[Congressional Record Volume 147, Number 93 (Friday, June 29, 2001)]
[Senate]
[Pages S7188-S7189]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT

  Mr. LEAHY. Mr. President, one of the most significant accomplishments 
of the 106th Congress was the Electronic Signatures in Global and 
National Commerce Act, commonly known as ``ESIGN.'' This landmark 
legislation establishes a Federal framework for the use of electronic 
signatures, contracts, and records, while preserving essential 
safeguards protecting the Nation's consumers. It passed both houses of 
Congress by an overwhelming majority, and went into effect in October 
2000.
  I helped to craft the Senate version of the bill, which passed 
unanimously in November 1999, and I was honored to serve as a conferee 
and help develop the conference report. I am proud of what we achieved 
and the bipartisan manner in which we achieved it. It was an example of 
legislators legislating rather than politicians posturing and 
unnecessarily politicizing important matters of public policy.
  Much of the negotiations over ESIGN concerned the consumer protection 
language in section 101(c), which was designed to ensure effective 
consumer consent to the replacement of paper notices with electronic 
notices. We managed in the end to strike a constructive balance that 
advanced electronic commerce without terminating or mangling the basic 
rights of consumers.
  In particular, ESIGN requires use of a ``technological check'' in 
obtaining consumer consent. The critical language, which Senator Wyden 
and I developed and proposed, provides that a consumer's consent to the 
provision of information in electronic form must involve a 
demonstration that the consumer can actually receive and read the 
information. Companies are left with ample flexibility to develop their 
own procedures for this demonstration.
  When the Senate passed ESIGN in June 2000, I expressed confidence 
that the benefits of a one-time technological check would far outweigh 
any possible burden on e-commerce. I also predicted that this provision 
would increase consumer confidence in the electronic marketplace.
  One year later, the Federal Trade Commission and the Department of 
Commerce have issued a report on the impact of ESIGN's consumer consent 
provision. In preparing the report, these agencies conducted extensive 
outreach to the on-line business community, technology developers, 
consumer groups, law enforcement, and academia. The report concludes:

       [T]hus far, the benefits of the consumer consent provision 
     of ESIGN outweigh the burdens of its implementation on 
     electronic commerce. The provision facilitates e-commerce and 
     the use of electronic records and

[[Page S7189]]

     signatures while enhancing consumer confidence. It preserves 
     the right of consumers to receive written information 
     required by state and federal law. The provision also 
     discourages deception and fraud by those who might fail to 
     provide consumers with information the law requires that they 
     receive.''

  Significantly, the consumer consent provision is benefitting 
businesses as well as consumers. The report states that businesses that 
have implemented this provision are reporting several benefits, 
including ``protection from liability, increased revenues resulting 
from increased consumer confidence, and the opportunity to engage in 
additional dialogue with consumers about the transactions.'' The 
technological check has not been significantly burdensome, and ``[t]he 
technology-neutral language of the provision encourages creativity in 
the structure of business systems that interface with consumers, and 
provides an opportunity for the business and the consumer to choose the 
form of communication for the transaction.''
  The report also finds that ESIGN's consumer safeguards are helping to 
prevent deception and fraud, which is critical to maintaining consumer 
confidence in the electronic marketplace.
  ESIGN is a product of bipartisan cooperation, and it is working well 
for the country. We should learn from experience as we take up new 
legislative challenges.

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