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Compliance FAQ - June 17, 2019

How may financial institutions ensure consumers are able to access the Electronic Signatures in Global and National Commerce Act (ESIGN Act) disclosure, and subsequent disclosures, when opening or applying for banking products or services online? 

 

Short Answer

The Electronic Signatures in Global and National Commerce Act (ESIGN Act) §101(c)(1)(C)(ii) states that the consumer must confirm his or her consent electronically in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent.

More Details

The ESIGN Act §101(c)(1)(C)(ii) states that the consumer must confirm his or her consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent. All disclosures should be presented to the customer in the same format. For example, if the account opening disclosures are provided in a PDF format, the ESIGN Act disclosure must also be a PDF document. If the account opening disclosures are provided in an internet pop-up window, the ESIGN Act disclosure must also be provided in an internet pop-up window.

There are various options available for institutions to confirm successful access to the ESIGN Act disclosure in the correct format, a few of which are detailed below:

  1. Using a check box which can only be checked off after the disclosure was opened, the institution can confirm that the consumer was able to open, view, and accept the contents of the disclosure.
  2. Using a code contained within the disclosure, the institution can confirm that the consumer was able to access the disclosure appropriately. The consumer must enter the code prior to moving forward and receiving the additional account opening disclosures.
  3. Requiring the consumer scroll through the entire disclosure prior to being able to accept the disclosure. This is typically used in an internet pop up window or HTML formatted disclosure.

However the disclosure is provided to the consumer, there should be a restriction that does not allow the consumer to move forward with their application without showing that they can access the information.

If you are interested in discussing your lending program, or in need of assistance relating to lending compliance issues, please contact Stephen King, Principal, Director of Regulatory Compliance Services, at 617-428-5448 or sking@wolfandco.com; Erica Torres, Principal, at 617-261-8121 or etorres@wolfandco.com; or Heather Johnson, Regulatory Compliance Supervisor, at 617-428-5438 or hjohnson@wolfandco.com.