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#2030309 - 07/28/15 08:43 PM E-SIGN consent question
THEBANKERLADY Offline
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I know this question has been asked before somewhere, but I am unable to find the exact answer on here at the moment. We have a new E-SIGN program that is interfaced through our mortgage loan software. We plan on sending out mortgage disclosures, appraisals, etc., out with it. When the employee sends the customer the applicable docs, the customer then has to set up their login info, then click the box to prove "consent" to receive the disclosures, then they can click on the attachments. This is a one time consent. From what I think I am reading on here is that the employee must send them a seperate email, prior to sending the one with the disclosures in it, to get consent prior to receiving the next email. Am I correct in my assumption?

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#2030315 - 07/28/15 08:54 PM Re: E-SIGN consent question THEBANKERLADY
rlcarey Online
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the customer then has to set up their login info, then click the box to prove "consent" to receive the disclosures, then they can click on the attachments

If the attachments are in PDF format for example, how does this prove that the customer can open and read a PDF document???
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#2030365 - 07/29/15 03:23 AM Re: E-SIGN consent question THEBANKERLADY
Richard Insley Offline
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Is this a "push" system? If so, why is it necessary to set up login info? That makes it sound more like a "pull" system.

Regardless of the method by which the mortgage disclosures reach the applicant, you aren't describing anything that appears to be a "test drive" that will provide the proof Randy mentions.
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#2030465 - 07/29/15 03:28 PM Re: E-SIGN consent question Richard Insley
ccman Offline
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Vendors that are E-sign compliant might help up all with complying with this act. Can anyone suggest a vendor? Does the ABA offer a software preferred provider? Thanks.

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#2030824 - 07/30/15 05:57 PM Re: E-SIGN consent question ccman
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What is a "push" vs "pull" system?

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#2030848 - 07/30/15 06:39 PM Re: E-SIGN consent question THEBANKERLADY
John Burnett Offline
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In a push system, you send e-documents to the customer, usually as email attachments. The customer needs the ability to open the documents. There's also a need for encryption of either the documents or the entire email.

Pull systems require the customer to log into a secure website and download their documents. Some of these systems are used in connection with an outbound email messages to the effect of: Your XXXXXXXXXX is ready for download. Such messages are not required by ESIGN.
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#2031121 - 07/31/15 05:19 PM Re: E-SIGN consent question John Burnett
ccman Offline
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Thanks, John. Would like to use e-sign compliant software to assist in delivery of TRID docs, appraisals, etc.

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#2031312 - 08/03/15 02:47 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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Sorry for the delay in responding, I have been super busy. I am trying really hard to get familiar with this whole process. This is all new to us here. We are using SDX by Wolters Kluwer. The customer has to "login" this secure website themselves, then download the document. So I think I am understanding you correctly that I am supposed to get consent first, then send a .pdf file to them to make sure that they can open it (if that is how the mortgage disclosures are coming)and then send my final documents to them.

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#2031345 - 08/03/15 04:50 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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Also, can someone please point me to where in the E-SIGN act it says that the customer must consent to get the disclosures electronically, then we must send them a dummy email with an attachment to make sure they can open it, and when they do open it, then we can send them our disclosures? All of the required verbiage is in the consent letter that the customer "signs" including all system requirements to be able to open documents, etc

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#2031349 - 08/03/15 05:06 PM Re: E-SIGN consent question THEBANKERLADY
Skittles Offline
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I am cutting and pasting this from the E-SIGN regulations on BOL:

(c) Consumer disclosures

(1) Consent to electronic records

Notwithstanding subsection (a) of this section, if a statute, regulation, or other rule of law requires that information relating to a transaction or transactions in or affecting interstate or foreign commerce be provided or made available to a consumer in writing, the use of an electronic record to provide or make available (whichever is required) such information satisfies the requirement that such information be in writing if—

(A) the consumer has affirmatively consented to such use and has not withdrawn such consent;

and then . . .
(C) the consumer—

(i) prior to consenting, is provided with a statement of the hardware and software requirements for access to and retention of the electronic records; and

(ii) consents electronically, or confirms his or her consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent; and
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#2031362 - 08/03/15 05:48 PM Re: E-SIGN consent question THEBANKERLADY
John Burnett Offline
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The pivotal requirement is in paragraph (c)(1)(ii): "in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used ....."

