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E-sign Sign-up Form

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Question: 
With regard to Esign, can the pre-consent disclosure itself be used to satisfy the demonstration requirement? Our plan: the only way to sign up for e-statements would be to log on to our Internet Banking system, navigate to the statement page, and open the pdf disclosure/sign up form. This is the same format and location in which the statements will be delivered. My thinking is that if this is the only way to obtain the sign up form, the customer has clearly demonstrated their ability to access the statements. Upon receipt of the sign-up form, we would send an email to the address on file, which would require a reply from the customer in order to also demonstrate their ability to receive the Alert messages. E-statements would only be activated after all of the above.
Answer: 

You should run your theory and scenario by bank counsel for approval, but the logic seems sound. The problem with E-SIGN is that it is a sleeper. Even if your regulator reviews your procedure and deems it sound, the real test might be years down the road when a consumer alleges that the bank never delivered a critical written disclosure. Admittedly, that might be more risky on the loan side of the bank, but some Regulation E liability issues depend on when you make the written periodic account statement available.

First published on BankersOnline.com 6/16/08

First published on 06/16/2008

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