Our experts make sure that we teach based upon the current environment. Jerod Moyer taught the Regulations B & Z Appraisal Requirements webinar. He starts out talking about E-Sign. Find the full program here –
Let’s go beyond coverage. Let’s talk a little bit about e-sign, let’s get this out of the way right away. So today we’re going to talk about a disclosure that’s required to leave the bank and go to the customer, as well as a free copy of the appraisal. Those are the two Reg B requirements. We’re also going to talk about Reg Z and they have very much the same thing.
So how does these requirements that we provide a disclosure and that we provide a free copy, how do they intersect with electronic communication? Suffice it to say, we’re probably doing a lot more of that today with this pandemic, because we’re not seeing customers face to face as much as we did in the past. And in fact, as an industry, we’ve been encouraged to communicate electronically more with our customers to help stop the spread of COVID-19 and such.
So where does e-sign come into play? Well, let’s talk a little bit about e-sign first, make sure we all have a general understanding of it. E-sign is a two part process. There is a consent and an acknowledgment. In other words, if I’m your customer and you want to offer me the opportunity to communicate with you electronically, you don’t just get to do that.
You can’t just start communicating with me electronically with regulatory disclosures that are required to leave the bank. What you have to do is get me to consent that, yes, I would in fact, like to communicate with you electronically, one, and two, you have to send me something and I have to acknowledge that I can view the information that you’re communicating to me. And that’s a onetime process. It doesn’t have to happen with each and every disclosure and piece of information that’s exchanged, but it does have to happen the first time.
If you don’t have a consent followed by an acknowledgement done through the e-sign requirements, any communication that happens relative to a disclosure or a document that is supposed to go from the bank to the customer, even though you know it and I know it and the dog knows it, and you get a return receipt from the email, it doesn’t happen in the eyes of the courts. You will lose because it has to be e-sign compliant in order to count when you go to court.
So you want to make sure these disclosures that leave the bank, these free copies that I want to talk about today, they leave the bank and they go down what we call the e-sign compliance channel. If they don’t, or if you’re unsure, go talk to your IT department and find out how you can get e-sign compliant, or you’re just going to have to default to in-person or mailbox communication, which always works, just might delay some things.
So let’s take a closer look at page one, Roman numeral three, if you’ll note that there’s a paragraph there that basically says what I just said, “Today’s requirements are subject to e-sign, however, there’s a carve out. With respect to the appraisal notice,” that I’m going to talk about here in a little bit, so I don’t want to get too much into what it is, but that notice we’re about to talk about, there’s an exception for it.
If the notice is provided in connection with an online application, in other words, if I go to a web page and you’ve got your application there, and this disclosure that we haven’t talked about yet is also there, on an online webpage, then you don’t have to follow e-sign and that’d be letter C at the bottom of page number one, it’s Roman number three. But that exception only applies relative to a webpage where you have an app and the disclosures also placed there.
If we’re talking about applications outside of a webpage, then the notice when you send it, has to be e-sign compliant. You can’t just email it out. Again, you can always drop it in the mail, but you can’t just hit send via email. That’s what this is saying. The free copy, when we get there a little bit later, that always has to be e-sign compliant. You can’t just email it to anyone. It has to go through that consent and acknowledgement process. So that’s e-sign and electronic communication, make sure you’re following the rules there.
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