[Congressional Record Volume 145, Number 157 (Tuesday, November 9, 1999)]
[House]
[Pages H11732-H11755]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT
The SPEAKER pro tempore. Pursuant to House Resolution 366 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the State of the Union for the consideration of the bill, H.R. 1714.
The Chair designates the gentleman from Texas (Mr. Bonilla) as
Chairman of the Committee of the Whole, and requests the gentleman from
Washington (Mr. Hastings) to assume the chair temporarily.
{time} 1226
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the State of the Union for the consideration of the bill
(H.R. 1714) to facilitate the use of electronic records and signatures
in interstate or foreign commerce, with Mr. Hastings of Washington
(Chairman pro tempore) in the chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered as having
been read the first time.
Under the rule, the gentleman from Virginia (Mr. Bliley) and the
gentleman from Michigan (Mr. Dingell) each will control 30 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Bliley).
Mr. BLILEY. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, last Monday the Committee on Commerce brought H.R.
1714, the Electronic Signatures in Global and National Commerce Act, to
the floor under suspension of the rules.
Unfortunately, H.R. 1714 fell just four short votes of passage. The
Clinton administration and minority leadership of this body mounted an
intense lobbying campaign against the bill. We were proud of the number
of votes that we were able to achieve in support of the bill, and we
return to the House floor this week with the identical bill that was
considered last Monday.
We remain confident that H.R. 1714 is strong legislation that helps
to facilitate e-commerce in the new economy. This bill is perhaps the
most important pro-technology vote that this Congress will take. It
should not fall prey to partisan battles.
The Committee on Commerce unanimously, Mr. Chairman, unanimously
voted this bill out of the committee this summer with support from both
sides of the aisle. Since that time, we have worked closely with the
minority leadership of the committee to craft the additional consumer
protection provisions that appear in the bill considered last week and
remain in the bill today.
We believe those negotiations to be fair and worthwhile, and were
disappointed to learn for the first time on the floor last week that
the minority did not feel the same. These important new provisions
offer consumers strong protection in the electronic world. They require
consumers to opt in if they wish to receive their documents in
electronic form.
Let me repeat, nothing, nothing in this bill requires consumers to
receive documents electronically against their wishes. Further, the
bill requires that all consumers must receive important notices that
may affect health or safety in the traditional paper form. This
includes notices of such as the termination of utility service,
cancellation of health benefits or life insurance, and foreclosure or
eviction from a residence.
I would like to take this opportunity to rebut some of the charges
and unfounded attacks that were made by my colleagues across the aisle
when this bill was brought to the floor last week.
We heard that under H.R. 1714, consumers would be forced to accept
electronic documents, even if the consumer
[[Page H11733]]
did not have a computer or an e-mail account.
{time} 1230
We also heard that 1714 will sweep away Federal and State consumer
protection laws. These claims, Mr. Chairman, are completely false.
As I have said many times previously, consumers must have safety,
security, and privacy on line or they will not accept this new
technology. H.R. 1714 provides on-line consumers with a confident
assurance that their on-line transactions will be secure and that they
will continue to receive the same consumer protections as consumers
purchasing a product at a local shopping mall.
We also heard, much to my surprise, claims that the process for
considering H.R. 1714 was unfair. First, it was claimed that the bill
had been substantially changed since the minority had last seen it. In
fact, it was even charged that the consumer protections in the bill had
been removed. This is simply untrue.
We provided the minority with a copy of the text of H.R. 1714 before
it came to the floor, and with minor exceptions that strengthen
consumer protections, it was identical to the bill that they had agreed
to just days before. The only real change was that the minority
leadership had called a meeting with a number of Committee on Commerce
Democrats in which they were told to stop cooperating with the
majority, so we had the instance of politics overriding substance.
Mr. Chairman, there were also charges that the bill was brought to
the floor too quickly. Again, such a claim is false. H.R. 1714 was
approved by the Committee on Commerce unanimously by voice vote on
August 5. We filed our report on September 27. The bill was originally
scheduled to come to the floor on October 18, but I asked it to be
withdrawn so that we could continue to negotiate with the minority.
The bill brought to the floor on November 1 was the product of 2
weeks of negotiations with the minority. This can hardly be considered
rushing legislation to the floor. Some have said that all that was
needed was one more day of negotiations. To that I say we have given
the minority 14 days of negotiations.
Any charges that the majority acted in bad faith are simply
incorrect. I gave the minority every opportunity to provide input from
before the bill was introduced to right up until the bill came to the
floor. I think our negotiations were very successful. In fact, key
consumer protections in the bill, Mr. Chairman, were the result of our
negotiations with the minority.
Unfortunately, at the last minute the minority leadership decided
they had to block this legislation. They had to keep Republicans from
passing an important pro-technology bill that enjoys unanimous support,
unanimous support in the technology community.
I would also like to touch on one more important consumer issue that
has been little discussed until now. Electronic signature technologies
provide consumers with much more assurance that their transactions and
communications will take place in a safe, secure and private
environment. The encryption capabilities that are used to protect such
valuable signatures offer much greater protection than ever possible in
the traditional paper world.
Electronic signatures provide a level of authentication that far
surpasses the ink signature that has come to be the accepted standard.
Moreover, H.R. 1714 makes it possible to have seamless and efficient
processing of electronic signatures records. Electronic transactions
have much less chance of human error, and provide for more reliable
retention after the initial transaction takes place.
Critics have argued that this bill should not apply to records. In
fact, they want to severely narrow the bill's scope to delete records.
This would be a shame and I could not support it. Records are an
important component in electronic commerce transactions. Consumers will
benefit from the use of electronic records and we should provide the
legal framework to allow their use and acceptance.
The world is moving towards a paperless society and we cannot sit
back and ignore reality as some would like us to do. A proper course of
action is to address records by adding appropriate consumer protections
like we have done in H.R. 1714.
Mr. Chairman, the 105th Congress was credited with passing monumental
legislation to help facilitate E-commerce. This vote is perhaps the
most critical one that the 106th Congress will consider to continue the
growth and success of the digital economy. If Members support the U.S.
high-tech industry, they will vote ``yes'' on this bill. A vote in
support of H.R. 1714 is a vote to support providing consumers with
greater security in on-line transactions. It is a vote in support of
allowing business to provide new and innovative services on line.
Mr. Chairman, I understand that an amendment will be offered today by
a number of my colleagues, including the gentleman from Washington (Mr.
Inslee), the gentlewoman from California (Ms. Eshoo), the gentleman
from Virginia (Mr. Moran) and the gentlewoman from California (Ms.
Lofgren). This amendment further clarifies the important consumer
protections that are included in this bill. I thank the gentleman from
Washington (Mr. Inslee) and his colleagues for their constructive work
on this amendment and recognize that he and several other Members of
his party have made valuable contributions to this process, instead of
trying to undermine it.
Mr. Chairman, I will support this amendment and I ask that all
Members of the House do the same. I urge my colleagues to rise above
partisan politics and support H.R. 1714.
Mr. Chairman, in September, the Banking Committee raised with the
Commerce Committee the need to make clear that the ``the autonomy of
parties'' provision of the reported version of H.R. 1714 was not
intended to limit the authority of the Federal banking agencies to
impose and enforce minimum safety and soundness standards for the use
of electronic signatures and records by entities they regulate. I want
to assure the Banking Committee today that the language in Section
103(a)(4) of the modified text before us this afternoon was drafted so
as to accommodate those concerns. Nothing in this bill should be
interpreted to interfere with the authority of federal banking agencies
to impose and enforce minimum safety and soundness standards for the
use of electronic signatures and records by entities they regulate.
Mr. Chairman, I reserve the balance of my time.
Mr. DINGELL. Mr. Chairman, I yield myself 6 minutes.
Mr. Chairman, I want to express considerable affection and respect
for the gentleman from Virginia (Mr. Bliley), my good friend and the
chairman of the committee. But I want to observe that he is in error on
a number of important points.
First of all, we did have 2 weeks of negotiation and we were making
good progress. Second of all, the gentleman from Virginia terminated
the discussions and brought the bill to the floor without completing
the negotiations. I would observe we were making good progress. I would
observe we could have made further good progress and we could have a
bill which could pass unanimously. Regrettably, we do not because there
are important consumer protections which are missing from this bill.
The haste is charged up to partisanship. Well, that might perhaps
tell more about the author of that statement than it does about anybody
else. In point in fact, our concern here is protecting consumers and I
will address that question as I go forward in my statement.
Mr. Chairman, I also would observe something else and that is that
there is no magic to completing this legislation now, nor is there
magic in completing it within 14 days. Completing legislation well in a
fashion which serves the interests of all parties, those who would
engage in electronic commerce and those who would be consumers and
customers of those who engage in electronic commerce, is in the best
traditions of this institution.
Now, Mr. Chairman, I would observe something else. The future of the
American economy depends upon our making this new form of conducting
business a success, one which can be accepted by all and which can be
regarded as being fair indeed to all. Unfortunately, the bill before us
contains major flaws that harm consumers, and I regret that the
gentleman from Virginia did not give us more time in which to complete
those matters.
Regrettably, I therefore must oppose the bill in its current form.
The gentleman from Virginia (Mr. Bliley) did
[[Page H11734]]
work closely with the minority to correct some of the deficiencies. I
regret, however, that gaps remain, some of which are indeed serious.
It is interesting to note that many of the companies recommending and
representing the high-tech community do not oppose the consumer
protections which we think should be included. Regrettably, a small but
nevertheless important minority of business interests continues to
oppose consumer protections in any form. Those are not, regrettably,
people in the electronic commerce business. Those are simply people in
the financial interests of this country which want to have it all their
way, and I can sympathize with my friend from Virginia in dealing with
such an obdurate lot.
An amendment today which will be offered will seek to improve the
legislation, and I commend the authors of the legislation, the
gentlewoman from California (Ms. Eshoo), the gentleman from Washington
(Mr. Inslee), and others. Unfortunately, the amendment would improve
certain aspects of the bill but, unfortunately, it still falls short.
The Bliley bill, even with the Inslee amendment, would harm consumers
in several ways. First, it would not require any notice, conspicuous or
otherwise, that consumers are entitled to receive certain records in
writing under existing law. Before choosing to receive these documents
electronically, I believe consumers should be given specific notice as
to what existing rights they are giving up. Regrettably, the Bliley
bill leaves consumers in the dark on this matter.
Secondly, the opt-in provision as currently structured in the bill
before us would allow all sorts of dissimilar records to be bundled
together giving, at best, confusion to the consumers and would require
them to essentially take an all-or-nothing approach in which records
they agree to receive electronically.
Clearly, there are records and records, and clearly they should and
can be easily treated differently by the consumers and the purchasers.
In effect, an on-line merchant could require consumers to take it or
leave it, thereby defeating the will of the parties, and especially the
consumers, to receive some records electronically, but not others that
they would prefer to receive in a traditional form.
Finally, the bill would allow merchants to vitiate contracts entirely
if consumers do not agree to opt in to receiving records
electronically. That is not an option. In the law it is called a
``contract of adhesion'' and in a word it is a contract which is not
equal and in which the parties are not equal parties to a contract.
Clearly, if we are seeking to improve the attitude of consumers and
to earn their trust, this is not the way that the matter should be
handled. The administration shares these concerns and strongly supports
the substitute which I will offer today with the gentleman from
Missouri (Mr. Gephardt), the gentleman from Michigan (Mr. Conyers) and
the gentleman from New York (Mr. LaFalce).
The administration has additional concerns, as do I, concerning the
effect of this bill in on-line transactions. For these reasons I urge a
``no'' vote on H.R. 1714 and urge my colleagues to support the
substitute which has been made in order by the Committee on Rules.
The substitute would take an important first step, fully recognizing
the validity of electronic signatures in contract law. That is good.
The legislation will give Congress the additional time to explore the
effect on consumers of the new electronic contract laws to the myriad
of important records and documents that accompany these agreements. It
also would avoid stomping on the actions of legislatures in having
created and in addressing contract problems, as they have traditionally
done under the historic laws of the United States, wherein the matters
of ordinary commerce are dealt with by the several States and dealt
with well, indeed, under things like the Uniform Commercial Code.
Mr. Chairman, I see no reason for supplanting the knowledge, reason,
and expertise and the traditions which have vested in the legislatures
the ability to address these questions by adding a whole new array of
changes which may or may not be in the consumers' interest and may not
be in the interest of business in the United States and which clearly
are opposed by consumer groups and by the administration.
Mr. Chairman, I ask unanimous consent to yield 15 minutes of my time
to the distinguished gentleman from Michigan (Mr. Conyers) to control
as he sees fit.
The CHAIRMAN. Is there objection to the request of the gentleman from
Michigan?
There was no objection.
Mr. DINGELL. Mr. Chairman, I reserve the balance of my time.
Mr. BLILEY. Mr. Chairman, I yield 3\1/2\ minutes to the gentleman
from Louisiana (Mr. Tauzin).
Mr. TAUZIN. Mr. Chairman, I thank the gentleman from Virginia (Mr.
Bliley), chairman of the Committee on Commerce, for yielding me this
time. I particularly want to commend him for this legislative effort
and, like him, I want to thank particularly the gentlewoman from
California (Ms. Eshoo) of our committee who has done such great work
over the years in helping to develop an electronic signature bill for
the E-commerce age, and the gentleman from Washington (Mr. Inslee) and
others for working with the chairman of the committee in offering a
very helpful amendment that we are going to hear about later today.
Mr. Chairman, let me first say that this bill obviously has the
support of an incredible array of business groups, including the United
States Chamber, which is going to score this as one of our major votes
this year because business sees this, of course, as a major step
forward in the development of electronic commerce for our country and
our country's economy.
But I want to speak more importantly about the impact of this E-SIGN
bill on consumers. I think we all agree that consumers are the backbone
of the electronic commerce model. If consumers do not feel comfortable,
if they do not feel at ease with this new technology, then they are
going to lose confidence in the growing electronic commerce of our
country and the world, and that is certainly a result no one wants.
I understand, Mr. Chairman, that over 10 million Americans are going
to join in the electronic commerce revolution this Christmas and make
purchases for their Christmas gifts over the Internet.
{time} 1245
But as more and more consumers come to use the Internet and the
electronic commerce, this E-SIGN bill is going to become more and more
important. This bill strikes, I think, the right balance. It recognizes
that we are moving toward electronic transactions and then allows many
types of transactions to take place over the Internet while, at the
same time, it continues to provide the protections that consumers have
been accustomed to in the world of paper and written checks and
contracts, and in the analog world itself.
H.R. 1714, which I was very pleased to join the gentleman from
Virginia (Chairman Bliley) in sponsoring in its onset, recognizes that
there are important State and Federal laws that protect consumers today
such as the requirement that consumers be provided copies of important
documents such as warrants, notices, and disclosures.
This bill recognizes and retains these important consumer protection
laws and develops a system whereby consumers can choose to accept
electronic versions of the documents and then receive them
electronically. Understand, consumers choose to do so.
It furthermore provides that consumers must separately and
affirmatively opt in and consent to receiving important documents
electronically and then must be assured that those documents can be
retained for future use. That is why this bill has the right balance,
good for business, good for consumers.
Let me say a word in opposition to the substitute that we will see.
The substitute would apply only to contracts.
Let me give an example of what the substitute will miss. Today we
spend almost $4 billion handling paper checks with an electronic
commerce world; $4 billion could be saved for consumers if, in fact, we
could literally bank electronically without the necessity of all this
paper. Imagine all the weight this paper has in the transport
industries as
[[Page H11735]]
cargo on planes. If one eliminates all that paper in our lives and in
the shipment and cargoes and transportation, those kind of savings are
ours if we reject the substitute and stick with the main bill.
Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I would like to begin by thanking the gentleman from
Michigan (Mr. Dingell), dean of the House and the ranking member of the
Committee on Commerce, for sharing the time in general debate with the
Committee on the Judiciary that I represent on this side.
Now, Mr. Chairman, we all know there are millions of Internet users
and millions of consumers, and that this number increases daily. It has
been said here earlier, electronic commerce is the future of our
economy. As more and more people buy and sell merchandise on-line, we
find that e-commerce has made life easier for people as well as
improved our overall economy by making shopping and other commercial
transactions far more convenient.
I want to enact Federal legislation that would facilitate electronic
signatures and make e-commerce more robust. We need to ensure that
contracts are not denied validity that they otherwise would have simply
because they are in electronic form or signed electronically.
Now, if the measure before us did this without doing violence to our
most cherished and long-fought consumer protections, I would be
supporting it without reservation. Now, especially with the recent
decision in the Microsoft case, which suggests that a high-tech giant
may not always be friendly to consumers, it makes it even more
important than ever that consumers have confidence in the Internet and
that they believe it is friendly and a friendly place to do business.
This is critical to the future of this whole industry.
It is only when consumers have confidence in on-line transactions
that it will become the vibrant marketplace that it can be. The high-
tech community should not let itself be hijacked by security firms or
banks or the insurance industry whose history with respect to consumers
has not always been what we would wish it to be. The on-line community
should be in the forefront of consumer protection. Instead, they are
being dragged backwards by special interests.
That is where I hope that I may be able to be of some small help in
this debate, because this measure, as it is written, goes far beyond
the needs of the vast majority of on-line businesses. H.R. 1714 has
become an 11th hour grab bag for our special interests to hurt
consumers by undermining critical laws that require notice of rights
and that prevent unscrupulous business people, of which, unfortunately,
there are some, from cheating unsuspecting customers.
Because of the special interests overreaching, what started as an
uncontroversial bill to validate electronic signatures and contracts
has turned into a battle over the electronic records of every type
imaginable. Let us try to rescue this measure from that kind of a
result.
So for this reason, instead of considering a bill that should be a
win-win situation, both for consumers and e-commerce, we are now being
pressured into voting on a bill that pits the opportunities of one
against the rights of the other.
It is, therefore, no surprise that the bill is opposed by our
administration. It is opposed by consumer groups. It is opposed by the
National Conference of State Legislatures and the United Automobile
Workers and many others.
So what we have here is, unfortunately, a very good idea that has
attached to it provisions that undermine consumer protection laws that
would require notice, warranties, and disclosures to be in writing
because it permits consumers to unwittingly click away many of these
rights.
For example, critical notices regarding the cancellation or change in
terms of insurance agreements or a change in the interest rate or the
service or the change of a servicer of a mortgage, of recall notices,
and other warranty information could be sent electronically or posted
on a Web site regardless of whether the person owns a computer, which
it may not come as news to you, many people do not, or whether the
consumer has an e-mail account, which they may not, or whether they
know how to navigate the World Wide Web even if they have the
technology, some of which do not.
Furthermore, this measure stands for the proposition that the States
somehow do not have the ability to enact their own electronic commerce
laws or to reinstate many additional consumer protections.
So rather than respecting the tradition in our country of hundreds of
years that reserves contract law to the States, the bill says that the
States, that they may only reenact supplemental consumer legislation if
it fits into a narrowly described category.
So far, thus, even if a State wanted to maintain its protections
against fraudulent or deceptive practices and automobile sales, for
example, the Federal Government would in effect tell the State that it
cannot do so.
