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Legislators, Regulators Act on E-SIGN Issues
Washington, DC, July 20, 2001 - Several developments have emerged in recent weeks related to the Electronic Signatures in Global and National Commerce Act (E-SIGN).
The Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth of the U.S. House of Representatives Committee on Financial Services held a hearing on E-SIGN. The hearing coincided with the release of a joint report to Congress by the Federal Trade Commission (FTC) and the Department of Commerce concerning the "reasonable demonstration" requirement of E-SIGN’s consumer consent provision.
Meanwhile, the Securities and Exchange Commission issued an interpretive release concerning the impact of E-SIGN on certain rules under the Securities Act of 1933, the Securities Exchange Act of 1934, and Regulation S-T that require issuers to maintain signature authentication documents and certain other records for required periods.
Congressional Hearing on E-SIGN
The Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth of the House Committee on Financial Services held a June 28 hearing entitled "ESIGN—Encouraging the Use of Electronic Signatures in the Financial Services Industry." Witnesses at the hearing included representatives from the FTC, the American Insurance Association, the Electronic Financial Services Council, the Financial Services Roundtable, and the National Consumer Law Center, as well as an attorney from the law firm of Alston & Bird LLP testifying on his own behalf.
Subcommittee Chairman Peter T. King (R-N.Y.) opened the hearing by indicating that the Subcommittee was "revisiting E-SIGN in an effort to determine if its ‘real world’ implementation is providing the legal certainty and protection envisioned by Congress." Industry witnesses highlighted various issues that may have slowed the pace at which businesses have embraced E-SIGN, including concerns about uniformity between E-SIGN and state laws, issues related to agency interpretations of E-SIGN, and questions surrounding E-SIGN’s consumer consent requirements. Nevertheless, most witnesses agreed that legislative changes were not warranted at this time.