The consent or confirmation must demonstrate the consumer can access the information in the format it will be provided in. If you don't include that demonstration step, you haven't completed the task of getting E-SIGN consent.
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#2031371 - 08/03/15 06:21 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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Ok, thank you for that info. I read that several times, but just understood the interpretation of consenting electronically that they can access.. Did not catch the "format it will be provided in." One more question and I will quit bugging you all. Exactly what kind of examiners are going to look at E-SIGN Compliance? Is it S&S or Compliance or both?? Who has sat through an exam of this and can tell me what all do they focus in on and what do they need to perform their exam at the beginning??

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#2031372 - 08/03/15 06:25 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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and btw, I have the FDIC Examination Procedures, I would just like to know if everyone's exam went good, any good tips they would like to share..

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#2031380 - 08/03/15 06:36 PM Re: E-SIGN consent question THEBANKERLADY
John Burnett Offline
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What kind of examiners? Probably not anyone from your prudential regulator. More likely, it will be an examination in a court of law when the consumer's junk-yard-dog lawyer in a foreclosure or other suit against the consumer challenges the bank on its claim that it delivered a required disclosure. When it turns out that the bank's E-SIGN consent process was faulty, the judge has to rule that the disclosure never happened.
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#2031390 - 08/03/15 07:07 PM Re: E-SIGN consent question THEBANKERLADY
Richard Insley Offline
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Originally Posted By THEBANKERLADY
The customer has to "login" this secure website themselves, then download the document....I am supposed to...send my final documents to them.
I'm still trying to decide whether this is a "push" or "pull" system. In one place you say the customer must download "the document." Is "the document" the TIL/RESPA disclosures? Just when I ready to call this a "pull" system, you talk about "sending" final documents to the applicant--a "push" system.

I'll be happy to describe an appropriate consent mechanism once the e-delivery method is clear.
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#2031585 - 08/04/15 06:22 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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Are you familiar with Secure Document Exchange (SDX) from Wolters Kluwer? That is the program I am referring to. Let's just say I log into this SDX program. I go to "create package." It is laid out almost like an email account. I type in the customer's email address, attach the document that I want to send (let's just pretend it is TILA/RESPA disclosures), and send to the customer. It pops up a notification saying that this particular customer has not registered yet onto SDX and it says it will send them instructions on how to set up their account, then i hit ok and send. The customer receives an email saying that their document package is available for review. Before you are able to download nad print these documents, you must first set up your user account by following these simple instructions: blah blah blah. They then set up their account, then login. When they do that, they have what appears to be an email with an attachment. When they click on the email, the e-consent page pops up and has all the required disclosures pertaining to withdraw consent, printed copies, minimum system requirements, and so on. They either can hit " I consent to Electronic Packages" or "I do not Consent." If they consent, then they are taken back to their main page to the email again. They click on the email. On this particular set of disclosures, I have required them to "sign" them. They have to actually open up the attachment prior to "signing" them. Once they have opened the disclosures up (it automatically downloads them to the mobile device), they then are allowed to "sign" the disclosures. As soon as they do that, I would get an email back of the attachment with a date, time and signed stamp on each page of the document that they opened.

