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#1154409 - 03/31/09 01:44 PM E-sign
ComplyWithMeToo Offline
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Can you put up with just a few more questions regarding E-Sign? My FI attended your seminar on E-sign last year sometime - unfortunately I was not employed at that time - and of course no one saw the benefit of having the new compliance officer attend the session in March (why pay twice). But of course I have a few questions.

I've done a bit of research and have seen mentioned that banks no longer need to send email alerts that statements are ready. I attempted to find "verification" of this but haven't come across it yet. I viewed the articles that Richard mentioned in another thread but couldn't put my finger on it - can you please direct me to that?

Also, when enrolling clients in e-statments help me with demonistratable consent - do we need to have them actual view a statement and then certify that they did so? Currently all of our online customers have access to their statements online - and can view them. We have also been sending paper copies. Now we are ready to enroll and turn off the paper copies. Should we have the enrolling client, view their statement prior to selecting "I agree"?

Also, what responsibities do we have over Final statements? If a client closes their account are we required to send a final statement in paper? I'm concern about the client who has one account, closes it, online access is terminated and the client doesn't get their last statement. Should we build into our program that final statements have to be sent in paper to cover ourselves?

Help would be appreciated as I'm currently writing the disclosures and need a little assistance. Thanks!

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#1154629 - 03/31/09 04:32 PM Re: E-sign ComplyWithMeToo
John Burnett Offline
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Go to BOL's Top Stories archive page for April 2007 and review the first five stories under April 30. Each has a link to the Fed's cancellation of the interim rule requiring email notices. Click on http://www.bankersonline.com/topstory/topstory_0407.html

The customers must either view a sample statement using the same method to be used for viewing actual statements (from the same server, ideally) or another sample document in the same file format (for example, PDF) to be used. Ideally, they can demonstrate their ability to access that document by parroting back something found only on that document, or my clicking on a link embedded in that document that evidences their ability to access and read the document. The sample document should not be readily accessible by any means other than through the demonstrable consent/esign approval process.

If it's likely or even possible that a final statement won't be available electronically, your idea to generate a final statement on paper and mail it is an excellent one.
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#1156071 - 04/01/09 09:19 PM Re: E-sign ComplyWithMeToo
Richard Insley Offline
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If I understand the opt-in process you described, there is no "test" included in the consent process. The ESIGN magic doesn't happen until the customer can demonstrate that s/he has the necessary hardware & software and knows how to use it to open and read an e-document of the exact type you will use to satisfy "in writing" requirements.

As you design your opt-in disclosures and process, keep Reg. E in mind. All Reg. E disclosures must be "in writing". If you don't provide them "in writing", they don't count and you are fully exposed to the EFTA's penalties. To be "in writing" your Reg. E disclosures must be on paper or contained in an e-document sent in a manner your depositor has already proven s/he can receive and read.
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#1156200 - 04/02/09 02:57 AM Re: E-sign Richard Insley
John Burnett Offline
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Some of the notices in section 205.11 do not have to be in writing. The bank has to inform the customer (writing not needed) if it gives provisional credit. It has to report (again, writing not required) the results of its investigation, although you have to provide a written explanation of the findings (go figure). And strangely, you don't have to use a writing to notify a customer that you're revoking provisional credit or to notify the customer that you'll honor certain items even if they overdraw the account, etc.

The customer could agree to get those notifications electronically without jumping through the ESIGN hoops, but it might just be easier not to split hairs, and to include "statements and all other disclosures and notices required" in the ESIGN agreement.
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#1158367 - 04/06/09 06:14 PM Re: E-sign John Burnett
ahkcompliance Offline
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I have a question regarding E-Sign. We have an account that when opened, the client is automatically enrolled into e-statements. We have the client sign a paper terms & conditions explaining e-statements. My question is if any other banks have this type of account. How do you get electronic consent? Our clients pull their e-statements through internet banking, but quite frankly not all clients will sign up so they don't give electronic consent. Will the account need to be converted?

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#1158462 - 04/06/09 07:10 PM Re: E-sign ahkcompliance
Andy_Z Offline
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Yes. You haven't complied with the E-SIGN rules for consumers if you failed to get the demonstrable consent. Sitting in the lobby and signing up for e-statements doesn't show that they gave you a valid email address or that they can access their statements.

They may be able to use their laptop or phone to do this, but that is less likely than you getting a failing mark on E-Sign.

The consumer comes to you a year later and says there has been $10,000 taken from their account on bad EFTs. You haven't provided any statements. You'll lose this money.

You'd be surprised how many people give you a bad email address, your email gets blocked by an ISp, or goes into a spam folder without the consumer ever seeing it. This is why you test the system.
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#1158477 - 04/06/09 07:18 PM Re: E-sign Andy_Z
ahkcompliance Offline
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Would having them click an "accept" button through internet banking be sufficient or sending them an email with a reply back or read receipt work?

