[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[S. 1179 Reported in Senate (RS)]
Calendar No. 187
103d CONGRESS
1st Session
S. 1179
[Report No. 103-130]
_______________________________________________________________________
A BILL
To amend the Federal Trade Commission Act to provide authorization of
appropriations, and for other purposes.
_______________________________________________________________________
August 24, 1993
Reported without amendment
Calendar No. 187
103d CONGRESS
1st Session
S. 1179
[Report No. 103-130]
To amend the Federal Trade Commission Act to provide authorization of
appropriations, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 29 (legislative day, June 22), 1993
Mr. Bryan (for himself, Mr. Gorton, and Mr. Danforth) introduced the
following bill; which was read twice and referred to the Committee on
Commerce, Science, and Transportation
August 24, 1993
Reported, under authority of the order of the Senate of August 2
(legislative day, June 30), 1993, by Mr. Hollings with amendments
[Omit the part struck through and insert the part printed in italic]
_______________________________________________________________________
A BILL
To amend the Federal Trade Commission Act to provide authorization of
appropriations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION. 1. SHORT TITLE.
This Act may be cited as the ``Federal Trade Commission Act
Amendments of 1993''.
SEC. 2. UNFAIR METHODS OF COMPETITION.
Section 5 of the Federal Trade Commission Act (15 U.S.C. 45) is
amended by adding at the end the following new subsection:
``(n) The Commission shall not have any authority to find a method
of competition to be an unfair method of competition under subsection
(a)(1) if, in any action under the Sherman Act (15 U.S.C. 1 et seq.),
such method of competition would be held to constitute State action.''.
SEC. 3. AGRICULTURAL COOPERATIVES.
The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended
by redesignating sections 24 and 25 as sections 26 and 27,
respectively, and by inserting immediately after section 23 the
following new section:
``Sec. 24. (a) The Commission shall not have any authority to
conduct any study, investigation, or prosecution of any agricultural
cooperative for any conduct which, because of the provisions of the Act
entitled `An Act to authorize association of producers of agricultural
products', approved February 18, 1922 (7 U.S.C. 291 et seq., commonly
known as the Capper-Volstead Act), is not a violation of any of the
antitrust Acts or this Act.
``(b) The Commission shall not have any authority to conduct any
study or investigation of any agricultural marketing orders.''.
SEC. 4. COMPENSATION IN PROCEEDINGS.
(a) Repeal.--Section 18(h) of the Federal Trade Commission Act (15
U.S.C. 57a(h)) is repealed, and subsections (i), (j), and (k) of
section 18 are redesignated as subsections (h), (i), and (j),
respectively.
(b) Conforming Amendment.--Section 18(a)(1) of the Federal Trade
Commission Act (15 U.S.C. 57a(a)(1)) is amended by striking
`'subsection (i)'' and inserting in lieu thereof ``subsection (h)''.
SEC. 5. KNOWING VIOLATIONS OF ORDERS.
(a) Exception for Consent Orders.--Section 5(m)(1)(B) of the
Federal Trade Commission Act (15 U.S.C. 45(m)(1)(B)) is amended by
inserting ``, other than a consent order,'' immediately after ``order''
the first time it appears.
(b) Review of Determinations of Law.--Section 5(m)(2) of the
Federal Trade Commission Act (15 U.S.C. 45(m)(2)) is amended by adding
at the end of the following: ``Upon request of any party to such an
action against such defendant, the court shall also review the
determination of law made by the Commission in the proceeding under
subsection (b) that the act or practice which was the subject of such
proceeding constituted an unfair or deceptive act or practice in
violation of subsection (a).''.
SEC. 6. PREVALENCE OF UNLAWFUL ACTS OR PRACTICES.
Section 18(b) of the Federal Trade Commission Act (15 U.S.C.
57a(b)) is amended by adding at the end the following new paragraph:
``(3) The Commission shall issue a notice of proposed rulemaking
pursuant to paragraph (1)(A) only where it has reason to believe that
the unfair or deceptive acts or practices which are the subject of the
proposed rulemaking are prevalent. The Commission shall make a
determination that unfair or deceptive acts or practices are prevalent
under this paragraph only if it has issued cease and desist orders
regarding such acts or practices, or any other information available to
the Commission indicates a pattern of unfair or deceptive acts or
practices.''.
SEC. 7. EFFECTIVE DATE OF ORDERS.
