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#2234683 - 04/13/20 05:17 PM E-Sign - Demonstable Consent
BA13 Offline
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E-sign is so confusing! We use a 3rd party vendor to establish the E-Sign consent. There are a few disclosures some lenders will send via Inkit! then send other disclosures using Outlook. If we use more than one platform to send our disclosures electronically, do we need to prove demonstrable consent for each method used?

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eBanking / Technology
#2234685 - 04/13/20 05:28 PM Re: E-Sign - Demonstable Consent [Re: BA13]
rlcarey Online
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Galveston, TX
Yes.
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#2234696 - 04/13/20 06:16 PM Re: E-Sign - Demonstable Consent [Re: BA13]
BA13 Offline
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Oh thank you! smile

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#2234726 - 04/13/20 09:51 PM Re: E-Sign - Demonstable Consent [Re: rlcarey]
Johnny5 Offline
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Johnny5
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Posts: 49
I just wanted to clarify; If we get someone's consent to E-SIGN and validate them via accessing a PDF document on their account online, then any documents we deliver electronically would have to be delivered and made available via the same method, correct?

We couldn't then email them a PDF? Or, we couldn't email them with a required notice in the body of the email? These are both assuming we didn't confirm E-SIGN delivery via email.

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#2234741 - 04/14/20 01:23 PM Re: E-Sign - Demonstable Consent [Re: BA13]
rlcarey Online
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Galveston, TX
It comes down to if you change the software necessary to access the information, a new demonstrable consent is required. Accessing a PDF through your on-line banking system and through e-mail requires different software. Browser versus e-mail platform, etc.

(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;
and

(D) after the consent of a consumer in accordance
with subparagraph (A), if a change in the hardware or
software requirements needed to access or retain electronic
records
creates a material risk that the consumer will
not be able to access or retain a subsequent electronic
record that was the subject of the consent, the person
providing the electronic record—
(i) provides the consumer with a statement of (I)
the revised hardware and software requirements for
access to and retention of the electronic records, and
(II) the right to withdraw consent without the imposition
of any fees for such withdrawal and without the
imposition of any condition or consequence that was
not disclosed under subparagraph (B)(i); and
(ii) again complies with subparagraph (C).
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#2234761 - 04/14/20 04:07 PM Re: E-Sign - Demonstable Consent [Re: BA13]
Richard Insley Offline
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Richard Insley
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Toano, VA
Keep in mind that Randy's "yes" answer to the original question assumes that:
1. the "disclosures" are all required by Federal laws/regs, and
2. the operative law/reg requires that these "disclosures" must be provided "in writing", and
3. the "disclosures" are being delivered to consumers, and
4. the delivery systems in question are significantly different (push vs. pull, file formats, need for email, etc.)

Unless 1, 2, and 3 are true, ESIGN is unnecessary (however your state's UETA may apply.)

As he mentions in the second post, additional consent (with a test drive) will be necessary, BUT only if a bank-initiated hardware/software requirement change creates a material risk that delivery of a legible electronic document will fail. What is a "material risk"? That's where all of this turns gray.
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#2234769 - 04/14/20 04:54 PM Re: E-Sign - Demonstable Consent [Re: BA13]
BA13 Offline
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Posts: 146
Richard, thank you for the additional information. Yes, 1, 2 & 3 would be correct for our case as E-Sign is mainly used for consumer real estate.
As far as #4, we send the customer an email (via InkIt) to "click here" for the consent form, they must read & agree to it prior to date/time stamp signature. A concern we have is a lender will get the consent form via InkIt but use Outlook to provide other required disclosures. If we use both methods to send the required information, then we need to prove demonstrable consent for both, correct?

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#2234808 - 04/14/20 09:28 PM Re: E-Sign - Demonstable Consent [Re: BA13]
Andy_Z Offline
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If there is a chance that a required disclosure could not be read then Yes. If I send you a Word document and you acknowledge and react to it in the consent process, we're good with Word. But then I send you a Reg DD disclosure in Word and refer to the attached XL spreadsheet for all the fees and charges that must also be disclosed, now we're not so good because you haven't shown you can read these. I'm not familiar enough with your programs to say there is any technological barrier or there isn't, Outlook was mainly and email program but it has other attributes and there there may be encryption of some sort or at least password protection... But I think you'll get the idea.
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#2234814 - 04/14/20 11:11 PM Re: E-Sign - Demonstable Consent [Re: BA13]
Richard Insley Offline
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Richard Insley
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Posts: 9,759
Toano, VA
BA13 -- Another way to look at this is to identify an event that would be the e-document-delivery equivalent of the stuff hitting the fan...and then work backwards.

Let's say you are foreclosing on a borrower and s/he alleges that you gave no TIL disclosures and therefore you have no right to collect the (undisclosed) Finance Charge. If it's an equity loan, the borrower's attorney will also say you provided no notice of the opportunity to rescind...and that the borrower is rescinding NOW!

Your response will be "hogwash", we provided those disclosures to you electronically.

Borrower's response: never got them, or couldn't open the files, or the document was nothing but chicken tracks.

Your response: but you consented to using electronic documents and demonstrated to us that you were able to receive, open, and read a test document....

Borrower: prove it.

Judge: OK, let's see the evidence.

You: gagging sound.
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#2235031 - 04/16/20 07:44 PM Re: E-Sign - Demonstable Consent [Re: BA13]
Andy_Z Offline
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There was a bankruptcy case involving, as I recall, AmEx in which the Trustee asked the bank to verify its claim amount. AmEx was given a couple opportunities to have a records custodian say "these are true and correct and have not been altered," but they couldn't. The debtor's much lower disclosure of debt to be repaid was accepted. I think the same gagging sound was heard there.
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My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#2235185 - 04/17/20 10:50 PM Re: E-Sign - Demonstable Consent [Re: BA13]
BA13 Offline
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Posts: 146
Thank you for the guidance. Our situation was corrected!

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