What is the Electronic Signatures in Global and National Commerce Act?

The Electronic Signatures in Global and National Commerce Act (ESIGN) is a federal law passed by the United States Congress in 2000. It establishes the electronic signature as an enforceable signature for any contract or other transaction conducted in Washington for any purpose. It outlines necessary requirements for a legally binding electronic signature and also sets forth rules that must be adhered to by businesses that use electronic signatures in the course of their operations. The Act allows for the use of electronic signatures in the banking and financial services industries, including mortgages, personal loans, and other transactions. It also outlines what constitutes a valid electronic signature, such as using an encrypted digital signature, a signature pad, or a fingerprint scanner. The Act also requires financial institutions to provide notice to consumers about their rights to use an electronic signature and the possible risks associated with it. The Electronic Signatures in Global and National Commerce Act provides important consumer protections, particularly in the banking and finance industries. It gives consumers the right to choose and use a secure, legally binding electronic signature to conduct transactions and ensures that businesses are acting in a fair and responsible manner when accepting electronic signatures. Additionally, the Act protects consumers from fraud, as it requires businesses to prove that a consumer understood the transaction and voluntarily agreed to it.

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