind on that score. the campaign. holic family. Believe me, I know first- Let me just say at this point, I am That study is only halfway through. hand the devastating effects of what it AUTENBERG It still has several years to go. I think pleased to join Senator L in does in a family. I have had over a if we dilute this message, if we start offering this amendment to the fiscal dozen relatives, uncles, cousins and so expanding the role, we are simply year 2000 Treasury and general govern- on, including a sister, who have died going to completely throw out the va- ment appropriations bill. The amend- from some form of alcohol-related lidity of that study the GAO is doing. ment would require that the Office of abuse. I know the devastating effects So, although I do appreciate the ef- National Drug Control Policy’s Anti- on a whole community; on society as a forts of the Senator from New Jersey, drug Youth Media Campaign include whole. I know the cost and I do not and I look forward to working with ads regarding illegal underage drink- think anybody detests it more than I him on other ways we can reduce alco- ing. It is absurd to me that our feder- do. hol use by youngsters, I, at this time, ally funded media campaign fails to in- As my colleague, Senator DORGAN, oppose the amendment. I will move to clude the No. 1 drug choice amongst knows, coming from a State in which table after my colleague speaks. children; namely, alcohol. I do not there are many Indian reservations, I yield the floor. know how that could escape anyone’s fetal alcohol syndrome, which is an ef- Mr. LAUTENBERG. Mr. President, I attention. I cannot understand why fect on children from mothers drinking yield myself such time as I require to that is not included. too much, is literally hundreds of respond to my friend from Colorado. Large numbers of young people are times worse on those reservations. On He talks, as he said, with experience, drinking. According to the 1997 Moni- one reservation in America, 1 out of 4 having seen alcohol addiction and the toring the Future Study conducted by July 1, 1999 CONGRESSIONAL RECORD — SENATE S7999 the University of Michigan, approxi- thors. I try to give them good stories. to tippy-toe around it? Why do the peo- mately 34 percent of high school sen- I try to teach them good lessons so ple in the administration who have re- iors, 22 percent of tenth graders, and 8 they will leave here having heard sponsibilities along this line have to percent of eighth graders, report being someone—and I am sure there are tippy-toe around it? Alcohol kills! Not drunk at least once in a given month. other Senators who do the same only does it sometimes kill the person Yes, Mr. President, drunk. I know thing—talk with them about values. who imbibes but it also kills others— that is a shocking statistic. It is also It was for that reason that I wanted wives, children, old people who are try- one that we should not tolerate. Alco- to see this execution. I often speak to ing to go to the grocery store or to a hol is a gateway drug. Young people young people in 4–H groups, Boy Scout child-care center. These are people who who consume alcohol are more likely groups, Girl Scout groups, and other are innocent. They are not doing the to use other drugs. groups, and I wanted to be able to tell drinking. But the person who drank Statistics compiled by the National them something that would help them and then got behind the wheel, that Center on Addiction and Substance in later life. person has killed others. Abuse at Columbia University show I went down and talked with the man Every year at commencement time, that 37.5 percent of young people who who was to be executed. He had hired a when high schools are holding their have consumed alcohol have used some cab driver to take him from Hun- commencements all over the country, illicit drug versus only 5 percent of tington, WV, over to Logan. On the we read stories in the newspapers. young people who have never consumed way, he pulled a revolver and shot the They are the same year after year: a alcohol. cab driver in the back, robbed him, group of youngsters, having just grad- Early alcohol use results in alcohol dumped him by the side of the road, uated, have a big party, and they get problems in life. A report by the Na- and left him there to die. drunk and they crash their automobile tional Institute on Alcohol Abuse and Later, Jim Hewlett was apprehended that is going at a speed of 100 miles per Alcoholism indicates that when young in a theater in Montgomery. He was hour into a tree. The automobile wraps people begin drinking before the age of brought to trial, convicted, and sen- itself around the tree and there are the 15, they are four times more likely to tenced to die in the electric chair. mangled, bleeding, dead bodies in the develop alcohol dependence than when He was asked if he would like a chap- twisted wreckage. And in the car is drinking begins at age 21. lain in his cell. He scoffed at the idea also found some alcohol. I noted in I believe it was either Roll of having a chaplain in his cell. He did It is time this country awakens. It is Call or the Hill earlier this week there not want any part of it. But when the time the churches of this country was a story about interns who are vis- Governor declined to commute his sen- awaken and tell our young people: iting the ‘‘watering holes’’—visiting tence, then the young man became se- Don’t do it. the watering holes. We all know what rious about a chaplain. He wanted a When I give a Christmas message, I chaplain in his cell. that means. These are not watering do not say: Don’t drink and drive. I On this occasion, the warden per- holes. These are places where these simply say: Don’t drink. I am not ex- mitted me to go down to the cell of the pecting everybody to feel as I do or to young interns are going to drink some young man, and I talked with him. I form of alcohol, and many of them will do as I do, but at least we ought to do told him I had the opportunity to talk what we can to educate the young peo- end up getting drunk. with young people on many occasions, Most tragically, alcohol kills. It is ple of this country as to the evils, the and I asked if he had something that he dangers, and the sorrows that will deadly. Deadly! It takes the lives of could tell me that would help these more children than all other drugs put come from the use of alcohol—alcohol. young people, some advice that I could There are some young people right together. Yet, for some reason, this pass on to them that might assist them now listening to me on the television particularly lethal drug is left out of in avoiding trouble in later life. somewhere who have heard me pass the media campaign. This administra- Jim Hewlett said yes. He said: ‘‘Tell along the advice of the condemned tion has been leading a great cam- them to go to Sunday school and man, Jim Hewlett: ‘‘Tell them not to paign, a great crusade against tobacco, church.’’ He said: ‘‘If I had gone to drink the stuff that I drank.’’ I hope against smoking, and that is all right. Sunday school and church, I wouldn’t those young people will listen. I hope That is well and good. But why doesn’t be here tonight.’’ they will take it to heart and not drink the administration put its stamp on a Our conversation was very short. The alcohol. crusade, on a great campaign against hour of 9 was rapidly approaching, and This amendment is a commonsense alcohol for youngsters? Why doesn’t he was to step into the electric chair at amendment—a commonsense amend- the administration lead in that cru- 9 o’clock. As I started to go, after ment—to address the staggering statis- sade? thanking him, he said, ‘‘Wait a minute. tics regarding youth alcohol use. We Let me repeat a story I have told Tell them one more thing. Tell them need to send a strong message to the many times. Russell Conwell, one of not to drink the stuff that I drank.’’ nation’s youth that drinking has seri- the great chautauqua speakers, told Those are his exact words. I have spo- ous consequences, and all too often the story ‘‘Acres of Diamonds’’ 5,000 ken them hundreds of times: ‘‘Tell they are deadly consequences. times. I have not told this story 5,000 them not to drink the stuff that I I thank Mr. LAUTENBERG for his times, but I have told it a number of drank.’’ statesmanship, for his courage, and for times. I said: ‘‘What do you mean by that?’’ his common sense. I appreciate very In 1951, when I was a member of the The chaplain spoke up and said: much his allowing me to cosponsor this West Virginia Senate, I asked the war- ‘‘Senator’’—I was a State senator at amendment. den of the State penitentiary in that time—‘‘Senator, you see that lit- I yield back the remainder of my Moundsville to let me be a witness to tle crack on the wall up there? If he time. the scheduled execution of a young were to have a couple of drinks, he The PRESIDING OFFICER. Who man by the name of James Hewlett. would try to go through that crack in yields time? Under the laws of West Virginia at the wall. That is what it does to him. Mr. LAUTENBERG. Mr. President, that time, a certain number of wit- He was drinking when he shot the cab on our time, I thank the Senator from nesses were required to be at an execu- driver.’’ West Virginia. He shows an interest in tion. The warden acceded to my re- I went back to the warden’s office. this subject that calls up our knowl- quest. The rest of the story, of course, is ob- edge of experience with alcohol that Why did I want to witness an execu- vious. The young man was executed, none of us should ever have—the loss of tion? I often have the opportunity to and I have been passing these words of a family member. speak to young people. I often speak to Jim Hewlett from Fayette County, WV, When you see the devastation of alco- these pages who are sitting right now on to young people during these almost hol, you do not understand why it is a on both sides of the aisle looking at 50 years since: ‘‘Tell them not to drink different class addiction than that me. I speak with them out in the halls. the stuff that I drank.’’ which is drugs. It is easier to get into. I try to tell them wholesome stories Why do we have to tippy-toe around It is less stigmatic. People do not say: from Tolstoy or from other great au- it? Why does the administration have Oh, look, he’s an alcoholic. S8000 CONGRESSIONAL RECORD — SENATE July 1, 1999 A friend of mine has a grand- said to me—and I could tell he liked had been killed. Others in my family daughter, 14 years old—14 years old— these kids; he cared about these kids; have been victims of drunk driving ac- who started sniffing glue, drank alco- he knew them, knew them well—said: cidents. I understand all that. But the hol. Now it is drugs. She is in an insti- You know, these are tough kids. These subject here is about drugs. tution. It is the most heartbreaking are kids who have done wrong, in most I have spoken on the floor about six thing one can imagine. cases have had a tough life, but they times of a person I am going to speak Mr. President, how much time do we are still kids. He said: What I regret about just briefly again, Leo Gonzales have? most about this job is going to their fu- Wright. A young attorney with, I am The PRESIDING OFFICER. The Sen- nerals. There are too many funerals. sure, great hope and stars in her eyes ator has 15 minutes 34 seconds. After they serve their time at the Oak moves to Washington, DC, to practice Mr. LAUTENBERG. I yield the floor. Hill Detention Center and they are environmental law. In her early The PRESIDING OFFICER. Who back on the streets—too often relaps- twenties, her name was Bettina yields time? ing back on hard drugs—I go to their Pruckmayr. Bettina Pruckmayr ended Mr. DORGAN addressed the Chair. funerals. her life in this town with the kind of The PRESIDING OFFICER. The Sen- The common element to the discus- horror that is not visited upon many. ator from North Dakota. sions I had at that Oak Hill Youth De- She stopped at an ATM machine, was Mr. DORGAN. I will use time allo- tention Center was hard drugs—ad- abducted by a man named Leo cated by Senator CAMPBELL. dicted to drugs at a very young age and Gonzales Wright, and stabbed over 30 Mr. President, it is a rare occasion then followed a life of crime, and in times by this violent felon. when I rise to oppose an amendment on most cases violent crime as well. Who was Leo Gonzales Wright? A alcohol offered by my colleague from This country has a problem with man addicted to drugs, a man high on New Jersey. I just heard the moving drugs. One approach to addressing this drugs, a man who had been convicted of comments by the Senator from West problem was recommended by the ad- murder before, let out of prison on pa- Virginia. On almost every other occa- ministration and some in Congress to trol, tested positive for drugs but not sion on the Senate floor, I have sup- say: We know that television has an in- put back in prison. ported their initiatives. The .08 na- fluence on people’s lives. Television ad- What do drugs mean? What do drugs do? It means that people on our tional standard on drunk driving, I vertising, hundreds of billions of dol- streets, who are addicted to drugs and have supported it. You name it, I have lars of television advertising has an in- are willing to commit violent acts, supported it. fluence on what people buy, what they murder innocent people like young My mother was killed by a drunk wear, how they look, and what they driver. I have been in an accident Bettina Pruckmayr. sing. If it has that kind of influence, The origin of this is the problem of caused by a drunk driver in which the can we use television in a way that can car I was driving was totaled. drugs. It is a very significant problem. influence people with respect to drugs The attempt was to decide whether we Senator BYRD described graduation and how they view drugs? could alter behavior, educate young parties. My cousin’s son Jesse was at a So the proposal was to put together a graduation party one night—the night children with $1 billion in a 5-year pro- $1 billion program over 5 years to do gram of advertising dealing with drugs. before he was to graduate from high intensive drug education television ad- school—a wonderful young boy, great I happen to think that makes sense. We vertising. I support that. have tried a lot of different things. It golfer, slight of build, a handsome This year, this subcommittee cut the young man—and at midnight got in the makes sense to try this. funding for that by $50 million. In Does it make sense to do a lot more wrong car, a car driven by a young man other words, there will be $50 million on alcohol? Absolutely. I am willing to who had had too much to drink. They less than was requested for it and $50 support that and do that. I don’t think, drove across a railroad track and were million less than was spent last year however, it ought to be used to dilute hit by a train, and that young boy lost on this program. this effort. This effort is an effort that his life. This program ought to be allowed to is in its third year. We have already I know about the scourges of alcohol. work so we can determine with what had to dilute it by reducing funding $50 I know about drunk driving. I know effectiveness we can change people’s vi- million. about the disease of alcoholism. I also sion and view about drugs, especially I say to my colleague, with whom I know about the issue of illegal drugs in young people. We are in the third year. voted on every occasion on this issue, this country and want to tell a story We need to allow this to work. let us find another way to fund this about that, if I might. Cutting this program by $50 million program and I will be with you. I un- I visited Oak Hill Detention Center was the last thing we wanted to do, but derstand the scourge of alcohol and al- recently, within the last matter of the budget allocations would not allow cohol addiction, the carnage it causes weeks. Oak Hill Detention Center is us to fully fund it. on American roads, and the devasta- not too far from this building. It is a Now we are told by our colleagues, tion it causes to American families. I half-hour drive. It houses some of the we want to add other things to it. I will also think those who spoke about that toughest young criminals who have support in an instant a proposal with such gripping emotion today prob- committed crimes on the streets of the brought to the floor of the Senate that ably could tell us stories that they un- District of Columbia. These are kids, in says let us do something of exactly the derstand the carnage caused by drug many cases tough, hardened criminals same scale on alcohol. I will support addiction in this country to hard drugs but still kids. that in an instant. A $1 billion program and the number of families whose I met a young man who at age 12 was over 5 years to educate young people hearts ache tonight because their loved dealing drugs and was addicted to hard about alcohol, we ought to do that. But one was killed by someone high on drugs on the streets of the District of I don’t think, having cut this program drugs, addicted to drugs for a number Columbia. He was shot a number of by $50 million this year—understanding of years in a circumstance where per- times, picked up, and convicted of that when you talk to young people haps, had we done things differently, armed robbery. At age 12, he was sell- anyplace in this country who have been had we done things better, had we had ing and addicted to hard drugs. involved in violent crime, you will find more influence on those lives, we Across the table from him sat an- out that the origin of that and the gen- might have avoided having that person other young man who, at age 12, was esis of much of that behavior comes addicted to drugs and, therefore, com- also dealing drugs and convicted of from addiction to drugs—now is the mitted to a life of crime. armed robbery. Across the table was a time to both cut this program by $50 That is what this effort is about. It is young girl who, at age 13, was on hard million, which is what has happened in what General McCaffrey and the Office drugs and selling drugs and had a this subcommittee, and then also add of Drug Control Policy, it is what we baby—all in the first year of her teen- other responsibilities to that program. are trying to do in a 5-year period. I age life. I indicated that my family was vis- think we ought to continue to do that. The security fellow in one of the ited by the horror of the phone call One final point: One of my regrets, areas of the Oak Hill Detention Center late at night saying that my mother standing as I am today, is a woman July 1, 1999 CONGRESSIONAL RECORD — SENATE S8001 named Karolyn Nunnallee, whom I con- Mario Cuomo—the group that coordi- is whether we are going to dramati- sider a good friend. She is the national nates efforts with the drug czar and cally diminish, if not gut, the war on president of the Mothers Against produces most of the Government’s drugs. Drunk Driving. She and her organiza- antidrug ads, does not support this The junior Senator from Kentucky tion very strongly support the Lauten- amendment. has outlined the progress made on the berg amendment. I almost never have Bill Bennett and Mario Cuomo don’t teenage drinking front in the last 20 disagreed with Mothers Against Drug agree on much, and when they do we years, and it is, indeed, significant. No Driving. I think they have done more should take notice and listen. one argues with any of the observa- in this country than most any other or- Second, passing the amendment and tions that have been made by Senator ganization I know to influence and adding underage drinking to the prob- BYRD and Senator LAUTENBERG, and alter behavior dealing with the issue of lems the drug czar has to tackle will others, about the devastating nature of drunk driving. I regret very much not just distract him from his principal the problem of teenage drinking, al- supporting them on this issue. focus—as Senator DORGAN said—the though it is encouraging that progress For reasons I have already stated, I war on illegal drugs. is being made. think we ought to stay the course on As Senator DORGAN, the ranking The industry itself advertises against this question of drug addiction and member on the subcommittee, pointed underage drinking extensively. The al- education dealing with drug addiction out last night, the drug czar’s re- cohol industry has spent $100 million among America’s youth. At the same sources are already stretched to the over the last 8 years, and the beer in- time, I want to join in and support in limit. dustry has spent $250 million over the any way possible the efforts of Senator Adding underage drinking to the last 10 years, for a total of $350 million, LAUTENBERG and Senator BYRD and drug czar’s portfolio would only stretch in their own financed effort to get at others to add money to transportation his resources even further, and force the problem of teenage drinking, which bills on drunk driving issues, to add him to take on another tough fight. I is a horrendous problem. But as Sen- money to health bills on drunk driving. don’t think that’s what we want. ator BUNNING has pointed out, it is a I will support a billion-dollar program In fact, we know the Federal Govern- problem upon which we have made sig- in 5 years. Sign me up. But don’t dilute ment is already spending hundreds of nificant progress. What is before us today with the this program. Let us let this program millions of dollars through the various Lautenberg amendment is whether we work to see, at the end of 5 years, agencies to fight underage drinking, are going to gut the war on drugs. Re- whether we have altered the behavior and the evidence shows we are making gretfully, since President Clinton came and substantially changed the deter- progress. to office, teenage drug use in this coun- mination by some young people in this Over the past 10 years, the Substance try has gone up 46 percent. We are country to understand more about Abuse and Mental Health Administra- tion reports that excessive drinking by going backwards in the war on drugs. drugs. While it may be an unintended con- Mr. President, I yield the floor. underage kids has dropped signifi- sequence of what Senator LAUTENBERG Mr. CAMPBELL addressed the Chair. cantly. is seeking to achieve today, the prac- The PRESIDING OFFICER. The Sen- The Centers for Disease Control tical effect of this amendment is to gut ator from Colorado. agrees. They report that underage the advertising campaign designed to Mr. CAMPBELL. How much time re- drinking has dropped by more than 50 go after teenage drug use, as Senator mains? percent over the past two decades. A study by the National Institute on DORGAN has pointed out. The PRESIDING OFFICER. The Sen- Let’s have no misunderstandings; no- Drug Abuse on drinking among high ator from Colorado has 30 minutes, 25 body is in favor of teenage drinking. school students reports similar seconds; the Senator from New Jersey Nobody thinks that we should not do has 15 minutes 20 seconds. progress. more about this problem. However, the Unfortunately, the evidence from the Mr. CAMPBELL. I yield 10 minutes issue before us is: Are we going to gut war on drugs is not as good. Over the to the Senator from Kentucky and 10 the advertising effort in the war on minutes to Senator MCCONNELL. past 5 years, the Department of Health drugs? The PRESIDING OFFICER. The Sen- and Human Services reports that ille- The National Youth Antidrug Media ator from Kentucky. gal drug use has increased for high campaign is underway. This amend- Mr. BUNNING. Mr. President, I rise school kids. ment, according to drug czar Barry in opposition to the Lautenburg We are turning the tide against un- McCaffrey, would undermine that. The amendment. derage drinking. What now is the com- Partnership for a Drug Free America, We all want to do what we can to pelling reason to involve the drug which is the nonprofit group that fight underage drinking. At first glance czar’s office? He already has his hands works with General McCaffrey to run this amendment might look like a good full with the war on illegal drugs. this antidrug campaign, opposes this idea. Putting the office of national As I said earlier, it’s an idea that amendment. drug control policy and the drug czar sounds good at first, but I don’t think General McCaffrey said just 3 weeks on the case sounds like we are really anyone has laid out a compelling jus- ago that proposals such as this amend- taking action in the fight against un- tification for it. ment ‘‘could dilute the focus of the derage drinking. Mr. President, I applaud Senator successful media campaign advertising I believe that this amendment would LAUTENBERG for his fight against un- effort to change attitudes of youth and actually hurt both the fight against derage drinking. It is a fight, as is the parents toward illegal drug use.’’ He underage drinking as well as our Na- war on illegal drugs, that we have to also said, ‘‘An anti-underage drinking tion’s struggle with illegal drugs. win. But I think he has taken the message to youth is largely a separate First of all, we’re not even sure if the wrong approach on this amendment. It and distinct message from the anti- drug czar, General McCaffrey, really sounds like a solution in search of a drug message, requiring a significantly wants this amendment. We are hearing problem. Let’s keep fighting underage different strategic approach based on rumblings that the administration is drinking with the tools we now have in scientific and behavioral knowledge.’’ against it, but no one seems to know place. They are working. I urge my col- So what we are doing is mixing up for sure. Until we know, it doesn’t leagues to vote against the Lautenberg apples and oranges. A campaign, de- make sense to pass the amendment. amendment. signed, properly researched, and under- If General McCaffrey, the man the I yield back my time. way, to deal with youth drug abuse President has asked to lead the charge Mr. McCONNELL addressed the would be diverted in an entirely dif- in our anti-drug efforts, isn’t sure Chair. ferent direction by the Lautenberg about it, I think we need to be very The PRESIDING OFFICER. The Sen- amendment. careful. ator from Kentucky is recognized. Others have referred to the letters In addition, we know that the bipar- Mr. McCONNELL. Mr. President, from Mario Cuomo, Bill Bennett, and tisan coalition for a drug-free Amer- others have said it probably better Jim Burke, the cochairs of the Part- ica—headed up by Bill Bennett and than I can, but what is really at stake nership for a Drug-Free America. They S8002 CONGRESSIONAL RECORD — SENATE July 1, 1999 oppose the Lautenberg amendment. Ob- I hope we will resist the temptation PARTNERSHIP FOR A viously, it is not because they are in to gut the war on drugs so that we can DRUG-FREE AMERICA, favor of teenage drinking, but they pursue it effectively. As evidence, we New York, NY, June 23, 1999. don’t want to gut the effort to have an have the testimony of Jim Burke, Hon. MITCH MCCONNELL, Mario Cuomo, and Bill Bennett. U.S. Senate, effective antidrug campaign among Washington, DC. America’s young people. I ask that the record include copies DEAR SENATOR MCCONNELL: An amendment Chairman Burke, of the Partnership of a letter from Bill Bennett of the has been introduced in the House of Rep- for a Drug-free America, said: ‘‘We Partnership for a Drug-Free America, resentatives that threatens the success of don’t believe . . . an effective campaign opposing the Lautenberg amendment; a the National Youth Anti-Drug Media Cam- targeting underage drinking can be letter from Mario Cuomo of the Part- paign, currently being coordinated by the Of- carved out of the current appropriation nership for a Drug-Free America, op- fice of National Drug-Control Policy and the Partnership for a Drug-Free America. This for the National Youth Antidrug Media posing the Lautenberg amendment; and a statement of Richard D. Bonnette, amendment, now part of the Treasury & Campaign. General Government Appropriations Bill, He went on: President and CEO of the Partnership mandates the inclusion of alcohol-related for a Drug-Free America, opposing the I can tell you that forcing the campaign to messages in the National Youth Anti-Drug address underage drinking (something it was amendment, along with a press release Media Campaign. not originally designed to do) will seriously from the Office of National Drug Con- If Congress wishes to support developing a jeopardize the success of this effort. trol Policy. national advertising campaign targeting un- derage drinking, we stand ready to support He is referring to their effort to deal I ask unanimous consent that those be printed in the RECORD. you be offering the assistance of our entire with teenage drug use, which, remem- There being no objection, the mate- organization. We do not believe, however, an ber, is going up while teenage drinking rial was ordered to be printed in the effective campaign targeting underage is going down. RECORD, as follows: drinking can be carved out of the current ap- Cochairman Mario Cuomo, former propriation for the National Youth Anti- Governor of New York, said this PARTNERSHIP FOR A Drug Media Campaign. DRUG-FREE AMERICA, As the former chairman and CEO of John- amendment ‘‘threatens the success of Washington, DC, June 24, 1999. one media campaign by creating an- son & Johnson and someone who has spent Hon. MITCH MCCONNELL, his entire career in marketing, I can tell you other that simply cannot and will not U.S. Senate, that forcing the campaign to address under- work given the current limitations.’’ Washington, DC. age drinking (something that it was not Governor Cuomo also said that ‘‘this DEAR SENATOR MCCONNELL: An amendment originally designed to do) will seriously jeop- type of program will require hundreds has been introduced in the House of Rep- ardize the success of this effort. To under- of millions more dollars—if not bil- resentatives that threatens the success of take such an effort, extensive consumer- the National Youth Anti-Drug Media Cam- based research would be needed to determine lions—to be effective.’’ paign, currently being coordinated by the Of- effective advertising strategies. No such re- Governor Cuomo’s cochairman, Bill fice of National Drug-Control Policy and the search exists. Additionally, to really change Bennett, said: Partnership for a Drug-Free America. This attitudes about alcohol, this type of effort amendment, now part of the Treasury & Advocates are wrong to suggest that this would have to compete head-to-head with General Government Appropriations Bill, enormous problem of teenage drinking can the billions spent to market alcohol products mandates the inclusion of alcohol-related be addressed effectively within the current and, therefore, require significantly more messages in the National Youth Anti-Drug appropriation for the antidrug campaign. We funding. Media Campaign. As former Director of read this amendment as the beginning of the Shaving money out of the National Youth ONCDP in the Bush administration and as end of the antidrug campaign. Anti-Drug Media Campaign will not accom- co-chairman of the Partnership, I write to plish this. We do not question the rightness Mr. President, we don’t need to end urge you to oppose any similar provision of addressing underage drinking. Our con- the antidrug campaign. Drug use is that may be offered in your Appropriations cerns focus on what we can and cannot ac- going up; drug use among high school Committee markup of the Treasury and Gen- complish with the current appropriation. We seniors has gone up 46 percent since eral Government Appropriations Bill. Representative Royal-Allard and Rep- question the wisdom of seriously risking— 1992. It needs to be addressed. That is and perhaps killing—the effectiveness of one what this appropriation is for. Cer- resentative Wolf, who introduced this amendment in the House are correct in their media campaign to create another that sim- tainly, a program to address underage convictions about underage drinking. But ply cannot and will not work, given current drinking, which all three of the men I advocates are wrong to suggest that this limitations. Should a similar amendment be have just quoted would tell us, would enormous problem can be addressed effec- proposed in the Senate, I respectfully ask have to be of a tremendous size. That is tively within the current appropriation for you to keep the anti-drug campaign focused an activity Congress would need to the anti-drug campaign. Advocates of the on what it was designed to target: illegal, il- analyze carefully before embarking on. amendment say it is simply designed to give licit drugs. Gen. McCaffrey statutory jurisdiction to ad- Sincerely, I know that there are probably many JAMES E. BURKE. Senators who are thinking that if they dress alcohol within the context of this cam- paign. We read this amendment as the begin- oppose the Lautenberg amendment, it ning of the end of the anti-drug campaign. PARTNERSHIP FOR A is going to be very difficult to explain If you wish to combat underage drinking, I DRUG-FREE AMERICA, in a campaign contest. Let me say this. urge you to support the development of a New York, NY, June 23, 1999. What would be even more difficult to mass media campaign specifically targeting Hon. MITCH MCCONNELL, explain, it seems to me, is a vote that this issue through a separate appropriation. U.S. Senate, Washington, DC. would gut the effort to combat drug The marketing experts who comprise the Partnership believe it will take hundreds of DEAR SENATOR MCCONNELL: As you may use in this country—teenage drug use millions of dollars to conduct a campaign de- know, the Partnership for a Drug-Free in particular—which is on the increase. signed to dissuade teenagers from drinking. America—a non-profit coalition of profes- That is what this appropriation is de- The Partnership offers its assistance in this sionals from the communications industry— signed to try to impact. pursuit. But many things need to fall into has for the past 12 years demonstrated a re- So if we are going to address teenage place first—research, market-testing, and markable expertise in the production of anti- drinking, let’s not do it at the expense hundreds of millions in funding to do this drug advertising and the execution of a na- of the war on drugs. The war on drugs correctly. tional anti-drug media campaign. The Part- Should a version of the Roybal-Allard/Wolf nership is currently donating all of its adver- has not been very effectively fought in amendment surface in the Senate, please tising to the National Youth Anti-Drug the last few years. I am not here to help us keep the National Youth Anti-Drug Media Campaign, being coordinated by the cast any particular aspersions against Media Campaign on track and focused. Office of National Drug Control Policy. The anybody for that, but it is a cold, hard Please oppose any effort to require this cam- Partnership also provides ongoing strategic reality that teenage drug use has gone paign to do more than it was originally de- advice to the campaign, and receives no fed- up 46 percent since 1992 in this country. signed to do. As you may know, the Partner- eral funds as part of this program. It was previously tracking down. We ship receives no part of the federal money The House Appropriations Committee will dedicated to the anti-drug campaign. The soon mark up its Treasury & General Gov- need to get back on track and address Partnership donates all its advertising to ernment Appropriations Bill. An amendment this youth drug use. That is what the this federally-backed effort for free. has been added to this bill authorizing the original appropriation was designed to Sincerely, inclusion of alcohol-related messages in the do. WILLIAM J. BENNETT. anti-drug campaign. As the Partnership has July 1, 1999 CONGRESSIONAL RECORD — SENATE S8003 demonstrated, advertising can be used to ad- does not question the relevance of targeting ads in this campaign, which is using federal dress teenage drug use. Backed by the proper underage drinking. It questions the wisdom funds to purchase media exposure for anti- research, advertising could also be used to of seriously risking—and perhaps killing— drug advertising. address underage drinking. But please under- the effectiveness of one media campaign to FACT SHEET create another that simply cannot and will stand this: We cannot target both effectively The Partnership for a Drug-Free America not work, given current limitations. within the current appropriation. is a non-profit coalition of professionals The alcohol industry spends billions each Our overriding concern about the Roybal- from the communications industry, whose year on marketing and promotion. As it Allard/Wolf amendment is that it will reduce mission is to reduce demand for illegal drugs stands, $185 million is authorized to fund the the overall media exposure for the anti-drug in America. Through its national anti-drug anti-drug campaign. Of this less than $150 campaign. The alcohol industry spends at advertising campaign and other forms of million is actually being spent on the pur- least $1 billion each year on marketing and media communication, the Partnership chase of media exposure for the campaign. If promotion; the National Youth Anti-Drug works to decrease demand for drugs by the Congress is interested in developing an Media Campaign is funded at $195 million. Of changing societal attitudes which support, effective campaign to address underage this, less than $150 million is backing the ad- vertising campaign. Clearly, an alcohol- tolerate, or condone drug use. drinking, the Partnership stands ready to The Partnership is comprised of a small abuse advertising campaign would require work with any and all concerned organiza- staff and hundreds of volunteers from the significantly more money to compete with tions and government agencies to see it communications industry, who create and the marketing muscle of the alcohol indus- through. But please understand that this disseminate the Partnership’s work. Adver- try. From a sheer marketing perspective, the type of program will require hundreds of mil- tising agencies create Partnership messages chances of such a campaign having an im- lions more dollars—if not billions—to be ef- pro bono; research firms donate information pact within the context of the current appro- fective. services; talent unions permit their members Unless the House plans to increase funding priation are very, very slim. to work for free; production professionals significantly for the anti-drug campaign, the The Partnership stands ready to support bring Partnership messages to life; a net- Partnership has urged members to vote to the development of a national advertising work of advertising professionals distribute strip the Roybal-Allard/Wolf Amendment campaign on underage drinking. We have the group’s work to national and local from the anti-drug media campaign appro- more than a decade’s worth of experience in media; public relations firms lend services to priation. The amendment threatens the suc- running a consumer-focused media campaign various Partnership projects; and media cess of one media campaign by creating an- designed to change attitudes on drugs. We companies donate valuable broadcast time other that simply cannot and will not work, will help any and all groups interested in and print space to deliver Partnership mes- given current limitations. A fact sheet on this type of campaign in every way we can. sages to millions of Americans. the Partnership and our position on this This type of campaign, however, must be To date, more than 500 anti-drug ads have amendment are attached for your conven- done correctly. been created by our volunteers. From March ience. If any similar provision is offered in The first step of any solid marketing effort 1987 through the end of 1998, the total value your Appropriations Committee markup of is thorough research. We have 11 years of ex- of broadcast time and print space donated to the Treasury and General Government Ap- perience in the marketplace and 12 years of Partnership messages topped $3 billion, mak- propriations Bill, I encourage you keep the research on consumer attitudes about illegal ing this the largest public service media anti-drug campaign focused by opposing any drugs. While one could assume this model campaign in history. The Partnership re- such measure, unless significantly more could work for alcohol abuse, extensive con- ceives major funding from The Robert Wood funds are appropriated. sumer-focused research would be needed to Johnson Foundation and support from more Sincerely yours, guide the development and execution of such than 200 corporations and companies. PDFA MARIO M. CUOMO. a program. Currently, this type of research does not exist. The development and lit- accepts no funding from manufacturers of al- cohol and/or tobacco products. The organiza- PARTNERSHIP FOR A DRUG-FREE AMERICA erature review backing the National Youth Anti-Drug Media Campaign took more than tion began in 1986 with seed money provided CO-CHAIRMAN 18 months. To insert an amendment requir- by the American Association of Advertising Mr. James E. Burke, Chairman Emeritus, ing alcohol abuse be addressed, without the Agencies. Johnson & Johnson, Chairman, Partnership same thorough approach taken in the devel- Research demonstrates that the Partner- for a Drug-Free America, 405 Lexington Ave- opment of the anti-drug media campaign, ig- ship’s national advertising campaign has nue, 16th Floor, New York, NY 10174, 212/973– nores the fundamental need for research. played a contributing role in reducing over- 3514, 212/697–1031 (Fax). Children and teenagers have different atti- all drug use in America. Independent studies Governor Mario M. Cuomo, Former Gov- tudes about different drugs—marijuana, co- and expert interpretation of drug trends sup- ernor, New York, Partner, Wilkie, Farr & caine, inhalants, methamphetamine, heroin port its effectiveness. The New York Times Gallagher, 787 Seventh Avenue, New York, and other illegal drugs. Kids of different has described the Partnership as ‘‘one of the NY 10019–6099, 212/728–8260, 212/728–8111 (Fax). ages, races and genders view these drugs dif- most effective drug education groups in the Dr. William J. Bennett, Former Director, ferently. Attitudes about certain drugs also U.S.’’ Office of National Drug Control Policy (Bush vary by region in the country. We have no Drastic changes in the media industry over administration), Former Secretary of Edu- similar consumer insights into what kids the past decade have led to an overall de- cation, US Department of Education (Reagan think about alcohol—beer, liquor, malt liq- cline in media exposure of public service ad- administration), Co-Director, Empower uor, etc.—and how these attitudes may differ vertising. This is one factor contributing to America, 1776 I Street, N.W., Suite 890, Wash- by alcohol brand, by age of kids, race, etc. the Partnership’s decision to participate in ington, DC 20036, 202/452–8200, 202/833–0556 Marketing to reduce alcohol abuse would the National Youth Anti-Drug Media Cam- (fax). be more difficult than marketing against il- paign, coordinated by the Office of National legal drugs. Alcohol, unlike illicit drugs, is Drug Control Policy in cooperation with STATEMENT OF RICHARD D. BONNETTE, PRESI- legal. While not impossible to accomplish, PDFA. Through the leadership of Gen. Barry DENT & CEO, PARTNERSHIP FOR A DRUG- changing attitudes about alcohol would be McCaffrey, director of the White House Of- FREE AMERICA ON THE ROYBAL-ALLARD/ very challenging, given its widespread cul- fice of National Drug Control Policy, and the WOLF AMENDMENT tural acceptance and use (responsible and commitment of numerous, outstanding NEW YORK, June 7th—We whole-heartedly otherwise) of alcohol products. Alcohol use is members of Congress, a total of $380 million support the concept of developing a national widely glamorized in movies, television and has been appropriated by Congress for this advertising campaign targeting underage music. Alcohol use is deeply ingrained in our effort to date ($195 million in FY ’98, $185 drinking. Alcohol abuse is a huge problem in culture—ritualized and commonplace. million in FY ’99). The bulk of this money is America, and plays an undeniable role in We respect the opinions and passion of our being used to pay for the one thing that has substance abuse among children and teen- colleagues working to reduce alcohol abuse. eluded our campaign in recent years—con- agers. As the Partnership has demonstrated, We do not have any ties with the beer and/or sistent, optimal, national media exposure. advertising can be used to address teenage alcohol trade organizations opposing this PDFA receives no funding for its role in this drug use. Backed by the proper research, ad- amendment; we do not accept funding from campaign. The organization donates all ad- vertising could also be used to address under- the alcohol and/or tobacco industries. We are vertising to the effort pro bono and serves as age drinking. But it is simply not possible to concerned about this amendment solely be- a primary strategic consultant (unpaid.) target both effectively within the current cause it could significantly diminish the im- In addition to its work on a national level, appropriation for the National Youth Anti- pact of the anti-drug campaign. the Partnership has helped create 54 state- Drug Media Campaign. The National Youth Anti-Drug Media Cam- and city-based versions of its national adver- I base this perspective on more than 30 paign is being coordinated by the Office of tising campaign through its State/City Alli- years in the advertising business, and 10 National Drug Control Policy in cooperation ance Program. Working with state/city gov- years of experience with the Partnership for with the Partnership for a Drug-Free Amer- ernments and locally-based drug prevention a Drug-Free America. The Partnership is a ica (PDFA). PDFA provides advertising to organizations, the Partnership provides at coalition of communications professionals the campaign pro bono and receives no fed- no cost—the guidance, on-site technical as- from advertising, marketing, public rela- eral funding for its role in this effort. The sistance and creative materials necessary to tions and related disciplines. This judgment amendment seeks inclusion of anti-alcohol shape a multimedia campaign tailored to the S8004 CONGRESSIONAL RECORD — SENATE July 1, 1999 needs and activities within the state or city. drinking and drunk driving public service through an advertising agency (and no fund- Several additional alliances are targeted for announcements in its pro bono component. ing allocation exists for this). The costs and launch, which will expand the program’s From July 1998 through January 1999 (the pe- contractual effort required to undertake this reach to 98 percent of the U.S. riod for which data is available), about 15% would be substantial. Further it would un- of the television public service time given to dermine a principle upon which the cam- EXECUTIVE OFFICE OF THE PRESI- the Media Campaign has been shared with paign was based—the pro bono development DENT, OFFICE OF NATIONAL DRUG four organizations involved with underage of advertising messages. CONTROL POLICY, drinking and drunk driving (They are: Na- Washington, DC. tional Council on Alcoholism and Drug De- EXECUTIVE OFFICE OF THE PRESI- pendence, Mothers Against Drunk Driving ASSESSMENT OF THE POTENTIAL INCLUSION OF DENT, OFFICE OF NATIONAL DRUG (MADD), Recording Artists, Athletes and Ac- ANTI-UNDERAGE-DRINKING ADVERTISING IN CONTROL POLICY, tors Against Drunk Driving, and the Dept. of THE ONDCP CAMPAIGN Washington, DC, June 7, 1999. Transportation). These 20 PSAs were elec- An anti-underage drinking message to MCCAFFREY SAYS INCLUSION OF tronically coded and reports are generated to UNRESEARCHED AND UNDER FUNDED ALCO- youth is largely a separate and distinct mes- identify and track when and where each mas- HOL ADS IN YOUTH ANTI-DRUG MEDIA CAM- sage from the anti-drug message, requiring a sage is played. Computerized tracking re- PAIGN WOULD BE ILL-ADVISED significantly different strategic approach ports indicate these massages have played based on scientific and behavioral knowl- over 7,000 times on local and network tele- WASHINGTON, DC.—White House National edge. If we were to be asked to communicate vision, which is conservatively valued at Policy Director Barry McCaffrey today said an additional anti-underage-drinking mes- $8,000,000 in media time. ONDCP does not that proposals to include alcohol prevention sage platform with the current media budg- count any time donated in the middle of the in the paid portion of the ongoing National et, we would fall below effective reach and night (1 a.m. to 5 a.m.) All of these PSAs Youth Anti-Drug Media Campaign ‘‘could di- frequency levels for all message platforms, were aired during appropriate time slots. lute the focus of the successful media cam- thus risking the success of the entire cam- In addition, the Partnership for a Drug paign advertising effort to change attitudes paign. Free America has 53 State and local alli- of youth and parents toward illegal drug An anti-underage drinking message to ances 15 of which support programs that in- abuse.’’ youth would also require separate produc- clude alcohol messages as public service an- McCaffrey stated, ‘‘We share a concern tion, and this would incur a considerable in- nouncements. These messages include under- about the terribly serious problem of under- vestment ($3–$4 million). aged drinking, binge drinking, prenatal alco- age alcohol use. We do not disagree with the An anti-underage drinking message to hol use, parental modeling, and other sub- desirability of a media campaign targeted adults might more easily be incorporated in jects that appear on television, radio, on bill- against underage drinking. However, it a strategic message focusing on encouraging boards, on posters, and in print PDFA esti- would be a serious mistake to simply add al- good parenting, and the important role of mates that the total value of media time do- cohol messages to the ONDCP paid media youth influencers, in shapping positive be- nated for these messages is approximately campaign without significantly increasing havior among youth. Ideally, of course, a $7,000,000. the funding level. Behavioral scientists and separate effort targeting adults would be ONDCP’s media match also comes in the youth and advertising experts advise us that more effective. form of television programming. At least our campaign will only be effective if we pur- While incremental advertising funds would four national network television programs chase a sufficient level of media exposure for absolutely be required to successfully mount have focused on youth-alcohol related issues. each of our messages. The addition of paid an anti-underage drinking campaign, it For example, on May 16, the entire episode of alcohol ads—without new funds, staff and re- would not be necessary to double the overall WB’s Smart Guy will concentrate on under- search—would only hamper the effectiveness ONDCP advertising budget if the adult ef- age drinking. ONDCP’s behavioral change ex- of our campaign. forts are combined. Since the youth cam- perts have worked closely with the writers A commercial advertiser would not add a paign represents about half of the campaign, and producers of this program to ensure key new product line to an advertising plan with- the ideal incremental budget would be ap- message strategies were incorporated. out increasing the advertising budget. We proximately $100 million. This would include Much of the campaign’s communications cannot simply add new alcohol messages some funds for such needed expenditures as strategy to reach parents regarding youth without seriously endangering the effective- additional production, new behavior change drug are appropriate to reaching parents re- ness of the anti-drug youth campaign. There expertise, and limited copy testing, tracking garding underage drinking (knowing where are several challenges that would make an and evaluation. We would seek every pos- your children are, who their friends are, es- anti-alcohol campaign an expensive propo- sible efficiency between the anti-drug and tablishing rules and values, etc.). sition. Although at the initiation of the Na- anti-underage-drinking campaigns from a Substantial and costly changes in the com- tional Youth Anti-Drug Media Campaign creative and media perspective (e.g., limiting munications strategy would be required. The there was a stockpile of illicit drug ads, the target to older teens). existing campaign strategy was developed there are very few ads currently available on If incremental funds are unavailable at over an eight-month period in an expert driv- underage drinking. We would need to develop this time, please be aware that the current en process. The strategy emphasizes specific and produce expensive new ads. Additionally, campaign already includes a substantial per- message platforms, techniques, and activi- since alcohol is legal for adults, an effective centage of anti-underage-drinking messages ties to address illicit drugs. Adding alcohol anti-alcohol campaign would need an en- (e.g., MADD, DOT, OSAP, etc.). This propor- to the strategy would mean a substantial de- tirely different strategy than our existing tion could be augmented, though this would parture from current strategy, and would re- media campaign, which has as its focus ille- obviously diminish other PSA efforts. The quire additional time and research for devel- gal substances. ‘‘match’’ airtime devoted to this advertising opment. For example, ads would need to be When ONDCP purchases time on national is every bit as good as that secured for the developed to address laws on underage drink- or local media, we negotiate to achieve a paid anti-drug units. ing, issues of access to alcohol (point of dollar-for-dollar matching contribution. sale), etc. This would dilute and delay the Most of this contribution comes in the form ISSUE PAPER overall impact of the anti-drug ads by reduc- of donated public service announcement Inclusion of alcohol in the National Youth Anti- ing their reach and frequency. Professional slots in similar time periods. ONDCP then Drug Media Campaign advertising and research staff have already passes these PSA opportunities to organiza- Using appropriated funds to include an al- alerted ONDCP that we may have too many tions that have anti-drug messages. From cohol or tobacco component in the paid por- strategic messages for the level of funds July 1998 through January 1999, roughly 15% tion of the ONDCP National Youth Anti-drug available. The addition of alcohol ads would of television public service time given to the Media Campaign, within existing budgets, further complicate efforts and delay the ONDCP Media Campaign was shared with would significantly dilute the campaign’s campaign from reaching its planned poten- four organizations confronting underage emphasis on illicit drugs, the primary intent tial and strength. drinking and drunk driving (National Coun- of Congress and the Clinton Administration Development of alcohol messages would cil on Alcoholism and Drug Dependence, in establishing this program. place new, unanticipated requirements on Mothers Against Drunk Driving, Recording The Media Campaign already addresses al- our existing partners, require substantial Artists, Athletes and Actors Against Drunk cohol in several key areas. time for production (behavioral briefs, focus Driving, and the Department of Transpor- When ONDCP purchases time on network groups and testing) and create additional ex- tation). These messages have played over or local television and/or radio stations, a pense. The Campaign was developed based on 7000 times on local and network television, condition of the media buy is a dollar-for- the Congressional expectation that all the which is conservatively valued at $8 million. dollar contribution to ONDCP from the messages used would be produced on a pro In this concrete way, we have already gen- media outlet in the form of public service. bono basis, primarily through the Partner- erated the largest youth anti-alcohol media Most comes in the form of donated public ship for a Drug Free America, whose agen- campaign in history. ONDCP has also used service slots in similar time periods, which cies provide their creative work free of the match part of the campaign to urge net- ONDCP shares with other organizations that charge. PDFA does not produce national works to include anti-alcohol messages in have drug-related messages (PSAs). The messages on alcohol use/abuse; thus, we entertainment programming. For example, Media campaign is already using underage- would required to pay for development costs the entire episode of WB’s Smart Guy that July 1, 1999 CONGRESSIONAL RECORD — SENATE S8005 aired on May 16 concentrated on underage money that they have that has been set spent on fighting drugs, even though drinking.’’ aside for advertising. They can, in fact, we are not doing it quite successfully. We are now entering the second year of an spend it on this horrendous problem. But we ought to be looking more increasingly successful youth anti-drug All you have to do to see this prob- critically at how we deal with the drug media campaign. Alcohol and tobacco use are clearly a major threat to the health and lem is to go to the hospital and talk to problem. We are building more jails. safety of our children. However, now is not an emergency room physician. Ask an We are penalizing those in institutions the time to lose focus on the start of a mas- emergency room physician how often and jails, or in other facilities of incar- sive, well designed and successful effort to alcohol is related to what they see. ceration, who are not drug addicts. We reverse the disastrous increase in illegal They will tell you that on any Friday are spending billions of dollars. And we drug use by Amedican adolescents.’’ night, or any Saturday night, it domi- don’t put alcoholics in jail. We don’t Mr. MCCONNELL. Mr. President, let nates the emergencies; that the vast punish them. We don’t stigmatize them us get on about the business of fighting majority of the emergencies they see, the same way we do drug users. teenage drug abuse. I urge my col- particularly the serious ones, are alco- But I point out that alcohol kills six leagues to support the motion to table. hol related. times more children ages 12 to 20 than I yield the floor. This is a leading killer of our young all other illegal drugs combined. The PRESIDING OFFICER. The Sen- people. To say that we are not going to What does that say? Does that say ator from New Jersey. use this money that is available for ad- that the children who die from alcohol Mr. LAUTENBERG. Mr. President, vertising, which we know is effective, are worth less to us as a society than my colleague from Ohio is going to for this horrendous problem, frankly, those who die from illegal drugs? I speak. I will give him 4 minutes to makes absolutely no sense. don’t think that is the message that we make his remarks. I appeal to my colleagues. While rea- want to convey. The PRESIDING OFFICER. The Sen- sonable minds can differ—and I think There is a $1 billion anti-drug media ator from Ohio. my colleagues on the other side of this campaign. That $1 billion, in light of Mr. DEWINE. I thank my friend. issue have made some very interesting this surplus, could grow. But because Mr. President, I rise in strong sup- and some good arguments—I believe the drug czar does not even have the port of the Lautenberg amendment. that the statistics clearly indicate that authority, he cannot issue messages This is a commonsense amendment. alcohol is the drug of choice among about underage drinking. There is What are the essential facts? The es- young people. something wrong with that. Why can’t sential facts are that underage drink- For those who are underage, alcohol an ad that shows a picture of a degen- ing is a huge problem in this country. is the drug of choice. It is the most se- erated adult brain from drug use say If you are worried about your child rious drug in this country, and it is that also happens from alcohol? dying, this is a good place to start. also a gateway drug, which simply In many cases, we see violence from Statistics are absolutely unbeliev- means it is the drug that most young alcohol that does not always kill. But able. The life expectancy of those be- people start with, and then they ‘‘ad- it enrages people and causes fights. Al- tween the age of 16 and 24 or 25 is not vance’’ to other drugs. cohol is the product largely responsible good. One of the main reasons it is not To be able to mount a successful and for spousal abuse and internal family good is underage drinking. Most of the a good advertising campaign—to take fights. Alcohol does it every time. fatalities are connected with underage the words from the amendment, the We have 4 million alcoholics between drinking. message of ‘‘discouraging underage al- the ages of 13 and 20—4 million. That is Let me also state some other essen- cohol consumption,’’ that is what this a lot of young people. Yet, we are not tial facts. amendment would allow. waging the same war against alcohol as Advertising works. We all know it I urge my colleagues to allow this we are against drugs. works. We know it works on cam- permissive use of the money. I believe By the way, in the message that we paigns. Where does the majority of the it will save lives. I believe it is the heard from the distinguished senior money that we raise for our campaigns right thing to do. Senator from Kentucky, he mentioned go? It goes to advertising. Advertising Mr. LAUTENBERG. Mr. President, outstanding citizens, Jim Burke and is how we communicate with people. what time remains? Mario Cuomo, as people who are on the We know it works. The PRESIDING OFFICER. The Sen- other side. But that doesn’t mean that If we are serious about dealing with ator from New Jersey has 11 minutes 1 they are right in this fight. I disagree this problem, then we need to spend second. The Senator from Colorado has with them and have great respect for the money and we need to do the adver- 15 minutes 39 seconds. both of them. I know them personally. tising. Mr. CAMPBELL. Mr. President, I The fact of the matter is, when we One of the statistics that has been think we have no further speakers on don’t mention that alcohol is a cited on this floor is very telling. It the issue on our side. We are prepared scourge, as are illegal drugs, then it is goes back to my question. If you are to yield back the time, unless someone assumed to be by young people some- serious about this problem, if you are shows up in the next minute or two. thing not so bad. We know it is ter- serious about protecting your kids, Mr. LAUTENBERG. Mr. President, I rible: Six times more fatal to young what do you do? think that we can move to conclude people than all of the illegal drugs Here is one statistic. One study indi- this debate. I will take just a couple of combined. cates that underage abuse of alcohol minutes. Unless there are further Mem- What keeps the message from getting certainly has serious consequences. Ac- bers who want to speak, I will then out there? I don’t know that there is cording to the Pacific Institute for Re- yield back the time. anybody lobbying for illegal drugs. But search and Evaluation, underage drink- This is one of those debates that I I know that there are people lobbying ing killed an estimated 6,350 young really do not enjoy because the friends to keep this anti-alcohol message away people between the age of 12 to 20. That who are opposing this are not people from children. When I see the was for the year 1994. All other illicit who are against what we want to do. Budweiser lizards talking on television, drugs killed 980 youth. They are not against eliminating un- it is a pretty attractive picture. But it If these statistics are true—based on derage drinking—not at all. What we is not a lot different from Joe Camel my experience as county prosecutor are arguing about is somewhat about attracting kids to smoking. Young peo- and someone who has been involved in process. ple laugh. They like those commer- this issue for many years, I think it is Frankly, though, we are on the same cials. I know it goes right from the tel- true—alcohol kills six times as many side of the issue. But I see them as hav- evision into young people’s minds. children than all other illicit drugs ing an argument that I can’t buy, and Those commercials make people combined. I don’t think the American people will think, ‘‘Beer is cool.’’ But it is not cool This is a very modest proposal be- buy. We are saying let’s preserve as when it is a 13-, 14-, or 15-year-old kid. cause it does not compel the drug czar much of the $1 billion that we have to As they say, a child who starts drink- to spend money. What it simply says is fight drugs through the media cam- ing at age 13 has a 47-percent chance of that the drug czar spend some of the paign, plus all of the other money becoming an alcoholic. Those who wait S8006 CONGRESSIONAL RECORD — SENATE July 1, 1999 until age 21 have only a 10-percent cate and enable America’s youth to reject il- considered mature enough to drink respon- chance. legal drugs as well as alcohol and tobacco.’’ sibly and safely. Why don’t we respond to this epi- It also notes that adults who started drink- That bit of wisdom seems to have been lost demic? We can talk about programs ing as children are nearly eight times more on Congress, which by sleight of hand banned likely to use cocaine than adults who did not the federal government from mentioning al- that can make a difference, but we are do so. cohol in a $195 million anti-drug media blitz not. But we are spending $1 billion on The second reason is that Mr. McCaffrey aimed at kids. an anti-drug campaign. Yes, there has believes that the statute granting his office A two-word phrase deep in the legislation been a cutback, but I see that being re- authority to combat controlled substances establishing the White House’s Office of Na- stored. If those funds grow, the drug leaves him no room to target alcohol. That tional Drug Control Policy—the so-called czar can’t add alcohol to the campaign, rigid interpretation is open to question. In ‘‘drug czar’’—limits its activities to ‘‘con- because he doesn’t have the authority. any case, the statutory problem can be trolled substances.’’ Liquor is not one, and This amendment gives him the author- quickly remedied by legislations. Represent- so the federal government can’t spend a atives Lucille Roybal-Allard, Democrat of nickel to warn kids about alcohol’s potential ity. It doesn’t tell him how to do it. It California, and Frank Wolf, Republic of Vir- dangers. says tell young people out there, you ginia, have introduced a measure that would A bill introduced this month by U.S. Rep. hurt your brain, you hurt your family, explicitly give General McCaffrey the au- Lucille Roybal-Allard (D–Calif.) would cor- you hurt your society, and you hurt thority to include under-age drinking among rect that and allow the drug czar to include yourself if you use alcohol. the campaign’s targets. alcohol warnings in anti-drug messages to The law is age 21. I wrote that law Ms. Allard and Mr. Wolf have lined up pow- children. It’s a sensible amendment, reflect- against terrific opposition in 1984. It erful support from groups like the American ing national concerns about underage drink- was a Republican President. President Medical Association. The National Beer ing, and it ought to be approved. Wholesalers’ Association opposes the meas- Leading the crusade against the Roybal- Reagan was President, and Elizabeth ure, as does the Partnership for a Drug-Free Allard bill is the National Beer Wholesalers’ Dole was the then-Secretary of Trans- America, a nonprofit coalition of advertising Association, whose tiresome refrain is that portation. We worked together to get it firms that has been working on the cam- liquor is a legal product and the federal gov- done because they saw alcohol as a paign. The Partnership argues that an anti- ernment has no business criticizing it in any scourge. alcohol message would dilute the anti-drug forum. I hope we are not put off by the argu- message, but some of the Partnership’s mem- Nonsense. Alcohol sales to minors are not ment that you can’t do two things at bers earn lucrative fees for promoting alco- legal, and the dangers of alcohol abuse by the same time: ‘‘No to drugs’’ on one hol products. adolescents are universally recognized. ‘‘It’s The measure, an amendment to an appro- the biggest drug abuse problem for adoles- side of the screen; ‘‘no to alcohol’’ on priations bill, deserves support. If warning cents, and it’s linked to the use of other, ille- the other side of the screen. I don’t about the dangers of excessive drinking is gal drugs,’’ said drug czar Barry McCaffrey think that hurts anybody, and it could not statutorily part of General McCaffrey’s at a Feb. 8 news conference. help somebody. That is the issue. job, it ought to be. Among other research, a 1998 University of I hate to disagree with some of my Michigan study reported that 74 percent of friends who have taken the other side. [From The Washington Post, June 18, 1999] high school seniors had already tried alco- I know they feel the problem deeply. I BEER LOBBY AT WORK hol—about twice as many as had smoked think they have chosen to dismiss an If beer lobbyists have their way in Con- marijuana—and nearly a third admitted get- gress, an expensive taxpayer-funded cam- ting drunk during the previous month. opportunity that I think is the only Still, a spokesman for the drug czar’s of- one that exists for us. We will not have paign against youth drug use—$1 billion over five years for a prime-time advertising fice argues that adding ‘‘. . . and alcohol’’ to an anti-alcohol program. Can you see blitz—will go through Congress without a the federal ad campaign for kids would mud- trying to get that through this place penny to combat the No. 1 drug choice dle its anti-drug message. with all of the friends of the alcohol in- among young people. In the eyes of the Na- That’s an inane distinction. Alcohol, in the dustry? There is not a chance. tional Beer Wholesalers Association—the hands of children or teens, is a dangerous This is the time to do it. We ought to group responsible for killing legislation last drug they should be warned about. It’s suffi- step up and vote the right way. Give year to toughen drunk-driving standards—al- ciently dangerous in fact, that if more the drug czar an opportunity to say no cohol doesn’t count when it comes to warn- money is needed to broaden the federal ing kids about illegal drug use. media blitz, Congress should provide it. to alcohol, as well as to drugs. Honesty has to be the trademark of a cam- I ask unanimous consent that a se- Karalyn Nunnallee, national president of Mothers Against Drunk Driving, points out paign against substance abuse, particularly ries of editorials be printed in the that alcohol kills six times more young peo- one aimed at kids. Playing phony games RECORD, including one from the New ple in this country than all illicit drugs com- with the definition of ‘‘dangerous substance’’ York Times, as well as a list of over 80 bined ‘‘and is the primary gateway drug for undermines the credibility of the effort and responsible organizations—many of other illicit drug use.’’ Yet the campaign also its effectiveness. them religious, a lot of them social— conducted by Gen. Barry McCaffrey, Presi- who are on our side of the issue, as well dent Clinton’s director of national drug pol- [From the Los Angeles Times, June 16, 1999] as the Surgeon General’s letter. icy, in cooperation with the Partnership for BOOZE AND ITS BACKERS There being no objection, the mate- a Drug-Free America, has excluded any ref- Federal drug czar Barry R. McCaffrey has erences to alcohol. The partnership, a non- launched a $1-billion media campaign to dis- rial was ordered to be printed in the profit, non-federally funded, non-industry- RECORD, as follows: suade youngsters from substance abuse. Not supported coalition of advertising firms, fa- a penny, however, will address the substance [From the New York Times, June 2, 1999] vors a separate campaign against drinking that today’s teenagers are abusing the most: THE ANTI-DRUG CAMPAIGN’S MISSING LINK by kids. It argues that anti-alcohol messages alcohol. Gen. Barry McCaffrey, President Clinton’s would inevitably dilute the focus on ‘‘cul- With youth consumption on the rise since director of national drug policy, has declared turally’’ very different drugs. the early 1990s, even McCaffrey acknowl- flatly that under-age drinking is the single Still, an anti-drug campaign that can’t edges that alcohol leads to more teenage biggest drug problem among adolescents, and mention alcohol—or binge drinking, a seri- deaths than other drugs combined. Neverthe- is intimately linked to the use of illegal ous problem across America—is flawed. Reps. less, he insists that including alcohol in the drugs. But as things stand now, the $195 mil- Lucille Roybal-Allard of California and campaign would only dilute its basic mes- lion national media campaign that General Frank Wolf of Virginia are sponsoring an sage, that kids should avoid illegal drugs. McCaffrey is running this year to dissuade amendment before the House Appropriations That’s hard to swallow, given federal stud- youngsters from using illicit drugs will not Committee that would free Gen. McCaffrey ies showing that 67% of children who start spend a penny in Federal funds to warn teen- of this restriction. Their point is not to de- drinking alcohol before age 15 end up using agers about the dangers of drinking. tract from anti-drug messages but to add to illicit drugs. And that adults who started The White House’s Office of National Drug their effectiveness by reflecting reality. Tax- drinking as children are nearly eight times Control Policy offers two reasons for not in- payer dollars ought not be spent by the hun- more likely to use cocaine than those who cluding alcohol in the anti-drug campaign. dreds of millions to talk about drugs but to did not. the first is that it would dilute the basic remain mute on the danger of illegal alcohol That’s why the House Appropriations Com- message, which is that kids should avoid ille- use by kids. mittee should pass an amendment by Rep. gal drugs. That is strange reasoning, given Lucille Roybal-Allard (D–Los Angeles), re- the solid evidence showing that teen-age [From the Chicago Tribune, June 4, 1999] quiring McCaffrey to include underage drinking is often a gateway to illicit drug SAY ‘NO’ TO UNDERAGE DRINKING, TOO drinking in his campaign’s targets. use. Indeed, the first goal of the White States uniformly ban the sale of alcoholic Ideally, the government would not be House’s national drug strategy is to ‘‘edu- beverages to minors because they are not spending any money at all to reach the July 1, 1999 CONGRESSIONAL RECORD — SENATE S8007 American people on TV and radio: Broad- reactions to an amendment directing the circumspect about adding underage drinking casters promised in 1996 to offer more free Federal Government to spend some of its to the campaign, saying the drug czar’s char- public-service spots, just before Congress anti-drug advertising dollars to discourage ter limits his mandate to fighting controlled gave them, without cost, a portion of the underage drinking? Unless, of course, cam- substances. This is why Congress should supposedly public airwaves that would have paign contributions are a factor. favor an amendment sponsored by Rep- fetched $70 billion on the open market. Given Many people believe that underage drink- resentatives Frank Wolf of Virginia, a Re- that McCaffrey’s money has already been al- ing is a far more serious problem than drug publican, and Lucille Roybal-Allard of Cali- located, however, Congress’ focus should be use by youngsters. And there’s evidence to fornia, a Democrat, that authorizes McCaf- on how he can spend it wisely. support their view. For example, nearly frey to include underage drinking in the edu- The people scrambling to defeat Roybal- three-quarters of the high school seniors sur- cation campaign. Allard’s amendment are unable to offer any veyed by the University of Michigan last The alcohol lobby is terrified of being reg- sound reason why alcohol should be excluded year said they had consumed alcohol in the ulated like that other legal killer, ciga- from McCaffrey’s campaign. But they do previous year, compared with the 38 percent rettes, with warning labels on beer cans and have a clear stake in opposing the amend- who reported smoking marijuana. A third limits on marketing to teenagers. It points ment. Leading the charge against it is Rep. admitted to being drunk in the previous to its voluntary public service ads that urge Anne M. Northrup (R–Ky.). She received month. responsible drinking. But the alcohol indus- nearly twice as much campaign money from Gen. Barry McCaffrey, director of federal try spends nearly $3 billion a year on mar- the alcoholic beverage industry in 1997 and drug policy, has called underage drinking the keting and promotion. Against that back- 1998 as any of her colleagues on the House ‘‘biggest drug abuse problem for adoles- drop, ‘‘responsibility’’ needs all the help it Appropriations Committee. At her side is a cents.’’ He has said it is ‘‘linked to the use of can get. coalition of advertising firms, called the other, illegal drugs.’’ The facts about underage drinking are so- Partnership for a Drug-Free America, that Yet while the federal government this year bering. The National Highway Traffic Safety have benefited handsomely from the $1 bil- plans to spend $195 million on a national Administration reports 16,100 alcohol-related lion the alcohol industry spent last year on media campaign to fight the use of illicit fatalities in 1997—one person killed every 32 promotions. drugs, no money has been set aside for an ad- minutes. Intoxication rates were highest for On Thursday, the executives of those firms vertising campaign to combat underage the youngest drivers. Although the universal will meet at the annual American Adver- drinking. drinking age of 21 has helped reduce fatali- tising Conference in Washington. In a valid Earlier this month, Lucille Roybal-Allard, ties, motor vehicle crashes remain the num- illustration of the capital’s incestuous world, a California Democrat, introduced legisla- ber one cause of death for teenagers. the opening speaker will be Gen. Barry tion to make underage drinking a target of June—prom season—is the month when McCaffrey. the federal anti-drug media campaign. Her most of these tragic deaths occur. It would [From the Christian Science Monitor, June measure is supported by the American Med- be a good month for Congress to do some- 4, 1999] ical Association, the American Public thing about it. Health Association, the American Society of THE MONITOR’S VIEW—DON’T SOFT-PEDAL Addictive Medicine, and Mothers against STATEMENT OF ORGANIZATIONS SUPPORTING ALCOHOL Drunk Driving. INCLUSION OF ANTI-UNDERAGE DRINKING The United States government will spend But several members of Congress and the MESSAGES IN THE YOUTH ANTI-DRUG MEDIA $195 million this year to persuade young beer wholesalers oppose it. Even the White CAMPAIGN Americans to avoid addictive drugs. Is there House’s Office of National Drug Control Pol- An effective antidrug prevention program any good reason why some of that money icy has questioned it. should not be used to point out the dangers directed at America’s young people must in- Why? The beer industry says it already clude a significant effort to discourage un- of the substance most abused by the young— spends hundreds of thousands of dollars to alcohol? derage drinking. Alcohol is the leading drug combat the problem. It says the drug czar problem among young people in America, A couple of members of Congress thought should focus only on illicit drugs. Rep. Anne not. That’s why they put forward legislation and a ‘‘gateway’’ to the use of other drugs. Northrup, R–KY, agrees and has promised to to give the country’s chief antidrug official, We therefore call on Members of Congress fight the measure when it comes up for a Barry McCaffrey, the authority to use some and the White House Office of National Drug vote. Ms. Northup says her opposition has of the advertising money available to the Control Policy (ONDCP) to work together to nothing to do with the nearly $40,000 in con- White House Office of National Drug Control insure that a series of underage drinking pre- tributions she has gotten from liquor and Policy to steer kids away from beer, wine, vention messages is included as a substantial beer interests in the past two years. part of the federally paid portion of the and liquor. The Partnership for a Drug-Free America, But these matters are not so clear-cut as ‘‘Anti-Drug Youth Media Campaign.’’ the coalition that coordinates the anti-drug they seem—or as they ought to be. No sooner media campaign, says it supports the con- NATIONAL ORGANIZATIONS has Reps. Lucille Roybal-Allard (D) of Cali- cept of targeting underage drinking. But it Adventist Health Network fornia and Frank Wolf (R) of Virginia offered says federal efforts would be dwarfed by the American Academy of Addiction Psychi- their amendment than a political-defense $3 billion a year the beer industry spends atry mechanism lurched into action. Alcoholic promoting its products. The Partnership American Academy of Pediatrics beverages have a powerful lobby on Capitol says $195 million is not enough to do two ef- American College of Nurse-Midwives Hill, and their producers and distributors fective campaigns, and that one good cam- American College of Preventive Medicine contribute faithfully to campaign war paign is preferable to two weak ones. American Dance Therapy Association chests. American Health and Temperance Associa- Opposition to the amendment is coalescing Maybe, but it’s hard to see how targeting underage drinking would dilute the message tion in Congress around the argument that in- American Medical Association cluding alcohol would dilute or distort the against drugs. If the two are connected—as Mr. McCaffrey says—discouraging youths American Medical Student Association antidrug message. How so, since alcohol de- American Medical Women’s Association stroys more young lives than any other drug, from drinking might also prevent some from using drugs. American Public Health Association and people who use ‘‘hard’’ drugs typically American School Health Association have tried alcohol first? Binge drinking, [From The Boston Globe, June 22, 1999] American Society of Addiction Medicine threatening order and individual lives, has Center for Science in the Public Interest become an increasing problem on college BEER PRESSURE Child Welfare League of America campuses. The same lobby that killed a proposal last Church of Jesus Christ of Latter Day No, what’s kicking in is ‘‘Big Alcohol’s’’ year to standardize blood alcohol levels for Saints political clout and America’s ambivalence drunken driving is now trying to keep under- Consumer Coalition for Health and Safety about its most popular over-the-counter ad- age drinking out of a youth education cam- Consumer Federation of America dictive drug, which is relentlessly pitched to paign sponsored by the nation’s drug czar, Face Truth and Clarity on Alcohol the young via TV beer ads. Sadly, General Barry McCaffrey. Join Together McCaffrey’s office is ambivalent, hardly The National Beer Wholesalers Association Latino Coalition on Alcohol and Tobacco leaping to support the amendment Leaving opposes the inclusion of underage drinking The Marin Institute alcohol out of the antidrug campaign creates in the $195 million media campaign, claiming Mothers Against Drunk Driving a gap in common sense and effectiveness. that alcohol is a legal substance and should National Alliance of Pupil Service Organi- Representatives Roybal-Allard and Wolf get not be lumped with marijuana, cocaine, and zations high marks for working to fill it. other illegal drugs. But drinking under age National Association of Addiction Treat- 21 is illegal in every state, and alcohol abuse ment Providers [From the Record, June 7, 1999] is far more common than any other drug National Association of Evangelicals OVERLOOKED TYPE OF ABUSE—FAR MORE among young people. National Association for Public Health YOUNGSTERS DRINK THAN USE DRUGS General McCaffrey himself has said alcohol Policy Common sense doesn’t always win in Con- is ‘‘the biggest drug abuse problem for ado- National Association of State Alcohol and gress. How else can you explain some of the lescents.’’ But his office has been strangely Drug Abuse Counselors S8008 CONGRESSIONAL RECORD — SENATE July 1, 1999 National Association on Alcohol, Drugs, Youth As Resources (Somerset County, derage and binge drinking. This campaign and Disability PA) will be successful only if it can receive the National Crime Prevention Council national dissemination available through a National Council on Alcoholism and Drug DEPARTMENT OF HEALTH AND HUMAN paid media campaign. It is time to more ef- Dependence SERVICES, ASSISTANT SECRETARY fectively address the drug that children and National Drug Prevention League FOR HEALTH AND SURGEON GEN- teens tell us is their greatest concern and National Families in Action ERAL, the drug we know is most likely to result in The National Road Safety Foundation Washington, DC, June 11, 1999. their injury or death. National Woman’s Christian Temperance Hon. BARRY F. MCCAFFREY, Sincerely yours, Union Director Office of National Drug Control Policy, DAVID SATCHER, M.D., PH.D. Partnership for Recovery: Executive Office of the President, Wash- Assistant Secretary for Health The Betty Ford Center ington, DC. and Surgeon General. Caron Foundation DEAR GENERAL MCCAFFREY: I congratulate Mr. KERREY. Mr. President, I want Hazelden Foundation you for your excellent work in developing Valley Hope Association the national anti-drug media campaign and to explain my opposition to the Lau- Security on Campus demonstrating such strong leadership in sup- tenberg amendment giving ONDCP’s Service Employees International Union port of our nation’s youth. I am confident National Youth Anti-Drug Media Cam- (AFL–CIO) that the effectiveness of this program as a paign jurisdiction to include underage Seventh-day Adventist Church of North means of educating and motivating children alcohol consumption for the purposes America and their families will be enhanced by a of the media campaign. Like all my Southern Baptist Ethics and Religious Lib- greater commitment to the problem of un- colleagues, I have seen the results of derage drinking. Thus, I want to recommend erty Commission underage drinking, and I deplore them. United Methodist Church, Board of Church that you include advertisements addressing & Society underage drinking in the paid portion of Young lives should not be wasted, and Youth Power (formerly: Just Say No, ONDCP’s media campaign. I challenge the White House and my International) Alcohol is the drug most frequently used colleagues to continue to take action STATE AND LOCAL ORGANIZATIONS by American teenagers. It is consumed more to curb this problem. frequently than all other illicit drugs com- However, I do not believe this amend- AGC/United Learning (Evanston, ILL) bined and is the drug most likely to be asso- Alabama Council on Substance Abuse ment is the correct way to solve the ciated with injury or death. Alcohol is a drug underage drinking crisis. The Youth Alcohol Research Information Service (MI) that can affect judgement, coordination and Alcohol Services, Inc. (Syracuse, NY) long-term health. It is involved in teen auto- Anti-Drug Media Campaign is not the Break Free Outpatient, Inc. (Hollywood, mobile crashes, homicides, and suicides; the right vehicle for anti-alcohol messages. FL) three leading causes of teen deaths. No com- The Office of National Drug Control ’Cause Children Count Coalition (Wash- prehensive drug control strategy for youth Policy fights the war on drugs, not al- ington, DC) can be complete without the full inclusion of cohol. I agree with Drug Czar Barry Charlotte-Mecklenburg [NC] Drug and Al- underage alcohol use and abuse. cohol Fighting Back Project McCaffrey that there is an important The National Household Survey on Drug distinction between illegal drugs and Christian Citizens of Arkansas Abuse reports that there are 11 million Communities that Care—Somerset County drinkers between the ages of 12 and 20. Over alcohol, which is a legal substance. Ad- (PA) fifty percent of high school seniors report ditionally, simply adding anti-alcohol Dauphin County Regional Alcohol/Drug having been drunk in the past year. Among messages to the ONDCP’s Youth Anti- Awareness Resources (PA) 12–17 year olds, less than half perceive great Drug Media Campaign without appro- Florida Association of Alcohol and Drug harm in consuming five or more drinks once priating more funds for this purpose Abuse Counselors or twice a week. In light of the prevalence of will dilute the anti-drug efforts. Re- Georgia Alcohol Policy Partnership underage drinking, it is little surprise that (GAPP) sources which are badly needed to fight alcohol consumption by youth so often re- drugs will be rerouted to fight under- Hillsborough County Community Anti- sults in risky behaviors which lead to un- Drug Coalition (Tampa, FL) planned pregnancies, sexually transmitted age drinking. I cannot support a bill Indiana Coalition to Reduce Underage diseases, involvement with law enforcement, which chooses to fight alcohol at the Drinking and worst of all, death and the death of oth- expense of illegal drugs. Institute for Health Advocacy (San Diego, ers. These are the immediate impacts on so- I have supported in the past, and will CA) ciety and do not include the even more cost- continue to support, programs that dis- Illinois Churches in Action ly, long term impact of alcohol abuse or de- courage underage drinking. In fact, I Lake County (FLA) Citizens Committee for pendence on individual health and the state Alcohol Health Warnings want to applaud the efforts of alcohol of families. distributers, who have initiated many Lancaster County Drug and Alcohol Com- A recent study from the National Institute mission (PA) of Alcohol Abuse and Alcoholism sheds even of these important programs. Lebanon County Drug & Alcohol Preven- greater light on the implications of these Let us find a different way to take tion Program (PA) figures. Youth who begin drinking before the action against underage alcohol con- Los Angeles County Commission on Alco- age of 15 are four times as likely to become sumption that does not compromise holism alcoholic as those who wait until age 21 or our actions against the use of illegal Maryland Underage Drinking Prevention later to begin drinking. This research also drugs. Coalition indicates that every year of delayed drinking Mr. LAUTENBERG. Mr. President, I National Capitol Area Coalition to Prevent onset will result in a significant reduction in yield the remaining 2 minutes to the Underage Drinking (DC) risk for alcohol abuse or alcoholism. Under- Network of Alabama Prevention Profes- age drinking is a shadow that threatens the Senator from Iowa. sionals health, safety and adolescence of our na- The PRESIDING OFFICER. The dis- New Haven Fighting Back tion’s youth. tinguished Senator from Iowa. Newark Fighting Back Partnership, Inc. We should utilize a public health media Mr. HARKIN. Mr. President, I am New Visitors/Mercy Hall Chemical Depend- campaign to send youth and their families pleased to cosponsor this amendment ency Program (Johnstown, PA) messages which will educate them about the offered by the distinguished Senator PAR, Inc. (Pinellas Park, Florida) health and social consequences of underage from New Jersey. I compliment him on Pennsylvanians Against Underage Drink- drinking. Through the ONDCP strategy, we his foresight for bringing this amend- ing can utilize this effective medium for altering Pennsylvania Council on Alcohol Problems youth attitudes about underage drinking and ment up. Pennsylvania Prevention Director’s Asso- for supporting community-based prevention We will have a 5-year media cam- ciation activities that will help young people adopt paign, with $1 billion targeted at youth Perry (County) Human Services (PA) lifestyles that eschew the use of alcohol and so they don’t get into drugs and start Phase: Piggy Back, Inc. (New York) other drugs. The evidence of need is over- taking drugs. The drug czar himself, PRIDE—Omaha whelming. General McCaffrey, said that alcohol is Somerset County Department of Human I stand ready to work with you to develop the gateway drug. Mr. President, 42 Services (PA) a powerful media campaign that will effec- percent of Iowa teens seeking sub- St. Vincent College Prevention Projects tively deglamourize underage drinking. I (Latrobe, PA) have established a Surgeon General’s Staff stance abuse treatment in 1998 were TODAY, Inc. (Vensalem, PA) Working Group to bring together the re- being treated for alcohol addiction; Vallejo Fighting Back Partnership (CA) sources of the Department to create an effec- three out of five teens have had an al- The Village (Miami, FL) tive campaign to curtail the incidence of un- coholic drink in the last month. July 1, 1999 CONGRESSIONAL RECORD — SENATE S8009 We have a 5-year, $1 billion ad cam- do not think this is a forced choice of The PRESIDING OFFICER. The Sen- paign to tell teens don’t take cocaine, the type he suggests we make; I do not ator from Colorado. don’t take meth, don’t smoke mari- think this is a choice that we ought to Mr. CAMPBELL. Senator DORGAN juana, and we are not going to say any- be required to make. One might at and I find ourselves in a strange debate thing about beer and alcohol? These some point put together a program, indeed, because I think we as much as are the first drugs these kids take. which I would fully support, to say let anyone in this body want to reduce That is what the Senator from New us do $1 billion advertising in 5 years, teenage drinking. All of us have had Jersey is saying. Let’s require in this targeted to Americans, especially personal tragedies in our families. As I package of ads over 5 years that they America’s kids, dealing with alcohol say, as a former deputy sheriff and as a also target drinking by kids. abuse. I would support that. Then one volunteer prison counselor, I know all I understand that the amendment is would say, perhaps, coming to the floor the horror stories. We know a lot of supported by Mothers Against Drunk of the Senate: This program you have them today. I don’t deny any of them. Driving, the National Association of dealing with alcohol abuse, why I am sure they have created terrible State Alcohol and Drug Abuse Coun- doesn’t it include drugs? Or, Why problems in families and in society, selors, and the National Association of doesn’t it include addiction to smoking too. But I think we are missing the Alcohol, Drugs, and Disability. cigarettes? I would support that as point I tried to make a while ago. It is It is time we took teen drinking seri- well. not whether we want to reduce teenage ously. I heard that the National Beer But we ought to do them as programs drinking. We all do. It is whether this Wholesalers Association is opposed to we can measure and evaluate. The pro- is the right vehicle; and it is not. the amendment. If I am wrong, some- gram we are talking about now is a I mentioned a while ago that ONDCP one please correct me. It is this asso- program dealing with drugs. It is 3 does not have statutory authority. If ciation that has always said they are years into the program. People say: we are going to add statutory author- against teen drinking. If they are Why doesn’t it include alcohol? Let’s ity and just bypass the legislative part against teen drinking, why would they do a program on alcohol. I will support of this body, why don’t we do away be opposed to this amendment to put that. with the legislative part of this body The story I told earlier, about going ads out showing teens what happens if and just do all legislation in appropria- to the Oak Hill Detention Center and they drink? tions bills? seeing these young children, kids on Eight young people every day die in I would join my friend from New Jer- drugs who were convicted of violent alcohol-related car crashes. It is time sey if he wanted to introduce a bill to crimes, do you know the other thing to stop this epidemic. add alcohol to the ONDCP’s agenda. about their stories? In every case, they Mr. CAMPBELL. How much time re- That would be fine with me, to add were 12 or 13 years old and they were mains? more money to it, too. I would be a co- addicted to drugs, selling drugs, shoot- The PRESIDING OFFICER. Fifteen sponsor. I will be more than willing to ing people, committing armed robbery, minutes 33 seconds. fight the battle with him to make sure being involved in violent crimes; and Mr. CAMPBELL. I yield to the Sen- we reduce teenage drinking in any kind the other common denominator in ator from Kentucky. of ad campaign that would be effective. every single case was they had parents Mr. MCCONNELL. Let me reiterate I hope we will do that, too. But I be- addicted to drugs. They came from that the practical effect of the Lauten- lieve this is the wrong vehicle for it. homes, often with only a single parent, berg amendment is to gut the effort to We ought to do it through the author- in which that parent was addicted to reduce teenage drug use. izing committees. drugs, died at a young age, and was an Mr. DORGAN. Mr. President, if the I wouldn’t argue with a single thing abusive parent because of being ad- Senator from Colorado will yield, let that any of our colleagues has said dicted to drugs. There is a common de- me make one final observation. He about the importance of combating nominator. mentions the issue of alcohol. He teenage drinking. Everybody thinks it This program is a program designed comes from a particular perspective, is important to combat teenage drink- to say to America’s youth, through being a Native American. ing. Fortunately, over the past 20 years drug education by television commer- I want to tell him just about two peo- teenager drinking has gone down. How- cials: Don’t do drugs. We know tele- ple, and I will do it in 30 seconds. I ever, according to a highly respected vision advertising works. We all use it. toured a hospital one day. He talks University of Michigan study, teenage Hundreds of billions of dollars a year about fetal alcohol syndrome. A young drug use has gone up 46 percent since are spent on television ads to convince Native American woman had just given 1992. people to listen to certain kinds of birth to a baby. The woman was an al- We should let this effort to combat music, wear certain kinds of jeans, to coholic. The baby was born with a .21 teenage drug use, which is dramati- buy certain kinds of food. We know it blood-alcohol content, a young baby cally on the increase, go forward. On works. I think it will work with re- born dead drunk. This woman, having another day in another contest, let’s spect to this issue of drugs as well. had a third baby, wanted nothing to do pursue an effort to deal with teenage We are 3 years into the program. I with that child, didn’t want to see that drinking. will support gladly, and with great ex- child. That child will probably have This amendment, regretfully, would citement, a program on alcohol. I have fetal alcohol syndrome. gut a very important campaign to com- supported every initiative dealing with But I was down at a hospital not far bat teenage drug use. That is not me alcohol abuse and drunk driving in this from this building and I saw babies speaking. That is Mario Cuomo and Senate. I will support it as well dealing born from crack-addicted mothers, and Bill Bennett, chairman of the Partner- with the addiction to cigarettes. The I saw babies born drug addicted, ad- ship for a Drug-Free America, who op- targeting of alcohol and cigarettes, dicted to hard drugs. The doctors told pose this amendment, which is not to both legal products, to this country’s me what those babies are like as they say that either one of those men is in youth, is unforgivable. try to shed this addiction, being born favor of teenage drinking. But this is a separate issue. We have of mothers who had taken drugs during Let’s keep this antidrug effort intact a campaign underway. It is 3 years in this pregnancy. and let what we hope will be an effec- progress. It is designed very delib- We have problems in all of these tive advertising campaign go forward. erately to change the understanding areas. I do not deny that. But this pro- I thank Senator CAMPBELL for yield- and the culture dealing with drugs. I gram deals with drugs. I think it has a ing time to me. think it has a chance of working. So chance of working. I hope we can allow The PRESIDING OFFICER. The Sen- let us do that. We had to cut it $50 mil- that to happen with this vote. ator from North Dakota. lion this year alone just on this issue. Mr. CAMPBELL. I thank the Senator Mr. DORGAN. Mr. President, let me Let us allow this to work. At another for those eloquent comments. make just a couple of concluding com- time I will be happy to join my col- Mr. President, I ask unanimous con- ments, again reiterating I am really league from New Jersey and others in sent that after the first vote, there be quite uncomfortable in the position of designing an identical program dealing 2 minutes equally divided in the usual opposing Senator LAUTENBERG. But I with alcohol abuse. form between the remaining votes. S8010 CONGRESSIONAL RECORD — SENATE July 1, 1999 The PRESIDING OFFICER. Without to the motion to table amendment No. [Rollcall Vote No. 195 Ex.] objection, it is so ordered. 1200 by Senator DEWINE be limited to YEAS—97 Mr. CAMPBELL. Mr. President, I see 45 minutes, to be equally divided in the Abraham Feingold Mack no further speakers. I yield the remain- usual form, and no other amendments Akaka Feinstein McCain ing time, and I move to table the Lau- be in order to the amendment prior to Ashcroft Fitzgerald McConnell Baucus Frist Mikulski tenberg amendment. the motion to table the vote. Bayh Gorton Moynihan I ask for the yeas and nays. The PRESIDING OFFICER. Without Bennett Graham Murkowski The PRESIDING OFFICER. Is there a objection, the request is agreed to. Biden Gramm Murray sufficient second? Bingaman Grams Nickles The question is on the amendment by Bond Grassley Reed There is a sufficient second. the Senator from Colorado, Mr. KYL. Boxer Gregg Reid The yeas and nays were ordered. Mr. CAMPBELL. We have reached Breaux Hagel Robb The PRESIDING OFFICER. The agreement, but we don’t have the Brownback Harkin Roberts Bryan Hatch Rockefeller question is on agreeing to the motion modification printed. Bunning Helms Roth to table amendment No. 1214. The yeas The PRESIDING OFFICER. Does the Burns Hollings Santorum and nays have been ordered. Senator ask that the amendment be Byrd Hutchinson Sarbanes The clerk will call the roll. Campbell Hutchison Schumer laid aside? Chafee Inhofe Sessions The legislative clerk called the roll. Mr. CAMPBELL. Yes, I make that re- Cleland Jeffords Shelby Mr. MCCAIN (when his name was quest, Mr. President. Cochran Johnson Smith (OR) called). Present. The PRESIDING OFFICER. Without Collins Kennedy Snowe Mr. REID. I announce that the Sen- Conrad Kerrey Specter objection, it is so ordered. Coverdell Kerry Stevens ator from Hawaii (Mr. INOUYE) is nec- Craig Kohl Thomas essarily absent. f Crapo Kyl Thompson The result was announced—yeas 58, Daschle Landrieu Thurmond nays 40, as follows: DeWine Lautenberg Torricelli EXECUTIVE SESSION Dodd Leahy Voinovich [Rollcall Vote No. 194 Leg.] Domenici Levin Warner YEAS—58 Dorgan Lieberman Wellstone Durbin Lincoln Wyden Abraham Dorgan Mack Edwards Lott Allard Enzi McConnell NOMINATION OF LAWRENCE H. Enzi Lugar Ashcroft Fitzgerald Murkowski Baucus Frist Nickles SUMMERS, OF MARYLAND, TO NAYS—2 Bennett Gorton Robb BE SECRETARY OF THE TREAS- Allard Smith (NH) Bond Graham Roberts URY Breaux Gramm Santorum NOT VOTING—1 Brownback Grams Sessions The PRESIDING OFFICER. Under Inouye Bunning Grassley Shelby the previous order, the Senate will now Burns Gregg Smith (NH) vote on the nomination of Lawrence H. The nomination was confirmed. Campbell Hagel Smith (OR) Mr. MOYNIHAN. Mr. President, I ask Chafee Hatch Snowe Summers to be Secretary of the Treas- Cochran Hutchinson Thomas ury. There will be 2 minutes evenly di- unanimous consent that the President Collins Inhofe Thompson vided on that nomination. Who yields be immediately notified of the Senate’s Conrad Jeffords Thurmond action. Coverdell Kerrey Torricelli time? Craig Kyl Voinovich Mr. MOYNIHAN. Mr. President, I The PRESIDING OFFICER. Without Crapo Lincoln Warner yield myself 1 minute. objection, it is so ordered. Daschle Lott The PRESIDING OFFICER. The Sen- Mr. MOYNIHAN. I thank the Chair. I Domenici Lugar ator from New York. yield the floor. NAYS—40 Mr. MOYNIHAN. I thank the Chair. f Akaka Harkin Moynihan This is a fine moment for the Senate. LEGISLATIVE SESSION Bayh Helms Murray We are here to confirm Mr. Lawrence Biden Hollings Reed Bingaman Hutchison Reid Summers as Secretary of the Treasury The PRESIDING OFFICER. The Sen- Boxer Johnson Rockefeller of the United States. He has had a fine ate will return to legislative session. Bryan Kennedy Roth career in Government. He was on the f Byrd Kerry Sarbanes staff of the Council of Economic Advis- Cleland Kohl Schumer TREASURY AND GENERAL GOV- DeWine Landrieu Specter ers under President Reagan. He was Dodd Lautenberg Stevens Under Secretary for International Af- ERNMENT APPROPRIATIONS, Durbin Leahy Wellstone fairs of the U.S. Treasury under Sec- 2000—Continued Edwards Levin Wyden Feingold Lieberman retary Lloyd Bentsen, our former col- Mr. LOTT. Mr. President, is there Feinstein Mikulski league. Since 1995, he has been Deputy going to be a modification to the Kyl ANSWERED ‘‘PRESENT’’—1 Secretary of the U.S. Treasury. If my amendment before we go to the Y2K li- ability? McCain revered colleague and chairman were present at this moment, he would want Mr. CAMPBELL. Mr. President, we NOT VOTING—1 to point out that his nomination was have an agreement on that, if Senator Inouye reported out from the Finance Com- KYL is ready. The motion was agreed to. mittee unanimously. AMENDMENT NO. 1195, AS MODIFIED The PRESIDING OFFICER (Mr. GOR- The PRESIDING OFFICER. Who Mr. KYL. I have a modification of TON). Under the previous order, there yields time? Who holds the time on the amendment No. 1195. I note for the are 2 minutes of debate before a motion majority side? record that this modification is cospon- to table the amendment of the Senator If not, by unanimous consent, all sored by Senators FEINSTEIN, MCCAIN, from Arizona, Mr. KYL. Who yields time is yielded back. The question is, ABRAHAM, GRAHAM, GRAMM, DOMENICI, time? Will the Senate advise and consent to and GRASSLEY, along with Senator The Senator from Colorado. the nomination of Lawrence H. Sum- HUTCHISON and myself. Mr. CAMPBELL. Mr. President, I ask mers, of Maryland, to be Secretary of The PRESIDING OFFICER. The unanimous consent to vitiate my mo- the Treasury? On this question the clerk will report. tion to table the Kyl-Hutchison amend- yeas and nays have been ordered. The The legislative clerk read as follows: ment No. 1195. During the break we clerk will call the roll. The Senator from Arizona (Mr. KYL), for were able to finalize some language for The legislative clerk called the roll. himself, and Senators HUTCHISON, FEINSTEIN, the amendment. Mr. REID. I announce that the Sen- MCCAIN, ABRAHAM, GRAHAM, GRAMM, DOMEN- The PRESIDING OFFICER. Without ator from Hawaii (Mr. INOUYE) is nec- ICI, and GRASSLEY, proposes an amendment objection, it is so ordered. essarily absent. numbered 1195, as modified. Mr. CAMPBELL. Mr. President, I ask The result was announced—yeas 97, The amendment (No. 1195), as modi- unanimous consent that the time prior nays 2, as follows: fied, is as follows: July 1, 1999 CONGRESSIONAL RECORD — SENATE S8011 SEC. 119. Provided further, That the Cus- Mr. CAMPBELL. Mr. President, the The concurrent resolution (S. Con. toms Service Commissioner shall utilize $50 majority supports the amendment. Res. 43) was agreed to, as follows: million to hire 500 new Customs inspectors, Mr. DORGAN. Mr. President, we have Resolved by the Senate (the House of Rep- agents, appropriate equipment and intel- reviewed the amendment and the modi- resentatives concurring), That when the Sen- ligence support within the funds available ate recesses or adjourns at the close of busi- under the Customs Service headings in the fication, and we have no objection to ness on Thursday, July 1, 1999, Friday, July bill, in addition to funds provided to the Cus- it. 2, 1999, or Saturday, July 3, 1999, on a motion toms Service under the FY99 Emergency The PRESIDING OFFICER. Without offered pursuant to this concurrent resolu- Drug Supplemental. objection, the amendment is agreed to. At the appropriate place, at the end of The amendment (No. 1195), as modi- tion by its Majority Leader or his designee, it stand recessed or adjourned until noon on Title I, insert the following on page 38, after fied, was agreed to. line 5 insert the following: Monday, July 12, 1999, or until such time on Mrs. HUTCHISON. Mr. President, I that day as may be specified by its Majority Mr. GRASSLEY. Mr. President, I just wanted to say that this is a very Leader or his designee in the motion to re- want to thank the chairman and com- important amendment. We will have cess or adjourn, or until noon on the second mittee for their willingness to work 500 more Customs agents for our drug day after Members are notified to reassemble with Senators KYL, HUTCHISON, me, and control. I think that it is very impor- pursuant to section 2 of this concurrent reso- others to include in the Treasury ap- tant that we were able to make this a lution, whichever occurs first; and that when propriations bill to hire 500 more in- priority. the House adjourns on the legislative day of Thursday, July 1, 1999, or Friday, July 2, spectors and agents, along with appro- I appreciate Senator DORGAN and priate intelligence support and equip- 1999, on a motion offered pursuant to this Senator CAMPBELL working with us. concurrent resolution by its Majority Leader ment. It is my understanding, in addi- The PRESIDING OFFICER. The ma- or his designee, it stand adjourned until 12:30 tion, that if there is a difference be- jority leader. p.m. on Monday, July 12, 1999, for morning- tween the House and Senate bills in f hour debate, or until noon on the second day this regard that the Committee will do after Members are notified to reassemble what it can in conference to ensure CONDITIONAL ADJOURNMENT OR pursuant to section 2 of this concurrent reso- that the funding for these increases RECESS OF CONGRESS lution, whichever occurs first. will be found outside of the Customs Mr. LOTT. Mr. President, I send a SEC. 2. The Majority Leader of the Senate budget. concurrent resolution to the desk call- and the Speaker of the House, acting jointly Mr. CAMPBELL. I thank my col- ing for the conditional adjournment of after consultation with the Majority Leader league from Iowa. The committee has Congress. I ask that the resolution be of the Senate and the Majority Leader of the faced a lot of tough decisions in this agreed to and the motion to reconsider House, shall notify the Members of the Sen- ate and House, respectively, to reassemble bill and I appreciate my colleagues’ be laid upon the table. whenever, in their opinion, the public inter- flexibility. The Senator is correct. I The PRESIDING OFFICER. The est shall warrant it. will do what I can in conference to sup- clerk will report. port the additional funding for Cus- The legislative clerk read as follows: Mr. WELLSTONE. Mr. President, I toms increased by this amendment, A concurrent resolution (S. Con. Res. 43) ask unanimous consent that after the and to try to identify appropriate providing for a conditional adjournment or DeWine amendment, which comes after sources of funding outside the U.S. recess of the Senate and a conditional ad- Y2K is dispensed with, I be able to Customs Service budget. journment of the House of Representatives. bring my amendment to the floor. The PRESIDING OFFICER. Is there The PRESIDING OFFICER. Without The PRESIDING OFFICER (Mr. GOR- further debate or discussion on the objection, it is so ordered. The concur- TON). Without objection, it is so or- amendment? rent resolution is agreed to. dered.

