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FINANCIAL SERVICES ACT OF 1999 -- (House of Representatives - July 01, 1999)

My constituents of my district have told me time and time again that they 

[Page: H5315]  GPO's PDF
do not want their names and permanent information sold to companies they have never heard of. If we pass this Oxley amendment, consumers will be able to tell their banks; no, I do not want my name sold; no, I do not want you to share information with third parties.

   Madam Chairman, this amendment takes us much further than I ever dreamt that we would go in strengthening current laws creating new and effective protections for consumers on privacy . Most of all, it has meaningful enforcement language. I urge its passage.

    

[Time: 22:15]

   Mr. OXLEY. Madam Chairman, I yield 2 minutes to the gentleman from California (Mr. DREIER), the chairman of the Committee on Rules.

   (Mr. DREIER asked and was given permission to revise and extend his remarks.)

   Mr. DREIER. Madam Chairman, I rise in strong support of this amendment. I would like to begin by not only congratulating the gentleman from Ohio (Mr. OXLEY) but, of course, my colleague on the second row here who worked long and hard as a member of the Committee on Rules and, yes, I want to even congratulate, we have once again made this a bipartisan effort, when I heard the word ``terrific'' used three times by my friend the gentleman from New York (Mr. LAFALCE), and I know that we will see very broad bipartisan support for what is I think a very important measure.

   We are all appalled at the thought of telemarketers getting access to information . We all want to do everything that we can to stop that. In fact, the base text of this bill has the strongest consumer privacy protection we have ever had. But guess what? This amendment, that we are all going to be, I hope, overwhelmingly supporting based on the statements that I have been hearing, will be even tougher. The fact of the matter is this is a very balanced compromise. Why? Because privacy is a first priority. That is what it is that the American people want. But there are some other demands that they have. They also demand low cost and integrated financial products and services, they demand on-line banking and brokerage services, and they demand protection against financial fraud. Quite frankly to meet these demands, all of these demands, affiliates have to be able to share some information . That is why I am convinced that this now bipartisan effort which has seen many Members involved is in fact the balance that is needed for us to deal with the issue of privacy as well as meeting consumer demands.

   I encourage my colleagues to support it.

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

   The CHAIRMAN. The gentleman from Ohio is recognized for 1 minute.

   Mr. OXLEY. Madam Chairman, let me reiterate to the Members. Under the Oxley amendment, for the first time we are requiring financial services organizations to actually have a privacy policy. It has to be printed, it has to be explained to the customer, the customer has an opportunity to understand exactly what that privacy policy is. It never happened before until this amendment becomes law.

   Secondly, now that the consumer who is working with this affiliate company understands that policy, he may or may not decide to continue to do business with that company. If he is so concerned that the company he is dealing with is going to be selling that information or leaking that information to other parts of the affiliate, he is going to vote with his feet, he is going to act like an educated consumer, to quote a famous line from Sy Syms. He is going to be an educated consumer, and he is going to go someplace else where his privacy is going to be protected. That is the marketplace working very effectively, I would say to my friend from Massachusetts, not some statute that ties up these financial institutions, costs them millions and millions of dollars which is going to be passed on to the consumer ultimately and is going to be less and less efficient.

   This is the product that was worked on in a bipartisan way. I ask the Members to support the amendment.

   Ms. JACKSON-LEE of Texas. Madam Chairman, I rise in support of the Oxley/Pryce/Roukema amendment because it requires financial institutions to respect the privacy of its customers. This is a basic consumer protection and I urge my colleagues to support this amendment.

   The provisions of this amendment include basic consumer privacy protections. It requires an ``affirmative and continuing obligation'' to protect customer's personal information .

   This amendment requires regulatory standards to insure security and confidentiality of customer records to protect against unauthorized access and use. With recent advances in technology, there is the possibility that a computer hacker can break into a bank's computer system and access personal account information .

   This amendment requires that consumers be given the opportunity to opt-out of the disclosure of their private information with unaffiliated third parties. It also prohibits unaffiliated third parties that receive confidential customer information from sharing that information with any other unaffiliated parties.

   Another important provision in this amendment requires that all financial institutions disclose their policies and practices for collecting customer information . All customers should have notice of these policies in advance.

   Customers should also have advance knowledge of policies that protect their confidential information and the policies that prevent that information from being shared with unaffiliated parties. Advance knowledge of these policies not only protect the consumer, but it also protects the financial institution.