(a) Orders Subject to Petition for Review.--Section 5(g)(2) of the
Federal Trade Commission Act (15 U.S.C. 45(g)(2)) is amended to read as
follows:
``(2) Except as to any order provision subject to paragraph
(4), upon the sixtieth day after such order is served, if a
petition for review has been duly filed; except that any such
order may be stayed, in whole or in part and subject to such
conditions as may be appropriate, by--
``(A) the Commission;
``(B) an appropriate court of appeals of the United
States, if (i) a petition for review of such order is
pending in such court, and (ii) an application for such
a stay was previously submitted to the Commission and
the Commission, within the thirty-day period beginning
on the date the application was received by the
Commission, either denied the application or did not
grant or deny the application; or
``(C) the Supreme Court, if an applicable petition
for certiorari is pending; or''.
(b) Orders Subject to Sections 5(m)(1)(B) and 19(a)(2) of FTCA.--
Section 5(g)(3) of the Federal Trade Commission Act (15 U.S.C.
45(g)(3)) is amended to read as follows:
``(3) For purposes of subsection (m)(1)(B) and of section
19 (a)(2), if a petition for review of the order of the
Commission has been filed--
``(A) upon the expiration of the time allowed for
filing a petition for certiorari, if the order of the
Commission has been affirmed or the petition for review
has been dismissed by the court of appeals and no
petition for certiorari has been duly filed;
``(B) upon the denial of a petition for certiorari,
if the order of the Commission has been affirmed or the
petition for review has been dismissed by the court of
appeals; or
``(C) upon the expiration of thirty days from the
date of issuance of a mandate of the Supreme Court
directing that the order of the Commission be affirmed
or the petition for review be dismissed; or''.
(c) Divestiture Orders.--Section 5(g)(4) of the Federal Trade
Commission Act (15 U.S.C. 45(g)(4)) is amended to read as follows:
``(4) In the case of an order provision requiring a person,
partnership, or corporation to divest itself of stock, other
share capital, or assets, if a petition for review of such
order of the Commission has been filed--
``(A) upon the expiration of the time allowed for
filing a petition for certiorari, if the order of the
Commission has been affirmed or the petition for review
has been dismissed by the court of appeals and no
petition for certiorari has been duly filed;
``(B) upon the denial of a petition for certiorari,
if the order of the Commission has been affirmed or the
petition for review has been dismissed by the court of
appeals; or
``(C) upon the expiration of thirty days from the
date of issuance of a mandate of the Supreme Court
directing that the order of the Commission be affirmed
or the petition for review be dismissed.''.
SEC. 8. CIVIL INVESTIGATIVE DEMANDS.
(a) Definitions.--Section 20(a) of the Federal Trade Commission Act
(15 U.S.C. 57b-1(a)) is amended--
(1) in paragraph (2), by inserting ``, or in any antitrust
violations'' immediately after ``section 5(a)(1))'';
(2) in paragraph (3), by inserting ``or any provisions
relating to antitrust violations'' immediately after ``section
5(a)(1))'';
(3) in paragraph (7), by inserting ``, or any antitrust
violation'' immediately after ``section 5(a)(1))''; and
(4) by adding at the end the following new paragraph:
``(8) The term `antitrust violation' means any unfair
method of competition (within the meaning of section 5(a)(1));
any violation of the Clayton Act; any violation of any other
Federal statute that prohibits, or makes available to the
Commission a civil remedy with respect to, any restraint upon
or monopolization of interstate or foreign trade or commerce;
or any activity in preparation for a merger, acquisition, joint
venture, or similar transaction, which if consummated, may
result in such an unfair method of competition or violation.''.
(b) Issuance of Demand.--(1) Section 20 (c)(1) of the Federal Trade
Commission Act (15 U.S.C. 57b-1 (c)(1)) is amended--
(A) by inserting ``or tangible things'' immediately after
``documentary material'' the first place it appears;
(B) by inserting ``or to antitrust violations,''
immediately after ``section 5 (a)(1)) ,''; and
(C) by inserting ``to submit such tangible things,''
immediately after ``copying or reproduction,''.
(2) Section 20(c) of the Federal Trade Commission Act (15 U.S.C.
