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#2251281 - 03/26/21 12:43 PM eSIGN - different platforms used, econsent on all?
Banker K, CRCM Offline
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Joined: Jan 2010
Posts: 293
Oklahoma
Hello, I have read several eSIGN threads from BOL and still am not 100% clear. I am being asked to provide a response as to what our lenders HAVE to do to comply. Below are our typical scenarios:

Our bank has its own eConsent document. It appears to contain the disclosure requirements from the eSIGN Act. The bank sends this document via DocuSign (eSIGN software/vendor), which also provides the customer with its own disclosure and steps to eConsent.

However, the loan officers are sending the Appraisals through different platforms: sometimes directly through their Outlook bank email, and other times through another eSIGN software/vendor, Appraisal Shield.
- If they use Appraisal Shield, my understanding is that the customer would need to follow the disclosure/eConsent steps provided by that specific program before the appraisal is considered delivered, right? It does allow a summary to be printed that will show the status, including if the customer has eConsented, etc. Would a copy of this summary be REQUIRED to be in the loan file to meet record requirements that the customer did indeed consent to receiving the appraisal in Appraisal Shield? They are not wanting to have to track this and print it for the file.
- If they simply use their bank email (via Outlook), is this eSIGN compliant? They are saying since the customer eSigned the Bank's eConsent form at application then they are covered. My concern is that the form was sent through DocuSign...not directly from their bank/Outlook email. While it would be logical that sending and receiving directly through regular email would be easier than DocuSign, I am concerned the customer hasn't proven their demonstrable consent there. The officers state the fact that the customer has replied to other outlook emails shows they have demonstrated they can receive from there. If that is true then I guess we are good there...unless...the appraisal has to be sent via our "secure" email server (which takes the customer to a website where they have to log in to view and reply to the email and to download the documents). If they have to send Appraisals in that secure manner, then wouldn't the initial eConsent disclosure have to have been sent via the "secure" site as well?

Thank you all in advance for your help on this. I have suggested they either solely use DocuSign for sending disclosures, or if they also use Appraisal Shield, to ensure the customer consents via that platform in order to meet the appraisal delivery requirements...and to not use the email system for docs subject to eSIGN. But they think it's a matter of "recommendation" over "requirement" and I honestly can't provide a black and white answer.
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#2251294 - 03/26/21 02:45 PM Re: eSIGN - different platforms used, econsent on all? Banker K, CRCM
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
I concur with your recommendations. Standard e-mail typically has more problems then just complying with E-Sign - which would require it's own demonstrable consent process and agreement.

Usually it is not encrypted and delivering appraisals unencrypted is probably not that wise of a choice.

Second, how do you know if they are ever actually delivered? Unlike other Regulations like TRID that says once you have demonstrable consent under E-Sign making disclosure available to the customer electronically is just like placing them in the mail and you can consider them received in three business days, Regulation B has no such provisions.
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#2251296 - 03/26/21 02:51 PM Re: eSIGN - different platforms used, econsent on all? Banker K, CRCM
Banker K, CRCM Offline
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Joined: Jan 2010
Posts: 293
Oklahoma
Thank you Randy; I value your responses!
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#2251298 - 03/26/21 02:58 PM Re: eSIGN - different platforms used, econsent on all? Banker K, CRCM
Adam Witmer Offline
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Joined: Sep 2010
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I too agree with your recommendations.

As far as your black and white answer, you can try two things. First, ESIGN is not a regulation, but rather a law so us non-lawyers (including both myself and your lenders) cannot offer an interpretation. That said, the law says this in regards to the consent requirement:

"(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;"

While I am not an attorney, I can see that the law says "in the electronic form that will be used to provide the information." To me, the only option to not interpret this law is to assume each system used needs its own electronic consent.

Here is another thought. To me, it isn't worth pushing the boundaries of E-SIGN as, if it were to be determined (by your regulator or a court) that you did not comply with E-SIGN, then it would be as if you didn't provide any of your disclosures at all (for the system determined to be non-compliant). Therefore, the best practice for risk management is to take the conservative approach to E-SIGN whenever possible.

The last CFPB regulatory agenda had E-SIGN on their list of possible future rules, so we may see further guidance on this in the future. But until then, all we have to go on is what I quoted above from the actual law itself.
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#2251300 - 03/26/21 03:00 PM Re: eSIGN - different platforms used, econsent on all? Banker K, CRCM
Banker K, CRCM Offline
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Joined: Jan 2010
Posts: 293
Oklahoma
Thanks Adam!
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#2251347 - 03/26/21 11:49 PM Re: eSIGN - different platforms used, econsent on all? Banker K, CRCM
Richard Insley Online
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Richard Insley
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Toano, VA
If a law/reg requires delivery of information (an appraisal, for example) "in writing", then:
(a) If you're using paper: no copy (preferably signed) = it didn't happen.
(b) If you're using electrons: no evidence of a system-specific pre-consent disclosure and "test drive" = it didn't happen.

If doing "it" correctly and in a timely manner is tied to civil penalties, then your exposure will come from the law/reg that required "it", not from ESIGN.

You could put all those system-specific disclosures in a composite e-document and deliver it once, or go à la carte and disclose each e-delivery system separately. The same holds true for "test drives" -- one that demonstrates consumer capability to handle anything you want to send, or test one system at a time. What DOESN'T work is doing pre-consent disclosures and a test drive for one system and then using other systems for which you cannot offer evidence that the consumer demonstrated necessary hardware, software, and savvy.
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#2251367 - 03/29/21 02:05 PM Re: eSIGN - different platforms used, econsent on all? Banker K, CRCM
Banker K, CRCM Offline
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Joined: Jan 2010
Posts: 293
Oklahoma
Thanks Richard!
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