Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005 -- (Senate - March 01, 2005)
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Mr. LEAHY. Mr. President, I stand to voice my support for the amendment offered by my friend and colleague, Senator DURBIN, which will protect our military servicemembers from attempts to penalize them by making it tougher for them to file for bankruptcy, even when the reason they lost all their income is because they answered the call of duty to serve America. I am proud to join my colleague as a cosponsor of this amendment.
We cannot have a thorough debate on bankruptcy reform without considering the economic hardships faced by servicemembers and their families. Calls to serve their country in Iraq, Afghanistan, or elsewhere can cause loss of family income, the closing of a family business, or unexpected expenses. Unfortunately, it is not uncommon for servicemembers and their families to be forced into filing for bankruptcy relief. We need to protect those who are fighting for us.
I support Senator DURBIN's efforts to protect our soldiers, particularly young recruits and junior officers, from sales of inappropriate insurance and investment products on military bases. It is crucial that servicemen and women who sacrifice for their country not be exploited or taken advantage of through dishonest business practices. It is our duty to ensure that America's military personnel are offered first-rate financial products so they can provide for their families and invest in their futures.
I commend Senator DURBIN for his leadership on this issue, and I urge my colleagues to accept his amendment so we can remedy the financial hardships faced by servicemembers who serve our nation and their families.
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Mr. LEAHY. Mr. President, the reason for this amendment--and I realize we will not vote on it today and we may vote on it tomorrow, although it may well be accepted--is one of the facts we have today.
The bankruptcy process requires the submission of many documents containing highly personal information. But we must be careful that our efforts to require documentation for accuracy and accountability do not inadvertently create problems for privacy and security.
We are in an age where personal information can be easily digitized and shared, and when it falls into the wrong hands, easily abused.
Identity theft is one danger. We have only to look to the recent debacle of Choicepoint selling the personal data of 145,000 individuals to scam artists. Many of these individuals have already become victims of identity theft, and they are not alone. Last year alone, 9.3 million people were victimized by identity theft. Another danger is tracking or harassing a former battered spouse. We need to minimize these possibilities, while still allowing for accountability.
We took an important first step by ensuring privacy protections for databases of personal information that become assets in bankruptcy. I was pleased to work closely with my colleagues in providing this protection.
But our responsibilities didn't end there. We also need to ensure reasonable privacy protection for personal information that is submitted by the debtors. I am submitting an amendment that will do just that by enhancing the court's discretion to protect personal information, and by requiring truncation of social security numbers in publicly filed documents. The Judicial Conference supports this amendment and I will ask unanimous consent that the Judicial Conference letter supporting the amendment be printed in the RECORD.
I am pleased that my colleagues Senator Snowe and Senator Cantwell have agreed to co-sponsor this amendment. They have been leaders on privacy issues, and I appreciate their support.
First, the amendment addresses court discretion in several ways. It allows the court, for cause, to protect personal identifiers, including the debtor's or other person's name, social security account number, date of birth, driver's license number, passport number, employee or taxpayer identification number, and unique biometric data. The personal identifiers protected under this provision are the same ones defined as ``means of identification'' under the Identity Theft Assumption Deterrence Act of 1998. This definition is codified as Section 1028(d) of Title 18 of the criminal code.
The amendment also allows the court, for cause, to seal or redact ``information that could cause undue annoyance, embarrassment, oppression or risk of injury to person or property.'' This standard is drawn from the current civil procedure discovery rules--Fed. Rule of Civ. Procedure 26--and would replace the existing standard in bankruptcy court, which only protects individuals against ``scandalous or defamatory matter.'' This change would allow the court to protect information, such as the home or employment address of a debtor, because of a personal security risk, including fear of injury by a former spouse or stalker. It would also allow the court to protect other information normally considered private, such as medical information.
The amendment would also provide persons the opportunity to request protection of sensitive information not only after it is filed with the court, but prior to filing as well. This protection is particularly important in an electronic filing environment, where information once filed is immediately available to the public.
In addition to enhancing court discretion, the amendment also protects social security numbers. Currently, the bankruptcy code requires debtors to include their tax payer identification numbers, which for individuals is almost uniformly his or her social security number, on any notice the debtor gives to creditors.
Because these notices are also filed with the court, the court's files routinely include unredacted social security numbers, creating the potential for abuse by those accessing public court records.
The amendment would simply allow debtors to limit disclosure to only a part of his or her social security number in notices that it files with the court. Specifically the notice to the court would include only the last four digits. The amendment still protects creditors where necessary, and specifies that creditors who are on the schedule of assets and liabilities should receive the full tax payer identification number in the notices sent specifically to the creditor.
