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To: Didi who wrote (228)	6/15/2000 10:07:00 AM
From: Didi	Respond to of 1115

Biz News by The Post:>>>Electronic Signatures Bill Passes The House washingtonpost.com By Juliet Eilperin and John Schwartz Washington Post Staff Writers Thursday , June 15, 2000 ; A01 The House yesterday overwhelmingly approved legislation giving a contract signed online the same legal status as a paper contract signed with a pen--a bill that proponents hope will make it much easier for Americans to conduct business on the Internet. The legislation, known as E-Sign, could set the stage for a dramatic expansion of e-commerce beyond such activities as buying books and CDs online. In the absence of national guidelines for "electronic signatures," many businesses have been reluctant to conduct such transactions as writing insurance policies, codifying wills and finalizing home mortgages online. "This is going to take e-commerce to the next level," said Michael Hogan, general counsel for online brokerage DLJ Direct. The Electronic Signatures in Global and National Commerce Act, which passed by a vote of 426 to 4, was hailed by backers as one of the most significant pieces of high-tech legislation of this legislative session. Key senators have agreed to identical language, and lawmakers said the other chamber should follow suit. The Clinton administration and consumer groups had fought provisions in earlier versions of the bill that they said would undermine consumer protections. Under previous drafts, for instance, a mortgage company might be able to notify a homeowner of eviction by e-mail, with no assurance that the consumer could even receive or read the notice. Situations such as that one are explicitly prohibited in the final E-Sign bill, which now includes a strong element of consumer consent to the use of electronic contracts and record-keeping, and which requires notice on paper for the most important messages. Any individual can also opt out of signing an electronic contract. The Clinton administration supports the compromise measure, and the president said he looks forward to signing the bill. "By marrying one of our oldest values--our commitment to consumer protection--with the newest technologies, we can achieve the full measure of the benefits that e-commerce has to offer," Clinton said. The technology to conduct a broad range of business transactions online has been in place for some time, and the Commerce Department said online sales amounted to $5.26 billion in the first quarter of the year. But businesses have been reluctant to commit to online transactions wholeheartedly, despite the clear cost savings involved in clicking on the dotted line instead of signing. In the absence of federal standards, states have been enacting electronic-signatures legislation of their own, creating a chaotic patchwork that threatens to hinder progress. The new federal legislation would set up standards that must be met for an online contract to be considered valid. Under the bill, for instance, consumers must first agree to participate in an electronic interaction and affirmatively consent to receive electronic records. There must also be a reasonable demonstration that consumers can access the records for their consent to take effect. The bill exempts certain notices from being transmitted solely via the Internet, such as court orders, the cancellation of utility services, eviction notices and the termination of health insurance. The potential repercussions of the legislation are large. In theory, it should make it easier for businesses to eliminate a lot of the paperwork used today. Hogan said it is difficult to predict whether the bill's passage would also affect regular and express mail delivery, since many consumers who buy products online usually have them shipped to their homes. "I would hope it would reduce the amount of mandatory mail that would be sent," he said, adding that financial services firms in particular might cut back on mailings to their clients. Lawmakers from both parties stood up to praise the bill on the House floor. "In less than six years, the Internet has revolutionized the way people communicate and conduct business," said House Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.). "E-sign is about the future. It is about laying the legal foundation of electronic commerce for many years to come." Rep. Anna G. Eshoo (D-Calif.) hailed "the new era" that relies on e-mail rather than quills or hot wax to forge a business deal. She recalled how she set up a "virtual district office" in 1996 with access to government forms, only to learn that her constituents could not fill them out because their online signatures were not binding. Consumer advocates said they could live with the final version of the legislation. They said the measure contains a number of ambiguous passages that will have to be clarified in the courts, and that the bill does not do enough to protect consumers from "identify theft"--crooks using innocent victims' credit and personal information to make purchases. "It could have been better, but it could have been a lot worse," said Margot Saunders, managing attorney for the National Consumer Law Center. ¸ 2000 The Washington Post Company<<<