I know that we need to provide disclosures and obtain demonstrable consent to provide docs. electronically. I need to clarify the following also fits under those requirements:

John Doe in process of opening a deposit account. The signature card is on the CSR's screen. She provides customer access to this screen and the customer is given a tool (Topaz) to sign that they have received the signature card. This signature is captured and replaces the traditional wet signature BUT it is not the "I consent to do things electronically" click where we will not have a sample of the actual signature on file. At this point, we offer the customer a copy of the signature card (paper).

Step #2. the disclosures. At this point we will still need to print the disclosures. I know the customer cannot use the bank's computer to sign up for electronic delivery of the disclosures and bypass getting a mitt full of paper at the point of a face to face account opening session. Are there any electronic hand held devices currently used with will assist banks in obtaining and documenting the test/consent?

To clarify, the first part of the process was to omit printing a copy of the agreement and then scanning it for record keeping purposes. We would still print a copy for the customers. Potential vendor has the capacity to allow an electronic signature on a document that allows us to immediately scan and store under the customer's name. Currently we print and scan all paper documents.

Assuming the signature card does not contain required consumer protection disclosures (Reg. DD, E, etc.), you can handle it any way you want. Until/unless the courts rule that certain types of electronic responses do not constitute "signatures", you're free to handle that any way you want, too.

Any handheld electronic device that can access the internet and open files of the type you plan to use for disclosure documents will suffice. Also, you could make your branches hot spots and allow customers to log their devices onto the internet while they are opening accounts or signing up for e-statements. The only catch is that it must be the customer's device that serves as the client that drives the session.

Richard, thank you. Just to be sure I understand. If a customer can access the e-mail address to which we will be sending most disclosures, notices, etc., then, conceivably, the customer can consent to electronic delivery of documents, per the E-sign, and demonstrate demonstrable consent, all the while they are opening the account face to face. For example, we tell them that we need to provide certain disclosures. They say OK, but can you send it to me? We say OK, but first you need to sign on to our transactional site and consent to the E-sign Agreement. Customer signs on and clicks consent. This being the case, can we review the disclosures with the customer, using our computer screen and then, right after, send the disclosures electronically to the customer's e-mail address??

This still appears to have some rough edges. Here are my thoughts as I digest your post:
I assume you mean "if, while present in a bank office, the customer can log onto the internet using his/her personal electronic device and access...."

Most disclosures? Does this mean there could be multiple email boxes, or that certain items may be on paper and all e-deliveries will be to a single email address?

Yes, if the bank provides wireless internet access in the branch and the customer brings his/her handheld device, laptop, etc., it can be done.

What comes next is "...but first we must confirm that we have a working email address for you and do a simple test to be sure you will be able to open and read files of the type we will send. Also, banking regulations require us to provide these account-opening disclosures to you before opening an account."

Two important steps are missing here. You don't indicate that you will provide the "hardware/software, how-it-works, how-to-withdraw-consent, etc." pre-consent disclosures required by ESIGN. Also, the act of clicking a link or button labeled "consent" is not a demonstration of the customer's ability to open and read a test file of the type you will use for the Reg. DD, E, etc. disclosures you will email. The act of signing on will need to be done on the customer's device, not bank-supplied equipment.

I understand "review the disclosures" to mean the Reg. DD, E, etc. disclosures. If you have gone through the appropriate ESIGN steps (disclosures, test drive, consent) and have obtained a valid consent, then you can legally deliver the account-opening-disclosures to the customer's email box. Reviewing them on your screen or paper would be a courtesy step.

Sorry for the lengthy post.

Yes, sorry about the Friday afternoon attempt to be coherent. We have the E-sign disclosure covering all key points, such as the proper equipment, how to contact us, how to obtain paper copies, potential additional costs, etc.

You provided one of the most concise explanations thus far with respect to this issue of meeting E-sign compliance with the pressure to do so while a customer is opening accounts. It can be done, however......

http://www.gpo.gov/fdsys/pkg/CRECB-2000-pt8/pdf/CRECB-2000-pt8-Pg11156-7.pdf

I was told (in 2010)that an examiner once told a fellow compliance officer (in 2008) that this could support an opposing position related to demonstrable consent. I don't think I'd want to test it. I'd like to know what the experts think of this....