The idea of truncation isn't new. Just last year, we passed the Fair and Accurate Credit Transactions Act of 2003, and that Act required truncation of credit card and debit card numbers on receipts given to cardholders. Under that law, only the last 5 digits of credit card and debit card numbers can be printed.
Requiring truncation for social security numbers is similarly reasonable. It provides protection against abuse, but still allows for important information sharing to take place.
The bankruptcy process requires submission of many documents containing highly personal information. I spoke about this on the floor yesterday. We must be careful that our efforts to require documentation for accuracy and accountability do not inadvertently create problems for privacy and security.
We are in an age where personal information can be easily digitized and shared, and when it falls into the wrong hands, easily abused. We know what happens with identity theft. Look at the totally irresponsible, outrageous, unbelievable debacle of Choicepoint, selling the personal data of 145,000 individuals to scam artists. It is hard to think of anything being done more irresponsibly than the executives at Choicepoint, unless it is the executives of Bank of America, who ship the data of their customers by commercial airplane--the same kind of flight we have all taken, and all of us have lost luggage. I said yesterday maybe their executives fly by private planes and they don't know what it is like to fly commercial. The point is their irresponsibility.
Many of the individuals who have had data stolen become victims of identity theft. There were 145,000 individuals whose data was compromised with Choicepoint that we know of now. Some have already become victims of identity theft. Last year alone, 9.3 million people were victimized by identity theft. Another danger is tracking or harassing a former battered spouse. I want to make sure we keep accurate information and that people have to say who they are, but we don't want to allow somebody to go into electronic court files and get Social Security numbers and names and addresses and everything else, and then use that information for identity theft or worse. We need to minimize these possibilities, while still allowing for accountability.
We took an important first step by ensuring privacy protections for databases of personal information that become assets in bankruptcy. I was please to work with my colleagues in providing this protection. But our responsibilities did not end there. We also need to ensure reasonable privacy protection for personal information submitted by the debtors. This amendment will do that by enhancing the court's discretion to protect personal information, and by requiring truncation of social security numbers in publicly filed documents.
I have a letter from the Judicial Conference of the United States, Chief Justice Rehnquist presiding, in which they support this amendment. They strongly support this amendment. These are the courts that are going to have to enforce this.
I ask unanimous consent that the Judicial Conference letter supporting the amendment be printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
JUDICIAL CONFERENCE
OF THE UNITED STATES,
Washington, DC, February 25, 2005.
Hon. PATRICK J. LEAHY,
Ranking Democrat, Committee on the Judiciary,
U.S. Senate, Washington, DC.
DEAR SENATOR LEAHY: I am writing today to express the Judicial Conference's support of two proposed amendments to the ``Bankruptcy Abuse Prevention and Consumer Protection Act of 2005'' (S. 256). Both amendments to the bill would amend the Bankruptcy Code to effect the Judicial Conference's privacy policy and protect confidential or sensitive information from public disclosure. Your support of these amendments to pending bankruptcy reform legislation would be greatly appreciated.
SECTION 107 OF THE BANKRUPTCY CODE
This amendment would implement Judicial Conference policy regarding protection of certain information contained in bankruptcy case files from public disclosure by means of four revisions to section 107 of the Bankruptcy Code. First, the amendment would transform former subsection (b)(1) regarding protection of trade secret or confidential research, development, or commercial information into a new subsection (b). No substantive change would be made to this provision.
Second, the amendment would create a new subsection (c) to allow the court for cause to authorize the redaction of personal identifiers to protect a debtor, creditor, or other person from identity theft or other harm. The amendment incorporates by reference section 1028(d)(7) of title 18, United States Code, a provision of the ``Identity Theft and Assumption Deterrence Act of 1998,'' with regard to the types of personal identifiers that may be redacted. These include the debtor's or other person's name, social security account number, date of birth, driver's license number, alien registration number, government passport number, employee or taxpayer identification number, unique biometric data, unique electronic identification number, electronic address or routing code, and telecommunication identifying information or access device. The amendment would also permit the court to exercise its discretion to protect personal identifiers by means other than redaction where appropriate in the circumstances of the case.
Third, this provision would allow the protection of information under subsection ( c) ``contained in a paper filed, or to be filed,'' in a bankruptcy case. This provision is intended to provide persons the opportunity to request protection of the information not only after it is filed with the court, but prior to filing as well. This authority would be especially useful in an electronic filing environment, where information once filed is immediately available to the public.
