Electronic Loan Notices

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Question:

We are thinking about adding loan notices (i.e. pmt notices/past due notices/ maturity notices/ rate adjustments/ etc.) to our list of items that a customer can sign up to get electronically. We already do it for deposit products (stmts and such). I realize I need to consult the applicable lending regs, most of which I believe defer to the esign act and allow for electronic delivery, but I'm just wondering if I'm missing something. I guess I'm a little nervous about sending someone's past due notice electronically even if they have to elect to receive it and confirm that they can (call me cautious). Is there anything else I need to watch out for? I am happy to do my own research but if you know of any prohibitions or can point me to something I'm missing, I would appreciate it.

Answer:

E-SIGN simply allows you to substitute required written disclosures or notices for those same things in electronic format. If your payment notice or maturity notice isn't federally required (and I don't recall that they are) there is no E-SIGN requirement. You are free to follow E-SIGN requirements for procedural simplicity if you want. If the notice is state required, UETA can allow the substitution. UETA is easier to do as it has fewer restrictions, such as E-SIGN's demonstrable consent. If you've met E-SIGN's requirements, you've met UETA's.

As you noted, each regulation defers to E-SIGN. So what you are proposing is perfectly fine.

First published on BankersOnline.com 3/28/11