Digital Signature and Electronic Authentication

¶ … Digital Signature and Electronic Authentication Law (SEAL) of 1998

The intention of the Digital Signature And Electronic Authentication Law (SEAL) of 1998, introduced to the United States Senate, as S.1594, and followed closely by H.R. 3472, was to update the Bank Protection Act of 1968 in connection with electronic authentication techniques that were used by financial institutions or for any other purposes. The Bill was presented by an individual named Mr. Cook to the Committee on Banking and Financial Services. The purpose of the Bill was permit and to regulate electronic banking as used by banks and other financial institutions. To that, the bill suggested that electronic authentication techniques be structured by Board of Governors of the Federal Reserve System in concert with the other Federal and State banking regulators so that consumer protection in regards to electronic banking be ascertained and so that electronic banking may become a viable option.

The purposes were three-fold:

1. To permit financial institutions to productively employ electronic banking as instrument for their benefit

2. To ensure that the interests of consumers engaged in online banking will be protected, and

3. To ascertain that all banks and financial organizations shred the same rules and codifications of online banking so that conflict as a result of divided and different rules would not develop (The Lib. Of Congress)

The following excerpts explain what the Bill meant by conceptualization of 'document', 'electronic authentication techniques', and when electronic authentication may be used.

f) DOCUMENT- The term 'document' means any message, instrument, information, data, image, text, program, software, database, or the similar item, regardless of how created, if such item can be retrieved or displayed in a tangible form. (SEAL, Section 3f)

'Electronic authentication techniques' the substance of the Act refers to:

g) ELECTRONIC AUTHENTICATION- The term 'electronic authentication' means a cryptographic or other secure electronic technique that allows the user of the technique

(1) to authenticate the identity of or information associated with a sender of a document

(2) to determine that a document was not altered, changed, or modified during its transmission to a recipient, or (3) to verify that a document received was sent by the identified party claiming to be the sender. (SEAL, Sec 3(g))

The following section tells us when electronic authentication may be used:

a) ELECTRONIC AUTHENTICATION OF DOCUMENTS, INFORMATION, AND IDENTITY-

(1) IN GENERAL- A financial institution may use electronic authentication in the conduct of its business if it has entered into an agreement regarding the use of electronic authentication with any counterparty, or if it has established a banking, financial, or transactional system using electronic authentication. (SEAL, Section 6f)