Compliance Blog

Mar 20, 2019
Categories: Operations

Are There Disclosures That Do Not Require E-Sign Consent?

Written by David Park, Regulatory Compliance Counsel, NAFCU

Every now and then the NAFCU Compliance team receives questions about how to obtain E-Sign consent during the account opening process. This blog is not about that. Instead, this blog describes certain situations for which compliance with the E-Sign requirements is not necessary.

Under the E-Sign Act, a credit union generally must have a member's consent before information that must be sent to a consumer in writing can be sent electronically. The act requires that credit unions receive the member's affirmative consent to receive electronic records before those records have any legal effect. See, 15 USC § 7001(c). In other words, electronically transmitting disclosures without first obtaining E-Sign consent, if needed, is essentially the same as not sending the disclosures in the first place.  

The Consumer Compliance Outlook, a Federal Reserve publication that discusses consumer compliance issues, contained an article in its Fourth Quarter 2009 edition about E-Sign Act compliance. The article provides an excellent overview of the six steps in the E-Sign consent process, and it also describes in general terms when compliance with the requirements of the E-Sign Act may not be necessary.

The chart below fills this gap and specifically identifies some of the disclosures described in the Consumer Compliance Outlook article that may not require E-Sign consent. It is in no way a comprehensive list of all disclosures, statements, or documents that are not subject to E-Sign consent. The exceptions to E-sign consent identified in the Consumer Compliance Outlook article generally relate to situations when a member accesses an electronic application or electronic advertisements. 

Some Disclosures Not Subject To E-Sign Consent Requirements
Regulation Section Description
Regulation B (only applies when the member is electronically applying for credit)

12 CFR § 1002.5(b)(1)

Self-test disclosure regarding information about race, color, religion, national origin or sex.
12 CFR § 1002.5(b)(2) Disclosure regarding sex (i.e., the designation of a title is optional).
12 CFR § 1002.5(d)(1) Disclosure regarding marital status information requests (i.e., "A creditor may explain that the category unmarried includes single, divorced, and widowed persons.").
12 CFR § 1002.5(d)(2) Disclosure regarding income from alimony, child support or separate maintenance.
12 CFR § 1002.13 Government monitoring information disclosure.
12 CFR § 1002.14(a)(2) Notice of right to receive appraisal.
Regulation E 12 CFR § 1005.20(c)(2) Gift card/gift certificate disclosures.
12 CFR § 1005.31(b)(1) Remittance transfer pre-payment disclosure when request is received electronically.
Regulation M 12 CFR § 1013.7 Advertising disclosures for electronic advertisements.
Regulation Z 12 CFR § 1026.16 Open-end credit advertising disclosures for electronic advertisements.
12 CFR § 1026.40 Home equity plan disclosures when accompanying an electronic application.
12 CFR § 1026.60 Credit and charge card application and solicitation disclosures for electronic application and solicitation.
12 CFR § 1026.17(g) Disclosures to be provided for mail/telephone order that are required to delay closed-end credit disclosures until the due date of the first payment. Does not apply to transactions subject to sections 1026.19(a), (e) or (f).
12 CFR § 1026.19(b) Early adjustable rate mortgage disclosures that must be provided at the time an electronic application is provided or before the member pays a non-refundable fee, whichever is earlier.
12 CFR § 1026.24 Closed-end credit advertising disclosures for electronic advertisements.
NCUA Truth In Savings 12 CFR § 707.4(a)(2) Account disclosures requested by members or potential members.
12 CFR § 707.8 Advertising disclosures for electronic advertisements.