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#2223018 - 10/04/19 12:47 PM eStatement Disclosure
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
Looking for some thoughts or ideas on what I see as an issue. Currently, when our customers sign up for eStatements, they are taken to a "Consent and Authorization" screen that contains a small paragraph that discloses that there is no cost to the customer, that they will be able to view current and past statements and the fee for requesting printed copies of their statement. It also states that they should read the eStatement disclosure that is located within the eStatement site, that they cannot get to until they "accept" the terms and conditions. Our eStatement disclosure is a 3 page document. I believe there should be a link on this "Consent and Authorization" screen that the customer can click on to read the disclosures before clicking on accept. However, our Core Processor will not allow a hyperlink on this screen for security reasons. I don't believe we should be asking the customer to accept the terms and conditions prior to reading the full disclosures, but I don't know what a solution is to this. I will say the disclosures are listed on our website, so could we put a statement saying they should go to the disclosure page to read the terms prior to accepting? Thoughts on how to handle this?

Thanks

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eBanking / Technology
#2223021 - 10/04/19 01:01 PM Re: eStatement Disclosure [Re: Bankwoman1]
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
Prior to consent, you have to determine that the consumer can actually view the statements in the format they will be provided to the consumer. That is what they call it "demonstrable consent". It does not sound like this is happening with this set up.

Typically, the terms and conditions document is presented in the same format as the statements will be provided, let's say a PDF format. The bank then builds the consent system in an manner to not allow the consumer to consent until you prove that the consumer can view the terms and conditions document. Commonly, there is a code imbedded into the terms and conditions PDF and the consumer has to enter the embedded code to prove that they can view the document when they provide their E-sign consent.
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#2223025 - 10/04/19 01:17 PM Re: eStatement Disclosure [Re: Bankwoman1]
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
Thank you Randy. This gives me even more to think about... I knew that we shouldn't be signing customers up for eStatements within the branch because they needed to do it on their own computer to verify they could receive them, but for some reason I never thought about them having to actually prove they could view them in this way. This opens another whole can of worms for us it seems. And if our vendor will not agree to providing any kind of link on the authorization page, how do we begin to correct this. Seems we have some thinking to do on this matter!

Thanks again for your help.

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#2223027 - 10/04/19 01:21 PM Re: eStatement Disclosure [Re: Bankwoman1]
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
And just to throw something else out there........it seems we do send an email to the customer informing them of what they will need (system wise) to access their eStatements. However, this email is sent AFTER they sign up and "accept" everything. I'm guessing this really should be provided prior to them "accepting" anything...... *sigh*

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#2223031 - 10/04/19 01:55 PM Re: eStatement Disclosure [Re: Bankwoman1]
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,333
I agree with Randy that it does not sound like your process complies with ESIGN. If that is the case, this is a big problem as any document you try to deliver via ESIGN was essentially NOT delivered. eek
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#2223035 - 10/04/19 02:11 PM Re: eStatement Disclosure [Re: Adam Witmer]
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
So.....do I take this to mean that any statement that has been delivered electronically or will be delivered electronically, could be considered not delivered by examiners because we technically haven't received proof from the customer that they could receive them and view them? It's never been an issue in the past with examiners (I know that is not a good reason to not correct this), I just want to make sure I am understanding everything when I bring this to the attention of our eBranch and IT department.

Thanks for your help!

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#2223044 - 10/04/19 02:56 PM Re: eStatement Disclosure [Re: Bankwoman1]
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,333
If your delivery method doesn't comply with ESIGN, it is like you didn't deliver the disclosures at all. This is backed up by (at least) the Minneapolis Fed in their Q&A here under the question of "What are the risks of delivering information or disclosures electronically?"

In addition, this Consumer Compliance article from the Fed does a pretty good job of outlining the six-step consumer consent process.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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#2223046 - 10/04/19 03:07 PM Re: eStatement Disclosure [Re: Adam Witmer]
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
Thank you Adam! These documents are a big help. It looks like we have some work to do to get our e-sign process compliant.

I appreciate all of your help!

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#2223067 - 10/04/19 04:36 PM Re: eStatement Disclosure [Re: Bankwoman1]
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
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Toano, VA
BW1 - Stop thinking about the statement. Instead, focus on the language within each statement that is required by Regs. E, DD, and possibly other rules and regulations. That's your risk. All Reg. E disclosures must be provided "in writing." Paper always passes. E-documents can pass as "written", too, but ONLY after you do the "ESIGN handshake" (informed, demonstrable consent.)

The ESIGN handshake is spelled out in Section 7001(a) through 7001(c)(1). (https://www.bankersonline.com/regulations/esign-7001) Everything you do to evaluate your current methods, declare deficiencies, and insist on changes must be based on those rules. They allow a great deal of flexibility, so study them carefully and be prepared to evaluate an unlimited range of possible solutions--both the current and all proposed methods.

As others point out, if you can't prove (to a regulator or in court) that you provided the necessary pre-consent disclosures and then obtained consumer consent in a manner that demonstrates the consumer has the necessary hardware, software, and savvy, then none of your e-documents are "written" and none of them comply with Section 1005.4(a)(1) of Reg. E. ESIGN has no penalties.

It is a license that makes electrons the legal equivalent of paper. Informed, demonstrable consent is a one-time requirement
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#2223078 - 10/04/19 05:57 PM Re: eStatement Disclosure [Re: Bankwoman1]
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
Thank you Richard for your input! As always, it is much appreciated!

I will be studying Section 7001(a) through 7001 (c)(1) thoroughly before we meet next week. Hopefully we can come up with a plan and put a solution in place quickly as we have an exam coming up in November.....

Thanks again!

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#2223105 - 10/04/19 07:50 PM Re: eStatement Disclosure [Re: Bankwoman1]
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
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Toano, VA
ESIGN's handshake rules aren't like the kind of regs that take the first 12 hours of your workday.

ESIGN works like the process you followed to get your driver's license from the government. You only have to worry about the rules if you want the license. After deciding you want a driver's license, you have to learn the rules of the road and pass a knowledge test...ESIGN conditions your license on educating the consumer about the hardware, software, and procedures for receiving "written" documents in electronic form. The final step in getting your driver's license was driving a nice police officer around the block to prove you can operate the vehicle safely and comply with the rules of the road. ESIGN also requires a test drive. Before the ESIGN license is valid, the customer must prove to you (demonstrate) that s/he can navigate your e-doc-delivery system and successfully receive, open, and read some kind of test file. That's frequently done with some kind of PIN response. The PIN can be anything...let's say it's the word "dog." The PIN word is included in a test document that's either pushed to or pulled by the customer--mirroring the exact method that will be used for live e-statement deliveries. ESIGN says consent must be electronic, so you need to get the customer to transmit "dog" back to you by email or some other electronic means. Consent must also be affirmative, so you want that response to put the words "I consent to electronic delivery" (or something equivalent) in whatever the customer's required to return. Since the only way the customer could know that "dog" is the PIN for the handshake is by receiving, opening, and reading the test document, you have absolute proof that the customer is adequately equipped and knowledgeable to receive live e-documents. Proving that it works once obviates the need for repeated monthly receipts when you e-deliver the live statements.
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...gone fishing.

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#2223109 - 10/04/19 08:05 PM Re: eStatement Disclosure [Re: Bankwoman1]
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 563
Midwest
Thank you again Richard! You really have made this easier for me to understand.....

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