Deposit customers can sign up for our internet banking product online. Our current process is to mail out the following after they have enrolled: (1) Reg E (because they're adding a new service & we need to provide Reg E in close proximity to the new service 205.7) and (2) online banking agreement. The customer doesn't need to sign the agreement and return it to the bank. The agreement is for them to keep.

Is it OK to provide the online banking agreement AFTER the customer has signed up & potentially initiated transactions? Or, must we provide the agreement online before they can initiate any transactions?

not sure you'll find a regulatory cite on this. from a liability standpoint, we require acknowledgement of all terms & conditions of the online banking product before ANY activity is allowed.

I agree about the liability issue and it's one of the reasons I'm questioning our current process.

Do you send the online banking agreement in hard copy to the customer? Or, do you have the the customer acknowledge receipt of the online banking agreement electronically before they initiate any transactions?

Thanks.

we allow them to agree electronically.