103D CONGRESS

1ST SESSION H. R. 2243

AMENDMENT
In the Senate of the United States,

September 22 (legislative day, September 7), 1993.

Resolved, That the bill from the House of Representatives (H.R. 2243) entitled ‘‘An Act to to amend the Federal

Trade Commission Act to extend the authorization of appropriations in such Act, and for other purposes’’, do pass with

the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION. 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Federal Trade Commis3 sion Act Amendments of 1993’’.

4 SEC. 2. UNFAIR METHODS OF COMPETITION.

5 Section 5 of the Federal Trade Commission Act (15

6 U.S.C. 45) is amended by adding at the end the following

7 new subsection:

8 ‘‘(n) The Commission shall not have any authority to

9 find a method of competition to be an unfair method of

10 competition under subsection (a)(1) if, in any action under

11 the Sherman Act (15 U.S.C. 1 et seq.), such method of com12 petition would be held to constitute State action.’’.

13 SEC. 3. AGRICULTURAL COOPERATIVES.

14 The Federal Trade Commission Act (15 U.S.C. 41 et

15 seq.) is amended by redesignating sections 24 and 25 as
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1 sections 26 and 27, respectively, and by inserting imme2 diately after section 23 the following new section:

3 ‘‘SEC. 24. (a) The Commission shall not have any au4 thority to conduct any study, investigation, or prosecution

5 of any agricultural cooperative for any conduct which, be6 cause of the provisions of the Act entitled ‘An Act to author7 ize association of producers of agricultural products’, ap8 proved February 18, 1922 (7 U.S.C. 291 et seq., commonly

9 known as the Capper-Volstead Act), is not a violation of

10 any of the antitrust Acts or this Act.

11 ‘‘(b) The Commission shall not have any authority to

12 conduct any study or investigation of any agricultural

13 marketing orders.’’.

14 SEC. 4. COMPENSATION IN PROCEEDINGS.

15 (a) REPEAL.—Section 18(h) of the Federal Trade

16 Commission Act (15 U.S.C. 57a(h)) is repealed, and sub17 sections (i), (j), and (k) of section 18 are redesignated as

18 subsections (h), (i), and (j), respectively.

19 (b) CONFORMING AMENDMENT.—Section 18(a)(1) of

20 the Federal Trade Commission Act (15 U.S.C. 57a(a)(1))

21 is amended by striking ‘’subsection (i)’’ and inserting in

22 lieu thereof ‘‘subsection (h)’’.

23 SEC. 5. KNOWING VIOLATIONS OF ORDERS.

24 (a) EXCEPTION FOR CONSENT ORDERS.—Section

25 5(m)(1)(B) of the Federal Trade Commission Act (15
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1 U.S.C. 45(m)(1)(B)) is amended by inserting ‘‘, other than

2 a consent order,’’ immediately after ‘‘order’’ the first time

3 it appears.

4 (b) REVIEW OF DETERMINATIONS OF LAW.—Section

5 5(m)(2) of the Federal Trade Commission Act (15 U.S.C.

6 45(m)(2)) is amended by adding at the end of the following:

7 ‘‘Upon request of any party to such an action against such

8 defendant, the court shall also review the determination of

9 law made by the Commission in the proceeding under sub10 section (b) that the act or practice which was the subject

11 of such proceeding constituted an unfair or deceptive act

12 or practice in violation of subsection (a).’’.

13 SEC. 6. PREVALENCE OF UNLAWFUL ACTS OR PRACTICES.

14 Section 18(b) of the Federal Trade Commission Act

15 (15 U.S.C. 57a(b)) is amended by adding at the end the

16 following new paragraph:

17 ‘‘(3) The Commission shall issue a notice of proposed

18 rulemaking pursuant to paragraph (1)(A) only where it has

19 reason to believe that the unfair or deceptive acts or prac20 tices which are the subject of the proposed rulemaking are

21 prevalent. The Commission shall make a determination that

22 unfair or deceptive acts or practices are prevalent under

23 this paragraph only if it has issued cease and desist orders

24 regarding such acts or practices, or any other information
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1 available to the Commission indicates a pattern of unfair

2 or deceptive acts or practices.’’.

