WASHINGTON, D.C. - Today, the Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth held a hearing: "ESIGN - Encouraging the Use of Electronic Signatures in the Financial Services Industry." Ranking Member Congresswoman Carolyn B. Maloney (D-NY) delivered the following statement at the hearing:

"A year ago this Saturday, June 30, 2000, President Clinton signed the historic ESIGN legislation granting electronic records and signatures legal enforceability on par with written documents. Enactment of ESIGN was driven by the explosion in online commerce and the bipartisan desire of Congress and the Clinton Administration to facilitate its continued expansion.

"While ESIGN modernizes our legal framework to reflect the new economy, Congress made clear that individuals deserve the same level of consumer protection in the online world as when they engage in paper-based transactions. One of the most important efforts to transfer these protections online is the consumer consent section in ESIGN. Today the Subcommittee meets to review the report of the Federal Trade Commission and Department of Commerce on the benefits and burdens of the consumer consent provisions.

"In preparing its report the Commission and Department of Commerce reviewed extensive public comments from industry and consumer groups and conducted a public workshop. While today we are only one year removed from enactment, I am pleased that the FTC and Commerce have concluded that thus far the ESIGN consent provisions are proving effective.

"The consumer consent provisions in ESIGN require that information that businesses are currently required to provide to consumers in writing may only be provided in electronic form if the consumer affirmatively consents to electronic delivery in a manner that reasonably demonstrates the consumer's ability to access the electronic record. Information that businesses are currently required to make in writing include contract terms and the gamut of consumer protection disclosures which are intended to protect customers from fraud and to hold parties to the terms of agreements. At this time I want to welcome to the Subcommittee Rep. Jay Inslee (D-WA), a member of the full Financial Services Committee who will join us today and who fought for these consumer provisions last year.

"The ESIGN consumer protection provisions recognize that there is a wide range in the level of public computer proficiency and access to the Internet. While customers of online banks or brokerages are already accustomed to conducting complicated transactions over the Internet, ESIGN is intended to prevent consumer who are less accustomed to the online world from unwittingly consenting to receive information in a form they cannot access.

"While I agree with the FTC/Commerce report's conclusion that the benefits of the consent provisions outweigh their burden, I am interested to hear the perspective of industry witnesses today and their perspective on complying with the provisions. I also look forward to the discussion of the interaction of ESIGN and the electronic signature legislation being promoted at the state level, the Uniform Electronic Transaction Act (UETA).

"Enactment and enforcement of strong consumer protections are the best tools Congress has to increase public confidence in the Internet and to contribute to the continued growth of e-commerce. The ESIGN Act's consumer consent provisions are an important step in this effort."

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