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Compliance The rules on e-statements
WASHINGTON (1/30/09)—Everyone is looking for cost savings in this tough economy and fictitious ABC CU is no different. An astute staff member suggests: Let’s just expedite our members’ transition from paper statements to electronic ones. It’s an appealing idea, management thinks while picturing the cost savings on paper, mailing costs, even processing expenses. But let’s check what our compliance expert says about this first, some cautious party proposes. Can ABC CU simply convert members still receiving paper statements to e-statements? What if the credit union offers the option to opt-out at any time? Well, it is a good thing the credit union has young Sara on its staff because she has been boning up on compliance issues. She knows: The credit union cannot automatically convert members without first getting their consent (opt-in) to receive e-statements. "Participation in e-commerce must be voluntary under the federal e-signature statute—known as ESIGN,” Sara says. The compliance experts at the Credit Union National Association (CUNA) back her up on this. They note ESIGN requires consumers to express their consent electronically, or confirm their consent electronically, in a manner that reasonably demonstrates that they’ll be able to access information electronically. Also, prior to consenting, consumers must be provided with a disclosure informing them of their rights regarding any electronic transaction, as well as a statement of hardware and software requirements for the access and retention of electronic records. For more on this, and other compliance challenges, use the resource link below.


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