Good Morning All --

My FI is a small institution and we do not participate in the eSign Act - it's simply too cost prohibitive given the small number of loans we do. Our applicants receive the documentation generated by our LOS either via good old fashioned US Mail or they can stop in the bank and pick it up - yes, we are that small and have very, very basic mortgage products.

My question is this, can we sent the documents via a secure email (we use ZixMail) to the applicant to expedite the process providing they (the applicant) understands that they must mail the docs back to us with a live signature on them? Any regulatory concerns by doing this?

Asking because I have an applicant who has a house he owns locally - free and clear - and is applying for a home equity loan for the improvements, but he currently lives in Atlanta - we're near Pittsburgh. He will be living in the completed house.

You can, but you would need to establish an ESIGN compliant manner in which to send him the disclosures.

https://www.bankersonline.com/forum/ubbt...ess#Post2154989

Secure email and eSign compliance are not the same thing, so securely sending email (which is a good thing) it not going to help you provide documents in a compliant manner, regardless if they are signed or not.

eSign compliance does not have to cost you anything. The point of eSign is to be able to prove that the receiver can open and read/view your documents, and you are able to document they have able to and have done so. While a smidge clunky, this can be accomplished at no additional cost to your bank. Just depends on the process you set up.

Have you looked at a low volume Docusign license?

OP here... thank you all for the responses and input. I've checked into the eSign services via our LOS as well as free standing vendors. Will look into them more for cost comparison. Gotta watch every penny nowadays! In the meanwhile, we're going with snail mail on this particular one. I've already informed the borrower that's the route we're taking.

Again... thanks to all responders!

OP here... I've read the thread that you attached, GM. Thank you for that - a lot of good suggestions in it. The one saving grace for me is that there is only one borrower. I'm still going the snail mail route, just to be safe.

If you believe that, then take a closer look at ESIGN (https://www.bankersonline.com/regulations/esign-7001) and stop listening to vendors. ESIGN is a simple handshake. First, you explain how your e-delivery works. Subsections (c)(1) (B) and (C) spell out the minimum details of your explanation. Then, you obtain the customer's consent in the manner provided in Subsection (c)(1)(C)(ii). The tricky part can be incorporating a "test drive" into the consent steps. In the case you describe, however, that appears to be easy. Do this:
1. Decide you your vendor-free low-volume e-delivery system will work. I'm imagining that you will scan the paper documents generated by your LOS and save the images in a secure .pdf document. Then, you will attach the secure document and push it (with ordinary email) to the applicant.
2. With your method defined, read Subsections (c)(1) (B) and (C) and create a summary of your responses to these pre-consent disclosure requirements. Send this summary to your applicant any way you want--it can even be oral. CAUTION: although the steps can be simple, don't forget that you will need to retain some kind of evidence of what you did. There are no hard and fast record retention requirements in ESIGN--just create & save whatever you will need to convince a regulator or judge that you did what ESIGN requires and you did it in a timely manner.
3. Create a test document and email it to your applicant. This test document should match the file format, encryption method, and other characteristics of the "live" document(s) you plan to send as the application is processed. Include some type of PIN or codeword in the test document. You could also make this the method by which you deliver the summary discussed in the previous step. In the email message transmitting the test document, instruct the applicant to open the test document, retrieve the codeword, and add the codeword to a reply that affirmatively instructs the bank to deliver the loan disclosures electronically and not on paper. (You could also instruct the applicant to email the reply to a special emailbox designed exclusively for this purpose--maybe you could call it 'esignconsent@mybank.com'. )

Once you get the applicant's reply and confirm that s/he sent you the correct codeword, you may legally e-deliver the documents or categories of documents you enumerated in step 2 above.

Consent is needed to legalize the act of sending an e-document in the place of a paper document. Nothing a customer does later can erase the fact that you did not have consent when you transmitted this document.