57b-1 (c)) is amended--
(A) by redesignating paragraphs (4), (5), (6), (7), (8),
(9), (10), (11), and (12) as paragraphs (5), (6), (7), (8),
(9), (10), (11), (13), and (14), respectively;
(B) by inserting immediately after paragraph (3) the
following new paragraph:
``(4) Each civil investigative demand for the submission of
tangible things shall--
``(A) describe each class of tangible things to be
submitted under the demand with such definiteness and certainty
as to permit such things to be fairly identified;
``(B) prescribe a return date or dates which will provide a
reasonable period of time within which the things so demanded
may be assembled and submitted; and
``(C) identify the custodian to whom such things shall be
-s-u-b-m-i-t-t-e-d-,-'-'-, submitted.''; and
(C) by inserting immediately after paragraph (11), as so
redesignated, the following new paragraph:
``(12) The submission of tangible things in response to a civil
investigative demand shall be made under a sworn certificate, in such
form as the demand designates, by the person to whom the demand is
directed or, if not a natural person, by any person having knowledge of
the facts and circumstances relating to such production, to the effect
that all of the physical evidence required by the demand and in the
possession, custody, or control of the person to whom the demand is
directed has been submitted to the custodian.''.
(c) Applicability of Section 20 of FTCA.--Section 20(j)(1) of the
Federal Trade Commission Act (15 U.S.C. 57b-1(j)(1)) is amended by
inserting immediately before the semicolon the following: ``, any
proceeding under section 11(b) of the Clayton Act (15 U.S.C. 21(b)), or
any adjudicative proceeding under any other provision of law''.
SEC. 9. COMMISSION CUSTODY OF TANGIBLE THINGS.
Section 21 of the Federal Trade Commission Act (15 U.S.C. 57b-2) is
amended--
(1) in subsection (a)(1), by inserting ``tangible things,''
immediately after ``documentary material,'';
(2) in subsection (b)(1), by inserting ``, tangible
thing,'' immediately after ``document'';
(3) in subsection (b)(2)(A), by inserting ``tangible
things,'' immediately after ``material,'';
(4) in subsection (b)(3)--
(A) in subparagraph (A), by inserting ``tangible
things,'' immediately after ``documentary material,'';
(B) in subparagraph (B), by inserting ``, and may
make tangible things available,'' immediately after
``oral testimony''; and by inserting
-`-`-t-h-i-n-g-s-,-'-' , things, immediately after
``such -m-a-t-e-r-i-a-l-,-'-'-, material'';
(C) in subparagraph (C), by inserting ``tangible
things,'' immediately after ``documentary material,'';
and
(D) in subparagraph (D), by inserting ``, tangible
things,'' immediately after ``documentary material'';
(5) in subsection (b)(4), by inserting ``tangible things,''
immediately after ``documentary material,'';
(6) in subsection (b)(5), by inserting ``tangible things,''
immediately after ``documentary material,'';
(7) in subsection (b)(6)--
(A) by inserting immediately after the first
sentence the following new sentence: ``The custodian of
any tangible things may make such things available for
inspection to such persons on the same basis.''; and
(B) by inserting ``results of inspections of
tangible things,'' immediately after -`-`-s-u-c-h
``Such documentary material,''; and
(8) in subsection (b)(7), by inserting ``tangible things,''
immediately after ``documentary material,''.
SEC. 10. DEFINITION OF UNFAIR ACTS OR PRACTICES.
Section 5 of the Federal Trade Commission Act (15 U.S.C. 45), as
amended by section 2 of this Act, is further amended by adding at the
end the following new subsection:
``(o) The Commission shall have no authority under this section or
section 18 to declare unlawful an act or practice on the grounds that
such act or practice is unfair unless the act or practice causes or is
likely to cause substantial injury to consumers which is not reasonably
avoidable by consumers themselves and not outweighed by countervailing
benefits to consumers or to competition.''.
SEC. 11. COMMERCIAL ADVERTISING.
Section 18(h) of the Federal Trade Commission Act (15 U.S.C.
57a(h)), as so redesignated in section 4(a) of this Act, is amended by
adding at the end the following: ``The Commission shall have no
authority under this section to initiate any new rulemaking proceeding
which is intended to or may result in the promulgation of any rule by
the Commission which prohibits or otherwise regulates any commercial
advertising on the basis of a determination by the Commission that such
commercial advertising constitutes an unfair act or practice in or
affecting commerce.''.
SEC. 12. VENUE AND SERVICE OF PROCESS.
