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

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