   This amendment prohibits financial institutions from sharing credit card, savings and transaction account numbers for purposes of marketing to the consumer. This account information is especially sensitive and should be kept as confidential as possible.

   These are common sense provisions that protect Americans who are sincerely concerned about privacy . These days, many companies have access to information about our spending and saving habits because of lax privacy laws that only make consumers vulnerable. However, I am looking forward to ensuring greater consumer protection as it relates to privacy issues--including medical records privacy --as this legislation moves to conference.

   I am concerned that this amendment will allow financial institutions to share consumer information through their affiliates without restriction. However, this amendment is an important first step to ensuring a marginal level of privacy for consumers.I support the provisions in this amendment and I urge my colleagues to vote for its passage.

   Mrs. MALONEY of New York. Madam Chairman, last year H.R. 10 passed this Chamber by one vote. In that version of Financial Modernization, there were no privacy provisions. This year things have changed. There are privacy provisions in the base text and there is this amendment which, if adopted, will make this one of the strongest privacy bills to involve the financial services industry.

   I would like to thank all of the members who have worked on crafting this amendment, including Representatives FROST, LAFALCE, PRYCE, and OXLEY. A few days ago I submitted to this informal privacy working group a suggested amendment. My proposal would make certain that if an affiliate in a holding company were sold to another entity, only the information about their own customers could be transferred. No information about customers in the original holding company are allowed to be shared with the sold entity's new affiliates unless they were already a customer. This is an important privacy protection and I was pleased that the authors agreed to add it into this amendment.

   Perhaps the most important part of this amendment are the strong disclosure provisions. This bill requires financial institutions to annually disclose to their customers their policies practices for collecting and protecting the customer's private information . Financial Modernization means more choices for consumers, and part of that choice should include the privacy policies of the firm which is trying to attract their business. If a customer is unsatisfied with a privacy policy of a firm, they can choose another. But this form of competition only works with strong disclosure requirements.

   This amendment will also prohibit financial institutions from reselling a consumer's private information to a third party and will prohibit them also from sharing a customer's account numbers in order to market to that customer. This should prevent many of those unwanted telemarketing calls resulting from a relationship with a bank or other financial firm.

   There are still some problems with the base text, including the problems with the privacy of medical information . But I am pleased with the colloquy between Mr. GANSKE and Mr. LAFALCE and I am confident that these issues will be worked out in conference.

   These are the best privacy provisions to ever appear in a draft of H.R. 10 and I am supportive of this effort. To be sure, during this debate many good issues have been raised about these privacy issues. Chairman 

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LEACH has announced hearings on privacy for the end of July and I am sure the Banking Committee will continue to examine the issue and consider appropriate legislation.

   The CHAIRMAN. The question is on the amendment offered by the gentleman from Ohio (Mr. OXLEY).

   The question was taken; and the Chairman announced that the ayes appeared to have it.

   Mr. OXLEY. Madam Chairman, I demand a recorded vote.

   The CHAIRMAN. Pursuant to House Resolution 235, further proceedings on the amendment offered by the gentleman from Ohio (Mr. OXLEY) will be postponed.

   SEQUENTIAL VOTES POSTPONED IN COMMITTEE OF THE WHOLE

   The CHAIRMAN. Pursuant to House Resolution 235, proceedings will now resume on those amendments on which further proceedings were postponed in the following order: Amendment No. 10 offered by the gentleman from Virginia (Mr. BLILEY); amendment No. 11 offered by the gentleman from Ohio (Mr. OXLEY).

   The Chair will reduce to 5 minutes the time for the second electronic vote in this series.

   AMENDMENT NO. 10 OFFERED BY MR. BLILEY

   The CHAIRMAN. The pending business is the demand for a recorded vote on the amendment offered by the gentleman from Virginia (Mr. BLILEY) on which further proceedings were postponed and on which the noes prevailed by voice vote.

   The Clerk will redesignate the amendment.

   The Clerk redesignated the amendment.

   RECORDED VOTE

   The CHAIRMAN. A recorded vote has been demanded.

   A recorded vote was ordered.