(a) Authority to Serve Certain Persons.--(1) Section 13(a) of the
Federal Trade Commission Act (15 U.S.C. 53(a)) is amended by striking
the last sentence and inserting in lieu thereof the following: ``Any
suit may be brought where such person, partnership, or corporation
resides or transacts business, or wherever venue is proper under
section 1391 of title 28, United States Code. In such a suit, the court
may, if the court determines that the interests of justice require that
any other person, partnership, or corporation should be a party in such
suit, cause such other person, partnership, or corporation to be
summoned without regard to whether it resides or transacts business in
the district in which the suit is brought. In any suit under this
section, process may be served on any person, partnership, or
corporation wherever it may be found.''.
(2) Section 13(b) of the Federal Trade Commission Act (15 U.S.C.
53(b)) is amended by striking the last sentence and inserting in lieu
thereof the following: ``Any suit may be brought where such person,
partnership, or corporation resides or transacts business, or wherever
venue is proper under section 1391 of title 28, United States Code. In
such a suit, the court may, if the court determines that the interests
of justice require that any other person, partnership, or corporation
should be a party in such suit, cause such other person, partnership,
or corporation to be summoned without regard to whether it resides or
transacts business in the district in which the suit is brought. In any
suit under this section, process may be served on any person,
partnership, or corporation wherever it may be found.''.
(b) Procedures for Serving Process.--Section 13 of the Federal
Trade Commission Act (15 U.S.C. 53) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting immediately after subsection (b) the
following new subsection:
``(c) Any process of the Commission under this section may -b-y be
served by any person duly authorized by the Commission--
``(1) by delivering a copy of such process to the person to
be served, to a member of the partnership to be served, or to
the president, secretary, or other executive officer or a
director of the corporation to be served;
``(2) by leaving a copy of such process at the residence or
the principal office or place of business of such person,
partnership, or corporation; or
``(3) by mailing a copy of such process by registered mail
or certified mail addressed to such person, partnership, or
corporation at his, or her, or its residence, principal office,
or principal place or business.
The verified return by the person serving such process setting forth
the manner of such service shall be proof of the same.''.
SEC. 13. REPORT ON RESALE PRICE MAINTENANCE.
(a) Report to Congress.--The Federal Trade Commission shall submit
to the Committee on Commerce, Science, and Transportation of the Senate
and to the Committee on Energy and Commerce of the House of
Representatives the information specified in subsection (b) every six
months during each of the fiscal years 1994, 1995, and 1996. Each such
report shall contain such information for the period since the last
submission under this section.
(b) Contents of Report.--Each such report shall list and
-d-e-s-c-r-i-b-e-d-, describe, with respect to instances in which
resale price maintenance has been suspected or alleged--
(1) each complaint made, orally or in writing, to the
offices of the Commission;
(2) each preliminary investigation opened or closed at the
Commission;
(3) each formal investigation opened or closed at the
Commission;
(4) each recommendation for the issuance of a
-c-o-m-p-l-i-a-n-t complaint forwarded by the staff to the
Commission;
(5) each complaint issued by the Commission pursuant to
section 5 of the Federal Trade Commission Act (15 U.S.C. 45);
(6) each opinion and order entered by the Commission;
(7) each consent agreement accepted provisionally or
finally by the Commission;
(8) each request for modification of an outstanding
Commission order filed with the Commission;
(9) each recommendation by staff pertaining to a request
for modification of an outstanding Commission order; and
(10) each disposition by the Commission of a request for
modification of an outstanding Commission order.
Such report shall include the sum total of matters in each category
specified in paragraphs (1) through (10), and copies of all such
consent agreements and complaints executed by the Commission. Where a
matter has been closed or terminated, the report shall include a
statement of the reasons for that disposition. The description required
under this subsection shall be as complete as possible but shall not
reveal the identity of persons or companies making the complaint or
those complained about or those subject to investigation that have not
otherwise been made public.
SEC. 14. REPORT ON PREDATORY PRICING PRACTICES.
(a) Report to Congress.--The Federal Trade Commission shall submit
to the Committee on Commerce, Science, and Transportation of the Senate
and to the Committee on Energy and Commerce of the House of
Representatives the information specified in subsection (b) every six
months during each of the fiscal years 1994, 1995, and 1996. Each such
report shall contain such information for the period since the last
submission under this section.