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#1158493 - 04/06/09 07:25 PM Re: E-sign ahkcompliance
ahkcompliance Offline
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I guess what I am wondering what is the best process to get that electronic consent? Our old compliance officer did not have see the need to get electronic consent. She just had clients sign a paper form. As I am going through her folders, I realized this. I want to get this corrected going forward. I wonder what other banks are doing to get electronic consent?

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#1158496 - 04/06/09 07:29 PM Re: E-sign ahkcompliance
Skittles Offline
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The last bank I worked for was cited for not obtaining the electronic consent.
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#1158500 - 04/06/09 07:33 PM Re: E-sign ahkcompliance
Andy_Z Offline
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They need to demonstrate that they can do what is needed to get their statements. You "pull" them on your site. They need to show you that they can reach your site, and read a sample statement like they would receive. That may be with an "I Agree" button. (You also need to worry about verifying that you have the right person to the right account(s). )

If you "push" encrypted statements, they have to show you that they can receive them, open them and read them.

You may also have to consider redelivery of the statements not yet officially received.

You need to review the E-SIGN 101(c) steps to ensure your E-SIGN process meets all the tests. Demonstrable consent is one part. There are disclosures as well.
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#1158700 - 04/06/09 10:51 PM Re: E-sign ahkcompliance
Richard Insley Offline
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Originally Posted By: ahkcompliance
I want to get this corrected going forward.

I'd also be concerned about the past. If you conclude that your ESIGN opt-in process never met the minimum standard, then you have not been sending "written" statements. As viewed from the Reg. E and DD perspective, you have a systemic failure to provide required periodic disclosures to 100% of the account holders who were never required to pass the ESIGN "test" (demonstrable consent.) If you have not yet given qualifying Reg. E disclosures then you remain exposed to customer allegations of EFT errors during every statement cycle since the accounts opened (or paper statements were discontinued, whichever occurred later.)

Originally Posted By: Duchess Skittles
The last bank I worked for was cited for not obtaining the electronic consent.

Good. It's high time the regulators recognized the exposure caused by faulty ESIGN opt-ins.
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#1163376 - 04/14/09 07:57 PM Re: E-sign Andy_Z
SusyG Offline
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Since the Fed cancelled the interim rule requiring email notices for electronic statements, is verifying a valid e-mail address still required for demonstrable consent if the pull method is used?

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#1163428 - 04/14/09 09:02 PM Re: E-sign SusyG
John Burnett Offline
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Ask yourself if you plan to notify the customer of anything by email. Will you send some of your notices that way? Will you notify the customer that a statement or disclosure is available?

If "Yes" to any of these questions, it would be wise to verify the email address.
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#1163459 - 04/14/09 09:35 PM Re: E-sign John Burnett
Andy_Z Offline
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The net, net, net is if you are pulling, and as John noted NOT corresponding with the customer, you don't need it. But I'll tell you as a consumer, I sure like getting that notice that says it is ready.

My wife does the internet banking. I review the statement to see where what I had went, and more importantly, to see those notices my wife doesn't when she balances almost daily. Fee changes, privacy, etc. I look at. (Go figure.)
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#1163622 - 04/15/09 01:58 PM Re: E-sign Andy_Z
John Burnett Offline
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Once a compliance geek, always a compliance geek.

Me too, Andy.
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#1170924 - 04/27/09 09:09 PM Re: E-sign John Burnett
river girl Offline
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We are doing our e statement sign ups correctly according to Esign but now we want to start delivering the new account disclosures electronically. I am having trouble wrapping my mind around how it needs to work.
When I have a member across the desk from me, I want to show a paper copy of the disclosures and explain them but then I want to ask if I can email their copy rather than providing hard copy. If they agree, can that consent be verbal? Can I provide the equipment requirements, etc, again just for new account disclousres, verbally?
If not, do they have to go home and log on to prove ability and to electronically consent? By this time I am out of compliance for providing new account disclosures prior to opening an account or requesting a service.
HELP...am I overthinking this?

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#1171005 - 04/27/09 10:35 PM Re: E-sign river girl
Richard Insley Offline
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If you're opening new accounts face to face, paper's your only choice. I don't think verbal disclosures will pass because ESIGN requires that the customer be "provided with a clear and conspicuous statement...." including all the hardware, software, and other pre-consent disclosures. The concept of "providing" and a "statement" isn't exactly "in print form", but I think a verbal explanation is a very long stretch--and it creates no evidence of compliance. Clearly, you can not meet "prior to opening account" timing requirements by sending the customer home to opt in.
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