Finally, this new subsection (c) would have the effect of striking from the current provision ``scandalous or defamatory matter'' as a basis for protection of a person and instead allow the court for cause to seal or redact ``information that could cause undue annoyance, embarrassment, oppression or risk of injury to person or property.'' This language is drawn from Federal Rule of Civil Procedure 26 regarding the issuance of protective orders in the course of discovery. This new provision would expand the authority of the bankruptcy court to allow the court to protect information, such as the home or employment address of a debtor, because of a personal security risk, including fear of injury by a former spouse or stalker. It would also allow the court to protect other information normally considered private, such as medical information which, if publicly) disclosed, could result in untoward consequences to the debtor or others.
SECTION 342(C) OF THE BANKRUPTCY CODE
This amendment to the bill would amend section 342(c) of the Bankruptcy Code to implement Judicial Conference policy that social security account numbers be protected from public disclosure in court documents.
Section 342(c) of title 11, United States Code, currently requires a debtor to include his or her taxpayer identification number, which for an individual is almost uniformly his or her social security account number, on any notice the debtor gives to his or her creditors. Debtors are required to give such notice in various contexts, including the filing of adversary proceedings, such as a complaint to determine the dischargeability of a debt, or contested matters, such as a motion to avoid a lien impairing an exemption.
As a copy of such notice is required to be filed with the court, court files routine include unredacted social security account numbers of debtors. By requiring only the last four digits of a taxpayer identification number to appear an the notice, the debtor's fun social security account number will no longer appear in the court file and thus be protected from public disclosure.
The amendment also adds a provision to section 342(c) to require that adequate notice of the bankruptcy filing is given to a creditor who is added to the case after the initial notice of the case has been sent. The taxpayer identification number would be treated in the same manner in the notice to a newly added creditor as the number was treated in the initial notice to the original creditors. The debtor is directed to send to the newly added creditors a notice of the bankruptcy filing containing the debtor's full taxpayer identification number, but to include only the last four digits of the number in the copy of the notice filed with the court.
Thank you far your consideration of these proposed amendments. If you have any questions or concerns, please have your staff contact Michael W. Blommer, Assistant Director, at (202) 502-1700.
Leonidas Ralph Mecham, Secretary.
Mr. LEAHY. Mr. President, I am pleased my colleague from Maine, Senator Snowe, and my colleague from Washington State, Senator Cantwell, have agreed to cosponsor this amendment. They both have been leaders of privacy issues. I appreciate their support.
Here is what the amendment does: It addresses court discretion in several ways. It allows the court for cause to protect personal identifiers, including the debtor's or other person's name, Social Security account number, date of birth, driver's license number, passport number, employee or tax identification number, and unique biometric data. The personal identifiers protected under this provision are the same ones defined as ``means of identification'' under the Identity Theft Deterrence Act of 1998. This definition is codified in Section 1028(d) of Title 18 of the criminal code.
The amendment also allows the court, for cause, to seal or redact ``information that could cause undue annoyance, embarrassment, oppression or risk of injury to person or property.'' This standard is drawn from the current civil procedure discovery rules. This change would allow the court to protect information, such as the home or employment address of a debtor because of a personal security risk. Unfortunately, many times that risk is from a former spouse or a stalker. It would also allow the court to protect other information normally considered private, such as medical information.
The amendment would provide persons the opportunity to request protection of sensitive information not only after it is filed with the court, but prior to filing as well. This protection is particularly important in an electronic filing environment, where information once filed is immediately available to the public.
In addition to enhancing court discretion, the amendment also protects Social Security numbers. Currently, the bankruptcy code requires debtors to include their tax payer identification numbers (which for individuals is almost uniformly his or her social security number) on any notice the debtor gives to creditors. Because these notices are also filed with the court, the court's files routinely include unredacted social security numbers, creating the potential for abuse by those accessing public court records.
This amendment would simply allow debtors to limit disclosure to only a part of his or her social security number in notices filed with the court. Specifically the notice to the court would include only the last four digits.
This amendment still protects creditors where necessary, and specifies that creditors who are on the schedule of assets and liabilities should receive the full tax payer identification number in the notices sent specifically to the creditor. What it means is somebody cannot get on line, get all this information, sell it, or do whatever they want to.
The idea of truncation isn't new. Just last year, we passed the Fair and Accurate Credit Transactions Act of 2003, and the Act required truncation of credit card and debit card numbers on receipts given to cardholders. Under that law, only the last 5 digits of credit card and debit card numbers can be printed. Requiring truncation for social security numbers is similarly reasonable. It provides protection against abuse, but still allows for important information sharing to take place.
I yield the floor.
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