Congress of the United States ‘Washington, BE 20515 October 20, 2017 ‘The Honorable Rodney Frelinghuysen, Charman ‘The Honorable Nita Lowey, Ranking Member ‘Committee on Appropriations US. House of Representatives 11.305 Capito! ‘Washington, DC 20510 Dear Chairman Frelinghuysen and Ranking Member Lowey: As you prepare for conference negotiations with the Senate for the Fiscal Year 2018 (FY 18) pproprations bills, we urge your strong support forthe Moolenaar Amendment (Section 633) tothe FYI8 House Financial Services and General Government appropriations bill FLR. 3280) This important ‘consumer protection provision passed the House Appropriations Committe on Jly 17 by vive ote. Pyramid schemes Seok to mislead and definud consumers by masquereding as dire selling ‘companies, eeatng confusion about legitimate and legitimate business practices in the marketplace. Greater claritin federal law is therefore neoded to help consumers ster clear from pyramid sehemes and ive legitimate direc selling companies more guidanee on what constitutes ethical business practices, ‘The Moolenaar Amendment bill docs jus that it defines a pyramid scheme forthe firs time in federal statute using the same definition that has been adopted to prosecute pyramid schemes by the Federal Trade Commission, 21 states across the county, and by international organizations like the uropean Union. This language is consistent with cas law and was included inthe 2004 Council of State Governments Suggested State Legislation, ln fact, the FIC used the principles of this mode tue to ‘prosecute a pyramid scheme in 2014. The Amendment simply takes what is already working at he state level an ese law and makes it consstnt atthe federal level, ‘The Moolenaar Amendment doesnot impact the existing enforcement authority ofthe FTC t0 ‘combat pytamid schemes, but gives the FTC another tol to go after these unserupulous businesses Further, this provision would not pe-empt any state consumer protection las By providing clear guidance on what constitutes a pyramid scheme, this Amendment helps protect millions of jobs and income-arning opportunites. More than 20 milion Americans ron smal, legitimate dive sling businesses across the country. Together, these men and women contribute more ‘han $35 billion tothe American economy each year and help form the backbone of many local ‘communities, 90% of eect sellers operate their small businesses parttime snd make a median income of $3,400 a year. They uso this supplemental income to help pay bills, buy groceries, or save for college oFretirement, They are independent entrepreneurs and they deserve a clear ditineton in federal law between thei eitimate businesses ad predatory promotional seems, Asstrong supporters of robust consumer protection, we urge you strong support forthe Moolenaar Amendment in conference. We re willing to Work with you and committe staff on ways to strengthen these provisions, and if possible make them permanent, Sincorely, ill Hizenga Edie Bernice Johnson Member of Congress Member of Congress