N O T I C E Incomplete record of Senate proceedings. Except for concluding business which follows, today’s Senate proceedings will be continued in the next issue of the Record.

f will reconvene at 12 noon on Monday, The Senator from West Virginia is July 12, and will immediately proceed recognized. LEGISLATIVE SESSION to a period of morning business until 1 f The PRESIDING OFFICER. Under p.m. the previous order, the Senate will re- By previous consent, the Patients’ ADJOURNMENT UNTIL MONDAY, turn to legislative session. Bill of Rights will be the pending busi- JULY 12, 1999 ness at 1 p.m. Amendments to that leg- f The PRESIDING OFFICER. The Sen- islation are possible. ate now stands adjourned until noon on ORDERS FOR MONDAY, JULY 12, Any votes ordered, however, will not Monday, July 12. 1999 take place until Tuesday, July 13, at a Thereupon, the Senate, at 10:24 p.m., Mr. GORTON. Mr. President, I ask time to be determined by the two lead- adjourned until Monday, July 12, 1999, ers. unanimous consent that when the Sen- at 12 noon. As previously announced by the ma- ate completes its business, it stand in jority leader, there will be a cloture f adjournment until 12 noon on Monday, vote on the pending lockbox amend- NOMINATIONS July 12. I further ask that on Monday, ment to S. 557 on Friday, July 16. following the prayer, the Journal of Executive nominations received by f proceedings be approved to date, the the Senate July 1, 1999: morning hour be deemed to have ex- ORDER FOR ADJOURNMENT DEPARTMENT OF ENERGY pired, the time for the two leaders be Mr. GORTON. Mr. President, if there CURT HEBERT, JR., OF MISSISSIPPI, TO BE A MEMBER reserved for their use later in the day, is no further business to come before OF THE FEDERAL ENERGY REGULATORY COMMISSION FOR THE TERM EXPIRING JUNE 30, 2004. (REAPPOINT- and the Senate then proceed to a pe- the Senate, I now ask unanimous con- MENT) riod of morning business until 1 p.m. sent that the Senate stand in adjourn- DEPARTMENT OF THE INTERIOR The PRESIDING OFFICER. Without ment under the provisions of Senate EARL E. DEVANEY, OF MASSACHUSETTS, TO BE IN- objection, it is so ordered. Concurrent Resolution No. 43, fol- SPECTOR GENERAL, DEPARTMENT OF THE INTERIOR, f lowing the remarks of my distin- VICE ELJAY B. BOWRON, RESIGNED. guished and extremely patient col- DEPARTMENT OF STATE PROGRAM league, Senator BYRD. LAWRENCE H. SUMMERS, OF MARYLAND, TO BE Mr. GORTON. Mr. President, for the UNITED STATES GOVERNOR OF THE INTERNATIONAL The PRESIDING OFFICER. Without MONETARY FUND FOR A TERM OF FIVE YEARS; UNITED information of all Senators, the Senate objection, it is so ordered. STATES GOVERNOR OF THE INTERNATIONAL BANK FOR S8012 CONGRESSIONAL RECORD — SENATE July 1, 1999

RECONSTRUCTION AND DEVELOPMENT FOR A TERM OF JOSEPH ALEXANDER BOSTON III, OF MARYLAND STACY R. TOWNSLEY, OF VIRGINIA FIVE YEARS; UNITED STATES GOVERNOR OF THE INTER- PAUL DAVID BURKHEAD, OF NEW YORK MICHAEL T. TROJE, OF FLORIDA AMERICAN DEVELOPMENT BANK FOR A TERM OF FIVE BART DAVID COBBS, OF CALIFORNIA MARKO G. VELIKONJA, OF WASHINGTON YEARS; UNITED STATES GOVERNOR OF THE AFRICAN DE- MICHELE ONDAKO CONNELL, OF OHIO JEROME B. WEINFIELD, JR., OF MARYLAND VELOPMENT BANK FOR A TERM OF FIVE YEARS; UNITED JULIE DAVIS FISHER, OF CALIFORNIA EDWARD A. WHITE, OF GEORGIA ELLEN JACQUELINE GERMAIN, OF NEW YORK STATES GOVERNOR OF THE ASIAN DEVELOPMENT BANK; YVETTA J. WOODBURY, OF VIRGINIA TODD C. HOLMSTROM, OF MICHIGAN UNITED STATES GOVERNOR OF THE AFRICAN DEVELOP- RICHARD TSUTOMU YONEOKA, OF NEW YORK MENT FUND; UNITED STATES GOVERNOR OF THE EURO- WILLIAM M. HOWE, OF ALASKA PEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT. BRYAN DAVID HUNT, OF VIRGINIA JAMES B. CUNNINGHAM, OF PENNSYLVANIA, A CAREER SANDRA JEAN INGRAM, OF OHIO EXECUTIVE OFFICE OF THE PRESIDENT HENRY VICTOR JARDINE, OF VIRGINIA MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF SALLY KATZEN, OF THE DISTRICT OF COLUMBIA, TO BE DAVID ALLAN KATZ, OF CALIFORNIA MINISTER-COUNSELOR, TO BE DEPUTY REPRESENTA- DEPUTY DIRECTOR FOR MANAGEMENT, OFFICE OF MAN- TIVE OF THE UNITED STATES OF AMERICA TO THE JAMES L. LOI, OF CONNECTICUT AGEMENT AND BUDGET, VICE G. EDWARD DESEVE. UNITED NATIONS, WITH THE RANK AND STATUS OF AM- VALERIE LYNN, OF COLORADO BASSADOR EXTRAORDINARY AND PLENIPOTENTIARY. MANUEL P. MICALLER, JR., OF CALIFORNIA HARRIET L. ELAM, OF MASSACHUSETTS, A CAREER KATHERINE ELIZABETH MONAHAN, OF CALIFORNIA DEPARTMENT OF COMMERCE MARK D. MOODY, OF MISSOURI MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF Q. TODD DICKENSON, OF PENNSYLVANIA, TO BE COM- MINISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- GEOFFREY PETER NYHART, OF FLORIDA MISSIONER OF PATENTS AND TRADEMARKS, VICE BRUCE DINARY AND PLENIPOTENTIARY OF THE UNITED STATES DANIEL W. PETERS, OF ILLINOIS A. LEHMAN, RESIGNED. OF AMERICA TO THE REPUBLIC OF SENEGAL. CHRISTOPHER TODD ROBINSON, OF PENNSYLVANIA J. RICHARD FREDERICKS, OF CALIFORNIA, TO BE AM- LORI A. SHOEMAKER, OF TENNESSEE BASSADOR EXTRAORDINARY AND PLENIPOTENTIARY OF MICHELE MARIE SIDERS, OF CALIFORNIA EQUAL EMPLOYMENT OPPORTUNITY COMMISSION THE UNITED STATES OF AMERICA TO SWITZERLAND, SHAWN KRISTEN THORNE, OF TEXAS CLIFFORD GREGORY STEWART, OF NEW JERSEY, TO BE AND TO SERVE CONCURRENTLY AND WITHOUT ADDI- MICHAEL CARL TRULSON, OF CALIFORNIA GENERAL COUNSEL OF THE EQUAL EMPLOYMENT OP- TIONAL COMPENSATION AS AMBASSADOR EXTRAOR- GRAHAM L. WEBSTER, OF FLORIDA DINARY AND PLENIPOTENTIARY OF THE UNITED STATES BRUCE C. WILSON, OF CALIFORNIA PORTUNITY COMMISSION FOR A TERM OF FOUR YEARS. OF AMERICA TO THE PRINCIPALITY OF LIECHTENSTEIN. DAVID JONATHAN WOLFF, OF FLORIDA (REAPPOINTMENT) BARBARA J. GRIFFITHS, OF VIRGINIA, A CAREER MEM- UNITED STATES INFORMATION AGENCY BER OF THE SENIOR FOREIGN SERVICE, CLASS OF MIN- CORPORATION FOR NATIONAL AND COMMUNITY ISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- COLLETTE N. CHRISTIAN, OF OREGON SERVICE DINARY AND PLENIPOTENTIARY OF THE UNITED STATES CAROLYN B. GLASSMAN, OF NEVADA OF AMERICA TO THE REPUBLIC OF ICELAND. MAUREEN MATTER HOWARD, OF WASHINGTON ANTHONY MUSICK, OF VIRGINIA, TO BE CHIEF FINAN- GREGORY LEE JOHNSON, OF WASHINGTON, A CAREER PATRICIA KOZLIK KABRA, OF CALIFORNIA CIAL OFFICER, CORPORATION FOR NATIONAL AND COM- MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF MARYANN MCKAY, OF CALIFORNIA MUNITY SERVICE, VICE DONN HOLT CUNNINGHAME, RE- MINISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- JEAN T. OLSON, OF FLORIDA SIGNED. DINARY AND PLENIPOTENTIARY OF THE UNITED STATES LAURA BAIN PRAMUK, OF COLORADO ANN N. ROUBACHEWSKY, OF MARYLAND OF AMERICA TO THE KINGDOM OF SWAZILAND. DEPARTMENT OF EDUCATION JIMMY J. KOLKER, OF MISSOURI, A CAREER MEMBER EDWINA SAGITTO, OF MISSOURI OF THE SENIOR FOREIGN SERVICE, CLASS OF COUN- THE FOLLOWING-NAMED MEMBERS OF THE FOREIGN MICHAEL COHEN, OF MARYLAND, TO BE ASSISTANT SELOR, TO BE AMBASSADOR EXTRAORDINARY AND SERVICE OF THE DEPARTMENTS OF COMMERCE AND SECRETARY FOR ELEMENTARY AND SECONDARY EDU- PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA STATE TO BE CONSULAR OFFICERS AND/OR SECRE- CATION, DEPARTMENT OF EDUCATION, VICE GERALD N. TO BURKINA FASO. TARIES IN THE DIPLOMATIC SERVICE OF THE UNITED TIROZZI, RESIGNED. SYLVIA GAYE STANFIELD, OF TEXAS, A CAREER MEM- STATES OF AMERICA, AS INDICATED: BER OF THE SENIOR FOREIGN SERVICE, CLASS OF MIN- MISSISSIPPI RIVER COMMISSION ISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- CONSULAR OFFICERS AND SECRETARIES IN THE DINARY AND PLENIPOTENTIARY OF THE UNITED STATES DIPLOMATIC SERVICE OF THE UNITED STATES MAJOR GENERAL PHILLIP R. ANDERSON, UNITED OF AMERICA TO BRUNEI DARUSSALAM. OF AMERICA: STATES ARMY, TO BE A MEMBER AND PRESIDENT OF FOREIGN SERVICE THE MISSISSIPPI RIVER COMMISSION, UNDER THE PRO- MARTIN J. AVERSA, OF VIRGINIA VISIONS OF SECTION 2 OF AN ACT OF CONGRESS, AP- THE FOLLOWING-NAMED PERSONS OF THE AGENCIES TODD B. AVERY, OF FLORIDA PROVED JUNE 1879 (21 STAT. 37) (33 USC 642). INDICATED FOR APPOINTMENT AS FOREIGN SERVICE OF- JOSEPH R. BABB, OF CALIFORNIA FICERS OF THE CLASSES STATED, AND ALSO FOR THE REBECCA M. BALOGH, OF VIRGINIA IN THE AIR FORCE OTHER APPOINTMENTS INDICATED HEREWITH: ANTHONY THOMAS BEAVER, OF OHIO FOR APPOINTMENT AS FOREIGN SERVICE OFFICERS OF MEGAN BEECHAM, OF MARYLAND THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT CLASS ONE, CONSULAR OFFICERS AND SECRETARIES IN LOUIS LAWRENCE BONO, OF NEW YORK TO THE GRADE INDICATED IN THE UNITED STATES AIR THE DIPLOMATIC SERVICE OF THE UNITED STATES OF KIRSTEN AILSA LESLIE BROOKS, OF FLORIDA FORCE AND FOR REGULAR APPOINTMENT (IDENTIFIED AMERICA: CHARLES R. BROOME, OF VIRGINIA BY AND ASTERISK (*)) UNDER TITLE 10, U.S.C., SECTIONS EMILY BRUNO, OF PENNSYLVANIA 624 AND 531: DEPARTMENT OF STATE MICHELLE A. BURTON, OF NORTH DAKOTA SUSAN HERTHUM GARRISON, OF FLORIDA ROBIN BUSSE, OF VIRGINIA SIGRID NELSON CALANDRA, OF VIRGINIA To be Lieutenant Colonel FOR APPOINTMENT AS FOREIGN SERVICE OFFICERS OF MATTHEW VICTOR CASSETTA, OF VIRGINIA MILTON C ABBOTT PHILLIP P. BACA CLASS TWO, CONSULAR OFFICERS AND SECRETARIES IN STEVEN M. CORLESS, OF WASHINGTON LARRY N. ADAIR JEFFREY L. BACHMANN THE DIPLOMATIC SERVICE OF THE UNITED STATES OF WENDY GRACE CROOK, OF OREGON DONNELL E. ADAMS DONALD J. BACON AMERICA: PHILIP MARTIN CUMMINGS, OF CALIFORNIA MICHAEL E. ADAMS VALENTINO BAGNANI III RICK A. DELAMBERT, OF CALIFORNIA DEPARTMENT OF COMMERCE JOE V. ALDAZ, JR. RICHARD J. BAGNELL GENE J. DEL BIANCO, OF MASSACHUSETTS BRUCE C. ALEXANDER DAVID L. BAKER STEVEN E. DE VORE, OF ILLINOIS BERYL C. BLECHER, OF FLORIDA DAVID L. ALEXANDER DAVID T. BAKER JASON ANTHONY DONOVAN, OF TEXAS DAVID L. GOSSACK, OF WASHINGTON FRANK ALI NORMAN J. BALCHUNAS, WILLIAM ERSKINE DUFF III, OF VIRGINIA JOSEPH B. KAESSHAEFER, JR., OF FLORIDA BRUCE A. ALLEN JR. ROBERT NICHOLS FARQUHAR JR., OF OREGON AMER M. KAYANI, OF CALIFORNIA COURT C. ALLEN LYNNE E. BALDRIGHI TERRENCE ROBERT FLYNN, OF MINNESOTA RONALD L. SORIANO, OF CONNECTICUT ROBERT C. ALLEN, JR. JEFFREY K. BALL DANA JANET FRANCIS, OF MASSACHUSETTS MERRIL J. ALLIGOOD, JR. JOE G. BALLARD DEPARTMENT OF STATE DAN O. FULWILER, OF WASHINGTON JOHN C. ALLISON DANIEL F. BALTRUSAITIS MATTHEW E. GOSHKO, OF MARYLAND MARK L. ALLRED LENNIE M. BANE PAUL A. FOLMSBEE, OF TEXAS BRIAN EDWARD GREANEY, OF NEW HAMPSHIRE DAVID W. ALLVIN CARL D. BANER SARA WHITE HAMILTON, OF MARYLAND UNITED STATES INFORMATION AGENCY MARK B. ALSID RICHARD T. BANKS II DANIEL ORDWAY HASTINGS, OF CALIFORNIA ROBERT G. BARLOW EDWARD J. KULAKOWSKI, OF VIRGINIA ROBERT A. HEM, OF VIRGINIA STEPHEN G. ALSING CONRAD WILLIAM TURNER, OF THE DISTRICT OF COLUM- MELISSA PRESTON HORWITZ, OF NEW YORK MARK D. ALTENBURG JUDY D. BARNES BIA DAE B. KIM, OF CALIFORNIA ROBERT L. ALTMAN PATRICK BARNES GENE L. KLINE, OF VIRGINIA DONATO J. ALTOBELLI, JR. RUSSELL C. BARNES FOR APPOINTMENT AS FOREIGN SERVICE OFFICERS OF GARY KONOP, OF PENNSYLVANIA STEVEN L. AMATO KEVIN D. BARON CLASS THREE, CONSULAR OFFICERS AND SECRETARIES JUDY HAIGUANG KUO, OF CALIFORNIA CURTIS R. AMBLE JAMES A. BARR IN THE DIPLOMATIC SERVICE OF THE UNITED STATES OF WENDY RENEE LAURITZEN, OF VIRGINIA JOHN M. AMIDON MICHAEL J. BARRETT III AMERICA: HARVEY W. LAWHORNE, OF VIRGINIA TRACY A. AMOS GARY S. BARRON HUGH A. AMUNDSON ROBERT K. BARRY DEPARTMENT OF AGRICULTURE ANDREA MICHELLE LEWIS, OF FLORIDA JEFFREY P. LODINSKY, OF NEW YORK KELLY E. ANDERSEN CHARLES J. BARTLETT MARTIN G. PATTERSON, OF VIRGINIA JENNIFER L. LUKAS, OF VIRGINIA E WEST ANDERSON PAUL K. BARTLETT, JR. JOHN H. MC CORMICK, OF MARYLAND GARY D. ANDERSON BURT A. BARTLEY DEPARTMENT OF COMMERCE PATRICK T. MC NEIL, OF ILLINOIS JOHN EDWARD ANDERSON PETER P. BARTOS LYNDON S. ANDERSON WILLIAM H. BATEMAN STEPHEN E. ALLEY, OF TENNESSEE SANDRA D. MIED, OF VIRGINIA MICHELLE BERGET MILLS, OF VIRGINIA ROBERT A. ANDRES THOMAS B. BAUCKMAN ROBERT D. BANNERMAN, OF FLORIDA PHILIP R. ANDREWS FRANKLIN W. BAUGH JOEL N. FISCHL, OF NEW HAMPSHIRE DAVID GEORGE MOSBY, OF ILLINOIS ANDREW HUANG NISSEN, OF VIRGINIA TALENTINO C. BRIAN T. BAXLEY GWEN B. LYLE, OF TEXAS ANGELOSANTE KRISTIN D. BEASLEY MICHAEL L. MCGEE, OF TENNESSEE LAWRENCE D. OWEN, OF MICHIGAN NICHOLAS PAPP III, OF FLORIDA BILLIE J. ANTES LAWRENCE A. BECKER UNITED STATES INFORMATION AGENCY JOSEPH ANTHONY PARENTE, OF NEVADA CHRISTOPHER M. APPLEBY ROBIN E. BECKER BRADLEY SCOTT PARKER, OF CALIFORNIA JAMES H. APPLEYARD, JR. THOMAS J. BEDNAREK MARY K. OLIVER, OF ARKANSAS ROY ALBERT PERRIN III, OF LOUISIANA MICHAEL P. ARCENEAUX KEVIN A. BEEBE JOHN ROBERT POST, OF WASHINGTON MARCO GLEN PROUTY, OF WASHINGTON LEE J. ARCHAMBAULT TERRI C. BEELERSAUCEDO JO ANN ELAINE SCANDOLA, OF THE DISTRICT OF COLUM- BHASKAR KOLIPAKKAM RAJAH, OF ILLINOIS GARY B. ARNOLD SUZANNE M. BEERS BIA ERICA RENEW, OF TEXAS RICHARD W. ARNOLD BENJAMIN W. BEESON BENJAMIN A. ROCKWELL, OF ILLINOIS STEVEN J. ARQUIETTE PAUL T. BEISSER III FOR APPOINTMENT AS FOREIGN SERVICE OFFICERS OF WILLIAM W. ARRASMITH PAUL G. BELL CLASS FOUR, CONSULAR OFFICERS AND SECRETARIES IN KENNETH T. ROGERS, OF THE DISTRICT OF COLUMBIA SUSANNE C. ROSE, OF THE DISTRICT OF COLUMBIA HUGH W. ARSENAULT HOWARD D. BELOTE THE DIPLOMATIC SERVICE OF THE UNITED STATES OF EDNA E. ARTIS LISA M. BELUE AMERICA: ELISABETH N. ROSENSTOCK, OF NEW YORK JOSE K. SANTACANA, OF MASSACHUSETTS HOWARD L. ASHFORD CHRISTOPHER J. BENCE DEPARTMENT OF COMMERCE GREGORY P. SEGAS, OF VIRGINIA BRADLEY K. ASHLEY NANNETTE BENITEZ PHILIP FRANZ D. SEITZ, OF VIRGINIA MARK R. ASHPOLE PAUL V. BENNETT HELEN D. LEE, OF VIRGINIA DENISE SHIPMAN, OF PENNSYLVANIA VIRGINIA B. ASHPOLE RICKEY B. BENNETT KAREN S. PILMANIS, OF COLORADO ALISON MOIRA SHORTER-LAWRENCE, OF VIRGINIA ROBERT P. ASHTON TERRY R. BENTLEY HARRY L. TYNER, OF VIRGINIA DANIEL E. SLAVEN, OF ARIZONA DAVID C. ASSELIN DONALD H. BERCHOFF MARK A. AVERY PAUL D. BERG DEPARTMENT OF STATE EDITH ARLENE SPRUILL, OF NEW YORK RHETT D. TAYLOR, OF TEXAS JAMES R. AYERS THOMAS C. BERG MARY EMMA ARNOLD, OF VIRGINIA ANNE MARIE THOMAS, OF VIRGINIA BRADLEY E. BABB WAYNE F. BERG, JR.