3 SEC. 7. EFFECTIVE DATE OF ORDERS.

4 (a) ORDERS SUBJECT TO PETITION FOR REVIEW.—

5 Section 5(g)(2) of the Federal Trade Commission Act (15

6 U.S.C. 45(g)(2)) is amended to read as follows:

7 ‘‘(2) Except as to any order provision subject to

8 paragraph (4), upon the sixtieth day after such order

9 is served, if a petition for review has been duly filed;

10 except that any such order may be stayed, in whole

11 or in part and subject to such conditions as may be

12 appropriate, by—

13 ‘‘(A) the Commission;

14 ‘‘(B) an appropriate court of appeals of the

15 United States, if (i) a petition for review of such

16 order is pending in such court, and (ii) an ap17 plication for such a stay was previously submit18 ted to the Commission and the Commission,

19 within the thirty-day period beginning on the

20 date the application was received by the Com21 mission, either denied the application or did not

22 grant or deny the application; or

23 ‘‘(C) the Supreme Court, if an applicable

24 petition for certiorari is pending; or’’.
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1 (b) ORDERS SUBJECT TO SECTIONS 5(m)(1)(B) AND

2 19(a)(2) OF FTCA.—Section 5(g)(3) of the Federal Trade

3 Commission Act (15 U.S.C. 45(g)(3)) is amended to read

4 as follows:

5 ‘‘(3) For purposes of subsection (m)(1)(B) and of

6 section 19 (a)(2), if a petition for review of the order

7 of the Commission has been filed—

8 ‘‘(A) upon the expiration of the time al9 lowed for filing a petition for certiorari, if the

10 order of the Commission has been affirmed or the

11 petition for review has been dismissed by the

12 court of appeals and no petition for certiorari

13 has been duly filed;

14 ‘‘(B) upon the denial of a petition for cer15 tiorari, if the order of the Commission has been

16 affirmed or the petition for review has been dis17 missed by the court of appeals; or

18 ‘‘(C) upon the expiration of thirty days

19 from the date of issuance of a mandate of the Su20 preme Court directing that the order of the Com21 mission be affirmed or the petition for review be

22 dismissed; or’’.

23 (c) DIVESTITURE ORDERS.—Section 5(g)(4) of the

24 Federal Trade Commission Act (15 U.S.C. 45(g)(4)) is

25 amended to read as follows:
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1 ‘‘(4) In the case of an order provision requiring

2 a person, partnership, or corporation to divest itself

3 of stock, other share capital, or assets, if a petition for

4 review of such order of the Commission has been

5 filed—

6 ‘‘(A) upon the expiration of the time al7 lowed for filing a petition for certiorari, if the

8 order of the Commission has been affirmed or the

9 petition for review has been dismissed by the

10 court of appeals and no petition for certiorari

11 has been duly filed;

12 ‘‘(B) upon the denial of a petition for cer13 tiorari, if the order of the Commission has been

14 affirmed or the petition for review has been dis15 missed by the court of appeals; or

16 ‘‘(C) upon the expiration of thirty days

17 from the date of issuance of a mandate of the Su18 preme Court directing that the order of the Com19 mission be affirmed or the petition for review be

20 dismissed.’’.

21 SEC. 8. CIVIL INVESTIGATIVE DEMANDS.

22 (a) DEFINITIONS.—Section 20(a) of the Federal Trade

23 Commission Act (15 U.S.C. 57b–1(a)) is amended—
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1 (1) in paragraph (2), by inserting ‘‘, or in any

2 antitrust violations’’ immediately after ‘‘section

3 5(a)(1))’’;

4 (2) in paragraph (3), by inserting ‘‘or any pro5 visions relating to antitrust violations’’ immediately

6 after ‘‘section 5(a)(1))’’;

7 (3) in paragraph (7), by inserting ‘‘, or any

8 antitrust violation’’ immediately after ‘‘section

9 5(a)(1))’’; and

10 (4) by adding at the end the following new para11 graph:

12 ‘‘(8) The term ‘antitrust violation’ means any

13 unfair method of competition (within the meaning of

14 section 5(a)(1)); any violation of the Clayton Act; any

15 violation of any other Federal statute that prohibits,

16 or makes available to the Commission a civil remedy

17 with respect to, any restraint upon or monopolization

18 of interstate or foreign trade or commerce; or any ac19 tivity in preparation for a merger, acquisition, joint

20 venture, or similar transaction, which if con21 summated, may result in such an unfair method of

22 competition or violation.’’.

