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#2233271 - 03/18/20 10:11 PM Demonstrable Consent & Follow-Up Docs
Mel in WA Offline
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Once you've received demonstrable consent through a compliant system (i.e. DocuSign), can you provide follow-up documents, such as an appraisal, through another method like secure email? The reason for doing this would be to save costs.

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eBanking / Technology
#2233272 - 03/18/20 10:37 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
rlcarey Offline
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Your E-Sign demonstrable consent is through DocuSign. You have no demonstrable consent through secured e-mail.
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#2233274 - 03/19/20 12:31 AM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Richard Insley Offline
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Legally, you can always switch to paper. That could put you at odds with the terms of your service agreement, but paper always counts as "written" in court. The whole idea behind the demonstration (test drive) is to be sure your e-delivery method will work for every customer who consents. The consent could apply to electronic documents provided for many different purposes, but as Randy says, consent is technology-specific. If your consent "handshake" session with the customer includes tests of multiple technologies, then you would be free to use any or all of the methods for which the customer "passed the test."
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#2233298 - 03/19/20 03:50 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Mel in WA Offline
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Thanks so much! I'm having a hard time explaining "demonstrable consent" to non-compliance folks.

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#2233300 - 03/19/20 03:57 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
BrianC Online
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"Demonstrable" closest word that will be more familiar is "demonstrate."

Has the customer demonstrated to us that they can read documents we're sending them using the technology we've agreed to use?

I've demonstrated that I can read documents via DocuSign. I have not demonstrated that I can read documents sent via secure email. As a result, I have to demonstrate that I can read via secure email before you can send documents to me using that method.
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#2233314 - 03/19/20 05:42 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Richard Insley Offline
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ESIGN consent is a type of license. It grants you authority to substitute electrons for paper--without fear that a judge will disregard e-documents and e-signatures that you and the customer have agreed to use in your business dealings.

ESIGN works a lot like a driver's license. Nobody is required to drive (or to use e-docs and e-signatures.) It's your choice. If you want the "license", you have to follow the procedures spelled out in the law/regulation (DMV rules for your driver's license, and ESIGN for your "license" to substitute electronics for paper and wet signatures.)

ESIGN (and state UETAs) legalize electronic signatures automatically...but only if you want to use them. You must also be willing to take the business risks that customers might try to disavow signing a particular document electronically. It's a small risk for actions like "signing" to acknowledge receipt of something. It's a BIG risk if a borrower tries to disavow signing a loan note or collateral instrument. The laws grant you blanket approval to switch from wet signatures to e-signatures--if you and the customer agree to this departure from traditional signature practices.

ESIGN (and state UETAs) also legalize the use of electronic documents. The main differences between these two laws are:
1. Your UETA "e-document license" is only good in state court.
2. An ESIGN "license" is valid in both state and federal courts.
3. A UETA "e-document license" is automatic--like the authority to use e-signatures. A simple agreement with the customer "activates" this "licence."
4. An ESIGN "e-document license" is automatic for documents sent to businesses.
5. An ESIGN "e-document license" for consumer communications is not "activated" until you and the consumer successfully complete the "informed demonstrable consent" steps spelled out in Section 7001(c) of ESIGN.

Since inception (2000), ESIGN's "informed demonstrable consent" mechanism has been widely misunderstood by bankers. Disclosing certain how-it-works information is very familiar...and so is the concept of a service agreement. The problem begins when they read the word "demonstrate" and understand that word to mean "declare." A demonstration is like the test drive you had to pass in order to get your driver's license. A declaration is a simple statement, like "I read the small print", that customers sign without reading the small print.
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#2233337 - 03/19/20 08:24 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Mel in WA Offline
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Great information!!!

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#2233450 - 03/20/20 10:43 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Mel in WA Offline
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We are implementing a process really fast due to the current pandemic environment. If the applicant does not open their email and provide demonstrable consent required by ESIGN within 3 days, are we required to print hardcopies and place the disclosures in the snail mail? The disclosures we are providing do not need to be returned with a signature.

I think I know the answer, but hoping I'm wrong....

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#2233455 - 03/20/20 11:53 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
rlcarey Offline
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For initial disclosures, yes you need to mail them.
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#2233457 - 03/21/20 12:29 AM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Richard Insley Offline
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Until your customers pass the "test drive," you have no license to substitute electrons in place of paper. ESIGN has no timing requirements--that would be a function of the law/reg that requires the delivery of the "written" disclosures about the product or service you are providing the customer.
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#2233799 - 03/27/20 04:57 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Comply Offline
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Originally Posted by Mel in WA
We are implementing a process really fast due to the current pandemic environment. If the applicant does not open their email and provide demonstrable consent required by ESIGN within 3 days, are we required to print hardcopies and place the disclosures in the snail mail? The disclosures we are providing do not need to be returned with a signature.

I think I know the answer, but hoping I'm wrong....



How does an applicant demonstrate consent as required by ESIGN? What steps must the financial do to show consent was demonstrated?

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#2233850 - 03/27/20 10:10 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Mel in WA]
Andy_Z Offline
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As an example, I send you an encrypted PDF. You get it, open it, and contact me with the correct response. I now know you received it, opened it and could read it. An automated system might track who it was sent to, when they replied, that the response was as expected, what IP it came from, etc. Things similar to what you would track when E-SIGN is actually used so you have more proof it was your customer who transacted business.
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#2233856 - 03/28/20 07:58 PM Re: Demonstrable Consent & Follow-Up Docs [Re: Comply]
Richard Insley Offline
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You must set up the challenge mechanism and the customer must jump through all your hoops. The challenge mechanism should mirror the "live" e-delivery methods as closely as possible. Andy describes one commonly used system. Your system's features and operation may be different, and if they ARE different, then your challenge should be different.
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Moderated by:  Andy_Z