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#2031609 - 08/04/15 07:08 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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Here is the answer I got from one of the supervisors.. Maybe this can explain what I am trying to say....... It is not common practice to send a “test email” nor is it necessary given the way we built the architecture. SDX is a “vault and notify” architecture; the attachment that you “send” to a client is only metaphorically “sent’. When you board it into SDX it is actually landing in a digital vault, and that’s where it stays unless and until the recipient downloads it. What is actually “sent” to the recipient is an email notification with a link in it. They click that link and access the digital vault, where the document resides. The “test email” concept might be prudent if one was using a regular email, that was going to leave the sender’s environment and land on the recipient's personal computer. Since you can’t send such emails “in the open” due to CPI/NPI concerns it would be necessary to encrypt the email itself, as well as all attachments. Given the complexity of resolving a peer to peer encryption of that type, a “test email” might be necessary to make sure they could actually open what you’d sent.

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#2031615 - 08/04/15 07:22 PM Re: E-SIGN consent question THEBANKERLADY
Gioia Offline
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^ looks like you got your answer. At no point are you sending an email with the disclosures, so they are not required to consent via email. They are providing demonstrable consent when they log into the system and open up the consent document, which is the same way they receive the disclosures you send.

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#2031694 - 08/05/15 01:30 AM Re: E-SIGN consent question THEBANKERLADY
Richard Insley Offline
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This is a "pull" system and it sounds like your customers touch all the necessary bases. Our confusion stemmed from the different facades the system presents to the documents' creators and recipients. From your perspective, documents are pushed toward the customer...but not all the way to him/her. Behind the scenes, the system holds the documents and requires the recipient to pull them off a secure server.

Gioia raises a good point--there is no requirement that these e-delivery customers must consent via email. I agree. Nevertheless, ordinary email is an integral part of this system and must be part of the "test drive." "Pull" systems used for statements and other regularly recurring e-documents might be able to dispense with the email announcement, but in a system designed to handle single items, the customer has no other way to know that a one-time e-document is available for download.

The system packages the consent process into a smoother, more customer-friendly appearance and labels it "registration." It makes no difference how it's presented or what it's called, so long as the "registration" steps include delivery of the ESIGN pre-consent disclosures to the consumer and a satisfactory test drive. Here's where those steps are handled:

Originally Posted By THEBANKERLADY
...customer has not registered yet...SDX will send...an email saying that their document package is available for review.
This message via ordinary email alerts the customer to go to SDX, log in, and follow the instructions. Beginning with the current document package, any future e-deliveries will begin the same way--with an ordinary email message announcing the availability of e-documents. By advancing past this step, the customer demonstrates that the email address that s/he provided is valid and that s/he can actually receive, open, and read the content of the type of alert messages that SDX sends out.

The next step:
Originally Posted By THEBANKERLADY
...set up your user account...they have what appears to be an email with an attachment. When they click on the email, the e-consent page pops up and has all the required disclosures pertaining to withdraw consent, printed copies, minimum system requirements, and so on.
Here you have satisfied ESIGN's preconsent disclosure requirements.

Originally Posted By THEBANKERLADY
They either can hit "I consent to Electronic Packages" or "I do not Consent."
By knowing the meaning of the two links, buttons, etc, and clicking the one labeled "I consent" the customer demonstrates that s/he got to the right place on the SDX server, opened the right document, and was able to comprehend the content. That's it!! Your customer has passed the test drive! S/he has done everything necessary to access, open, and use the content of your disclosure package, and your electronic disclosure document is now the legal equivalent of paper.
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#2031840 - 08/05/15 04:31 PM Re: E-SIGN consent question THEBANKERLADY
THEBANKERLADY Offline
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Awesome!!!! I am so glad I am approved! Thanks to all of you for your help explaining this to me. I just kept getting confused when I would see some of the other questions answered on this e-page of bankersonline. Which, I am a Lending Compliance Officer, meaning, systems like these are hard for me to understand since this it not familar territory. Thanks again for your help.

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#2031863 - 08/05/15 05:16 PM Re: E-SIGN consent question THEBANKERLADY
Richard Insley Offline
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Originally Posted By THEBANKERLADY
this it not familar territory
Oh, but it is! You aren't familiar with it in the wonderful world of banking, but it's very similar to driving.

