For the “demonstrable consent” portion of ESIGN, C(ii) states “the customer - 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.”

In a set of workpapers we utilize it phrases this section as follows “Then once they are given a statement of the requirements, they must provide consent electronically or confirm it electronically in a manner that will satisfy the bank that the customer has they systems required to receive and access information electronically.”

While the language has similarities, the workpapers’ explanation makes it seem that a customer (consumer) can confirm (verify) they have the ability to receive and access the information electronically, and that as long as the bank can capture their confirmation, that would count as “demonstrable consent”. In other words, a bank presents to the customer how the information will be sent (PDF or onscreen information that can be printed), and the bank can capture that the customer clicked a radio button or checked a box electronically stating that their system can receive and access the information (PDF or view / print a screen), the bank has fulfilled this portion of its ESIGN requirement.

I know that some bank ESIGN systems capture “demonstrable consent” by sending a PDF to the customer, requesting the customer to open the PDF and click a link or submit a code in order to comply with this requirement. However, can it be as easy as having the customer confirm their system has the capability and then capturing that confirmation within the bank’s systems?

I've always understood that the "confirm it electronically" method is limited to cases where the customer's statement of consent is obtained in paper (or some other non-electronic) form. When you boil as system like that down to the essentials, it becomes a redundancy--the customer signs a paper service agreement that says "I consent to electronic delivery of _____" and then the customer goes home or uses a handheld device to transmit a message that says "I confirm my consent to electronic delivery of ____". Essentially, ESIGN allows the business to obtain a courtest copy of the consent statement on paper.

Training manuals and other "plain language" or "understandable" restatements of legal/regulatory requirements are useful, but can never replace the words of the law/reg. Since ESIGN's enactment in 2000, the most common industry mistake has been to read the word "demonstrate" and understand it to mean "declare." Customers are required to sign off on many types of bank service agreements with boilerplate language "declaring" they received something, read something, or understood something. They don't have to prove it--just say it--and we file the signed document away in case a dispute arises. ESIGN requires proof--not merely a signed statement.

Think about ESIGN's "informed demonstrable consent" system like the DMV's system for issuing driver's licenses. That's the closest comparable process I've ever found. The "demonstration" part of the DMV process includes a driving test behind the wheel on the public highway. The examining officer doesn't sign off on your driver's license until s/he sees you operate the vehicle safely and in compliance with all traffic lights, signs, and markings encountered during the test drive. Transferring that same concept to ESIGN, you and the consumer don't get the license to substitute electrons for paper until you prove to each other (and possibly to some future regulator or judge) that it actually works. Allowing the consumer to simply declare (without a comprehensive test) that s/he has the hardware, software, and savvy, would be like asking DMV if you could just sign something in lieu of taking the driving test.

Richard,

As always, thank you for your response. Showing the difference between "declare" and "demonstrate", as well as the DMV comparison was very helpful.