So for these and other reasons, we have created, along with the
gentleman from Michigan (Mr. Dingell) and the other Members, a
substitute that represents the bipartisan language agreed on by Members
of the other body, Members, Senator Abraham and Senator Leahy, that
satisfies the needs of the high-tech community which we laud without
sacrificing consumers in the process.
So I urge that my colleagues reserve their support for this
substitute.
Mr. Chairman, I reserve the balance of my time.
Mr. DINGELL. Mr. Chairman, I reserve the balance of my time.
Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Virginia (Mr. Davis) in strong support of this legislation.
(Mr. DAVIS of Virginia asked and was given permission to revise and
extend his remarks.)
Mr. DAVIS of Virginia. Mr. Chairman, I am proud to be an original
cosponsor of this legislation and also familiar with the need to
provide legal certainty to electronic signatures and electronic
records. That is why I eagerly cosponsored this legislation, because I
think it is time for Congress to take positive, not regulatory, steps
to help promote growth and development of electronic commerce.
Late last week, we were surprised by the minority leadership. They
must have decided that appearing to oppose high-technology legislation
was not the political stance, so they decided to introduce their own
electronic signature bill, H.R. 3220, which we will be considering
later today as a substitute amendment.
Unfortunately, that legislation falls way short of what is needed.
The appearance of supporting technology legislation is not enough.
There has to be substance behind that appearance. I believe that H.R.
3220 falls short.
Last week on the floor, I spoke at length about the important
consumer protections contained in this legislation, H.R. 1714, and
tried to rebut some of the claims that this was bad for consumers. I
would like to briefly touch on some of those points.
First, consumers are absolutely free to choose or not to choose to
enter into an electronic transaction. Nothing requires any party to use
or accept electronic records or electronic signatures. The bill simply
offers consumers the option to engage in electronic transactions. If a
consumer does choose to conduct an on-line transaction, that consumer
is protected by the underlying Federal or State laws governing that
transaction.
If a law requires that a notice or a disclosure be made available in
writing to a consumer, then those traditional writings must continue to
be delivered to the consumer. Nothing in this bill, nothing, will
nullify such existing State consumer protection laws.
Let me reiterate. Under H.R. 1714, consumers must be provided with
important notices, disclosures, or other documents as they are entitled
to receive under the current law.
Before a consumer can receive an electronic copy of an important
document, such as a warranty or a disclosure, a consumer must
separately and affirmatively consent to receive such a document
electronically. That is, a consumer must specifically approve of
receiving electronic documents and that portion of a contractor
agreement telling a consumer what documents he or she will receive
electronically.
[[Page H11736]]
I urge my colleagues to support this legislation. The companies and
manufacturers that use electronic technology, along with on-line users,
need this legislation.
Mr. DINGELL. Mr. Chairman, may I inquire of the time remaining.
The CHAIRMAN. The gentleman from Virginia (Mr. Bliley) has 15\1/2\
minutes remaining. The gentleman from Michigan (Mr. Conyers) has 7\1/2\
minutes remaining. The gentleman from Michigan (Mr. Dingell) has 9
minutes remaining.
Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished
gentlewoman from California (Ms. Eshoo).
Ms. ESHOO. Mr. Chairman, I thank the gentleman from Michigan, the
distinguished ranking member of the House Committee on Commerce, for
granting me the 2 minutes, especially since we hold opposing views on
this. But I sincerely appreciate it.
Mr. Chairman, I rise in support of H.R. 1714, and I urge my
colleagues to do support its passage.
I would like to thank the gentleman from Virginia (Mr. Bliley), the
distinguished chairman of the full committee, for his work on the
legislation and for all of my colleagues for their interest in this
very important public policy area.
As many of my colleagues know, I have a legislative history on the
issue of electronic signatures in the Congress, having introduced the
first piece of legislation addressing this issue in the last Congress
and succeeding in passing it into law. That bill required Federal
agencies to make government forms available on-line and accept a
person's electronic signature on these forms.
In this Congress, I introduced a bill to expand the legality of
electronic signatures to the private sector. Today, we are going to
discuss a very important amendment to the bill of the gentleman from
Virginia (Mr. Bliley), which I believe improves the bill as it relates
to consumer protections.
The bill includes technical neutrality, and it grants to States who
have not yet adopted legislation in this area this piece of
legislation; and if they so wish to come up with more stringent
legislation in a given period of time, they then can do so.
{time} 1300
I believe that the Congress must ensure that no roadblocks exist
which would stymie the growth of e-commerce. So I think the Congress
must act to bridge the gap between now and the time when every State
has passed an updated form of the Uniform State Law Code. The
projections for the growth of e-commerce and its effect on our economy
are just simply too overwhelming. Business to business e-commerce was
nearly five times greater than e-commerce in the consumer market,
reaching $43 billion just last year.
This bill ensures that our laws do not impede this staggering growth,
and with the adoption of the amendment that we are going to discuss,
and which I am proud to offer with my colleague, the gentleman from
Washington (Mr. Inslee), and several other Democrats, the bill takes a
major step in guaranteeing that strong consumer protections can coexist
with transactions in cyberspace. I think that we can do both, Mr.
Chairman, and I am proud to support this bill, H.R. 1714, and urge all
of my colleagues to support it.
Mr. BLILEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Ohio (Mr. Oxley).
(Mr. OXLEY asked and was given permission to revise and extend his
remarks.)
Mr. OXLEY. Mr. Chairman, I rise in strong support of H.R. 1714.
Last Thursday, Mr. Chairman, the House passed legislation to
modernize the laws that govern our financial services industry. The
laws we changed were more than 60 years old and had been bypassed in
recent years by the marketplace. Congress was in many ways just trying
to catch up with what had already happened. The lessons we learned in
that debate I think are quite clear. If Congress cannot respond quickly
to the changes in the marketplace and update the applicable laws, the
inevitable result will be more harm than good. The longer we wait to
act, the more entrenched the various factions will become, making it
more difficult for legislation with each passing day.
We do not need another web of inconsistent State laws and Federal
regulations that will leave consumers and businesses guessing whether
their contract is valid or not just because it was conducted on line.
Let us understand that the world is changing and the Congress needs to
change the laws to reflect those inevitable changes. Electronic
commerce is growing exponentially and will continue to change the way
we conduct our business. Given the opportunity before us to enhance
electronic commerce in the same manner the marketplace has, it would be
foolish to a large extent not to provide the legal certainty that will
benefit consumers and facilitate commerce. Our laws need to keep up
with the significant technological developments.
This bill, sponsored by the chairman of the Committee on Commerce,
the gentleman from Virginia (Mr. Bliley), is designed to bring legal
certainty to electronic transactions. Legal certainty. The parties need
to understand that when they sign that contract there is a legal
binding obligation on both of them, and the handwritten signature more
and more becomes less and less significant.
Mr. Chairman, this is another essential step necessary for our
economy to take advantage of the efficiencies of electronic commerce.
This is the same exact legislation most of us supported just last week.
I will also be supporting the amendment by our friend, the gentleman
from Washington (Mr. Inslee), who will be offering that recordkeeping
provision and clarifying the recordkeeping provisions of the bill.
Mr. Chairman, this legislation is good public policy and it continues
a strong tradition by the Committee on Commerce of enacting legislation
that keeps up with the electronic marketplace that is changing so
dramatically. I urge strong support of this legislation.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
California (Ms. Lofgren), a member of the Committee on the Judiciary.
Ms. LOFGREN. Mr. Chairman, I am pleased to appear today in favor of
1714, especially after the Inslee amendment is adopted. I would like to
say that some of the tinge of rhetoric that approaches partisanship, I
think, is unfortunate.
I am privileged to serve with the gentleman from Michigan (Mr.
Conyers), the ranking member, who really has played such a leadership
role in so many high-tech issues this year, including the patent reform
bill and the Y2K reform bill. I mean we are here because we are dealing
with difficult times, a transition from the analog world to the digital
world, and I think that as we do that, we have to create a transition
rule for the parts of the country that are not where Silicon Valley is
yet.
In doing so, I think it is important that we establish some
principles. I heard the distinguished Member from Michigan mention
contracts of adhesion, and clearly contracts of adhesion violate
contract law. I think it needs to be emphasized that nothing in this
bill amends contract law other than the means of transmission. The
medium for transmission does not change the substance of the law. A
contract is a contract is a contract.
We recognize that because we are in a transition area there are
certain things that are too high risk to have fully in electronic
commerce in this transition period, including foreclosures of real
property and the like, that are outlined in the bill of the gentleman
from Virginia (Mr. Bliley), but it is important that we take a step
forward to promote electronic commerce.
How do I do it? We bought our last car on line. And when I get the
notices, I just click and file those notices under my commercial
receipts file in my e-mail account. When I go to amazon.com, and they
send me the notices of where my books are on the way, I file those in a
pending file. Some day, all of us will do that.
For now, this bill, with the amendment, will allow all of America to
move forward.
Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from New
York (Mr. Fossella), a distinguished member of the committee.
Mr. FOSSELLA. Mr. Chairman, I thank the chairman of the Committee on
Commerce, the gentleman from Virginia (Mr. Bliley), for yielding me
this
[[Page H11737]]
time, and I compliment him for his efforts and his leadership.
The American people want action, they just do not want words. And
when we add this to the Telecommunications Act of 1996, and as was
mentioned earlier the Financial Modernization Act that was passed
overwhelmingly by the House and Senate last week, I think the gentleman
from Virginia (Mr. Bliley) deserves a lot of credit from this Congress
because, ultimately, it means good things for the American consumers,
more jobs, and coming out on the side of growth, such as the case with
the Electronic Signatures in Global and National Commerce Act.
I rise today in support of H.R. 1714, the Electronic Signatures in
Global and National Commerce Act. As of today, the success of
electronic commerce has led 44 States to enact laws to provide
recognition for electronic signatures and records. However, all 44
statutes are different and many only recognize the use of electronic
signatures and records in governmental transactions. In today's global
economy, a certain level of uniformity is necessary in order to conduct
the business over State and international borders. That is common
sense.
While electronic commerce, in theory, represents the perfect model of
interstate commerce, these many conflicting standards lead to legal
uncertainty, to the point where it becomes impossible to effectively
use electronic signatures in the digital arena.
H.R. 1714 creates a uniform nationwide legal standard for the use and
acceptance of electronic signatures and electronic records in
interstate commerce. It allows parties the freedom to set their own
rules for using electronic signatures and electronic records in
interstate commerce. Any contracts or agreements developed
electronically by the agreeing parties have full legal effect.
H.R. 1714 furthermore recognizes the progress that States have
already made in the area of electronic signatures and allows them to
pass any statute that complies with the basic principles of this
Federal bill.
Mr. Chairman, I urge my colleagues to join me in supporting this
important bill. It is common sense and it puts Congress on the side of
facilitating and encouraging economic growth instead of standing in its
way.
Mr. CONYERS. Mr. Chairman, I yield 4 minutes to the gentleman from
California (Mr. Berman).
Mr. BERMAN. Mr. Chairman, I think the entire body wholly supports and
we want to use this opportunity to encourage the growth of the Internet
and e-commerce, but moving to a digital world, moving to the world of
the Internet, it does not follow that every principle of Federalism and
every principle of consumer protection should be wiped out, obviated
and extinguished in the name of advancing e-commerce and e-contracts
and e-signatures.
Eliminating hard fought laws, both State and Federal, that make sure
that a consumer has the information that they need to make informed
decisions takes us back to the age of scams and frauds, but this time
in the on-line environment. We have been so successful in developing a
legal environment that gives consumers' rights and assures that outlaw
merchants are dealt with, it is not necessary and it benefits no one
for the Internet to become the place for unscrupulous businesses to
flourish. My fear is that H.R. 1714, the underlying bill sponsored by
the gentleman from Virginia (Mr. Bliley), would lead us down that path.
The high-tech industries are seeking an immediate Federal law
validating electronic contract formation to help pave the way for the
growth of electronic commerce until States can adopt a recently
promulgated Uniform Electronic Transaction Act. We need to provide that
help, but H.R. 1714 goes way, way beyond this need. It satisfies a much
broader, much more controversial, long-range desire of financial
services and insurance industries to accomplish the goal of the
financial services.
H.R. 1714 seriously undercuts hard fought consumer protections as
well as both Federal and State regulatory requirements. The bill
threatens a State's ability to adopt a uniform State law with a
permanent preemption provision.
The National Conference of State Legislatures, in their letter of
November 1, opposes H.R. 1714, stating that the legislation will
eviscerate consumer protections and impede the States' insurance
securities and banking agencies in their regulatory oversight of the
financial services industry. This from the State legislatures.
In a letter we received today, the National Consumers Law Center, the
United Auto Workers, and the Consumers Union expressed their opposition
for the underlying bill, and even with the Inslee amendment, and their
support for the Dingell-Conyers-LaFalce-Gephardt substitute.
States and the Federal Government should have the opportunity to
review their writing requirements and determine which can be done away
with and which standards should apply in each specific situation where
electronic records may be substituted. A reckless uninformed broad-
brush approach, such as we see in H.R. 1714, is offensive to this
notion. We cannot blindly wipe away State and Federal writing
requirements and then provide a narrow patchwork of exceptions and
opportunities for only States, not the Federal Government, not Federal
regulatory agencies, to reestablish requirements where needed after
some disastrous systemic failure.
The substitute amendment offered by the ranking member, the gentleman
from Michigan (Mr. Dingell) and his colleagues, provides the needed
uniformity as to contract formation. It gives the boost that is needed
for e-commerce without interfering with existing laws that address
writing requirements for important notices, disclosures, or retained
records necessary for regulatory or supervisory government activities.
This amendment, the Dingell amendment, is the very same language as
the bipartisan compromise reached by Mr. Abraham and Mr. Leahy in the
Senate. If H.R. 1714 were to pass the House, it would never see the
light of the day in the Senate, it would be vetoed by the
administration, and it would mark us as supporting an anti-consumer
bill.
I urge opposition to the bill and support for the Dingell-Conyers
amendment.
Mr. BLILEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Roanoke, Virginia (Mr. Goodlatte).
Mr. GOODLATTE. Mr. Chairman, I want to thank the gentleman for
yielding me this time, and I especially want to thank the gentleman
from Virginia, the chairman of the Committee on Commerce, for his
leadership on this issue. He has been at the forefront of this issue
throughout this Congress, and this is vitally important legislation
that I urge my colleagues to support and to oppose any substitutes or
any alternatives.
The previous gentleman made reference to protecting consumers. In my
opinion, this legislation does more to help consumers in the
transactions that they participate in than anything that we could do
with relation to making sure that they get prompt and adequate
disclosure about contracts they sign.
{time} 1315
None of the current Federal or State laws are abrogated in terms of
notices that go to consumers regarding particular transactions that
they participate in. They simply will be allowed to receive those
notices electronically now. And that has a number of very positive
benefits.
First, it is faster. If there is a change in circumstances, if there
is a problem with a product, a defect, they are going to get that
notice much more quickly electronically than they will get it through
the mail.
Secondly, it is cheaper. Some types of financial transactions are 100
times more costly to conduct in person than they are if they can
conduct the transaction electronically. And if they are dealing with
somebody on the other side of the country, the delay in being able to
participate in that and close that contract, because we do not have a
nationally recognized standard for accepting digital signatures, is
very costly to consumers as well as to other people. Business people
engage in business-to-business transactions, as well.
But probably the most important reason why this is more helpful to
consumers than current law is that the information they get will be
better; it will be more comprehensive.
If they have a notice about a particular disclosure that is required
under the law for a real estate closing
[[Page H11738]]
or a bank loan, whatever the case might be, and they do not understand
a particular word in that notice, under electronically transmitted
information, the bank or the other company providing the information
can put a whole host of other information on-line. They can click on a
particular word in that notice and get an explanation of it, a
definition of the word, if they do not understand what it means in that
particular context.
So from the standpoint of the consumer, this is vitally important.
Secondly, from the standpoint of uniformity, of having one national
area of commerce to be able to conduct business across State lines
without the difficulties that come from a morass of, a variety of
different laws from different States, that is vitally important.
Now, instead of being only able to buy from people nearby them all
governed by the same State law, people are now empowered to buy things
by auction or other ways on-line from a whole host of different ways.
I urge Members to reach across the line. We have had some differences
on this bill. Let us have a strong bipartisan vote. It had almost a
two-thirds vote when it came up under suspension. Let us give it a
majority here today.
Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished
gentleman from Washington State (Mr. Inslee).
Mr. INSLEE. Mr. Chairman, I rise in support of H.R. 1714 after
completion of our amendment.
I want to thank the gentleman from Michigan (Mr. Dingell), the
gentleman from Michigan (Mr. Conyers), and the gentleman from New York
(Mr. LaFalce) for their guidance and long-time leadership on consumers
issues. They have helped me craft this amendment in a way that I think
will help consumers.
I want to thank the gentleman from Virginia (Chairman Bliley) for his
courtesy in trying to put this together.
Mr. Chairman, I want to tell my colleagues that I believe we have a
product, after completion of our amendment, that is pro-consumer. I
will tell my colleagues two reasons. Number one, this is a consumer
freedom bill. It gives consumers a new freedom and the freedom to be
allowed to receive information and complete transactions
electronically, a right, a freedom that will remain theirs and theirs
alone. Only consumers will have the prerogative to decide whether or
not transactions are electronic.
Secondly, Mr. Chairman, I want to make abundantly clear throughout
this debate, nothing in my amendment or the bill, nothing, not one
word, will remove one single consumer protection to receive a notice of
any law in this country State, Federal, or municipal. Look at page 3 of
our amendment. Nothing will remove the right to get this notice.
All it does is it changes from papyrus or lambskin to electronic at
the consumer's request.
Mr. BLILEY. Mr. Chairman, how much time do we have remaining?
The CHAIRMAN pro tempore (Mr. Miller of Florida). The gentleman from
Virginia (Mr. Bliley) has 8 minutes remaining. The gentleman from
Michigan (Mr. Conyers) has 1\1/2\ minutes remaining. The gentleman from
Michigan (Mr. Dingell) has 6 minutes remaining.
Mr. BLILEY. Mr. Chairman, I reserve the balance of my time.
Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished
gentleman from Minnesota (Mr. Vento).
Mr. VENTO. Mr. Chairman, I thank the distinguished gentleman from
Michigan (Mr. Dingell) for yielding me the time.
Mr. Chairman, I rise in opposition to this bill. I would have opposed
the rule had I been here and requested a rollcall vote. The fact of the
matter is, late in the session, first this is attempted to be passed on
suspension of the rules. It has been a moving target for the last 3
weeks in terms of how this bill can be sold to the Members of this
body.
I think any discussion or evaluation of this measure yields more and
more problems that are inherent in the bill. The fundamental bill in
terms of electronic signatures, as has been pointed out by some of my
other colleagues, probably could have been passed with near unanimous
support in this body.
The fact is that this bill does not just deal with electronic
signature but goes on to invade a plethora of both State and national
laws which are at the heart, basically, of financial transactions and
consumer protection, which have received the deliberate judgment of
this Congress for decades and, I trust, that of legislatures across
this country.
