House Certifies E-Signature Bill
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The U.S. House of Representatives late Wednesday passed the e-signature bill by a 426 to 4 vote in favor of the measure.
The bill known in short as E-SIGN [S.761] is a part of Capitol Hill's eContract 2000 and is scheduled to go to the U.S. Senate for further consideration.
The bill is at the heart of Congressional efforts to modernize the nation's laws; in-step with the paradigm shift advancing technologies brings to the American economy.
House Majority Leader Dick Armey (R-TX), said the legislative initiative would be remembered as a historic vote.
Currently, a consumer that desires to open a mutual fund account can get a load of information about varying funds on the Internet. But there is no way to open an account without printing a document and faxing a form back, and forth while the consumer waits for the transaction to be processed.
Armey said the bill eliminates the paper, delay and inconvenience by letting consumers open such accounts online.
"By removing barriers to e-commerce, the E-SIGN bill will expand digital opportunities and conveniences for all Americans." Armey said. "E-SIGN is a crucial piece of our eContract 2000 that we unveiled in May. We're continuing to remove government obstacles that keep consumers from taking full advantage of the wonders of modern technology."
Since May, the House has passed several key measures designed to promote growth in the new economy. Representatives have worked to press through legislation that could eventually extend a five-year moratorium on Internet taxes, permanently ban taxes on Internet access fees and eliminate the 3 percent federal excise tax on long-distance telephone charges.
If the E-SIGN bill passes the Senate, electronic contracts would gain the same legal status as handwritten signatures. The legislation would set national standards for e-signatures and documents, granting them the same legal validity as written contracts.
Both the House and Senate passed e-signature bills with little opposition last November, but differences between the two bills needed to be resolved in order to keep the legislation alive.
The Clinton Administration and several Democrats opposed sections of the bill's original mark-up language because they believed it could weaken consumer protections. Business groups also lobbied against provisions concerning consumer consent, contending that federal interference would hinder smooth e-commerce transactions.
A major hurdle to quick passage of the bill was eliminated in the Senate last week, when Banking Committee Chairman Phil Gramm, (R-TX), who originally balked at the bill, confirmed he would vote in favor of the legislation.
Gramm said the electronic-signature bill is an important step into the future that establishes legal footing for electronic commerce, which, over time, will be parallel to the existing paper-based commerce.
"Progress was made in addressing my final concerns with regard to the consent process," Gramm said. "While there is still a delay for the use of electronic commerce in financial services, the disparity between the financial industry and other industries has been significantly reduced."
Gramm added that a loophole that would have allowed states to require both paper and electronic notification had been closed.