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U.S. Senate Passes Digital Signature Law

"I think this is a big victory for consumers and for the new economy," Sen. Rob Wyden, Democrat-Oregon, told Newsbytes in an interview following the 87-0 Senate vote. "In a nutshell, we've acted to tap the vibrant potential for information technology, while at the same time making it clear that basic consumer protections aren't going to be an afterthought."

It was Wyden, along with Sen. Spencer Abraham, Republican-Michigan, who first introduced the Senate legislation that came to be known as E-Sign.

Friday's Senate passage follows Wednesday's 426-4 vote by the House of Representatives to approve the E-Sign language agreed to by the House- Senate conference committee. The legislation now heads to the Oval Office for President Clinton's approval.

Clinton Friday applauded the Senate passage of E-Sign and said he looks forward to signing the legislation.

"This may well be the biggest high-tech measure of the (legislative) session," Wyden said.

The conference report, S. 761, the Electronic Signatures in Global and National Commerce (E-Sign) Act, won the approval of most conferees on both sides of the aisle, though several Republican senators did not sign off on the report.

Abraham and House Commerce Committee Chairman Thomas Bliley, R-Virginia, offered last-minute changes to the bill to try to appease both financial services industry representatives and consumer protection advocates. One of the main concerns of the bill from a financial perspective was that it placed too much of a burden on document senders to make sure that the recipients have the right equipment to read the documents.

Consumer advocates disagreed with the idea that certain documents could be made available in a digital format only, which conceivably could keep non-Internet-proficient people from receiving important notices. The bill now contains an opt-in provision forcing institutions to obtain customer consent before making documents available only electronically.

Several opponents of the bill also were concerned that it would preempt states' abilities to determine their own electronic signatures and document delivery rules.

The bill also calls for several studies of e-signatures and methods of obtaining consumer consent. It also, in an unrelated clause, allows the commission established by the Child Online Protection Act (COPA) to accept donations to keep itself afloat while it studies children and pornography on the Internet.

On the technology front, the Senate must now turn its attention toward further addressing the thorny issues surrounding e-commerce taxation and toward passing a bill to increase the number of high-tech oriented H-1B visas available to foreign-born workers, Wyden said.

Wyden would also like to see online privacy addressed this session, and is working to build support for bipartisan privacy language.

Robert MacMillan contributed to this report.

Reported by Newsbytes.com, www.newsbytes.com.

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