E-Sign Act Flashcards
When considering compliance with E-SIGN and other consumer protection regulations, which statement is true?
A. Regulations A, D, F, and O must be provided in accordance with E-SIGN consumer compliance requirements
B. If the consumer cannot demonstrate that he/she can retrieve the disclosures, the bank still has satisfied the requirement of providing them
C. Disclosures delivered in an electronic format will meet the requirement to provide disclosures in writing under a given regulation regardless of whether they comply with the E-SIGN delivery requirements specifically provided for in the relevant regulation
D. All regulations that require banks to provide disclosures in writing and in a form the consumer can keep are subject to E-SIGN requirements
The correct answer is d. A is not correct because these are not regulations with consumer disclosure provisions subject to E-SIGN. B is incorrect because if the consumer cannot demonstrate that he/she can retrieve the disclosures, it is as if the bank never provided the disclosures at all. C is incorrect because any disclosure that the bank delivers in an electronic format will not meet the requirement to provide disclosures in writing under a given regulation unless it complies with the E-SIGN delivery requirements specifically provided for in the relevant regulation
You just attended a meeting where you were informed that your bank intends to eliminate paper disclosures. Which option should be your primary concern?
A. That the bank meets the requirements of the E-SIGN Act
B. That all customers receive information about this decision
C. That all impacted customers need access to computers
D. That your customers are informed about fees for paper disclosures
The correct answer is a. B, C, and D are incorrect because although E-SIGN disclosures may address these things, your primary concern should be that your bank meets the E-SIGN requirements prior to providing any communications electronically
When the consumer logs onto Silver Bank’s online banking, the webpage presents the consumer with the bank’s E-SIGN disclosures. Consumers may opt to agree to receive disclosures electronically, or cancel. Regarding this delivery method, which statement is true?
A. This is an example of a push system as long as consumers have a choice to push or click on ‘‘Agree’’ to receive disclosures electronically
B. Demonstrable consent may be assumed even if consumers click on ‘‘Cancel’’ because they logged in
C. The bank now has consent to push periodic e-statements to a consumer in the same or different format as their other online banking products and services
D. This is an example of a pull system for accomplishing demonstrable consent
The correct answer is d. A is incorrect because this is an example of a pull system. B is incorrect because for any delivery method, consumers must consent to the E-SIGN disclosure prior to receiving disclosures electronically. C is incorrect because this is a pull system for delivering electronic disclosures and all documents must be in the same format.
A bank has provided disclosures to consumers about their rights and options under the E-SIGN Act. What else does the bank need to do to satisfy E-SIGN requirements?
A. The bank must make computers available for all customers and customers must prove that they can use them
B. The bank must mandate electronic disclosures for all customers and customers must agree to accept them
C. The bank must receive consumers’ consent and confirmation that they can receive or access the information electronically on their device
D. Consumers must request electronic delivery and the bank must agree to send all disclosures using that method
The correct answer is c. A, B, and D are incorrect because the E-SIGN Act requires that in addition to providing the disclosures the banks must receive consumers’ consent and confirmation (demonstrable consent) that they can receive or access the information electronically.
. A bank decides to use electronic disclosures in accordance with the provisions of the E-SIGN Act. Which fact is true?
A. All of the bank’s consumer and commercial customers who wish to use online banking must use electronic disclosures
B. The electronic disclosures can be used for commercial customers, only
C. The bank can only use the electronic disclosures for consumers using mobile banking and remote deposit capture
D. The bank’s electronic disclosures will have the same validity as paper disclosures as long as the disclosure and consent provisions of the E-SIGN Act are met
The correct answer is d. A is incorrect because the E-SIGN Act does not mandate electronic disclosures. B is incorrect because the disclosure portion of the E-SIGN Act applies to consumer transactions. Only the consent provision of the E-SIGN Act applies to consumers. C is incorrect because the E-SIGN Act applies to required disclosures that are provided electronically and not to specific bank activities.
E-SIGN establishes rules regarding electronic signatures. Which statement is correct regarding e-signatures?
A. E-signatures can never have the legal force of paper signatures
B. The E-SIGN Act provides for the legal validity of electronic signatures on contracts but not on checks or loan applications
C. A document or signature can be denied legal effect or enforceability solely because it is in electronic form
D. If digital documents and signatures are used, customers will need reasonable access to those documents
The correct answer is d. A is incorrect because e-signatures can and do have the legal force of paper signatures. B is incorrect because the E-SIGN Act provides for the legal validity of electronic signatures for such documents as checks, or loan applications. C is incorrect because the E-SIGN Act provides that a signature cannot be denied legal effect if it is provided in electronic form.
In order to comply with two E-SIGN requirements that are applicable to all consumer accounts, when must banks provide regulatory disclosures about consumers’ rights and options and receive consumers’ demonstrable consent?
A. Before the consumer downloads website information on FDIC insurance coverage
B. Before the consumer logs on to the website
C. Before the consumer chooses the type of account he wants
D. Before he receives any other regulatory disclosures
The correct answer is d. A, B, and C are incorrect because the E-SIGN process must occur prior to providing any regulatory disclosures electronically.
Which disclosure is a bank permitted to provide electronically assuming that all the E-SIGN requirements are met?
