3.140- What is the Electronic Signature in Global and National Commerce Act (E-SIGN Act) ?

The Electronic Signatures in Global and National Commerce Act (E-Sign Act), was signed into law on June 30, 2000. The Act provides a general rule of validity for electronic records and signatures for local, interstate or foreign commerce transactions.

The E-Sign Act allows the use of electronic records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing, if the consumer has affirmatively consented to such use and has not withdrawn such consent.

The E-Sign Act grandfathered existing agreements between a consumer and an institution to deliver information electronically. However, agreements made on or after October 1, 2000, are subject to the requirements of the E-Sign Act

Prior to obtaining their consent, financial institutions must provide the consumer, a clear and conspicuous statement informing the consumer:

• of any right or option to have the record provided or made available on paper or in a non electronic form, and the right to withdraw consent, including any conditions, consequences, and fees in the event of such withdrawal;

• whether the consent applies only to the particular transaction that triggered the disclosure or to identified categories of records that may be provided during the course of the parties’ relationship;

• describing the procedures the consumer must use to withdraw consent and to update information needed to contact the consumer electronically; and

• informing the consumer how the consumer may nonetheless request a paper copy of a record and whether any fee will be charged for that copy.

The E-Sign Act requires a financial institution to maintain electronic records accurately reflecting the information contained in applicable contracts, notices or disclosures and that they remain accessible to all persons who are legally entitled to access for the period required by law in a form that is capable of being accurately reproduced for later reference.