E-Sign and CIP Requirements

Our institution is still early on in the E-Sign implementation for consumer loans. One question that has come up is regarding CIP. How is your institution verifying the identity of the applicant if they are not in front of you?

This is a tiny slice of the overall project and there's no interconnection with CIP. ESIGN removed legal barriers from the use of digital signatures and redefined "in writing" to include electronic documents where federal laws and regulations require delivery of "written" documents to consumers. The only implementation required for ESIGN is the "informed demonstrable consent" handshake that gets you the consumer's agreement to receive e-docs in lieu of paper. No action is required to claim ESIGN's authorization to use electronic signatures. "Authorized" does not mean "secure", however. Confirming the true identity of applicants and the validity of their digital signatures are security and CIP considerations.

Regarding customer identity verification - you can accomplish this through documentary methods (The customer provides a photo ID and a bank representative looks at it and ensures it matches the customer and the information they provided) and non-documentary methods (This is usually done through a third party vendor who has access to various data bases).