A. A notice to a borrower that the bank is going to begin foreclosure proceedings
B. A notice to a borrower that the bank plans to repossess his car
C. A notice to a customer that she is being evicted from her home
D. A notice to a borrower of the right to cancel a private education loan
The correct answer is d. A, B, and C are incorrect because these are notices that must be provided in paper format.
Once a bank has decided to offer disclosures electronically, what information must be disclosed by the bank to the consumer?
A. That once the consumer agrees to electronic disclosures they must maintain the same email address
B. That the consumer must contact the bank by phone or in person to obtain the hardware and software requirements for accessing and retaining records
C. That if the consumer wants to revert to paper, their account will be closed and they will be asked to find another bank
D. That the consumer has the right to withdraw consent, how to withdraw consent, and the consequences of withdrawing consent
The correct answer is d. A is incorrect because the E-SIGN disclosure does not prohibit consumers from changing their email contact information; it explains how to notify the bank of new contact information. B is incorrect because the disclosures must outline the hardware and software requirements for accessing and retaining records, not mandate that the consumer contact the bank to be informed of those requirements. C is incorrect because the disclosures must indicate whether customers have a right or option to receive information on paper.
A bank provides e-statements in portable document format (PDF). It requires consumers to sign up for e-statements online in the same format. Is this demonstrable consent for electronic delivery of e-statements?
A. Yes, if consumers can read the instructions to sign up for e-statements
B. Yes, if consumers also sign a form at account opening agreeing to receive disclosures electronically
C. Yes, as long as consumers show they know how use a computer at a bank kiosk
D. Yes, as long as they enter a password when they log in to online banking
The correct answer is a. B, C, and D are incorrect because they are not examples of demonstrable consent.
Once a consumer receives the required E-SIGN disclosures, the consumer must provide demonstrable consent. Which customer activity represents demonstrable consent?
A. Signing a form at account opening agreeing to receive disclosures electronically
B. Clicking on a hyperlink within a PDF document sent by the bank in order to agree to receive electronic disclosures in that format
C. Agreeing to receive electronic disclosures using a computer at a customer service representative’s desk
D. Logging into online banking and choosing a password
The correct answer is b. A, C, and D are incorrect because they are not examples of demonstrable consent.
A loan application has been called into question as to its validity because it has a digital signature. Parties to the transaction have made the following statements to support their position. Which party accurately states the rules E-SIGN establishes for digital signatures?
A. Party A says the E-SIGN Act provides for the legal validity of electronic signatures on contracts but not on checks or loan applications
B. Party B says a document or signature can be denied legal effect or enforceability solely because it is in electronic form
C. Party C says that the electronic signatures are valid as long as the parties intended to sign
D. Party D says E-signatures can never have the legal force of paper signatures
The correct answer is c. A is incorrect because the E-SIGN Act provides for the legal validity of electronic signatures for such documents as checks, or loan applications. B is incorrect because the E-SIGN Act provides that a signature cannot be denied legal effect if it is provided in electronic form. D is incorrect because e-signatures can and do have the legal force of paper signatures
Which statement is true?
A. The E-SIGN Act mandates electronic disclosures for all consumer and commercial customers who wish to use online banking
B. The E-SIGN Act gives electronic disclosures the same validity as paper disclosures as long as the disclosure and consent provisions of the E-SIGN Act are met
C. The E-SIGN Act applies only to consumer customers
D. The E-SIGN Act applies primarily to consumers using mobile banking and remote deposit capture
The correct answer is b. A is incorrect because the E-SIGN Act does not mandate electronic disclosures. C is incorrect because the E-SIGN Act itself applies to both consumer and commercial transactions. Only the consent provision of the E-SIGN Act applies to consumers. D is incorrect because the E-SIGN Act applies to required disclosures that are provided electronically and not to specific bank activities.
. In order to comply with two E-SIGN requirements that are applicable to all consumer accounts, when must banks provide regulatory disclosures about consumers’ rights and options and receive consumers’ demonstrable consent?
A. Before the consumer downloads website information on FDIC insurance coverage
B. Before the consumer logs on to the website
C. Before the consumer chooses the type of account he wants
D. Before he receives any other regulatory disclosures
The correct answer is d. A, B, and C are incorrect because the E-SIGN process must occur prior to providing any regulatory disclosures electronically.
When the consumer logs onto Silver Bank’s online banking, the webpage presents the consumer with the bank’s E-SIGN disclosures. Consumers may opt to agree to receive disclosures electronically, or cancel. Regarding this delivery method, which statement is true?
A. This is an example of a push system as long as consumers have a choice to push or click on ‘‘Agree’’ to receive disclosures electronically
B. Demonstrable consent may be assumed even if consumers click on ‘‘Cancel’’ because they logged in
C. The bank now has consent to push periodic e-statements to a consumer in the same or different format as their other online banking products and services
D. This is an example of a pull system for accomplishing demonstrable consent
The correct answer is d. A is incorrect because this is an example of a pull system. B is incorrect because for any delivery method, consumers must consent to the E-SIGN disclosure prior to receiving disclosures electronically. C is incorrect because this is a pull system for delivering electronic disclosures and all documents must be in the same format.