23 (b) ISSUANCE OF DEMAND.—(1) Section 20 (c)(1) of

24 the Federal Trade Commission Act (15 U.S.C. 57b–1 (c)(1))

25 is amended—
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1 (A) by inserting ‘‘or tangible things’’ imme2 diately after ‘‘documentary material’’ the first place

3 it appears;

4 (B) by inserting ‘‘or to antitrust violations,’’ im5 mediately after ‘‘section 5 (a)(1)) ,’’; and

6 (C) by inserting ‘‘to submit such tangible

7 things,’’ immediately after ‘‘copying or reproduc8 tion,’’.

9 (2) Section 20(c) of the Federal Trade Commission Act

10 (15 U.S.C. 57b–1 (c)) is amended—

11 (A) by redesignating paragraphs (4), (5), (6),

12 (7), (8), (9), (10), (11), and (12) as paragraphs (5),

13 (6), (7), (8), (9), (10), (11), (13), and (14), respec14 tively;

15 (B) by inserting immediately after paragraph

16 (3) the following new paragraph:

17 ‘‘(4) Each civil investigative demand for the submis18 sion of tangible things shall—

19 ‘‘(A) describe each class of tangible things to be

20 submitted under the demand with such definiteness

21 and certainty as to permit such things to be fairly

22 identified;

23 ‘‘(B) prescribe a return date or dates which will

24 provide a reasonable period of time within which the
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1 things so demanded may be assembled and submitted;

2 and

3 ‘‘(C) identify the custodian to whom such things

4 shall be submitted.’’; and

5 (C) by inserting immediately after paragraph

6 (11), as so redesignated, the following new paragraph:

7 ‘‘(12) The submission of tangible things in response to

8 a civil investigative demand shall be made under a sworn

9 certificate, in such form as the demand designates, by the

10 person to whom the demand is directed or, if not a natural

11 person, by any person having knowledge of the facts and

12 circumstances relating to such production, to the effect that

13 all of the physical evidence required by the demand and

14 in the possession, custody, or control of the person to whom

15 the demand is directed has been submitted to the custo16 dian.’’.

17 (c) APPLICABILITY OF SECTION 20 OF FTCA.—Section

18 20(j)(1) of the Federal Trade Commission Act (15 U.S.C.

19 57b–1(j)(1)) is amended by inserting immediately before the

20 semicolon the following: ‘‘, any proceeding under section

21 11(b) of the Clayton Act (15 U.S.C. 21(b)), or any adjudica22 tive proceeding under any other provision of law’’.

23 SEC. 9. COMMISSION CUSTODY OF TANGIBLE THINGS.

24 Section 21 of the Federal Trade Commission Act (15

25 U.S.C. 57b–2) is amended—
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1 (1) in subsection (a)(1), by inserting ‘‘tangible

2 things,’’ immediately after ‘‘documentary material,’’;

3 (2) in subsection (b)(1), by inserting ‘‘, tangible

4 thing,’’ immediately after ‘‘document’’;

5 (3) in subsection (b)(2)(A), by inserting ‘‘tan6 gible things,’’ immediately after ‘‘material,’’;

7 (4) in subsection (b)(3)—

8 (A) in subparagraph (A), by inserting ‘‘tan9 gible things,’’ immediately after ‘‘documentary

10 material,’’;

11 (B) in subparagraph (B), by inserting ‘‘,

12 and may make tangible things available,’’ imme13 diately after ‘‘oral testimony’’; and by inserting

14 ‘‘, things,’’ immediately after ‘‘such material’’;

15 (C) in subparagraph (C), by inserting ‘‘tan16 gible things,’’ immediately after ‘‘documentary

17 material,’’; and

18 (D) in subparagraph (D), by inserting ‘‘,

19 tangible things,’’ immediately after ‘‘documen20 tary material’’;

21 (5) in subsection (b)(4), by inserting ‘‘tangible

22 things,’’ immediately after ‘‘documentary material,’’;

23 (6) in subsection (b)(5), by inserting ‘‘tangible

24 things,’’ immediately after ‘‘documentary material,’’;

25 (7) in subsection (b)(6)—
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1 (A) by inserting immediately after the first

2 sentence the following new sentence: ‘‘The custo3 dian of any tangible things may make such

4 things available for inspection to such persons on

5 the same basis.’’; and

6 (B) by inserting ‘‘results of inspections of

7 tangible things,’’ immediately after ‘‘Such docu8 mentary material,’’; and

9 (8) in subsection (b)(7), by inserting ‘‘tangible

10 things,’’ immediately after ‘‘documentary material,’’.

