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Opening Statement of Commissioner Joseph E. Brennan: Hearing of the Federal Maritime Commission on Passenger Vessel Financial Responsibility

March 3, 2010

I am pleased that the Commission is holding this public hearing. Revising the financial responsibility requirements of passenger vessels has been on the Commission’s agenda for about 16 years. Last September, the Commission discontinued a rulemaking from 2002 because the record had become outdated. Now we are seeking the most current information again. I am especially interested in whether the current $15 million cap is adequate to protect passenger deposits. The Commission has not increased the cap since the early 1990s, even though the cruise lines have grown tremendously since then. To me, the law passed in 1966 is plain. It was called “an act to require evidence of adequate financial responsibility to . . . repay fares in the event of nonperformance of voyages.”

I want to note that there is no one here to testify on behalf of passengers. I feel strongly that it is the responsibility of the Commission to represent passenger interests as the Congress instructed the Commission to do. The Chairman and the staff have inquired as to whether any interest group advocates on behalf of cruise passengers. We do not know of any. That is all the more reason for the Commission to recognize the interests of cruise passengers. That was the direction of Congress: protect the consumer. It is a consumer protection statute we are administering here. Congress told the Commission to make sure that passengers get reimbursed. I am concerned, however, that our current regulations – being nearly 20 years old now – could result in refunds of only a fraction of each passenger dollar.

So I am very interested in your viewpoint as to whether the $15 million cap should be increased and as to what an appropriate level of coverage would be.