E-statement Procedures

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Question:

Our bank is currently in the process of testing electronic delivery of monthly deposit account statements to employees on a voluntary basis. The statements are delivered in the following manner: an e-mail notification is sent to customers letting them know that the statement is available for review. Then, in order to view the statement, the customer is required to sign onto the bank's website, where the statement can then be accessed (in order to receive electronic statements, the customer must be signed up for e-banking). The statement can then be printed and/or saved to another file by the customer. What would be the E-SIGN ramifications, if any, of this type of statement delivery? Does this type of statement delivery require the bank to obtain demonstrable consent? Would the log on procedures (username and password) suffice for the customer's electronic signature, etc.?

Answer:

E-SIGN's rules require that you obtain demonstrable consent from your customer, including an employee, if you want the e-statement to be the legal equivalent of the traditional written statement. What is missing from your scenario is the initial sign-up agreement for e-statements, wherein you describe the equipment and software requirements for receiving and retaining the statements, and all of the other detailed information required in section 101(c) of the Act. The customer demonstrates an ability to access a record of the same type (for example, if statements will be in PDF format, the demo document should be in PDF format), and agrees to accept electronic statements and other notices and disclosures that you include in the agreement explanation. If the acceptance can be accomplished only by click on a link in the demo PDF document (it could be a terms and conditions document with a link or button signifying acceptance of terms and agreement to accept e-documents), then all of what you've described should work. In normal practice, if all of that front end stuff can only take place inside your online banking system's access controls, you'll be able to point to the clicking of the agreement button as your customer's signed agreement for e-statement delivery.

First published on BankersOnline.com 6/01/09