U.S. House Shoots Down E-Signatures Bill

House Commerce Committee Chairman Tom Bliley’s move to push the Electronic Signatures in Global and National Commerce Act through the House of Representatives without the blessing of House leadership has backfired and resulted in defeat.

The measure, which was defeated Monday, garnered enough votes to pass under standard house procedures, but Bliley’s move to suspend the rules of procedure and vote early required a two-thirds majority vote. The bill failed by a vote of 234 in favor to 122 against, with 77 members not voting.

The E-SIGN bill would have given an electronically signed contract formed over the Internet the same legal validity as a paper contract with a hand written signature.

“The lack of legal certainty for electronic signatures and records has been cited by many in the e-commerce industry as a potential roadblock to the growth of electronic commerce,” Bliley said, noting the measure was the upshot of numerous hearings by the Commerce Committee and Judiciary Committee on the issue.

Partisan Bickering

Bliley decried the bill’s failure as a product of partisan politics, arguing that he spent several weeks recently trying to iron out issues that Democratic members of his committee and the House Judiciary Committee raised with the bill.

Bliley pulled the bill from the House calendar two weeks ago to work on those items, negotiating withRep. Ed. Markey (D-Massachusetts) and John Dingell (D-Michigan) to amend the bill in a manner that the three believed would win support from both sides of the aisle.

Despite this effort, Bliley claimed, the Clinton administration persuaded enough Democratic members of Congress to withdraw their support for the bill, in an effort to deny the Republican party a political victory. Bliley moved Monday to force a vote on the measure before debate on the bill was complete, in an effort to stem any further loss of support, but the damage had already been done.

“As of the middle of last week, I believed that we had reached a substantive agreement,” Bliley said. “Numerous changes were made to the text of the bill on a good-faith effort by me to address the legitimate concerns raised about the bill by some of our colleagues.”

The changes included adding an opt-in provision to prevent consumers from being forced to use or accept electronic records. The Congressmen also added provisions to prohibit the use of electronic records, as opposed to print versions, if those records are necessary to protect the person’s health, safety or home.

Democrats Call Bill Incomplete

Markey, a longtime member of Congress and the Commerce Committee, disputed Bliley’s charge of partisan politics working to scuttle the bill. Though he praised Bliley for his efforts to reach bipartisan agreement on the changes to the bill, Markey said that some issues remained unresolved to the Democrats’ satisfaction.

Such issues included “what kind of notice, whether it be conspicuous or otherwise, that consumers are entitled to under existing laws to receive these documents in writing,” he said.

“We are quite regretful on this side, because we clearly would like to support a piece of legislation that advances these goals and could be passed on a bipartisan near-unanimous vote out here on the floor,” Markey said on the day of the vote. “But at this point I have to regretfully ask the Members to vote no.”

The bill also lost support from some members because House leaders did not send it to the Committee on Banking and Financial Services for examination, members said. Rep. Bruce Vento (D-Minnesota) argued that the final version of the bill up for a vote Monday turned out to be more complex, and therefore warrant closer scrutiny, than the original bill that moved through Commerce and Judiciary Committees earlier this year.

The bill “encompasses much more than simply an electronic signature,” said Vento, chairman of the House Financial Institutions and Consumer Credit Subcommittee. “In fact, this legislation would undermine some of the fundamental consumer laws that we have that relate to financial institutions and agreements, such as truth in lending.”