It fundamentally invalidates any State law and a host of Federal laws
that are inconsistent with the provisions of this bill. It permits
consumers simply on the assumption that they understand what is in the
disclosure documents and records to dispense with them and to receive
them electronically.
I would just suggest that the efforts to date to try and repair this
by virtue of accepting something like the Inslee amendment simply
sugarcoats the end result. The end result will be the same.
I appreciate the effort of the gentleman to try and protect
consumers. But, in the end, I think that that proposal may make
something more palatable that is indigestible in terms of what goes
down.
This bill fundamentally is an overreach. It sunsets all of these
State laws with the right for States to come back and reenact them.
Well, we all know the host of special interest groups that are going
to be there waiting to oppose that both at the Federal and State level
such enactment. It just is breathtaking. And it is dumping and reneging
on consumer laws that exist and protect individuals.
Mr. Chairman, I rise today in support of the amendment, and against
the underlying legislation. While I favor an implementation of the use
of electronic signatures, this measure sets a policy path of electronic
commerce and computer dependence, and strips key federal and consumer
safeguards and protections from transactions.
I have deep reservations about this legislation for reasons which I
brought forth on the floor last week. One specific concern which I
raised at that time was that H.R. 1714 completely undermines
protections afforded by laws and regulations such as the Consumer
Credit Protection Act, Truth in Saving, the Real Estate Settlement
Procedures Act and other key consumer laws such as the Magnuson Moss
Act, which is the federal law requiring basic information about the
extent and limitations of warranties to consumers.
I requested to offer an amendment last night at rules which would add
these protections to the provisions excluded in the bill, so that these
laws would not be overridden. Unfortunately, this amendment was not
made in order by the Rules Committee. By preserving, not preempting the
requirements of these laws that afford consumers key information at the
right time before, during and after transactions are consummated, the
Vento amendment would have assured that essential information required
by federal laws and regulations would not be made electronically when a
consumer might not have a computer, might have a broken computer or
printer, might acquire a new e-mail address or service provider, or
might not clearly understand the importance of notifications or
disclosures that they assent to obtaining electronic electronically,
never to read or know if they missed it. Without these protections,
populations like our seniors who are already at a technological
disadvantage will be rendered even more vulnerable.
I also offered an amendment which would have added a new section
providing privacy protections to this legislation. This too was
rejected by the Rules Committee. Digital signatures will make it easier
for consumers to buy goods and services directly from the comfort of
their own homes, and allows businesses an unprecedented opportunity to
reach more customers. This expansion of e-Commerce, however, should not
come at the expense of allowing for the misuse or exploitation of a
wide range of consumer data. This amendment would have allowed
consumers to regain some control over their own personal information
without unnecessarily hindering Internet services which collect
information for legitimate purposes, and replace the self regulated
environment that is being promoted today--without standards or
compliance and no enforcement. It is unworkable and unacceptable.
Specifically, my amendment would have disallowed any Internet service
from passing on information to a third party unless clear and
conspicuous notice is provided and consumers are allowed an opportunity
to direct that the information not be shared. In addition, consumers
would be able to require a copy of the information compiled about them
at no charge, and allowed to review, verify or correct such data.
Internet services would still be able to share information with their
affiliates, allowing them to perform necessary transactional services
and functions. Most importantly, this amendment would have ensured that
those businesses which offer services or products over the Internet
take affirmative responsibility to maintain the integrity of the
information being accumulated.
[[Page H11739]]
Recently, the House included privacy provisions into the Financial
Services Modernization legislation. This was a step forward in the
arena of providing safeguards for consumer data. However, we are all
well aware that concerns regarding the protection of consumer data go
far beyond the realm of the financial world. It is important that we in
Congress support a clear and consistent message when dealing with the
issue of information collection and use. This amendment would expand
privacy regulations to ensure that consumers as well as businesses are
able to utilize technology to its fullest potential without infringing
on the basic right to privacy.
Some of my other concerns have been addressed by the Dingell/Conyers/
LaFalce/Gephardt amendment, which I have cosponsored. This substitute
amendment recognizes that in order to be successful, e-Commerce can not
pit high-tech business against consumers. Additionally, it deals with
another problem which I raised last week, by not undermining State
rights and judgment in dealing with issues such as what records must be
retained in paper forms and when and how consumers must be notified
about changing circumstances or enforcement of key contract terms.
Additionally, it provides that a contract may not be denied legal
effect or enforceability solely because an electronic signature or
electronic record was used in its formation. These are common sense
measures which ensure that consumers are not the unsuspecting victims
in the excitement to embrace technological advances in commercial
dealings.
In conclusion, I feel that the House should address the issue of
electronic signatures in its totality, and H.R. 1714 fails to address
several areas which should be further improved. The consequences of
moving too quickly on the implementation of legislation which will
expand e-Commerce can not be underestimated. The law of unintended
consequences should be avoided by not over reaching with the underlying
measure. With the vast potential that the Internet promises, it is
vital that we consider the interests and needs of businesses, the
industry and consumers equally, so that everyone can benefit from this
venture.
Mr. BLILEY. Mr. Chairman, I yield 3 minutes to the gentleman from
Virginia (Mr. Moran).
Mr. MORAN of Virginia. Mr. Chairman, we have heard a lot about the
digital divide. And certainly one exists between those school systems
and communities who can afford to be wired and those who cannot.
But there is also a digital divide in the Congress. It is between
those who understand the new economy and what constructive role we can
play in it and those who are afraid of it and feel the need to protect
us from it.
The people who are using the Internet with their computers around the
country tend to be more confident of themselves than we are of them and
their ability to use the New Economy to their advantage. They, in many
ways, are more knowledgeable than we are about the role that computers
can play in making their lives easier and more productive. They
certainly want to be empowered to have the choice of whether or not
they will use their computer to maximum advantage because they are far
more interested in opportunity than in security.
In fact, when they were recently asked in a survey what was more
important to them, opportunity or security, they saw opportunity
overwhelmingly as more important to them. They wanted to be able to
protect themselves, certainly, but they feel empowered to do that on
their own. .
The fact is that the consumers that will be affected by this bill
will be empowered, will be advantaged by this legislation. It is not
just companies who will be able to operate more efficiently. It is
consumers who want the ability to use their computers, to use the
Internet in the most efficient and effective and legal, manner
possible.
The fact is that in this bill consumers who will be using e-commerce,
digitized signatures, have the opportunity to affirmatively and
separately consent prior to receiving their notices electronically. It
ensures that existing consumer protection laws that are in place today
are maintained. The fact is that we build upon the laws that exist
today.
This is going to come. It can either come with the support, the
encouragement, the empowerment by the Congress, or it can come despite
the Congress. We ought to work for and with the new economy, not in
opposition to its culture and its opportunities.
My comments are really directed to my own party because I know that
the opposition is well intentioned; and it is thoughtful and it is
knowledgeable. But it is wrong and shortsighted. The reality is that
what we are debating is already happening today.
Digitized signatures work. People find them to be not only easier to
use but, in fact, entirely consistent with the economy in which they
are operating. This will show that the Congress can be ahead of the
curve, that Congress can play a constructive role, that the Congress
can be leading instead of impeding. Instead of always trying to play
catch-up like we had to do with the Financial Services Modernization
Act.
Look to the consumers who are using the Internet. They are asking for
this ability to use digitized signatures. This is what the new economy
is all about. This is why we are so prosperous. We ought to be part of
this progress by contributing to it and certainly not oppose thoughtful
legislation like this.
Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished
gentleman from Massachusetts (Mr. Delahunt).
Mr. CONYERS. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman
from Massachusetts (Mr. Delahunt), my colleague on the Committee on the
Judiciary.
The CHAIRMAN pro tempore. The gentleman from Massachusetts (Mr.
Delahunt) is recognized for 2\1/2\ minutes.
Mr. DELAHUNT. Mr. Chairman, I thank both gentlemen for yielding me
the time.
Mr. Chairman, at our hearings on the Committee on the Judiciary, we
were told that legislation was needed to ensure the validity of
electronic agreements entered into by private parties until the States
are able to adopt the uniform electronic transactions act. In other
words, it was needed to fill the gap until the States could act.
That made sense. But then the bill was hijacked. Instead of filling
the gap, it preempted the field; it prohibits the States from enacting
the uniform law, as California has just recently already done, in a way
that preserves consumer protections. It even prohibit the States from
reenacting those protections to the extent that we supersede them.
Now, how do people who only yesterday were waving the banner of
States' rights and espousing federalism defend a bill that sets aside
the will of the States in such a cavalier fashion?
Well, we hear the term ``uniformity.'' Yet, if uniformity were all
they were after, they would have been satisfied to let the bill sunset
as the uniform act is adopted by each of the States over the coming
months. And they did not. It is not in the bill.
What the proponents of the bill really want is to arrest the process,
to prevent the States from preserving consumer protection laws, which
they want to do away with. It is that simple. It is one thing to try to
ensure the validity of electronic signatures. I support that effort,
and I am sure if that was the import of the legislation it would pass
unanimously in this body. But it is another attempt to use this
legislation as an end run around State consumer protection legislation.
That is what this bill is all about.
I urge adoption of the substitute and defeat of the bill.
Mr. Chairman, I rise in opposition to this bill and in support of the
Dingell-Conyers-LaFalce-Gephardt substitute.
What we have here, Mr. Chairman, is a case of legislative hijacking.
A bill intended to enhance the ease and security of electronic
transactions has been commandeered. By a financial services industry
that sees an opportunity to sweep aside a generation of state laws.
Laws that enshrine such familiar and fundamental concepts as proper
notice. Full disclosure. Informed consent. Truth in lending. Fair
credit practices.
These laws have helped ensure that the ordinary citizen will not be
taken advantage of by powerful commercial interests who have all the
leverage. Who hold all the cards. And in so doing, these laws have
helped maintain a thriving economy that depends on consumer confidence.
That is supposedly what this bill is about. Consumer confidence in
electronic transactions. Yet ironically, by undermining state
protections, this bill will erode consumer confidence. Not enhance it.
If this bill becomes law, consumers will have fewer rights. And they
will be less certain what rights they retain. Hardly a recipe for
consumer confidence.
At our hearings, we were told that federal legislation was needed to
ensure the validity of electronic agreements entered into by private
parties until the states are able to adopt,
[[Page H11740]]
the Uniform Electronic Transactions Act. In other words, it was needed
to fill the gap until the states could act.
But then the bill was hijacked. Instead of filling the gap, it
preempts the field. It prohibits the states from enacting the uniform
law--as California has recently done--in a way that preserves consumer
protections. It even prohibits the states from RE-enacting those
protections to the extent we supersede them.
How do people who only yesterday were waving the banner of ``states
rights'' defend a bill that sets aside the will of the states in so
cavalier a fashion?
They do so in the name of ``uniformity.'' yet it uniformity were all
they were after, they would have been satisfied to let this bill sunset
as the Uniform Act is adopted by each of the states over the coming
months.
What the proponents of the bill really want is to arrest that
process. To prevent the states from preserving consumer protection laws
which they want to do away with. It is one thing to try to ensure the
viability of electronic signatures, and I support that effort. But it
is another to use this legislation as an ``end run'' around state
consumer protection laws.
Apart from the policy considerations, it raises serious
constitutional questions. Given the recent holdings of the Supreme
Court regarding the limits of congressional power, I have serious
doubts that we have the authority to preclude the states from re-
enacting laws in an area of commercial activity that lies so squarely
within their traditional sphere of competence.
We should do all we can to embrace and encourage the development of
electronic commerce. But if that brave new digital world is to provide
hospitable to human habitation, we must take with us the great advances
in the law that have made this world habitable.
I am ready and willing to support a bill that does this, Mr.
Chairman, but the current proposal falls too far short of the mark.
That is why it is opposed by the Administration, and by every major
consumer organization in the country.
I urge my colleagues to oppose the bill and support the substitute.
Mr. BLILEY. Mr. Chairman, how much time do I have remaining?
The CHAIRMAN pro tempore. The gentleman from Virginia (Mr. Bliley)
has 5 minutes remaining. The gentleman from Michigan (Mr. Dingell) has
3 minutes remaining.
Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentlewoman from
New Jersey (Mrs. Roukema).
{time} 1330
Mrs. ROUKEMA. Mr. Chairman, I thank the gentleman for yielding me
this time. I will not take the entire 2 minutes. I had not anticipated
speaking on behalf of the general debate, but I certainly do rise in
strong support of this proposal.
I want to make it clear here that this is not anti-consumer, it is
both pro-business and pro-consumer, it really does not denigrate or
eliminate any consumer protections that are currently in law, and it
goes beyond that. I particularly am a strong supporter of the Inslee
amendment and would like to speak on that at the appropriate time.
I want to congratulate the chairman of the Committee on Commerce for
his leadership here. This is excellent legislation. As a member of the
Committee on Banking and Financial Services, I will look forward to
continuing to work in the future on other aspects of e-commerce as it
relates to more specific banking legislation.
I rise today in strong support of H.R. 1714, the Electronic
Signatures in Global and National Commerce Act.
The bill accomplishes the two major, and often conflicting, goals of
being both Pro Business and Pro Consumer. As we have heard, millions of
Americans are shopping via the Internet everyday. The growth in e-
commerce is expected to explode in the next 2 years with U.S. Consumers
spending billions on line by the year 2001. E-commerce is happening as
we speak. We here in Congress should do everything we can to promote e-
commerce. I believe H.R. 1714 strikes the right balance between
encouraging the growth of e-commerce while including common sense
consumer protections.
The bill is Pro Business because it ensures that Internet
transactions have the same legal effect and recognition as paper
transactions. This is accomplished by establishment of a federal law
which recognizes e-signatures as having the same force and effect as an
ink signature. In addition, required records and disclosures may be
delivered electronically IF the Consumer ``opts in''.
The bill is Pro Consumer because it encourages the growth of e-
commerce--which has led to lower prices, greater choice and round the
clock availability. These developments are all Pro Consumer.
Later on we are going to consider the Inslee/Eshoo/Dooley/Moan/
Roukema Amendment. This Amendment includes several provisions from H.R.
2626, the Electronic Disclosures Delivery Act of 1999, which I
introduced on September 1st along with Mr. Inslee and Mr. Lazio. The
Amendment is pro consumer because it provides the additional consumer
protections such as (1) Customer ``opt in'' for electronic delivery
specifically required, (2) clear requirements on review, retention and
printing of documents and disclosures, (3) the ability of a Customer to
``opt out'' of electronic delivery at any time.
I thought these were good provisions when I introduced H.R. 2626. I
thought they were good provisions when proposed before the Rules
Committee, and that is why I cosponsored the Inslee Amendment. It
clearly improves the Bill and we should approve the Inslee Amendment
later on when we have the opportunity.
Mr. Chairman, this bill is an extremely good bill. I urge strong
support for H.R. 1714.
Mr. DINGELL. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, the issue here is a very simple one. It is not about
whether the contract may be signed electronically. Everyone here is in
agreement that that is a good thing. It is about the notices which
follow after that, notices of waste on a real estate contract, notice
of failure to comply with requirements for insurance, failures of the
electronic media to deliver.
An interesting thing to note would be that this proposal is going to
come just in time, if it is signed into law, for the year 2K bug to
bite. The question that has to be asked is what happens if the Internet
provider is down and the individual does not get the notice. What
happens if on that particular day there is a virus that contaminates
the operation of the recipient or the sender, so the recipient never
gets it. Look at the wide array of notices which are extremely
important and which are protected in a wide array of State laws,
notices of nonpayment of taxes, notices which would vitiate a mortgage,
entitle the mortgagor to cancel or to foreclose. Those are things which
would hurt the mortgagee.
I would ask my colleagues to understand that what we are trying to do
here is not to stop electronic commerce or the signing of contracts
electronically but, rather, to assure that a wider array of judgments
are available to the purchaser and that he may then insist that he get,
for very good reason, certain kinds of notices which he might view as
being important. The mortgagor or the seller or the vendor under the
contract has every right to ask that individual if he will then change
the contract to waive those rights. But we are trying to protect
historic rights that have always belonged to purchasers under written
contracts under the law of the several States.
I would give Members just one last quote. Under Statement of
Administration Policy, the administration makes this statement, and
Members should be aware that they are probably looking at a veto here:
``The administration believes that en bloc amendments fall short of
eliminating serious defects in H.R. 1714. The Secretaries of Commerce,
Housing and Urban Development, and the Treasury will recommend the
President veto H.R. 1714 with the en bloc amendments. For the reasons
explained below and in the enclosed Statement of Administration Policy,
the administration would support adoption of the Gephardt-Dingell-
LaFalce-Conyers substitute.''
Let us try to pass something which will make progress, something
which will protect consumers, something which will move forward
electronic commerce but not something which affords enormous operation
to hurt innocent purchasers around this country.
Mr. BLILEY. Mr. Chairman, I yield myself the balance of my time.
This has been an interesting debate. First of all let me say that
this bill came out of the Committee on Commerce unanimously August 5.
We have worked with the minority. It was originally scheduled for
October 18 on the floor. They asked for further consideration. We
pulled it. And we worked. Everything was all in agreement. And then
last Friday, the White House comes down here and gets a meeting with
the Democrat leadership and all of a sudden this becomes a terrible
bill. Nothing could be further from the truth. This is a thing to
prevent this
[[Page H11741]]
legislation being adopted on Republicans' watch.
Let me give Members a list of the people who support this
legislation:
IBM, Information Technology Association of America, Information
Technology Industry Council, Microsoft, American Insurance Association,
Alliance of American Insurers, American Council of Life Insurance,
Council of Insurance Agents and Brokers, National Association of Mutual
Insurance Companies, National Association of Surety Bond Producers,
Reinsurance Association of America, Securities Industry Association,
America Online, America Electronics Association, GTE, MCI WorldCom,
Cable and Wireless, DLJ Direct, PanAm Sat, Telecommunications Industry
Association, National Retail Federation, Charles Schwab, Fidelity, Ford
Motor Credit, National Association of Manufacturers, AT&T, U.S. Chamber
of Commerce, and the Chamber will score this bill; Investment Company
Institute, Yahoo, Equifax, International Biometric Industry
Association, Consumer Mortgage Coalition, Financial Services
Roundtable, Sallie Mae, Apple Computer, Hewlett-Packard, American
Bankers Association, Consumer Bankers Association, the New York Stock
Exchange, Business Software Alliance.
This is a good bill. Nobody in this legislation is coerced to do
anything. They have to agree. And, working with the minority, we say
that if there is anything to do with eviction, foreclosure, that this
is exempted, it is carved out of here, you cannot do it this way.
Mr. Chairman, this is a good bill. We had a great vote a week ago.
Let us not go back on that. Let us move the legislation forward, go to
conference with the Senate, and then send legislation to the President.
Mrs. MINK of Hawaii. Mr. Speaker, I rise today in opposition to H.R.
1714, the Electronic Signatures in Global and National Commerce Act.
No one can deny what an amazing effect the Internet and electronic
commerce has had on national and global commerce. The Internet has
allowed some businesses to flourish in a global marketplace in a way
not possible by traditional means.
The remarkable opportunities which the Internet and electronic
commerce provides needs to be protected by ensuring that electronic
signatures and contracts are held as legally valid and binding. H.R.
