Regulatory Compliance
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Statements versus e-Statements #CreditUnions

How did you receive your account statements this month? What about your credit card statement? Credit unions are minimizing costs by electing to produce e-Statements rather than printed statements for members. Many accounts are being set up with e-Statements as a default and now require a member to opt-in for a paper statement or opt-out of the e-Statements. If your credit union’s primary means of delivering statements to your members is via e-Statements, how are your members consenting to receive them? How are you ensuring they have access to the statements? How do you know if they are reading the disclosures enclosed in the statement?

First, have you reviewed the requirements under the Electronic Signatures in Global and National Commerce (E-SIGN) Act, (15 U.S.C. 7001)? Section 7001(c) outlines the requirements that should be followed to ensure your member properly consents to receive electronic records (e-Statements and/or other documents in your agreement with the member).

Prior to obtaining a members consent to receive electronic records a credit union must inform the member of any right or option to receive the record on paper or non-electronic form (if a non-electronic option is not available a relationship may not be formed) and the members right to withdraw consent to have the records provided electronically and any conditions, consequences (including relationship termination), or any fees that may result from the withdrawal of such consent. In addition, if the member must use specific procedures to withdraw consent or update electronic contact information this should be described in detail to the member prior to obtaining their consent.

A credit union shall also provide the member with a statement of the required hardware and software required in order to access and retain the electronic records, prior to obtaining the members consent.

After the member (or potential member) has been informed of the above information they then need to consent electronically, or confirm his or her consent electronically, in a manner that reasonably demonstrates his or her ability to access information in the electronic form that will be used to obtain the information from the credit union.

Now that you have the members consent, what will the consent apply to? When drafting an electronic record disclosure I recommend not limiting the scope of the materials that can be provided electronically, unless that is your intent. If the scope of the consent is going to be limited the credit union should clearly describe what the member is consenting to receive electronically; will the consent apply to only the particular transaction which gave rise to the obligation to provide the record, or will you identify categories of records that may be provided or available during the entire relationship with the member?

The credit union shall also disclose to the member how, after they have consented, he/she may obtain or request a paper copy of the electronic record and if a fee may be charged for such a copy.

To ensure your credit union is following the proper guidelines for obtaining consent to send electronic communications make sure you review the above E-SIGN Act and your credit unions policy and disclosures.

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