CONSUMER CONSENT PROVISIONS - June 16, 2000
Mr. MCCAIN.
Mr. President, I want to engage in a colloquy with the Senator from Michigan, who is the original sponsor of the electronic signatures legislation, to discuss the consumer consent provisions in the conference report.
Mr. ABRAHAM.
Mr. President, I welcome the chance to participate in a colloquy about the consent provisions in the conference report.
Mr. MCCAIN.
Is it the Senator's understanding that pursuant to subsection 101(c)(1)(C)(ii) of the conference report a consumer's affirmative consent to the receipt of electronic records needs to "reasonably demonstrate" that the consumer will be able to access the various forms of electronic records to which the consent applies?
Mr. ABRAHAM.
Yes. The conference report requires a "reasonable demonstration" that the consumer will be able to access the electronic records to which the consent applies. By means of this provision, the conferees sought to provide consumers with a simple and efficient mechanism to substantiate their ability to access the electronic information that will be provided to them.
Mr. MCCAIN.
I agree. The conferees did not intend that the "reasonable demonstration" requirement would burden either consumers or the person providing the electronic record. In fact, the conferees expect that a "reasonable demonstration" could be satisfied in many ways. Does the Senator agree with me that the conferees intend that the reasonable demonstration requirement is satisfied if the consumer confirmed in an e-mail response to the provider of the electronic records that he or she can access information in the specified formats?
Mr. ABRAHAM.
Yes. An e-mail response from a consumer that confirmed that the consumer can access electronic records in the specified formats would satisfy the" reasonable demonstration" requirement.
Mr. MCCAIN.
Does the Senator also agree with me that the "reasonable demonstration" requirement would be satisfied, for instance, if the consumer responds affirmatively to an electronic query asking if he or she can access the electronic information or if the affirmative consent language includes the consumer's acknowledgement that he or she can access the electronic information in the designated format?
Mr. ABRAHAM.
.
Yes. A consumer's acknowledgment or affirmative response to such a query would satisfy the "reasonable demonstration" requirement.
Mr. MCCAIN.
Would the "reasonable demonstration requirement" be satisfied if it is shown that the consumer actually accesses records in the relevant electronic format?
Mr. ABRAHAM.
Yes. The requirement is satisfied if it is shown that the consumer actually accesses electronic records in the relevant format.
Mr. MCCAIN.
Mr. President, I appreciate my colleague's willingness to participate in this colloquy to clarify the clear intent of the conference with respect to this provision.
nstrable consent. Here's an excerpt:

Lucky- I was not aware of these statements and have always relied upon the comments made during the conference committee's debate and markup of the various bills that became ESIGN. I've thought about this since your post and did some additional research which unearthed this FTC document which may explain why the gist of these conversations did not attach to our understanding of the curious language of Section 101(c)(1)(C)(ii). The relevant part of the linked document (below) traces ESIGN's history and puts the "colloquy" comments into proper perspective.

I am still of the opinion (worth what you're paying for it ) that there should be no short cuts in the "demonstration." To me, Section 101(c)(1)(C)(ii) demands an exercise comparable to the behind-the-wheel part of the tests I had to pass in order to get my driver's license. Just saying "I assure you I can drive safely" didn't cut it. The examining officer insisted that I drive him down the street and back (and parallel-park the car) before signing off.

The House … passed the bill by an overwhelming 426-4 vote on June 14, and the Senate did the same by a vote of 87-0 on June 16. It then went to President Clinton for signature. However, unlike most legislation, the E-Sign Act, by the decision of the majority of the conferees, has a conference report which is simply the text of the Act, with no accompanying statement of managers.43 Therefore, there is no dispositive legislative history to illuminate what the text of the E-Sign Act is intended to mean. Although a number of conferees engaged in extended colloquies and inserted statements into the Congressional Record on the floor, their eventual legal significance as legislative history is unclear.44

43 A “statement of managers” is a section of a conference report (the final version of a bill proposed by House and Senate conferees) which provides a section-by-section explanation of the agreement. Normally included as part of the conference report, the statement of managers is an important element of the legislative history of an act.

44 The weight accorded floor statements will depend on the court interpreting them. See e.g., concurring opinion of Justice Scalia in Thompson v. Thompson, 484 U.S. 174 (1988), in which he stated: “Committee reports, floor speeches, and even colloquies between Congressmen … are frail substitutes for bicameral vote upon the text of a law and its presentment to the President.”

