Electronic Signatures in Global and National Commerce Act (ESIGN) – Page 2

We are beginning to image our in-house loan files (including notes and mortgages) and our deposit-related records, such as signature cards. Once a document has been scanned, can we destroy the original, or should we retain it for a certain period of time? Should we stamp the documents with a “scanned” stamp or “true and certified copy” stamp?

Oct 25, 2021

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Generally, you do not need to retain hard copies of documents that have been scanned electronically, but we do not recommend scanning and shredding certain negotiable instruments, including documents that qualify as notes under Article 3 of the Uniform Commercial Code (UCC) — such as negotiable mortgage notes. The general rule under Illinois law is…

We are looking into using Docusign for loan documents. Are electronic signatures made with Docusign legally binding in Illinois, and do you have any tips on using electronic signatures?

Oct 25, 2021

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We believe that electronic signatures are generally valid on most loan documents in Illinois, with the exception of promissory notes — special requirements apply to electronic promissory notes that are negotiable instruments. The general rule under Illinois law is that electronic signatures have “the same force and effect under the laws of this State” as…

We are implementing procedures for processing Single Entry Telephone-Initiated (TEL) Entry ACH loan payments. For Single Entry TEL Entries, the updated Nacha rules going into effect on September 17, 2021, state that an Originator must make an audio recording of the oral authorization or provide written notice confirming the oral authorization to the Receiver. If we provide the written notice electronically, must we follow the E-Sign Act and related Illinois laws? The Nacha rules state that Originators must comply with Regulation E for authorizations of Recurring TEL Entries but are silent on this point for Single Entry TEL Entries.

Aug 9, 2021

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We do not believe you are required to follow the E-Sign Act or related Illinois laws when providing electronic written notices confirming consumers’ oral authorizations for Single Entry TEL Entries (in lieu of making audio recordings of the oral authorizations). We believe that the E-Sign Act applies only to statutes, regulations, and other rules of…

Are we required to retain undeliverable mail that has been returned by the post office? If so, what kind of mail should we be retaining and for how long? We have read that if we can reproduce the mailing (such as an account statement) on request, then we can shred it immediately.

Jun 24, 2021

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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. We are unaware of any recordkeeping requirements specifically for mail that has been sent to…

What are the record retention periods for deposit account statements and checks? Do these requirements vary between paper and electronic records?

Sep 28, 2020

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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. Your bank should retain deposit account statements for at least five years and checks for…

What documentation should we require before closing an account remotely? Are there different guidelines for accounts that have a zero balance and accounts that have remaining funds? For example, if we receive a request to close an account with a zero balance, are we still required to obtain a letter of direction with a signature, or is an email from the email address we have on file for the account sufficient?

Aug 28, 2020

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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. We believe that you may accept electronic signatures to close accounts. Both Illinois and federal…

Can we accept an electronic signature for a wire transfer request made by a business?

Jun 29, 2020

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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. Yes, we believe you may accept an electronic signature on a wire transfer request if…

We are considering implementing a process for borrowers to electronically sign mortgage loan documents. Freddie Mac requires us to obtain wet ink signatures on notes and mortgages, but we would like to have borrowers sign certain disclosures electronically. Do we need to send borrowers an Electronic Signatures in Global and National Commerce Act (E-Sign Act) disclosure and E-Sign policy?

May 6, 2020

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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. Yes, we believe you should send borrowers an E-Sign Act disclosure before they execute disclosure…

We are setting up a manual E-Sign compliance process to assist with COVID-19 modifications and SBA Paycheck Protection Program (PPP) applications and loans. We would like to send a PDF file with a secure email that will facilitate obtaining consent and signing other necessary documentation. Does Illinois law create any additional requirements beyond the federal Electronic Signatures in Global and National Commerce Act (E-Sign Act)?

Apr 10, 2020

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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. No, we do not believe Illinois law creates any additional requirements beyond those in the…

How long should we retain commercial and real estate loan documents that have been scanned electronically? What about those that have not been scanned electronically? If we scan loan documents at the time the loan is originated, how long must we retain the paper copies?

Feb 14, 2020

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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. We recommend retaining loan agreements for a period of ten years after the loan is…

IBA Compliance Connection

Topic: Electronic Signatures in Global and National Commerce Act (ESIGN)

We are looking into using Docusign for loan documents. Are electronic signatures made with Docusign legally binding in Illinois, and do you have any tips on using electronic signatures?

Are we required to retain undeliverable mail that has been returned by the post office? If so, what kind of mail should we be retaining and for how long? We have read that if we can reproduce the mailing (such as an account statement) on request, then we can shred it immediately.

What are the record retention periods for deposit account statements and checks? Do these requirements vary between paper and electronic records?

Can we accept an electronic signature for a wire transfer request made by a business?

How long should we retain commercial and real estate loan documents that have been scanned electronically? What about those that have not been scanned electronically? If we scan loan documents at the time the loan is originated, how long must we retain the paper copies?