Financial industry heavyweights pushed legislation Wednesday that would establish a uniform system for authenticating electronic commerce.

Michael Nugent, general counsel for technology and intellectual property at Citibank, told a Senate Banking subcommittee that the current system-in which many states have their own authentication laws-is unworkable.

"Fifty different regimes will confuse consumers doing business over the Internet and will result in a patchwork quilt of differing legal protections, commercial standards, and levels of security," he said.

The Digital Signature and Electronic Authentication Law of 1998 would let financial institutions use electronic authorization, create a national protocol for doing so, and encourage dialogue with other countries on setting up an international protocol.

Sen. Robert F. Bennett, R-Utah, chairman of the financial services and technology subcommittee hosting the hearing, said his bill would make the electronic signature "as valid as one created with pen and paper."

Digital signature technology lets the parties in a transaction verify one another's identity and authority to perform the transaction. It also encrypts the transmission of the agreement, thereby securing its privacy.

Citibank's sentiments were echoed by Ken Lieberman, senior vice president for corporate risk management at Visa U.S.A. The Bennett legislation "will enable Visa, its 21,000 financial institution members, 580 million cardholders, and 14 million merchants to enjoy the full benefits of digital signature technology," he said.

The most contentious issue among those testifying Wednesday was the bill's limited scope. It does not cover nonfinancial institutions.

Harris N. Miller, president of the Information Technology Association of America, a trade group representing software, Internet, and telecommunications businesses, argued that the exclusion of nonfinancial institutions is shortsighted.

"Banks are not the only providers of financial services," he said. "All companies and their customers should be able to benefit from the same secure electronic authentication scheme afforded to banks and their affiliates."

Citibank's Mr. Nugent called the trade group's complaint a delay tactic. "I think they would rather stop any legislation."

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