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Adding E-bills to E-banking

We currently have e-statements available for our e-banking customers and will be adding e-bills. Any e-banking customers that have e-statement and a loan account within their profile, will be converted to an e-bill for these loans. We will continue to send both the e-bill and the paper bill for a two to three month time period. There is no way to have these customers agree or accept a revised agreement without shutting off all e-statements and have them agree again, which is not a good option from a customer service perspective. Will we be OK if we send an email communication to all e-banking customers of the pending change and have a message printed on the loan bills alerting customers to the pending change? e-statement customers agreed to receive all disclosures and statements electronically when they initially signed up for e-statements.

Answer by John Burnett:Before diving off the cliff, check for rocks beneath the surface of the water. If you want to send those "e-bills", which I take to refer to periodic statements on open-end credit, share your plan with bank counsel, along with detailed information on the E-SIGN demonstrative consent process in which the current e-statement recipients engaged.

You need to have bank counsel's assurance that the E-SIGN consent given in connection with delivery of deposit account statements extends beyond "all disclosures and statements" related to the deposit accounts to disclosures, notices, statements and other records required by Regulation Z or other applicable regulations to be delivered in writing. If you can't get that assurance, your plan is faulty because phasing out of written statements on open-end credit accounts would mean that customers would not be receiving statements that comply with the law and regulations.


Answer by Richard Insley:ESIGN says "prior to consenting, ... [you must provide the consumer] with a clear and conspicuous statement—...(ii) informing the consumer of whether the consent applies (I) only to the particular transaction whichgave rise to the obligation to provide the record, or (II) to identified categories of records that may be provided or made available during the course of the parties’ relationship...."

ESIGN does not define or elaborate on the meaning of the terms "identified categories of records" and "clear and conspicuous." I doubt you can find two people who will agree on the meaning of these terms and the only way it can be resolved is before a federal judge. ESIGN does not require or permit rulemaking by any agency.

While reviewing the adequacy of your consent language, also review what you said about the consumer's right to withdraw consent and the method to be used to withdraw consent. Now is the time your mechanism will be tested.

First published on 11/09/09

First published on 11/09/2009

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