We are implementing E-statements shortly, and the more I read regarding the rules and regs, the more confused I get. From previous threads posted here, I was under the impression that the notification and consent (enrollment) had to be electronic and that was the banks "documentation" that they could receive the statement. However, here is BOB's interpretation

"A bank cannot simply replace written disclosures
with electronic ones. Paper disclosures are required
unless the customer is first notified of what receiving
disclosures electronically means. The customer must
then provide affirmative consent for the bank to
provide disclosures electronically. The notification
must be provided and consent received before
electronic disclosures are provided. The notification
and consent may be provided together on a single
document or separately, in writing or electronically
(meaning the bank can e-mail them to the consumer
or post them to the bank’s Web site with instructions
on how the consumer may access them)."

Also, doesn't the notification that they have a statement ready have to be "pushed" to them and can the actual PDF statement be attached to the notification?

THANKS FOR YOUR HELP!!

Periodic statements may be provided either by e-mail or posted on the web site. E-mail is not secure - so the stmt would have to be encrypted. If you post on web site, the stmt must be available for 90 days and you must sent a notice by e-mail that the stmt is available.

Anyway, you have to abide by E-sign, which means that the consumer must electronically consent to receiving the stmt in this manner. Prior to getting the customer's consent, you must disclose certain things under e-sign etc.

BOB is generally putting E-Sign into English, or is it e-English? Anyway, those comments and ahou agree. I always throw in this one caveat. UETA, if properly adopted by your state may supersede E-Sign in the Sect. 101 area. You need to research this and determine which applies and which is best for you.

We push statements to the customers in an encrypted PDF file to which they selected the password.

Thanks Andy & ahou - the part that is confusing me is where it says the notification and consent can be provided in writing or electronically. From everything else I've read, I thought consent had to be electronic???

You are dealing with two sets of rules that need to be separated in order to design your e-delivery system.

ESIGN spells out the requirements for getting the customer's permission to substitute electrons for paper. (See Section 101(c) of ESIGN.) It's a disclosure & opt-in system. Disclosures to the customer may be on paper or electronic, but they must explain the hardware & software requirements the customer must meet in order to receive, use, and retain the e-statements. Opt-in must be handled in a manner that "demonstrates" the consumer's success in using the required medium. Demonstrating success involves more than simply getting the customer to agree to e-delivery--somehow there must be feedback to the bank proving that the customer has been able to receive and use a test message of the type to be used "for real."

Having gotten the customer's consent, you now turn your attention to Reg. DD (for deposit statements) or Reg Z (for HELOCS, credit cards, etc.) for the specific rules governing the delivery of required disclosures. In March/April 2001, the Fed issued "interim final rules" addressing e-delivery. These rules outline a system you must follow in order for your electrons to meet the Fed's minimum standard for "written" disclosures under these regs.

You face two serious risks if you don't set this up correctly.

First, by failing to meet ESIGN's requirements, your electrons would not constitute a legal substitution for paper. That means the disclosures you thought you delivered don't count. Add up the civil liability. Update your resume.

Second, failing to implement your delivery in accordance with the interim final rules (or some alternative that accomplishes the same thing and will pass muster during an exam), your disclosures may not count, or may be judged to be flawed. Add up the civil liability. Update your resume.

Well stated Richard. (love your humor)

Thanks for clearing up my confusion Richard. The fog seems to be lifting now!

Unfortunately, clearer does not mean easier. ESIGN's test drive is tricky and the Fed's insistence on e-mail based delivery is challenging, too. These obstacles account for the dearth of e-delivery by banks.

Who's BOB?

Kirchman had BOB the Big Orange Book. Now I think they refer to it as the Regulatory Service Manual.