1714, however, is not the best bill to accomplish this because it
achieves the goal of validating electronic signatures and contracts at
the expense of American consumers.
If H.R. 1714 becomes law, we can expect that many of our Nation's
consumers will unknowingly ``click away'' their rights because this
bill does not ensure that any and all notices to consumers about their
rights and the consequences of electronically signing their names be
either clear or conspicuous. This is fundamentally unfair to consumers,
especially those who may not yet be familiar with the concepts of the
Internet and electronic commerce.
I urge my colleagues to protect consumers and reject H.R. 1714.
The CHAIRMAN pro tempore (Mr. Miller of Florida). All time for
general debate has expired.
In lieu of the amendments recommended by the Committees on Commerce
and the Judiciary now printed in the bill, it shall be in order to
consider as an original bill for the purpose of amendment under the 5-
minute rule an amendment in the nature of a substitute printed in the
Congressional Record and numbered 1. That amendment shall be considered
read.
The text of the amendment in the nature of a substitute is as
follows:
H.R. 1714
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Electronic Signatures in
Global and National Commerce Act''.
TITLE I--VALIDITY OF ELECTRONIC RECORDS AND SIGNATURES FOR COMMERCE
SEC. 101. GENERAL RULE OF VALIDITY.
(a) General Rule.--With respect to any contract, agreement,
or record entered into or provided in, or affecting,
interstate or foreign commerce, notwithstanding any statute,
regulation, or other rule of law, the legal effect, validity,
or enforceability of such contract, agreement, or record
shall not be denied--
(1) on the ground that the contract, agreement, or record
is not in writing if the contract, agreement, or record is an
electronic record; or
(2) on the ground that the contract, agreement, or record
is not signed or is not affirmed by a signature if the
contract, agreement, or record is signed or affirmed by an
electronic signature.
(b) Autonomy of Parties in Commerce.--
(1) In general.--With respect to any contract, agreement,
or record entered into or provided in, or affecting,
interstate or foreign commerce--
(A) the parties to such contract, agreement, or record may
establish procedures or requirements regarding the use and
acceptance of electronic records and electronic signatures
acceptable to such parties;
(B) the legal effect, validity, or enforceability of such
contract, agreement, or record shall not be denied because of
the type or method of electronic record or electronic
signature selected by the parties in establishing such
procedures or requirements; and
(C) nothing in this section requires any party to use or
accept electronic records or electronic signatures.
(2) Consent to electronic records.--Notwithstanding
subsection (a) and paragraph (1) of this subsection--
(A) if a statute, regulation, or other rule of law requires
that a record be provided or made available to a consumer in
writing, that requirement shall be satisfied by an electronic
record if--
(i) the consumer has separately and affirmatively consented
to the provision or availability of such record, or
identified groups of records that include such record, as an
electronic record; and
(ii) has not withdrawn such consent; and
(B) if such statute, regulation, or other rule of law
requires that a record be retained, that requirement shall be
satisfied if such record complies with the requirements of
subparagraphs (A) and (B) of subsection (c)(1).
(c) Retention of Contracts, Agreements, and Records.--
(1) Accuracy and accessibility.--If a statute, regulation,
or other rule of law requires that a contract, agreement, or
record be in writing or be retained, that requirement is met
by retaining an electronic record of the information in the
contract, agreement, or record that--
(A) accurately reflects the information set forth in the
contract, agreement, or record after it was first generated
in its final form as an electronic record; and
(B) remains accessible, for the period required by such
statute, regulation, or rule of law, for later reference,
transmission, and printing.
(2) Exception.--A requirement to retain a contract,
agreement, or record in accordance with paragraph (1) does
not apply to any information whose sole purpose is to enable
the contract, agreement, or record to be sent, communicated,
or received.
(3) Originals.--If a statute, regulation, or other rule of
law requires a contract, agreement, or record to be provided,
available, or retained in its original form, or provides
consequences if the contract, agreement, or record is not
provided, available, or retained in its original form, that
statute, regulation, or rule of law is satisfied by an
electronic record that complies with paragraph (1).
(4) Checks.--If a statute, regulation, or other rule of law
requires the retention of a check, that requirement is
satisfied by retention of an electronic record of all the
information on the front and back of the check in accordance
with paragraph (1).
SEC. 102. AUTHORITY TO ALTER OR SUPERSEDE GENERAL RULE.
(a) Procedure To Alter or Supersede.--Except as provided in
subsection (b), a State statute, regulation, or other rule of
law may modify, limit, or supersede the provisions of section
101 if such statute, regulation, or rule of law--
(1)(A) constitutes an enactment or adoption of the Uniform
Electronic Transactions Act as reported to the State
legislatures by the National Conference of Commissioners on
Uniform State Laws; or
(B) specifies the alternative procedures or requirements
for the use or acceptance (or both) of electronic records or
electronic signatures to establish the legal effect,
validity, or enforceability of contracts, agreements, or
records; and
(2) if enacted or adopted after the date of enactment of
this Act, makes specific reference to this Act.
(b) Limitations on Alteration or Supersession.--A State
statute, regulation, or other rule of law (including an
insurance statute, regulation, or other rule of law),
regardless of its date of enactment or adoption, that
modifies, limits, or supersedes section 101 shall not be
effective to the extent that such statute, regulation, or
rule--
(1) discriminates in favor of or against a specific
technology, process, or technique of creating, storing,
generating, receiving, communicating, or authenticating
electronic records or electronic signatures;
(2) discriminates in favor of or against a specific type or
size of entity engaged in the business of facilitating the
use of electronic records or electronic signatures;
(3) is based on procedures or requirements that are not
specific or that are not publicly available; or
(4) is otherwise inconsistent with the provisions of this
title.
(c) Exception.--Notwithstanding subsection (b), a State
may, by statute, regulation, or rule of law enacted or
adopted after the date of enactment of this Act, require
[[Page H11742]]
specific notices to be provided or made available in writing
if such notices are necessary for the protection of the
safety or health of an individual consumer. A consumer may
not, pursuant to section 101(b)(2), consent to the provision
or availability of such notice solely as an electronic
record.
SEC. 103. SPECIFIC EXCLUSIONS.
(a) Excepted Requirements.--The provisions of section 101
shall not apply to a contract, agreement, or record to the
extent it is governed by--
(1) a statute, regulation, or other rule of law governing
the creation and execution of wills, codicils, or
testamentary trusts;
(2) a statute, regulation, or other rule of law governing
adoption, divorce, or other matters of family law;
(3) the Uniform Commercial Code, as in effect in any State,
other than sections 1-107 and 1-206 and Articles 2 and 2A;
(4) any requirement by a Federal regulatory agency or self-
regulatory organization that records be filed or maintained
in a specified standard or standards (including a specified
format or formats), except that nothing in this paragraph
relieves any Federal regulatory agency of its obligations
under the Government Paperwork Elimination Act (title XVII of
Public Law 105-277);
(5) the Uniform Anatomical Gift Act; or
(6) the Uniform Health-Care Decisions Act.
(b) Additional Exceptions.--The provisions of section 101
shall not apply to--
(1) any contract, agreement, or record entered into between
a party and a State agency if the State agency is not acting
as a market participant in or affecting interstate commerce;
(2) court orders or notices, or official court documents
(including briefs, pleadings, and other writings) required to
be executed in connection with court proceedings; or
(3) any notice concerning--
(A) the cancellation or termination of utility services
(including water, heat, and power);
(B) default, acceleration, repossession, foreclosure, or
eviction, or the right to cure, under a credit agreement
secured by, or a rental agreement for, a primary residence of
an individual; or
(C) the cancellation or termination of health insurance or
benefits or life insurance benefits (excluding annuities).
SEC. 104. STUDY.
(a) Followup Study.--Within 5 years after the date of
enactment of this Act, the Secretary of Commerce, acting
through the Assistant Secretary for Communications and
Information, shall conduct an inquiry regarding any State
statutes, regulations, or other rules of law enacted or
adopted after such date of enactment pursuant to section
102(a), and the extent to which such statutes, regulations,
and rules comply with section 102(b).
(b) Report.--The Secretary shall submit a report to the
Congress regarding the results of such inquiry by the
conclusion of such 5-year period.
SEC. 105. DEFINITIONS.
For purposes of this title:
(1) Electronic record.--The term ``electronic record''
means a writing, document, or other record created, stored,
generated, received, or communicated by electronic means.
(2) Electronic signature.--The term ``electronic
signature'' means information or data in electronic form,
attached to or logically associated with an electronic
record, and executed or adopted by a person or an electronic
agent of a person, with the intent to sign a contract,
agreement, or record.
(3) Electronic.--The term ``electronic'' means of or
relating to technology having electrical, digital, magnetic,
optical, electromagnetic, or similar capabilities regardless
of medium.
(4) Electronic agent.--The term ``electronic agent'' means
a computer program or an electronic or other automated means
used independently to initiate an action or respond to
electronic records in whole or in part without review by an
individual at the time of the action or response.
(5) Record.--The term ``record'' means information that is
inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
(6) Federal regulatory agency.--The term ``Federal
regulatory agency' means an agency, as that term is defined
in section 552(f) of title 5, United States Code, that is
authorized by Federal law to impose requirements by rule,
regulation, order, or other legal instrument.
(7) Self-regulatory organization.--The term ``self-
regulatory organization'' means an organization or entity
that is not a Federal regulatory agency or a State, but that
is under the supervision of a Federal regulatory agency and
is authorized under Federal law to adopt and administer rules
applicable to its members that are enforced by such
organization or entity, by a Federal regulatory agency, or by
another self-regulatory organization.
TITLE II--DEVELOPMENT AND ADOPTION OF ELECTRONIC SIGNATURE PRODUCTS AND
SERVICES
SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN INTERSTATE
AND FOREIGN COMMERCE.
(a) Inquiry Regarding Impediments to Commerce.--
(1) Inquiries required.--Within 180 days after the date of
the enactment of this Act, and biennially thereafter, the
Secretary of Commerce, acting through the Assistant Secretary
for Communications and Information, shall complete an inquiry
to--
(A) identify any domestic and foreign impediments to
commerce in electronic signature products and services and
the manners in which and extent to which such impediments
inhibit the development of interstate and foreign commerce;
(B) identify constraints imposed by foreign nations or
international organizations that constitute barriers to
providers of electronic signature products or services; and
(C) identify the degree to which other nations and
international organizations are complying with the principles
in subsection (b)(2).
(2) Submission.--The Secretary shall submit a report to the
Congress regarding the results of each such inquiry within 90
days after the conclusion of such inquiry. Such report shall
include a description of the actions taken by the Secretary
pursuant to subsection (b) of this section.
(b) Promotion of Electronic Signatures.--
(1) Required actions.--The Secretary of Commerce, acting
through the Assistant Secretary for Communications and
Information, shall promote the acceptance and use, on an
international basis, of electronic signatures in accordance
with the principles specified in paragraph (2) and in a
manner consistent with section 101 of this Act. The Secretary
of Commerce shall take all actions necessary in a manner
consistent with such principles to eliminate or reduce, to
the maximum extent possible, the impediments to commerce in
electronic signatures, including those identified in the
inquiries under subsection (a) for the purpose of
facilitating the development of interstate and foreign
commerce.
(2) Principles.--The principles specified in this paragraph
are the following:
(A) Free markets and self-regulation, rather than
government standard-setting or rules, should govern the
development and use of electronic records and electronic
signatures.
(B) Neutrality and nondiscrimination should be observed
among providers of and technologies for electronic records
and electronic signatures.
(C) Parties to a transaction should be permitted to
establish requirements regarding the use of electronic
records and electronic signatures acceptable to such parties.
(D) Parties to a transaction--
(i) should be permitted to determine the appropriate
authentication technologies and implementation models for
their transactions, with assurance that those technologies
and implementation models will be recognized and enforced;
and
(ii) should have the opportunity to prove in court or other
proceedings that their authentication approaches and their
transactions are valid.
(E) Electronic records and electronic signatures in a form
acceptable to the parties should not be denied legal effect,
validity, or enforceability on the ground that they are not
in writing.
(F) De jure or de facto imposition of standards on private
industry through foreign adoption of regulations or policies
with respect to electronic records and electronic signatures
should be avoided.
(G) Paper-based obstacles to electronic transactions should
be removed.
(c) Consultation.--In conducting the activities required by
this section, the Secretary shall consult with users and
providers of electronic signature products and services and
other interested persons.
(d) Privacy.--Nothing in this section shall be construed to
require the Secretary or the Assistant Secretary to take any
action that would adversely affect the privacy of consumers.
(e) Definitions.--As used in this section, the terms
``electronic record'' and ``electronic signature'' have the
meanings provided in section 104 of the Electronic Signatures
in Global and National Commerce Act.
TITLE III--USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER FEDERAL
SECURITIES LAW
SEC. 301. GENERAL VALIDITY OF ELECTRONIC RECORDS AND
SIGNATURES.
Section 3 of the Securities Exchange Act of 1934 (15 U.S.C.
78c) is amended by adding at the end the following new
subsection:
``(h) References to Written Records and Signatures.--
``(1) General validity of electronic records and
signatures.--Except as otherwise provided in this
subsection--
``(A) if a contract, agreement, or record (as defined in
subsection (a)(37)) is required by the securities laws or any
rule or regulation thereunder (including a rule or regulation
of a self-regulatory organization), and is required by
Federal or State statute, regulation, or other rule of law to
be in writing, the legal effect, validity, or enforceability
of such contract, agreement, or record shall not be denied on
the ground that the contract, agreement, or record is not in
writing if the contract, agreement, or record is an
electronic record;
``(B) if a contract, agreement, or record is required by
the securities laws or any rule or regulation thereunder
(including a rule or regulation of a self-regulatory
organization), and is required by Federal or State statute,
regulation, or other rule of law to be signed, the legal
effect, validity, or enforceability of such contract,
agreement, or record shall not
[[Page H11743]]
be denied on the ground that such contract, agreement, or
record is not signed or is not affirmed by a signature if the
contract, agreement, or record is signed or affirmed by an
electronic signature; and
``(C) if a broker, dealer, transfer agent, investment
adviser, or investment company enters into a contract or
agreement with, or accepts a record from, a customer or other
counterparty, such broker, dealer, transfer agent, investment
adviser, or investment company may accept and rely upon an
electronic signature on such contract, agreement, or record,
and such electronic signature shall not be denied legal
effect, validity, or enforceability because it is an
electronic signature.
``(2) Implementation.--
``(A) Regulations.--The Commission may prescribe such
regulations as may be necessary to carry out this subsection
consistent with the public interest and the protection of
investors.
``(B) Nondiscrimination.--The regulations prescribed by the
Commission under subparagraph (A) shall not--
``(i) discriminate in favor of or against a specific
technology, method, or technique of creating, storing,
generating, receiving, communicating, or authenticating
electronic records or electronic signatures; or
``(ii) discriminate in favor of or against a specific type
or size of entity engaged in the business of facilitating the
use of electronic records or electronic signatures.
``(3) Exceptions.--Notwithstanding any other provision of
this subsection--
``(A) the Commission, an appropriate regulatory agency, or
a self-regulatory organization may require that records be
filed or maintained in a specified standard or standards
(including a specified format or formats) if the records are
required to be submitted to the Commission, an appropriate
regulatory agency, or a self-regulatory organization,
respectively, or are required by the Commission, an
appropriate regulatory agency, or a self-regulatory
organization to be retained; and
``(B) the Commission may require that contracts,
agreements, or records relating to purchases and sales, or
establishing accounts for conducting purchases and sales, of
penny stocks be manually signed, and may require such manual
signatures with respect to transactions in similar securities
if the Commission determines that such securities are
susceptible to fraud and that such fraud would be deterred or
prevented by requiring manual signatures.
``(4) Relation to other law.--The provisions of this
subsection apply in lieu of the provisions of title I of the
Electronic Signatures in Global and National Commerce Act to
a contract, agreement, or record (as defined in subsection
(a)(37)) that is required by the securities laws.
``(5) Savings provision.--Nothing in this subsection
applies to any rule or regulation under the securities laws
(including a rule or regulation of a self-regulatory
organization) that is in effect on the date of enactment of
the Electronic Signatures in Global and National Commerce Act
and that requires a contract, agreement, or record to be in
writing, to be submitted or retained in original form, or to
be in a specified standard or standards (including a
specified format or formats).
``(6) Definitions.--As used in this subsection:
``(A) Electronic record.--The term `electronic record'
means a writing, document, or other record created, stored,
generated, received, or communicated by electronic means.
``(B) Electronic signature.--The term ``electronic
signature'' means information or data in electronic form,
attached to or logically associated with an electronic
record, and executed or adopted by a person or an electronic
agent of a person, with the intent to sign a contract,
agreement, or record.
``(C) Electronic.--The term `electronic' means of or
relating to technology having electrical, digital, magnetic,
optical, electromagnetic, or similar capabilities regardless
of medium.''.
The CHAIRMAN pro tempore. No amendment to that amendment shall be in
order except those printed in House Report 106-462. Each amendment may
be offered only in the order printed in the report, may be offered only
by a Member designated in the report, shall be considered read,
debatable for the time specified in the report, equally divided and
controlled by the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for a division of the
question.
The Chairman of the Committee of the Whole may postpone a request for
a recorded vote on any amendment and may reduce to a minimum of 5
minutes the time for voting on any postponed question that immediately
follows another vote, provided that the time for voting on the first
question shall be a minimum of 15 minutes.
It is now in order to consider amendment No. 1 printed in House
Report 106-462.
Amendment No. 1 Offered by Mr. Inslee
Mr. INSLEE. Mr. Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Mr. Inslee:
In section 101(b), strike paragraph (2) and insert the
following:
(2) Consent to electronic records.--Notwithstanding
subsection (a) and paragraph (1) of this subsection--
(A) if a statute, regulation, or other rule of law requires
that a record be provided or made available to a consumer in
writing, that requirement shall be satisfied by an electronic
record if--
(i) the consumer has affirmatively consented, by means of a
consent that is conspicuous and visually separate from other
terms, to the provision or availability (whichever is
required) of such record (or identified groups of records
that include such record) as an electronic record, and has
not withdrawn such consent;
(ii) prior to consenting, the consumer is provided with a
statement of the hardware and software requirements for
access to and retention of electronic records; and
(iii) the consumer affirmatively acknowledges, by means of
an acknowledgement that is conspicuous and visually separate
from other terms, that--
(I) the consumer has an obligation to notify the provider
of electronic records of any change in the consumer's
electronic mail address or other location to which the
electronic records may be provided; and
(II) if the consumer withdraws consent, the consumer has
the obligation to notify the provider of electronic records
of the electronic mail address or other location to which the
records may be provided; and
(B) the record is capable of review, retention, and
printing by the recipient if accessed using the hardware and
software specified in the statement under subparagraph
(A)(ii) at the time of the consumer's consent; and
(C) if such statute, regulation, or other rule of law
requires that a record be retained, that requirement shall be
satisfied if such record complies with the requirements of
subparagraphs (A) and (B) of subsection (c)(1).
