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ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT
(House of Representatives - November 09, 1999)
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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
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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
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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
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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.
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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
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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
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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
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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 Massach
Major Actions:
All articles in House section
ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT
(House of Representatives - November 09, 1999)
Text of this article available as:
TXT
PDF
[Pages
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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
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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
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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
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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
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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
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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
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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.
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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 collea
