Proving Demonstrable Consent for eStatements

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Question:

We are in the process of starting e-statements for our customers. They will have to sign into our secure internet banking site to view their statements. However, the statements will be coming from another imaging company that does our imaging processing. These two companies are forming a single sign in for the images. I keep hearing about "demonstrable consent"; would we still have to prove this with our customers signing into a site that they have been or does this rule apply because it is the customers' actual statements being viewed?

Answer:

E-delivery of statements is a regulatory issue because your statements contain a number of disclosures required by Regulations E and DD (deposits) or Regulation Z (open end credit). These regulations require you to provide disclosures "in writing". In the past, that meant paper. Now, electronic delivery also counts as being "in writing", provided that you follow the setup steps spelled out in the federal ESIGN Act.

ESIGN requires you to tell customers what technology they must possess and be able to use. Customers who wish to opt for e-delivery must give their affirmative consent (no cram-downs allowed) and they must prove to you that they are able to retrieve, open, and use the content of a test document.

In a "pull" system such as you describe, this "test drive" (the "demonstration" part of "demonstrable consent") can be accomplished in a couple of automated steps. First, you direct the customer to the URL of a sample statement (or any other type of document with the same file format). Next, the customer must navigate to the sample document, open it, and retrieve some type of PIN or code. Finally, the customer returns to a sign-up page, enters the code in a form, and submits the form. When your system receives a valid code, it marks the customer's record in some manner that indicates the election of e-delivery instead of paper.

First published on BankersOnline.com 9/20/10