11 SEC. 10. DEFINITION OF UNFAIR ACTS OR PRACTICES.

12 Section 5 of the Federal Trade Commission Act (15

13 U.S.C. 45), as amended by section 2 of this Act, is further

14 amended by adding at the end the following new subsection:

15 ‘‘(o) The Commission shall have no authority under

16 this section or section 18 to declare unlawful an act or prac17 tice on the grounds that such act or practice is unfair unless

18 the act or practice causes or is likely to cause substantial

19 injury to consumers which is not reasonably avoidable by

20 consumers themselves and not outweighed by countervailing

21 benefits to consumers or to competition.’’.

22 SEC. 11. COMMERCIAL ADVERTISING.

23 Section 18(h) of the Federal Trade Commission Act

24 (15 U.S.C. 57a(h)), as so redesignated in section 4(a) of

25 this Act, is amended by adding at the end the following:
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1 ‘‘The Commission shall have no authority under this section

2 to initiate any new rulemaking proceeding which is in3 tended to or may result in the promulgation of any rule

4 by the Commission which prohibits or otherwise regulates

5 any commercial advertising on the basis of a determination

6 by the Commission that such commercial advertising con7 stitutes an unfair act or practice in or affecting

8 commerce.’’.

9 SEC. 12. VENUE AND SERVICE OF PROCESS.

10 (a) AUTHORITY TO SERVE CERTAIN PERSONS.—(1)

11 Section 13(a) of the Federal Trade Commission Act (15

12 U.S.C. 53(a)) is amended by striking the last sentence and

13 inserting in lieu thereof the following: ‘‘Any suit may be

14 brought where such person, partnership, or corporation re15 sides or transacts business, or wherever venue is proper

16 under section 1391 of title 28, United States Code. In such

17 a suit, the court may, if the court determines that the inter18 ests of justice require that any other person, partnership,

19 or corporation should be a party in such suit, cause such

20 other person, partnership, or corporation to be summoned

21 without regard to whether it resides or transacts business

22 in the district in which the suit is brought. In any suit

23 under this section, process may be served on any person,

24 partnership, or corporation wherever it may be found.’’.
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1 (2) Section 13(b) of the Federal Trade Commission Act

2 (15 U.S.C. 53(b)) is amended by striking the last sentence

3 and inserting in lieu thereof the following: ‘‘Any suit may

4 be brought where such person, partnership, or corporation

5 resides or transacts business, or wherever venue is proper

6 under section 1391 of title 28, United States Code. In such

7 a suit, the court may, if the court determines that the inter8 ests of justice require that any other person, partnership,

9 or corporation should be a party in such suit, cause such

10 other person, partnership, or corporation to be summoned

11 without regard to whether it resides or transacts business

12 in the district in which the suit is brought. In any suit

13 under this section, process may be served on any person,

14 partnership, or corporation wherever it may be found.’’.

15 (b) PROCEDURES FOR SERVING PROCESS.—Section 13

16 of the Federal Trade Commission Act (15 U.S.C. 53) is

17 amended—

18 (1) by redesignating subsection (c) as subsection

19 (d); and

20 (2) by inserting immediately after subsection (b)

21 the following new subsection:

22 ‘‘(c) Any process of the Commission under this section

23 may be served by any person duly authorized by the Com24 mission—
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1 ‘‘(1) by delivering a copy of such process to the

2 person to be served, to a member of the partnership

3 to be served, or to the president, secretary, or other ex4 ecutive officer or a director of the corporation to be

5 served;

6 ‘‘(2) by leaving a copy of such process at the res7 idence or the principal office or place of business of

8 such person, partnership, or corporation; or

9 ‘‘(3) by mailing a copy of such process by reg10 istered mail or certified mail addressed to such per11 son, partnership, or corporation at his, or her, or its

12 residence, principal office, or principal place or busi13 ness.

14 The verified return by the person serving such process set15 ting forth the manner of such service shall be proof of the

16 same.’’.