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WILLIAM J. BERG TODD L. CARNAHAN MICHAEL D. DAVIS JOSEPH B. FENTRESS TIMOTHY A. GUIDEN MICKIE S. HO KEITH BERGERON DAVID L. CARRAWAY ROBIN DAVIS DANIEL R. FERNANDEZ MICHAEL J. GUIDRY CLEOPHAS S. HOCKADAY, THOMAS A. BERGHOFF RICHARD J. CARRIER SHUGATO S. DAVIS KENNETH H. FIELDING JAMES P. GUINAN JR JOHN C. BERRY JAMES J. CARROLL STEVEN TODD DAVIS FRANK E. FIELDS DANA L. GUNTER RICHARD E. HOEFERKAMP WARREN D. BERRY GREGORY W. CARSON LILI D. DAWIDOWICZ EDWARD A. FIENGA ERIC V. GUNZINGER JEFFREY A. HOFFER KEVIN T. BETZ DONALD C. CARTER STEVEN O. DAWSON DANIEL L. FIGUEROA RANDALL H. GUPTON GREGORY J. HOFFMAN JAMES BIERSTINE, JR. JESSE D. CARTER KATHYRN A. DAY DAVID A. FILIPPINI MICK R. GUTHALS ROBERT K. HOFFMANN DONALD F. BILLARD SUE B. CARTER RONALD J. DEAK HERBERT J. FINCH GARY M. GUTOWSKY KENNETH E. HOGAN BRUCE S. BISHOP THOMAS C. CARTER JAMES W. DEAN KENNETH J. FISCHER ROBERT L. HAASE, JR. WILLIAM E. HOGAN JUDITH D. BITTICK ALLAN R. CASSADY JOHN F. DEAN, JR. CRAIG H. FISHER DANIEL V. HACKMAN RICHARD A. HOLCOMB MARK C. BIWER PETER H. CASTOR MARY K. DEATHERAGE EDWARD L. FISHER MICHAEL D. HAEFNER MELVIN A. HOLLAND, III BRIAN M. BJORNSON RONALD J. CELENTANO MICHAEL V. DEATON GREGORY L. FISHER JEFF L. HAGENS KIRBY R. HOLMES DALE A. BLACKBURN JAMES J. CHAMBERS, JR LAURIE A. DEGARMO STEPHEN M. FISHER DEAH T. HAGMAIER *BARBARA J. RICHARD E. BLACKBURN DAVID W. CHANDLER KEVIN D. DEGNAN TIMOTHY E. FISK JAMES C. HAHN HOLMSTEDTMARK LESLIE A. BLACKHAM VONDA F. CHANEY MICHAEL P. DEGREEF CLIFFORD B. FITTS CHRIS E. HAIR DAVID L. HOLT DANIEL C. BLAETTLER DENNIS W. CHENEY GUS W. DEIBNER JOHN H. FLETCHER MARVIN C. HAIRE MICHAEL A. HOMAN HARRY H. BLANKE III JULIE A. CHESLEY MARKUS R. DEITERS DIANA R. FLORES KATHRYN E. HALL GARY L. HOPPER THOMAS L. BLASE BARRY R.J. CHEYNE WILLIAM G. DEKEMPER STEVEN W. FLOWERS PAMELA J. HALL STEVEN L. HOPPER MARY A. BLAZEK KEVIN T. CHRISTENSEN DENIS P. DELANEY DAVID J. FOELKER SUSAN R. HALL LELAND R. HOPSON VIRGINIA V. BLAZICKO FRANCIS K. CHUN WILLIAM P. DELANEY DANIEL T. FOGARTY THOMAS J. HALL, II DANIEL J. HORACK CARL H. BLOCK STEPHEN A. CILEA THOMAS DELAROSA BRIAN R. FOLEY DAVID C. HAM GEORGE S. HORAN MAX J. BLOOD PETER A. CIPPERLY STEPHEN J. DELLIES CHARLES M. FOLSOM JOHN J. HAMBEL ANNE T. HOUSEAL MATHIAS C. BODDICKER, II DAN L. CLARK ANNE C. DEMENT DOUGLAS C. FORBES STEVEN E. HAMMOCK MICHAEL J. HOUSEHOLDER LANCE E. BODINE JASON L. CLARK SCOTT L. DENNIS NORMAN J. FORBES BRUCE A. HANESSIAN RICHARD K. HOUSTON TODD A. BOESDORFER RICHARD M. CLARK PAUL DENNO MARK S. FORESTER JERROLD J. HANNA RALPH D. HOWARD MICHAEL F. BONADONNA WESLEY J. CLARK DAVID M. DENOFRIO JAMES F. FORREST JAMES L. HANNON MARILYN H. HOWE ROBERT G. BONO JOHN G. CLARKE LEE K. DEPALO JOHN K. FORSYTHE, JR. THOMAS M. HARKENRIDER JAMES E. HUBBARD JOHN K. BORLAND MARGARET A. CLAYTOR LEE E. DEREMER DEBORAH A. FORT BRUCE F. HARMON JEFFREY A. HUBBARD DANA H. BORN KAREN A. CLEARY JAMES L. DEW, JR CINDY L. FOSSUM JOSEPH F. HARMON, JR JAMES A. HUBERT KARL S. BOSWORTH JAMES D. CLIFTON DEBRA A. DEXTER JOSEPH FOSTER JOSEPH H. HARRELL LINDA K. HUGGLER MICHAEL N. BOUCHER WILLARD E. CLITES III KIRK R. DICKENSON BOBBY G. FOWLER, JR. BRIAN D. HARRIETT BRIAN D. HUIZENGA ROBERT H. BOULWARE MARK A. COAN JAMES R. DICKERSON KEVIN J. FOWLER JEFFREY L. HARRIGIAN BENJAMIN J. HULSEY III JEFFREY B. BOWLES WILLARD D. COBLE MICHAEL R. DICKEY TIMOTHY J. FOWLER CHARLES H. HARRIS, JR JEFFERY A. HUNT HUGH D. BOWMAN RICHARD J. COCCIE MARK C. DILLON DEAN G. FOX DAVID A. HARRIS ERIC C. HUPPERT JAMES C. BOYD WALTER E. COCHRAN JON C. DITTMER ERIC EDWARD FOX JACKSON S. HARRIS, JR DAVID M. HUSBAND MARCUS G. BOYETTE JAMES M. COHEN KATHLEEN T. DOBY BRUCE D. FRANK JERRY D. HARRIS, JR STEPHEN L. HUTCHENS WILLIAM J. BRANDT TRACY W. COLBURN GREG R. DODSON DONALD A. JOHN D. HARRIS OTTIS L. HUTCHINSON, JR. CHRISTOPHER N. LINDA R. COLE ELAINE R. DOHERTY FRANKENBERRY RAY P. HARRIS JAMES M. HUTTO BRANTLEY RAYMOND E. COLLINS ARDEN L. DOHMAN HOLLY R. FRANZ ROBERT HARRIS DONALD D. BRATTON, JR. THERESA L. COLLINS THOMAS J. DOLNEY JOHN H. FRANZ JEFFREY J. INGALLS WILLIAM S. HARRIS JOHN R. INGHAM SHAWN P. BRAUE JOHN C. COLOMBO ROBERT A. DOMINGUEZ MARK C. FRASSINELLI JOHN C. HARRISON PAUL A. BRAUNBECK, JR THOMAS R. COMER JOHN T. DONESKI DAVID C. FRAZEE KAREN A. INSKEEP JAMES A. HARROLD DON C. IRWIN ANNE E. BRELAND MAVIS E. COMPAGNO JOHN F. DONNELLY KEITH D. FREDE JACQUELINE C. R. HARRY ERIC R. BRENKERT JOHN H. COMTOIS CHRIS E. DONOVAN BARRY A. FREDERICK TROY V. IRWIN DAVID E. HARSHMAN STEVEN M. ISENHOUR *ERIN S. BRETT KATHLEEN O. CONCANNON JOHN A. DORIAN TIM B. FREEMAN EDWARD R. HARTMAN MICHAEL D. BRICE CURTIS C. CONNELL CHARLES S. DORSEY PATRICIA ANN EILEEN M. ISOLA PAUL G. HARTMAN ELIZABETH J. BRIDGES MICHAEL P. CONNER EDWARD K. DOSKOCZ FREEMANFORD MARK E. ISRAELITT RICHARD W. HARTMAN AARON C. BRIDGEWATER MICHAEL F. CONNOLLY JOHN W. DOUCETTE KARL L. FREERKS ARMAND G. IZZO ROBERT J. HARTNETT, JR ROBERT T. BRIGANTIC SUSAN B. CONNOR SAMUEL R. DOUGLAS GERALD J. FRISBEE KEVIN E. JACKSON *MICHAEL C. HARTZELL JACK L. BRIGGS, II JEFFREY P. CONNORS PAUL E. DOWDEN JACKIE D. FRISBYGRIFFIN TIMOTHY M. JACOBS TINA M. HARVEY DANIEL C. BRINK KATHLEEN C. CONRAD MARIA J. DOWLING PATRICK E. FROST JAY A. JACOBSON ROGER A. HARVILLE HARRIS L. BRISBON ROBERT S. COOK BENJAMIN H. DOWNING ROY H. FUKUOKA THOMAS E. JACOBSON MARK R. HASARA SALLEE A. BRITTON WILLIAM T. COOK, JR. *KONNIE M. DOYLE CLAUDE V. FULLER, JR. WILLIAM J. JACOBY, III MICHAEL R. HASS JAMES S. BROADWAY KENNETH C. COONS, JR. GREGORY F. DRAGOO DONALD J. GALE DAVID R. JACQUES ARTHUR G. HATCHER, JR MONTY L. BROCK CHARLES E. COOPER JOHN D. DRIESSNACK BRYAN J. GALLAGHER LISA A. JACQUES BRENDA A. HAVEN GREGORY N. BRODMAN PAUL S. COPELAND WILLIAM A. DRUSCHEL MARK A. GALLAGHER THOMAS A. JAEGER EDWARD M. BROLIN RAYMOND C. CORCORAN SCOTT C. DUDLEY RONALD J. GARAN, JR. ANGELO T. HAYGOOD *MICHAEL JAENSCH BUD L. BROOKS REBECA F. CORDINGLY SEAN P. DUFFY SCOTT R. GARDNER ROBERT L. HEAD, JR RONALD J. JAKOVAC CHRISTOPHER K. BROOKS CHARLES P. CORLEY DENISE DUMAS WONZIE L. GARDNER, JR. THOMAS Y. HEADEN ALLEN J. JAMERSON KAREN D. BROOKS JOAN H. CORNUET MARY E. DUNCAN ROBERT F. GASS LAURIE S. HEALY DEREK D. JAQUISH JAMES L. BROOME, III CHARLES D. CORPMAN RONALD L. DUNIC DANIEL J. GATES II SEAN V. HEATHERMAN *DEWEY W. JENKINS, JR. PAUL. B. BROTEN JOHN F. CORRIGAN DIEP N. DUONG RICHARD W. GATES JOEL C. HECK ERIC R. JENKINS FRANCIS M. BROWN COLIN B. COSGROVE, JR. THEOPHILE DUPLECHAIN, SANDRA E. GATEWOOD KEITH L. HEDGEPETH GEORGE R. JENKINS MARY E. BROWN JOHN F. COSTA, JR. JR KERMIT J. GETZ BART H. HEDLEY ROBERT Q. JENKINS STEVEN M. BROWN GERALD R. COSTELLO THOMAS L. DUQUETTE JAMES F. GEURTS MARK A. HEDMAN STEVEN S. JENKINS VIRGINIA G. BROWN FRANCIS COX JON A. DURESKY DAVID C. GEUTING WARD E. HEINKE MARK L. JENNER RAYMOND J. BROYHILL KEVIN S. COX DARREN P. DURKEE DAVID S. GIBSON JULIE A. HEITZMAN THOMAS W. JENSEN RICHARD M.C. BRUBAKER KIMBERLY S. COX DAVID J. DUVALL RANDY L. GIBSON LENORE M. HEMINGWAY JAMES W. JERNIGAN SANDRA L. BRUCE SUSAN A. COX MICHAEL S. DUVALL JAMES M. GIESKEN MICHAEL G. HEMLER HERMAN O. JETT ANTHONY L. HENDERSON DANIEL K. BRUNSKOLE MATTHEW L. CRABBE GREGORY M. DZOBA ROBERT C. GIFT DAVID D. JIVIDEN DAVID E. HENDERSON MICHAEL P. BRYANT PHYLLIS KAY CRAFT THOMAS J. EANNARINO DENISE L. GILLEN DAVID L. JOHANSEN JAMES L. HENDERSON MARK A. BUCCIGROSSI ROBERT L. CRAIG ERIC M. EARNEST WILLIAM S. GILLEY BRENT A. JOHNSON SCOTT A. HENDERSON DAVID J. BUCK RODNEY L. CROSLEN DAVID J. EASTMAN DAVID S. GILMORE BRIAN L. JOHNSON GEORGE M. HENKEL KEVIN W. BUCKLEY THOMAS G. CROSSAN, JR. LINDA L. EBLING THERESA GIORLANDO EUGENE O. JOHNSON, JR. KIRSCHBAUM JOANNE JOHN G. BULICK, JR MICHAEL P. CROWLEY ROBERT J. EGBERT FREDERICK M. GIRBERT GREGORY GENE JOHNSON HENKENIUS BRENDA R. BULLARD SHANNON B. CROWLEY GERARD W. EGEL ALAN G. GLODOWSKI GREGORY H. JOHNSON PAUL R. HENNING CASSINE JAY P. BULLOCK CRAIG A. CROXTON RANDY D. EIDE DAVID M. GLOGOWSKI JON E. JOHNSON EUGENE H. HENRY EDWARD J. BURBOL JESSE K. CRUMP CRAIG A. EIDMAN JOHN E. GOCHENAUR KARL B. JOHNSON KEVIN M. HENRY ISMAEL BURGOS, JR. ROBERT E. CRUZ ANGELO B. EILAND RICHARD A. GODDARD MILTON W. JOHNSON RICHARD J. BURKE MICHAEL T. CULHANE RICHARD C. EINSTMAN JAMES D. GODWIN MICHAEL W. HENRY JOHN J. HEPNER RICHARD T. JOHNSON ROBERTA B. BURKE ROBERT J. CULHANE ASHLEY S. ELDER THOMAS W. GOFFUS SUSAN J. JOHNSON LEE C. BURKETT PATRICK E. CUMMINS JAMES M. ELDRIDGE, JR TERRY L. GOLD SHARON M. HERMAN MICHAEL F. HERMSEN TERRY L. JOHNSON MICHAEL D. BURNES JENNIFER D. CUNNINGHAM NEIL R. ELTON LIESEL A. GOLDEN DOUGLAS L. JOHNSTON DAVID M. BURNS GERALD D. CURRY BRUCE C. EMIG FRANCINE P. GOODE BRADLEY P. HERREMANS SHERRY A. HERRERA CHRISTOPHER A. JONES DENISE L. BURTON JAMES M. CURTIS RANDALL M. EMMERT, JR JOHN T. GOODE DAVID L. JONES PETER L. BUSSA RANDY K. CURTIS MARK D. ENGEMAN GERALD S. GORMAN MARK S. HERSHMAN GARY D. HETLAND DRUSSELL B. JONES ROBERT F. BUSSIAN ROBERT L. CUSHING, JR. JON L. ENGLE MARK N. GOSE FRANK E. JONES LUIS E. BUSTAMANTE, JR BRIAN P. CUTTS ROBERT S. ENGLEHART PATRICK A. GOULD BRUCE E. HEYLMUN ROLLINS G. HICKMAN JACK L. JONES JAMES W. BUTTS WALTER CYKTICH, JR. CHARLES M. ENNIS, JR WAYNE E. GRACHEK, JR. NATHAN H. JONES RUDOLPH T. BYRNE TERRI J. CZENKUS DAVID ENNIS LARRY M. GRANT KYLE E. HICKS STEPHEN R. JONES ANDREW S. CAIN MARK R. DAGGITT ARNEL B. ENRIQUEZ MARION R. GRAVELY III MANUEL A. HIDALGO THOMAS A. JONES SEAN P, CAIN LINDA J. DAHL DAVID A. ERCHINGER DAVID L. GRAVES MELISSA A. MICHAEL JOY LARRY E. CAISON DENNIS E. DALEY LESLIE D. ERICKSON MICHAEL R. GRAY HIGGINBOTHAM PAUL R. JOYCE LISA C. CAMP DOUGLAS H. DALSOGLIO MARK S. ERICKSON WILLIAM R. GRAY III JOHN R. HIGGS, JR SETH M. JUNKINS CRAIG F. CAMPBELL RAYMOND T. DALY, JR. TERESE A. ERICKSON THOMAS A. GREALISH DOUGLAS D. HIGH BRIAN J. JURKOVAC RICKY L. CAMPISE KEVIN B. DAMATO KAREN G. EVERS DANIEL J. GREEN JOHN T. HILDEN KURT J. KAISLER ROBERT A. CANFIELD DONNA L. DANIELSON DEBORAH Y. EVES TIMOTHY S. GREEN CHRISTINE O. HILL THOMAS A. KALDENBERG JOHN E. CANNADAY, III JAMES R. DARBY III WALTER G. FARRAR, III SOCRATES L. GREENE DOUGLAS E. HILL JAMES D. KANABAY, JR. LOUIS A. CAPORICCI DOUGLAS W. DAUER VINCENT M. FARRELL JAMES M. GREER, JR. JOEL H. HILL GERARD F. KANE LORRIE J. CAPPELLINO THOMAS P. DAVENPORT DONALD G. FARRIS AMY M. GRIESE NORAH H. HILL ZYNA C. CAPTAIN KENNETH J. DAVID MICHAEL A. FATONE JOYCE L. GRIM RAYMOND R. HILL, JR REBECCA A. KANTER DAVID L. CARLON PETER D. DAVIDSON DANIEL C. FAVORITE DANIEL G. GROESCHEN ROBERT L. HINKLE BYRON J. KAPPES BRIAN L. CARLSEN WILLIAM T. DAVIDSON JAMES V. FAVRET VIRGIL A. GROGEAN II DONALD P. HINKSON LAURA M. KARANOVICH CARL R. CARLSON DONNIE G. DAVIS, JR. DAVID A. FEEHS HARRY N. GROSS DONALD W. HINTON JAMES R. KASMER GRANT E. CARLSON KIMBERLY A. DAVIS RICHARD W. FEESER PAUL A. GROVEN GREGORY H. HINTON ROBERT A. KAUCIC, JR. THOMAS L. CARLSON MARK L. DAVIS DOUGLAS H. FEHRMANN ELIZABETH M. GRUDZINSKI SUSAN E. HIRST EDWARD KEEGAN

