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#2188531 - 08/09/18 03:26 PM ESIGN AND WIRES
ComplianceGurl, CRCM Offline
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Joined: Jul 2007
Posts: 497
Hello,
For one of our large customers when they request to do a wire, they would like us to email them the wire form, they will electronically sign it and email it back. Does this fall under the E-Sign rules? Do we need to provide them with an agreement and/or disclosures? Obviously they are able to read and sign it so I feel like this wouldn't fall under the E-Sign requirements??
Help and Thank you!!

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eBanking / Technology
#2188541 - 08/09/18 04:10 PM Re: ESIGN AND WIRES ComplianceGurl, CRCM
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,207
Illinois
Before we even get into an esign discussion, I'm putting my BSA hat on. This advisory from FinCEN may open your eyes to the amount of wire fraud that has been initiated via compromised email credentials.

https://www.fincen.gov/resources/advisories/fincen-advisory-fin-2016-a003
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#2188553 - 08/09/18 04:50 PM Re: ESIGN AND WIRES ComplianceGurl, CRCM
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,036
Toano, VA
If you get past Brian's warning, there are a few things about ESIGN that you will need to understand.
1. The ESIGN act permits no regulations and no agency is authorized to interpret the law.
2. Only a small part of the act concerns bankers. Read Section 7001(a) through (c)(1)(C) and you will have it all.
https://www.bankersonline.com/regulations/esign-7001
3. ESIGN declares electronic signatures to be legal, period. The hitch, of course, is that it sets no standards for what is or isn't an electronic signature and it leaves the entire security and implementation risk to you.
4. Other than signatures, ESIGN declares e-documents to be the legal equivalent of paper AFTER you engage in the "informed demonstrable consent" handshake spelled out in Section 7001(c)(1). If you want to e-deliver documents that are subject to a federal law or regulation requiring delivery "in writing", then you must obtain consent in this manner--BUT ONLY FOR CONSUMERS!

"Large customers" doing wire transfers sound like businesses, not consumers.
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#2188555 - 08/09/18 04:57 PM Re: ESIGN AND WIRES ComplianceGurl, CRCM
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,649
Galveston, TX
And remember, whatever you do, if you do not meet the commercially reasonable security standards under the UCC4A, then the bank could be on the hook for every wire transfer - whether you have an agreement with the customer or not.
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#2188563 - 08/09/18 05:33 PM Re: ESIGN AND WIRES ComplianceGurl, CRCM
rainman Offline
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rainman
Joined: Nov 2004
Posts: 3,058
Randy's point is the key here. Nothing "requires" a signature in order for the bank to do a wire. But under UCC 4A, if the bank has a commercially reasonable security procedure that the customer has agreed to, then the bank can rely on wire requests initiated using that procedure and is not obligated to reimburse the customer if a request turns out to be fraudulent (if the bank followed the agreed on procedure). But Esign is not a security procedure and UCC 4A says that verification of a "signature" is not by itself a security procedure.

As Brian noted, both banks and customers are losing big money (hundreds of thousands of dollars at a pop) on wire fraud, so this is a critical issue.
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#2188579 - 08/09/18 06:15 PM Re: ESIGN AND WIRES ComplianceGurl, CRCM
ComplianceGurl, CRCM Offline
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Joined: Jul 2007
Posts: 497
Great information!! Thank you all so much!!!!

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