17 SEC. 13. REPORT ON RESALE PRICE MAINTENANCE.

18 (a) REPORT TO CONGRESS.—The Federal Trade Com19 mission shall submit to the Committee on Commerce,

20 Science, and Transportation of the Senate and to the Com21 mittee on Energy and Commerce of the House of Represent22 atives the information specified in subsection (b) every six

23 months during each of the fiscal years 1994, 1995, and

24 1996. Each such report shall contain such information for

25 the period since the last submission under this section.
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1 (b) CONTENTS OF REPORT.—Each such report shall

2 list and describe, with respect to instances in which resale

3 price maintenance has been suspected or alleged—

4 (1) each complaint made, orally or in writing,

5 to the offices of the Commission;

6 (2) each preliminary investigation opened or

7 closed at the Commission;

8 (3) each formal investigation opened or closed at

9 the Commission;

10 (4) each recommendation for the issuance of a

11 complaint forwarded by the staff to the Commission;

12 (5) each complaint issued by the Commission

13 pursuant to section 5 of the Federal Trade Commis14 sion Act (15 U.S.C. 45);

15 (6) each opinion and order entered by the Com16 mission;

17 (7) each consent agreement accepted provision18 ally or finally by the Commission;

19 (8) each request for modification of an outstand20 ing Commission order filed with the Commission;

21 (9) each recommendation by staff pertaining to

22 a request for modification of an outstanding Commis23 sion order; and
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1 (10) each disposition by the Commission of a re2 quest for modification of an outstanding Commission

3 order.

4 Such report shall include the sum total of matters in each

5 category specified in paragraphs (1) through (10), and cop6 ies of all such consent agreements and complaints executed

7 by the Commission. Where a matter has been closed or ter8 minated, the report shall include a statement of the reasons

9 for that disposition. The description required under this

10 subsection shall be as complete as possible but shall not re11 veal the identity of persons or companies making the com12 plaint or those complained about or those subject to inves13 tigation that have not otherwise been made public.

14 SEC. 14. REPORT ON PREDATORY PRICING PRACTICES.

15 (a) REPORT TO CONGRESS.—The Federal Trade Com16 mission shall submit to the Committee on Commerce,

17 Science, and Transportation of the Senate and to the Com18 mittee on Energy and Commerce of the House of Represent19 atives the information specified in subsection (b) every six

20 months during each of the fiscal years 1994, 1995, and

21 1996. Each such report shall contain such information for

22 the period since the last submission under this section.

23 (b) CONTENTS OF REPORT.—Each such report shall

24 list and describe, with respect to instances in which preda25 tory pricing practices have been suspected or alleged—
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1 (1) each complaint made, orally or in writing,

2 to the offices of the Commission;

3 (2) each preliminary investigation opened or

4 closed at the Commission;

5 (3) each formal investigation opened or closed at

6 the Commission;

7 (4) each recommendation for the issuance of a

8 complaint forwarded by the staff to the Commission;

9 (5) each complaint issued by the Commission;

10 (6) each opinion and order entered by the Com11 mission;

12 (7) each consent agreement accepted provision13 ally or finally by the Commission;

14 (8) each request for modification of an outstand15 ing Commission order filed with the Commission;

16 (9) each recommendation by staff pertaining to

17 a request for modification of an outstanding Commis18 sion order; and

19 (10) each disposition by the Commission of a re20 quest for modification of an outstanding Commission

21 order.

22 Such report shall include copies of all such consent agree23 ments and complaints executed by the Commission referred

24 to in such report. Where a matter has been closed or termi25 nated, the report shall include a statement of the reasons
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1 for that disposition. The descriptions required under this

2 subsection shall be as complete as possible but shall not re3 veal the identity of persons or companies making the com4 plaint or those complained about or those subject to inves5 tigation that have not otherwise been made public. The re6 port shall include any evaluation by the Commission of the

7 potential impacts of predatory pricing upon businesses (in8 cluding small businesses).

9 SEC. 15. INTERVENTION BY COMMISSION IN CERTAIN PRO10 CEEDINGS.

11 (a) LIMITATION ON USE OF AUTHORIZED FUNDS.—

12 The Federal Trade Commission shall not have any author13 ity to use any funds which are authorized to be appro14 priated to carry out the Federal Trade Commission Act (15

15 U.S.C. 41 et seq.) for fiscal years 1994, 1995, and 1996,

16 for the purpose of submitting statements to, appearing be17 fore, or intervening in the proceedings of, any Federal or

18 State agency or State legislative body concerning proposed

19 rules or legislation that the agency or legislative body is

20 considering unless the Commission advises the Committee

21 on Commerce, Science, and Transportation of the Senate

22 and the Committee on Energy and Commerce of the House

23 of Representatives regarding such action as soon as possible.

24 (b) CONTENTS OF NOTICE TO CONGRESS.—The notice

25 required in subsection (a) shall include the name of the
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1 agency or legislator involved, the date of such action, and

2 a concise statement regarding the nature and purpose of

3 such action.

