When Disclosures Can Be Made Electronically

Issue/Inquiry

What Federal regulations allow disclosures to be made electronically?

Response Summary

Regulations Z, X, B, M, DD, and E allow disclosures to be made electronically, subject to the requirements of the E-Sign Act. Regulations Z, B, P, and CC also allow some disclosures to be made electronically without compliance with the E-Sign Act. The FCRA allows some disclosures to be made electronically with the agreement of the consumer or compliance with the E-Sign Act.

Response Detail

Introduction

Some Federal regulations allow written disclosures to be made electronically, provided that the consumer consent to such and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) (15 U.S.C. 7001 et seq.) are complied with. In some cases, disclosures can be made without E-Sign Act compliance.

Regulation Z

Generally, the written disclosures required by Regulation Z for open and closed-end consumer loans can be made electronically, provided that the requirements of the E-Sign Act are complied with. Some disclosures, however, can be made electronically without such compliance, including the following:

• Initial disclosures in response to credit card applications and solicitations (e.g., APR and variable rate information, fees, etc.)
• Early HELOC disclosures and booklets
• Periodic statements for open-end accounts
• APRs, finance charges, loan amounts, or terms of repayment information provided in response to mail or telephone orders for consumer loans other than private education or mortgage loans
• Mortgage loan special information booklets
• Advertisements 12 CFR 1026.5(a)(1)(iii);17(a)(1)

Real Estate Settlement Procedures Act (Regulation X)

The disclosures required by RESPA to be provided in writing can be made electronically, subject to compliance with the requirements of the E-Sign Act. 12 CFR 1024.3.

Consumer Leasing Act (Regulation M)

The disclosures that are required by the Consumer Leasing Act to be given in writing can be made electronically, subject to compliance with the requirements of the E-Sign Act. Advertisements can be made electronically without compliance with the E-Sign Act. 12 CFR 1013.3(a);7.

Regulation B

Generally, the disclosures required by Regulation B to be given in writing can be made electronically, subject to compliance with the requirements of the E-Sign Act. When disclosures accompany an application accessed by the applicant in electronic form, such can be made without compliance with the E-Sign Act. Disclosures containing the following pertain to this rule:

• Information requested about an applicant’s race, color, nationality, race, or sex for the purposes of a self-test by the institution
• Information requested about an applicant’s spouse when appropriate (e.g., spouse will be allowed to use the account, applicant is relying on the spouse’s income, etc.)
• Information requested about an applicant’s marital status when appropriate (e.g., applicant is applying for unsecured loans and lives in a community property state)
• Information requested about income from alimony, child support, or separate maintenance when appropriate
• Information requested for government monitoring purposes for applications for credit that will be used primarily for the purchase or refinance of a dwelling used by the applicant as the applicant’s principal residence
• A notice of availability of appraisal for the loan applied for that will be secured by a first lien on a dwelling. 12 CFR 1002.4(d)(2).

Fair Credit Reporting Act (Regulation V)

The FCRA permits the opt-out notice to be provided electronically to the consumer if the consumer agrees to receive disclosures via e-mail or a posting of the disclosure on the financial institution’s website (with the acknowledgment of the consumer), or through compliance with the requirements of the E-Sign Act. The risk-based pricing notice can be provided electronically without compliance to the E-Sign Act. 12 CFR 1022.26(a);73(b)(1)(iii).

Regulation E

The written disclosures required by Regulation E can be made electronically, subject to compliance with the requirements of the E-Sign Act. 12 CFR 1005.4(a)(1).

Regulation DD

The written disclosures required by Regulation E can be made electronically, subject to compliance with the requirements of the E-Sign Act. 12 CFR 1030.3(a).

Regulation CC

Commentary by the Federal Reserve indicates that a financial institution satisfies the written exception hold notice and the general disclosure requirement by sending an electronic version that displays the text and is in a form that the customer may keep. The customer must agree to such a means of delivery. An example of a disclosure that the customer may keep is a notice that can be downloaded. Compliance with the E-Sign Act is not required. Commentary, 229.13(g) – 1a, 15(a) – 1.

Regulation P

Regulation P allows any privacy notices and opt-out notices, including short-form initial notices, to be provided in a way that a consumer can reasonably be expected to receive the actual notice in writing or, if the consumer agrees, electronically. A consumer can receive the privacy notice electronically if it is posted on the financial institution’s website and the consumer is required to acknowledge it as a condition for obtaining a product or service. The requirements of the E-Sign Act do not have to be complied with. 12 CFR 1016.9(a); (b)(1).

This response is for informational purposes only and is not intended for legal guidance.

This entry was posted on Monday, November 25th, 2019 at 6:00 am.