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#1799213 - 03/28/13 03:34 PM Internet Banking Enrollment
Doug Hendrickson Offline
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Doug Hendrickson
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In comparing our IB enrollment page to other banks, I came across one bank that had the following message on the enrollment page, right above where you would enter the key information to enroll:

For your convenience, statements and notices for checking and savings accounts will automatically be delivered online. If you prefer paper, you can switch your delivery preferences at any time.

I didn't try to go through the whole process, but is it permissible to 'opt in' a customer automatically upon enrollment like this, as long as you give them a way to 'opt-out' later on? And if, during the enrollment, they do not have the capability for e-sign, do you then have to 'opt them out' immediately and resort to paper?
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eBanking / Technology
#1799279 - 03/28/13 04:43 PM Re: Internet Banking Enrollment Doug Hendrickson
Richard Insley Offline
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1. Many consumer protection laws and regs, including Regs. E and DD, require you to deliver various disclosures "in writing."
2. Paper is always an acceptable way to deliver something in "written" form.
3. Electronic documents are the legal equivalent of paper, BUT ONLY IF the "consumer has affirmatively consented" to the use of electronic documents AND that consent is obtained in the exact manner prescribed by ESIGN.
4. Like a driver's license, ESIGN "consent" is not valid until the customer has passed a test drive. Those who lack the necessary hardware, software, or savvy won't pass and can't be enrolled in e-delivery.
5. If your enrollment process does not comply with ESIGN, none of the ensuing electronic documents are legally "in writing", i.e. a 100% rate of ongoing systemic violations of Regs. E, DD, and any others that may apply.

Allowing a customer to opt out is not the same thing as "affirmative consent", but unless you go all the way through the other bank's enrollment process, you can't know whether it works exactly as marketed. Although the promotional message above says "automatically delivered online", in actual practice that might mean "automatically delivered online...provided you consent in the following manner...."

Although ESIGN does not allow cramdown of e-delivery on unwilling accountholders, you are free to bundle services and adjust fees in any way that motivates customers to consent.
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#1799403 - 03/28/13 07:44 PM Re: Internet Banking Enrollment Doug Hendrickson
Andy_Z Offline
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Adding to Richard's answer, in just a few words, no, it can't be mandatory. And what they provide is (IMHO) misleading at best and in violation of E-SIGN at worst.

From a marketing perspective it may make customers weary of e-delivery find a new bank if they're shopping.
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#1799416 - 03/28/13 07:54 PM Re: Internet Banking Enrollment Andy_Z
Doug Hendrickson Offline
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Thanks to you both for sharing your thoughts. This was one of the mega-banks and it just seemed strange that they'd be allowed to start off with the presumption of e-statements and then have the customer have to opt-out. I'll see if I can follow the process, but it may be a bank to which I already have e-access.
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#1799484 - 03/28/13 10:00 PM Re: Internet Banking Enrollment Doug Hendrickson
Richard Insley Offline
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Originally Posted By: Doug Hendrickson
it may be a bank to which I already have e-access.
That possibility occurred to me, too. If the bank had already gotten consent (by doing it the right way) and that consent was very broad, then it would cover whatever range of documents originally agreed. Then, knowing that consent had already been obtained, the bank would act properly if it offered the customer the ability to opt back out on an account by account basis. One of the ESIGN provisions that we usually skip past is the second part of Section 7001(c)(1)(A): "...the consumer has affirmatively consented to such use and has not withdrawn such consent...."
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#1799486 - 03/28/13 10:06 PM Re: Internet Banking Enrollment Doug Hendrickson
Doug Hendrickson Offline
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It was a bank with which I do not have an account, so I couldn't proceed any further to see the rest of the enlistment process. I'm still curious.
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#1800214 - 04/01/13 08:49 PM Re: Internet Banking Enrollment Doug Hendrickson
Andy_Z Offline
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Just because it's a "mega bank" doesn't mean it's right.

Part of the E-SIGN issues are that we haven't heard of penalties and suits and litigation. So an equal part may be a bank's appetite for risk. I personally tend to be more conservative.
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#1800272 - 04/02/13 01:37 AM Re: Internet Banking Enrollment Doug Hendrickson
rlcarey Online
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Just because it's a "mega bank" doesn't mean it's right.

Based on the size of some of the recent enforcement actions on various issues, I would agree smile
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#1800281 - 04/02/13 03:31 AM Re: Internet Banking Enrollment Doug Hendrickson
Kathleen O. Blanchard Offline

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I will say that I have seen regulators give a pass to eSign recently that is not really up to the legal requirements. And the banks don't understand that the regulator is not really their risk; their risk is the legal risk of the documents not being truly received and signed for both disclosure and contract purposes.
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#1800289 - 04/02/13 11:19 AM Re: Internet Banking Enrollment Kathleen O. Blanchard
Richard Insley Offline
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Originally Posted By: Kathleen B
I have seen regulators give a pass to eSign recently
They've never taken it seriously. That's hard to understand, considering the fact that a botched ESIGN consent automatically causes systemic violations of multiple consumer protection regulations.
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#1800290 - 04/02/13 11:28 AM Re: Internet Banking Enrollment Doug Hendrickson
Kathleen O. Blanchard Offline

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That attitude makes it very hard for compliance or anyone else to get management to care.
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#1800296 - 04/02/13 12:08 PM Re: Internet Banking Enrollment Richard Insley
John Burnett Offline
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Originally Posted By: Richard Insley
Originally Posted By: Kathleen B
I have seen regulators give a pass to eSign recently
They've never taken it seriously. That's hard to understand, considering the fact that a botched ESIGN consent automatically causes systemic violations of multiple consumer protection regulations.


And particularly when it involves lending, there can be genuine safety and soundness issues that can pop up years down the road.
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#1800345 - 04/02/13 01:48 PM Re: Internet Banking Enrollment John Burnett
Richard Insley Offline
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Originally Posted By: John Burnett
And particularly when it involves lending, there can be genuine safety and soundness issues that can pop up years down the road.
I had that exact conversation with a senior level S&S regulator shortly after ESIGN became effective and he basically laughed at me.
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#1800855 - 04/03/13 03:06 PM Re: Internet Banking Enrollment Doug Hendrickson
Andy_Z Offline
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I worry when the banker tries to enforce a lien, and they discover they have no binding agreement. Compliance disclosure violations are a bonus to the litigant, the ambulance chasing lawyers will advertise "get out of debt and get paid to do it" when they know the bank has been doing it wrong for several years. Robo signing foreclosure crisis II.
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