E-Sign & Billing/Mortgage Stmts/Past Due Notices

Posted By: scb2011

E-Sign & Billing/Mortgage Stmts/Past Due Notices - 08/28/15 07:55 PM

If an E-Sign Act Notice is provided and demonstrable consent takes place, is it allowable to provide electronic billing notices, periodic mortgage statements required for large servicers by TILA, and past due notices for open and closed end consumer loans? If so, would any disclosure related to electronic delivery need to be disclosed at origination? The service is free and not required. Consumer may sign up at any time after loan origination. Thank you.
Posted By: Richard Insley

Re: E-Sign & Billing/Mortgage Stmts/Past Due Notices - 08/28/15 08:40 PM

In general, ESIGN allows you and your customers to agree to use electronic documents in lieu of paper whenever you want. Section 7003 of ESIGN excludes from this blanket permission several types of communications--none of which are on your list. By following ESIGN's informed demonstrable consent process, your e-documents become the legal equivalent of paper documents.

The only cases where ESIGN consent is necessary are those documents which some other federal law/regulation requires you to deliver "in writing." There's no "one size fits all" rule--you must look at the specific law/reg requiring each of these documents.

Additional disclosure?
Maybe, maybe not. Section 7001(c)(1)(B)(ii) required you to include in your pre-consent disclosures the scope of the consent being given. It gave you two choices:
1. consent limited to the particular transaction which gave rise to the obligation to provide the record, or
2. consent includes "identified categories of records that may be provided or made available during the course of the parties’ relationship"
Depending on the wording you used in this pre-consent disclosure, you may already have consent to provide these documents electronically. If your wording was not expansive, you should obtain an additional consent to include the additional types of documents on the "approved for e-delivery" list.
Posted By: John Burnett

Re: E-Sign & Billing/Mortgage Stmts/Past Due Notices - 08/31/15 01:48 PM

The Bureau included a rather unique "permission" for e-billing in Comment 41(c)-4, allowing the use of electronically-delivered periodic statements when a borrower has provided E-SIGN compliant consent for e-delivery of other required written disclosure or statements:

4. Presumed consent. Any consumer who is currently receiving disclosures for any account (for example, a mortgage or checking account) electronically from their servicer shall be deemed to have consented to receiving e-statements in place of paper statements.

I would make sure, however, that the delivery mechanism and software requirements for the periodic statements conforms to those previously agreed to.