4 SEC. 16. RESOURCE ALLOCATION STUDY.

5 The Federal Trade Commission shall conduct an eval6 uation of the level of its personnel resources and the manner

7 in which such resources are allocated. The Commission shall

8 study—

9 (1) whether overall resources at the Commission

10 are adequate to fulfill the Commission’s responsibil11 ities in the areas of competition and consumer protec12 tion;

13 (2) the distribution of personnel to individual of14 fices of commissioners, departments, bureaus, and

15 other units within the Commission, and whether the

16 current allocation of personnel most efficiently enables

17 the Commission to fulfill its statutory mandate;

18 (3) the number of personnel in supervisory posi19 tions, contrasted with those personnel in non20 supervisory positions; and

21 (4) whether the amount of workyears devoted to

22 research activities should be increased, and what re23 sults (if any) such an increase would produce.

24 The Commission shall transmit the results of such study,

25 together with any recommendations that the Commission
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1 determines appropriate, to the Committee on Commerce,

2 Science, and Transportation of the Senate and the Commit3 tee on Energy and Commerce of the House of Representa4 tives not later than six months after the date of enactment

5 of this Act.

6 SEC. 17. FEDERAL-STATE COOPERATION.

7 The Federal Trade Commission shall review its statu8 tory responsibilities to identify those matters within its ju9 risdiction where Federal enforcement is particularly nec10 essary or desirable, and those areas that might more effec11 tively be enforced at the State or local level. In identifying

12 such areas, the Commission shall—

13 (1) consider the resources available to the Com14 mission and the States, as well as particular rules

15 that have been promulgated by the Commission;

16 (2) consult with the attorneys general of the

17 States, representatives of consumers and industry,

18 and other interested parties; and

19 (3) consider such other issues as will result in

20 more efficient implementation of the statutory respon21 sibilities of the Commission.

22 Not later than six months after the date of enactment of

23 this Act, the Federal Trade Commission shall transmit to

24 the Committee on Commerce, Science, and Transportation

25 of the Senate and the Committee on Energy and Commerce
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1 of the House of Representatives the information identified

2 in paragraphs (1) through (3), together with specific rec3 ommendations for methods of achieving greater cooperation

4 between the Commission and the States.

5 SEC. 18. CREDIT REPAIR ORGANIZATIONS AND LOAN BRO6 KERS.

7 (a) DEFINITIONS.—In this section, the following terms

8 apply:

9 (1)(A) The term ‘‘advance fee’’ means any fee

10 (including any advance payment of interest or other

11 fees for any extension of consumer credit) which is as12 sessed or collected by a loan broker from any person

13 seeking the consumer credit before the extension of

14 such credit.

15 (B) The term ‘‘advance fee’’ does not include—

16 (i) any amount that the loan broker can

17 demonstrate is collected solely for the purpose of

18 payment to unaffiliated, third party vendors for

19 actual expenses incurred and payable before the

20 extension of any consumer credit; or

21 (ii) any application fee or other charge as22 sessed or collected—

23 (I) by a retail seller of property that is

24 primarily for personal, family, or household

25 purposes or automobiles; and
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1 (II) in connection with a consumer

2 credit transaction in which a purchase

3 money security interest arising under an

4 installment sales contract (or any equiva5 lent consensual security interest) is created

6 or retained against any such property or

7 automobile being sold by the retail seller to

8 the person seeking the extension of credit.

9 (2) The terms ‘‘consumer’’ and ‘‘credit’’ have the

10 meanings given to such terms in section 103 of the

11 Truth in Lending Act (15 U.S.C. 1602).

12 (3)(A) The term ‘‘credit repair organization’’

13 means any person who sells, provides, or performs, or

14 represents that such person can or will sell, provide,

15 or perform, in return for the payment of money or

16 other valuable consideration, a service for the express

17 or implied purpose of—

18 (i) improving a consumer’s credit record,

19 history, or rating; or

20 (ii) providing advice or assistance to a

21 consumer with regard to the consumer’s credit

22 record, history, or rating.

