WASHINGTON, May 1, 1998 -- A bill establishing a legal framework for banks and other financial institutions to use 'digital signature' systems raises important privacy and consumer concerns, the Center for Democracy and Technology (CDT) and the U.S. Public Interest Research Group (PIRG) argued today in a letter to the Senate Banking Committee. The full text of the CDT/PIRG letter can be found online.

S. 1594, the Digital Signature and Electronic Authentication Law of 1998 (known by the acronym SEAL), proposed by Senate Banking chairman Robert Bennett (R-Utah), deals with technologies that are expected to become an essential part of doing business via the Internet. Based on a range of encryption techniques, digital signature systems allow people and organizations to electronically certify such features as their identity, their ability to pay, or the authenticity of an electronic document. CDT and PIRG believe that policies governing the collection of information for digital signatures, and the architecture and legal liabilities associated with these technologies, must include distinct privacy and consumer protections.

The CDT/PIRG letter argues that the framework proposed by the SEAL bill raises important concerns that should be addressed before the Committee marks up the bill Wednesday, May 6. Digital signature systems are currently the subject of over a dozen state laws, and the SEAL bill would preempt much of the emerging state law to the extent that it governs financial institutions, CDT and PIRG also argued.

The Center for Democracy and Technology, non-profit organization, is dedicated to developing public policy solutions that advance civil liberties and democratic values in the new computer and communications media.