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ROBERT L. KEITH PETER E. LINNEMANN ROY D. MC MICKELL, JR. KEVIN W. NORTON JOHN C. PYRYT FREDERICK W.D. STEVEN E. KEITH JOHN LIPINSKI ROBERT H. MC MILLAN III JAMES R. NORWOOD WILLIAM P. QUINONES SCHMOKEL JULIE I R. KELLER RAUL A. LIRA, JR. ROBERT D. MC MURRY, JR. STEVEN R. NOTTOLI MICKEY L. QUINTRALL EUGENE H. SCHNIPKE RICHARD C. KELLOGG SCOTT C. LOCKARD SEAN T. MC NAMARA MARK C. NOWLAND SUZANNE T. QUIRAO ERIC J. SCHNITZER ERIC D. KELLY RANDALL L. LONG RICHARD G. MC SPADDEN, KEVIN W. OATLEY RICHARD J. RAGALLER JOHN H. SCHOENEWOLF JAMES M. KELLY WAYNE D. LOOSBROCK JR. CHARLES E. O’BRIEN JEFFREY A. RALSTON HEATHER W. SCHOLAN FRED C. KELSEY ADELAIDA LOPEZ WILSON G. MC WHIRTER III EDWARD P. O’CONNELL ANTHONY RAMOS PAUL R. SCHOMBER DOUGLAS L. KENDALL MARK J. LORENZ LINDA R. MEDLER MAURICE T. O’DONNELL FRANKLIN D. RAND THORNTON C. SCHULTZ JAMES M. KENDLER JOHN E. LOSCHIAVO SCOTT D. MEISINGER DONALD E. OFFILL TAMRA L. RANK PETER H. SCHWARZ MICHAEL W. KENNEDY JAMES A. LOTT STEPHAN J. MELITZ JAMES H. OGDEN KEVIN D. RASMUSSEN SUSAN L. SCHWEISS VAN D. KEPLEY, JR. MICHAEL G. LOUGHLIN GREGORY L. MELTON TERENCE N. OHERON GREGORY J. RATTRAY PETER W. SCHWEYHER JERRY D. KERBY CATHERINE T. LOVELADY MARK A. MELVILLE PAUL M. OLDE JEFFREY RATTRAY JAMIE C. SCOTLAND BART R. KESSLER WYLIE E. LOVELADY III MICHAEL R. MENDONCA ROBERT I. OLSON BRIAN S. RAY LYNN R. SCOTT THOMAS R. KETTLER ANDRE L. LOVETT ANN E. MERCER TIMOTHY A. OLSON GREGORY MARK RAY THOMAS A. SCOTT KENNETH V. KIBURIS RAY DON LOWE II STEVEN J. MERRILL ROBERT C. O’NEAL JOEL D. RAY JOHN C. SELL *JOHN A. KILDEW JEFFREY D. LOWERY DONALD C. MERTZ, JR. ELAINE ORABONA TIMOTHY M. RAY PHILIP M. SENNA MICAH E. KILLION RONALD P. LOWTHER DARRYL C. METZ VIRGINIA A. ORR ANTHONY P. REARDON PATRICIA L. SEROKA MAURICE L. KILPATRICK, EDWARD W. LOXTERKAMP DANIEL D. MEYER ROBERT L. ORWIG, JR. ANDREW M. REDMOND HUGH G. SEVERS JR. JOSEPH R. LUBIC EDWARD F. MEYER PHILLIP L. OSBORNE HERRIE L. REED, JR. WARD W. SEVERTS STEVEN A. KIMBRELL DAVID E. LUCIA JEFFREY W. MEYER TERRENCE J. RICHARD A. REED DANIEL B. SHAFFER ANITA M KING LOUISE M. LUNDVAA RICHARD E. MEYER O’SHAUGHNESSY, JR. RODNEY E. REED MICHAEL R. SHANAHAN EDMUND T. KING II ROALD F. LUTZ RONALD J. MIKRUT BRADLEY D. OSWALT SCOTT A. REED ANN D. SHANE EDWARD R. KING STEPHEN P. LUXION JAMES D. MILBURN WILLIAM F. OVERBEY, JR. JOEL S. REESE JOSEPH R. SHANNAHAN ROBERT W. KING CHRISTOPHER H. LYONS CHARLES B. MILLER KELLY J. OWENS KENNETH W. REESE SCOTT T. SHARP KAREN J. KINLIN DOUGLAS J. LYPEK CYNTHIA L. MILLER MARC E. OWENS MATTHEW F. REESE MICHAEL R. SHAW SHEILA M. KINTY BRIAN D. MAAS DOUGLAS W. MILLER JOSEPH G. PACHECO HOWARD A. REID CURTIS L. SHELDON KEVIN R. KIRKPATRICK ROBERT J. MAC DONALD JAMES C. MILLER DUANE A. PADRICK FREDERICK L. SHEPHERD MARGARET A. REILLY MICHAEL R. KIRPES PATRIVA V. MACK MIKEL M. MILLER LEON D. PAGE, SR. III BRADFORD M. REINERT, ANTHONY T. KITT S. THOMPSON MAC KENZIE RANDOLPH P. MILLER WILLIAM J. PALIWODA SCOTT F. SHEPHERD SR. DENNIS K. KITTERMAN KRISTIAN G. MACKEY RICHARD C. MILLER NORMAN H. PALLISTER STEVEN M. SHEPRO BRADY R. REITZ ERIC A. KIVI KEMMIT C. MAC LEAN THOMAS J. MILLER MARGUERITE J. PALMER IVAN L. SHERARD DAVID REMENDOWSKI GARY W. KLABUNDE BARRY S. MAC NEILL MICHAEL K.J. MILLIGAN ROBERT C. PALMER DANIEL R. SHERRED DAVID RESENDEZ TERRY D. KLINE BRIAN MAGAZU ARTHUR G. MILLS GUY M. PALUMBO BRIAN D. SHIMEL TERRI J. REUSCH EDWARD J. KLINENBERG DONALD J. MAGEE DIANE M. MILLS ROBERT E. PANNONE, JR. HENRY H. SHIN CHRISTOPHER J. REVIS STEPHEN S. KMIECIK WILLIAM J. MAHONY, JR. ROBERT F. MILLS RONALD B. PANTING LUKE A. SHINGLEDECKER DAVID L. REYNOLDS RICHARD P. KOEPKE ROBERT W. MAHOOD ERNEST M. MILTON GLEN J. PAPPAS STEVEN E. SHINKLE GEORGE F. RHAME BETH Y. KOHSIN KARL B. MAJOR EDWARD M. MINAHAN ORLANDO J. PAPUCCI JOYCE M. SHIVELY ALBERT N. RHODES III WILLIAM A. KOLAKOWSKI MYRON V. MAJORS STEPHEN L. MITCHELL JAMES E. PARKER GREGORY A. SHOALES KEITH E. KOLEKOFSKI, JR. JERALD T. MALLERNEE SUSAN E. MITCHELL MICHAEL K. PARKER CLIFTON D. RHODES KEITH A. SHOMPER JEFFREY A. KOONZ RICHARD L. MALLICK WILLIAM L. MITCHELL MONTE R. PARKER DANIEL J. RICHARD BILLY R. SHRADER PHILIP L. KOPPA CHRISTOPHER R. MALOY ZANE W. MITCHELL, JR. VICTOR F. PARKER MARC D. RICHARD STEPHEN D. SICKING JOHN M. KORLASKE FILEMON S. MANANSALA EUGENE W. MITTUCH JOHN B. PARKES III NANCY S. RICHARDS KIMBERLY B. SIEVERS RICHARD A. KOSANKE KATHRYN S. MANCHESTER MATTHEW H. MOLLOY ANTHONY T. PARLATI DANNY B. RICHARDSON SCOTT A. SILLIMAN STEVEN T. KOTAN MARK A. MANEELY JEFFREY M. MOODY DAVID R. PATTERSON BRENT A. RICHERT JAY B. SILVERIA DIANE L. KOVACH JAMES E. MANKER, JR. JAMES M. MOORE JACK D. PATTERSON BRET G. RIDER BRIAN J. SIMES STEWART J. KOWALL MARK T. MANNEY LARRY B. MOORE SPENCER H. PATTERSON, GILBERTO G. RIOS VERNON N. SIMMONS MARK D. KRAMER CHARLES A. MANSHIP II SCOTT W. MOORE JR. JOSE RIVERA MARK A. SIMON PAUL A. KRAUSE WALTER B. MANWILL STEVEN G. MOORE ERIC M. PAULSON ROBERT J. RIZZA PHILIP S. SIMONSEN MICHAEL V. KRAUT HOWARD K. MARDIS TIMOTHY S. MOORE GEORGE L. PAVELKO, JR. SCOTT M. ROBERTS GARY J. SINGLER JOHN H. KRESEK, JR. JAMES R. MARRS WILLIAM A. MOORE JONATHON S. PAYNE DAVID D. ROBERTSON JAMES C. SINWELL WOLFGANG K. KRESSIN NATHAN W. MARTENS LUIS F. MORALES DAVID W. PEAIRE DAVID M. ROBERTSON JAMES L. SISSON THOMAS W. KRISE JAMES F. MARTIN, JR. ROBERT E. MORIARTY BRADLEY J. PEARSON BRENDA M. ROBINSON DEBRA S. SITES MARK S. KROSS LAWRENCE M. MARTIN, JR. DANIEL P. MORIN ALEX S. PEAT JAMES T. ROBINSON KERRY L. SITLER JOHN C. KRUEGER LESLIE C. MARTIN ANNE R. MORRIS MICHAEL W. PEEL JOHN B. ROBINSON DANIEL R. SITTERLY DANA C. KUECKER RONALD G. MARTIN KAREN P. MORRIS PATRICK E. PENCE LOUIS J. ROBINSON, JR. MICHAEL A. W. SIZOO DAVID E. KUGLER STEVEN W. MARTIN MICHAEL F. MORRIS DAVID C. PENNY RANDALL L. ROBINSON JOHN P. SKINNER KARL W. KUSCHNER DAVID W. MARTINEZ GARY P. MORRISON PHILIP E. PEPPERL EVELYN A. ROCKWELL DAVID A. SLADE GARY R. KUWASHIMA GLEN S. MARUMOTO DAVID L. MORROW JOHN J. PERICAS JEFFREY A. ROCKWELL PAUL A. SMILEY KURT R. KUZNICZCI JAMES K. MASON PATRICIA G. MOSELEY GREGORY M. PERKINSON DAVID A. RODRIGUEZ ANTHONY J. SMITH ROBBY A. KYROUAC SHARI L. MASSENGALE WILLIAM A. MOSS GARY R. PERRY WILLIAM RODRIGUEZ ARTHUR C. SMITH THOMAS P. LACOMBE STEPHEN M. MATECHIK URSULA P. MOUL JENNIFER HANSELL PERRY JOHN C. ROELOFS, III BILLY R. SMITH THOMAS M. LAFFEY ERIC S. MATHEWSON JAMES C. MOULTON LAWRENCE J. PETER ANDY D. ROGERS BRADLEY J. SMITH ANDREW D. LAGRONE DONALD F. MATTNER, JR. MARK W. MOUW EUGENE G. PETERSON, JR. LANE T. ROGERS BRIAN K. SMITH ROBERT A. LALA JUAN M. MAURTUA PATRICK O. MOYLAN MARK R. PETERSON PETER T. ROGERS DALE R. SMITH JOHN D. LALUMIA KATHY L. MAXWELL RONALD J. MOZZILLO DAVID PETRILLO JOACHIM A. ROGL DOUGLAS D. SMITH RAYMOND E. LAMARCHE, DANITA C. MC ALLISTER MICHAEL R. MUELLER HANS J. PETRY EDWARD H. ROHLK ERNEST P. SMITH JR. EVERETT B. MC ALLISTER MARK D. MULLEN WILLIAM G. PFEIFFER, JR. MICHAEL S. ROMEO GARLAND D. SMITH MICHAEL A. LAMBERT GARY D. MC ALUM BARRY E. MULLINS KURT P. PFITZNER NYDIA A. ROSADO GREGORY A. SMITH SCOTT V. LANDIS PATRICK W. MC ANDREWS RICHARD F. MUNSELL DAVID D. PHILLIPS, JR. ALLEN E. ROSE KEVIN C. SMITH PHILLIP T. LANMAN PETER M. MC CABE TRACY M. MURAKAMI DON E. PHILLIPS RANDY E. ROSE KYLE J. SMITH WILSON DAVIS LANNOM, JOHN M. MC CAIN KEVIN M. MURPHY GARY E. PHILLIPS, JR. CHARLES W. ROSS LANI M. SMITH JR. RANDY MC CANNE TIMOTHY W. MURPHY RONALD B. PHIPPS HUBERT A. ROSS NEIL F. SMITH FRANK H. LARA MICHAEL J. MC CARTHY BRIAN K. MURRAY RONALD H. PICKETT KEVIN D. ROSS PATRICK J. SMITH MARK J. LAROSE JAMES E. MC CLAIN JEFFREY M. MURRAY CHARLES K. PIGG TERRY L. ROSS RICARD K. SMITH BRUCE A. LARSEN JOSEPH S. MC CLAIN PATRICK H. MURRAY ALAN J. PINEAULT FRANK J. ROSSI, JR SANDRA M. SMITH DAVID M. LARSON DAVID B. MC CORMICK EDEN J. MURRIE JOHN P. PINO CONSTANCE M. ROTHER THOMAS H. SMITH, JR. DEBORAH L. LARY TIMOTHY R. MC CORMICK BARBARA L. MYERS CURTIS O. PIONTKOWSKY MAX R. ROTHMAN THOMAS J. SMITH STEPHEN LATCHFORD CLEVELAND R. MC CRAY BROOKS A. MYERS *GARY F. PIPER MARIANNE C. ROWE TIMOTHY S. SMITH ANITA E. LATIN CARLOS L. MC DADE RICHARD R. NEEL STEVE E. PITCHER JONATHAN D. RUDMAN CURT D. SMOLINSKY STUART T. LATTA CARL E. MC DANIEL, JR. MICHAEL L. NEELEY LEE PLOWDEN BRUCE A. RUSCIO CHAPMAN JAMILYN J. JOHN W. LAVIOLETTE LOUIS N. MC DONALD III THERESE M. NEELY MARK A. POHLMEIER FLOYD RUSSELL III SMYSER THOMAS J. LAWHEAD, JR. GUY W. MC GEE JAMES B. NEES TODD J. POLLARD HOWARD R. RUSSELL CRAIG H. SMYSER, JR. NAOMI T. LAWLESS MICHAEL B. MC GEE, JR. GEORGE J. NELSON, JR. JOHN D. POLLEY MARK A. RUSSELL JOHN W. SNODGRASS ROBERT G. LAWS TERESA M. MC GONAGILL JULIA E. NELSON CHRISTOPHER J. POOCK PATRICK E. RYAN RICHARD W. SNYDER GREGORY E. LAXTON DONALD A. MC GOUGH, JR. MARY S. NELSON TIMOTHY G. POOLE TIMOTHY L. SAFFOLD JAMES T. SOHAN PETER C. LEAHY MAURA THERESA JEFFREY L. NEUBERGER PATRICIA L. POPPINO CASSANDRA R. SALVATORE LORI L. SOUTH TIMOTHY J. LEAHY MC GOWAN VISHNU V. NEVREKAR CHARLES E. POTTER BRIJ B. SANDILL STEPHEN F. SOVAIKO PATRICK G. LEE JOSEPH H. MC GUGAN JOHN F. NEWELL III RONALD K. POWELL, JR. CRAIG A. SANDS VIC A. SOWERS RONALD A. LEE LAWRENCE J. MC GUIN MATTHEW P. NEWMAN DONNA L. POWERS ROBERT A. SANFORD BRADLEY D. SPACY JOHN D. LEEZER TIMOTHY J. MC ILHENNY JOSEPH W. NICHOLS WINSTON D. POWERS MARK B. SANSOUCI WILLIAM L. SPACY II RANDY J. LEFEVRE FRANCIS L. MC ILWAIN, JR. STUART O. NICHOLS MARK R. PRICE MARC A. SARCHET THOMAS P. SPELLMAN SCOTT J. LEMPE BRIAN K. MC INTOSH PHILIP G. NICHOLSON PAUL A. PRICE CLAIRE M. SAUCIER GEORGE E. SPENCER III BABETTE M. LENFANT JANET E. MC INTOSH DAVID A. NICKELS PHILIP J. PRICE EDWARD G. SAUVAGEAU LOUIS R. SPINA MARIACRISTINA C. LEONE PAUL D. MC INTOSH CLARA L. NIELSEN JOSEPH J. PRIDOTKAS NORMAN P. SCHAFFER HAROLD L, SPRINGS, JR NATHAN A. LEPPER STEPHEN M. MC INTYRE STEPHEN J. ELEGEAR J. PRIMUS JUDITH SCHAFFER BRIAN S. SQUYRES MARK W. LEVSKY TIMOTHY P. MC INTYRE NIEMANTSVERDRIET MICHAEL E. PRIVETTE KURT W. SCHAKE JOHN R. STAFFORD JEFFREY L. LEWIS MICHAEL V. MC KELVEY LAWRENCE J. NIKOLAUS DENISE M. PROCTOR MARGARET E. SCHALCH MICHAEL C. STANLEY PAULA A. LEWIS MATTHEW P. MC KEON WESLEY L. NOLDEN II JOSEPH F. PUGLIESE RANDALL A. MICHAEL B. STARK THEODORE P. LEWIS CHRISTOPHER M. BRIAN S. NORMAN PETER PUHEK SCHERMERHORN WILLIAM C. STARR DARCY L. LILLEY MC LAUGHLIN CYNTHIA L.A. NORMAN JAMES R. PULLIAM GREGORY J. SCHMIDT CYNTHIA S. STAUFFER SOLEDAD LINDOMOON JOHN A. MC LAUGHLIN, JR. JON A. NORMAN SCOTT T. PURDIE JEFFREY E. SCHMIDT CAROL E. STDENIS MARK W. LINDSEY MONTE C. MC MEANS CLETUS G. NORRIS ROBERT A. PURKHISER MARCEL T. SCHMIDT ANTHONY L. STEADMAN LANCE J. LINDSLEY * SARAH P. MC MENAMIN JAN A. NORTH STEVEN O. PURTLE MARK J. SCHMITZ GOODWIN LINDA STEEL

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JOHN H. STEENKEN, JR. WYNE B. WALDRON CHARLIE R. YOUNG DAVID F. ZEHR PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA KENNETH T. STEFANEK MICHELLE L. WALDROND DAVID M. YOUNG MARK D. ZETTLEMOYER TO THE REPUBLIC OF NICARAGUA. JEFFREY L. STEPHENSON JEFFREY K. WALKER JUDY A. YOUNG DANIEL B. ZIEGLER JOYCE E. LEADER, OF THE DISTRICT OF COLUMBIA, A PAUL R. STEPHENSON RICHARD F. WALKER BARR D. YOUNKER, JR. CAROL A. ZIENERT CAREER MEMBER OF THE SENIOR FOREIGN SERVICE, BARRY E. STERLING ROY E. WALKER, JR. DEBORAH L. ZAMORASOON ANDREW G. ZINY CLASS OF COUNSELOR, TO BE AMBASSADOR EXTRAOR- DOUBLAS E. STEWART RAYMOND B. ZAUN SCOTT J. ZOBRIST STEVEN J. WALKER DINARY AND PLENIPOTENTIARY OF THE UNITED STATES NOYES C. STICKNEY III JEAN A. WALLACE OF AMERICA TO THE REPUBLIC OF GUINEA. JOHN W. STIERWALT JOHN E. WALLIN f DAVID B. DUNN, OF CALIFORNIA, A CAREER MEMBER CHARLES B. STILL JUDSON E. WALLS JOHN G. STIZZA JOSEPH T. WALDROND CONFIRMATIONS OF THE SENIOR FOREIGN SERVICE, CLASS OF COUN- TIMOTHY A STOCKING ROSS E. WALTON SELOR, TO BE AMBASSADOR EXTRAORDINARY AND DANIEL W. STOCKTON MARK D. WARD Executive nominations confirmed by PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA KATHERINE E. STODDARD SCOTT F. WARDELL TO THE REPUBLIC OF ZAMBIA. DANIEL J. STOEHR STEVEN E. WARE the Senate July 1, 1999: M. MICHAEL EINIK, OF VIRGINIA, A CAREER MEMBER RICHARD B. STONESTREET JEFFERY J. WARNEMENT OF THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- ENVIRONMENTAL PROTECTION AGENCY STEPHAN G. STRINGHAM FRED L. WARREN, III COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND DIANE K. STRUCK JONATHAN E. WASCHE GARY S. GUZY, OF THE DISTRICT OF COLUMBIA, TO BE PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA RICHARD M. STUCKEY LESLEE E. WASHER AN ASSISTANT ADMINISTRATOR OF THE ENVIRON- TO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA. CHARLIE R. STUTTS JEFFREY W. WATSON MENTAL PROTECTION AGENCY. MARK WYLEA ERWIN, OF NORTH CAROLINA, TO BE AM- JOHN E. STUWE REGINA A. WATSON BASSADOR EXTRAORDINARY AND PLENIPOTENTIARY OF TERRENCE L. SUNNARBORG MICHAEL L. WAYSON DEPARTMENT OF STATE THE UNITED STATES OF AMERICA TO THE REPUBLIC OF STANLEY B. SUPINSKI CHARLES L. WEBB, III RICHARD A. SUPPES MARSHALL B. WEBB DIANE EDITH WATSON, OF CALIFORNIA, TO BE AMBAS- MAURITIUS, AND TO SERVE CONCURRENTLY AND WITH- DANIEL A. SUROWITZ EDWARD V. WEBER SADOR EXTRAORDINARY AND PLENIPOTENTIARY OF OUT ADDITIONAL COMPENSATION AS AMBASSADOR EX- JOSEPH C. SUSSINGHAM JAMES M. WEBER THE UNITED STATES OF AMERICA TO THE FEDERAL TRAORDINARY AND PLENIPOTENTIARY OF THE UNITED ROLAND O. W. SUTTON BRADLEY N. WEBSTER STATES OF MICRONESIA. STATES OF AMERICA TO THE FEDERAL ISLAMIC REPUB- CARL J. SWANSON THOMAS M. WEBSTER, JR. LIC OF THE COMOROS AND AS AMBASSADOR EXTRAOR- MATTHEW D. SWANSON CHARLES D. WEEKES DEPARTMENT OF ENERGY DINARY AND PLENIPOTENTIARY OF THE UNITED STATES JOHN T. SWINSON ROBERT M. WEESNER CAROLYN L. HUNTOON, OF VIRGINIA, TO BE AN ASSIST- OF AMERICA TO THE REPUBLIC OF SEYCHELLES. ROBERT W. SWISHER CHRISTOPHER P. ANT SECRETARY OF ENERGY (ENVIRONMENTAL MAN- CHRISTOPHER E. GOLDTHWAIT, OF FLORIDA, A CAREER JOHN K. SWITZER WEGGEMAN AGEMENT). MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF CARLA S. SYLVESTER GEORGE E. WEIL CAREER MINISTER, TO BE AMBASSADOR EXTRAOR- JERRY R. S. TACKETT ROBERT J. WEILAND, JR. EXECUTIVE OFFICE OF THE PRESIDENT WENDEL H. TAKENAKA JAMES R. WEIMER DINARY AND PLENIPOTENTIARY OF THE UNITED STATES ANTHONY G. TALIANCICH JAMES W. WEISSMANN JOHN T. SPOTILA, OF NEW JERSEY, TO BE ADMINIS- OF AMERICA TO THE REPUBLIC OF CHAD. MICHAEL E. TALLENT DAVID L. WEISZ TRATOR OF THE OFFICE OF INFORMATION AND REGU- JOSEPH LIMPRECHT, OF VIRGINIA, A CAREER MEMBER MARK S. TALLEY MICHAEL F. WELCH LATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDG- OF THE SENIOR FOREIGN SERVICE, CLASS OF COUN- DEAN C. TANO MICHAEL R. WELDON ET. SELOR, TO BE AMBASSADOR EXTRAORDINARY AND HALBERT F. TAYLOR, JR. BILL C. WELLS PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA LUCILLE P. TAYLOR GEOFFREY M. WELLS DEPARTMENT OF THE TREASURY TO THE REPUBLIC OF ALBANIA. MICHAEL D. TAYLOR MARK A. WELLS PRUDENCE BUSHNELL, OF VIRGINIA, A CAREER MEM- NANCI M. TAYLOR TIMOTHY S. WELLS LAWRENCE H. SUMMERS, OF MARYLAND, TO BE SEC- BER OF THE SENIOR FOREIGN SERVICE, CLASS OF MIN- WILLIAM D. TAYLOR JAMES E. WELTER RETARY OF THE TREASURY. ISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- ROGER W. TEAGUE JON S. WENDELL SAINT LAWRENCE SEAWAY DEVELOPMENT DONALD D. THARP JOSEPH C. WENDLBERGER DINARY AND PLENIPOTENTIARY OF THE UNITED STATES MICHAEL T. THAYNE TRACY L. WENTWORTH CORPORATION OF AMERICA TO THE REPUBLIC OF GUATEMALA. ERIC E. THEISEN MICHAEL J. WERMUTH DONALD KEITH BANDLER, OF PENNSYLVANIA, A CA- ALBERT S. JACQUEZ, OF CALIFORNIA, TO BE ADMINIS- SUSAN E. THIBODEAU DAVID C. WESLEY REER MEMBER OF THE SENIOR FOREIGN SERVICE, TRATOR OF THE SAINT LAWRENCE SEAWAY DEVELOP- DENNIS R. THOMAS BRUCE A. WEST CLASS OF MINISTER-COUNSELOR, TO BE AMBASSADOR MENT CORPORATION FOR A TERM OF SEVEN YEARS. LAWRENCE D. THOMAS ROBERT J. WEST EXTRAORDINARY AND PLENIPOTENTIARY OF THE MICHAEL L. THOMAS MARK W. WESTERGREN CONSUMER PRODUCT SAFETY COMMISSION UNITED STATES OF AMERICA TO THE REPUBLIC OF CY- ROBERT D. THOMAS EDWARD B. WESTERMANN PRUS. WILBERT J. THOMAS, JR. TODD C. WESTHAUSER MARY SHEILA GALL, OF VIRGINIA, TO BE A COMMIS- JOHNNIE CARSON, OF ILLINOIS, A CAREER MEMBER OF MARY C. THOMASSON KEITH R. WEYENBERG SIONER OF THE CONSUMER PRODUCT SAFETY COMMIS- THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- ANGELA L. THOMPSON MARY E. WHISENHUNT SION FOR A TERM OF SEVEN YEARS FROM OCTOBER 27, COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND DAVID D. THOMPSON DONALD J. WHITE 1998. PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA JEROME B. THOMPSON JEFFREY D. WHITE ANN BROWN, OF FLORIDA, TO BE A COMMISSIONER OF KEITH A. THOMPSON JOHN W. WHITE THE CONSUMER PRODUCT SAFETY COMMISSION FOR A TO THE REPUBLIC OF KENYA. FRANK B. THORNBURG, III THOMAS P. WHITE TERM OF SEVEN YEARS FROM OCTOBER 27, 1999. THOMAS J. MILLER, OF VIRGINIA, A CAREER MEMBER MICHAEL H. THORNTON MARY K. WHITTENBURG ANN BROWN, OF FLORIDA, TO BE CHAIRMAN OF THE OF THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- DEAN W. THORSON CHARLES L. WICHLAC CONSUMER PRODUCT SAFETY COMMISSION. COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND MICHAEL W. THYSSEN RONALD C. WIEGAND PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA JOHN J. TILLIE MARVIN W. WIERENGA, JR. DEPARTMENT OF VETERANS AFFAIRS TO BOSNIA AND HERZEGOVINA. DAVID L. TIMM WILLIAM WIGNALL BISMARCK MYRICK, OF VIRGINIA, A CAREER MEMBER GREGORY S. TIMS PHYLLIS T. WILCOX JOHN T. HANSON, OF VIRGINIA, TO BE AN ASSISTANT OF THE SENIOR FOREIGN SERVICE, CLASS OF COUN- KENNETH R. TINGMAN TIMOTHY G. WILEY SECRETARY OF VETERANS AFFAIRS (PUBLIC AND JAMES E. TINSLER, JR. WILLIAM P. WILHELM INTERGOVERNMENTAL AFFAIRS). SELOR, TO BE AMBASSADOR EXTRAORDINARY AND MARK S. TISSI DONALD R. WILHITE PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA DAVID M. TOBIN AARON L. WILKINS ENVIRONMENTAL PROTECTION AGENCY TO THE REPUBLIC OF LIBERIA. DANIEL R. TODD ANTHONY R. WILLIAMS MICHAEL D. METELITS, OF CALIFORNIA, A CAREER TIMOTHY FIELDS, JR., OF VIRGINIA, TO BE ASSISTANT JAMES H. TOLER CHARLES KEITH WILLIAMS ADMINISTRATOR, OFFICE OF SOLID WASTE, ENVIRON- MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF KIMBERLY K. TONEY CLIFFORD V. WILLIAMS MENTAL PROTECTION AGENCY. COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND TERRI L. TOPPIN DONALS S. WILLIAMS PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA MARK E. TORRES FREDERICK L. WILLIAMS UNITED STATES INTERNATIONAL DEVELOPMENT TO THE REPUBLIC OF CAPE VERDE. CHRISTOPHER M. TOSTE JACK G. WILLIAMS THE ABOVE NOMINATIONS WERE APPROVED SUBJECT STEPHEN M. TOURANGEAU RICHARD J. WILLIAMS COOPERATION AGENCY TO THE NOMINEES’ COMMITMENT TO RESPOND TO RE- HENRY TOUSSAINT THOMAS L. WILLIAMS MELVIN E. CLARK, JR., OF THE DISTRICT OF COLUMBIA, QUESTS TO APPEAR AND TESTIFY BEFORE ANY DULY ANDREW C. TRACEY CRAIG J. WILLITS TO BE A MEMBER OF THE BOARD OF DIRECTORS OF THE HAU T. TRAN JAMES R. WILLSIE CONSTITUTED COMMITTEE OF THE SENATE. OVERSEAS PRIVATE INVESTMENT CORPORATION FOR A DARRYL G. TREAT DARRELL R. WILSON TERM EXPIRING DECEMBER 17, 1999. JOHN E. TRIMMER, JR. GARY L. WILSON DONALD LEE PRESSLEY, OF VIRGINIA, TO BE AN AS- FOREIGN SERVICE JAMES A. TRIPP KELLY W. WILSON SISTANT ADMINISTRATOR OF THE AGENCY FOR INTER- MICHAEL W. TRUNDY MICHAEL G. WILSON THE FOLLOWING-NAMED CAREER MEMBER OF THE NATIONAL DEVELOPMENT. ALLAN T. TUCKER, JR. SCOTT A. WILSON SENIOR FOREIGN SERVICE OF THE DEPARTMENT OF KATHERINE K. TUCKER CRAIG S. WINDORF DEPARTMENT OF STATE STATE FOR PROMOTION INTO THE SENIOR FOREIGN MONA LISA D. TUCKER KELLY A. WING SERVICE TO THE CLASS INDICATED: DWAYNE R. TURMELLE DAVID R. WINKLER DONALD W. KEYSER, OF VIRGINIA, A CAREER MEMBER CAREER MEMBER OF THE SENIOR FOREIGN SERVICE GAYLENE B. UJCIK STEVEN W. WINTERS OF THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- OF THE UNITED STATES OF AMERICA, CLASS OF COUN- CHARLES L. ULLESTAD VANESSA WISE COUNSELOR, FOR RANK OF AMBASSADOR DURING TEN- SELOR: TERRY A. ULRICH EDWARD W. WITHERSPOON URE OF SERVICE AS SPECIAL REPRESENTATIVE OF THE PETER S. WOOD, OF CALIFORNIA WILLIAM A. ULRICH CLAYTON E. WITTMAN SECRETARY OF STATE FOR NAGORNO-KARABAKH AND DONALE M. UTCHEL JAMES S. WOLCOTT NEW INDEPENDENT STATES REGIONAL CONFLICTS. FOREIGN SERVICE NOMINATIONS BEGINNING CON- DAVID R. UZZELL GARY A. WOLVER LARRY C. NAPPER, OF TEXAS, A CAREER MEMBER OF STANCE A. CARRINO, AND ENDING RUTH H. VAN HEUVEN, DANIEL M. VADNAIS HOWARD L. WONG THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- WHICH NOMINATIONS WERE RECEIVED BY THE SENATE JAMES P. VAKOS EMMETT G. WOOD COUNSELOR, FOR RANK OF AMBASSADOR DURING TEN- AND APPEARED IN THE CONGRESSIONAL RECORD ON FLORENCE A. VALLEY ROBERT R. WOODLEY URE OF SERVICE AS COORDINATOR OF THE SUPPORT FEBRUARY 23, 1999. BUSKIRK DAVID J. VAN COENNIE F. WOODS FOR EAST EUROPEAN DEMOCRACY (SEED) PROGRAM. FOREIGN SERVICE NOMINATIONS BEGINNING BRIAN E. SCOTT C. VANBLARCUM DAVID S. WOODS FRANK ALMAGUER, OF VIRGINIA, A CAREER MEMBER SCOTT A. VANDERHAMM PENNY D. WOODSON CARLSON, AND ENDING LEONARDO M. WILLIAMS, WHICH OF THE SENIOR FOREIGN SERVICE, CLASS OF CAREER JOHN W. VANDERHOVEN DAVID W. WOODWARD NOMINATIONS WERE RECEIVED BY THE SENATE AND AP- MINISTER, TO BE AMBASSADOR EXTRAORDINARY AND STAN L. VANDERWERF RUDI D. WOODWARD PEARED IN THE CONGRESSIONAL RECORD ON MARCH 24, PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA KENNETH J. VANTIGER DANIEL WOOLEVER 1999. TO THE REPUBLIC OF HONDURAS. MICHAEL E. MATTHEW F. WOOLLEN FOREIGN SERVICE NOMINATIONS BEGINNING DALE V. JOHN R. HAMILTON, OF VIRGINIA, A CAREER MEMBER VANVALKENBURG MICHAEL S. WOOLLEY SLAGHT, AND ENDING ERIC R. WEAVER, WHICH NOMINA- OF THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- PETER M. VANWIRT DAVID J. WORLEY TIONS WERE RECEIVED BY THE SENATE AND APPEARED COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND EMILIO VARCARCEL GEORGE J. WORLEY IN THE CONGRESSIONAL RECORD ON MARCH 24, 1999. JAMES W. VAUGHT, JR. CAMERON H.G. WRIGHT PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA TO THE REPUBLIC OF PERU. FOREIGN SERVICE NOMINATIONS BEGINNING JOHNNY RENNIE VAZQUEZ DANNY C. WRIGHT E. BROWN, AND ENDING MEE JA YU, WHICH NOMINATIONS KATIE D. VEAZIE DAVID L. WRIGHT, JR. GWEN C. CLARE, OF SOUTH CAROLINA, A CAREER MEM- WERE RECEIVED BY THE SENATE AND APPEARED IN THE TIMOTHY A. VEEDER MARCUS D. WROTNY BER OF THE SENIOR FOREIGN SERVICE, CLASS OF COUN- CONGRESSIONAL RECORD ON APRIL 12, 1999. DAVID VEGA LEE O. WYATT SELOR, TO BE AMBASSADOR EXTRAORDINARY AND RAMON G. VEGA, JR. FRANCIS V. XAVIER PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA FOREIGN SERVICE NOMINATIONS BEGINNING JAY M. ROBERT J. VERICA, JR. ROBERT A. YAHN, JR. TO THE REPUBLIC OF ECUADOR. BERGMAN, AND ENDING ROBIN LANE WHITE, WHICH NANCY R. VETERE DENNIS D. YATES OLIVER P. GARZA, OF TEXAS, A CAREER MEMBER OF NOMINATIONS WERE RECEIVED BY THE SENATE AND AP- ROSE M. VICKERY BRIAN D. YOLITZ THE SENIOR FOREIGN SERVICE, CLASS OF MINISTER- PEARED IN THE CONGRESSIONAL RECORD ON MAY 11, THELMA D. VINCENT BRADFORD P. YOUNG COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND 1999.

VerDate Sep 11 2014 14:56 Aug 05, 2019 Jkt 000000 PO 00000 Frm 00043 Fmt 0624 Sfmt 9801 C:\ERIC\CONGRESSIONAL-RECORD-SSN-FILES_2\S01JY9.REC S01JY9 ejoyner on DSK30MW082PROD with CONG-REC-ONLINE S8016 CONGRESSIONAL RECORD — SENATE July 1, 1999 THE FOLLOWING-NAMED PERSON OF THE AGENCY INDI- FOREIGN SERVICE NOMINATIONS BEGINNING KAREN 1999, withdrawing from further Senate CATED FOR APPOINTMENT AS FOREIGN SERVICE OFFI- AGUILAR, AND ENDING LAURIE M. KASSMAN, WHICH CER OF THE CLASS STATED, AND ALSO FOR THE OTHER NOMINATIONS WERE RECEIVED BY THE SENATE AND AP- consideration the following nomina- APPOINTMENTS INDICATED HEREWITH: FOR APPOINT- PEARED IN THE CONGRESSIONAL RECORD ON MAY 26, tion: MENT AS FOREIGN SERVICE OFFICER OF CLASS FOUR, 1999. CONSULAR OFFICER AND SECRETARY IN THE DIPLO- f EXECUTIVE OFFICE OF THE PRESIDENT MATIC SERVICE OF THE UNITED STATES OF AMERICA: WITHDRAWAL G. EDWARD DE SEVE, OF PENNSYLVANIA, TO BE DEP- DEPARTMENT OF STATE UTY DIRECTOR FOR MANAGEMENT, OFFICE OF MANAGE- MENT AND BUDGET, VICE JOHN A. KOSKINEN, WHICH WAS STEPHEN A. DODSON, OF TEXAS Executive message transmitted by the President to the Senate on July 1, SENT TO THE SENATE ON FEBRUARY 12, 1999. July 1, 1999 CONGRESSIONAL RECORD — Extensions of Remarks E1455 EXTENSIONS OF REMARKS

ESTABLISHING PEACEFUL AND was established with Chairman Mao Tz Tung President Lee’s understanding and perspec- STABLE RELATIONS ACROSS THE as its leader. Thereafter, China has been tive have provided direction to SEF’s tasks. TAIWAN STRAIT ruled separately, with the Chinese com- We hope to establish a peaceful and stable munists exercising jurisdiction on the main- cross-strait relationship step by step, as fol- land; while ROC government exercising ju- lows: HON. BENJAMIN A. GILMAN risdiction in Taiwan, Penghu, Kinmen, and First of all, we have made all necessary OF NEW YORK Matsu. China has not been united for the preparations for the coming of Mr. Wang Dao IN THE HOUSE OF REPRESENTATIVES past half century, and our situation resem- han, the senior chairman of the Association bles that of North and South Korea. This is for Relations Across the Taiwan Strait Wednesday, June 30, 1999 a very simple political reality, known and (ARATS). I address him as ‘‘senior’’ because Mr. GILMAN. Mr. Speaker, permit me to accepted around the world. he is eighty-three years old, and I’m a year Beijing’s claim that ‘‘there is only one younger that he is. I am expecting Mr. take this opportunity to commend the mem- China and Taiwan is part of China, and one bers of the Straits Exchange Foundation and Wang’s visit as one which will renew the China means the People’s Republic of channel of constructive discourse we first es- its distinguished Chairman Dr. Koo Chen-fu for China,’’ or ‘‘Taiwan is a renegade province of tablished during my trip to mainland last their great efforts toward establishing peaceful PRC’’ not only deviates from reality, but October. The SEF will make arrangements and stable relations across the Taiwan Strait. completely negates the truth. It is my view for Mr. Wang’s ‘‘getting to know Taiwan’’ I would like to draw the attention of my col- that China is now divided, and both Taiwan trip safe and comfortable, so the mainland’s and the mainland are parts of China and the leagues to the following address given by Dr. leading persons will have a better under- two sides of the Taiwan Strait are ruled by standing and knowledge of Taiwan. And, for Koo at the Meeting of the International Press two distinct political entities, with neither the above mentioned reasons, I look forward Institute World Congress and 48th General subordinate to the other. What is important to the Taipei meeting with Mr. Wang, which Assembly on May 18, 1999 regarding future is that both sides do not exclude the possi- will be held this autumn, so we can work to- relations between Taiwan and the People's bility of future unification of China through gether to frame a peaceful and mutually ben- the process of peace and democracy, when Republic of China. I request that Dr. Koo's re- eficial relationship for both sides of the time and conditions are mature. marks as well as two reports describing Tai- strait. wan's contribution of $300 million in aid to At the current stage of development of cross-strait relations, the Straits Exchange In addition, we will try to persuade the Kosovar refugees be inserted at this point in Foundation (SEF), under the authorization Beijing authorities to reopen the institu- the RECORD: of the government, has from the very begin- tionalized consultations established during the Singapore round of the Koo-Wang talks ESTABLISHING PEACEFUL AND STABLE ning, stressed several key points. We have insisted on conditions that respect historic in April 1993. Regarding substantive issues, RELATIONS ACROSS THE TAIWAN STRAIT which most concern the rights of the people, (Dr. Koo Chen-fu, Chairman) facts and the status quo, safeguard the well- being of the people on Taiwan, and normalize such as repatriating mainland stowaways Honorable Public Opinion Leaders from cross-strait relations. For humanitarian rea- and hijackers, solving fishing disputes, and Both at Home and Abroad, Distinguished sons, the ROC government in 1987 began to dealing with illegal activities cooperatively, Guests, Ladies, and Gentleman: I feel greatly allow our people to visit relatives on the we hope that interim agreements will be honored to be invited to participate in the mainland and worked effectively to increase signed as soon as possible. These agreements annual conference of the International Press mutual understanding and exchanges be- will form a basis from which to expand step Institute held in the Republic of China. This tween the people on both sides of the Taiwan by step the content gained from future con- year marks the first occasion that the IPI Strait. solations or important issues concerning has held an annual conference of such mag- Then again in 1991, we terminated the Pe- both sides. nitude in Taipei. Your meeting here is an af- riod of National Mobilization for Suppres- I am well aware that there are people on firmation of and encouragement by the IPI sion of the Communist Rebellion, clearly the Beijing side who anxiously promote po- for the ROC government’s efforts in pro- manifesting our government’s sincerity not litical negotiations and dialogue between the moting freedom of press over the past two to resolve cross-strait problems by force. It two sides. In fact, just as in the Shanghai decades and for the entire press of our na- was a pragmatic move, as our government meeting last October, I would like to broad- tion, which has worked diligently to pursue took the first step and demonstrated our en the range of subjects during the talk with the consistent advancement of the news in- goodwill to acknowledge the existence of the Mr. Wang in the upcoming Taipei meeting on dustry. communist authorities. To help raise the liv- whatever issues are of concern. If the meet- I would like to take this opportunity to ing standards on the Chinese mainland and ing is restricted only to talks about issues in discuss a major issue that is currently con- develop its economy, Taiwan’s business sec- a particular area, it will minimize the effect fronting our general public: the problem of tor has invested as much as US$25 billion of the agreement we may make. This will having too much information, rather than across the strait over the last ten plus years, not be beneficial for improving relations be- too little. I believe all of the people respon- creating a great number of job opportunities tween the two sides. sible for Taiwan’s media and communication for the people on the mainland and contrib- The 1993 Singapore agreement was the first sectors present today are proud to have con- uting remarkably to the expeditious accu- agreement which was officially authorized tributed to this hard-to-achieve status. mulation of foreign exchange reserves for for signature by both governments and was On my way to the conference, I was won- the Chinese mainland over the recent years. approved by respective elected bodies after dering why the prestigious sponsors of the In order to show the sincerity of the ROC separation on each side of the strait. If ei- conference invited me to deliver a speech on government in promoting peaceful and sta- ther of the two parties was not willing to this occasion. Knowing that a host of promi- ble cross-strait relations, President Lee abide by the agreement, then the confidence nent personages from all sectors around the Teng-hui made a six-point proposal on nor- level for the signing of future agreements world are participating in this grand event, I malizing cross-strait relations in April 1995. will certainly be negatively affected. Over felt even more apprehensive, until I thought These points are: 1. use Chinese culture as a time, we will attain more agreements con- of a privilege I have over all of you: senior- base to strengthen exchanges between the cerning the people’s rights and interests. ity. I am 82 years old and in a society, such two sides; 2. enhance economic ties and de- Thus, we can build mutual confidence as ours, that attaches great respect to elder- velop reciprocal and complementary cross- through the accumulation of interim agree- ly people, my age, I suspect, was my ticket strait relations; 3. participate in inter- ments. This method gives us the ground to attend this magnificent conference. national organizations on an equal-footing, work for a solid foundation for peaceful and The topic I will speak to you about today thus allowing meetings of leaders from the stable cross-strait relations. is unquestionably quite serious, but it is the two sides in appropriate situations; 4. assert Third, the two sides should gradually de- subject specifically requested by the spon- peaceful solutions for any disputes which velop a confidence building measure (CBM), soring unit of this conference. I promise that arise; 5. combine the efforts of both sides to in order to insure the peace of the Taiwan I will do my best to be concise and clear maintain the prosperity of Hong Kong and Strait and the security of the Asia-Pacific about a complex matter. Macau and enhance democracy in these two region. Beginning in 1991, the two sides set As you all know, the Republic of China was areas; 6. pursue future national unification up the Straits Exchange Foundation and the founded by Dr. Sun Yat-sen in 1912, after the while respecting that China is currently di- Association for Relations Across the Taiwan overthrow of the Ching imperial dynasty. vided and ruled by different political enti- Straits, respectively, to be the institutional- Then in 1949, the People’s Republic of China ties. ized communication mechanism between the

