E-Sign Warning
The OCC has issued an Advisory Letter on electronic disclosures. Dated October 1, AL 2004-11 contains advice and warnings on procedures for making electronic disclosures in lieu of paper disclosures. The OCC is concerned that banks may be providing electronic disclosures that do not comply with statutory requirements and without following appropriate procedures under the E-Sign Act. AL 2004-11 outlines steps that banks should take before providing electronic disclosures.
First, clearly determine the scope of transactions that will be covered and for which consumer consent is needed. Second, provide all pre-consent disclosures. Third, design an appropriate method for obtaining consumer consent. Include advice to consumers about changes in their equipment that could interfere with receiving electronic notices.
The institution should also develop its electronic disclosures with procedures to deal with disclosures that are returned undelivered, procedures to determine that the disclosure can be read and retained by the consumer, and how notices will be tracked and retained within the institution.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 10, 10/04
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