E-sign Compliance

What are the two requirements to electronically deliver documents to a customer?

1. Bank must provide certain disclosures and the hardware/software requirements necessary 2. Consumer must consent and reasonably demonstrate ability to access documents

There are exclusions to permissible electronic notifications. What are they?

1. Notice of default, acceleration, repossession, foreclosure, eviction 2. Right to cure, under a credit agreement secured by or a rental agreement for a person's primary residence 3. Cancellation or termination of life insurance

Which disclosure must be provided in accordance with E SIGN act requirements? a) Reg B consumer notification of action taken b) Reg DD disclosures contained in advertisements c) Reg CC disclosures posted at locations where employees accept consumer deposits, ATMs, and on preprinted deposit slips d) Reg Z private education solicitation disclosures

A

What is a push systems in regards to demonstrable consent?

A psh system involves sending the disclosure to the consumer using email "pushed" to the consumer

What is a pull system in regards to demonstrable consent?

A pull system involves bringing the customer to the bank's website to access the disclosures there

A bank wants its commercial customers to be able to sign commercial installment loan documents electronically. What three actions does the bank need to take? a) Ensure the transaction is legitimate ad defined in the bank's policies and procedures b) Proivde dislocates and obtain demonstrable consent c) Ensure the customer's copy of the loan document matches the bank's copy D) Obtain proof of the signer's identity

A, C, D

The E SIGN act establishes rules regarding electronic signatures. Which two statements are correct regarding e-signatures? a) Signatures obtained using E SIGN act provisions lack the legal force of paper signatures b) The E SIGN act provides for the legal validity of electronic signatures on contracts, checks, and loan applications c) A document or signature can be denied legal effect or enforceability solely because it is in electronic form d) If the customer and the bank use digital signatures, all parties will need reasonable access to those documents

B and D

Which two statements are true regarding electronic disclosures? a) A bank must provide all disclosures required by Reg B, Reg DD, Reg E, Reg M, Reg X, and Reg Z in accordance with the E SIGN act b) Advertising disclosures need not be provided in accordance with E SIGN act c) A consumer may not apply for a loan without first agreeing to receive application disclosures in accordance with the E SIGN Act d) Most disclosures required by Regs B, DD, E, M, X, and Z that must be provided in writing and in a form the customer can keep must be provided in accordance with the consumer consent provisions of E SIGN act if the consumer wants electronic disclosures

B and D

Can consenting customers revert to paper information?

Bank must include in disclosures the customer has the right to withdraw consent for E SIGN, as well as the consequences of withdrawing consent, such as fees, termination of the relationship, loss of preferred pricing or having to switch account types

What information about availability of paper is required in E SIGN disclosures?

Banks must disclose whether the customer has the right/option to receive information on paper

Prior to providing any consumer disclosures electronically, what should a bank do? a) Inform customers about fees for paper disclosures b) Send information to customers about the bank's use of electronic disclosures c) Meet the consumer consent requirements of the E SIGN act d) verify that all customers have access to computers

C

There are certain documents must provide in paper form even is a consumer has agreed to receive documents electronically. Which disclosure is a bank permitted to provide electronically assuming ESIGN act requirements are met? a) A notice of foreclosure b) A notice of eviction c) A notice of deposit hold not provided at the time of deposit d) A notice of repossession of an automobile

C

Which option identifies a permissible way for a customer to provide demonstrable consent based on the E SIGN act requirements? a) Access the information electronically on any computer b) Check "I agree" box on a form to indicate one can access, open, and read disclosures c) Clicking "Agree" to confirm online banking enrollment after receiving the E SIGN act disclosure in the same format as other required disclosures and online statements d) Agreeing to receive electronic disclosures using a kiosk in a bank lobby

C

Which party accurately states the rules the E SIGN act establishes for digital signatures? a) Party A says the E SIGN act provides for the legal validly if electronic signatures on contracts but not on checks or loan applications b) Party B says a document or signature can be denied legal effect or enforceability solely because it is in electronic form c) Party C says that electronic signatures are valid as long as the parties intend to sign d) Party D says e-signatures can never have the legal force of paper signatures

C

Your bank provides statements electronically using a push system. Which option demonstrates a push delivery system? a) The bank posts account statements on its website and requires customer to log in to online banking to retrieve them b) The bank pushes consumers into agreeing to receive disclosures electronically c) The bank emails statements to customers and attaches the statement to the email as a PDF d) The bank pays referral fees to customer service representatives when they enroll customers in online banking

C

Once a bank has decided to offer disclosures electronically, what information must the bank disclose to the consumer? a) Once the consumer agrees to electronic disclosures, they must maintain the same email address b) The consumer must contact the bank by phone or in person to obtain the hardware and software requirements for accessing and retaining records c) If the customer wants to revert to paper, their account will be closed and they will be asked to find another bank d) The consumer has the right to withdraw consent, how to withdraw, and the consequences of withdrawing

D

What are the two E SIGN act requirements that a bank must satisfy prior to providing any regulatory communications electronically? a) The bank must mandate electronic disclosures for all customers and customers must agree to accept them b) consumers must request electronic delivery and the bank must agree to send all disclosures using that method c) The bank must make computers available for all customers and customers must prove they can use them d) The bank must provide specific disclosures and customers must demonstrate their ability to receive or access the information electronically

D

When must banks provide regulatory disclosures about consumer's rights and options and receive consumer demonstrable consent? a) Before the consumer downloads website information on FDIC insurance coverage b) Before the consumer logs on to the website for the first time c) Before the consumer chooses the type of account they want to open d) Before the consumer receives any other regulatory disclosures

D

Which of the following statements are true: A) Banks can ask customers to choose to consent on a product-by-product consent process b) Banks can ask customers to agree to get all information electronically c) Banks can provide a list of all possible communications and disclosures and allow the customer to select which to receive electronically d) All of the above

D

What are the requirements of FCRA for joint applicants as they relate to E SIGN?