At the end of section 101, add the following new
subsections:
(d) Ability To Contest Signatures and Charges.--Nothing in
this section shall be construed to limit or otherwise affect
the rights of any person to assert that an electronic
signature is a forgery, is used without authority, or
otherwise is invalid for reasons that would invalidate the
effect of a signature in written form. The use or acceptance
of an electronic record or electronic signature by a consumer
shall not constitute a waiver of any substantive protections
afforded consumers under the Consumer Credit Protection Act.
(e) Scope.--This Act is intended to clarify the legal
status of electronic records and electronic signatures in the
context of writing and signing requirements imposed by law.
Nothing in this Act affects the content or timing of any
disclosure required to be provided to any consumer under any
statute, regulation, or other rule of law.
In section 102(c), strike ``safety or health of an
individual consumer'' and insert ``public health or safety of
consumers''.
In section 104, add at the end the following new
subsection:
(c) Additional Study of Delivery.--Within 18 months after
the date of enactment of this Act, the Secretary of Commerce
shall conduct an inquiry regarding the effectiveness of the
delivery of electronic records to consumers using electronic
mail as compared with delivery of written records via the
United States Postal Service and private express mail
services. The Secretary shall submit a report to the Congress
regarding the results of such inquiry by the conclusion of
such 18-month period.
The CHAIRMAN pro tempore. Pursuant to House Resolution 366, the
gentleman from Washington (Mr. Inslee) and the gentleman from Michigan
(Mr. Conyers) each will control 15 minutes.
The Chair recognizes the gentleman from Washington (Mr. Inslee).
Mr. INSLEE. Mr. Chairman, I yield myself 2 minutes.
Mr. Chairman, I would like to tell Members what our goal was in
drafting this amendment. Our goal basically is to assure an American's
right to make the decision by themselves based on the information they
have to receive information electronically and to form contracts
electronically.
Our goal is based on the proposition something like this: If you read
the Declaration of Independence, it reads just as well electronically
as it does on a piece of paper. And when you receive information in an
on-line transaction, if you want to purchase insurance, a car, a book,
the information you are going to receive reads just as well
electronically. Therefore, we have crafted an amendment that would
assure that every consumer has a new right, and, that is, the right to
decide they want to receive information electronically.
I want to point out several things about it. Number one, it makes
sure that this is a decision made and has to
[[Page H11744]]
be made affirmatively by an American. They have to affirmatively take
an action to disclose they want to do business electronically. Number
two, and very importantly, this makes very clear that any requirement
of any government in America to give any notice will still exist after
the passage of this bill if this amendment prevails.
I want to read the applicable section. It reads:
Nothing in this Act affects the content or timing of any
disclosure required to be provided to any consumer under any
statute, regulation, or other rule of law.
I read this because I have heard many other Members suggest that
somehow consumers will lose the right to receive notifications. This is
inaccurate. This amendment will assure that every notification a person
is entitled to receive, they will still be entitled to receive.
Third, it makes abundantly clear, we added a provision that consumers
have to be notified what hardware and software they need to receive
this information so that they are not acting blindly. We have heard
suggestions that somehow electronic commerce is inefficient,
ineffective. I think we have to realize sometimes the mail gets eaten
by the dog as well, or misplaced, and, in fact, if consumers want to do
business electronically, they should be entitled to do so.
We have also, fifth, provided that the credit card rules, the
limitations of liability, still apply in this context, if somebody
steals your identity essentially.
And, sixth, we provide, and I think this is very important because I
have heard some misinformation on the floor already in this regard.
Where the law requires provision of a notice, where a business has to
provide notice to a consumer, they will still be required to provide
notice, not simply post it on a website.
Mr. Chairman, I yield 1 minute to the gentlewoman from California
(Ms. Lofgren).
Ms. LOFGREN. Mr. Chairman, when do you have information? Ten years
ago, I was in local government and we organized our court files
electronically and allowed the sheriff to access those court files for
jail management. I remember going over to talk to the then sheriff who
had deputies handwriting the information down on pieces of paper off
the screen.
I asked, ``Why are you doing this?'' He said, ``So we'll really have
the information.''
Do you have the information when it is on the screen, on your hard
drive, in your head, or when it is on a piece of paper? The answer is,
in all of those cases. We are not changing any consumer law at all with
this bill and with this amendment. What we are doing is allowing for
the free flow of information on the Internet, so that we can have
electronic commerce, so that information in the Information Age can
flow.
I have heard many expressions really of anxiety by Members about the
Information Age and the concept that you have information when it is
electronic. Let me assure my colleagues that you do and consumers will
be fully protected under the amendment.
Mr. CONYERS. Mr. Chairman, I yield myself 3 minutes.
I want to start off by commending my friends that are with the
gentleman from Washington (Mr. Inslee) on his amendment. This is an
important step forward. The problem is, it is still a half a loaf, and
I appreciate the Democrats that are trying to improve it.
This amendment makes minor improvements in the underlying bill but,
indeed, it makes it worse in several respects. That is why it is quite
clear why financial services, industries and banks are supporting it
and consumer groups are opposing it.
Here is why it is a backward step. It leaves to the courts to
determine who bears the burden when an electronic disclosure notice is
not received.
{time} 1345
The bill does that. The Inslee amendment puts the burden squarely on
the consumer's shoulders.
Mr. Chairman, H.R. 1714, the Bliley bill leaves it to the courts; the
Inslee amendment leaves it to the consumer the responsibility of
creating an affirmative obligation to notify a provider of a change of
e-mail address.
Now, in addition, this will not be corrected by the Inslee amendment.
No requirement that the consumer be told what legal rights he is
waiving or to what types of records that is the notices, disclosures
and statements, that the waiver applies to. Because both the bill and
the amendment permit a consumer to waive writing requirements for
groups, ``groups of records,'' and there is no requirement that the
record be similar or relate to the same transaction. The consumer can,
without any prior knowledge, waive all the future notices with one
click.
This, I say to my colleagues, is the substance of what leads me to
regretfully not be able to support the Inslee amendment. It does help
in some respects, but in other respects, it is worse. For that reason I
would urge that we think very carefully about this so-called
improvement.
The amendment improves the opt-in by requiring it to be conspicuous
and visually separate. But there is still no requirement that the
consumer be told what legal rights he or she is waiving or what types
of notices and disclosures the waiver applies to.
The Inslee amendment narrows the States' ability to reenact
supplemental protective legislation for their citizens. This is not
good. For that reason I ask that my colleagues critically evaluate this
supposed improvement in the bill.
While I appreciate the efforts of my fellow Democrats to improve H.R.
1714, this amendment is merely an industry-drafted cosmetic fix that
makes only minor improvements to the underlying bill, and indeed, makes
it worse in several respects. Furthermore, it leaves unaddressed many
fundamental problems of H.R. 1714.
It is therefore no surprise--and is quite telling, in fact--that this
amendment is supported by the banks and financial services industries,
but is opposed by the consumer groups.
The Inslee amendment is a step backwards for consumers in many ways.
Unlike H.R. 1714, which leaves it to the courts to determine who bears
the burden when an electronic disclosure or notice is not received, the
Inslee amendment puts the burden squarely on consumers' shoulders by
creating an affirmative obligation for consumers to notify a provider
of a change of email address. The U.S. Postal Service has standardized
procedures for address changes, forwarding mail, and returning mail to
the sender that currently are not present in the on-line world. Without
these real-world ``back-up'' mechanisms, this amendment simply creates
a defense for merchant in cyberspace that it would not have in the
physical world.
The Inslee amendment also is a step backward from H.R. 1714 because
it takes away the requirement that when a contract is required by law
to be in writing, the electronic record of the contract must: (1)
accurately set forth the information in contract after it was first
generated, and (2) remain accessible for later reference, transmission
and printing. Under the amendment, these standards apply only where a
law requires a record to be retained. This significantly undercuts the
reach of H.R. 1714.
In addition, the Inslee amendment narrows the states' ability to
reenact supplemental protective legislation for their citizens. Instead
of allowing the states to enact laws for the safety or health of an
individual consumer, the amendment permits the states to legislate only
where it is necessary for the protection of ``public health or safety
of consumers.'' Thus, if certain notices and disclosures are not for
the benefit of the public health or safety and only benefit individual
consumers--such as notices to individuals about changes in their
insurance policies, or a specific consumer's late payment on his
utilities--the state cannot enact or reenact supplemental laws for this
purpose.
Furthermore, the Inslee amendment leaves in place many of the most
troubling aspects of H.R. 1714. For instance, although the amendment
improves the opt-in by making requiring it to be ``conspicuous'' and
``visually separate,'' there is still no requirement that the consumer
be told what legal rights she is waiving or what types of notices and
disclosures the waiver applies to. In addition, the consumer can still
waive ``groups of records'' with one click, regardless of whether or
not they are related to each other or if they are similar in nature.
The Inslee amendment also maintains the bill's broad preemption of
state laws. In order for a state to avoid preemption by the federal
statute, the Uniform Electronic Transactions Act, or UETA, must be
consistent with the electronic contracts and records provisions of this
bill. This does not give the states sufficient flexibility to exempt
necessary state writing requirements. Ironically, even if a state
adopted UETA without excepting any of its laws. The state would still
be preempted by the federal law, because UETA does not provide for an
[[Page H11745]]
opt-in, and that would make the state law inconsistent with--and
therefore preempted by--the federal law.
Another flaw with the Inslee amendment is that it does not address
the regulatory and supervisory problems with H.R. 1714. Under this
amendment, regulated industries such as the banking and insurance
industries would still be relieved from their legal requirements to
maintain paper records. How can a state insurance regulator determine
if an insurance company is properly capitalized, or if it has the
proper reinsurance it cannot access the company's electronic records,
or if the regulator can not require that the company keep its records
in a tamper-proof format?
I understand my colleagues' desire to improve H.R. 1714--because it
needs much improvement. But the Inslee amendment just scratches the
surface of what's needed to make the necessary improvements in H.R.
1714. Indeed, the amendment makes the bill worse in several respects.
Mr. Chairman, I reserve the balance of my time.
Mr. INSLEE. Mr. Chairman, I would note that that click will waive no
rights; it will simply indicate that notifications will be coming
electronically rather than writing them in. A click will waive no
rights under this amendment.
Mr. Chairman, I yield 1 minute and 40 seconds to the gentlewoman from
California (Ms. Eshoo).
Ms. ESHOO. Mr. Chairman, I thank the gentleman from Washington (Mr.
Inslee) for yielding me this time.
I am very proud to be offering this amendment with him and several of
my Democratic colleagues as well as the gentlewoman from New Jersey
(Mrs. Roukema).
First, let me just stipulate that there is not any mandate in this
amendment that says to the consumers of America that they have to go
on-line and use digital signatures. There is not a mandate. This is all
about choices, but it does add the protections to the consumer if they
so choose to exercise this.
This amendment that we bring before my colleagues today I believe
cures some of the criticisms, many of the criticisms of the underlying
bill. Quite simply, it ensures that consumers who choose to receive
electronic records from their banks, their mortgage companies, or their
on-line trading brokers will make this decision knowingly. The
amendment gives consumers the ability to opt in to receive electronic
records and requires that the consent be conspicuous and visually
separate from other terms. In other words, consumers must agree to a
statement that they will accept the records electronically. This
statement cannot be buried in a morass of terms and conditions. It must
be clear and separate.
Additionally and importantly, this amendment requires that prior to
consenting, consumers must be provided with an explanation of how to
access and retain electronic records. This is important because if a
consumer cannot review, retain, and print an electronic record, that
record is not considered valid.
I am very proud of this amendment. I believe that it makes the bill
totally acceptable. This should not be a partisan issue. We should come
together from both sides of the aisle, because it protects consumers
and it allows electronic commerce to go forward. I urge support of this
amendment.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from
New York (Mr. LaFalce), the distinguished ranking member of the
Committee on Banking and Financial Services.
(Mr. LaFALCE asked and was given permission to revise and extend his
remarks.)
Mr. LaFALCE. Mr. Chairman, I think that almost everyone would favor
the purposes of the primary bill before us today, and it is possible to
achieve a good bill and a bipartisan bill. And, on the Senate side,
Senator Abraham, a Republican, Senator Wyden, a Democrat, Senator
Leahy, a Democrat, and the administration have gotten together and
basically they have come together in support of a good bill, and that
is what the gentleman from Michigan (Mr. Dingell) and the gentleman
from Michigan (Mr. Conyers) and I are going to offer as a substitute.
The gentleman from Washington (Mr. Inslee) and the gentlewoman from
California (Ms. Eshoo) are attempting to deal with the Bliley bill,
which the administration strongly opposes and said they would veto with
an amendment. I know they are good faith, but I point out that the
National Consumer Law Center, the Consumer Federation of America, the
United Auto Workers, the Consumers Union, the U.S. Public Interest
Research Groups, and the National Consumers League have drafted a
letter today which they have sent out to each of us which says, ``The
Inslee-Eshoo amendment is a cosmetic attempt to make a dangerous bill
appear more palatable. Further, this amendment will make it more
difficult for consumers to assert their rights under existing consumer
protection laws.''
So this is cosmetically attractive, but dangerous because of that
very fact.
Mr. INSLEE. Mr. Chairman, I yield 30 seconds to the gentleman from
California (Mr. Dooley).
(Mr. DOOLEY of California asked and was given permission to revise
and extend his remarks.)
Mr. DOOLEY of California. Mr. Chairman, I rise in support of the
underlying bill and also in strong support of the amendment offered by
the gentleman from Washington (Mr. Inslee), myself and a number of our
colleagues.
This legislation is a step forward to trying to ensure that consumers
and businesses have a better ability to conduct commerce over the
Internet. This amendment that we are supporting today provides for
added consumer protections. It ensures that every consumer will have to
opt in in order to participate. It ensures that consumers will have to
acknowledge the conditions of a contract. It also provides assurances
that a consumer will have to acknowledge that they will have to notify
the business or the entity that they might be doing business with if
they change their e-mail.
This is not any different than what one would have to do with one's
address at one's home if one is going to relocate.
Now, if we want to have people to have the benefits that the Internet
can provide and e-commerce can provide, we have to understand that we
are dealing with a different medium, and this amendment goes a long way
to ensuring that consumers will have those protections, that they will
have the notifications that are important for them to understand their
responsibilities and obligations.
Mr. Chairman, I heard some folks earlier today talking in opposition
to the underlying bill, but there are a lot of people out there that do
not have a computer; there are a lot of people out there that do not
have an e-mail address; there are a lot of people out there that do not
know how to navigate the Web. Well, if we use that as a standard to
preclude us from moving forward with digital signature, we are never
going to get there. But we also have assured that any consumer that
might not have a computer, that does not have e-mail, that they do not
have to opt in to participate in a digital signature. We provide the
consumer protections. This amendment is a good amendment; the
underlying bill deserves passage.
Mr. CONYERS. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman
from California (Mr. Berman), a distinguished member of the Committee
on the Judiciary.
Mr. BERMAN. Mr. Chairman, I rise in opposition to the amendment.
While it makes some improvements in some parts of the base bill, it
also in some areas actually goes backward. But I think the broader
point is the point I would like to speak to.
We seem to be talking just totally by each other. No one here is
opposed to the concept that we need to legislate a digital signature
law so that people in places where there is now an obligation to enter
into a writing-in contract can enter into a contract electronically and
bind themselves to that through digital signatures along the standards
of the bill. There is no dispute about that.
I hear my friend from Virginia speak in exciting and provocative
terms about the new economy, the new elite, people who want the
opportunity, they are governed by potentials and not their fears, and I
say yes. But it is not a requirement to be an advocate of the new
economy or to be a new Democrat to think that there are some people who
will be caught in the transition and that maybe, where the Comptroller
of the Currency decides that a particular bank should have a backup set
[[Page H11746]]
of records in writing because that might be the only place they can go
to determine whether reserves are being kept adequately, or whether in
a particular situation involving changes in an insurance policy, let us
just validate that for this particular type of consumer whose, perhaps,
adult children signed them on to the insurance policy electronically,
we should validate it by the written contract, that we are going to
just trample over these people in the name of doing something new and
exciting.
Mr. Chairman, I do not have the arrogance to say that every single
law that says that without regard to whom the consumer is, what the
State of their mentality is, that we are going to wipe out some
considered judgment by a regulator or by a State legislator, by a
Federal legislator that in all circumstances, that is preempted.
The gentleman from Washington says his amendment waives no rights,
but it does waive one right. By conscious decision, hopefully of a
sophisticated and educated consumer, it waives the right to have the
disclosures, the changes, the notices in writing. That is indisputable.
His amendment waives that right. In most cases, that will be great.
There might be a few cases where it is not great, and it is in those
cases that I say let us be a little careful about just wiping out all
of these laws.
Mr. INSLEE. Mr. Chairman, I yield 10 seconds to the gentlewoman from
California (Ms. Lofgren).
Ms. LOFGREN. Mr. Chairman, I think it is important to point out that
there is no waiver of notice in writing. All we are talking about is
transmission of that writing and whether the writing is received
electronically or on a piece of paper, it is in writing in both cases.
Mr. INSLEE. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman
from Washington (Mr. Smith).
Mr. SMITH of Washington. Mr. Chairman, I rise in support of the
Inslee amendment and in support of the underlying bill.
Everyone says we all agree, we are going to have digital signature,
it is just a matter of the details. Unfortunately, the details that are
being presented by the opponents of the Inslee amendment and of the
Dingell amendment are such that one would, in practical effect, not be
able to do digital signature. If, first of all, one does not have
uniformity and one is doing something across State lines and one has 50
or maybe even 100 different rules and regulations for how it is going
to be done, it makes it very, very difficult to do business in the
electronic commerce world. That is what the Dingell amendment would do.
That creates a huge problem for the bill.
Second of all, it requires that paper be done in addition to the
digital signature. Well, if we are going to have to do a paper
contract, what is the advantage of doing a digital contract? One merely
has to duplicate oneself. Those two provisions basically mean that what
the opponents of the Inslee amendment are doing is creating a situation
where digital signature will not be a choice that any logical
businessman will make. That is why we have to oppose it.
Two final points. Consumer protection is clearly protected in this
bill. The sentence says this law changes in no way one's contractual
protections under consumer protection laws. We are simply doing it
digitally instead of by paper. We have the same protections.
Lastly, this well, if one goes on a computer it could get lost, the
computer could blow up; paper notices get lost all of the time. If one
moves and the notice is required to go by mail, many times these
notices do not arrive. Whether it is paper or digital, there are
challenges in making sure that all of the notices get there. I strongly
submit that those challenges are no greater with digital signature than
they are with paper, and we are stuck in a lost mindset here thinking
that somehow, if it is not paper, it is not real. If we do not do this
right, we will not have digital signature. The Inslee amendment does it
right. Support it.
{time} 1400
Mr. CONYERS. Mr. Chairman, I am pleased to yield 3 minutes to the
gentleman from Minnesota (Mr. Vento).
Mr. VENTO. Mr. Chairman, I thank the gentleman for yielding time to
me.
I rise in opposition to the amendment, Mr. Chairman. I recognize that
there is an effort here to make this, as I said, palatable, but it
remains indigestible. What we are doing here is we are force-feeding
the States, force-feeding consumers this particular format in terms of
how transactions and record will be eliminated.