(b) Contents of Report.--Each such report shall list and describe,
with respect to instances in which predatory pricing practices have
been suspected or alleged--
(1) each complaint made, orally or in writing, to the
offices of the Commission;
(2) each preliminary investigation opened or closed at the
Commission;
(3) each formal investigation opened or closed at the
Commission;
(4) each recommendation for the issuance of a complaint
forwarded by the staff to the Commission;
(5) each complaint issued by the Commission;
(6) each opinion and -o-t-h-e-r order entered by the
Commission;
(7) each consent agreement accepted provisionally or
finally by the Commission;
(8) each request for modification of an outstanding
Commission order filed with the Commission;
(9) each recommendation by staff pertaining to a request
for modification of an outstanding Commission order; and
(10) each disposition by the Commission of a request for
modification of an outstanding Commission order.
Such report shall include copies of all such consent agreements and
complaints executed by the Commission referred to in such report. Where
a matter has been closed or terminated, the report shall include a
statement of the reasons for that disposition. The descriptions
required under this subsection shall be as complete as possible but
shall not reveal the identity of persons or companies making the
complaint or those complained about or those subject to investigation
that have not otherwise been made public. The report shall include any
evaluation by the Commission of the potential impacts of predatory
pricing upon businesses (including small businesses).
SEC. 15. INTERVENTION BY COMMISSION IN CERTAIN PROCEEDINGS.
(a) Limitation on Use of Authorized Funds.--The Federal Trade
Commission shall not have any authority to use any funds which are
authorized to be appropriated to carry out the Federal Trade Commission
Act (15 U.S.C. 41 et seq.) for fiscal years 1994, 1995, and 1996, for
the purpose of submitting statements to, appearing before, or
intervening in the proceedings of, any Federal or State agency or State
legislative body concerning proposed rules or legislation that the
agency or legislative body is considering unless the Commission advises
the Committee on Commerce, Science, and Transportation of the Senate
and the Committee on Energy and Commerce of the House of
Representatives regarding such action as soon as possible.
(b) Contents of Notice to Congress.--The notice required in
subsection (a) shall include the name of the agency or legislator
involved, the date of such action, and a concise statement regarding
the nature and purpose of such action.
SEC. 16. RESOURCE ALLOCATION STUDY.
The Federal Trade Commission shall conduct an evaluation of the
level of its personnel resources and the manner in which such resources
are allocated. The Commission shall study--
(1) whether overall resources at the Commission are
adequate to fulfill the Commission's responsibilities in the
areas of competition and consumer protection;
(2) the distribution of personnel to individual offices of
commissioners, departments, bureaus, and other units within the
Commission, and whether the current allocation of personnel
most efficiently enables the Commission to fulfill its
statutory mandate;
(3) the number of personnel in supervisory positions,
contrasted with those personnel in nonsupervisory positions;
and
(4) whether the amount of workyears devoted to research
activities should be increased, and what results (if any) such
an increase would produce.
The Commission shall transmit the results of such study, together with
any recommendations that the Commission determines appropriate, to the
Committee on Commerce, Science, and Transportation of the Senate and
the Committee on Energy and Commerce of the House of Representatives
not later than six months after the date of enactment of this Act.
SEC. 17. FEDERAL-STATE COOPERATION.
The Federal Trade Commission shall review its statutory
responsibilities to identify those matters within its jurisdiction
where Federal enforcement is particularly necessary or desirable, and
those areas that might more effectively be enforced at the State or
local level. In identifying such areas, the Commission shall--
(1) consider the resources available to the Commission and
the States, as well as particular rules that have been
promulgated by the Commission;
(2) consult with the attorneys general of the States,
representatives of consumers and industry, and other interested
parties; and
(3) consider such other issues as will result in more
efficient implementation of the statutory responsibilities of
the Commission.
Not later than six months after the date of enactment of this Act, the
Federal Trade Commission shall transmit to the Committee on Commerce,
Science, and Transportation of the Senate and the Committee on Energy
and Commerce of the House of Representatives the information identified
in paragraphs (1) through (3), together with specific recommendations
for methods of achieving greater cooperation between the Commission and
the States.
SEC. 18. CREDIT REPAIR ORGANIZATIONS AND LOAN BROKERS.
(a) Definitions.--In this section, the following terms apply:
(1)(A) The term ``advance fee'' means any fee (including
any advance payment of interest or other fees for any extension
of consumer credit) which is assessed or collected by a loan
broker from any person seeking the consumer credit before the
extension of such credit.
