We started doing eStatements for deposit accounts this year. We usually send the privacy notice and annual error resolution notices stuffed with our paper statements. We are trying to find a way to do this via our eStatement system but are having problems because of the need to identify each account that the notice pertains to. Is anyone else doing eStatements and how are you handling the regulatory disclosures?

We're just getting started with e-statements, and to address this issue we've added a disclosures/notices section to our website, which contains various disclosures in .pdf format. The e-statement notifications are then written to direct the customer to this section, along with an indication of what (if any) updates may have occurred since the last statement.

Keep in mind that for an electronic disclosure to be permissible to substitute for a disclosure required to be "in writing", the requirements of E-SIGN must be followed. The most often overlooked component of E-SIGN is that the customer's consent to receive electronic disclosures must be done or affirmed in a way that demonstrates their ability to receive disclosures in the format anticipated to be used by the bank.

In Jac's example, I hope his bank has a procedure that the customer must perform to demonstrate to the bank that he/she can link from the pdf document to the website where the other disclosures are located before that customer stops receiving paper disclosures.

If you're using "pull" delivery, why not simply add appropriate links to all your disclosuregrams? Nothing says you can't e-deliver privacy and Reg. E notices with every statement.

That's a good point, Jim. Our e-statement agreement includes the technical requirements, along with the customer's consent to receive their disclosures in .pdf format via our website. FWIW, the statements themselves also are in .pdf format. Is the customer's acknowledgement of the requirements sufficient to pass the demonstration test? Basically, they're saying, "Yes, my system can handle a .pdf", but we are not testing this to ensure that.

Reg E says that when I notify the customer about the annual error resolution notice I need to identify the account it is pertaining to. We were going to say "checking account" but the customer could have multiple checking accounts. So we were going to truncate the account number but our system can't handle that. Has anyone else run into this problem?

Where does Reg. E say you have to identify the account the disclosure pertains to?

Could it have something to do with the Official Staff Commentary to section 205.17(c)(2)?

To be valid, the act of consenting to e-delivery must demonstrate the customer's capability to receive, open, and read e-documents of the type you will use to give the disclosures. Getting customers to declare capability without demonstrating capability does not meet this standard.

Thank you for clarifying that, Richard.

"This is applicable to all your checking accounts..." Would it not?

Yes according to Sec 205.17 (c) (2) (i) "The notice shall identify the account involved..."

Don't forget the commentary, as it explains this more fully.



Even if you have different ownerships, stating that this applies to all of them (assuming it does) it would meet the spirit and intent that this notice is applicable.

In a quest to change all statements to e-statements, can you charge for those customers who do not change? My gut tells me "No", but the Pres thinks otherwise. Some people don't have that capability.

I would say no as well. You have to deliver a statement to your customer only when required under the regulations. So, everytime the cusotmer conducts an ACH or EFT transaciton, you are required to send them a monthly statement disclosing the ACH or EFT transaction. If the cusotmer does not have means to access the statement, then technically it was not delivered and you are in violation of Regulation E. Now if your bank is willing to offer a checking account whereby the consumer will receive a free computer with lifetime technical support and Internet access(while a customet of the bank), then I believe there is definitely an option there. But then again, they would still have to accept the receipt of such documentation electronically. As for charging your customers a fee for not receiving e-statements, you can have an account for which, in agreeing to the terms of the account, the customer agrees to the receipt of e-statements. For those customer who do not wish to open this accounts, then your service fee would be sufficient to accommidate the fee difference in sending paper versus electronic statements.

Change notice, (1) the monthly fee is going up on all accounts by $2.00.
(2) Discount of $2.00 for all customers getting e-statements.

Problem solved.