Have to do a esign quick fix unable to use a vendor at this point.
Does anyone know if you can do your entire esign process via email. Customer applies for loan. We email an esign disclosure to them they email back saying they accept then we provided required disclosures and appraisal via email going forward? We would keep email back to bank as proof of their ability to read documents. Please advise. Thank you.

Send an email the required pre-consent disclosures, with an attachment in the format that will be used for the disclosures, etc. Place a phrase or password in that attachment. The customer must reply advising of that phrase or password and agree to use electronic communications. Track the customers who have agreed and who have demonstrated the ability to open/read the document.

Using that process you will have met the E-sign requirements.

If the subject e-document is an email message or attachment, you MUST limit the test drive to email.

Richard please explain limit the test drive to email?

Your original post says you plan to substitute email messages for paper delivery of "required disclosures and appraisal(s)." If your e-delivery method is email, then email hardware, software, and capability is what you must get the customer to demonstrate. Since the transaction disclosures shouldn't be exposed to assorted online con artists, you will most likely use some form of encrypted attachment...and that, too, must be tested as part of the customer's demonstration.

Thank you

We are implimenting a similar process and I have a question with regard to the timing of electronic delivery. (We will have the E-Sign consent prior to sending any documents electronically.)

What is considered delivered with electronic disclosures? If we send the disclosures today are they considered delivered today? Our secure email system will show if the customer actually retrieved the document, but wonder if this is actually required to demonstrate. If we were to mail a document we can't be sure they open the envelope.

I appreciate any help with this. Thank you.

Answered here.

When we get to the new integrated mortgage disclosure rules next Aug 1 there is a twist. You need receipt whether paper or electronic. An email acknowledging receipt of the bank's email is mentioned in the example.

Clarification: electronic delivery won't speed things up without evidence of receipt (opening of email).

That's interesting. What if you send the disclosures electronically within 3 days but the customer doesn't access the documents for 5 days? Are you out of compliance?

Thank you.

It is a twist but I need to clarify. Sending in compliance with esign doesn't speed things up without evidence of receipt. So, you can't just email if you are running out of time. You need receipt.

1026.19(e)(1)(iv)

2. Electronic delivery. The three-business-day period provided in § 1026.19(e)(1)(iv) applies to methods of electronic delivery, such as email. For example, if a creditor sends the disclosures required under § 1026.19(e) via email on Monday, pursuant to § 1026.19(e)(1)(iv) the consumer is considered to have received the disclosures on Thursday, three business days later. The creditor may, alternatively, rely on evidence that the consumer received the emailed disclosures earlier. For example, if the creditor emails the disclosures at 1 p.m. on Tuesday, the consumer emails the creditor with an acknowledgement of receipt of the disclosures at 5 p.m. on the same day, the creditor could demonstrate that the disclosures were received on the same day. Creditors using electronic delivery methods, such as email, must also comply with § 1026.37(o)(3)(iii), which provides that the disclosures in § 1026.37 may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-Sign Act. For example, if a creditor delivers the disclosures required under § 1026.19(e)(1)(i) to a consumer via email, but the creditor did not obtain the consumer's consent to receive disclosures via email prior to delivering the disclosures, then the creditor does not comply with § 1026.37(o)(3)(iii), and the creditor does not comply with § 1026.19(e)(1)(i), assuming the disclosures were not provided in a different manner in accordance with the timing requirements of § 1026.19(e)(1)(iii).

Three business days before consummation:

1026.19(f(1)(iv)

2. Receipt of disclosures three business days before consummation. Section 1026.19(f)(1)(ii)(A) provides that the consumer must receive the disclosures no later than three business days before consummation. To comply with this requirement, the creditor must arrange for delivery accordingly. Section 1026.19(f)(1)(iii) provides that, if any disclosures required under § 1026.19(f)(1)(i) are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. Thus, for example, if consummation is scheduled for Thursday, a creditor would satisfy the requirements of § 1026.19(f)(1)(ii)(A) if the creditor places the disclosures in the mail on Thursday of the previous week, because, for the purposes of § 1026.19(f)(1)(ii), Saturday is a business day, pursuant to § 1026.2(a)(6), and, pursuant to § 1026.19(f)(1)(iii), the consumer would be considered to have received the disclosures on the Monday before consummation is scheduled. See comment 19(f)(1)(iii)-1. A creditor would not satisfy the requirements of § 1026.19(f)(1)(ii)(A) in this example if the creditor places the disclosures in the mail on the Monday before consummation. However, the creditor in this example could satisfy the requirements of § 1026.19(f)(1)(ii)(A) by delivering the disclosures on Monday, for instance, by way of electronic mail, provided the requirements of § 1026.38(t)(3)(iii) relating to disclosures in electronic form are satisfied and assuming that each weekday is a business day, and provided that the creditor obtains evidence that the consumer received the emailed disclosures on Monday. See comment 19(f)(1)(iii)-2.

Thank you for the additional information, Kathleen!

Just one of the new twists for us to wrap our heads around.

What is your opinion that would constitute "evidence" of receipt? Would a read receipt work?

I am on the road right now and cannot check but I believe that is not sufficient; you need something more than that like a reply from the customer.

Do you think just a reply from the borrower that they opened the attachment or would putting a "code" on the disclosure and have the borrower respond with the code be better?

The language in Comment 19(e)(1)(iv) suggests that all you need is "evidence that the consumer received the disclosures earlier than three business days." However, as examples of that evidence, the comment gives an illustration of "signing a receipt for a delivery via overnight mail" (which I take to suggest something like a FedEx service, where the addressee's signature can be documented by FedEx) in paragraph 1 of that comment; and "the consumer emails the creditor with an acknowledgement of receipt of the disclosures" which were emailed to him (in paragraph 2 of the comment).

In both cases, the evidence is more than just documentation of delivery to the address indicated. It is documentation from the designated consumer that he/she received it.

For that reason, I would not hang my hat on a simple auto-generated delivery report from an email client. I'd want a message from the addressee something like: "Thanks, I got your email with the disclosures." Something that the addressee had to create him- or herself.

Thank you, John.