(B) The term ``advance fee'' does not include--
(i) any amount that the loan broker can demonstrate
is collected solely for the purpose of payment to
unaffiliated, third party vendors for actual expenses
incurred and payable before the extension of any
consumer credit; or
(ii) any application fee or other charge assessed
or collected--
(I) by a retail seller of property that is
primarily for personal, family, or household
purposes or automobiles; and
(II) in connection with a consumer credit
transaction in which a purchase money security
interest arising under an installment sales
contract (or any equivalent consensual security
interest) is created or retained against any
such property or automobile being sold by the
retail seller to the person seeking the
extension of credit.
(2) The terms ``consumer'' and ``credit'' have the meanings
given to such terms in section 103 of the Truth in Lending Act
(15 U.S.C. 1602).
(3)(A) The term ``credit repair organization'' means any
person who sells, provides, or performs, or represents that
such person can or will sell, provide, or perform, in return
for the payment of money or other valuable consideration, a
service for the express or implied purpose of--
(i) improving a consumer's credit record, history,
or rating; or
(ii) providing advice or assistance to a consumer
with regard to the consumer's credit record, history,
or rating.
(B) The term ``credit repair organization'' does not
include--
(i) a depository institution whose deposits are
insured by the Federal Deposit Insurance Corporation,
the Federal Savings and Loan Insurance Corporation, or
the National Credit Union Administration Board, or a
depository institution chartered by a State;
(ii) any nonprofit organization exempt from
taxation under section 501(c)(3) of the Internal
Revenue Code;
(iii) a licensed real estate broker acting within
the course and scope of that license;
(iv) a licensed attorney at law rendering services
within the course and scope of that license;
(v) any broker-dealer registered with the
Securities and Exchange Commission or the Commodity
Futures Trading Commission acting within the scope of
the Securities and Exchange Commission or the Commodity
Futures Trading Commission regulations;
(vi) any consumer reporting agency acting within
the course and scope of this title; or
(vii) any debt collector as defined in section 803
of the Fair Debt Collection Practices Act (15 U.S.C.
1692a), acting within the course and scope of that Act.
(4)(A) The term ``loan broker'' means any person who--
(i) for, or in expectation of, a consideration,
arranges or attempts to arrange or offers to find for
any individual, consumer credit;
(ii) for, or in expectation of, a consideration,
assists or advises an individual on obtaining, or
attempting to obtain, consumer credit; or
(iii) acts or purports to act for, or on behalf of,
a loan broker for the purpose of soliciting individuals
interested in obtaining consumer credit.
(B) The term ``loan broker'' does not include--
(i) any insured depository institution (as defined
in section 3(c)(2) of the Federal Deposit Insurance
Act; 12 U.S.C. 1813(c)(2)), any insured credit union
(as defined in section 101(7) of the Federal Credit
Union Act; 12 U.S.C. 1752(7)), or any depository
institution which is eligible for deposit insurance
under the Federal Deposit Insurance Act or the Federal
Credit Union Act and has deposit insurance coverage
provided by any State;
(ii) any lender approved by the Federal Housing
Administration, Farmers Home Administration, or
Department of Veterans Affairs;
(iii) any seller or servicer of mortgages approved
by the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation; or
(iv) any consumer finance company, retail
installment sales company, securities broker or dealer,
real estate broker or real estate salesperson,
attorney, credit card company, installment loan
licensee, mortgage broker or lender, or insurance
company if such person is--
(I) licensed by and subject to regulation
or supervision by any agency of the United
States or by the State in which the person
seeking to utilize the services of the loan
broker resides; and
(II) is acting within the scope of that
license or regulation.
(b) Prohibited Practices of Credit Repair Organizations.--A credit
repair organization shall not charge or receive any money or other
valuable consideration prior to completion of the services that the
credit repair organization has agreed to perform for the consumer and
that are described in subsection (a)(1).
(c) Prohibited Practices of Loan Brokers.--(1) No loan broker may
receive an advance fee in connection with--
(A) arranging or attempting to arrange consumer credit;
(B) offering to find for any individual consumer credit; or
(C) advising any individual as to how to obtain consumer
credit.