Someone says, the electronic signatures, we are all for it, we can
permit that, but we need this because we need to eliminate or give the
possibility for people to accept notices and disclosures
electronically, that is the only thing. But the heart and soul of most
consumer laws are the absolute disclosure provisions. So once we go
down this path, we have, for all intents and purposes, circumvented
many of the consumer laws of the Federal and many at the State level.
This is not transactions initiated over the Internet, this could be
someone at the door that we open the possibility of fraud and abuse to
here, because someone at the door, when we get a cooling off period for
not purchasing, we would sign it away. There is no assurance that they
have Internet; electronic computer equipment or service. It is only
one-third of the homes in this Nation have Internet, so these are not
even just transactions. We open up that possibility.
We have tried mightily in terms of this particular provision, but we
have gone one step forward and two back. The rule of holes is that when
you are in a hole and you want to get out, quit digging, but this
amendment digs in more. It tries to legitimatize what is inappropriate
in this bill.
The fact of the matter is, look at where the consumer is. They are
buying a home, they are buying a car. They are blinded by the fact of
that new shiny Chevrolet or that wonderful new home that they are going
to get. They are signing a whole bundle of papers. In the process of
doing it, they sign the copy, disclosure and notification away with no
assurance, and all the responsibility put back on the individual
consumer on something that may be the most important transaction they
make.
This vitiates the truth-in-lending, the real estate State Sales
Practices Act. The Federal regulators are already working on the issue
of electronic commerce and attempting to interface the rules and e-
commerce. Instead of doing something for the consumer, they are taking
away the options they have today.
Members are saying that the price of being active in this electronic
signature bill and this electronic Internet world is that we are going
to deny some of the rights people have today. We basically say, we will
let you give up your rights. We should not do that, and we should know
that individuals do not have fully informed consent, the mechanics,
workers, blue collar workers or others getting minimum wage. They are
not sitting in the halls of this Congress, they are not out there
walking around in the lobbies, they need our help. Ironically this
legislation protects the sophisticated financial institutions and
Federal regulators.
We ought to be doing something for the consumer, like providing
favorable options for them on privacy in the Internet. We are not doing
for them what we did in the Financial Modernization Act. We are doing
more harm in this act, with this particular provision and certainly the
underlying measure.
When we talk about the provision in the financial modernization, we
had balance in that bill. There is no balance in this bill. This policy
in this bill is not necessary. These provisions on records are not
necessary to make the electronic signature legitimate. We are
undercutting consumer law. There is a bandwagon effect here in terms of
the special interests that have annealed themselves to this popular
electronic signature legislation in order to circumvent the very real
decades of consumer law that have protected and serve the consumers and
the people we represent. Vote ``no'' on this bill.
Mr. INSLEE. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman
from the Garden State, New Jersey (Mrs. Roukema).
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)
[[Page H11747]]
Mrs. ROUKEMA. Mr. Chairman, I have to say, as a member of the
Committee on Banking and Financial Services, I rise in strong support
of the amendment offered by the gentleman from Washington (Mr. Inslee).
I would like to identify myself as a cosponsor of that amendment.
I would also like to take exception to some of the loose rhetoric
that I have heard on the floor today, and would like to speak to the
specifics.
It seems to me that Congress and the regulators are overdue in
playing a leadership role in updating many of the consumer protection
laws to reflect the new technologies in electronic commerce that we see
out there. This bill and this amendment takes a giant step toward that
protection. It does not diminish in any way, as far as I can tell, the
protections that consumers already have.
I want to be specific. The amendment is pro-consumer because it
provides the additional consumer protections such as a clear, number
one, customer opt-in for electronic delivery specifically is required,
an opt-in. There are clear requirements on review, retention, and
printing of documents and disclosures. Three, the ability of a customer
to opt out is there for any customer at any time for the electronic
delivery system.
I think that this is, as I said, not only a giant step, but it is
also clearly defined, and I dismiss any of the loose rhetoric that acts
as though we are taking something away. We are really building not only
a firm foundation, but a giant step for consumers in this new
electronic age.
Mr. Chairman, as a cosponsor, I rise today in strong support of the
Inslee/Eshoo/Dooley/Moran/Roukema amendment. It is both Pro Business
and Pro Consumer. It is common sense and will improve the bill.
Millions of consumers today routinely conduct business over the
Internet, buying and selling a myriad of products and services from
companies large and small, near and far. Many of these consumers engage
in financial transactions--investing in stocks and bonds, checking
account balances, transferring funds, applying for credit cards, and
paying bills without leaving their homes. This explosion of on-line
financial services offers great benefits. Nonetheless, the ability to
offer many financial services, particularly loans and mortgages, would
be enhanced if the banking laws were amended to clarify the rules
governing the electronic delivery of financial services.
H.R. 1714 and the Inslee Amendment will clarify that electronic
delivery of required consumer disclosures over the Internet is
permissible as long as there are certain safeguards for consumers. This
bill does not lessen the rights of consumers to receive required
disclosures. In addition, it does not affect the content of any
disclosure, including the timing, format and information to be
provided. Furthermore, consumers would control which information could
be sent to them electronically.
This legislation will assist the growth of on-line financial
transactions and at the same time provide consumer protections. Online
disclosures will provide consumers with a number of benefits:
Convenience and time-saving--Consumers can conduct transactions
virtually anywhere and at any time, 7-days-a-week, 24-hours-a-day.
User friendly information--Legalistic jargon in on-line disclosure
forms can be linked to plain-English definitions, making them much more
readable and understandable. Consumers can electronically search
documents rather than reading through reams of paper.
Enhanced services for under-served communities--Rural and urban
communities will have enhanced access to financial services, even where
brick and mortar branches are not available. In areas where residents
cannot afford computers, libraries and schools provide on-line access.
Reduced cost--Electronic delivery of disclosures will cost less than
providing the same information on paper or paying employees to handle
face-to-face disclosures, Competition should encourage business to pass
on those savings to consumers.
E-commerce is here. U.S. citizens are spending billions of dollars
each year on-line. Congress and the regulators must play a leadership
role in updating many of the consumer protection laws to reflect new
technologies and establish a coherent legislative framework for the
delivery of financial services through electronic commerce. This bill
and this amendment takes a giant step toward that protection.
The Inslee/Eshoo/Dooley/Moran/Roukema Amendment includes several
provisions from H.R. 2626, the Electronic Disclosures Delivery Act of
1999, which I introduced on September 1st along with Mr. Inslee and Mr.
Lazio. The Amendment is pro consumer because it provides the additional
consumer protections such as clear (1) Customer ``opt in'' for
electronic delivery specifically required, (2) clear requirements on
review, retention and printing of documents and disclosures, (3) the
ability of a Customer to ``opt out'' of electronic delivery at any
time.
I thought these were good provisions when I introduced H.R. 2626 with
Mr. Lazio and Mr. Inslee. I thought they were good provisions when
proposed before the Rules Committee, and that is why I cosponsored the
Inslee Amendment. I believe the Inslee/Roukema Amendment protects
consumers in a rational clearly defined common sense manner. It clearly
improves the bill.
We should approve the Amendment and we should approve H.R. 1714.
Mr. CONYERS. Mr. Chairman, I yield 30 second to the gentleman from
New York (Mr. LaFalce).
Mr. LaFALCE. Mr. Chairman, I wonder if the gentlewoman from New
Jersey would answer why the chairperson of the Subcommittee on
Financial Institutions has had no hearings on the bill that she
introduced, and dealing with the impact of this bill and her bill on
the consumer protection laws?
Mrs. ROUKEMA. Mr. Chairman, will the gentleman yield?
Mr. LaFALCE. I yield to the gentlewoman from New Jersey.
Mrs. ROUKEMA. Mr. Chairman, I will tell the gentleman exactly why; we
got a little directed and focused on financial modernization.
Mr. LaFALCE. The gentlewoman was too busy to have hearings on these
consumer protections.
Mrs. ROUKEMA. I was the author of the financial privacy and financial
modernization. I find this completely consistent.
Mr. INSLEE. Mr. Chairman, I yield 2 minutes to the gentleman from
Virginia (Mr. Moran).
Mr. MORAN of Virginia. Mr. Chairman, I thank the gentleman from
Washington (Mr. Inslee) for yielding time to me.
Mr. Chairman, I am also an original sponsor of this amendment because
it clarifies the consumer protections in H.R. 1714. I have been wanting
to respond to my friend, the gentleman from California, not because I
take issue with his characterization of my remarks as New Democrat in
nature, but because he said that I am supporting this bill because it
is new and exciting.
That is not why I am supporting this bill. It is because it is
responsible and needed. The fact is that this bill provides a
consistent and predictable national framework of rules governing the
use of electronic signatures. This bill is needed. This bill was and is
bipartisan. When the final vote is taken, it will be apparent that it
is bipartisan. In fact the vote will be lopsided because it provides
consumers and companies doing business on the Internet the legal
certainty they need for electronic signatures, until all 50 States pass
their own legislation on the legality of electronic signatures.
This amendment is important because it clarifies the consumer
protections that were originally inlcuded in this bill. It makes it
clear, as the prior speakers have said, that consumers are not required
to use or accept electronic records or electronic signatures. There has
to be mutual consent, and it expands the bill's requirement that
consumers be able to receive and retain electronic records.
Mr. Chairman, this amendment is important because it says that
opportunity for consent must be conspicuous and visually separate from
all the other terms.
In addition, the consumer must be provided with an explanation of how
to access and retain electronic records. Records will be received,
retained, and printed. The fact is that consumers are going to be
protected, but most importantly, they are going to have a choice. Today
they do not have that uniformity, that predictability that comes with
uniform national standards.
The Internet is national in nature. Our constituents need this
legislation. Make it bipartisan and make it an expression of our
unequivocal support for this productive, prosperous new economy.
Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Michigan (Mr. Dingell), the dean of the House and the ranking member of
the Committee on Commerce.
Mr. DINGELL. Mr. Chairman, I thank my good friend for yielding time
to me.
[[Page H11748]]
Mr. Chairman, I want to try and make clear what is at stake here.
There is no objection, I think, on the floor on the part of anyone,
my good friend, the gentleman from Michigan, myself, or anybody else,
to whether or not the contract is signed electronically. The question
relates to notice of later events under that contract which can
severely impact the purchaser, such as things which would trigger
foreclosure of a mortgage on a house or an automobile, failure to keep
up insurance, failure to prevent waste, failure to make payments.
It could happen for many reasons, such as year 2K. It could happen
because of the situation which might occur, a hard drive might crash,
or there might be any one of a number of other events, including a
failure of the Internet provider or something of that sort, or the
matter would just get lost in cyberspace.
There is nothing in anything that we are talking about here that
would preclude an individual from giving up some right and waiving his
right to that notice. But as an attorney of longstanding and as one who
has dealt with foreclosures and the hardship that those kinds of events
trigger, I think it is important to see to it that some who might not
be as smart as some of the Internet whizzes and the computer whizzes
and jocks that we have has the capability of protecting himself,
because we are talking about things such as the purchase of stock,
mortgages on homes, automobile purchases, major purchases of equipment,
and things of that kind which could incur enormous obligations on the
part of the purchaser.
I propose to support the amendment. It improves the bill. It does not
improve the bill by addressing the fundamental, basic question of
whether the consumer gets the necessary notices that are required by a
long history of State law to apprise him that he is in danger under the
contract of losing money or rights.
Mr. INSLEE. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I would just like to specifically note that the
underlying bill excludes from its ambit notices of foreclosure, of
acceleration of default on the home. Those are specifically excepted
and should not be an issue.
Mr. DINGELL. Mr. Chairman, will the gentleman yield?
Mr. INSLEE. I yield to the gentleman from Michigan.
Mr. DINGELL. I thank the gentleman for yielding.
Mr. Chairman, I am not talking about notices of foreclosure, I am
talking about notices that would trigger foreclosure, notice that the
insurance has not been paid, that damage was being committed on the
property, that a public nuisance is being committed on the property, or
even a notice that the individual has failed to make a payment, which
will trigger foreclosure.
Those are the kinds of notices that I am talking about, and they can
severely, adversely impact the party.
Mr. INSLEE. Reclaiming my time, those will be given. Those notices
will be given. In every case, the consumers electronically, if they
want it electronically, and on paper if they want it on paper, those
notices shall be given.
Mr. Chairman, I yield 1 minute to the gentleman from from Virginia
(Mr. Bliley).
Mr. BLILEY. Mr. Chairman, I appreciate the gentleman yielding time to
me.
Mr. Chairman, I think the gentleman's amendment improves the bill. I
support it.
I would also like to point out, as was mentioned in the earlier
debate, that what happens if the Y2K problem happens or the computer
breaks down, the bill requires that a record sent be able to be
retainable, printable, and transferrable. If the Internet is down this
standard is not met, and thus, a consumer would not be liable.
I fully support this amendment. I urge its adoption, and I urge
adoption of the underlying bill.
Mr. CONYERS. Mr. Chairman, I yield the balance of my time to the
gentlewoman from Texas (Ms. Jackson-Lee), a distinguished member of the
Committee on the Judiciary.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the distinguished
ranking member of the Committee on the Judiciary for yielding time to
me.
I thank the Members for their good intentions behind this effort. I
happen to be a supporter of electronic commerce. I wish we could have
done this in a bipartisan way.
Mr. Chairman, I do rise to support the incremental change that the
Inslee amendment makes. It does not answer my concerns, however. I do
believe that it is important for the consumers to conspicuously be able
to opt in to give consent to know whether or not their business is
going to be done in an electronic form, but I think what my good
friends are missing and the reason I support the substitute is they are
missing the fact that although we can lay out the long list of
supporters of this bill, the responsibility of this Congress is to
ensure that those voices which cannot be heard, those people needing to
have information about the drugs they get out of the Food and Drug
Administration, those young couples who are buying homes, still need to
have the ability to understand the documents that they are utilizing.
Under the underlying bill, creditors could condition credit on a
consumer's consent to receive all disclosures electronically. I do want
us to all be hooked up to the Internet, but unfortunately, even as we
go into the 21st century, all Americans are not. Can Members imagine
being denied credit because they refuse or do not understand that they
need to be hooked up to the Internet? Even in credit transactions
involving the mortgage, people would have that problem.
Consider the FDA's responsibility to provide people with information
about drugs, and those drugs that would conflict with others. Now we
have the obligation of written information. Just imagine that that
information will now be on the web page, and they leave people to their
own devices, and they say, forget about the written materials, just go
to the web page that most of those who are in certain levels in our
country do not have.
{time} 1415
The substitute, however, would sunset when a state enacted a uniform
electronic transactions act which would provide for protections for our
consumers.
The substitute also does not affect Federal laws or regulations, but
instead gives Federal agencies 6 months to conduct a careful study of
barriers to electronic transactions under Federal laws or regulations.
The substitute also represents the E-commerce bill that is the most
likely to be enacted into law, because it is a combination of Democrats
and Republicans, House Members and Senate Members, who have come
together.
Mr. Chairman, we are not against electronic commerce. I think that is
the point that should be made. I have friends on the other side that I
agree with, and friends over here that I agree with. But what my voice
must be for are those individuals who do not know the Internet, who do
not have access to computers, who are intimidated by some large
business telling them they can not get credit or that home that they
have been dreaming of because they will not consent to have their
business done in an electronic process.
Mr. Chairman, let us make it a bipartisan bill and support the
substitute and do the right thing for the American people.
Mr. INSLEE. Mr. Chairman, I yield 15 seconds to the gentleman from
Ohio (Mr. Kasich).
Mr. KASICH. Mr. Chairman, I would like to compliment the gentleman
from Washington (Mr. Inslee) for his amendment in terms of clarifying.
But one thing we should not be confused about, this Congress nor
government should stand in the way of what has been remarkable progress
here at end of the 20th century moving into the 21st century. It has
done an enormous amount of good for families, not just in America but
across the globe. Let us clarify this but not hesitate to invest and
have confidence in those people who are really moving us forward and
empowering people.
The CHAIRMAN pro tempore (Mr. Miller of Florida). The question is on
the amendment offered by the gentleman from Washington (Mr. Inslee).
The question was taken; and the Chairman pro tempore announced that
the ayes appeared to have it.
[[Page H11749]]
Recorded Vote
Mr. INSLEE. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 418,
noes 2, not voting 13, as follows:
[Roll No. 577]
AYES--418
Abercrombie
Ackerman
Aderholt
Allen
Andrews
Archer
Armey
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Bass
Bateman
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Capps
Capuano
Cardin
Carson
Castle
Chabot
Chambliss
Chenoweth-Hage
Clay
Clayton
Clement
Clyburn
Coble
Collins
Combest
Conyers
Cook
Cooksey
Costello
Cox
Coyne
Cramer
Crane
Crowley
Cubin
Cummings
Cunningham
Danner
Davis (FL)
Davis (IL)
Davis (VA)
Deal
DeFazio
DeGette
Delahunt
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart
Dicks
Dingell
Dixon
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Fattah
Filner
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Frank (MA)
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gejdenson
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (IN)
Hill (MT)
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hyde
Inslee
Isakson
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kasich
Kelly
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Knollenberg
Kolbe
Kucinich
Kuykendall
LaFalce
LaHood
Lampson
Lantos
Larson
Latham
LaTourette
Lazio
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Martinez
Mascara
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntosh
McIntyre
McKeon
McKinney
McNulty
Meehan
Meeks (NY)
Menendez
Metcalf
Mica
Millender-McDonald
Miller (FL)
Miller, Gary
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Ose
Owens
Oxley
Packard
Pallone
Pastor
Payne
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Roybal-Allard
Royce
Rush
Ryan (WI)
Ryun (KS)
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Saxton
Schaffer
Schakowsky
Scott
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (WA)
Snyder
Souder
Spratt
Stabenow
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
Whitfield
Wicker
Wilson
Wise
Wolf
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NOES--2
Paul
Vento
NOT VOTING--13
Coburn
Condit
Dickey
Gephardt
Hutchinson
Largent
Matsui
Meek (FL)
Pascrell
Scarborough
Smith (TX)
Spence
Tiahrt
{time} 1439
Mr. KUCINICH and Mr. WATT of North Carolina changed their vote from
``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Stated against:
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, on rollcall No.
577, I was unavoidably detained. Had I been present, I would have voted
``no.''
The CHAIRMAN pro tempore (Mr. Miller of Florida). It is now in order
to consider amendment No. 2 printed in House Report 106-462.
Amendment No. 2 In The Nature Of A Substitute Offered by Mr. Dingell
Mr. DINGELL. Mr. Chairman, I offer an amendment in the nature of a
substitute.
The CHAIRMAN pro tempore. The Clerk will designate the amendment in
the nature of a substitute.
The text of the amendment in the nature of a substitute is as
follows:
Amendment No. 2 in the nature of a substitute offered by
Mr. Dingell:
Strike out all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Millennium Digital Commerce
Act''.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) The growth of electronic commerce and electronic
government transactions represent a powerful force for
economic growth, consumer choice, improved civic
participation and wealth creation.