Wanted to refresh this thread. Our branches would very much like to allow a customer to use bank equipment to sign up for online banking/estatements. Up until now I have been successful in telling them that the customer must use their own device to demonstrate their ability to obtain required statements, notices, etc. I don’t know of a specific reference or place that I can point to in the e-sign rule that will say this specifically and I really need to be able to point to something specific - or maybe I just need a better basis for my position.

Is there anything more specific someone can share that would help me win this disagreement?

Try this -- The demonstrable consent requirement in E-Sign is designed to accomplish two things. First, to show the consumer's ability (online access, compatible browser, ability to open documents of type in question) to access the disclosure or other document in question. Second, to provide consent for the use of electronic delivery.

Consent is the easy part. Documenting the consumer's ability to access the electronic documents is the big hurdle.

How is the use of the bank's equipment going to demonstrate that the customer can access those statements from outside the bank? How can it possibly demonstrate that the consumer has a PDF file reader on his computer or other device to enable him to open a PDF of a statement? How does it show that the consumer even has access to the necessary wireless or WiFi connection to get online? E-Sign isn't about being able to access those documents from a branch device. It's about access from the consumer's home, office, village library or other location where the consumer will be expected to do so.

Would your branch people like to open up the branch at 2 a.m. on a Saturday morning because a consumer customer wants access to his bank statement?

Curious if Saal has the same vendor as us. It can get frustrating when the consumer has the ability to view the documents we send them easily with their smart phone, but our vendor doesn't allow for the initial "demonstration" piece to take place on a mobile device.

How about dumbing down that demonstration a bit. Let's suppose you provide the documents in question in PDF format and you routinely send the customer a "heads up" email when a new document is ready. Put a test PDF document on your server in the same directory as the one to be used for live documents. Include a test phrase in that document -- "XYZ Bank statement access is easy."

Send the customer a clickable link to the test page. If he can pull down the test PDF document and open it, have him confirm his permission for e-delivery by sending back the test phrase with another sentence -- "I consent to receiving [document type(s)] electronically."

Change your test phrase document regularly.

We may or may not have taken an easier, less compliant, approach...

All official ESIGN "reference" is contained in Section 7001 of the Act plus any case rulings by federal courts. That's it. The Act provides for no regulations, interpretations, or guidance. Consequently, there are no official answers to questions (like the topic at hand) about specific issues. The only way we could get an official answer would be to get Congress to amend ESIGN or to risk the consequences of losing a consumer-initiated lawsuit.

Short of a ready-made answer, the best we can do is parse Section 7001(c)(1) of ESIGN looking for a viable defense of the position your branch managers want to adopt.

Section 7001(c)(1) (relevant parts):
"...if a...regulation...requires that information...be provided or made available to a consumer in writing, the use of an electronic record ...satisfies the requirement that such information be in writing if— ...
(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...."

Paragraph (i) relates to the types of hardware and software, not to bits, bytes, or ownership. Just like your driver's license allows you to drive a borrowed or rented Ford, Chevy, or Ferrari, this part of the ESIGN "license" allows consumers to use any hardware they can purchase, beg, borrow, or steal.

Paragraph (ii) is tricky. You have to read it very carefully to see the source of the problem we're discussing. In order get ESIGN's benefits (legal recognition that your electrons are as good as paper in meeting the requirements of Regs. E, DD, Z, etc., etc.) the consumer must "consent...in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the (Reg. E, DD, etc. disclosures)."

While it is certain that a consumer has used the bank-owned hardware and software to demonstrate access to the one-time test information in the necessary electronic form, is it reasonable to think the bank branch will continue providing the consumer the same hardware/software service for the entire time Reg. E, DD, etc. require the bank to provide "written" periodic disclosures? Here, the bank places itself in an awkward position.

...of opening the branch to let the dude use your equipment to access his statement at 2 a.m., perhaps?

"...our vendor doesn't allow for the initial "demonstration" piece to take place on a mobile device"


Why? My wife does our internet banking and prefers my iPad or her iPhone to her PC. It seems to me that a rule like this will inhibit your growth in this area as more and more millennials are shedding computers. Consider the Apple commercial where the girl is on her iPad all day and her neighbor asks "what are you doing on your computer?" and the reply is "what's a computer?"

I agree with you, we want it to work - the vendor just knows we're too far deep and doesn't plan on making the change. The 'inhibit growth' reason is why we (may or may not have) took the riskier approach.