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. E1456 CONGRESSIONAL RECORD — Extensions of Remarks July 1, 1999 two sides. This is the accepted communica- tionship for both sides of the Taiwan Strait, lems. ‘‘We want to play an active role in the tion channel under the informalized relation under conditions which respect the political world arena and work together with other between the two sides. status quo of both sides. members of the world society in maintaining For years, these two organizations have As time is pressing, let me finish my world peace,’’ Lee said, adding that the aid exchanged phone calls and letters to conduct speech here. Thank you very much. And I to displaced Kosovar refugees is purely based necessary contacts and communication. In wish all the distinguished participants of on humanitarianism. 1996, however, the Chinese mainland unex- this conference health and confirmed suc- Asked about his view on possible backlash pectedly launched a military threat against cess. from mainland China, Lee said humanitarian Taiwan and unilaterally suspended the func- aid to Kosovar refugees is a common goal of tions of the two organizations for more than PRESIDENTIAL STATEMENT REGARDING all civilized countries. three years. It is a situation we deeply re- ASSISTANCE TO KOSOVAR REFUGEES ‘‘Since the two sides of the Taiwan Strait gret. The huge number of Kosovar casualties co-exist in the international community, we Under the influence of democracy and free- and refugees from the Kosovo area resulting should make joint efforts to promote inter- dom, Taiwan is becoming increasingly liber- from the NATO-Yugoslavia conflict in the national peace and stability,’’ Lee said. alized and advanced. Such an environment Balkans have captured close world-wide at- The president urged mainland China to has exerted a direct impact on the SEF to be tention. From the very outset, the govern- throw support behind the ROC’s aid drive, more flexible and open, when holding con- ment of the ROC has been deeply concerned adding that he hopes mainland China will sultations with ARATS. Let me assure you and we are carefully monitoring the situa- also take concrete steps to assist hundreds of that the ROC government is fully confident tion’s development. thousands of displaced Kosovar refugees. and sincere in resolving any political dif- We in the Republic of China were pleased Lee’s announcement came a day after Mac- ferences between the two sides via consulta- to learn last week that Yugoslavia President edonian Prime Minister Ljubco Georgievski tions. Even so, we will not hold talks with Slobodan Milosevic has accepted the peace arrived in Taipei on Sunday for a six-day of- the Chinese mainland under such unfriendly plan for the Kosovo crisis proposed by the ficial visit. conditions as political inequality, diplomatic Group of Eight countries, for which specific This is the 33-year-old Macedonian prime interference, and military threat. National peace agreements are being worked out. minister’s first trip to the ROC since the two security and dignity are what I myself and The Republic of China wholeheartedly countries forged formal diplomatic ties in the SEF personnel constantly must bear in looks forward to the dawning of peace in the January this year. mind, when we exchange contacts with the Balkans. For more than two months, we Macedonia has been burdened by a large Chinese mainland. I believe that these two have been concerned about the plight of the number of ethnic Albanian refugees from the criterias are also the two foremost concerns hundreds of thousands of Kosovar refugees neighboring Yugoslav province of Kosovo. of the people of Taiwan. who were forced to flee to other countries, (By Sofia Wu) In recent years, I have observed that Bei- particularly from the vantage point of our jing has been withdrawing from the position f emphasis on protecting human rights. We that ‘‘we can talk about anything’’ toward a thereby organized a Republic of China aid WOMEN’S SOCCER parochial mentality that ‘‘we can only talk mission to Kosovo. Carrying essential relief about political issues.’’ This confuses us. items, the mission made a special trip to the I would like to take this opportunity to refugee camps in Macedonia to lend a help- HON. HOWARD COBLE call on Beijing to return to the consultation ing hand. OF NORTH CAROLINA table as soon as possible, to establish mutual Today, as we anticipate a critical moment trust between the two sides through con- IN THE HOUSE OF REPRESENTATIVES of forth-coming peace, I hereby make the fol- sultations, and to adopt necessary and posi- lowing statement to the international com- Wednesday, June 30, 1999 tive measures to insure the peace and sta- munity on behalf of all the nationals of the bility of the Taiwan Strait. Mr. COBLE. Mr. Speaker, as we watch the Fourth, the two sides should expand items Republic of China: U.S. Women's Soccer Team advance to the and the scope of exchanges and cooperations As a member of the world community com- final rounds of the World Cup, we are re- and treat each other with sincerity through mitted to protecting and promoting human rights, the Republic of China would like to minded of two teams from our district, High reciprocity, in order to ultimately normalize Point Central High School and Ragsdale High bilateral relations. During the past 50 years, develop further the spirit of humanitarian concern for the Kosovar refugees living in School, which both are 1999 North Carolina the two sides have accumulated individual High School Soccer Champions. experiences of development that can be ex- exile as well as for the war-torn areas in dire changed to assist each other. In the past, we need of reconstruction. We will provide a High Point Central captured the 1A/2A North have proposed that the two sides conduct ex- grant aid equivalent to about US $300 mil- Carolina High School Athletic Association changes and cooperate in the areas of agri- lion. The aid will consist of the following: (NCHSSA) Women's Soccer Championship. 1. Emergency support for food, shelters, culture, scientific technology, economic de- The Bison ended their season with an out- medical care, and education, etc. for the velopment, and rule by law. We have also Kosovar refugees, living in exile in neigh- standing record of 19±3±3. We congratulate suggested the two sides deal with the Asian boring countries. Mandi Tinsley, Katie Copeland, Jenny Thom- financial crisis together, in order to jointly 2. Short-term accommodations for some of as, Jenni Tensley, Lee Culp, Lindsay Hol- contribute to the prosperity and stability of the refugees in Taiwan, with opportunities of brook, Tina Tinsley, Graham Magill, Andrea the Asia-Pacific region. Unfortunately, we have not had any posi- job training in order for them to be better Brown, Lindsay Husted, Leigh Spencer, tive response from Beijing, to date. In the fu- equipped for the restoration of their home- Lemeh Horace, Jessica Harrison, Erica Bell, ture, we will continue to encourage and per- land upon their return. Jennifer Applegate, Sarah Bencini, Jrily White, suade the Chinese mainland to pragmati- 3. Furthermore, support the rehabilitation Krystion Obie. A few people who helped lead of the Kosovo area in coordination with cally respond to our constructive proposals. them along the way were Head Coach David We will also unfold various cooperation international long-term recovery programs when the peace plan is implemented. Upchurch, Assistant Coach Pete Chumbley, plans with Beijing to increase mutual trust, and managers Scott Salter and Robert White. achieve consensus, and ultimately attain the We earnestly hope that the above-men- goal of establishing normalized relations be- tioned aid will contribute to the promotion Central's Athletic Director is Gary Whitman. tween the two sides. of the peace plan for Kosovo. I wish all the Ragsdale High School won the NCHSSA Ladies and gentlemen, during the past four refugees an early return to their safe and Women's 3A State Championship. The Tigers decades, the ROC has managed to create mir- peaceful homes. ended their impressive season with a record acles in economic development and political of 22±2±4. We congratulate Cindy Mullinix, democratization, under unfavorable natural ROC TO DONATE US$300 MILLION TO HELP KOSOVAR REFUGEES Julia Deaton, Danielle Brown, Jamie Davis, environments and conditions. Naturally, we Jordan Allison, Erin Beeson, Brooke Dewitt, wish to achieve more, and it is our hope that Taipei, June 7 (CNA) President Lee Teng- we can bridge the gap of the Taiwan Strait hui announced Monday that the Republic of Lydia Gibson, Holly Walker, Jen Ryback, in economic and political developments by China will donate US$300 million to help Michele Andrejco, Stacy Hopkins, KK appropriate interaction and constructive Kosovar refugees rebuild their homes. Dalrymple, Michelle Pizzurro, Alysha Hall, dialogue between the both sides of the Tai- Lee made the announcement at a news Laura Stafford, Kellie Dixon, Emily Foster, and wan Strait. This will help us to realize the conference held after chairing a meeting on manager Sandra Simoes. Contributing to natural reunification of both sides in a the Kosovo problems. The meeting was at- Ragsdale's win was Coach Brian Braswell, peaceful and democratic way. tended by Vice President Lien Chan, Premier Trainer Josh Beaumont and Athletic Director is At the threshold of the twenty-first cen- Vincent Siew, Foreign Minister Jason Hu, tury, with the Cold War era ended, I sin- and Ying Chung-wen, secretary-general of Mike Raybon. cerely hope that the Chinese mainland will the National Security Council. The Sixth District of North Carolina is proud discard the remnants of the Cold War ‘‘zero- Lee said the ROC, as a member of the of both these teams for all their hard work and sum’’ thinking and expand their horizons to international community, has consistently dedication. Congratulations to the girls at High join us in building a peaceful and stable rela- been concerned about world affairs and prob- Point Central and Ragsdale. Now let's hope CONGRESSIONAL RECORD — Extensions of Remarks E1457 that the U.S. Women's Team can win the pleased to share the news of the Simmons archaeological sites. This means that each World Cup! 72nd anniversary. Their 72-year commitment question of housing for seasonal workers, for f to each other proves that there are many good additional accommodations and for marina ex- and decent Americans in this country, who like pansion is posed against the question of pro- THE DRUG-FREE SCHOOL ZONE the Simmons, are committed to their families, tecting what is truly a national treasure. ENFORCEMENT ACT values, and their marriages. I would like to Mayor Doud has served the island well in wish the Simmons a very joyful anniversary addressing these questions, Mr. Speaker. I HON. JAMES E. ROGAN and a happy and healthy future. ask my House colleagues to join me in recog- OF CALIFORNIA f nizing her efforts and offering our sincerest IN THE HOUSE OF REPRESENTATIVES appreciation for her dedication and efforts in TRIBUTE TO THE HON. MARGARET guiding this island community into the next Wednesday, June 30, 1999 DOUD millennium. Under Margaret's guidance, and Mr. ROGAN. Mr. Speaker, as you know, our with the advice and assistance of the island's nation's schools have become playgrounds for HON. BART STUPAK city council, I know the island is well prepared drug dealers. Every day, thousands of children OF MICHIGAN for its next 100 years. get hooked on drugs in and around our local IN THE HOUSE OF REPRESENTATIVES f schools. Meanwhile, our local communities Wednesday, June 30, 1999 struggle to hold back the rising tide of drug CENTURY 21 ROBINSON REALTY, crime. Sadly, local efforts to protect our na- Mr. STUPAK. Mr. Speaker, I rise today to INC. ACHIEVES THE QUALITY tion's school zones have received little direct call your attention and that of my House col- SERVICE PINNACLE AWARD federal support. leagues to an important historical milestone in As a former gang murder prosecutor in Los my northern Michigan congressional district. HON. JOHN J. DUNCAN, JR. Angeles County, who prosecuted drug dealers This month the City of Mackinac Island, a OF TENNESSEE who got children hooked on drugs, I know the unique blend of state park and local munici- IN THE HOUSE OF REPRESENTATIVES limitations our local governments face in their pality and a special mix of important archae- Wednesday, June 30, 1999 ological sites and impressive tourist attrac- war on drugs. That is why I am introducing the Mr. DUNCAN. Mr. Speaker, I would like to tions, celebrates its centennial. Tonight the bipartisan Drug-Free School Zone Enforce- take this opportunity to congratulate a busi- city council of Mackinac Island will both for- ment Act. ness in my District for its outstanding cus- mally acknowledge this milestone and honor a The Drug-Free School Zone Enforcement tomer service. Recently, Century 21 Robinson remarkable public servant, island resident Act will provide $150 million of the Safe and Realty, Inc. was honored by the Century 21 Margaret M. Doud, who has served as mayor Drug Free Schools money appropriated each Real Estate Corporation with its Quality Serv- for 25 of the city's 100-year history. year to local governments, so that they may ice Pinnacle Award. The community that Margaret Doud both take steps to reduce drug crimes within a one- The Pinnacle Award is given only to those leads and serves is not just unique in my 1st mile radius of any school. In addition, this bill Century 21 offices that deliver the best in con- Congressional District. It is an important na- will allow communities to hire additional law sistent quality service at the highest level. tional resource with a rich history as a spiritual enforcement agents and prosecutors, and co- Century 21 Robinson Realty, Inc. certainly fits home and meeting place of Native American ordinate drug enforcement efforts with state this criteria. and federal agencies. Finally, this bill will re- tribes, a way-station in the European explo- Additionally, on June 29, 1999, the Daily quire that 95 percent of these funds must go ration of the Upper Midwest, an important mili- Post-Athenian announced that Century 21 to local communities. tary site during America's two wars with Eng- Robinson Realty was named as the ``Best Mr. Speaker, now is the time to show that land, a resource center for fur and fish trade, Real Estate Firm'' in its ``People's Choice'' sur- Congress means business in fighting the drug and now a temperate haven for tourists in the vey. This survey was placed in the DPA for war on a local level. As we begin to focus on heat of summer. readers to choose their favorite in a number of our priorities on education and keeping drugs Mackinac Island is the home of memorable different categories. away from our children, I urge that Members fudge and the majestic Grand Hotel. It is cir- Charles Robinson, founder and principal join me in supporting the Drug-Free School cled and criss-crossed by rural lanes that in broker of Robinson Realty, has been involved Zone Enforcement Act. summer are used by residents and visitors on in the real estate industry for over 30 years. f foot, bicycle, or horse and buggyÐbut nor He is a respected businessman in the Athens cars, not since motorized vehicles were community and has helped countless families BILL AND AVA SIMMONS CELE- banned in 1898. It has served as summer realize the ``American Dream'' of homeowner- BRATE THEIR 72ND WEDDING AN- home for Michigan's governor, the site of nu- ship. NIVERSARY merous business and political conferences, Robinson Realty affiliated with the Century and the backdrop for movie cameras in the ro- 21 Real Estate Corporation in 1977, and has HON. DAVID D. PHELPS mantic Christopher Reeve and Jane Seymour been recognized with numerous awards over OF ILLINOIS movie, Somewhere in Time. For the everyday the years. IN THE HOUSE OF REPRESENTATIVES cameras of tourists, the island's backdrop in- Mr. Speaker, Century 21 Robinson Realty, cludes the magnificent span of the Mackinac Wednesday, June 30, 1999 Inc. is truly a family business. Charles and Bridge. The island is a fair destination for sail- Linda Robinson work together with their son, Mr. PHELPS. Mr. Speaker, I rise today to ors who race up Lake Michigan in the Chi- General Manager Mike Robinson and daugh- pay tribute to Bill and Ava Simmons of West cago-to-Mackinac race and up Lake Huron in ter, Office Coordinator Paula Robinson Frankfort, IL. On June 18th of this year, Ava the Port Huron-to-Mackinac event. Scarbrough. The Robinson family in Athens is and Bill celebrated their 72nd wedding anni- The island takes its name from the Native synonymous with the real estate business. versary. The Simmons have been residents of American word ``Michilimackinac,'' which I am especially proud customer service is the beautiful city of West Frankfort since the means ``Land of the Giant Turtle,'' a reference the number one priority at Century 21 Robin- early 1900's and are long time members of to the island's humped shape, like a turtle ris- son Realty. For the past six years, Robinson the First Baptist Church in West Frankfort. Mr. ing from the northern end of the Lake Huron. Realty has earned the prestigious Quality Simmons recently retired as owner of the In Indian lore, the island was the first land to Service Award. This fact says a great deal Stone Funeral Home, when he was 92 years appear above water after the Great Flood, and about the professional real estate agents that young. His wife was a stenographer for an at- a place of origin for native peoples. make up Robinson Realty. torney from Benton and worked for the State You can see, Mr. Speaker, that while it's Robinson Realty has combined real estate of Illinois during the Depression. true Margaret Doud may serve as mayor over experience totalling almost 200 years. There Mr. Speaker, I wanted to take the time to let a small population of about 500 permanent are not many businesses that can offer their all of my fellow Members of Congress and the residents, she also guides a community that customers so much experience. nation know of this most impressive and mo- must constantly address a host of intensely Mr. Speaker, I would like to congratulate the mentous occasion. On the floor of this Con- conflicting land use demands. The effort to ac- Robinson Family on this important occasion. I gress we always hear Members describing the commodate tourists from all over the world would also like to congratulate the profes- decline of family values and personal respon- must be balanced against limited resources sional agents that make up the Robinson Re- sibility in this country; this is why I am so and the need to protect its unique historic and alty ``Gold Team.'' They are: Barbara Reed, E1458 CONGRESSIONAL RECORD — Extensions of Remarks July 1, 1999 Peggy Hallenberg, Charlie Simpson, LuAnne He livedÐand enjoyedÐhis work 24-hours-a- peace and actively search for creative solu- Vaughan, Diana Girand, Phyllis Maxwell-Day, day. He worked at a series of stations in Ten- tions. We must construct a foundation for Alma Sliger, Emma Lee Tennyson, Judy nessee, including serving as general manager peace through negotiation, mediation, and di- Keen, Sarah Pointer, LaVerne Tuell and Vickie of WJLE in Smithville, general manager of plomacy. Peeler. Charles Robinson would be the first to WAKI in McMinnville and operations manager Part of the dynamic of peace is a willing- tell you that without these professionals, Rob- of WBMC±WTRZ in McMinnville and owner ness to engage in meaningful dialogue, to lis- inson Realty would not be successful. I am and general manager of WSMT AM±FM in ten to one another openly and to share our proud to have such a fine business as a part Sparta from 1975 through 1980. views in a constructive manner. I hope that of my District. At 6 a.m. on July 14, 1986, Tollye Wayne these Teach-In sessions will contribute to this Mr. Speaker, I have included a copy of a signed on the air at WSDQ in Dunlap. He was process by providing a forum for Members of story that ran in the Daily Post-Athenian that a powerful voiceÐand a personalityÐknown Congress and the public to explore options for honors Century 21 Robinson Realty and would throughout the Sequatchie Valley. He took an a peaceful resolutions. We will hear from a va- like to call it to the attention of my fellow mem- interest in folks from all walks of life. It did not riety of speakers on different sides of the bers and other readers of the RECORD. matter to Tollye Wayne whether the person he Kosovo situation. I will be introducing into the LOCAL REAL ESTATE FIRM HONORED BY was speaking with was a hard working em- CONGRESSIONAL RECORD transcipts of their re- CENTURY 21 ployee at a convenience store or just hap- marks and essays that shed light on the many Century 21 Real Estate Corporation, fran- pened to be Vice President of the United dimensions of the crisis. chiser of the world’s largest residential real States. Tollye Wayne was interested in what This presentation is by Alistair Millar, pro- estate organization, has announced that Cen- he or she had to say. gram director and Washington Office Director tury 21 Robinson Realty, Inc., is the recipi- To those of us who have the honor of rep- of the Fourth Freedom Forum, an independent ent of the Quality Service Pinnacle Award. resenting the Sequatchie Valley, a visit with research organization that sponsors scholarly The Quality Service Pinnacle Award recog- Tollye Wayne was on our ``must do'' list any- conferences, cultural programs and research nizes Century 21 offices that deliver the best in consistent quality service at the highest time we were in the Dunlap area. Not only did fellowships to promote awareness of peace level. To qualify, an office must earn a Qual- we get a chance to communicate with folks and security issues. Before joining the Forum, ity Service Award in the current year, re- throughout the valley through radio station Mr. Millar was a Senior Analyst at the British turn a minimum of 50 completed Quality WSDQ, butÐjust as importantlyÐwe got a American Security Information Council. He is a Service surveys during the past two years chance to pick Tollye Wayne's brain about British citizen and has a Masters Degree in and meet or exceed the minimum Quality what was going on in the Valley. It is not very International Studies from the University of Service Index on the number of surveys re- much of an exaggeration to say that Tollye Leeds. turned during the last two years. Wayne knew just about everything that was ‘‘We are thrilled to recognize the work of PRESENTATION Century 21 Robinson Realty, Inc., for this happening in the valley. (By Alistair Millar and David Cortright) significant achievement,’’ said Van Davis, Tollye Wayne did not simply cover his com- A peace settlement, no matter how ten- senior vice president, Franchise and Field munity. He worked to make it better, serving uous, has been reached and the war in Yugo- Services, Century 21 Real Estate Corpora- as a member of a number of civic clubs and slavia over Kosovo is now over. NATO’s tion. The Century 21 system commended the community boards, including the Sequatchie bombing campaign is being sold as a success, dedication, professionalism and commitment Valley Health Council, the Sequatchie County but the problems in the region—in part cre- to quality service exemplified by Century 21 Hospital Board, The Sequatchie Valley Plan- ated by the destruction resulting from allied Robinson Realty, Inc., a news release stated. bombing raids—are far from over. The proc- Also recognized at the annual awards ban- ning Commission and the American Legion Harvey Merriman Post 190. He was also in- ess of reconstruction, repatriation and reha- quet were several sales associates for their bilitation is just beginning and will be yearly sales commission totals in the Top strumental in establishing the Dunlap Cham- hugely expensive. Producer category. This year’s winners were ber of Commerce. And he was a past presi- First we must be clear that this is a prob- Diana Girand, Peggy Hallenberg, Judy Keen dent of the Dunlap Lions Club. He also quietly lem that does not only affect Kosovo and and Charlie Simpson. The Century 21 Robin- helped folks who needed it. Serbia. The entire Euro-Atlantic region will son Realty office was also awarded the Top I know that Tollye Wayne would take com- suffer the consequences of this conflict for Producing office in the Chattanooga mar- fort in the fact that what he built at WSDQ is years to come. Regarding the Balkans area keting area for units sold and commissions being carried on by his family. I also want to suffering the most acute impact of the war, received. express my most profound sympathy to his the International Monetary Fund has identi- Century 21 Robinson Realty, Inc., has more fied a core group of six countries (Albania, than 30 years of experience in the real estate wife, Ruth Myers Tittsworth; his son Stephen Bosnia-Herzegovina, Bulgaria, Croatia, the industry and has been affiliated with the Wayne Tittsworth; step-daughter, Teresa Ann Former Yugoslav Republic of Macedonia and Century 21 system for 23 years. Hennessee; his mother, Willie Cantrell Romania). In a recent analysis the Fund pro- f Tittsworth; brother James Gary Tittsworth and jected that in the best case scenario the his sister, Rita Poncina. total IMF financing for the region will cost A TRIBUTE TO THE LATE TOLLYE All of us who knew Tollye Wayne are grate- $1.3 billion. The breakdown of the costs in- WAYNE TITTSWORTH ful that we had the chance to work with him volved are detailed in the IMF study which and sincerely mourn his passing. Tollye looked at two scenarios. Economic output in the region has been reduced by an estimated HON. ZACH WAMP Wayne, God-Speed in the Better World where five percent. This, in turn, will lead to a OF TENNESSEE you are now. And thanks for the good you did large trade imbalance—estimated at nearly IN THE HOUSE OF REPRESENTATIVES for all of us. $2 billion. The IMF study along with the Wednesday, June 30, 1999 f United Nations interagency cost projections for the remainder of this calendar year are Mr. WAMP. Mr. Speaker, today I wish to CRISIS IN KOSOVO (ITEM NO. 14), now available on the internet. http:// honor the memory of a fine resident of the REMARKS BY ALISTAIR MILLAR www.worldbank.org/ Sequatchie Valley and the 3rd District of Ten- OF THE FOURTH FREEDOM In Europe, the European Commission has nessee who left this life last May 2. Tollye FORUM estimated that the reconstruction of Kosovo Wayne Tittsworth died at age 60. For his fam- alone will cost $18 billion. At the G–8 Sum- mit in Cologne, European delegates were ily and the many friends who admired his work HON. DENNIS J. KUCINICH hinting strongly that the United States— as a radio broadcaster and citizen, his death OF OHIO which currently has a large budget surplus— came far, far too soon. IN THE HOUSE OF REPRESENTATIVES should bear the brunt. The United States was Tollye Wayne, as he was called throughout responsible for 85 percent of the war damage, the Sequatchie Valley, knew from the time he Wednesday, June 30, 1999 and it should pay a commensurate share of was still in his teen years that radio would be Mr. KUCINICH. Mr. Speaker, on June 24, the reconstruction effort. Incidentally, EU his life's work and his life's love. While still in 1999, I joined with Representative CYNTHIA A. countries have paid 60 percent of the recon- high school, he began working part time at a MCKINNEY, Representative BARBARA LEE, and struction costs in Bosnia. As for the United States, President Clinton radio station in McMinnville where he was Representative JOHN CONYERS in hosting the has noted that Washington did its share in born and grew up. sixth in a series of Congressional Teach-In providing two-thirds of the aircraft and all Like all people who excel at what they do, sessions on the Crisis in Kosovo. If a lasting the cruise missiles for NATO’s 78-day air Tollye Wayne did not regard his career in peace is to be achieved in the region, it is es- war. At about $100 million a day, that comes radio and the news business as just ``a job.'' sential that we cultivate a consciousness of to more than $7 billion. In a foreign aid bill CONGRESSIONAL RECORD — Extensions of Remarks E1459 approved last Thursday by the US Senate venting genocide and human rights abuse. to the table a credible package of sanctions Appropraitions Committee, about $535 mil- The ground is thus being prepared for future and incentives to persuade the Serbs and Al- lion is targeted for the Balkan region but bombing campaigns and military interven- banians to begin to resolve their differences none of it has been allocated for Serbia. tions, as NATO increasingly assumes the and strive toward cooperation and reconcili- It is vital that an agreement about who role of global policeman. ation. will pay is reached as soon as possible. Re- There is another way. The use of military The sanctions part of the package might sponsibility on the part of the United States force was not necessary to resolve the crisis include the threat to go beyond the present for the destruction of Yugoslavia’s infra- in Kosovo, and it need not serve as a primary arms embargo to impose targeted sanctions structure as a result of the US-led bombing basis for securing global peace in the future. against those who renege on their obliga- campaign is an important first step. Consid- More effective and less destructive means tions under the peace settlement. Among the ering the costs in human terms, rather than exist for exerting pressure on wrongdoers selective measures that might be applied are just purely as numbers would also help to and encouraging international cooperation. aviation and travel bans, the freezing of fi- focus attention on the severity of this prob- The key to securing the peace in Kosovo and nancial assets, and the blocking of govern- lem. If you make a mess and don’t have to beyond is not military might but economic ment and leadership financial transactions. clean it up, you aren’t likely to think much power. Through the judicious application of The prospect of a selective oil embargo, tar- about the consequences of making another economic sanctions and incentives, coupled geted against refined petroleum products, mess in the future. with support for early monitoring to prevent might also be part of a sanctions package. Even while the initial assessments are conflict from escalating into wars, the The incentives package might include the being made, it is almost certain that the United States and its partners can more ef- progressive lifting of sanctions, the encour- costs, not least the costs of maintaining an fectively enforce civilized standards of be- agement of investment and trade, and a mas- sive aid and reconstruction program for the armed military or peace enforcement pres- havior and lay the foundations for coopera- region’s battered infrastructure and crippled ence in the region, are going to increase tion and security, not only in Yugoslavia but economy. Huge levels of humanitarian as- sharply over short periods of time. One around the world. sistance will be needed for returning Kosovar major additional expense will be the peace- History teaches that the greatest force on refugees and vulnerable populations in Yugo- keeping operation itself, both military and earth is not military might but economic power. Civilizations rise or fall more on the slavia and surrounding countries. The deliv- civilian. ery of economic assistance and development Given the extended period for which peace basis of their economic and social vitality aid should be used to encourage compliance enforcement troops are likely to remain in than their military prowess. The Soviet with the peace settlement and a greater place, some analysts argue that peace- Union was a military superpower but an eco- commitment to democratization. Aid should keeping could prove even more expensive nomic weakling. When the underlying eco- be targeted to those constituencies and sec- than the war. For example, the Royal Insti- nomic and social rot caught up with the military-political superstructure, the tors which have a demonstrated commit- tute of International Affairs in London has ment to democracy and human rights and calculated that, with a projected K-For pres- Potemkin village of Soviet power collapsed. The greatest strength of the United States which are most likely to support a long term ence of about 50,000 troops, the bill could process of conflict resolution and multi-eth- lies not in bombers and missiles but in the amount to as much as $25 billion a year. nic cooperation. The delivery of aid should Increases in the costs of enforcing the Day- extraordinary dynamism and creativity of be conditioned on compliance with the peace ton peace accords and repatriating displaced its economy. Over the long run the power to settlement and should be delayed or sus- refugees affected by the war in Bosnia also give or withhold economic benefits is the pended if the recipient groups balk or refuse provides us with a relevant and recent exam- most effective and creative way to influence to cooperate with one another in creating a human behavior. The use of economic ple of the extent of the problem in Kosovo. new, more cooperative society. The post-Dayton pricetag has increased power—providing inducements for coopera- The promise of economic prosperity is a enormously since 1995, and the enforcement tion, and applying sanctions against wrong- powerful incentive for encouraging democ- of the civilian provisions of the accord has doing—offers the best hope for advancing the racy, human rights, and respect for the rule fallen woefully short of its stated goals, cre- goals of peace, democracy, and human of law. The desire for participation in the ating a multiethnic peaceful society. rights. European system of economic development Currently, the Stabilization Force, or Sanctions are often dismissed as ineffec- and political cooperation is an especially SFOR is still made up of 30,000 Troops; 6,900 tive, but a closer look reveals that they have strong inducement for many people in the are Americans. According to the record of been successful on a number of occasions, in- Balkans. Even in Serbia political leaders the Military Operations in the Federal Re- cluding in the Balkans. During the 1992–95 have voiced a desire to be part of the Euro- public of Yugoslavia Limitation Act of 1999: crisis in Bosnia, the U.N. Security Council pean community. Some argue that the deci- The deployment of United States ground imposed economic sanctions against Yugo- sion to exclude Yugoslavia from Europe in forces to participate in the peacekeeping op- slavia to encourage Serbian support for a ne- the late 1980s contributed to the breakup of eration in Bosnia, which has resulted in the gotiated settlement. An extensive system of the country and the consequent armed con- expenditure of approximately $10,000,000,000 sanctions monitoring and enforcement was flicts. Offering now to integrate the coun- by United States taxpayers to date, which established in cooperation with neighboring tries of the Balkans into the European sys- has already been extended past two previous European states. These U.N. sanctions were tem of prosperity and cooperative develop- withdrawal dates established by the Admin- described in a report from the Organization ment could be an effective inducement for istration, and which shows no sign of ending for Security and Cooperation in Europe as conflict resolution and prevention. This is in the near future, clearly argues that the ‘‘the single-most important reason for the the concept of ‘‘association-exclusion,’’ as costs and duration of a deployment of United government of Belgrade changing its policies opposed to the traditional ‘‘compellence-de- States ground forces to the Federal Republic and accepting a negotiated peace agree- terrence’’ approach embodied in NATO mili- of Yugoslavia to halt the conflict and main- ment.’’ Military analyst Edward Luttwak tary policy. The greatest hope for a more co- tain the peace in the province of Kosovo will has written that ‘‘sanctions moderated the operative future lies not in the power to pun- be much heavier and much longer than ini- conduct of Belgrade’s most immoderate lead- ish, but in the creative use of association as tially foreseen. ership.’’ While other factors contributed to a means of rewarding those who abide by civ- As Senator Kay Bailey Hutchison recently the Dayton peace accords, including the Cro- ilized standards of behavior while excluding pointed out ‘‘We have tried an experimental atian-Bosnian military offensive of August/ those who do not. Balkan policy in Bosnia. It is not workable. September 1995, U.N. sanctions played a role Because the conflicts in the Balkans are Thousands of American troops are there with in bringing the parties to the bargaining interconnected, and the economies of the re- no end in sight. The head of the inter- table. gion were once closely linked, it is impor- national observer group has fired elected of- U.N. sanctions were employed again at the tant to view the region as an integrated ficials and canceled sessions of parliament beginning of the Kosovo crisis, but the effort whole, and to develop an aid program that because opposition parties oppose what we was half-hearted. In March 1998, as fighting applies to the entire region. Economic as- are doing in Kosovo. People vote in elections in Kosovo intensified, the Security Council sistance should be designed not only to re- and then cannot stay and serve where they imposed an arms embargo on Yugoslavia. No build war-related damage but to lay the are elected.’’ effort was made to enforce the embargo, foundations for future economic develop- Unfortunately the history of the war in however, and no further steps were taken to ment and interdependence. Economic assist- Bosnia is repeating itself in Kosovo. NATO increase sanctions pressure. Nor were efforts ance should be offered not only to Kosovo officials are interpreting their defeat of made to develop the kind of elaborate moni- but to Serbia, Albania, and all the republics Slobodan Milosevic as an important example toring and enforcement machinery that was of the region. By making an extra effort now for the future. The lesson they are drawing is so effectively employed by the European to raise the economic and social standards of that military force can effectively serve hu- community during the earlier episode. the entire region, the United States and its manitarian purposes, and that NATO must Sanctions could yet contribute to a resolu- European partners can help to establish the be prepared to use its military might again. tion of the Kosovo crisis, as part of a pack- conditions for cooperation in the future and A new ‘‘Clinton Doctrine’’ is reportedly age of inducements and coercive measures thereby reduce the likelihood of renewed being developed in Washington to emphasize designed to enforce the terms of the peace warfare. This in turn will hasten the day this point. Bombing and military force are agreement. Working through the U.N., the when NATO forces can safely leave the re- being justified as legitimate means of pre- United States and its partners should bring gion. E1460 CONGRESSIONAL RECORD — Extensions of Remarks July 1, 1999