23 (B) The term ‘‘credit repair organization’’ does

24 not include—
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1 (i) a depository institution whose deposits

2 are insured by the Federal Deposit Insurance

3 Corporation, the Federal Savings and Loan In4 surance Corporation, or the National Credit

5 Union Administration Board, or a depository

6 institution chartered by a State;

7 (ii) any nonprofit organization exempt

8 from taxation under section 501(c)(3) of the In9 ternal Revenue Code;

10 (iii) a licensed real estate broker acting

11 within the course and scope of that license;

12 (iv) a licensed attorney at law rendering

13 services within the course and scope of that li14 cense;

15 (v) any broker-dealer registered with the Se16 curities and Exchange Commission or the Com17 modity Futures Trading Commission acting

18 within the scope of the Securities and Exchange

19 Commission or the Commodity Futures Trading

20 Commission regulations;

21 (vi) any consumer reporting agency acting

22 within the course and scope of this title; or

23 (vii) any debt collector as defined in section

24 803 of the Fair Debt Collection Practices Act (15
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1 U.S.C. 1692a), acting within the course and

2 scope of that Act.

3 (4)(A) The term ‘‘loan broker’’ means any person

4 who—

5 (i) for, or in expectation of, a consideration,

6 arranges or attempts to arrange or offers to find

7 for any individual, consumer credit;

8 (ii) for, or in expectation of, a consider9 ation, assists or advises an individual on obtain10 ing, or attempting to obtain, consumer credit; or

11 (iii) acts or purports to act for, or on behalf

12 of, a loan broker for the purpose of soliciting in13 dividuals interested in obtaining consumer cred14 it.

15 (B) The term ‘‘loan broker’’ does not include—

16 (i) any insured depository institution (as

17 defined in section 3(c)(2) of the Federal Deposit

18 Insurance Act; 12 U.S.C. 1813(c)(2)), any in19 sured credit union (as defined in section 101(7)

20 of the Federal Credit Union Act; 12 U.S.C.

21 1752(7)), or any depository institution which is

22 eligible for deposit insurance under the Federal

23 Deposit Insurance Act or the Federal Credit

24 Union Act and has deposit insurance coverage

25 provided by any State;
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1 (ii) any lender approved by the Federal

2 Housing Administration, Farmers Home Ad3 ministration, or Department of Veterans Affairs;

4 (iii) any seller or servicer of mortgages ap5 proved by the Federal National Mortgage Asso6 ciation or the Federal Home Loan Mortgage Cor7 poration; or

8 (iv) any consumer finance company, retail

9 installment sales company, securities broker or

10 dealer, real estate broker or real estate sales11 person, attorney, credit card company, install12 ment loan licensee, mortgage broker or lender, or

13 insurance company if such person is—

14 (I) licensed by and subject to regula15 tion or supervision by any agency of the

16 United States or by the State in which the

17 person seeking to utilize the services of the

18 loan broker resides; and

19 (II) is acting within the scope of that

20 license or regulation.

21 (b) PROHIBITED PRACTICES OF CREDIT REPAIR OR22 GANIZATIONS.—A credit repair organization shall not

23 charge or receive any money or other valuable consideration

24 prior to completion of the services that the credit repair
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1 organization has agreed to perform for the consumer and

2 that are described in subsection (a)(1).

3 (c) PROHIBITED PRACTICES OF LOAN BROKERS.—(1)

4 No loan broker may receive an advance fee in connection

5 with—

6 (A) arranging or attempting to arrange

7 consumer credit;

8 (B) offering to find for any individual consumer

9 credit; or

10 (C) advising any individual as to how to obtain

11 consumer credit.

12 (2) No loan broker may—

13 (A) make or use any false or misleading rep14 resentations or omit any material fact in the offer or

15 sale of the service of a loan broker; or

16 (B) engage, directly or indirectly, in any act

17 that operates or would operate as fraud or deception

18 upon any person in connection with the offer or sale

19 of the services of a loan broker, notwithstanding the

20 absence of reliance by the person to whom the loan

21 broker’s services are offered or sold.

22 (d) ENFORCEMENT BY FEDERAL TRADE COMMIS23 SION.—Any violation of this section shall—

24 (1) be treated as a violation of a rule of the Fed25 eral Trade Commission issued pursuant to section
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1 18(a)(1)(B) of the Federal Trade Commission Act (15

2 U.S.C. 57a(a)(1)(B)); and

3 (2) be subject to enforcement by the Federal

4 Trade Commission under the enforcement and pen5 alty provisions applicable to violations of such rules.

6 (e) CRIMINAL PENALTY.—(1) Whoever knowingly vio7 lates subsection (b) or (c) shall be fined under title 18, Unit8 ed States Code, imprisoned for not more than five years,

9 or both.

