The National Telecommunications and Information Administration urged Congress in a report issued Monday to retain current exemptions from the Electronic Signatures In Global E-Commerce (ESIGN) Act, which allows transactions such as mortgages to be completed entirely electronically.
The 2000 law exempted documents in nine categories: court records; wills and testaments; domestic and family law records; contracts governed by state commercial law; cancellation notices for utility services; cancellation notices for health or life insurance benefits; property foreclosures, evictions and default notices; product-recall notices; and shipping papers for hazardous materials and dangerous goods.
Those exemptions were included to allow lawmakers, as well as industry and consumer groups, to study the impact of e-signatures in those areas. Congress called on NTIA to conduct a three-year evaluation of the law to determine whether those areas should continue to be excused.
After collecting comments and studying the issue for nearly a year, the agency said it is too early to eliminate the nine exemptions to ESIGN. NTIA suggested that while the use of e-signatures has been growing, today's technology is not adequate enough to guard the confidentiality of the most sensitive documents, so Congress should not eliminate the exemptions.
The agency noted that in several of the categories, states are the primary governing entities and have enacted exemptions to their own e-signature laws for documents such as wills, court testimonies and family law papers. The elimination of some of the ESIGN exemptions could lead to inadvertent disclosures of information that is otherwise considered highly sensitive and confidential in some states, the report noted.
"After three years," the report said, "there has been remarkable progress in some of the areas covered by the exceptions in terms of the use of electronic signatures and records. ... Due to the high confidentiality and privacy interests inherent in transactions involving other exceptions (such as wills, family law, foreclosure and defaults, utility cancellations), there are few, if any, solutions other than ESIGN that institutions and the marketplace can provide at this time."
Moreover, NTIA found, "policies and practices for consumer protection in each area are still being established and incorporated into e-commerce and market systems."
The agency's recommendations incorporate advice that it received from various experts and industry groups that supported retaining the nine exemptions. They include trade associations for banks, mortgage lenders, financial services firms and lawyers.