The United States and its allies have made SPEECH OF H.E. PRESIDENT MOHAMED HOSNY development have vanished when investor an enormous military commitment to the re- MUBARAK ON THE OCCASION OF THE AWARD- sentiments changed in far away markets. gion. Now they must make an even larger ING OF A DOCTORATE HONORIS CAUSA, The global economy of the twenty first cen- economic commitment to create the condi- GEORGE WASHINGTON UNIVERSITY, JUNE 29, tury will bring us closer together, but it can tions for a lasting peace. The centerpiece of 1999 also push us further apart. Now more than an economic strategy for peace should be a President Trachtenberg, Faculty Members ever before global prosperity has come to massive reconstruction and economic devel- and Students of George Washington Univer- rely on the welfare of each one of us. But can opment program for the Balkans. The pro- sity, Ladies and Gentlemen, it is a great this really be so? Can we really build our posed assistance program should be on the privilege to be with you today to receive this world on a culture of cooperation? scale of the Marshall Plan. At the end of honorary degree, from one of the leading Doubt has seeped in many a mind. Can we World War II the victorious allies invested centers of learning and excellence of this really rely on each other for our common massively in rebuilding war-torn Europe and great nation. prosperity? Will this global economy be an helped their former enemies recover eco- For many years your institution has been economy of shared responsibility, of common nomically and become functioning democ- dedicated to the shaping of minds, the build- purpose and common means? This last year racies. The strategy was a brilliant success ing of character through knowledge, through has seen efforts to change our global institu- that laid the foundation for European pros- study and the pursuit of truth. In this, it has tions to better our dialogue and to join ef- perity and cooperation and that has helped contributed to building a better world. But forts in development. A few weeks ago, the to secure the peace in Western Europe for most importantly it has helped in building group of eight industrial nations agreed to more than 50 years. the future; as each mind, strong in its share the burden of debt of the poorest coun- No less an effort is needed now to bring knowledge, richer in its humanity and con- tries. Will it also agree to share its affluence prosperity and security to Southeast Europe. fident in its powers, reaches for its ambi- with them? We have all embraced market The guiding vision of U.S. and European tions, to build a better tomorrow of peace forces as the guide of our development. But strategy should be to create prosperous, and well-being. we must harness them to serve our common democratic, economically interdependent In the Middle East we also seek a future of purpose. The global economy stands at a states throughout the Balkans—to build so- prosperity. Over the years Egypt has strived crossroads between a polar world of rich and cieties where people trade rather than in- to build a sustainable peace. And for over poor and a true partnership for a common fu- vade, where commerce, communication, and twenty years, it showed the way. Through- ture. interdependence gradually break down the out we forged a path to conquer decades of Let our children say one day that when we animosities that have so often fueled armed enmity, of wars, of grief, and wasted lives. had to choose, we chose the difficult path conflict in the region. On this path of trust, of commitment to a but we chose well and most of all, we chose The price of a massive multi-year eco- just and lasting peace, we sought the respect together. But our reforms must not be just eco- nomic assistance and incentives package for of the rights of all to legitimacy, to security nomic, they must reach deep into our soci- the Balkans will be huge, but it is far less and to the pursuit of a prosperous future. eties. They must reach into our civil institu- than the costs of indefinite military occupa- The road ahead is still long and the obsta- tions, our political structures, our human tion or the losses that would occur in future cles many, but we have seen the birth of a capital and our intellectual regeneration. wars and armed conflicts. The price of peace new hope. A new government in Israel has Economic reform and the gradual liberal- is surely less than the cost of war. come to power. It holds the promise of better ization of markets all over the world reduced Only through a long-term program of eco- days for the peoples of Israel and Palestine. the role of governments. They also opened up nomic assistance and political engagement For over two decades, the United States unlimited prospects and frontiers for both can the United States and its partners en- and Egypt have worked together. We have the private and the voluntary sectors. Each sure that the war for human rights has truly drawn from the deepest recesses of our rich of them is now a full partner with the gov- been won. pasts, our cultures of peace, our traditions of ernment in setting policies and in imple- tolerance and commitment to prosperity to menting them. In Egypt, we have encouraged make a lasting future happen. f this partnership for the benefit of all citi- We built on the friendship that binds our zens. two nations, to bring together enemies, WELCOMING HOSNI MUBARAK Today our private sector stands at the bridge suspicions, draft compromises, and forefront of our efforts to modernize and build the foundations of a lasting dialogue. grow. Egypt’s spirit of private initiative has HON. GARY A. CONDIT And over the years we have shown that the been revived. And this spirit is allowing peo- partnership that unites us, the trust we have OF CALIFORNIA ple to pursue their dreams, to realize their in each other can be the catalyst that will, full potential and to play an active part in IN THE HOUSE OF REPRESENTATIVES one day, one day soon, bring back tran- building their future. quility to this holy land. Wednesday, June 30, 1999 The Egyptian Government has learned, In Egypt, over twenty years ago, we turned through hard experience, that its role is that Mr. CONDIT. Mr. Speaker, today we were the page on a long history of wars. We turned of a regulatory, a facilitator, a guarantor of honored to welcome Hosni Mubarak, the our energies towards rebuilding the Egypt basic rights, and a provider of urgent help that we have known throughout the cen- for those who are in need during the difficult President of the Arab Republic of Egypt, to turies. An Egypt that is strong and pros- Capitol Hill. A leader in the Arab world, Presi- period of transition. Above all, it is respon- perous. One that holds the promise that its sible for encouraging and protecting an envi- dent Mubarak is considered by many of us to sons and daughters are entitled to. We re- ronment in which the private sector can cre- be a friend and trusted ally. built the infrastructure: the bridges, the ate jobs, wealth, goods and services. With President Mubarak was awarded an hon- roads, the power, the water, the ports and these, come stability, security, and a sense orary degree of laws by George Washington the cities. We recreated our society to seek of shared responsibility that is the essence of University during his Washington visit. In his progress in stability and in freedom, in human society. growth and most of all in peace. And at the forefront of the institutions of remarks at the University's ceremony, Presi- In the early nineties, we restored the fi- dent Mubarak stressed the importance of eco- civil society, stand political participation nancial balances that will usher us into the and the extension of democracy and account- nomic progress in Egypt. Under Mubarak's twenty-first century. A strong economy, able government. leadership, Egypt has implemented significant open to the world, liberal, market driven and The road to democracy is a long one, and economic reforms, including economic privat- caring for the welfare of all its people. We we travel it with confidence. We have not ization, revival of the stock exchange, and IMF built the institutions, drafted the laws, and turned back under the most difficult condi- and World Bank reform programs. President trained the people so that we may join the tions, economic hardships, social pressure, Mubarak also discussed the crucial role Egypt world in its prosperity. We have come a long malicious terrorism and narrow-minded in- way, and look forward, with confidence, to a continues to play in the Middle East region as tolerance. And we will not turn back, nor longer way still, to reach a society that is will our belief in the rule of law be shaken. the first Arab country to make peace with equal to the challenges ahead. We will work towards consolidating our de- Israel. As many of my colleagues know, Egypt We worked to integrate the world econ- mocracy gradually, steadily, and in the spir- has long been a strong ally of the U.S. and a omy, join its ranks, seek its rules and abide it of tolerance and cooperation that is force for stability in a volatile region of the by them. We opened our markets, and freed known of the Egyptian people. world. President Mubarak was optimistic about our trade. We welcomed investment and But civil society is about much more than the prospects for the peace process with the shared our resources. We are building our parliamentary democracy. It is about com- new Government in Israel. economy to the scale of global competition. plementing good government and creating But the challenges ahead have changed in communities with shared values. For many I would like to share with my colleagues the last few years. A world economy of close- centuries, the voluntary sector in Egypt President Mubarak's June 29, 1999, address ness, of open borders and of shared pros- played a crucial role in binding our society to a crowded assembly at George Washington perity has given way to instability and hard- together, even during some of the hardest University. ship. In country after country, long years of times. The spirit of charity and compassion CONGRESSIONAL RECORD — Extensions of Remarks E1461 advocated by Christianity since the Holy western progress and eastern values. A haven VERMILLION COUNTY’S 175TH Family’s journey in ancient Egypt, and the between a prosperous North and a South full BIRTHDAY strong message of sharing carried forward by of promise. We seek to modernize by embrac- Islam fourteen centuries ago, have both en- ing change and not defying it, centered dowed our society with a deep sense of civil around human nature selfless and self-inter- HON. STEPHEN E. BUYER responsibility. Today, as a result of falling ested, cooperative and competitive all at OF INDIANA boundaries all over the world, a global agen- once. IN THE HOUSE OF REPRESENTATIVES da for social development is being put for- We are a country that has found its bal- ward. Our voluntary sector must be involved ance. We will share it in friendship with all. Wednesday, June 30, 1999 in the setting of such agenda and in playing In this place of learning, in this place of Mr. BUYER. Mr. Speaker, I rise to honor the an active part in its implementation. excellence, you foster sharing, under- 175th birthday of Vermillion County, Indiana. Our success in redirecting our economy standing, and tolerance. You bring forth the and reviving our civil institutions is real. It future like we do in reform. And in the end Nearly two centuries of proud history and tra- is tangible and we build on it. But what is we must join hands, for the many lives we dition encompass an area only seven miles the value of success if it is not based on change, will one day, shape the century to wide and 37 miles long. The county's unusual human dignity? Indeed, can there be any suc- come in the image of our dreams. shape was formed in order to better govern cess if the human being is neglected? Thank you very much. and patrol the area when it was still a frontier The only long term guarantee of sustain- f on the Wabash River. able development, the main source of value Vermillion County gained its name from a and competitiveness, is investment in human SWOYERSVILLE ANNIVERSARY French translation of a Miami Indian word capital. Egypt’s history and ancient civiliza- tion taught us this reality. For thousands of meaning ``red earth,'' or clay. For years, clay years, investment in human capital was the HON. PAUL E. KANJORSKI provided a major business for this county. cornerstone of every success. It allowed pyr- OF PENNSYLVANIA Now businesses such as Eli Lilly, Inland Con- amids to be built, rivers to be tamed, innova- IN THE HOUSE OF REPRESENTATIVES tainer, Public Service Indiana, Peabody Coal, tions to be discovered, and art to flourish. and the Newport Army Ammunition Depot are Our investment in human capital has been Wednesday, June 30, 1999 the major employers that exist in this ''red in all fields. It covers education, health and Mr. KANJORSKI. Mr. Speaker, I rise today earth'' county. basic services. It aims at preserving the envi- to bring to the attention of my colleagues the Even though Vermillion County is small in ronment, encouraging creative thinking and maintaining family values. It is conscious Centennial Anniversary of Swoyersville Bor- size, many notable figures have called it and respectful of human rights in the most ough in Northeastern Pennsylvania. The Bor- home. Henry Washburn, a Newport lawyer, comprehensive sense. Human rights which ough will celebrate at a banquet on July 3. I was appointed Lieutenant Colonel of the 18th include every individual’s right to freedom am pleased and proud to have been asked to Indiana Volunteer Infantry Regiment during the of speech, of expression and intellectual ful- participate in this event. Civil War. Washburn and his regiment served fillment, the right to a happy childhood, to Originally part of Kingston Township, heroically in several battles such as Pea a productive life and a peaceful retirement, Swoyersville first sought incorporation as a Ridge, Ulysses S. Grant's Vicksburg cam- to a decent environment, basic services, borough in 1888, but the action was chal- paign, and Sheridan's Shenandoah Valley shelter, and food. Moreover, it aims at build- ing cultural bridges with people throughout lenged in court. Eleven years later, the Supe- campaign. After the Civil War, Washburn was the world. rior Court of Pennsylvania sustained the incor- elected to the U.S. House of Representatives But beyond this, the key to our basic de- poration and the Borough was officially born. where he contributed to the creation of Yellow- velopment is the status and role of women in Named for coal baron John Henry Swoyer, stone National Park. our society. For this we have used every mining was the major industry in the Borough Born on a farm near Dana was yet another means to improve women’s share in edu- at the time. Swoyersville was broken up into historic figure, the famous World War II cor- cation, in health services, in job opportuni- sections, such as Shomemaker's Patch and respondent Ernie Pyle. Pyle accompanied ties, and in leading a fulfilling life as mem- bers of a family, a community and a country. Maltby, with several smaller sub-divisions with- American serivcemen in both the European But the true essence of Egypt’s endurance in the sections. The patches were groups of and Pacific theaters. Pyle's work portrayed the and prosperity over the centuries, is the company homes owned by the coal compa- grim aspects of war and also the lighter mo- sense of belonging to one community. One nies. Today, coal mining is just a part of ments between the chaos. His writing was, nation founded on equal worth and equal Swoyersville's history, as are the garment and and still is, seen as some of the best jour- rights for every individual. Throughout the clothing factories which replaced that industry. nalism of the twentieth century. centuries, Egypt sheltered people from every In 1972, when Tropical Storm Agnes caused Besides historical figures, Vermillion County origin, background, creed and race. Their the Susquehanna River to overflow her banks, has also been home to entertainment person- traditions and cultures, their habits and cus- toms have melted to form one people. This is eighty percent of the town was inundated. Like alities as well. The actor Ken Kercheval was a country where all are equal in law, in prac- all residents of the Wyoming Valley, the born in Wolcottville. One of his most notable tice and in spirit, men and women, peasants townspeople pulled together during the sum- acting jobs was on the hit television series and urban dwellers, rich and poor, regardless mer of 1972, shoveled mud out of their ``Dallas.'' Kercheval has even had a guest ap- of their creed or beliefs. homes, and began to rebuild. Today, pearance on ``ER.'' Another Vermillion native Since the dawn of time, Egypt’s position in Swoyersville flourishes as a beautiful residen- is Jill Marie Landis. Landis is a nationally best- the world, its natural resources and cultural tial area. selling author. She has written 13 award win- diversity have allowed her to be at the cross- Mr. Speaker, I am proud to join with the ning books. Landis claims that her childhood roads of civilization. The same is true today. We have built a country of the twenty-first community in recognizing this milestone anni- in Clinton, Indiana, helped to inspire her sto- century that has bridged millennia of his- versary of the Borough Charter. I send my sin- ries. tory with a boundless future, the traditions cere best wishes to the people of Swoyersville I congratulate all of the residents of of old and the energy of youth. We have as they gather for their Centennial Celebra- Vermillion County who are taking part in the blended economic reform and social balance, tion. 175th birthday celebrations. Thursday, July 1, 1999 Daily Digest

