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We are considering implementing electronic signature pads for new deposit accounts and, eventually, loans. What are the state law implications that we should be considering during this process?

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Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021. Please note that this change may affect the continued accuracy of this guidance as it pertains to the ECSA.

Illinois law provides that electronic signatures have the same validity as ink signatures, but additional requirements apply to electronic signatures on negotiable instruments and instruments of title.

Under the Illinois Electronic Commerce Security Act, “where a rule of law requires a signature . . . an electronic signature satisfies that rule of law.” However, this law imposes stringent requirements on electronic signatures for records that confer title, including negotiable instruments conferring title (such as mortgage notes). If you will be using electronic signatures on promissory notes and vehicles of title, for example, this law requires that “an electronic version of such record is created, stored, and transferred in a manner that allows for the existence of only one unique, identifiable, and unalterable original with the functional attributes of an equivalent physical instrument, that can be possessed by only one person, and which cannot be copied except in a form that is readily identifiable as a copy.”

For resources related to our guidance, please see:

  • Electronic Commerce Security Act, 5 ILCS 175/5-105 (Defines “electronic signature” as “a signature in electronic form attached to or logically associated with an electronic record.”)
  • Electronic Commerce Security Act, 5 ILCS 175/5-120(a) (“Where a rule of law requires a signature . . . an electronic signature satisfies that rule of law.”)
  • Electronic Commerce Security Act, 5 ILCS 175/5-120(c)(3) (Among others, there is an exception for “negotiable instruments and other instruments of title . . . unless an electronic version of such record is created, stored, and transferred in a manner that allows for the existence of only one unique, identifiable, and unalterable original with the functional attributes of an equivalent physical instrument, that can be possessed by only one person, and which cannot be copied except in a form that is readily identifiable as a copy.”)