E-statements to Acquired Bank Customers

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Question:

We recently acquired two banks from the FDIC. One of them has e-statements, as do we. Do they have to agree to our e-statement terms or does the agreement with their current bank still apply?

Answer:

Given the double unique risks caused by acquisitions of failed banks from FDIC, and the likelihood of faulty or missing ESIGN consent, I'd think about treating these new customers the same as any other brand new customer. Your attorney, working with FDIC attorneys and staff, can advise you what (if any) provisions of the account agreements were wiped out by the FDIC "failed bank" process. Remember, these customers entered into contracts (various account agreements) with corporations that no longer exist. Going through the "informed demonstrable consent handshake" again is a small price to pay to eliminate the risks associated with failed e-delivery.

With regard to e-statements, your greatest fear should be customers claiming that they did not receive compliant "written" documents. If you are not sending paper and cannot prove that each e-delivery customer consented to e-documents, then it's the same risk as if you decided to stop sending statements and disclosures entirely.

First published on BankersOnline.com 3/22/10