President Clinton signed the electronic signatures bill into law on Friday, which allows electronic signatures to be used instead of handwritten signatures to authorize contracts for mortgages, loans, insurance policies and other products and services that traditionally require pen-and-paper authorization
The bill gives Internet transactions legal status. The legislation takes effect in October.
Consumers will be able to sign agreements through the Internet authorizing contractors to perform home improvement projects, for example.
The law, known as eSign, would cover interstate commerce nationwide. A few states already have approved electronic-signature legislation for transactions conducted within the state.
The federal legislation was expected to receive broad, bipartisan support after legislators spent months resolving their differences on the law. Some Democrats, backed by the White House, were pushing to include more protections for consumers in the bill, while some Republicans were pushing to make the bill favorable to businesses that conduct e-commerce, according to reports.
Several online insurance companies and lenders already offer their products online, though they have to include a step in which they obtain a physical signature on paper. That step adds costs to what otherwise would be a more efficient process, the companies said.
