Office of Management and Budget Click to print this document

November 8, 1999
(House Rules)

H.R. 1714 - Electronic Signatures in Global
and National Commerce Act

(Bliley (R) Virginia and 10 cosponsors)

The Administration strongly opposes House passage of the version of H.R. 1714 that was considered by the House on November 1, 1999. The Administration strongly urges the Committee on Rules to adopt a rule that permits floor consideration of H.R. 3220 as a substitute amendment, which the Administration endorses as an alternative to the text of H.R. 1714.

As the Congress was advised on November 1, 1999, in a previous Statement of Administration Policy on H.R. 1714 (copy enclosed), we share the view of the Congress that electronic commerce can play an important role in expanding our economy at the same time that it provides new benefits to consumers, and that States - and to the extent necessary, the Federal government - can assist the growth of electronic commerce by ensuring a predicable legal environment with regard to the validity of electronic signatures and contracts.

Unfortunately, H.R. 1714 overreaches in its efforts to accomplish this goal. The provisions of this bill on electronic records and electronic record retention unnecessarily deprive consumers of significant protections under current law. The bill deprives regulators of the ability to ensure that electronic disclosures and notices under existing consumer protection statutes will be made in a meaningful way. Under this bill, financial institutions could continue to make disclosures or notices electronically even if a consumer does not have, or never had, reliable access to a computer and never actually receives the notice. The bill would also preempt State laws too broadly.

H.R. 3220, by contrast, would:

  • ensure the legal validity of contracts between private parties that are made and signed electronically;

  • preserve longstanding authority to establish safeguards, such as consumer protection laws, to promote the public interest in electronic commerce among private parties just as they can now establish safeguards for paper-based commerce;

  • cover only commercial transactions between private parties that affect interstate commerce;

  • not affect Federal laws or regulations, but instead would give Federal agencies six months to conduct a careful study of barriers to electronic transactions under Federal laws or regulations and to develop plans to remove such barriers, where appropriate; and

  • sunset completely when a State enacts the Uniform Electronic Transactions Act.

The Administration supports these provisions, or any similar alternative or amendment that seeks to accomplish these critically important and more focused objectives.

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