Last summer when the Fed put it's interim final amendments to Regs B, E, M, Z, and DD on indefinite hold, it announced that:

"To address commenters' concerns, the Board is considering adjustments to the rules to provide additional flexibility. .... Once permanent final rules are issued,the Board expects to afford institutions a reasonable period of time to comply with those rules."
Has anyone seen or heard anything from the Fed indicating progress?

Are e-banking vendors waiting for the Fed to move, or instead developing disclosure delivery solutions that rely on ordinary e-mail communication with customers?

[This message has been edited by Richard Insley (edited 02-01-2002).]

Although I have not heard anything about this from the Fed (anyone from the Fed read these postings?), the fact that the Spring 2001 "interim final" rules are already effective doesn't change. It was the mandatory compliance date of October 1 that got "lifted."

A couple of comments -- My GUESS is that those banks and vendors who have ventured into this swamp since last Spring have done so hoping they haven't created systems that will prove to be problems when the final rules issue. I'd also GUESS that anything the Fed does to the interim final rules will loosen their definition somewhat on "consumer's electronic address" and perhaps give us a little wiggle room on the issue of undeliverable notices or disclosures. So PERHAPS anything that conforms to the interim rules will prove acceptable under the final edicts?

Of course, even if we don't comply with the Spring 2001 interim rules, we MUST comply with E-Sign (particularly section 101) if we want to "wing it" on doing e-disclosures.

I haven't heard anything either. I believe there is some hesitation because dealing with emerging technology is difficult at best.

The regulators are used to gathering information, studying a topic and then issuing the rules. Now, by the time they are into step two, what was in step one is changing. They also may contradict another agency or Congress so coordination is harder.

Lastly, since 9-11 this hasn't been an area of necessity as they have had their hands full.

Bottom line, if you follow the interim-final rules you are likely in good shape since the rules shouldn't get tougher. But, in creating systems that comply, will you have spent to much if the final-final rules are easier?

Just an opinion.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

The fact that we've seen nothing from the Fed suggests that it's getting no demands from the industry. Meanwhile, consumer activists continue to pound the drum about predatory lending, privacy and other traditional and emerging issues. The Fed appears to be applying the squeaking wheel system of project management.

A few years ago I, too, subscribed to the argument that the Fed should allow Internet technologies to mature before strangling innovation with regulations. Not any more. We now have fully-developed e-banking systems and client-side technology has reached a reliable plateau. We're at the same critical point in developing this delivery channel as we were in the late 1970s when the deployment of ATMs was being stymied by the lack of EFTA & Reg E. Once the rules, risks and responsibilities were formalized, massive investments in ATMs began.

9/11 HAS changed the overall emphasis in Washington, but almost all of the emphasis is on the safety & soundness side of the regulators' agenda (OFAC, BSA, AML, S&SCRA). The Fed's consumer protection rulewriters aren't accountable for ANY of these responses to terrorism, so they're free to go about business as usual. Why are they postponing the additional flexibility that could actually make the e-regs serviceable?

When you get right down to it, workable standards for electronic delivery of periodic disclosures (statements) ARE a response to the bio-terror threat. Consumers fear anthrax and who-knows-what in their mailbox. Bankers are bracing for a 9% postage hike (or more) due to bio-terror cleanup and prevention costs. Workable e-regs would clear the way for e-delivery of statements in the same way Reg E cleared the way for ATMs.

Why aren't bankers pushing the Fed for workable e-regs?