If you're using the Combined Disclosure method, are you then precluded from using electronic delivery? The rule seems to only anticipate the Pre-Payment Disclosure and Receipt route for this delivery type.

You can provide the pre-payment disclosure electronically if the Sender made the request for the transfer electronically. E-SIGN conformity is not required.

But the receipt and receipt/pre-payment combo disclosure must ALWAYS be in writing and in a form the Sender can keep, which means you can still provide it electronically if, and only if, you conform to the requirements of E-SIGN.

Just to make sure I'm understanding what you're saying - The Combined Disclosure could be provided electronically if the consumer requests the transfer electronically and the E-Sign consent and other applicable provisions are met.

And following this logic, if the consumer requests the remittance transfer by phone, the information required for the Pre-Payment Disclosure could be provided by phone and if the money for the transfer is taken from the consumer's account with the bank, the Combined Disclosure, along with some proof of payment could be sent to the customer with the next scheduled periodic statement or within 30 days after payment is made if no periodic statement is provided.

Is it just me or are the amazing amount of details making it difficult to understand this thing? Thanks for the help, John!

A more accurate statement is "The Combined Disclosure could be provided electronically if the consumer requests the transfer electronically and the E-Sign consent and other applicable provisions are met." It doesn't matter whether the transfer is requested electronically. E-SIGN-compliant consent allows you to make any written disclosure electronically.


You don't provide a pre-payment disclosure and a combined disclosure. You provide either a pre-payment disclosure and a receipt (two-step disclosure) or just a combined disclosure (one-step disclosure). The combined disclosure must adhere to the timing requirement for the pre-payment disclosure (at the time the transaction is requested and before payment is received by the provider), so it will never be delayed until 30 days after the fact. A receipt can be provided in written form using the 30-day delay provision if the entire transaction was requested by phone, text messaging or phone app, and funded from the sender's account with you.

I know you don't provide both the pre-payment disclosure and a combined disclosure. That's pretty clear in the rule. I just didn't explain myself very well.

If you provide a Combined Disclosure when the transaction is authorized in person and this is the only disclosure your system is can create, how could you meet the pre-paid disclosure/receipt requirements when the transaction is conducted by phone?

For example, if a customer calls to initiate a foreign remittance transfer, you can, by the rule, provide the PPD orally. If the system doesn't create a receipt, as required by the rule, could the Combined Disclosure be a substitute? What I should have left out was mention of the proof of payment as providing that is not necessary with the PPD/Receipt disclosure method.

The issue with this "solution" though is convincing the regulator that providing the Combined Disclosure in the Receipt's place could be acceptable.

If the transaction is by telephone, the pre-payment disclosure gets made orally during the telephone conversation (with some additional information about cancellation and error resolution rights. Then the receipt gets created in written form and is mailed the next day (or sent with the next periodic statement if an account in-house was charged for it, and if that statement is issued within 30 days). If there's no periodic statement within 30 days, it gets sent within 30 days by separate mail.

By definition, the combined disclosure will have all of the information required for the receipt. You'll need to annotate it with something to document the fact that payment was received.

Thanks, John. One more thing - before I started here, the bank got a legal opinion that says telephone disclosures cannot be provided in the following situation:

Customer emails their banker to request a transfer. Banker calls the customer and it is due to the phone call that the transfer is initiated.

The reasoning is that it doesn't meet the regulatory requirement that the transaction is conducted "entirely" by telephone. I'm arguing that because the transfer is initiated by the phone call and not the email, the transaction is conducted entirely by telephone. Thoughts?

I think you are right, as long as the entire transaction is conducted on the phone. For example, the bank would need to get full instruction on the transfer in the phone call, much of which would be a repetition of information in the email. Put another way, the email should be treated only as a request that the bank call its customer concerning the customer's need for a remittance transfer, all terms of which will be discussed by phone.

That said, you have a legal opinion that you paid for. I am not an attorney, and I am not offering legal advice. You (the bank) must decide whether to follow the legal opinion or not.

Thanks. I appreciate the input. I am an attorney, but they purchased the advice before my arrival, so I may be stuck with it.

We are going to use the combined disclosure/proof of payment route. I'm sorry if my questions/comments are redundant but I have read this thread a couple of times and I still need clarification on the following:

1. Customer requests a remittance transfer via email. Currently a CSR prepares the wire and places a hold on the funds. An approver calls the customer to confirm the validity of the request and approves the transaction. Based on the other bank's legal counsel's opinion this was not entirely conducted by telephone so we can't provide telephone disclosures. Do we have to provide the disclosure via email or can we fax it to them? If we have to provide the combined disclosure via email do we have to follow ESIGN? I'm asking this because the timing of the combined disclosure coincides with the timing of the prepayment disclosure however I wasn't sure if the ESIGN exception applies as well.

2. Customer requests a remittance transfer via telephone its my understanding that we can provide the combined disclosure information via phone and mail it to the customer within 30 days. Is this correct?

3. Customer requests a remittance transfer via fax. Is this considered are request via telephone?

Email is electronic. You can use electronic delivery for pre-payment disclosures only, unless you have stepped through the e-SIGN disclosures and obtained demonstrable consent for electronic delivery. The combined disclosure, because it's a substitute for the receipt, can't be electronic unless e-SIGN is taken care of.

