Hi everyone, was wondering if I could get some feedback.

I have a correspondent lender in Texas whose MLO delivered a blank 1003 to an applicant through email in order for the applicant to fill out to apply for a loan. My initial reaction was to ask for proof of consent to receive disclosures electronically. Is that a warranted concern in this situation? Would the consent requirement not apply in this situation or for the 1003?

The 1003 is not a disclosure required to be provided to the consumer in writing by the regulation. If the 1003 is the only form mailed without e-consent then you should be fine.

Welcome to BOL.

Thank you for the welcome, and for the feedback!

If the lender plans to transmit the credit decision to the applicant via email when the time comes, consent will be needed if there is adverse action. Logistically, you want to get that out of the way now--while the applicant is optimistic (and cooperative.)

I had read in an article: "Additionally, if the bank will be sending the URLA electronically, such as by email or through another online portal, the bank must comply with the E-Sign Act before doing so, as the application contains federally required disclosures."

Thoughts?

And just what disclosures does a 1003 contain???

I presumed the article referred to the "alimony, child support, separate maintenance payments" disclosure? Also the individual vs. joint credit and HMDA disclosure on the Demographic collection page?

I think they are nuts - you are just providing a blank application - correct? Which is completed and returned to the bank?

Yes, just a blank application. So, then, our MLOs may email a 1003 without E-Sign, as per the discussions above. Thank you!!

See Section 1002.4(d)(2), 2nd sentence. This is your specific authorization to skip ESIGN for several of the incidental notices Reg B requires you to include in a credit application.

I read the aforementioned article today and was immediately suspicious about the statement of needing to follow ESIGN for sending out applications. Richard is right about these really being the only "disclosures" on application forms, and Reg. B has always exempted them from ESIGN (as is the case with most consumer regulations exempting application related disclosures).

This article was from a very reputable industry source as well.