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#1626873 - 11/09/11 11:43 PM Re: E-Sign Compliance [Re: mmumm]
Richard Insley Online
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Richard Insley
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Toano, VA
How will loan applicants secure their information before sending it through the internet?

The e-statement sign-up process you described will not comply with ESIGN. You can provide the preconsent disclosures on paper at the time you open a new account, but the customer's consent must be electronic and it must be handled in a manner that proves the customer has the necessary hardware, software, and technical capability.
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eBanking / Technology
#1628348 - 11/15/11 12:21 AM Re: E-Sign Compliance [Re: Richard Insley]
mmumm Offline
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Santa Cruz, California
We would have them password protect it and send it back. Or, they could print it and provide it to us that way.

For providing a loan applicaiton to them via email, do they need to first demonstrate that they can receive it?

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#1628351 - 11/15/11 01:37 AM Re: E-Sign Compliance [Re: mmumm]
Richard Insley Online
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Richard Insley
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Demonstration only comes into play if you are using ESIGN, and you only need to use ESIGN if federal law requires you to deliver a document "in writing."

See Section 202.4 (c) and (d) of Reg. B for general rules concerning applications, including specific exclusions from ESIGN. If Reg. Z requires time-of-application disclosures for the type(s) of credit you're offering with e-applications, then you must review those rules to determine what must be "in writing", how it must be delivered, when, and how ESIGN applies.
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#1641102 - 12/20/11 05:46 PM Re: E-Sign Compliance [Re: mzachau, CRCM]
mmumm Offline
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Santa Cruz, California
We do commercial/commercial construction loans, SBA/B&I/FSA loans, and the only consumer loans we do are HELOC's/LOC's.

Should we be worried about complying with E-SIGN for sending loan app's via email for the above loans?

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#1641462 - 12/21/11 01:47 PM Re: E-Sign Compliance [Re: mzachau, CRCM]
Richard Insley Online
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Richard Insley
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Toano, VA
With a few exceptions, electronic transmissions are a legal alternative to paper documents for all transactions - both commercial and consumer. ESIGN applicability can only be determined on a document-by-document basis.

Your question covers a wide range of transactions and related documents. Some of these documents are required by state or federal law and others are not. Unless a document is required by law, is necessary to document your compliance with a law, or is necessary to support a contract with your customer, you are free to handle it any way you wish. Considering that not all customers care to use electronics for some or all of their communications with your company, it's always a good business practice to provide alternate means of document delivery.

Since contract documents fall under state laws and will be judged in a California court, these items must conform to state laws for content, timing, and method of delivery. Although these documents can be handled in electronic form, delivery must conform with either ESIGN or California's UETA. Disclosures (if any) required by state law are handled the same way.

Federal consumer disclosures can also be handled electronically, but they fall into three delivery categories. Most demanding are "written" communications. If a federal law or regulation says you must deliver something "in writing", then you must use paper or ESIGN-enabled electronic communication. A few federal items must comply with standards specified in a particular law, but need not follow the full ESIGN regimen. Remaining federal items can be handled any way you want. Keep in mind, however, that investor rules will apply to any loan destined for the secondary market.

So how do you sort all of this out? Document by document. A complete ESIGN/UETA analysis matrix would list (column 1) all documents you plan to deliver in electronic form. Column 2 would list the specific (cite the law/reg and section) legal requirement (if any) satisfied by each document. Column 3 would be an indication of the delivery method ("written", regulated, or unrestricted) required by the law or reg shown in Column 2.
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#1887775 - 01/16/14 09:53 PM Re: E-Sign Compliance [Re: mzachau, CRCM]
Red Raiders Offline
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We are kicking around online account opening. Our provider has a process to do CIP and OFAC to verify the customer and will provide the disclosures on the screen through the opening process (applicant will have to check box that they reviewed to continue). Do we have to go through the E-Sign hoops (mainly demonstrable consent) and if so, how do most banks do this for online account opening?
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#1887838 - 01/17/14 12:15 AM Re: E-Sign Compliance [Re: Red Raiders]
Richard Insley Online
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Richard Insley
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Toano, VA
How about moving this over to a new thread. This one is already a monster.
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