HIGHLIGHTS Senate passed Treasury/Postal Service Appropriations and the District of Columbia Appropriations bills. Senate agreed to the conference report on the Y2K Act. See Re´sume´ of Congressional Activity. House Committee ordered reported the Military Construction and Inte- rior appropriations for fiscal year 2000. House agreed to the conference report on H.R. 775, Year 2000 Readiness and Responsibility Act. House passed H.R. 10, Financial Services Act of 1999. Senate S. 1258, to authorize funds for the payment of Chamber Action salaries and expenses of the Patent and Trademark Routine Proceedings, pages S7973–S8016 Office. Measures Introduced: Thirty-two bills and six res- S. 1259, to amend the Trademark Act of 1946 re- olutions were introduced, as follows: S. 1312–1343, lating to dilution of famous marks. S. Res. 132–136, and S. Con. Res. 43. S. 1260, to make technical corrections in title 17, (See next issue.) United States Code, and other laws, with an amend- Measures Reported: Reports were made as follows: ment in the nature of a substitute. (See next issue.) Special Report entitled ‘‘Further Revised Alloca- Measures Passed: tion to Subcommittees of Budget Totals’’. (S. Rept. Adjournment Resolution: Senate agreed to S. No. 106–101. Con. Res. 43, providing for a conditional adjourn- S. 335, to amend chapter 30 of title 39, United ment or recess of the Senate and a conditional ad- States Code, to provide for the nonmailability of cer- journment of the House of Representatives. tain deceptive matter relating to games of chance, Page S8011 administrative procedures, orders, and civil penalties relating to such matter, and for other purposes, with Department of the Treasury/Postal Service Ap- an amendment in the nature of a substitute. (S. propriations: Senate passed S. 1282, making appro- Rept. No. 106–102) priations for the Treasury Department, the United S. 468, to improve the effectiveness and perform- States Postal Service, the Executive Office of the ance of Federal financial assistance programs, sim- President, and certain Independent Agencies, for the plify Federal financial assistance application and re- fiscal year ending September 30, 2000, after taking porting requirements, and improve the delivery of action on the following amendments proposed there- services to the public, with amendments. (S. Rept. to: Pages S7981±S8011, (continued next issue) No. 106–103) Adopted: S. Res. 59, A bill designating both July 2, 1999, Campbell (for Jeffords) Amendment No. 1197, to and July 2, 2000, as ‘‘National Literacy Day’’. ensure the safety and availability of child care centers S. 467, to restate and improve section 7A of the in Federal facilities. Pages S7987, S7996 Clayton Act, with an amendment in the nature of a Campbell (for Lott/Daschle) Amendment No. substitute. 1201, to authorize the conveyance to the Columbia S. 1257, to amend statutory damages provisions of Hospital for Women of a certain parcel of land in title 17, United States Code. the District of Columbia. Pages S7987, S7989±90 D766 July 1, 1999 CONGRESSIONAL RECORD — DAILY DIGEST D767 Campbell (for Collins/Campbell/Dorgan) Amend- for an income tax payment which itemizes the por- ment No. 1202, to request the United States Postal tion of the payment which is allocable to various Service to issue a commemorative postage stamp Government spending categories. (See next issue.) honoring the 100th anniversary of the founding of Rejected: the Veterans of Foreign Wars of the United States. Dorgan (for Lautenberg) Amendment No. 1214, Pages S7987±88 to provide for the inclusion of alcohol abuse by mi- Campbell (for DeWine) Amendment No. 1200, to nors in the national anti-drug media campaign for prohibit the use of funds to pay for an abortion or youth. (By 58 yeas to 40 nays, 1 member responding to pay for the administrative expenses in connection present (Vote No. 194), Senate tabled the amend- with certain health plans that provide coverage for ment.) Pages S7987, S7997±S8010 abortions. (By 47 yeas to 51 nays (Vote No. 197), Withdrawn: Senate earlier failed to table the amendment.) Dorgan (for Moynihan) Amendment No. 1191, to Pages S7987, (continued next issue) ensure that health and safety concerns at the Federal Dorgan (for Harkin) Modified Amendment No. Courthouse at 40 Centre Street in New York, New 1209, to provide additional funding to reduce meth- York are alleviated. Page S7987 amphetamine usage in High Intensity Drug Traf- Reed Amendment No. 1193, to enable the State ficking Areas. Pages S7987, (continued next issue) of Rhode Island to meet the criteria for rec- Dorgan (for Wellstone) Amendment No. 1212, to ommendation as an Area of Application to the Bos- require the Secretary of Health and Human Services ton-Worcester-Lawrence; Massachusetts, New Hamp- to provide bonus grants to high performance States shire, Maine, and Connecticut Federal locality pay based on certain criteria and collect data to evaluate area. Pages S7987, S7990±91 the outcome of welfare reform. Dorgan (for Landrieu) Amendment No. 1211, to Pages S7987, (continued next issue) ensure the availability of child care in Federal facili- Campbell (for Kyl) Modified Amendment No. ties. Pages S7987, S7996 1195, to increase by $50,000,000 funding for Dorgan (for Torricelli) Amendment No. 1213, to United States Customs Service for salaries and ex- amend title 4 of the United States Code to prohibit penses to hire 500 new inspectors to stop the flow the imposition of discriminatory commuter taxes by of illegal drugs into the United States and facilitate political subdivisions of States. legitimate cross-border trade and commerce. Pages S7987, (continued next issue) Pages S7987, S7992±95, S8010±11 Campbell (for Warner) Amendment No. 1194, to Campbell (for Enzi/Thomas) Amendment No. provide for professional liability insurance coverage 1198, to include Campbell and Uinta Counties to for Federal employees. the Rocky Mountain High Intensity Drug Traf- Pages S7987, (continued next issue) ficking Areas for the State of Wyoming. Campbell (for Kyl) Amendment No. 1196, to ex- Pages S7987, (continued next issue) press the sense of the Senate that the Congress Dorgan (for Reid) Modified Amendment No. should provide funding for additional United States 1205, to provide additional funds for the Youth Customs Service inspectors to stop the flow of illegal Crime Gun Interdiction Initiative. drugs into the United States and facilitate legitimate Pages S7987, (continued next issue) cross-border trade and commerce. Campbell/Dorgan Amendment No. 1192, to pro- Pages S7987, (continued next issue) vide for an increase in certain Federal buildings Campbell (for Grassley) Amendment No. 1199, to funds. Pages S7987, (continued next issue) provide full funding for United States Customs Serv- Campbell Amendment No. 1218, to provide for a ice salaries and expenses. reduction in the amounts provided for certain rental Pages S7987, (continued next issue) of space, building operations and in aggregate Campbell (for Hutchison/Kyl) Amendment No. amount of Federal Buildings Fund. (See next issue.) 1204, to increase by $50,000,000 funding for Campbell/Dorgan Amendment No. 1219, to pro- United States Customs Service salaries and expenses, vide that funds made available for fiscal year 2000 for the purpose of hiring 500 new United States by this or any other Act to any department or agen- Customs inspectors to stop the flow of illegal drugs cy, which is a member of the Joint Financial Man- into the United States. agement Improvement Program (JFMIP) shall be Pages S7987, (continued next issue) available to finance an appropriate share of JFMIP Dorgan (for Baucus) Amendment No. 1206, to salaries and administrative costs. (See next issue.) amend title 39, United States Code, to establish Campbell (for Schumer) Amendment No. 1220, to guidelines for the relocation, closing, consolidation, require the Secretary of the Treasury to develop an or construction of post offices. Internet site where a taxpayer may generate a receipt Pages S7987, (continued next issue) D768 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999 Dorgan (for Moynihan/Schumer) Modified Amend- Open-market Reorganization for the Betterment ment No. 1208, to ensure that the health and safety of International Telecommunications Act: Senate concerns at the Federal courthouse at 40 Centre passed S. 376, to amend the Communications Sat- Street in New York, New York, are alleviated. ellite Act of 1962 to promote competition and pri- Pages S7987, (continued next issue) vatization in satellite communications, after agreeing Dorgan (for Schumer) Amendment No. 1210, to to a committee amendment in the nature of a sub- amend chapter 44 of title 18, United States Code, stitute, and the following amendment proposed relating to the regulation of firearms dealers. thereto: (See next issue.) Pages S7987, (continued next issue) Burns Amendment No. 1221, to prohibit Dorgan (for Cochran) Amendment No. 1217, to INTELSAT from entering the United States market repeal section 1122 of the National Defense Author- directly to provide any satellite communications ization Act for fiscal year 1994. services or space segment capacity to carriers (other Pages S7990, (continued next issue) than the United States signatory) or end users in the Dorgan (for Graham) Amendment No. 1215, to United States until July 1, 2001 or until INTELSAT increase funding for law enforcement in the High achieves a pro-competitive privatization pursuant to Intensity Drug Trafficking Area associated with section 613 (a) if privatization occurs earlier. Jacksonville, Florida. Pages S7990, (continued next issue) (See next issue.) Dorgan (for Graham) Amendment No. 1216, to District of Columbia Appropriations: Senate provide that Customs Service personnel assigned to passed S. 1283, making appropriations for the gov- Florida and the Southwest border are not reduced ernment of the District of Columbia and other ac- below fiscal year 1999 levels. tivities chargeable in whole or in part against the Pages S7990, (continued next issue) revenues of said District for the fiscal year ending Dorgan (for Moynihan) Amendment No. 1189, to September 30, 2000, taking action on the following ensure the expeditious construction of a new United amendments proposed thereto: (See next issue.) States Mission to the United Nations. Adoption: Pages S7987, (continued next issue) Daschle Amendment No. 1223, to direct the Sec- Dorgan (for Moynihan) Amendment No. 1190, to retary of the Interior to implement the notice of de- ensure that the General Services Administration has cision approved by the National Capital Regional adequate funds available for programmatic needs. Director, dated April 7, 1999. (See next issue.) Pages S7987, (continued next issue) Durbin Amendment No. 1227, to express the Campbell (for DeWine/Coverdell) Amendment sense of the Senate regarding the urgent need to ad- No. 1203, to provide additional funding for the dress basic quality of life concerns in the District of United States Customs Service for enhance drug Columbia. (See next issue.) interdiction efforts as authorized in the Western Hutchison Amendment No. 1228, to encourage Hemisphere Drug Elimination Act. the Mayor of the District of Columbia to adhere to Pages S7987, (continued next issue) the recommendations of the Health Care Develop- Dorgan (for Schumer) Amendment No. 1207, to ment Commission with respect to the use of Med- require the Secretary of the Treasury to develop an icaid Disproportionate Share payments. Internet site where a taxpayer may generate a receipt (See next issue.) for an income tax payment which itemizes the por- Hutchison (for Edwards) Amendment No. 1229, tion of the payment which is allocable to various to allow the District of Columbia Public Schools to Government spending categories. consider funding of a program to discourage school Pages S7987, (continued next issue) violence. (See next issue.) A unanimous-consent agreement was reached pro- Hutchison (for Dorgan) Amendment No. 1230, to viding that when the Senate receives the House com- require a GAO study of the criminal justice system panion measure, the Senate strike all after the enact- of the District of Columbia. (See next issue.) ing clause and insert in lieu thereof the text of S. Hutchison (for Dorgan) Amendment No. 1231, to 1282, as passed, and the House bill, as amended, be amend the District of Columbia Code to require the read for a third time and passed, that the Senate in- arrest and termination of parole of a prisoner for ille- sist on its amendment, request a conference with the gal drug use. (See next issue.) House thereon, and the Chair be authorized to ap- Withdrawn: point conferees on the part of the Senate. Further, Coverdell/Ashcroft Amendment No. 1222, to pro- that upon passage of the House bill, passage of S. hibit the use of funds for the distribution of sterile 1282 be vitiated and then be indefinitely postponed. needles or syringes for the hypodermic injection of (See next issue.) any illegal drug. (See next issue.) July 1, 1999 CONGRESSIONAL RECORD — DAILY DIGEST D769 Durbin Amendment No. 1224, to strike Federal with respect to United Nations General Assembly funding for the District of Columbia resident tuition Resolution ES–10/6. (See next issue.) support program. (See next issue.) Palestine Partition Plan Condemnation: Senate A unanimous-consent agreement was reached pro- agreed to S. Con. Res. 36, condemning Palestinian viding that when the Senate receives the House com- efforts to revive the original Palestine partition plan panion measure, the Senate strike all after the enact- of November 29, 1947, and condemning the United ing clause and insert in lieu thereof the text of Nations Commission on Human Rights for its April S. 1283, as passed, and the House bill, as amended, 27, 1999, resolution endorsing Palestinian self-deter- be read for a third time and passed, that the Senate mination on the basis of the original Palestine parti- insist on its amendment, request a conference with tion plan. (See next issue.) the House thereon, and the Chair be authorized to Qatar Central Municipal Council Election: Sen- appoint conferees on the part of the Senate. Further, ate agreed to H. Con. Res. 35, congratulating the that upon passage of the House bill, passage of State of Qatar and its citizens for their commitment S. 1283 be vitiated and then be indefinitely post- to democratic ideals and women’s suffrage on the oc- poned. (See next issue.) casion of Qatar’s historic elections of a central mu- Oregon Land Conveyance: Senate passed S. 416, nicipal council on March 8, 1999. (See next issue.) to direct the Secretary of Agriculture to convey the Digital Theft Deterrence and Copyright Dam- city of Sisters, Oregon, a certain parcel of land for ages Improvement Act: Senate passed S. 1257, to use in connection with a sewage treatment facility, amend statutory damages provisions of title 17, after agreeing to committee amendments and the United States Code. (See next issue.) following amendment proposed thereto: (See next issue.) Patent Fee Integrity and Innovation Protection Gorton (for Smith of OR.) Amendment no. 1225, Act: Senate passed S. 1258, to authorize funds for to authorize the acquisition of replacement lands the payment of salaries and expenses of the Patent within Oregon, and within or in the vicinity of the and Trademark Office. (See next issue.) Deschutes National Forest. (See next issue.) Trademark Amendments Act: Senate passed National Trail Systems: Senate passed S. 700, to S. 1259, to amend the Trademark Act of 1946 re- amend the National Trails System Act to designate lating to dilution of famous marks. (See next issue.) the Ala Kahakai Trail as a National Historic Trail, Technical Corrections: Senate passed S. 1260, to after agreeing to committee amendments. make technical corrections in title 17, United States (See next issue.) Code, and other laws, with an amendment in the na- Loess Hill Preservation Study Act: Senate passed ture of a substitute. (See next issue.) S. 776, to authorize the National Park Service to National Literacy Day: Senate agreed to S. Res. conduct a feasibility study for the preservation of the 59, designating both July 2, 1999, and July 2, Loess Hills in western Iowa, after agreeing to com- 2000, as ‘‘National Literacy Day’’. (See next issue.) mittee amendments. (See next issue.) Private Relief: Senate passed S. 606, for the relief Black Canyon National Park/Gunnison Gorge of Global Exploration and Development Corporation, National Conservation Area Act: Senate passed Kerr-McGee Corporation, and Kerr-McGee Chem- S. 323, to redesignate the Black Canyon of the Gun- ical, LLC (successor to Kerr-McGee Chemical Cor- nison National Monument as a national park and es- poration), after agreeing to a committee amendment. tablish the Gunnison Gorge National Conservation (See next issue.) Area, after agreeing to a committee amendment in Military and Extraterritorial Jurisdiction Act: the nature of a substitute. (See next issue.) Senate passed S. 768, to establish court-martial ju- Deschutes Resources Conservancy Authorization risdiction over civilians serving with the Armed Act: Senate passed S. 1027, to reauthorize the par- Forces during contingency operations, and to estab- ticipation of the Bureau of Reclamation in the lish Federal jurisdiction over crimes committed out- Deschutes Resources Conservancy. (See next issue.) side the United States by former members of the Armed Forces and civilians accompanying the Armed Sudan National Islamic Front: Senate agreed to Forces outside the United States, after agreeing to a S. Res. 109, relating to the activities of the Na- committee amendment in the nature of a substitute, tional Islamic Front government in Sudan, after and the following amendment proposed thereto: (See next issue.) agreeing to committee amendments. (See next issue.) United Nations General Assembly: Senate agreed Gorton (for Sessions) Amendment No. 1226, in to S. Res. 119, expressing the sense of the Senate the nature of a substitute. (See next issue.) D770 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999 Condemning Arson in Synagogue: Senate agreed Appointment: to S. Res. 136, condemning the acts of arson at International Financial Institution Advisory three Sacramento, California, area synagogues on Commission: The Chair, on behalf of the Majority June 18, 1999, and calling on all Americans to cat- Leader, who consulted with the Speaker of the House egorically reject crimes of hate and intolerance. of Representatives and the Minority Leaders of the (See next issue.) Senate and the House, and pursuant to Public Law Budget Process Reform: Senate resumed consider- 105–277, announced the designation of Allan H. ation of S. 557, to provide guidance for the designa- Meltzer, of Pennsylvania, as the Chairman of the tion of emergencies as a part of the budget process, International Financial Institution Advisory Commis- taking action on the following amendments proposed sion. (See next issue.) thereto: Pages S7974±81 Authority for Committees: All committees were Pending: authorized to file legislative reports during the ad- Lott (for Abraham) Amendment No. 254, to pre- journment of the Senate on Thursday, July 8, 1999, serve and protect the surpluses of the social security from 11 a.m. until 1 p.m. (See next issue.) trust funds by reaffirming the exclusion of receipts Nominations Confirmed: Senate confirmed the fol- and disbursement from the budget, by setting a lowing nominations: limit on the debt held by the public, and by amend- By 97 yeas to 2 nays (Vote No. 195), Lawrence ing the Congressional Budget Act of 1974 to pro- H. Summers, of Maryland, to be Secretary of the vide a process to reduce the limit on the debt held Treasury. Pages S7996±97, S8010, (continued next issue) by the public. Page S7980 Timothy Fields, Jr., of Virginia, to be Assistant Abraham Amendment No. 255 (to Amendment Administrator, Office of Solid Waste, Environmental No. 254), in the nature of a substitute. Page S7980 Protection Agency. Lott motion to recommit the bill to the Com- Albert S. Jacquez, of California, to be Adminis- mittee on Governmental Affairs, with instructions trator of the Saint Lawrence Seaway Development and report back forthwith. Page S7981 Corporation for a term of seven years. Lott Amendment No. 296 (to the instructions of Diane Edith Watson, of California, to be Ambas- the Lott motion to recommit), to provide for Social sador to the Federal States of Micronesia. Security surplus preservation and debt reduction. Melvin E. Clark, Jr., of the District of Columbia, to be a Member of the Board of Directors of the Page S7981 Lott Amendment No. 297 (to Amendment No. Overseas Private Investment Corporation for a term expiring December 17, 1999. 296), in the nature of a substitute (Social Security Carolyn L. Huntoon, of Virginia, to be an Assist- Lockbox). Page S7981 ant Secretary of Energy (Environmental Manage- During consideration of this measure today, Senate ment). also took the following action: John T. Spotila, of New Jersey, to be Adminis- By 99 yeas to 1 nay (Vote No. 193), three-fifths trator of the Office of Information and Regulatory of those Senators duly chosen and sworn having Affairs, Office of Management and Budget. voted in the affirmative, Senate agreed to close fur- Gary S. Guzy, of the District of Columbia, to be ther debate on the motion to proceed to consider- an Assistant Administrator of the Environmental ation of the bill. Pages S7974±80 Protection Agency. A motion was entered to close further debate on John T. Hanson, of Virginia, to be an Assistant the pending Lott Amendment No. 297 (listed above) Secretary of Veterans Affairs (Public and Intergov- and, pursuant to the order of June 30, 1999, a vote ernmental Affairs). on the cloture motion will occur on Friday, July 16, Frank Almaguer, of Virginia, to be Ambassador to 1999. Page S7981 the Republic of Honduras. Subsequently, the bill was returned to the Senate John R. Hamilton, of Virginia, to be Ambassador calendar. Page S7981 to the Republic of Peru. Donald W. Keyser, of Virginia, a Career Member Y2K Act—Conference Report: By 81 yeas to 18 of the Senior Foreign Service, Class of Minister- nays (Vote No. 196), Senate agreed to the conference Counselor, for Rank of Ambassador during tenure of report on H.R. 775, to establish certain procedures service as Special Representative of the Secretary of for civil actions brought for damages relating to the State for Nagorno-Karabakh and New Independent failure of any device or system to process or other- States Regional Conflicts. wise deal with the transition from the year 1999 to Gwen C. Clare, of South Carolina, to be Ambas- the year 2000. (See next issue.) sador to the Republic of Ecuador. July 1, 1999 CONGRESSIONAL RECORD — DAILY DIGEST D771 Oliver P. Garza, of Texas, to be Ambassador to Earl E. Devaney, of Massachusetts, to be Inspector the Republic of Nicaragua. General, Department of the Interior. Joyce E. Leader, of the District of Columbia, to Lawrence H. Summers, of Maryland, to be United be Ambassador to the Republic of Guinea. States Governor of the International Monetary Fund David B. Dunn, of California, to be Ambassador for a term of five years; United States Governor of to the Republic of Zambia. the International Bank for Reconstruction and De- M. Michael Einik, of Virginia, to be Ambassador velopment for a term of five years; United States to The Former Yugoslav Republic of Macedonia. Governor of the Inter-American Development Bank Mark Wylea Erwin, of North Carolina, to be Am- for a term of five years; United States Governor of bassador to the Republic of Mauritius, and to serve the African Development Bank for a term of five concurrently and without additional compensation as years; United States Governor of the Asian Develop- Ambassador Extraordinary and Plenipotentiary of the ment Bank; United States Governor of the African United States of America to the Federal Islamic Re- Development Fund; United States Governor of the public of the Comoros and as Ambassador Extraor- European Bank for Reconstruction and Development. dinary and Plenipotentiary of the United States of James B. Cunningham, of Pennsylvania, to be America to the Republic of Seychelles. Deputy Representative of the United States of Amer- Christopher E. Goldthwait, of Florida, to be Am- ica to the United Nations, with the rank and status bassador to the Republic of Chad. of Ambassador Extraordinary and Plenipotentiary. Larry C. Napper, of Texas, a Career Member of Harriet L. Elam, of Massachusetts, to be Ambas- the Senior Foreign Service, Class of Minister-Coun- sador to the Republic of Senegal. selor, for Rank of Ambassador during tenure of serv- J. Richard Fredericks, of California, to be Ambas- ice as Coordinator of the Support for East European sador to Switzerland, and to serve concurrently and Democracy (SEED) Program. without additional compensation as Ambassador Ex- Donald Lee Pressley, of Virginia, to be an Assist- traordinary and Plenipotentiary of the United States ant Administrator of the Agency for International of America to the Principality of Liechntenstein. Development. Barbara J. Griffiths, of Virginia, to be Ambassador Joseph Limprecht, of Virginia, to be Ambassador to the Republic of Iceland. to the Republic of Albania. Gregory Lee Johnson, of Washington, to be Am- bassador to the Kingdom of Swaziland. Prudence Bushnell, of Virginia, to be Ambassador Jimmy J. Kolker, of Missouri, to be Ambassador to the Republic of Guatemala. to Burkina Faso. Mary Sheila Gall, of Virginia, to be a Commis- Sylvia Gaye Stanfield, of Texas, to be Ambassador sioner of the Consumer Product Safety Commission to Brunei Darussalam. for a term of seven years from October 27, 1998. Sally Katzen, of the District of Columbia, to be Donald Keith Bandler, of Pennsylvania, to be Deputy Director for Management, Office of Manage- Ambassador to the Republic of Cyprus. ment and Budget. Johnnie Carson, of Illinois, to be Ambassador to Q. Todd Dickenson, of Pennsylvania, to be Com- the Republic of Kenya. missioner of Patents and Trademarks. Thomas J. Miller, of Virginia, to be Ambassador Clifford Gregory Stewart, of New Jersey, to be to Bosnia and Herzegovina. General Counsel of the Equal Employment Oppor- Bismarck Myrick, of Virginia, to be Ambassador tunity Commission for a term of four years. to the Republic of Liberia. Anthony Musick, of Virginia, to be Chief Finan- Michael D. Metelits, of California, to be Ambas- cial Officer, Corporation for National and Commu- sador to the Republic of Cape Verde. nity Service. Ann Brown, of Florida, to be a Commissioner of Michael Cohen, of Maryland, to be Assistant Sec- the Consumer Product Safety Commission for a term retary for Elementary and Secondary Education, De- of seven years from October 27, 1999. partment of Education. Ann Brown, of Florida, to be Chairman of the Major General Phillip R. Anderson, United States Consumer Product Safety Commission. Army, to be a Member and President of the Mis- Routine lists in the Foreign Service. sissippi River Commission, under the provisions of Pages S8015±16 Section 2 of an Act of Congress, approved June 1879 Nominations Received: Senate received the fol- (21 Stat. 37) (33 USC 642). lowing nominations: A routine list in the Foreign Service. Curt Hebert, Jr., of Mississippi, to be a Member Pages S8011±15 of the Federal Energy Regulatory Commission for Nomination Withdrawn: Senate received notifica- the term expiring June 30, 2004. tion of the withdrawal of the following nomination: D772 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999 G. Edward DeSeve, of Pennsylvania, to be Deputy tives Lazio and Frank; and William C. Apgar, As- Director for Management, Office of Management and sistant Secretary of Housing and Urban Development Budget, which was sent to the Senate on February for Housing/Federal Housing Commissioner. 12, 1999. Page S8016 BUSINESS MEETING Messages From the House: (See next issue.) Committee on Energy and Natural Resources: Committee Measures Referred: (See next issue.) ordered favorably reported the nominations of David Communications: (See next issue.) L. Goldwyn, of the District of Columbia, to be As- Petitions: (See next issue.) sistant Secretary of Energy for International Affairs, and James B. Lewis, of New Mexico, to be Director Executive Reports of Committees: (See next issue.) of the Office Of Minority Economic Impact, Depart- Statements on Introduced Bills: (See next issue.) ment of Energy. Additional Cosponsors: (See next issue.) SANCTIONS IN U.S. NATIONAL SECURITY Amendments Submitted: (See next issue.) POLICY Notices of Hearings: (See next issue.) Committee on Foreign Relations: Committee held hear- Authority for Committees: (See next issue.) ings on the role of sanctions in United States na- tional security policy, receiving testimony from Stu- Additional Statements: (See next issue.) art E. Eizenstat, Under Secretary of State for Eco- Text of S. 1234 as Previously Passed: nomic, Business and Agricultural Affairs. (See next issue.) Hearings recessed subject to call. Record Votes: Five record votes were taken today. U.S. POLICY ON HONG KONG (Total—197) Pages S7980, S8010, (continued next issue) Committee on Foreign Relations: Subcommittee on East Adjournment: Senate convened at 9:30 a.m. and, in accordance with the provisions of S. Con. Res. 43, Asian and Pacific Affairs concluded hearings to ex- adjourned at 10:24 p.m., until 12 Noon, on Mon- amine United States policy towards Hong Kong, day, July 12, 1999. (For Senate’s program, see the after receiving testimony from Stanley O. Roth, As- remarks of the Acting Majority Leader in today’s sistant Secretary of State for East Asian and Pacific Record on page S8011.) Affairs; Margaret Ng Negoi-yee, Representative for the Legal Functional Constituency, Legislative Coun- cil, Hong Kong Special Administrative Region, Peo- Committee Meetings ple’s Republic of China; Stephen J. Yates, Heritage Foundation, Washington, D.C.; and Jerome A. (Committees not listed did not meet) Cohen, Council on Foreign Relations, New York, MILITARY OPERATIONS IN KOSOVO New York. Committee on Armed Services: Committee concluded EGG SAFETY hearings on issues relating to military operations in Kosovo, after receiving testimony from Gen. Wesley Committee on Governmental Affairs: Subcommittee on K. Clark, USA, Commander in Chief, European Oversight of Government Management, Restruc- Command, Supreme Allied Commander, Europe. turing and the District of Columbia concluded hear- ings to examine the federal food safety system, focus- LOW-INCOME HOUSING AVAILABILITY ing on the safety of eggs and egg products, after re- Committee on Banking, Housing, and Urban Affairs: ceiving testimony from Lawrence J. Dyckman, Di- Subcommittee on Housing and Transportation con- rector, Food and Agriculture Issues, Resources, Com- cluded hearings on S. 1318, to authorize the Sec- munity, and Economic Development Division, Gen- retary of Housing and Urban Development to award eral Accounting Office; Morris E. Potter, Director, grants to States to supplement State and local assist- Food Safety Initiatives, Center for Food Safety and ance for the preservation and promotion of affordable Applied Nutrition, Food and Drug Administration, housing opportunities for low-income families, and Department of Health and Human Services; Mar- S. 1319, to authorize the Secretary of Housing and garet Glavin, Associate Administrator, Food Safety Urban Development to renew project-based contracts and Inspection Service, Department of Agriculture; for assistance under section 8 of the United States Michael F. Jacobson, Center for Science in the Public Housing Act of 1937 at up to market rent levels, Interest, and Jill A. Snowdon, Egg Nutrition Center, in order to preserve these projects as affordable low- both of Washington, D.C.; Keith Mussman, income housing, after receiving testimony from Sen- Mussman’s Back Acres, Grant Park, Illinois, on be- ators Grams, Kerry, Bond, and Jeffords; Representa- half of the United Egg Producers; and Harold July 1, 1999 CONGRESSIONAL RECORD — DAILY DIGEST D773 DeVries, Jr., Mallquist Butter and Egg Company, concluded oversight hearings on the implementation Rockford, Illinois. of the Workforce Investment Act of 1998, after re- BUSINESS MEETING ceiving testimony from Senator DeWine; Raymond L. Bramucci, Assistant Secretary of Labor for Em- Committee on the Judiciary: Committee ordered favor- ployment and Training; Steven M. Gold, Vermont ably reported the following business items: S. 467, to restate and improve section 7A of the Department of Employment and Training, Montpe- Clayton Act, with an amendment in the nature of a lier; Terry W. Hudson, Houston Works, Houston, substitute; Texas; Earl Wilson, Minnesota Department of Eco- S. 1257, to amend statutory damages provisions of nomic Security, St. Paul; and Roberts T. Jones, Na- title 17, United States Code; tional Alliance of Business, Washington, D.C. S. 1258, to authorize funds for the payment of salaries and expenses of the Patent and Trademark AMERICAN INDIAN EDUCATIONAL Office; FOUNDATION S. 1259, to amend the Trademark Act of 1946 re- Committee on Indian Affairs: Committee concluded lating to dilution of famous marks; hearings on S. 1290, to amend title 36 of the S. 1260, to make technical corrections in title 17, United States Code to establish the American Indian United States Code, and other laws, with an amend- Education Foundation, after receiving testimony ment in the nature of a substitute; from Representatives Kildee and Patrick Kennedy; S. Res. 59, designating both July 2, 1999, and Michael J. Anderson, Deputy Assistant Secretary of July 2, 2000, as ‘‘National Literacy Day’’; and the Interior for Indian Affairs; John W. Cheek, Na- The nominations of Marsha L. Berzon, of Cali- fornia, to be United States Circuit Judge for the tional Indian Education Association, Alexandria, Vir- Ninth Circuit, Robert A. Katzmann, of New York, ginia; Roger Bordeaux, Association of Community to be United States Circuit Judge for the Second Tribal Schools, Inc., Sisseton, South Dakota; Gerald Circuit, and T. John Ward, to be United States Dis- Monette, Turtle Mountain Community College, trict Judge for the Eastern District of Texas. Belcourt, North Dakota, on behalf of the American Indian Higher Education Consortium; Kathryn WORKFORCE INVESTMENT ACT Benally, Navajo Area School Board Association, Committee on Health, Education, Labor, and Pensions: Window Rock, Arizona. Subcommittee on Employment, Safety and Training h House of Representatives a Ticket to Work and Self-Sufficiency Program in Chamber Action the Social Security Administration to provide such Bills Introduced: 52 public bills, H.R. 2413–2464; individuals with meaningful opportunities to work, and 7 resolutions, H. J. Res. 61, H. Con. Res. amended (H. Rept. 106–220 Part 1). Page H5331 148–150, and H. Res. 238–240, were introduced. Speaker Pro Tempore: Read a letter from the Pages H5331±34 Speaker wherein he designated Representative Ewing Reports Filed: Reports were filed today as follows: to act as Speaker pro tempore for today. Page H5181 H.R. 1761, to amend provisions of title 17, United States Code, amended (H. Rept. 106–216); Guest Chaplain: The prayer was offered by the guest Chaplain, Rev. Chris Geeslin of Frederick, Report on the Revised Suballocation of Budget Allocations for Fiscal Year 2000 (H. Rept. Maryland. Page H5181 106–217); Journal: Agreed to the Speaker’s approval of the H.R. 1431, to reauthorize and amend the Coastal Journal of Wednesday, June 30 by a yea and nay Barrier Resources Act, amended (H. Rept. 106–218); vote of 358 yeas to 56 nays with 1 voting ‘‘present,’’ H.R. 1691, to protect religious liberty, amended Roll No. 262. Pages H5181, H5184 (H. Rept. 106–219); and Year 2000 Readiness and Responsibility Act: By H.R. 1180, to amend the Social Security Act to a yea and nay vote of 404 yeas to 24 nays, Roll No. expand the availability of health care coverage for 265, the House agreed to the conference report on working individuals with disabilities and to establish D774 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999 H.R. 775, to establish certain procedures for civil ac- of sections 1049 and 1050 of the Senate bill, and tions brought for damages relating to the failure of modifications committed to conference; Page H5215 any device or system to process or otherwise deal Committee on Education and the Workforce, for with the transition from the year 1999 to the year consideration of sections 579 and 698 of the Senate 2000. Pages H5196±H5206 bill, and sections 341, 343, 549, 567, and 673 of H. Res. 234, the rule which waived points of the House amendment, and modifications committed order against the conference report, was agreed to to conference: Chairman Goodling and Representa- earlier by a yea and nay vote of 423 yeas with 1 vot- tives Deal of Georgia and Mink of Hawaii; Pages H5184±86 ing ‘‘nay’’, Roll No. 263. Page H5215 National Defense Authorization Act for Fiscal Committee on Government Reform, for consider- Year 2000: The House disagreed to the Senate ation of sections 538, 652, 654, 805–810, 104, amendment to S. 1059, to authorize appropriations 1052–54, 1080, 1101–07, 2831, 2862, 3160, 3161, for fiscal year 2000 for military activities of the De- 3163, and 3173 of the Senate bill, and sections 522, partment of Defense, for military construction, and 524, 525, 661–64, 672, 802, 1101–05, 2802, and for defense activities of the Department of Energy, 3162 of the House amendment, and modifications and to prescribe personnel strengths for such fiscal committed to conference: Chairman Burton of Indi- year for the Armed Forces, and agreed to a con- ana and Representatives Scarborough and ference. Page H5206 Cummings. Provided that Representative Horn is Appointed as conferees: Committee on Armed Forces, for consideration of appointed in lieu of Representative Scarborough for the Senate bill and the House amendment, and consideration of sections 538, 805–810, 1052–54, modifications committed to conference: Chairman 1080, 2831, 2862, 3160, and 3161 of the Senate Spence and Representatives Stump, Hunter, Bate- bill and sections 802 and 2802 of the House amend- man, Hansen, Weldon of Pennsylvania, Hefley, ment; Page H5215 Saxton, Buyer, Fowler, McHugh, Talent, Everett, Committee on International Relations, for consid- Bartlett of Maryland, McKeon, Watts of Oklahoma, eration sections 1013, 1043, 1044, 1046, 1066, Thornberry, Hostettler, Chambliss, Hilleary, Skelton, 1071, 1072, and 1083 of the Senate bill, and sec- Sisisky, Spratt, Ortiz, Pickett, Evans, Taylor of Mis- tions 1202, 1206, 1301–07, and 1404, 1407, 1408, sissippi, Abercrombie, Meehan, Underwood, Reyes, 1411, and 1413 of the House amendment, and Turner, Sanchez, Tauscher, Andrews, and Larson; modifications committed to conference: Chairman Page H5215 Gilman and Representatives Bereuter and Gejdenson; Permanent Select Committee on Intelligence, for Page H5215 consideration of matters within the jurisdiction of Committee on the Judiciary, for consideration of that committee under clause 11 of rule X: Chairman sections 3156 and 3163 of the Senate bill and sec- Goss and Representatives Lewis of California and tions 3166 and 3194 of the House amendment, and Dixon of California; Page H5215 modifications committed to conference: Chairman Committee on Banking and Financial Services, for Hyde and Representatives McCollum and Conyers; consideration of section 1059 of the Senate bill and Page H5215 section 1409 of the House bill and modifications Committee on Resources, for consideration of sec- committed to conference: Representatives McCollum, tions 601, 602, 695, 2833, and 2861 of the Senate Bachus, and LaFalce; Page H5215 bill and sections 365, 601, 602, 653, 654, and 2863 Committee on Commerce, for consideration of sec- of the House amendment and modifications com- tions 326, 601, 602, 1049, 1050, 3151–53, 3155–65, 3173, 3173, 3175, 3176–78 of the Senate mitted to conference: Chairman Young of Alaska and bill, and sections 601, 602, 653, 3161, 3162, 3165, Representatives Tauzin and George Miller of Cali- 3167, 3184, 3186, 3188, 3189, and 3191 of the fornia; Page H5215 House amendment, and modifications committed to Committee on Science, for consideration of sec- conference: Chairman Bliley and Representatives tions 1049, 3151–53, and 3155–65 of the Senate Barton of Texas and Dingell. Provided that Rep- bill, and sections 3167, 3170, 3184, 3188–90, and resentative Bilirakis is appointed in lieu of Rep- 3191 of the House amendment and modifications resentative Barton of Texas for consideration of sec- committed to conference: Chairman Sensenbrenner tions 326, 601, and 602 of the Senate bill, and sec- and Representatives Calvert and Costello; tions 601, 602, and 653 of the House amendment Pages H5215±16 and modifications committed to conference and pro- Committee on Transportation and Infrastructure, vided that Representative Tauzin is appointed in lieu for consideration of sections 601, 602, 1060, 1079, of Representative Barton of Texas for consideration and 1080 of the Senate bill, and sections 361, 601, July 1, 1999 CONGRESSIONAL RECORD — DAILY DIGEST D775 602, and 3404 of the House amendment, and modi- Agreed to: fications committed to conference: Chairman Shuster The Schakowsky amendment that requires a five and Representatives Gilchrest and DeFazio; and year study by the Department of the Treasury and Page H5216 Federal banking agencies on the affect of financial Committee on Veterans’ Affairs, for consideration modernization, as enacted, on small business and of sections 671–75, 681, 682, 696, 697, 1062, and farm lending; Pages H5286±87 1066 of the Senate bill, and modifications com- The Vela´zquez amendment that modifies the pro- mitted to conference: Representatives Bilirakis, visions concerning restrictions on foreign banks Quinn, and Filner. Page H5216 doing business in the United States; Page H5287 Agreed to the Skelton motion of instruct conferees The Foley amendment that allows foreign banks to insist upon the provisions contained in section to upgrade bank agencies and branches with the ap- 1207 of the House amendment relating to goals for proval of the appropriate chartering agency; the conflict with Yugoslavia by a yea and nay vote Pages H5291±92 of 261 yeas to 162 nays with 5 voting ‘‘present’’, The Slaughter amendment that expresses the Sense of the Congress that trust officers and other financial Roll No. 266). Pages H5206±14 planners and advisors should develop presentations Agreed to close conference committee meetings at that eliminate stereotypical examples which lead to such times as classified national security information actions that are financially detrimental to women; is under consideration by a yea and nay vote of 413 Pages H5292±93 yeas to 9 nays, Roll No. 267. Pages H5214±15 The Burr amendment that sought to provide that Late Reports: Committee on Appropriations re- a financial holding company that meets all require- ceived permission to have until midnight on July 9 ments for grandfathering of non-financial activities to file a report on a bill making appropriations for shall not be subject to expansion limitations with re- the Department of Interior and related agencies for spect to federally regulated communications compa- fiscal year 2000, and a report on a bill making ap- nies (agreed to by a recorded vote of 238 ayes to 189 propriations for military construction, family hous- noes, Roll No. 268); Pages H5285±86, H5300±01 ing, and base realignment and closure for the De- The Roukema amendment that requires the Secu- partment of Defense for fiscal year 2000. Page H5216 rities and Exchange Commission to consult and co- ordinate comments with the appropriate Federal Legislative Branch Appropriations: The House banking agency before taking any action with re- disagreed to the Senate amendments to H.R. 1905, spect to the manner in which loan loss reserves are making appropriations for the Legislative Branch for reported in financial statements by banks (agreed to the fiscal year ending September 30, 2000, and by a recorded vote of 407 ayes to 20 noes, Roll No. agreed to a conference. Appointed as conferees: Rep- 271); Pages H5294±H5300, H5302±03 resentatives Taylor of North Carolina, Wamp, Lewis The Watt of North Carolina amendment that of California, Granger, Peterson of Pennsylvania, clarifies that a lender cannot condition a loan on the Young of Florida, Pastor, Murtha, Hoyer, and Obey. purchase of an insurance product from the particular Page H5216 lender or one of its subsidiaries; Pages H5303±04 Financial Services Act: The House passed The Bliley amendment that prohibits discrimina- H.R. 10, to enhance competition in the financial tion against victims of domestic violence and allows services industry by providing a prudential frame- mutual insurance companies to redomesticate to an- work for the affiliation of banks, securities firms, and other state and reorganize into a mutual holding other financial service providers by a recorded vote company or stock company (agreed to by a recorded of 343 ayes to 86 noes, Roll No. 276. vote of 226 ayes to 203 noes, Roll No. 273); and Pages H5304±08, H5316 Pages H5216±H5323 The Oxley amendment that includes provisions to Rejected the Markey motion to recommit the bill protect nonpublic personal information and imposes to the Committee on Banking and Financial Services on all financial institutions an obligation to respect with instructions to report it back forthwith with the privacy of consumers and protect the security amendments that add provisions dealing with med- and confidentiality of nonpublic personal information ical and financial privacy protections and the prohi- (agreed to by a recorded vote of 427 ayes to 1 no, bition of redlining by insurance companies by a yea Roll No. 274). Pages H5308±17 and nay vote of 198 yeas to 232 nays, Roll No. 275. Rejected: Pages H5317±22 The Barr amendment that sought to eliminate the Agreed to the amendment in the nature of a sub- authority to require ‘‘Know your Customer’’ stitute made in order by the rule. Page H5317 profiling of accounts and source of funds (rejected by D776 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999 a recorded vote of 129 ayes to 299 noes, Roll No. 269); Pages H5287±91, H5301 Committee Meetings The Cook amendment that sought to strike dis- MILITARY CONSTRUCTION AND INTERIOR closure of customer costs of acquiring financial prod- APPROPRIATIONS; BUDGET ALLOCATIONS ucts provisions and require GAO to conduct a study Committee on Appropriations: Ordered reported the fol- regarding the consequences of limiting, through reg- lowing appropriation bills: Military Construction ulation, commissions, fees, or other costs incurred by and Interior for fiscal year 2000. customers (rejected by a recorded vote of 114 ayes The Committee also approved revised Section to 313 noes, Roll No. 270); Pages H5293±94, H5301±02 302(b) budget allocations. Rejected the LaFalce motion to rise by a recorded vote of 179 ayes to 232 noes, Roll No. 272. SECURITY AND FREEDOM THROUGH Pages H5305±06 ENCRYPTION (SAFE) ACT H. Res. 235, the rule that provided for consider- Committee on Armed Services: Held a hearing on H.R. ation of the bill was agreed to earlier by a yea and 850, Security and Freedom through Encryption nay vote of 227 yeas to 203 nays, Roll No. 264. (SAFE) Act. Testimony was heard from the following Pages H5186±96 officials of the Department of Defense: John J. Hamre, Deputy Secretary; and Barbara A. McNa- Independence Day District Work Period: The mara, Deputy Director, NSA. House agreed to S. Con. Res. 43, providing for an conditional adjournment or recess of the Senate and ECONOMIC DEVELOPMENT a conditional adjournment of the House of Rep- CONVEYANCES—MILITARY resentatives. H. Res. 236, providing for consider- INSTALLATIONS REUSE ation of a concurrent resolution was laid on the Committee on Armed Services: Subcommittee on Mili- table. Page H5323 tary Installations and Facilities held a hearing on Resignations-Appointments : Agreed that not- economic development conveyances and the reuse of withstanding any adjournment of the House until former U.S. military installations. Testimony was Monday, July 12, 1999, the Speaker, Majority Lead- heard from Representatives Riley, Farr, Ford, Hutch- er, and Minority Leader be authorized to accept res- inson and Lewis of California; Randall Yim, Deputy ignations and to make appointments authorized by Under Secretary, Installations, Department of De- fense; the following officials of Defense Management law or by the House. Page H5323 Issues, GAO: David Warren, Director, and Barry W. Calendar Wednesday: Agreed that business in Holman, Associate Director; and public witnesses. order under the Calendar Wednesday rule be dis- pensed with on Wednesday, July 14, 1999. AH–64 APACHE HELICOPTER FLEET Page H5323 Committee on Armed Services: Subcommittee on Mili- Speaker Pro Tempore: Read a letter from the tary Readiness held a hearing on AH–64 Apache Speaker wherein he appointed Representative Davis helicopter fleet. Testimony was heard from the fol- of Virginia to act as Speaker pro tempore to sign en- lowing officials of the Department of the Army: rolled bills and joint resolutions through July 12. Brig. Gen. Richard Cody, USA, Assistant Division Commander, 4th Infantry Division, Ft. Hood, Texas; Page H5324 Col. Oliver H. Hunter, IV, USA, Commander 11th Senate Messages : Messages received from the Sen- Aviation Regiment, Illieshiem, Germany; and Col ate appear on pages H5181 and H5291. Howard T. Bramblett, USA, Project Manager, Quorum Calls—Votes: Seven yea and nay votes and AH–64 Apache helicopter. eight recorded votes developed during the pro- ELECTRICITY COMPETITION ceedings of the House today and appear on pages H5184, H5186, H5196, H5205–06, H5214, Committee on Commerce: Subcommittee on Energy and H5214–15, H5300–01, H5301, H5301–02, H5306, Power continued hearings on Electricity Competi- H5316, H5316–17, H5322, and H5322–23. There tion, focusing on State and Local Issues. Testimony was heard from the following members of the Legis- were no quorum calls. lature, State of Texas: David Sibley, Senate; and Ste- Adjournment: The House met at 10:00 a.m. and phen Wolens, House of Representatives; Jim Sul- pursuant to S. Con. Res. 43 adjourned at midnight livan, President, Public Service Commission, State of until 12:30 p.m. on Monday, July 12, for morning- Alabama; David Svanda, Commissioner, Public Serv- hour debates. ice Commission, State of Michigan; William July 1, 1999 CONGRESSIONAL RECORD — DAILY DIGEST D777 Nugent, Commissioner, Public Utilities Commis- cerning United Nations General Assembly Resolu- sion, State of Maine; Preston Bass, Mayor, Town of tion ES–10/6; H. Res. 227, amended, expressing the Stantonsburg, State of North Carolina; and public sense of the Congress in opposition to the Govern- witnesses. ment of Pakistan’s support for armed incursion into ESEA REFORM—BUSINESS COMMUNITY Jammu and Kashmir, India; and H. Con. Res. 140, VIEWS amended, expressing the sense of the Congress that Haiti should conduct free, fair, transparent, and Committee on Education and the Workforce: Held a hear- peaceful elections. ing on Business Community Views on Reform of ESEA. Testimony was heard from public witnesses. U.S. OPPOSITION TO PAKISTAN’S SUPPORT FOR ARMED INCURSION BUDGETING PILOT PROGRAMS Committee on Government Reform, Subcommittee on Committee on International Relations: Subcommittee on Government Management, Information, and Tech- Asia and the Pacific approved for full Committee ac- nology held a hearing on ‘‘The Results Act: Status tion, as amended, H. Res. 227, expressing the sense of Performance Budgeting Pilot Programs,’’ Testi- of the Congress in opposition to the Government of mony was heard from Diedre Lee, Acting Deputy Pakistan’s support for armed incursion into Jammu Director, Management, OMB; Paul L. Posner, Direc- and Kashmir, India. tor, Budget Issues, GAO; Sallyanne Harper, Chief FAIRNESS IN ASBESTOS COMPENSATION Financial Officer, EPA; Olivia A. Golden, Assistant ACT Secretary, Administration for Children and Families, Committee on the Judiciary: Held a hearing on H.R. Department of Health and Human Services; and 1283, Fairness in Asbestos Compensation Act of Jesse L. Funches, Chief Financial Officer, NRC. 1999. Testimony was heard from public witnesses. MISCELLANEOUS MEASURES PATENT FAIRNESS ACT Committee on International Relations: Ordered reported, Committee on the Judiciary: Subcommittee on Courts as amended, H.R. 1993, Export Enhancement Act of and Intellectual Property held a hearing on H.R. 1999. 1598, Patent Fairness Act of 1999. Testimony was The Committee also favorably considered the fol- heard from Senator Torricelli; Representatives Bry- lowing measures and adopted a motion urging the ant, McDermott, Waxman and Berry; and public Chairman to request that they be considered on the witnesses. Suspension Calendar: H. Res. 57, amended, express- ing concern over interference with freedom of the MISCELLANEOUS MEASURES press and the independence of judicial and electoral Committee on the Judiciary: Subcommittee on Crime institutions in Peru; H.R. 1477, Iran Nuclear Pro- approved for full Committee action the following liferation Prevention Act of 1999; H.R. 1794, bills: H.R. 218, Community Protection Act of 1999; amended, concerning the participation of Taiwan in H.R. 1791, Federal Law Enforcement Animal Pro- the World Health Organization (WHO); H. Con. tection Act of 1999; and H.R. 2336, United States Res. 121, amended, expressing the sense of the Con- Marshals Service Improvement Act of 1999. gress regarding the victory of the United States in the cold war and the fall of the Berlin Airlift; H. INS’ INTERIOR ENFORCEMENT STRATEGY Con. Res. 144, urging the United States Govern- Committee on the Judiciary: Subcommittee on Immi- ment and the United Nations to undertake urgent gration and Claims held an oversight hearing on the and strenuous efforts to secure the release of Branko Immigration and Naturalization Service’s Interior Jelen, Steve Pratt, and Peter Wallace, 3 humani- Enforcement Strategy. Testimony was heard from tarian workers employed by CARE International, Robert Bach, Executive Associate Commissioner, who are being unjustly held as prisoners by the Gov- Policy and Planning, Immigration and Naturaliza- ernment of the Federal Republic of Yugoslavia; H. tion Service, Department of Justice; John R. Fraser, Con. Res. 128, expressing the sense of the Congress Acting Administrator, Wage and Hour Division, regarding the treatment of religious minorities in Department of Labor; Richard M. Stana, Associate the Islamic Republic of Iran, and particularly the re- Director, Administration of Justice Issues, General cent arrests of members of that country’s Jewish Government Division, GAO; and public witnesses. community; H. Res. 25, congratulating the Govern- ment of Peru and the Government of Ecuador for OVERSIGHT signing a peace agreement ending a border dispute Committee on Resources: Subcommittee on National which has resulted in several military clashes over Parks and Public Lands held an oversight hearing on the past 50 years; H. Con. Res. 117, amended, con- the Franchise Fee Calculation for Ft. Sumter Tours. D778 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999 Testimony was heard from Representative Sanford; vention. Testimony was heard from Robert Berenson, Robert Stanton, Director, National Park Service, De- M.D., Director, Center for Health Plans and Pro- partment of the Interior and public witnesses. viders, Health Care Financing Administration, De- MISCELLANEOUS MEASURES partment of Health and Human Services; Thomas L. Garthwaite, M.D., Deputy Under Secretary, Health, Committee on Resources: Subcommittee on Water and Department of Veterans Affairs; and the following Power held a hearing on H.R. 795, Chippewa Cree officials of the GAO: William J. Scanlon, Director, Tribe of the Rocky Boy’s Reservation Indian Re- Health Financing and Public Health Issues, Health, served Water Rights Settlement Act of 1999. Testi- Education, and Human Services Division; and Ste- mony was heard from David Hayes, Acting Deputy phen P. Backhus, Director, Veterans’ Affairs and Secretary, Department of the Interior; and public Military Health. witnesses. NETWORKING AND INFORMATION WORK OPPORTUNITY TAX CREDIT TECHNOLOGY RESEARCH AND Committee on Ways and Means: Subcommittee on DEVELOPMENT ACT Oversight held a hearing on the Work Opportunity Committee on Science, Subcommittee on Technology Tax Credit. Testimony was heard from Representa- held a hearing on H.R. 2086, Networking and In- tives Rangel, Bilirakis and Johnson of Connecticut; formation Technology Research and Development Leonard Burman, Deputy Assistant Secretary, Tax Act of 1999, Resources for IT Research. Testimony Analysis, Department of the Treasury; John R. Bev- was heard from public witnesses. erly, III, Director, U.S. Employment Service, Depart- SMALL BUSINESS INNOVATION RESEARCH ment of Labor; and public witnesses. PROGRAM REAUTHORIZATION ACT BRIEFING—CHINESE EMBASSY BOMBING Committee on Small Business: Ordered reported, as Permanent Select Committee on Intelligence: Met in execu- amended, H.R. 2392, Small Business Innovation Re- tive session to hold a briefing on Chinese Embassy search Program Reauthorization Act of 1999. Bombing. The Committee was briefed by depart- MISCELLANEOUS MEASURES mental witnesses. Committee on Ways and Means: Adversely reported the following measures: H.J. Res. 58, disapproving the extension of the waiver authority contained in sec- Joint Meetings tion 402(c) of the Trade Act of 1974 with respect Y2K ACT to Vietnam; H.J. Res. 57, disapproving the exten- sion of nondiscriminatory treatment (normal trade Conferees, on Tuesday, June 29, agreed to file a con- relations treatment) to the products of the People’s ference report on the differences between the Senate Republic of China. and House passed versions of H.R. 775, to establish certain procedures for civil actions brought for dam- MEDICARE VETERANS SUBVENTION ages relating to the failure of any device or system Committee on Ways and Means: Subcommittee on to process or otherwise deal with the transition from Health held a hearing on Medicare Veterans Sub- the year 1999 to the year 2000. h

COMMITTEE MEETINGS FOR House FRIDAY, JULY 2, 1999 No committee meetings are scheduled. Senate No meetings/hearings scheduled. July 1, 1999 CONGRESSIONAL RECORD—DAILY DIGEST D779

Re´sume´ of Congressional Activity

FIRST SESSION OF THE ONE HUNDRED SIXTH CONGRESS The first table gives a comprehensive re´sume´ of all legislative business transacted by the Senate and House. The second table accounts for all nominations submitted to the Senate by the President for Senate confirmation.

DATA ON LEGISLATIVE ACTIVITY DISPOSITION OF EXECUTIVE NOMINATIONS January 6 through June 30, 1999 January 6 through June 30, 1999

Senate House Total Civilian nominations, totaling 236, disposed of as follows: Days in session ...... 94 73 . . Confirmed ...... 49 Time in session ...... 609 hrs., 9 ′ 542 hrs., 6 ′ . . Unconfirmed ...... 183 Congressional Record: Withdrawn ...... 4 Pages of proceedings ...... 7,972 5,180 . . Extensions of Remarks ...... 1,454 . . Public bills enacted into law ...... 7 29 36 Other civilian nominations, totaling 1,240, disposed of as follows: Private bills enacted into law ...... Confirmed ...... 780 Bills in conference ...... 5 4 . . Unconfirmed ...... 460 Measures passed, total ...... 202 272 474 Senate bills ...... 51 9 . . House bills ...... 33 117 . . Air Force nominations, totaling 4,036, disposed of as follows: Senate joint resolutions ...... 1 . . . . Confirmed ...... 3,956 House joint resolutions ...... 3 6 . . Unconfirmed ...... 80 Senate concurrent resolutions ...... 11 4 . . House concurrent resolutions ...... 17 31 . . Simple resolutions ...... 86 105 . . Army nominations, totaling 2,313, disposed of as follows: Measures reported, total ...... *144 *205 349 Confirmed ...... 1,647 Senate bills ...... 105 2 . . Unconfirmed ...... 666 House bills ...... 15 129 . . Senate joint resolutions ...... 3 . . . . House joint resolutions ...... 4 . . Navy nominations, totaling 3,456, disposed of as follows: Senate concurrent resolutions ...... 3 . . . . Confirmed ...... 3,050 House concurrent resolutions ...... 1 10 . . Unconfirmed ...... 406 Simple resolutions ...... 17 60 . . Special reports ...... 11 6 . . Conference reports ...... 4 . . Marine Corps nominations, totaling 2,120, disposed of as follows: Measures pending on calendar ...... 107 36 . . Measures introduced, total ...... 1,505 2,856 4,361 Confirmed ...... 1,321 Bills ...... 1,310 2,412 . . Unconfirmed ...... 799 Joint resolutions ...... 28 60 . . Concurrent resolutions ...... 42 147 . . Simple resolutions ...... 125 237 . . Summary Quorum calls ...... 7 2 . . Total Nominations received this Session ...... 13,401 Yea-and-nay votes ...... 192 133 . . Total Confirmed ...... 10,803 Recorded votes ...... 126 . . Total Unconfirmed ...... 2,594 Bills vetoed ...... Total Withdrawn ...... 4 Vetoes overridden ......

* These figures include all measures reported, even if there was no accom- panying report. 100 reports have been filed in the Senate and 215 reports have been filed in the House. D780 CONGRESSIONAL RECORD — DAILY DIGEST July 1, 1999

Next Meeting of the SENATE Next Meeting of the HOUSE OF REPRESENTATIVES 12 noon, Monday, July 12 12:30 p.m., Monday, July 12

Senate Chamber House Chamber Program for Monday: After the transaction of any Program for Monday: To be announced. morning business (not to extend beyond 1 p.m.), Senate will begin consideration of the proposed Patient’s Bill of Rights bill.

Extensions of Remarks, as inserted in this issue

HOUSE Duncan, John J., Jr., Tenn., E1457 Rogan, James E., Calif., E1457 Gilman, Benjamin A., N.Y., E1455 Stupak, Bart, Mich., E1457 Buyer, Stephen E., Ind., E1461 Kanjorski, Paul E., Pa., E1461 Wamp, Zach, Tenn., E1458 Coble, Howard, N.C., E1456 Kucinich, Dennis J., Ohio, E1458 Condit, Gary A., Calif., E1460 Phelps, David D., Ill., E1457

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