During an online deposit application, electronic consent is presented and acknowledged and flags are set to "enroll" the applicant into e-statements. The applicant signs into OLB and sees the election of e-statements, is this a compliant process?

At what point of time is a sample document presented to the borrower to make sure they can open the document and read it in the manner in which the statements are going to be presented to them?

The document is presented during the online application opening process. They are not able to proceed with the application unless they acknowledge the disclosure, by checking off.

Fast forward to the end of the first cycle. I'm the depositor. It's time for you to deliver my first monthly statement. What will happen?

Once i sign into OLB, i will see the generated e-statement.

Because this is not a single process relating to a single law/regulation, there can't be a single answer.

One set of Reg E requirements applies when you establish the service -- Section 1005.7, Initial Disclosures. Because you have decided to deliver these initial disclosures electronically, not on paper, you take on a second set of requirements - the ESIGN consent process spelled out by 15 USC 7001.

Since you have also decided to use electronic delivery for statements (required by Section 1005.9) in addition to the initial disclosures, the ESIGN consent must cover both the method of delivery of the up-front disclosures, and also the ongoing delivery of statements. If an identical method is used to place the initial disclosures AND the ongoing statements in the depositor's hands, then ESIGN consent requires a single test drive. However, if the delivery methods are not identical, then ESIGN requires separate test drives of both methods. You have not told us exactly how the initial and statement disclosures reach the customer's eyes.

It's fairly common to mimmick traditional paper-based processes and place the initial disclosures in a separate file (most likely a .pdf document) and link that file to the setup page where the customer is selecting available service options. (To read the content of the .pdf document, the customer must click a link to the document.) If that is the case, then ESIGN requires you to obtain proof (i.e., put the customer through a "test drive") that the customer has the hardware, software, and savvy to access, open, and read the content of this file. You would NOT obtain the necessary proof if the customer only needs to check an "I read it" box. To create proof (the ESIGN "demonstration"), you must require the customer to open and view a test document of the type that will be used to deliver the initial disclosures, AND do something to create evidence of success - retrieve a code, for example.

If statements will be delivered in .pdf files and opened the same way as the file containing the initial disclosures, then one successful test drive will cover both types (initial and periodic) of disclosure document deliveries.

You said: I assume "the document" is a combined service agreement and all of the necessary disclosures required by both Reg. E and ESIGN. Does "presented" mean I have to click to view, or does the document open automatically?

There's a subtle but important distinction between a "declaration" of success (which I could click without actually seeing the text of the disclosures) vs. "demonstration" of success, i.e., a test drive. When you say "acknowledge the disclosure", do you mean a declaration, or a declaration supported by a successful demonstration?

Does the e-statement open automatically, or must I click a link to a file containing the statement?

"You have not told us exactly how the initial and statement disclosures reach the customer's eyes"

The applicant is presented with e-consent that includes language of consent for electronic delivery and the ongoing electronic delivery of the statements during the online account opening process. Applicant must open in order to view and acknowledge. As a result, the application manager (back office admin tool) contains a date and time stamp indicating the acknowledgement of the disclosure. I believe my response may answer the 2nd and 3rd callout you presented to me.

Once in OLB, the e-statement will open once the customer clicks on the link under statements.

Acknowledging the disclosure is one thing. Actually being able to open and read the document is the litmus test. Does your document have something in it that the customer must respond with, proving receipt and readability? An example might be “Please respond using the account code H256B7”

If the bank gets a reply back with H256B7, they are assured the customer actually is able to read the document.

The date and time stamp is the result of the acknowledgement. The acknowledgment is not complete unless it is opened and checked off.

OK, so when the time comes, in order to view my statements, I will have to:
1. navigate to the OLB section of the bank's website
2. present my customer information/credentials to enter the secure area
3. locate and click the link that says something like "December statement"
4. view the information that pops up on my screen

Is that the flow of the process? Must I have any kind of installed reader (in addition to my browser) in order to open and view the statement page that pops up? Is the statement a .pdf document, or does the OLB system display it in ordinary .html?

(Side note: if the statement content is written into an ordinary .html document, are you comfortable that an exact duplicate image of the statement is captured and retained for 2 years as evidence of compliance with Section 1005.9(b)?)

Yes, as you described,

OK, so when the time comes, in order to view my statements, I will have to:
1. navigate to the OLB section of the bank's website
2. present my customer information/credentials to enter the secure area
3. locate and click the link that says something like "December statement"
4. view the information that pops up on my screen

Displayed in ordinary .html with the option of PDF

Answer to side note question: Yes

If your e-delivery of monthly statements is handled via ordinary .html, then that GREATLY simplifies the ESIGN consent part of your deposit application process. By merely responding to your instruction (displayed in .html) to check a box or otherwise select e-delivery, the customer has demonstrated that s/he has the hardware, software, and savvy to use your system reliably. That's all ESIGN requires for the customer's consent to be valid.

You don't have any obligation to test the customer's ability to open and read .pdf files if they are used only for courtesy copies of the statements. The statements viewable in ordinary .html are your means of complying with Reg. E. (Of course, the .html version of the statement must be 100% complete and contain all the same Reg E disclosure details that would appear in a paper, or .pdf in this case, document.)

There's only one step remaining before you can sign off on this consent system. Run through the pre-consent requirements spelled out in Section 7001(c)(1) and check off all the items ESIGN requires you to disclose to the customer before asking for his/her consent.

Sorry to drag this out into a much-longer discussion than you expected, but for many years after ESIGN was enacted we saw inadequate opt-in systems. Frequently, they were little more than a Y/N checkbox that customers could select but did not add up to a valid test of his/her ability to receive, open, and read the e-documents containing statements and other types of federal disclosures. These faulty systems allowed customers to check a box, but bypass the test drive.

Thanks for your response, appreciate the information