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OMB Guidance on Implementing the Electronic Signatures in Global and National Commerce Act
MEMORANDUM FOR THE HEADS OF DEPARTMENTS AND AGENCIES
FROM:
Jacob J. Lew Director
SUBJECT:
OMB Guidance on Implementing the Electronic Signatures in Global
and National Commerce Act
This document transmits OMB guidance to Executive Agencies regarding
the interpretation and implementation of the Electronic Signatures in Global
and National Commerce Act ("E-SIGN") (Public Law 106-229) enacted on June 30,
2000. E-SIGN eliminates legal barriers to the use of electronic technology to
form and sign contracts, collect and store documents, and send and receive
notices and disclosures.
Under E-SIGN, companies can contract online to buy and sell a broad
array of products and services. Businesses can use servers the size of a
laptop to collect and store transaction records
that once filled up vast warehouses. Consumers can buy insurance, get a
mortgage, or open a brokerage account on-line, without waiting for physical
documents to be mailed back and forth. E-SIGN will offer improved efficiencies
in U.S. markets; this historic legislation will help to bring the full benefits
of electronic commerce to our economy. The government will do its part to
implement E-SIGN in a manner that best achieves the legislation’s goals.
E-SIGN eliminates barriers to electronic commerce, while also
providing consumers with protections equivalent to those available in the world
of paper-based transactions. The Act makes clear that no person is required to
use electronic records, signatures, or contracts. Indeed, E-SIGN requires that
a consumer affirmatively consent to the use of electronic notices and records.
Prior to consenting, the consumer must receive notice of his or her rights.
Moreover, the consumer must provide the affirmative consent electronically, in
a manner that reasonably demonstrates that the consumer can access the
electronic records that are the subject of the consent.
E-SIGN applies broadly to Federal and state statutes and regulations
governing private sector (including business-to-business and
business-to-consumer) activities. The Act generally covers legal requirements
that information be disclosed in private transactions. It also requires that
agencies generally permit private parties to retain records electronically. The
government may establish appropriate performance standards for the accuracy,
integrity, and accessibility of records retained electronically, to ensure
compliance with applicable laws and to guard against fraud.
Agency activities and requirements that involve information, but do
not relate to business, commercial, or consumer transactions, are not within
the scope of this legislation. Instead they are addressed by the Government
Paperwork Elimination Act (GPEA). Certain laws and regulations involve both
GPEA and E-SIGN, especially with respect to record retention requirements in
agency regulations that relate to business, consumer and commercial
transactions. The attached guidance discusses this interaction:
A general summary of the dates when E-SIGN provisions become
effective:
Most of E-SIGN is effective as of October 1, 2000.
Certain provisions relating to government record retention
requirements become effective on March 1, 2001, unless an agency by that date
has otherwise announced or initiated a rulemaking on a record retention
requirement. In the latter case, the law is effective for that record retention
requirement on June 1, 2001.
For loan guarantees, mortgage insurance, or commitments for such
transactions, E-SIGN applies only to transactions entered into on or after June
30, 2001, and to loans or mortgages made, insured, or guaranteed by the United
States Government on or after June 30, 2001.
E-SIGN establishes specific effective dates for consumer
provisions as they relate to the student loan programs of the Education
Department.
These effective dates are rapidly approaching and agencies should
take all steps necessary to implement this law. Agencies should work with their
customers and their regulated communities to help them understand the scope of
this law, through appropriate outreach strategies. Agencies should also review
recordkeeping and regulatory requirements to identify revisions necessary to
ensure proper program oversight.
The attached OMB guidance was developed with substantial input from
the agencies most involved in the enactment of E-SIGN: the Departments of
Commerce, Treasury, and Justice, working with the National Economic Council.
This guidance is designed to aid in Federal agency implementation of E-SIGN.
The guidance contains three parts: (1) a short summary of the law; (2) a
description of specific steps agencies should take to comply with the law; and
(3) a detailed description of the law’s requirements, including
illustrative examples.
E-SIGN is complex and has wide-ranging implications. Accordingly, the
guidance covers many areas. It is essential that agencies become familiar with
the Act and determine how it will affect activities within their domain.
Should you need additional information or have general questions
about this guidance, please contact Jonathan Womer in the Office of Management
and Budget at 395-3785 or jwomer@omb.eop.gov. Any questions related to specific
legal issues regarding this guidance may be referred to the Justice Department
at ESIGN@usdoj.gov; specific questions about the legislative history of E-SIGN
may be referred to the Commerce Department at ESIGN@doc.gov.