Compromise in the Works on Digital Signatures Bill

Digital signature legislation, once seen as a relatively simple measure that has since become mired in a thicket of consumer protection concerns, may finally be inching closer to approval in Congress.

U.S. House and Senate Republicans working on the digital signature issue have been circulating a compromise draft proposal this week, and a conference vote on it could take place at any time. A vote originally was expected as early as today, but one hadn't been scheduled as of 3 p.m. eastern time this afternoon.

The proposal - a combination of the Senate's Millennium Digital Commerce Act and the House's E-Sign bill - provides a number of legislative carve-outs that would require companies to continue providing paper-based notices to consumers on such things as termination of health care and life insurance benefits, loan defaults and health insurance benefits.

The proposed compromise, which would give digital signatures the same legal weight that written ones have, also requires consumers to consent to receiving documents by e-mail, said one Congressional staff member.

But Margot Saunders, managing attorney at the Washington office of the National Consumer Law Center and a prominent critic of the digital signatures legislation, said the combined proposal hasn't abated consumer protection concerns. "There is no protection of any meaningful consequence for consumers," she said.

For instance, Saunders said she's worried that predatory lenders - companies that aggressively push loans with high interest rates to people who are vulnerable to such sales pitches - will use the provisions in the legislation to hide details of loan agreements from consumers who may not have access to computers.

"This bill essentially forces electronic commerce down people's throats," Saunders said. "The purpose of the bill was to facilitate e-commerce. The bill goes way further than that."

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