(2) No loan broker may--
(A) make or use any false or misleading representations or
omit any material fact in the offer or sale of the service of a
loan broker; or
(B) engage, directly or indirectly, in any act that
operates or would operate as fraud or deception upon any person
in connection with the offer or sale of the services of a loan
broker, notwithstanding the absence of reliance by the person
to whom the loan broker's services are offered or sold.
(d) Enforcement by Federal Trade Commission.--Any violation of this
section shall--
(1) be treated as a violation of a rule of the Federal
Trade Commission issued pursuant to section 18(a)(1)(B) of the
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)); and
(2) be subject to enforcement by the Federal Trade
Commission under the enforcement and penalty provisions
applicable to violations of such rules.
(e) Criminal Penalty.--(1) Whoever knowingly violates subsection
(b) or (c) shall be fined under title 18, United States Code,
imprisoned for not more than five years, or both.
(2) Section 981(a)(1)(C) of title 18, United States Code, is
amended--
(A) by striking ``title or a violation'' and inserting in
lieu thereof ``title, a violation''; and
(B) by inserting ``, or a violation of section 18 (b) or
(c) of the Federal Trade Commission Act Amendments of 1993''
immediately before the period.
(3) For purposes of section 3005(a) of title 39, United States
Code, a violation of subsection (b) or (c) of this section by any
person shall constitute prima facie evidence that such person is
engaged in conducting a scheme or device for obtaining money or
property through the mail by means of false representations.
SEC. 19. AUTHORIZATION OF APPROPRIATIONS.
Section 25 of the Federal Trade Commission Act, as so redesignated
by section 3 of this Act, is amended--
(1) by striking ``and'' after ``1981;''; and
(2) by inserting immediately before the period at the end
the following: ``; not to exceed $88,000,000 for the fiscal
year ending September 30, 1994; not to exceed $92,000,000 for
the fiscal year ending September 30, 1995; and not to exceed
$95,000,000 for the fiscal year ending September 30, 1996, and
such additional sums for the fiscal years ending September 30,
1994, and September 30, 1995, as may be necessary for increases
in salary, pay, and other employee benefits as authorized by
law''.
SEC. 20. EFFECTIVE DATE; APPLICABILITY.
(a) In General.--Except as provided in subsections (b), (c), (d),
(e), and (f), the provisions of this Act shall take effect on the date
of enactment of this Act.
(b) Applicability of Section 2.--The amendment made by section 2 of
this Act shall apply only with respect to proceedings under section 5
of the Federal Trade Commission Act (15 U.S.C. 45) after the date of
enactment of this Act. This amendment shall not be construed to affect
in any manner a cease and desist order which was issued, or a rule
which was promulgated, before the date of enactment of this Act. This
amendment shall not be construed to affect in any manner a cease and
desist order issued after the date of enactment of this Act, if such
order was issued pursuant to remand from a court of appeals or the
Supreme Court of an order issued by the Federal Trade Commission before
the date of enactment of this Act.
(c) Applicability of Sections 6 and 11.--The amendments made by
sections 6 and 11 of this Act shall apply only to rulemaking
proceedings initiated after the date of enactment of this Act. These
amendments shall not be construed to affect in any manner a rulemaking
proceeding which was initiated before the date of enactment of this
Act.
(d) Applicability of Section 7.--The amendments made by section 7
of this Act shall apply only with respect to cease and desist orders
issued under section 5 of the Federal Trade Commission Act (15 U.S.C.
45) after the date of enactment of this Act. These amendments shall not
be construed to affect in any manner a cease and desist order which was
issued before the date of enactment of this Act.
(e) Applicability of Sections 8 and 9.--The amendments made by
sections 8 and 9 of this Act shall apply only with respect to
compulsory process issued after the date of enactment of this Act.
(f) Applicability of Section 10.--The amendments made by section 10
of this Act shall apply only with respect to cease and desist orders
issued under section 5 of the Federal Trade Commission Act (15 U.S.C.
45), or to rules promulgated under section 18 of the Federal Trade
Commission Act (15 U.S.C. 57a), after the date of enactment of this
Act. These amendments shall not be construed to affect in any manner a
cease and desist order which was issued, or a rule which was
promulgated, before the date of enactment of this Act. These amendments
shall not be construed to affect in any manner a cease and desist order
issued after the date of enactment of this Act, if such order was
issued pursuant to remand from a court of appeals or the Supreme Court
of an order issued by the Federal Trade Commission before the date of
enactment of this Act.
S 1179 RS----2
S 1179 RS----3