Compliance Blog

Written by Steve Van Beek

A couple of weeks ago we blogged on the CFPB's mortgage servicing proposal and the ability to send mortgage periodic statements electronically - if the proposal is adopted as proposed - without following the full E-SIGN Act consent process.  Here was a snippet from that post:

"Thus, if the CFPB's proposal is adopted as is - credit unions would have flexibility to send mortgage periodic statements electronically without following the full E-SIGN Act consent process.  A member's authorization - properly documented by the CU - would be sufficient."

NAFCU's comment letter showed strong support for this ability to have member's sign up for mortgage statements without following the full E-SIGN Act process:

"NAFCU does support allowing credit unions to be able to send notices electronically without following the E-SIGN Act. Under the proposal, the periodic statement may be transmitted in writing or electronically; thus, a credit union would not need to obtain a person’s signature as required by the E-SIGN Act. NAFCU strongly supports this proposal and urges the CFPB to pursue legislation that would amend the E-SIGN Act to remove the outdated and onerous requirement of obtaining the borrower’s signature in order to transmit communications electronically."

The next question is - what about members with existing mortgages?  How does the credit union obtain a member's authorization or opt-in for electronic periodic statements?  

Here is from NAFCU's comment letter:

"NAFCU requests that the CFPB develop a model opt-in form that credit union can send to their members to facilitate member acceptance of electronic statements. This is especially important considering the new periodic statement requirement would apply to existing mortgages as well as new mortgages."

A model opt-in form that credit unions could send to existing members would help both credit unions and their members.  Members would be able to simply agree to "go paperless" in response to the monthly statement they are sent.  They could also opt-in for electronic periodic statements by providing the indication inside the CU's online banking platform.  

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Of course, this is still a proposal and the final rule could differ.  Additionally, keep in mind that this flexibility for member agreement for electronic delivery of statements without the full E-SIGN Act consent process does not necessarily extend to other proposed notices that are being added to Reg Z and RESPA.