Topic: Online Banking
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What are some of the rules and regulations to consider if a bank starts to offer online unsecured personal loans? Also, have there been any fines, penalties, enforcement actions, consent orders etc. regarding offering online loans?
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The laws and regulations applicable to online unsecured personal loans are the same laws and regulations that would apply to any unsecured personal loan. We cannot provide a comprehensive list that would cover every possible situation, but examples in federal law include everything from Regulation Z to fair lending requirements to regulations under the Military…
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Can we attach a HELOC to a customer’s pre-existing demand deposit account so that the customer can use their debit card to access the HELOC funds?
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Yes, we believe your bank may attach a home equity line of credit (HELOC) to a deposit account to enable your customers to access HELOC funds with a debit card. We are not aware of any Illinois or federal law that would prohibit this practice. For example, Regulation E recognizes that a home equity line…
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Can a correspondent bank that requires fingerprinting to login to their online system to retrieve statements retain the fingerprint on their server without violating Illinois and federal privacy laws?
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Yes, we believe that a correspondent bank may retain customer fingerprints on its server without violating Illinois and federal privacy laws. Neither Illinois nor federal financial institution privacy laws prohibit banks from storing biometric data, such as fingerprints. The Illinois Personal Information Protection Act (PIPA) requires banks to implement and maintain reasonable security measures to…
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For a certificate of deposit (CD), is cashing an interest check sufficient to count as activity on the account under the new Illinois unclaimed property law? What if we call and speak to the customer to confirm that they want to renew the CD? What if the customer logs into online banking to look at a checking account balance, but we can’t confirm that the customer looked at the CD balance? Our online banking system does not automatically show account information for CDs by default — viewing a CD’s balance would require an additional click after logging in.
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Yes, cashing a check for CD interest is a valid indication of interest under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). The “presentment of a check” for an “interest payment” is one of many activities that serve as an “indication of interest” under the Illinois RUUPA. However, note that if the CD’s interest…
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The new Illinois unclaimed property law provides that the “presentment of a check or other instrument of payment of a dividend, interest payment, or other distribution” is an indication of interest in an account. My understanding is that if an account pays interest or dividends by check, and the apparent owner negotiates that check, that activity counts as an indication of interest. But if we credit interest and dividends for an account automatically with no other activity or contact from the apparent owner (such as an online banking login or oral inquiry), there is no indication of interest. Is that right?
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Yes, we agree with your interpretation of the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). An indication of interest includes the “presentment of a check or other instrument of payment” for distributions of interest and dividends. But if the apparent owner has not presented a check or other instrument to deposit a distribution of…
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If a business or consumer customer has signed up for online and/or mobile banking, and we are sending a communication regarding the online or mobile banking platform, would that communication require us to obtain affirmative consent in order to send it electronically under the E-SIGN Act?
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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 that the E-SIGN Act requires you to obtain affirmative consent…
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We have added a “device bar” at our main branch with Android and Apple devices that customers can use to access internet banking and sign up for mobile banking. Our wifi network is password-only, which we do not give out to our customers. Through the devices, customers have access to our wifi network, but they can access only our website and a few other specific sites, such as a mortgage calculator website. Do we need to provide any disclosures regarding our wifi network?
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No, you are not required to provide specific disclosures, although certain disclosures and policies may be prudent. For example, your bank may wish to require guests to agree to a “wifi acceptable use” policy; we have provided two examples of such policies below. In addition, we note that providing your customers access to a limited…
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Our bank donates money to various fundraising events of local organizations and clubs. In exchange, our logo is listed as a sponsor on the organizations’ websites and at the event. If our logo is posted in a group of logos of other sponsors on their website or on a banner at the event, do we need to include “Member FDIC” as part of our logo? Is this still considered a commercial message? If our logo is listed on the organization’s website, and the logo is linked to our website, do we need to include member FDIC in the logo?
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No, we do not believe that your bank is required to include the “Member FDIC” statement on third party websites and banners promoting a fundraising event, provided that your bank name or logo is featured without a tagline or other promotional language. However, if you use your bank logo and it incorporates a tagline, we…
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We plan to start accepting deposit account applications online. When a customer applies for an account, we plan to gather credit data about the applicant. What disclosures are required under the Fair Credit Reporting Act (FCRA)?
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We are not aware of any initial disclosures required by the FCRA at the time of an account opening. However, if your bank rejects an online account application based on information in a consumer credit report, the FCRA requires you to send an adverse action notice to the applicant. In such case, you should follow…