I need guidance on the delivery of the required program disclosure/Charm booklet on online application for ARM loans. Our F/I is in the beginning stage of implementing online loan applications. We want to deliver online disclosures. Prior to any application input, we would have the applicant create a user name and password for authentication. The e-sign disclosure would appear that would require a “consent handshake”. Application screens would follow.

Reg Z 226.19(c) says, “For an application that is accessed by the consumer in electronic form, the disclosures required by paragraph (b) of this section (CHARM/program disclosure) may be provided to the consumer in electronic form on or with the application”.

I think the key words here are “may be provided”. It appears that a F/I has the option of delivery with the application or within 3 days with other early disclosures. I'm I correct in this assumption?

Guidance is appreciated.

Pounder, the commentary to section 226.19(c) states: If a consumer accesses an ARM loan application electronically, such as online at a home computer, the creditor must provide the disclosures in electronic form (such as with the application from on its website) in order to meet the requirement to provide disclosures in a timely manner on or with the application. If the creditor instead mailed paper disclosures to the consumer, this requirement would not be met.

I think what the section you referenced it saying is that the disclosure/booklet can either be directly on the application screen, or on another screen linked to it. If the application for an ARM is electronic, then the disclosure/brochure must be in electronic form as well and provided at the same time the application is provided.