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This question came in to us recently.
We have an E-Sign compliant vendor we use for the delivery of loan prelims (including the Loan Estimate), appraisals and the initial Closing Disclosure. For the appraisals and Closing Disclosures we retain proof that we electronically sent the document and either assume it takes them 3 days to receive it or will use the retrieved date shown through the esign vendor to document the received date to start the 3 day count.
My question is about the loan prelims that are sent via esign and the requirement that prelims must be sent by the end of the third business day after completed application. If we put prelims in the paper mail by the end of the third business day we are in compliance. If we send them via esign by the end of the third day are we okay or do we need to ensure the documents have actually been “retrieved” by the customer by the end of the third business day? I do not see anything “black and white” on this issue and trying to weigh out acceptable practices and risk.
Assuming you have complied with the E-SIGN requirements, the same rule would apply for delivering the LE electronically – it would be required to be delivered (i.e. sent in compliance with E-SIGN) no later than 3 business days after application. As with regular mail, if you send the LE via email it is considered received 3 business days after delivery unless you have evidence the consumer received the disclosures earlier.
See 1026.19(e)(1)(iii)-A and (iv).Also, comment 19(e)(I)(iv)-2 states:
The three-business-day period provided in § 1026.19(e)(1)(iv) applies to methods of electronic delivery, such as email. For example, if a creditor sends the disclosures required under § 1026.19(e) via email on Monday, pursuant to § 1026.19(e)(1)(iv) the consumer is considered to have received the disclosures on Thursday, three business days later. The creditor may, alternatively, rely on evidence that the consumer received the emailed disclosures earlier. For example, if the creditor emails the disclosures at 1 p.m. on Tuesday, the consumer emails the creditor with an acknowledgement of receipt of the disclosures at 5 p.m. on the same day, the creditor could demonstrate that the disclosures were received on the same day. Creditors using electronic delivery methods, such as email, must also comply with § 1026.37(o)(3)(iii), which provides that the disclosures in § 1026.37 may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-Sign Act. For example, if a creditor delivers the disclosures required under § 1026.19(e)(1)(i) to a consumer via email, but the creditor did not obtain the consumer’s consent to receive disclosures via email prior to delivering the disclosures, then the creditor does not comply with § 1026.37(o)(3)(iii), and the creditor does not comply with § 1026.19(e)(1)(i), assuming the disclosures were not provided in a different manner in accordance with the timing requirements of § 1026.19(e)(1)(iii).
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