[05melissa]

In regards to disclosing the LE within 3 days of application. What if we disclose electronically? Say, the App date is Oct 1st and we send initial disclosures out Oct 3rd via e-disclosure. Technically, we’ve sent them out within the 3 days, however what if the borrower e-consents and views/signs the disclosures after the 3 days, say on Oct 11th. Are we in violation because the borrower did not at minimum e-consent within the 3 days so that we could prove delivery?

[rcooper]

By e-consent, I assume you’re talking about complying with esign (e.g. providing the required disclosure and obtaining demonstrable consent from the consumer that they can access the information in the electronic form provided). If you did not comply with esign prior to providing the documents electronically, you have not provided the disclosures according to Reg Z. If you have complied with esign and then deliver the disclosures electronically that is all you need to do (i.e. you do not need to obtain evidence that the consumer has viewed or read the disclosures; however, you many want to obtain acknowledgement of receipt if your at the end of the timeframe). To sum up, even if you comply with esign and deliver by electronic means, as with standard mail electronic receipt is considered three business days after delivery unless you obtain some form of acknowledgement from the consumer saying they received it earlier. See the commentary below that explains all of this.

Comment 1026.19(3)(1)(iv)-2: (emphasis added is my own)
2. Electronic delivery. 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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