Answer by Richard Insley:If a document must be in writing, then you must have the consumer's consent before you can legally substitute electroic statements for paper. If you cram e-delivery down your customers' throats, even customers who happen to be employees, then you have not met ESIGN's basic requirement that consumers have a choice of delivery method and there is no consent. Failing to obtain proper consent, you violate Reg E, DD, and/or Z every time you transmit an electronic statement (periodic disclosure). Of greater concern, you open a perpetual error resolution window for each statement because the error resolution clock does not start until a proper disclosure is given.
Answer by John Burnett:ESIGN will allow you to offer a product that provides its disclosures (or just its statements) only in an electronic format, as long as you disclose that it's the only format provided for that product, and the consumer agrees to accept the electronic version and demonstrates the consumer's ability to receive it in legible form. As Richard has noted, ESIGN won't allow you to force e-statements on customers who have signed up for a product with paper disclosures.
As an alternative, you can encourage your employees to try e-delivery out to pave the way for offering e-delivery to your broader customer base. Offer incentives, appeal to them to be "team players," or otherwise convince (but don't force) them to test the waters.
First published on BankersOnline.com 4/02/07