Question about E-Sign

Posted By: ACBbank

Question about E-Sign - 07/16/21 03:38 PM

The Bank is contemplating providing e-sign disclosures to entity customers. From what I understand they think it will provide them with a competitive advantage. I have no idea how they came to such a conclusion and my old places we simply would allow entity customers to sign up for email updates/forms without doing the e-sign steps.

Does anyone go through this process for entity clients? If so, any feedback about it would be appreciated.
Posted By: Richard Insley

Re: Question about E-Sign - 07/17/21 07:29 PM

If the "ESIGN disclosures" include only what is required by Section 7001(c)(1), then there's nothing to gain. Those disclosures outline the consent mechanism that applies only to the bank's communications with consumers. Even worse, the content of the consumer disclosures may create rights that are not prescribed by law and are not to the bank's advantage.
Posted By: Andy_Z

Re: Question about E-Sign - 07/18/21 04:47 PM

It is easier to start out E-SIGN offerings with commercial accounts because those have fewer rights than consumers. If you offer commercial accounts some protections it will provide a competitive advantage, but only because the bank is accepting unnecessary risk. In reality, the bank is making additional disclosures to consumers and forcing them to go through with the E-SIGN hoops for consent and the bank improves communication requirements because it has more to do, but a commercial account isn't going to gain any real protections.
Posted By: Richard Insley

Re: Question about E-Sign - 07/19/21 04:01 PM

I didn't say "protections", but rather "rights." Mainly, I'm thinking about the disclosures relating to paper copies. Depending on their wording, "disclosures" sometimes function as service agreements -- creating contractual rights. If the wording of the standard ESIGN preconsent notice for consumers says things like "paper copies are available" (which would be true for consumer accounts, but unintended for commercial accounts), then the commercial customer gains the right to paper copies. Disclosure wording about fees for paper copies could compound the unintended effects for commercial accounts.

When it comes to "over-disclosure", I'm a firm believer that "less is more"...and "none" is better still.