Each applicant must receive a copy of their credit report. If the report is to be sent electronically, each applicant must provide demonstrable consent. If joint applicants use the same computer, mailing the credit notice may be a better option

What are the rescission provisions for joint applicants as it relates to E SIGN?

Each consumer applicant under certain mortgages has the right to rescind and must be provided their own copy of the notice. Both applicants must provide demonstrable consent to receive the notices electronically

What does E Sign stand for?

Electronic Signatures in Global and National Commerce Act

True or False: Banks can include E SIGN disclosures with Reg E or Reg CC disclosures

False

True or False: Timing requirements in the various regulations change due to electronic delivery

False

True or False: The E SIGN disclosures must be provided electronically

False- Banks can provide a paper version of the disclosure as long as the customer can still demonstrate access

True or False: The E Sign user consent provisions apply broadly to consumer and commercial transactions

False- user consent provisions apply only to consumer transactions

What should a bank consider when changing hardware or software?

If it will affect how customers can access electronic documents. Customers may need to re-consent and provide new demonstrable consent after changes are made. The bank will need to provide the right to withdraw consent statement.

The bank provides periodic statement electronically using the same internet base technology as other online banking products/ services. After logging in to online banking, the webpage presents the E SIGN act disclosures. The consumer can click agree or cancel. Does this show demonstrable consent and through what kind of system?

If the consumer can successfully log on and view or use online banking, then there is demonstrable consent. This is an example of a pull system

What are the requirements for E SIGN when consumers applying jointly are denied credit?

If the notice is to be sent electronically, only one applicant must provide demonstrable consent

What should a bank do if a customer makes changes that alters their ability to access disclosures?

It is the customer's responsibility to notify the bank. The bank may need to switch to paper statements, migrate the account to another account that offers paper statements, or close the account

Carlsbad Community Bank offers e-disclosures and obtains consumer consent according to the E-Sign act requirements. The bank stipulates in its E SIGN act disclosure that it will provide all disclosures in PDF format., Due to a system conversion, the bank will switch from PDF format to HTML which will change the method it has used to obtain consumer consent along with the way it provides disclosures . Can the bank continue to rely on the exiting consumer consent?

No

Reg B requires that banks provide notice of action taken when the bank denies a request for credit. If the application involves more than one applicant, this notification need only be given to one of them but must be given to the primary applicant when one is readily apparent. If the bank delivers this notice of action taken electronically, do both applicants need to provide demonstrable consent?

No- the primary applicant only

What are the requirements for E SIGN when consumers opening a joint account?

Only one account holder needs to provide demonstrable consent

E SIGN act provisions apply only to specific sections of certain regulations: primarily those dislocates the bank must provide in writing in a form the consumer may keep. What regulations do not require E SIGNs provisions?

Reg P (GLBA) mandates banks must provide annual privacy notices. The only requirement to provide electronically is the consumer consenting to receive it electronically. No demonstrable consent is necessary.

True or False: Banks can make some but not all disclosures available electronically

True

True or False: Banks can require customers to agree to get all information electronically

True

True or False: If a statute or regulation requires bank to retain documentation, that requirement is met by retaining an electronic record.

True- IF the electronic record accuractely reflects the information contained in the document and the record is accessible to anyone entitled to access for the period required by law and in a form that can be accurately reproduced

True or False: E sign regulations apply broadly to both consumer and commercial transactions

True-only the user consent provisions are exclusive to consumer transactions

Donald opened an account and stated he would like to receive all disclosures and statements electronically. The bank emailed Donald the E SIGN act disclosure in the same format used for the bank's required disclosures. To access the electronic disclosures, Donald must click on the link within the document. When he clicks on the link and email window addressed to the bank opens. Instructions in the email tell Donald to enter a special code into the return email and send it. Has the bank complied with E SIGN act requirements?

Yes the bank has proven Donald could read the document to get access to the hyperlink and entered the special code into the return email

Advertisements direct customer to the bank's website where the customer can sign up for electronic delivery of disclosures/statements. The sign up process presents the customer with the E SIGN act disclosure including what documents the bank will provide electronically in the same format. The customer is prompted to agree or cancel the enrollment. Does this show demonstrable consent and through what kind of system?

Yes the customer has demonstrated the ability to open and read a document in the same format that other disclosures will be provided in. This is an example of a pull system

The bank provides all disclosures and statements in pdf format. The bank emails the disclosures in a pdf file to the customer. The customer must be able to open the pdf and click on a hyperlink to consent to electronic disclosures in that format. The hyperlink opens an email window addressed to a bank employee. Does this show demonstrable consent and through what kind of system?

Yes this satisfies the requirement of E SIGN. The bank used a push system

Under Reg Z, the Bank must provide each consumer who has the right to rescind a mortgage transaction their own copy of the notice. For joint applicants, if a bank provides the Right of Rescission forms electronically, do both applicants need to provide demonstrable consent?

Yes, as each applicant must receive their own copy of the notice