   The vote was taken by electronic device, and there were--ayes 226, noes 203, not voting 5, as follows:

[Roll No. 273]
AYES--226

   Aderholt

   Archer

   Armey

   Bachus

   Baker

   Ballenger

   Barr

   Barrett (NE)

   Bartlett

   Barton

   Bass

   Bateman

   Bilbray

   Bilirakis

   Bliley

   Blunt

   Boehner

   Bonilla

   Bono

   Boucher

   Brady (TX)

   Brown (OH)

   Bryant

   Burr

   Burton

   Buyer

   Callahan

   Calvert

   Camp

   Campbell

   Canady

   Cannon

   Capps

   Castle

   Chabot

   Chambliss

   Coble

   Coburn

   Collins

   Combest

   Cook

   Cooksey

   Cox

   Cramer

   Crane

   Cubin

   Cunningham

   Danner

   Davis (FL)

   Davis (VA)

   Deal

   DeGette

   DeLay

   DeMint

   Deutsch

   Diaz-Balart

   Dickey

   Dingell

   Doolittle

   Dreier

   Duncan

   Dunn

   Ehlers

   Ehrlich

   Emerson

   English

   Everett

   Ewing

   Fletcher

   Forbes

   Fowler

   Franks (NJ)

   Frelinghuysen

   Gallegly

   Ganske

   Gekas

   Gillmor

   Goode

   Goodlatte

   Goodling

   Goss

   Graham

   Granger

   Green (WI)

   Greenwood

   Gutknecht

   Hall (OH)

   Hall (TX)

   Hansen

   Hastings (WA)

   Hayes

   Hayworth

   Hefley

   Herger

   Hill (MT)

   Hilleary

   Hobson

   Hoekstra

   Horn

   Hostettler

   Houghton

   Hulshof

   Hunter

   Hutchinson

   Hyde

   Inslee

   Isakson

   Istook

   Jenkins

   John

   Johnson (CT)

   Johnson, Sam

   Kasich

   Kelly

   Kildee

   King (NY)

   Kingston

   Knollenberg

   Kuykendall

   LaHood

   Largent

   Latham

   LaTourette

   Lazio

   Lewis (CA)

   Lewis (KY)

   Linder

   LoBiondo

   Lucas (KY)

   Lucas (OK)

   Maloney (CT)

   McCollum

   McCrery

   McInnis

   McIntosh

   McIntyre

   McKeon

   Metcalf

   Miller (FL)

   Miller, Gary

   Moran (KS)

   Myrick

   Nethercutt

   Ney

   Northup

   Norwood

   Ose

   Oxley

   Packard

   Pallone

   Pease

   Peterson (PA)

   Petri

   Pickering

   Pickett

   Pitts

   Pombo

   Porter

   Portman

   Pryce (OH)

   Quinn

   Radanovich

   Ramstad

   Regula

   Reynolds

   Riley

   Rogan

   Rogers

   Rohrabacher

   Ros-Lehtinen

   Roukema

   Royce

   Ryan (WI)

   Salmon

   Sanford

   Saxton

   Scarborough

   Schaffer

   Sensenbrenner

   Sessions

   Shadegg

   Shaw

   Shays

   Sherman

   Sherwood

   Shimkus

   Shows

   Shuster

   Simpson

   Sisisky

   Skeen

   Smith (MI)

   Smith (NJ)

   Smith (TX)

   Souder

   Spence

   Stearns

   Strickland

   Stump

   Sununu

   Talent

   Tancredo

   Tauzin

   Taylor (NC)

   Terry

   Thomas

   Thornberry

   Thune

   Tiahrt

   Toomey

   Towns

   Traficant

   Upton

   Vitter

   Walden

   Wamp

   Watkins

   Watts (OK)

   Weldon (PA)

   Weller

   Whitfield

   Wicker

   Wilson

   Wolf

   Young (AK)

   Young (FL)

NOES--203

   Abercrombie

   Ackerman

   Allen

   Andrews

   Baird

   Baldacci

   Baldwin

   Barcia

   Barrett (WI)

   Becerra

   Bentsen

   Bereuter

   Berkley

   Berman

   Berry

   Biggert

   Bishop

   Blagojevich

   Blumenauer

   Boehlert

   Bonior

   Borski

   Boswell

   Boyd

   Brady (PA)

   Brown (FL)

   Capuano

   Cardin

   Carson

   Chenoweth

   Clay

   Clayton

   Clement

   Clyburn

   Condit

   Conyers

   Costello

   Coyne

   Crowley

   Cummings

   Davis (IL)

   DeFazio

   Delahunt

   DeLauro

   Dicks

   Dixon

   Doggett

   Dooley

   Doyle 

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