When the transaction is conducted entirely by phone, you can make the pre-payment disclosure with a few added pieces of information (not the combined disclosure) orally during the call. You can provide the receipt by mail a day later or, if payments is coming from an on-us account, you can use the 30-day provision.

As for fax, I have seen info from an attorney's presentation that suggests it is not a request by telephone.

So in regards to requests received via telephone, we can provider the prepayment disclosure along with the cancellation and error resolution information orally. In lieu of the receipt we can provide the combined disclosure by mail. Is this correct?

In regards to requests received via fax we can provide the combined disclosure via fax. Is this correct?

Your first statement is correct.

Facsimile transmission is not mentioned anywhere in the regulation or in any of the Federal Register documents accompanying the rule or its amendments to publication. I simply don't have an answer, but I am aware that one law firm suggested that allowing fax communications under subpart B is a slippery slope. They advised picking up the phone right away on receipt of such a request and starting a conversation to make the whole deal fall under the rules for transactions conducted entirely on the telephone.

OK, Thanks as always.

Would we be able to use the same logic with email requests for transer of funds as a fax request in that in both situations we make a call to the customer and consider the entire transaction to be over the phone? We handle both of these the same due to the high risk nature of accepting wire transfer requests using both of these methods.

Yes, I see no reason that would not work.

Picking up on this, we receive requests from consumers to process international wires through consumer Internet banking. We are reviewing the agreement to ensure it would include disclosures related to international wires. Once the request is received we antipathetic providing the combined disclosure via consumer Internet banking in response to the consumer's request. I am fuzzy on the actual disclosure. Is it prohibited to provide it as an attachment to the email? I believe it is, but it certainly adds one more step to a already over complicated process.
(We do realize we would also have to provide the proof of payment.)

if I take this a step further and we were to utilize secure email,to provide disclosures to our customers, I understand we would have to get e-sign consent. I still believe that if we get by that, we still have the issue of providing the document as a copy and paste, because I still believe we cannot provide a link to the disclosure in the email.
Am I correct in understanding the limitation of the link? I am trying to think of a creative and compliant way, but keep coming back to copy and paste!

Thanks all!

antipathetic ==> anticipate?

Duh! Yes, but this is pretty pathetic!

Unless you're dealing with one of the special rules for transactions conducted entirely by telephone or via smartphone app or text messaging, the only disclosure you can provide electronically without e-SIGN demonstrable consent is the pre-payment disclosure, and that is only an option if the sender requests the transfer electronically. The receipt and combined prepayment/receipt disclosure must be in writing unless you have the e-SIGN consent (which you may be able to work into the flow of the electronic request processing). Email attachments are not considered written; they are electronically delivered.

So if we have e-Sign demonstrable consent, I apologize for being dense, your last comment about email attachments, if they are considered electronically delivered, would it be acceptable to provide the combined disclosure as an attachment? I am asking because I had thought it was not permitted to include them as a link that the customer might not open- which I would consider the same as an attachment in that a consumer might not open the attachment.

(We are considering providing a wire form our consumer Internet banking customers would complete after the secure signon to initiate the transaction)

Yes. I would consider an email attachment acceptable if you had E-SIGN coverage. I'd recommend referring to the attachment in the email message. Like any disclosure, you cannot compel the consumer to read it, even if he's standing in front of you with a written disclosure in his hand.

I know this is an old thread but we are going to change our email process so I would like to address this again to see if what I'm going to propose will meet the regulatory requirements.

We use the combined disclosure. We allow our customers to submit wire transfer requests via fax, phone, email or in person. For the requests that are not in person we conduct a call back to confirm the validity of the request. During the call back we provide the combined disclosure orally before sending out the wire.

We will be implemented the ability to send encrypted emails. I would like to change our process regarding requests received by emails to provide the combined disclosure electronically via secured email channel. I envision the process as follows:

1. Customer submits request via email.
2. Call back is done to confirm validity of request and to advise the customer that an email will be sent for which their reply will be required to finalize their request.
3. Email 1 will be sent with an attachment. The email will instruct the recipient to open the attachment and to reply to the email with the code that is included on the attachment and a subsequent email will include disclosure information as an attachment.
4. Email 2 will have the combined disclosure attached and will request the customer to review the disclosure and reply to the email to confirm their approval.
5. Email 3 will include the combined disclosure with proof of payment.

Bump

The disclosure provided under 1005.31(b)(2) -- the receipt -- must be given in written form whether it is used as a receipt only or as a "combined disclosure" under 1005.31(b)(3). It may only be given electronically if the consumer has provided demonstrable consent under the provisions of the E-SIGN Act.

If a consumer who has not provided E-SIGN demonstrable consent for electronic delivery requests a transfer via email, you can send the 1005.31(b)(1) prepayment disclosure electronically, but not the .31(b)(2) disclosure.

Unless you have left something out of your steps, there is no E-SIGN demonstrable consent in evidence. The disclosure statement identified in step 3 would legally not have been provided without E-SIGN consent.

The proof of payment can be provided electronically.