E-SIGN bill reintroduced in U.S. Senate

U.S. Republican Senators reintroduced legislation on Tuesday to amend the Electronic Signatures in Global and National Commerce Act (E-SIGN), with the hopes of modernizing the decades-old regulation that requires customers to prove they can receive documents electronically before opting to receive digital versions. The E-SIGN Modernization Act aims to “streamline how consumers consent to receiving electronic documents like bank statements, account information, and contracts,” according to a July 2020 release , when the bill was first introduced following the onset of the COVID-19 pandemic. Senators John Thune (R-S.D.), Todd Young (R-Ind.), Marsha Blackburn (R-Tenn.) and Jerry Moran (R-Kan.) backed the bill’s reintroduction. Previously, the bill passed out of the Senate Commerce Committee but did not advance further, according to the National Association of Federally Insured Credit Unions (NAFCU), which helps to support the bill. “The E-SIGN Act was passed 20-some years ago at the dawn of the technology age, recognizing there should be a way for consumers to electronically get information,” Brad Thaler, VP of legislative affairs at NAFCU, told Auto Finance News . “It hasn’t really been updated since then. “Regulators have been trying to focus on how we take this [legislation] and recognize the modern age,” Thaler said. “Obviously, the pandemic also accelerated [the need for modernization] when people are less likely to want to do things in person and do things in a more virtual environment.” One of the outdated elements in the E-SIGN Act requires consumers to prove they have the technological capabilities to receive electronic documents before they could opt in to receiving them, Thaler said. Now, in the age of the smartphone, those requirements serve as a point of friction for consumers, Andrew Morris, senior counsel for research and policy at NAFCU, told AFN. “During the pandemic, [the Consumer Financial Protection Bureau ] CFPB explored ways to alleviate some of that friction,” Morris said. “What this bill accomplishes longer term is recognizing that we have entered into an era where the ability to receive an email is more or less ubiquitous and there is no doubt about the [consumer’s] ability to receive an electronic attachment. “Ideally, we’d like to see this be put in place in a legislative sense rather than have to deal with the CFPB offering only temporary relief in response to extreme events,” Morris said. Opposition To be sure, the bill will likely face some opposition from consumer groups who want to avoid situations where customers end up not receiving a notice because they didn’t receive an email, for example, Thaler said. “There have been some Senators that have expressed concern that they don’t want this to be a way to get consumers in trouble,” Thaler said. “That’s not the intent here. What we found — and what our members have found, and other lenders and financial institutions have found — is oftentimes [the process of proving the ability to receive electronic documents] creates consumer confusion.” Outdated regulations surrounding technology advancements are a common theme in financial services. The Federal Debt Collection Practices Act, which regulates debt collectors, began the process of being updated in 2019 to reflect, in part, new modes of reaching consumers. The Telephone Consumer Protection Act, too, has been in the limelight over the past couple years as regulators and the courts seek how to define an automatic telephone dialing system. Auto Finance Innovation Summit, the premier event for technology in auto finance, returns April 25-26 in San Diego. The event will showcase today’s technology and tomorrow’s innovation-driven opportunities to position your company for success in this fast-paced digital era. To learn more about the 2022 event and register, visit www.AutoFinanceInnovation.com .

E-SIGN bill reintroduced in U.S. Senate

The bill is designed to modernize decades-old regulations

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