On November 1, 2007, the Federal Reserve Board adopted amendments that clarify the requirements for providing consumer disclosures in electronic form for Regulation B, implementing the Equal Credit Opportunity Act; Regulation E, implementing the Electronic Fund Transfers Act; Regulation M, implementing the Consumer Leasing Act; Regulation Z, implementing the Truth in Lending Act; and Regulation DD, implementing the Truth in Savings Act. These amendments were developed from the 2001 interim final rules establishing uniform standards for the delivery of electronic disclosures (with which compliance was not mandatory). The Board delayed further action with respect to the interim final rules while it gathered further information to allow electronic commerce and electronic disclosure practices to continue to develop without regulatory intervention.

    In April of 2007, the Board proposed to amend the relevant portions of Regulations B, E, M, Z and DD and their commentary by (1) withdrawing portions of the 2001 interim final rule that restate or cross-reference provisions of the Electronic Signatures in Global and National Commerce (“E-SIGN”) Act and are thus unnecessary, (2) withdrawing other portions of the interim final rule that the Board believes may impose undue burdens on electronic banking and commerce and may be unnecessary for consumer protection and (3) retaining the substance of certain provisions of the interim final rule that provide regulatory relief or guidance regarding electronic disclosures.

    The amendments are meant to reduce confusion about the status of the electronic disclosure provisions and simplify Regulations B, E, M, Z and DD. Generally, the regulations have been revised to allow institutions to provide disclosures to consumers in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-SIGN Act. However, if creditors provide disclosures in both electronic and paper form and rely on the paper form of the disclosures to satisfy their disclosure obligations, the electronic forms may be provided to consumers without regard to consumer consent or other provisions of the E-SIGN Act. The amendments also address situations in which disclosures must be provided on or with an application or at the time of account opening; if these transactions are completed electronically, the creditor must provide the disclosures in electronic form in order to meet the requirement to provide disclosures in a timely manner.

    The mandatory compliance date for the amendments is October 1, 2008.

    • Mike Tomkies