If you want to use the highway (e-delivery of documents), you must have a driver's license (consent via ESIGN.) All candidates for driver's licenses must obtain and comprehend the rules for driving on public highways (the ESIGN pre-consent disclosures.) All candidates for driver's licenses must submit an application for a license (ESIGN's "affirmative consent") in order to be considered.

The trickiest part of ESIGN is the demonstration, but that's also the part that's the closest comparison with getting a driver's license. It would be laughable if a candidate could simply sign a statement like "I know how to drive a car" and that declaration would satisfy the behind-the-wheel part of the driver's license exam! That's why ESIGN requires a demonstration (test drive), and not just a simple declaration. Congress wanted to be sure that each e-delivery applicant could actually navigate an e-delivery system before granting an "ESIGN license" to use the system as the legal equivalent of paper. The demonstration should work just like the test drive where you have to climb behind the wheel, take your vehicle around the block, and return safely.
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#2032290 - 08/07/15 12:53 PM Re: E-SIGN consent question THEBANKERLADY
trinna Offline
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I don’t know if this belongs in this forum or the BOL couch!!!
Would love some opinions, thoughts, advice…from some fellow bankers.

This is the gist of my dilemma: I discovered recently that we have lenders emailing various mortgage docs to their customers without obtaining E-Sign consent first. I dug into the Act, got a notice ready and reviewed for compliance, set-up some training on it…..and then got kicked to the curb. I was shut-down. Since the Act has essentially been in effect since 2000 and we haven’t been written up for not complying yet……..well, why start complying now? was the general comment. I don’t know why we haven’t been “called on the carpet” before now. With TRID coming up I thought it would be a good time to start doing things right. Am I overreacting? Am I misinterpreting the Act completely? There are days when I wonder why I even bother.

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#2032310 - 08/07/15 01:55 PM Re: E-SIGN consent question trinna
Love Cruising Offline
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What about when you have one consumer that agrees to electronic documents, but the other jointly on the account does not? Do we still go ahead and set them up on e-documents.

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#2032333 - 08/07/15 02:43 PM Re: E-SIGN consent question THEBANKERLADY
Richard Insley Offline
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One way or another, I've dealt with regulators for 45 years. During that time, I never saw them mishandle an issue worse than they have mishandled ESIGN. They will be the first to caution you that the absence of criticism does NOT amount to their approval of a particular banking practice.

By itself, ESIGN looks innocent enough. It isn't politically-charged and has no penalties or enforcement mechanism. That's probably why the regulators have paid it so little attention. That has been a huge disservice to an industry that relies (too much) on its regulators to establish it's risk focus.

Assuming your "various mortgage docs" include TIL, RESPA, and other regulatory disclosures, your lenders are playing with fire--limitless exposure to penalties. These are the familiar penalties--not in ESIGN--but in TILA, RESPA, and other consumer laws/regulations that require "written" disclosures. If you dispense with paper and ignore ESIGN, you are fully exposed to allegations that you did not give these disclosures at all. You won't be able to offer copies of paper documents and won't be able to produce any evidence that you had the consumers' consent to substitute electrons for paper. A court can (and probably will) rule that you gave none of these disclosures and are liable for the same penalties that would apply if you decided not to put paper in the printer!

You are not overreacting or misinterpreting ESIGN, but you may be warning about the wrong storm.
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#2032335 - 08/07/15 02:55 PM Re: E-SIGN consent question Love Cruising
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Originally Posted By Love Cruising
What about when you have one consumer that agrees to electronic documents, but the other jointly on the account does not? Do we still go ahead and set them up on e-documents.
We discussed this recently, but I can't find that thread. Maybe someone else can link that discussion.

There isn't a single answer to this question because your "electronic documents" may or may not contain consumer disclosures of some kind and not all of those disclosures are required by the same law/regulation. You must inspect the content of each document. If it contains one or more consumer disclosures, you must look at the delivery requirements for each disclosure you find. If a disclosure must be given to multiple parties, then ESIGN consent or paper will be required for each person.
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