Senate Approves Electronic-Signature Bill
WASHINGTON - The Senate on Friday approved legislation that would authorize the use of electronic signatures and contracts.Unlike the House bill adopted earlier this month, the Senate version does not permit financial services companies to electronically make mortgage and other disclosures required by consumer protection laws.
Industry lobbyists have pushed hard for the electronic disclosures, but nevertheless welcomed the Senate passage.
"It gets us to the next stage of negotiations," said James F. Febeo Jr., staff attorney for the Consumer Bankers Association. "We have received word from the principal players that they would work toward a final product that will include provisions authorizing electronic disclosures."
Their job will not be easy. The White House and advocacy groups have been critical of electronic disclosures, arguing that customers might not have regular on-line access and that the bill inadvertently could weaken protections in current law.
The industry aims to convince lawmakers that the House bill has plenty of consumer protections because, among other things, customers would have to sign a "conspicuous and visually separate" consent request before lenders could send electronic disclosures and records. The House bill also would require that customers can always review, retain, and print records using a pre-authorized computer format.
Congress was expected to adjourn over the weekend, so further action on the bill will not occur until January at the earliest. Sponsor Sen. Spencer Abraham said Friday that federal legislation is necessary because 42 states have enacted differing electronic signatures laws. The Michigan Republican vowed to work with House lawmakers so that a compromise bill can be sent to President Clinton "very early" next year.
- Dean Anason
Regulatory Reminder on Y2K Safeguards
WASHINGTON - Federal regulators on Friday reissued guidelines advising bank and thrift management on how to protect computer systems from fraud or sabotage in the weeks surrounding Jan. 1.Compiling separate year-2000 advisories sent over the past year, the agencies recommended that managers ensure that computer staff and external contractors have cleared background checks.
The list of 11 reminders also suggests that employees keep passwords and account names confidential from any unauthorized parties requesting the information purportedly to fix an urgent problem.
"Hackers may step up their activities at a time when it may be difficult for financial institutions, without adequate safeguards, to detect or distinguish between a routine software or operations program, a year-2000 related problem, or fraudulent activity," the advisory stated.
- Katharine Fraser
Massachusetts Mutual Gains Trust Charter
WASHINGTON - The Office of Thrift Supervision on Friday granted a trust charter to Massachusetts Mutual Life Insurance Co.Federally chartered MassMutual Trust Co., based in Hartford, Conn., plans to offer personal and employee benefit trusts, investment management, and custody services. With 2.7 million policyholders, MassMutual is the country's sixth-largest mutual life insurance company and the owner of the OppenheimerFunds mutual fund family, which manages more than $100 billion of assets.
At least 40% of MassMutual Trust Co.'s directors may not be employed by its holding company or affiliates, and at least one director must be independent of the thrift itself, OTS said.
MassMutual Trust president Frank Barone said he expects that the thrift will open its doors in January. With the new financial reform law, he said, the thrift probably will seek deposit-taking authority from OTS.
"I would think all insurers would want to be a private bank," Mr. Barone said.
- Katharine Fraser