(2) The promotion of growth in private sector electronic
commerce through Federal legislation is in the national
interest because that market is globally important to the
United States.
(3) A consistent legal foundation, across multiple
jurisdictions, for electronic commerce will promote the
growth of such transactions, and that such a foundation
should be based upon a simple, technology neutral,
nonregulatory, and market-based approach.
(4) The Nation and the world stand at the beginning of a
large scale transition to an information society which will
require innovative legal and policy approaches, and
therefore, States can serve the national interest by
continuing their proven role as laboratories of innovation
for quickly evolving areas of public policy, provided that
States also adopt a consistent, reasonable national baseline
to eliminate obsolete barriers to electronic commerce such as
undue paper and pen requirements, and further, that any such
innovation should not unduly burden inter-jurisdictional
commerce.
(5) To the extent State laws or regulations do not provide
a consistent, reasonable national baseline or in fact create
an undue burden to interstate commerce in the important
burgeoning area of electronic commerce, the national interest
is best served by Federal preemption to the extent necessary
to provide such consistent, reasonable national baseline or
eliminate said burden, but that absent such lack of a
consistent, reasonable national baseline or such undue
burdens, the best legal system for electronic commerce will
result from continuing experimentation by individual
jurisdictions.
(6) With due regard to the fundamental need for a
consistent national baseline, each jurisdiction that enacts
such laws should have the right to determine the need for any
exceptions to protect consumers and maintain consistency with
existing related bodies of law within a particular
jurisdiction.
(7) Industry has developed several electronic signature
technologies for use in electronic transactions, and the
public policies of the United States should serve to promote
a dynamic marketplace within which these technologies can
compete. Consistent with this Act, States should permit the
use and development of any authentication technologies that
are appropriate as practicable as between private parties and
in use with State agencies.
SEC. 3. PURPOSES.
The purposes of this Act are--
(1) to permit and encourage the continued expansion of
electronic commerce through the operation of free market
forces rather than proscriptive governmental mandates and
regulations;
(2) to promote public confidence in the validity, integrity
and reliability of electronic commerce and online government
under Federal law;
(3) to facilitate and promote electronic commerce by
clarifying the legal status of electronic records and
electronic signatures in the context of contract formation;
(4) to facilitate the ability of private parties engaged in
interstate transactions to agree among themselves on the
appropriate
[[Page H11750]]
electronic signature technologies for their transactions; and
(5) to promote the development of a consistent national
legal infrastructure necessary to support of electronic
commerce at the Federal and State levels within areas of
jurisdiction.
SEC. 4. DEFINITIONS.
In this Act:
(1) Electronic.--The term ``electronic'' means relating to
technology having electrical, digital, magnetic, wireless,
optical, electromagnetic, or similar capabilities.
(2) Electronic agent.--The term ``electronic agent'' means
a computer program or an electronic or other automated means
used to initiate an action or respond to electronic records
or performances in whole or in part without review by an
individual at the time of the action or response.
(3) Electronic record.--The term ``electronic record''
means a record created, generated, sent, communicated,
received, or stored by electronic means.
(4) Electronic signature.--The term ``electronic
signature'' means an electronic sound, symbol, or process
attached to or logically associated with a record and
executed or adopted by a person with the intent to sign the
record.
(5) Governmental agency.--The term ``governmental agency''
means an executive, legislative, or judicial agency,
department, board, commission, authority, or institution of
the Federal Government or of a State or of any county,
municipality, or other political subdivision of a State.
(6) Record.--The term ``record'' means information that is
inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
(7) Transaction.--The term ``transaction'' means an action
or set of actions relating to the conduct of commerce,
between 2 or more persons, neither of which is the United
States Government, a State, or an agency, department, board,
commission, authority, or institution of the United States
Government or of a State.
(8) Uniform electronic transactions act.--The term
``Uniform Electronic Transactions Act'' means the Uniform
Electronic Transactions Act as provided to State legislatures
by the National Conference of Commissioners on Uniform State
Law in the form or any substantially similar variation.
SEC. 5. INTERSTATE CONTRACT CERTAINTY.
(a) In General.--In any commercial transaction affecting
interstate commerce, a contract may not be denied legal
effect or enforceability solely because an electronic
signature or electronic record was used in its formation.
(b) Methods.--Parties to a transaction are permitted to
determine the appropriate electronic signature technologies
for their transaction, and the means of implementing such
technologies.
(c) Presentation of Contracts.--Notwithstanding subsection
(a), if a law requires that a contract be in writing, the
legal effect or enforceability of an electronic record of
such contract shall be denied under such law, unless it is
delivered to all parties to such contract in a form that--
(1) can be retained by the parties for later reference; and
(2) can be used to prove the terms of the agreement.
(d) Specific Exclusions.--The provisions of this section
shall not apply to a statute, regulation, or other rule of
law governing any of the following:
(1) The Uniform Commercial Code, as in effect in a State,
other than section 1-107 and 1-206, article 2, and article
2A.
(2) Premarital agreements, marriage, adoption, divorce or
other matters of family law.
(3) Documents of title which are filed of record with a
governmental unit until such time that a State or subdivision
thereof chooses to accept filings electronically.
(4) Residential landlord-tenant relationships.
(5) The Uniform Health-Care Decisions Act as in effect in a
State.
(e) Electronic Agents.--A contract relating to a commercial
transaction affecting interstate commerce may not be denied
legal effect or enforceability solely because its formation
involved--
(1) the interaction of electronic agents of the parties; or
(2) the interaction of an electronic agent of a party and
an individual who acts on that individual's own behalf or as
an agent, for another person.
(f) Insurance.--It is the specific intent of the Congress
that this section apply to the business of insurance.
(g) Application in UETA States.--This section does not
apply in any State in which the Uniform Electronic
Transactions Act is in effect.
SEC. 6. PRINCIPLES GOVERNING THE USE OF ELECTRONIC SIGNATURES
IN INTERNATIONAL TRANSACTIONS.
To the extent practicable, the Federal Government shall
observe the following principles in an international context
to enable commercial electronic transaction:
(1) Remove paper-based obstacles to electronic transactions
by adopting relevant principles from the Model Law on
Electronic Commerce adopted in 1996 by the United Nations
Commission on International Trade Law (UNCITRAL).
(2) Permit parties to a transaction to determine the
appropriate authentication technologies and implementation
models for their transactions, with assurance that those
technologies and implementation models will be recognized and
enforced.
(3) Permit parties to a transaction to have the opportunity
to prove in court or other proceedings that their
authentication approaches and their transactions are valid.
(4) Take a nondiscriminatory approach to electronic
signatures and authentication methods from other
jurisdictions.
SEC. 7. STUDY OF LEGAL AND REGULATORY BARRIERS TO ELECTRONIC
COMMERCE.
(a) Barriers.--Each Federal agency shall, not later than 6
months after the date of enactment of this Act, provide a
report to the Director of the Office of Management and Budget
and the Secretary of Commerce identifying any provision of
law administered by such agency, or any regulations issued by
such agency and in effect on the date of enactment of this
Act, that may impose a barrier to electronic transactions, or
otherwise to the conduct of commerce online or by electronic
means. Such barriers include, but are not limited to,
barriers imposed by a law or regulation directly or
indirectly requiring that signatures, or records of
transactions, be accomplished or retained in other than
electronic form. In its report, each agency shall identify
the barriers among those identified whose removal would
require legislative action, and shall indicate agency plans
to undertake regulatory action to remove such barriers among
those identified as are caused by regulations issued by the
agency.
(b) Report to Congress.--The Secretary of Commerce, in
consultation with the Director of the Office of Management
and Budget, shall, within 18 months after the date of
enactment of this Act, and after the consultation required by
subsection (c) of this section, report to the Congress
concerning--
(1) legislation needed to remove barriers to electronic
transactions or otherwise to the conduct of commerce online
or by electronic means; and
(2) actions being taken by the Executive Branch and
individual Federal agencies to remove such barriers as are
caused by agency regulations or policies.
(c) Consultation.--In preparing the report required by this
section, the Secretary of Commerce shall consult with the
General Services Administration, the National Archives and
Records Administration, and the Attorney General concerning
matters involving the authenticity of records, their storage
and retention, and their usability for law enforcement
purposes.
(d) Include Findings If No Recommendations.--If the report
required by this section omits recommendations for actions
needed to fully remove identified barriers to electronic
transactions or to online or electronic commerce, it shall
include a finding or findings, including substantial reasons
therefore, that such removal is impracticable or would be
inconsistent with the implementation or enforcement of
applicable laws.
The CHAIRMAN pro tempore. Pursuant to House Resolution 366, the
gentleman from Michigan (Mr. Dingell) and a Member opposed each will
control 15 minutes.
The Chair recognizes the gentleman from Michigan (Mr. Dingell).
Mr. DINGELL. Mr. Chairman, I yield myself such time as I may consume.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Chairman, my old dad taught me to measure twice and
cut once. He said that that was better carpentry, and he was right.
{time} 1445
This amendment is essentially a bipartisan agreement reached in the
Senate between Senators Abraham and Leahy. It is supported by the
administration and it does not bear with it the threat of veto of the
legislation without this amendment. It recognizes the validity of
electronic signatures and contracts. It stays out of the more
complicated questions and controversy associated with electronic
records attendant on those contracts. It also avoids the problem of
telling the contracting parties exactly what they do.
Here is what the substitute does do. It says a contract may not be
denied legal effect or enforceability solely because of electronic
signature or an electronic record was used in the formation. It allows
parties to the transaction to determine appropriate electronic
signature technologies for their transaction. It protects parties by
requiring that the electronic record be delivered in the form that can
be retained by the parties for later reference, and it can be used to
prove the terms of the agreement. It sets forth principles to guide the
Federal Government in expanding the use of electronic signatures in
international transactions. It requires the Federal Government to study
legal and regulatory barriers to electronic contracts.
Now, here is what it does not do. It does not hurt the ability of
States to establish safeguards, such as consumer protection laws for
electronic commerce. It does not wipe out the ability
[[Page H11751]]
of Federal regulators to eliminate abuses that may occur when
electronic records are used. It does not wipe out State laws and
regulations on the maintenance of records critical to protection of
individual rights and claims. It does not preempt State and Federal
records signature requirements, including those in tax laws and
regulatory statutes.
We do not need to sacrifice consumer protections to facilitate
electronic commerce. The concerns that I pointed out earlier are
avoided. Electronic commerce will go forward, the parties will define
the terms under which they will function, State laws will be protected,
consumers will be protected, and entrepreneurs on the Internet will
also be protected. And consumers will know that they have the means to
protect themselves on terms of contracts in which they enter.
Mr. Chairman, may I inquire as to how much time I have consumed?
The CHAIRMAN pro tempore (Mr. Miller of Florida). The gentleman from
Michigan (Mr. Dingell) has used 2\1/2\ minutes and will have 12\1/2\
minutes remaining.
Mr. DINGELL. Mr. Chairman, I reserve the balance of my time.
The CHAIRMAN pro tempore. Does the gentleman from Virginia (Mr.
Bliley) seek the time in opposition?
Mr. BLILEY. I do, Mr. Chairman.
The CHAIRMAN pro tempore. The gentleman from Virginia is recognized
for 15 minutes.
Mr. BLILEY. Mr. Chairman, I yield myself 5\1/2\ minutes, and I rise
in opposition to the substitute offered by the gentleman from Missouri
(Mr. Gephardt), the gentleman from Michigan (Mr. Dingell), the
gentleman from Michigan (Mr. Conyers), and the gentleman from New York
(Mr. LaFalce).
Just last week the House leadership and the administration pulled out
all the stops to defeat H.R. 1714 when it was considered under
suspension. In spite of their opposition, we fell just a few votes shy
of a two-thirds majority. Just this past week an amazing conversion has
taken place. Not only has the majority leadership stopped opposing
electronic signature legislation, but it now supports the concept of
providing legal validity to electronic signatures, and even went so far
as to introduce a bill, H.R. 3220.
I commend my colleagues for their conversion and for recognizing the
importance of this Congress approving electronic signature legislation.
Unfortunately, their amendment, as the old saying goes, is a day late
and a dollar short. The amendment only provides for electronic
signatures on contracts and is, thus, substantially narrower than 1714.
The amendment does not provide for the use or acceptance of electronic
records, such as warranties, notices of or disclosures in electronic
form.
The offerers of this amendment have leveled charges that the
inclusion of records in H.R. 1714 would bring harm to consumers. Such a
charge is completely false. H.R. 1714 contains important provisions
protecting consumers who choose to accept an electronic document. This
makes H.R. 1714 a broader bill, covering a wide range of electronic
commerce transactions. Indeed, we just passed an amendment to improve
this bill dealing with records by a vote of 418 to 2. Why would we want
to strike the provision now?
Coupled with the records provision in H.R. 1714 are key consumer
protections. In short, the key consumer protections are an opt-in
system for consumers who want to accept electronic documents; standards
to ensure that electronic documents are accurate and can be printed for
use for future reference, and a requirement that key notices, such as
termination of a utility service, cancellation of health insurance or
life insurance, and foreclosure or eviction must still be delivered in
writing.
The amendment before us also fails to address the need for uniformity
in electronic signature laws. Currently, Mr. Chairman, 44 States have
enacted some sort of electronic signature law. However, all 44 are
different and many are inconsistent. With such a patchwork of differing
laws, electronic commerce is nearly impossible. This amendment will
only perpetuate that patchwork of laws by allowing States to enact any
law, any law, regulating electronic signatures, no matter how
nonuniform or how inconsistent with the laws of other States.
In contrast, H.R. 1714 allows States to enact a uniform electronic
signature law provided that it meets minimum standards consistent with
promoting electronic commerce. Two of the key principles are that State
laws must be technology neutral and that States cannot limit the
offering of electronic signature services to specific types of
businesses. H.R. 1714 will encourage States to enact uniform laws while
ensuring that States do not inhibit interstate commerce.
In addition, the amendment does not fully address the concerns I have
about the use and acceptance of electronic signatures internationally.
As other speakers have pointed out, some nations have enacted or are
proposing electronic signature legislation that would be harmful to
American interests. Title II of H.R. 1714 provides guidance to the
Secretary of Commerce to work against any barriers to promote American
principles in this area.
I would also like to point out that H.R. 1714 has been the subject of
long and substantial negotiations with the minority. Prior to its
consideration at the subcommittee and full committee level, we engaged
in lengthy negotiations with the minority. The substitute amendments
offered in committee by the gentleman from Ohio (Mr. Oxley), the
gentleman from Louisiana (Mr. Tauzin), and myself contain important
provisions that enjoyed bipartisan support. In fact, H.R. 1714 was
approved through two subcommittees and the full committee by a voice
vote.
We are also hearing that we should support this amendment because it
is identical to the compromise legislation that has been agreed to in
the other body. First, if such a compromise has been reached, it
certainly has not been cleared for floor consideration. I think it is
premature to refer to this as the so-called compromise until it is
voted on and approved by the full committee of the other body.
Second, I am surprised to hear my colleagues say that we should
merely accept the work of the other body without thoroughly considering
this issue in the House. We should not blindly accept any legislation
merely because the other body has supposedly reached a compromise on
the text of a bill.
I am pleased to see that many of my colleagues from across the aisle
have seen the light and decided to support rather than oppose
electronic signature legislation. Unfortunately, their amendment falls
far short of what is needed to promote electronic commerce.
Mr. Chairman, I reserve the balance of my time.
Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the gentleman from
New York (Mr. LaFalce).
(Mr. LaFALCE asked and was given permission to revise and extend his
remarks.)
Mr. LaFALCE. Mr. Chairman, I do not believe there is a representative
in this body who does not favor electronic signatures. That is not the
issue before us. The issue before us is should we pass Federal
legislation that, A, preempts consumer rights; and, B, preempts States
rights. I think the answer to that is no.
So there is another question. Why not this substitute? Why not this
substitute that the administration favors, that is the agreed-upon
compromise at least between Senator Abraham, the chairman of the
relevant Judiciary Subcommittee in the Senate, and Senator Wyden and
Senator Leahy?
With respect to consumer rights, every consumer group believes that
we must pass this substitute in order to keep the consumer protections
that are presently in existing law. Industry, the Microsofts, the
Yahoos of this world, would embrace the substitute if it were to be
before the President for his signature. It is just that if they can get
a better bill that preempts consumer rights, why not?
I remember when I first studied law, the Uniform Commercial Code was
to be adopted by the States. Nobody suggested that because contracts
are interstate in nature there should be a Federal law preempting the
ability of States to adopt the Uniform Commercial Code sometime, with a
little change here or a little change there, and that is how it has
evolved.
The present bill that is before us would preempt any State law unless
it
[[Page H11752]]
is fully consistent with the Federal bill. In other words, it preempts
it totally. The substitute would pass this legislation, protect the
consumer, but also protect the abilities to enact consumer protections
that might be even greater. I think that is something we want to
preserve.
We will get the signature of the President on the substitute. It is
probably going to be the virtual identical bill that passes the Senate.
Why not vote for this substitute, get a law, and get the law passed
immediately?
Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from Utah
(Mr. Cannon).
Mr. CANNON. Mr. Chairman, I rise in opposition to the substitute. I
do not support the substitute because it fails to simplify, clarify,
and modernize the law governing electronic commerce. It fails to
promote uniformity of law among the States, and it fails to advance
American interests worldwide by promoting a uniform legal regime
addressing the use of electronic and similar technological means of
effecting and performing commercial and governmental transactions.
The substitute will not accomplish what should be the basic objective
of any legislation on this subject; that is, bringing legal certainty
to electronic transactions in commerce. The substitute fails in this
regard because, instead of promoting uniformity of law among the
States, it will lead to the balkanization of applicable law. This will
lead to greater uncertainty.
Balkanization will occur because, even with its most narrow scope,
the substitute does not apply to States where the Uniform Electronic
Transactions Act, UETA, is adopted in whole or any substantially
similar variation. Between Section 3(b)(5) of UETA, which permits a
State to exclude any of its laws from the application of UETA, and the
substitute's substantially similar variation language, a State is
completely free to institute its own electronic commerce laws
regardless of such laws' effect on interstate commerce.
That is exactly what happened in California, the first State to adopt
UETA. Relying on Section 3(b)(5) of the UETA, better known in some
circles UETA's black hole, California excluded many laws from the
application of UETA's principles. Those laws include most sections of
the following California codes: Uniform Commercial Code, the Business
and Professions Code, the Civil Code, the Financial Code, the Insurance
Code, Public Utilities Code, and the Vehicle Code.
If every State was to take California's approach, the effect would be
to further remove legal certainty. Rather, 50 separate legal regimes
may arise governing electronic transactions in commerce. This outcome
is counterproductive and unacceptable. I therefore urge my colleagues
on both sides of the aisle to vote ``no'' on the substitute.
Mr. CONYERS. Mr. Chairman, I yield myself 2 minutes.
My colleagues, this substitute is just what we need. It has come not
a moment too soon, because I think we can now bring a marriage to the
rights of consumers and the high-tech necessities of e-signature. It
satisfies the need of the high-tech community by recognizing the
validity of the electronic signatures in contracts, but it does not go
as far as the base bill in getting into the controversial issue of
other electronic records that might arise from electronic contract
formation.
