It Just Keeps Getting More Useful - ESIGN Act

Most all of us are quite familiar with the evolution of the mobile phone/cellphone/smartphone. The base concept has been around now, believe it or not, since approximately 1973, with the initial version weighing about 4.4 pounds.

We are familiar as well with the evolution during our lifetimes of the automobile. What was once only an auto now have GPS and backup safety features and is moving in the direction of a driverless vehicle just as the mobile phone, now a smartphone, has a multitude of extended usefulness beyond that of mere voice communication.

Hence, things that have been around a while have increased usefulness as time continues on.

The same can be said of the ESIGN Act. The Electronic Signatures In Global and National Commerce Act (15 U.S.C. Ch. 96) is a federal law enacted June 30, 2000 for the purpose of facilitating use of electronic records and electronic signatures. In addition to electronic signatures, in the world of compliance, the ESIGN Act allows for electronic records to satisfy any regulation requiring that such information be in writing, if the consumer has consented to such and has not withdrawn consent.

The latest example of increased usefulness could be that of Beneficial Ownership, effective May 11, 2018, where the certification signature could well be an electronic signature.

Thus, yet another potential usage of ESIGN brings into focus the ESIGN Act for those institutions may not yet be ESIGN compliant as well as the importance of dusting off and reviewing procedures for ESIGN compliance for those institutions who deem themselves to be ESIGN compliant to be sure they are indeed ESIGN compliant.

Major provisions of the Act include:

  • Informational statements to the consumer prior to obtaining their consent, with such statements informing the consumer of hardware and software requirements and their right to request a paper copy.
  • Demonstrated consent by the consumer prior to electronic record disclosure, in a manner that specifically demonstrates the consumer is able to access the disclosure information to be provided in electronic form.
  • Accurate electronic record retention by the institution and ongoing accessibility to those legally entitled to access for the legally required retention period.
  • A new consumer affirmative consent and demonstrated ability to access disclosure information upon a change in hardware or software requirements.
Thus, a thing which has indeed been around a while, the ESIGN Act of June 30, 2000, be it upcoming with Electronic certification signature relative to Beneficial Ownership or electronic delivery of currently required consumer regulatory related disclosures or even through disclosures related to new product delivery channels - it is always good to revisit those ESIGN Act procedures. Like other things in our daily lives, a thing which has been around a while continues to increase its usefulness.