10 (2) Section 981(a)(1)(C) of title 18, United States

11 Code, is amended—

12 (A) by striking ‘‘title or a violation’’ and insert13 ing in lieu thereof ‘‘title, a violation’’; and

14 (B) by inserting ‘‘, or a violation of section 18

15 (b) or (c) of the Federal Trade Commission Act

16 Amendments of 1993’’ immediately before the period.

17 (3) For purposes of section 3005(a) of title 39, United

18 States Code, a violation of subsection (b) or (c) of this sec19 tion by any person shall constitute prima facie evidence

20 that such person is engaged in conducting a scheme or de21 vice for obtaining money or property through the mail by

22 means of false representations.

23 SEC. 19. AUTHORIZATION OF APPROPRIATIONS.

24 Section 25 of the Federal Trade Commission Act, as

25 so redesignated by section 3 of this Act, is amended—
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1 (1) by striking ‘‘and’’ after ‘‘1981;’’; and

2 (2) by inserting immediately before the period at

3 the end the following: ‘‘; not to exceed $88,000,000 for

4 the fiscal year ending September 30, 1994; not to ex5 ceed $92,000,000 for the fiscal year ending September

6 30, 1995; and not to exceed $95,000,000 for the fiscal

7 year ending September 30, 1996, and such additional

8 sums for the fiscal years ending September 30, 1994,

9 and September 30, 1995, as may be necessary for in10 creases in salary, pay, and other employee benefits as

11 authorized by law’’.

12 SEC. 20. EFFECTIVE DATE; APPLICABILITY.

13 (a) IN GENERAL.—Except as provided in subsections

14 (b), (c), (d), (e), and (f), the provisions of this Act shall

15 take effect on the date of enactment of this Act.

16 (b) APPLICABILITY OF SECTION 2.—The amendment

17 made by section 2 of this Act shall apply only with respect

18 to proceedings under section 5 of the Federal Trade Com19 mission Act (15 U.S.C. 45) after the date of enactment of

20 this Act. This amendment shall not be construed to affect

21 in any manner a cease and desist order which was issued,

22 or a rule which was promulgated, before the date of enact23 ment of this Act. This amendment shall not be construed

24 to affect in any manner a cease and desist order issued after

25 the date of enactment of this Act, if such order was issued
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1 pursuant to remand from a court of appeals or the Supreme

2 Court of an order issued by the Federal Trade Commission

3 before the date of enactment of this Act.

4 (c) APPLICABILITY OF SECTIONS 6 AND 11.—The

5 amendments made by sections 6 and 11 of this Act shall

6 apply only to rulemaking proceedings initiated after the

7 date of enactment of this Act. These amendments shall not

8 be construed to affect in any manner a rulemaking proceed9 ing which was initiated before the date of enactment of this

10 Act.

11 (d) APPLICABILITY OF SECTION 7.—The amendments

12 made by section 7 of this Act shall apply only with respect

13 to cease and desist orders issued under section 5 of the Fed14 eral Trade Commission Act (15 U.S.C. 45) after the date

15 of enactment of this Act. These amendments shall not be

16 construed to affect in any manner a cease and desist order

17 which was issued before the date of enactment of this Act.

18 (e) APPLICABILITY OF SECTIONS 8 AND 9.—The

19 amendments made by sections 8 and 9 of this Act shall

20 apply only with respect to compulsory process issued after

21 the date of enactment of this Act.

22 (f) APPLICABILITY OF SECTION 10.—The amendments

23 made by section 10 of this Act shall apply only with respect

24 to cease and desist orders issued under section 5 of the Fed25 eral Trade Commission Act (15 U.S.C. 45), or to rules pro-
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1 mulgated under section 18 of the Federal Trade Commission

2 Act (15 U.S.C. 57a), after the date of enactment of this Act.

3 These amendments shall not be construed to affect in any

4 manner a cease and desist order which was issued, or a

5 rule which was promulgated, before the date of enactment

6 of this Act. These amendments shall not be construed to af7 fect in any manner a cease and desist order issued after

8 the date of enactment of this Act, if such order was issued

9 pursuant to remand from a court of appeals or the Supreme

10 Court of an order issued by the Federal Trade Commission

11 before the date of enactment of this Act.

Attest:

Secretary.
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S 1179 ES EAS——2

S 1179 ES EAS——3

S 1179 ES EAS——4