{time} 1500
In other words, this steers a midcourse. It has a counterpart in the
United States Senate. And it also has the assurance that the President
will sign it into law.
So I am asking my colleagues, please, if we are supporting e-
signatures and want to move high tech forward, here is the substitute
that we can do this by.
The substitute deals only with the formation of electronic contracts
and not other types of records. It does not undermine the important
consumer protection laws. For example, regulations implementing the
Truth in Lending Act require creditors to provide consumers with
periodic statements that include information essential to a consumer in
managing a credit card account.
Now, this cannot be accomplished unless we have the substitute.
Creditors could request on a consumer's consent to receive all
disclosures electronically under H.R. 1714. That is exactly what we are
trying to make the distinction between the substitute and the base
bill. Please support this substitute.
Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Louisiana (Mr. Tauzin).
Mr. TAUZIN. Mr. Chairman, I thank the gentleman for yielding me the
time. I rise in opposition to this substitute.
Mr. Chairman, members of the committee, the substitute, if adopted,
will rob this body of one of its rare opportunities to do good not only
by our generation of Americans but by generations yet unborn.
We are about to enter a new millennium that, in large measure, is
going to be governed by the enormous possibilities of not only the
current Internet as we know it but as broadband, high-speed, always-on,
always-available, supercontent-rich, broadband Internet services that
are going to merge with television and provide us with new means of
communicating and entertaining ourselves and indeed conducting
electronic commerce across the span of the globe. It is going to make a
smaller world and make possible enormous opportunity for citizens of
this country and citizens of the word.
But in order for that to flourish, the legal rules that are to govern
electronic commerce ought to be made clear. The bill does that.
The problem with the substitute is that it limits the bill only to
those matters dealing with the formation of an electronic contract.
Now, in the earlier discussions, I tried to point out to my
colleagues that many things that happen in electronic commerce do not
involve the formation of a contract. The best example is when we write
a check and that check has to be physically delivered by the bank to
the bank of the recipient to whom we are sending the money. Just the
physical transfer of all those checks, all that paperwork, costs
consumers in America $4 billion a year just moving that paper around.
The substitute would do nothing to provide for digital signature in
the electronic commerce of transferring money around in the form of
payments and checks.
I urge that this substitute be defeated and we stick with the main
body of the bill.
Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished
gentleman from New York (Mr. Weiner), a member of the Committee on the
Judiciary.
Mr. WEINER. Mr. Chairman, I rise in support of the amendment and the
substitute being offered by the gentleman from Michigan (Mr. Dingell)
and the gentleman from Michigan (Mr. Conyers) and others. I would
appeal to my colleagues on perhaps a different level than this issue
has been debated for some time.
We still have relatively small numbers of American citizens
participating in Internet commerce, but that number continues to rise
almost exponentially each year. And the reason for that rise in
participation in the Internet commerce world is people are developing
more confidence. Each time they go make a purchase and they get their
product and their credit card number is not stolen and their
information not shopped around, people are more likely to come back in
future years to partake in that activity again.
That is why it is so absolutely important during this period when
Internet commerce is growing that we do everything we can to reassure
consumers and reassure those in the States that when they pass laws
that they are going to be protected. The substitute adheres to the most
stringent consumer protection while still allowing digital signatures.
For those of my colleagues who are like me who on some level do
believe that the banking community and the insurance and financial
services community should have easier access to this world, I believe
we have to do this in a thoughtful way while preserving consumers'
rights and, of course, while preserving the rights of States and
localities to do what they need to do to reassure those who do partake
in the Internet commerce that they will be safe in doing so.
[[Page H11753]]
The substitute does that. It does not jeopardize the basic things
that the sponsor of the bill would like to do. I urge a yes vote on the
substitute.
Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Ohio (Mr. Oxley).
(Mr. OXLEY asked and was given permission to revise and extend his
remarks.)
Mr. OXLEY. Mr. Chairman, I rise in opposition to the substitute
offered by my good friend, the gentleman from Michigan (Mr. Dingell).
As I said in my statement in supporting the underlying bill, we will
do irreparable harm to the future of electronic commerce if we are
unable to provide the basis for uniformity and legal certainty. And,
indeed, that is really what this legislation is all about.
Those of us who study law understood that the Uniform Commercial Code
really for the first time turned loose this great engine of economic
opportunity and contracts throughout our 50 States when we had some
degree of certainty when we are dealing with the Uniform Commercial
Code.
In many ways, this legislation sponsored by our good friend, the
chairman of the Committee on Commerce, is a natural consequence of
following along with the Uniform Commercial Code, but we are doing it
as it relates to electronic commerce. Electronic commerce is that
natural consequence of what we are doing. So, essentially, that is
really what this bill is all about.
The substitute amendment only provides legal certainty if the
transaction was conducted as a result of a contract. And indeed, a lot
of commerce takes place without formal contracts. And that is what
really this legislation is all about.
This substitute, I would tell my good friend from Michigan, is over
regulatory, it is industrial policy legislation that is contrary to
what electronic commerce is really all about.
Mr. Chairman, the substitute amendment is simply a failure in regards
to trusting people who are becoming more and more sophisticated in
dealing with electronic commerce and more and more feeling comfortable
with what is happening out there in the marketplace. This would be a
huge step backwards in the name of consumer protection, when in fact it
is quite the opposite and trusts government and trusts regulations and
trusts bureaucrats far more than we trust the consumer in making these
very important decisions in the marketplace.
So, for that reason, I would ask the substitute be defeated.
Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished
gentleman from New York (Mr. LaFalce).
Mr. LaFALCE. Mr. Chairman, the gentleman from Ohio (Mr. Oxley) made
reference to the Uniform Commercial Code bringing uniformity. I point
out that it was not by Federal legislation; it was by the adoption of
the individual States. We retain States' rights.
There is such a thing as the Uniform Electronic Transactions Act. The
National Conference of State Legislators wants the individual States to
adopt that.
Now the issue is not whether we should adopt UETA on a Federal level,
because we are not doing that. We are adopting it with some changes
here, some changes there. What changes are we making? Those that don't
benefit the consumers.
We are also saying to the States that they can pass whatever law they
want, but it cannot in any way be inconsistent with what we pass, which
is not the UETA.
Support the substitute. Defeat the main bill. Because if it goes
before the President for his signature as it is before the House right
now, it will be vetoed. The substitute will be signed.
Mr. BLILEY. Mr. Chairman, I reserve the balance of my time.
Mr. DINGELL. Mr. Chairman, I yield myself 4 minutes.
Mr. Chairman, this bill in its original form passed from the
Committee on Commerce unanimously. Now, what happened between now and
then is really very interesting. The bill has been changed. The Members
on the minority side consulted extensively with our good friend, the
chairman of the committee, and we were negotiating with him; and there
were a number of agreements made to change the bill to make it still
more acceptable and more workable.
But then something funny happened on the way to the floor. The
distinguished gentleman from Virginia, or somebody else, all of a
sudden decided they are going to put the bill on the floor, and they
decided they were going to terminate the negotiations without any
notice to the minority.
They then took the step of making some significant changes in the
bill. It is not the bill that came out of the Committee on Commerce to
which the minority objects. We will be happy to vote for that right
this minute. But what we are confronted with here is the unfortunate
situation where our dear friends on the majority side have changed the
bill with no notice, and it is quite different than the original bill.
Now, what is the basic objection to the bill? Let us try and
understand to what does the minority really object.
The minority objects not to the idea that we should authorize under
law a uniform system of recognizing the electronic signature of
contracts. What is objected to here is something quite different, and
that is that all of the matters which are associated with the contract
and with contracting are with one swoop of the pen or one click of the
computer changed so that they immediately go into force and that no
right on the part of the individual who contracts remains intact after
the original electronic signature has taken place.
Now, what can happen? A number of matters of notice come
electronically. They are not in hard copy and in writing. The right of
the contracting parties to say but certain other things have to be
under signature and on paper in the conventional fashion as required by
existing State law and by even things going back to common law and
ordinary business practices and transactions are no longer permitted.
Those are done once they have made the initial electronic contracts by
a further electronic transaction.
Now, what is wrong with that? First of all, the hard drive may crash.
Second of all, the Y2K bug may strike. Third of all, these notices may
get lost in cyberspace. The individual may do a bad job of notifying
the other party of an address change. Or the computer may crash. Or any
of many things may transpire. The parties cannot even agree to these
questions amongst themselves. That is wrong.
If we want to go forward, let us proceed and go forward on the bill
that was adopted by the Committee on Commerce. Let us adopt this, which
allows everything that the original legislation would have done and
which was supported by both sides, majority and minority. Let us
proceed in that fashion.
I see no benefit to moving forward with a bill which is so strongly
objected to, which is not in the Senate language, and which is
threatened with a veto by the President.
All I am suggesting is that they listen to the words of my old dad.
When we are going to make this size of massive change, do it sensibly.
Know what we are accomplishing. As my dad used to warn me when I was
doing carpentry, he would say, ``Measure twice. Cut once. Be careful.''
That is what I am suggesting to this body. Measure twice. Cut once.
Adopt the amendment. Get the bill signed. And then let us proceed
forward to such other matters as may be required.
Mr. BLILEY. Mr. Chairman, how much time do I have remaining?
The CHAIRMAN pro tempore (Mr. Miller of Florida). The gentleman from
Virginia (Mr. Bliley) has 3\1/2\ minutes remaining, and the gentleman
from Michigan (Mr. Dingell) has 2\1/2\ minutes remaining.
Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from
Mississippi (Mr. Pickering).
Mr. PICKERING. Mr. Chairman, I rise in opposition to the substitute.
Again, with great respect to the ranking member from the other side, I
rise in opposition.
I do so because the substitute fails in its own objective of
eliminating barriers to electronic commerce by recognizing the validity
of electronic signatures and contracts.
The fact is that the substitute does very little to remove barriers
that result from the legal uncertainty associated with electronic
signatures and contracts.
Actually, the substitute further exacerbates the uncertainty
associated with the legal effect and enforceability
[[Page H11754]]
of electronic mediums such as electronic contracts, agreements,
signatures, and records.
{time} 1515
Under the substitute, electronic signatures and records will enjoy
legal effect and enforceability only if they are used in the formation
of an electronic contract. Thus, an electronic signature or record is
not accorded legal validity unless used in the context of contract
formation. The net positive effect of the substitute on e-commerce is
minimal at best. Moreover, as the substitute enables a State to exclude
any of its laws from the application of the substitute's rule, even
that minimal positive effect is at risk of further diminishment. Still
another disconcerting fact is that permitting a State to exclude any or
all of its laws, the substitute actually undermines the growth of
electronic commerce by exacerbating uncertainty by codifying that
uncertainty in Federal law.
The simple fact is that the substitute fails to facilitate and
promote electronic commerce by validating and authorizing the use of
electronic contracts, agreements, records and signatures. And
resultantly, it fails to promote public confidence in the validity,
integrity and reliability of electronic commerce. H.R. 3220 may
actually hinder the development of legal and business infrastructure
necessary to implement electronic commerce and therefore retard growth
in e-commerce.
Mr. Chairman, I rise in support of the underlying bill and in
opposition to the substitute.
Mr. DINGELL. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, I have here a Floor Alert from the National Conference
of State Legislatures, Office of State-Federal Relations, in which they
point out that the substitute offered by my friends and colleagues and
me will accomplish the purposes of ensuring the proper recognition of
electronic signatures without trampling on the rights of consumers and
without engaging in the completion of legislation which will be opposed
and vetoed by the administration.
Our proposal here is fair. There is no significant trampling on State
laws. There is a piece of legislation which will be accepted by the
administration and which will protect the rights of consumers. Messages
which would be transported in cyberspace and perhaps lost to the
detriment of consumers who might find as a result of that foreclosures
of mortgages and other hurtful actions by the seller will not be
occurring.
I think this is a sensible way to proceed. Let us know what we are
doing. We embarked upon this process in the idea that we would have a
bill which would approve electronic signatures. The original committee
bill did that. Declarations were festooned upon the committee bill.
This amendment gives all of the rights to the parties that they want.
An individual to that contract may waive contract rights to carry the
matter more far and further forward, but this proposal that we confront
and seek to amend will impose upon innocent persons conditions which
will only be understood by lawyers and experts in electronic matters.
Be fair to your constituents and to the people. Allow them to proceed
slowly into the time of cyberspace. Do not put them at risk because all
of a sudden they are going to find to their vast surprise, somewhere
hidden in a contract which they had signed electronically are a waiver
of a whole plethora of rights that are very important to them.
Accept the amendment. Vote for it. And in failing that, reject the
bill. It is not in the interests of your constituents.
Mr. BLILEY. Mr. Chairman, I yield myself the balance of my time.
I again rise in opposition to this amendment. Records are important
to add to this, it is voluntary, and we have been into that over and
over.
In addition to that, what this amendment would do would be to allow
States to enact any kind of legislation they want on this subject, and
44 States have already acted. There is a wide variety of difference
between the 44 States. The one thing about electronic commerce, it is
certainly interstate commerce and that has always been reserved to the
Congress.
I would hope that we would reject this amendment and adopt the
underlying bill. I would like to point out that the gentleman from
Michigan (Mr. Conyers) is a cosponsor of H.R. 2626, a bill that allows
electronic delivery of consumer disclosures under a variety of banking
laws, including the Truth-in-Lending Act, the Equal Credit Opportunity
Act, the Fair Credit Reporting Act, the Real Estate Settlement Act, and
yet we have the gentleman opposing the inclusion of records in H.R.
1714. Passing strange.
I urge the defeat of this amendment and the adoption of the
underlying bill.
The CHAIRMAN pro tempore (Mr. LaTourette). The question is on the
amendment in the nature of a substitute offered by the gentleman from
Michigan (Mr. Dingell).
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mr. DINGELL. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 126,
noes 278, not voting 29, as follows:
[Roll No. 578]
AYES--126
Abercrombie
Ackerman
Allen
Andrews
Baldacci
Baldwin
Barrett (WI)
Becerra
Berman
Blagojevich
Bonior
Borski
Brady (PA)
Brown (OH)
Capps
Capuano
Cardin
Clayton
Clyburn
Conyers
Costello
Coyne
Danner
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Dixon
Doyle
Duncan
Edwards
Engel
Eshoo
Evans
Farr
Fattah
Filner
Frank (MA)
Green (TX)
Gutierrez
Hall (OH)
Hastings (FL)
Hilliard
Hinchey
Hinojosa
Hoeffel
Hoyer
Jackson (IL)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Lee
Levin
Lewis (GA)
Lipinski
Lowey
Luther
Maloney (NY)
Markey
Martinez
Mascara
McCarthy (MO)
McDermott
McGovern
McKinney
McNulty
Meehan
Menendez
Miller, George
Mink
Moakley
Mollohan
Nadler
Neal
Oberstar
Obey
Olver
Ortiz
Pallone
Pastor
Paul
Phelps
Pomeroy
Rahall
Rangel
Reyes
Rivers
Rothman
Roybal-Allard
Rush
Sabo
Sanders
Sawyer
Schakowsky
Scott
Serrano
Slaughter
Smith (MI)
Spratt
Stark
Strickland
Stupak
Tierney
Towns
Turner
Velazquez
Vento
Visclosky
Waters
Watt (NC)
Waxman
Weiner
Wexler
Wise
Woolsey
Wynn
NOES--278
Aderholt
Archer
Armey
Bachus
Baird
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bentsen
Bereuter
Berkley
Biggert
Bilbray
Bilirakis
Bishop
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bono
Boswell
Boucher
Boyd
Brady (TX)
Brown (FL)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Clement
Coble
Collins
Combest
Condit
Cook
Cooksey
Cox
Cramer
Crane
Crowley
Cubin
Cunningham
Davis (FL)
Davis (VA)
Deal
DeLay
DeMint
Deutsch
Diaz-Balart
Doggett
Dooley
Doolittle
Dreier
Dunn
Ehlers
Ehrlich
Emerson
English
Etheridge
Everett
Ewing
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gejdenson
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (WI)
Greenwood
Gutknecht
Hall (TX)
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (IN)
Hill (MT)
Hilleary
Hobson
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hyde
Inslee
Isakson
Istook
Jenkins
John
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
Kind (WI)
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Larson
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lofgren
Lucas (KY)
Lucas (OK)
Maloney (CT)
Manzullo
McCarthy (NY)
McCollum
McCrery
McHugh
McInnis
McIntosh
McIntyre
McKeon
Metcalf
Mica
Miller (FL)
Miller, Gary
Minge
Moore
Moran (KS)
Moran (VA)
Murtha
Myrick
Napolitano
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Pease
[[Page H11755]]
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Roemer
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanchez
Sandlin
Sanford
Saxton
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Smith (NJ)
Smith (WA)
Souder
Spence
Stabenow
Stearns
Stenholm
Stump
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thornberry
Thune
Thurman
Tiahrt
Toomey
Traficant
Udall (CO)
Udall (NM)
Upton
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Weygand
Whitfield
Wicker
Wilson
Wolf
Wu
Young (AK)
Young (FL)
NOT VOTING--29
Berry
Carson
Clay
Coburn
Cummings
Davis (IL)
Dickey
Gephardt
Hutchinson
Jackson-Lee (TX)
Jefferson
Johnson, E. B.
Jones (OH)
King (NY)
Largent
Matsui
Meek (FL)
Meeks (NY)
Millender-McDonald
Morella
Owens
Pascrell
Payne
Rodriguez
Rogan
Scarborough
Smith (TX)
Snyder
Thompson (MS)
{time} 1547
Messrs. REGULA, WEYGAND, GEJDENSON, SCHAFFER, SHOWS, and HEFLEY, Mrs.
CHENOWETH-HAGE, and Mrs. THURMAN changed their vote from ``aye'' to
``no.''
Mr. WEXLER and Mr. SPRATT changed their vote from ``no'' to ``aye.''
So the amendment in the nature of a substitute was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. BERRY. Mr. Speaker, I was unavoidably detained for rollcall vote
578. Had I been present, I would had voted ``yes'' on rollcall vote
number 578.
Stated against:
Mr. ROGAN. Mr. Chairman, on rollcall No. 578, I was attending the
Little Rock Nine Congressional Medal of Honor Ceremony at the White
House. Had I been present, I would have voted ``no.''
The CHAIRMAN pro tempore. The question is on the amendment in the
nature of a substitute, as amended.
The amendment in the nature of a substitute, as amended, was agreed
to.
The CHAIRMAN pro tempore. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
LaHood) having assumed the chair, Mr. LaTourette, Chairman pro tempore
of the Committee of the Whole House on the State of the Union, reported
that that Committee, having had under consideration the bill (H.R.
1714) to facilitate the use of electronic records and signatures in
interstate or foreign commerce, pursuant to House Resolution 366, he
reported the bill back to the House with an amendment adopted by the
Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on the amendment to the amendment in the
nature of a substitute adopted by the Committee of the Whole? If not,
the question is on the amendment in the nature of a substitute.
The amendment in the nature of a substitute was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. LaFALCE. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on passage of the bill are postponed until later today.
____________________