Credit Card Statements and E-Sign in the Time of COVID

By C/A Staff

In this new era of the global COVID-19 pandemic, E-Sign has become both a hot topic and lifeline for many banks and customers that have had to close their lobbies or whose customers have not been able to come into the bank. E-Sign disclosure and consent are generally required any time the bank is giving federally required disclosures to a consumer, including any Reg Z disclosures, like account opening disclosures and periodic statements.

On June 3, 2020, however, the CFPB released a statement related to E-Sign and credit card disclosures required under Reg Z ( This statement from the CFPB was in response to COVID-19 and the unique burdens that banks and other creditors are experiencing at this time. In particular, creditors have noted a large increase in customers wanting to take advantage of electronic records rather than paper documents. This has led to a sharp increase in incoming call volume for creditors trying to help customers get signed for electronic statements. Credit card creditors have noted that the E-Sign consent requirements in particular have resulted in increased call length, dropped calls, and multiple calls with the same customer to complete the E-Sign consent process. As a result, the CFPB has decided that because of the burden of the E-Sign consent requirement in relation to the benefit for consumers to obtain electronic records rather than paper documents during the current COVID-19 outbreaks, the CFPB will provide some flexibility in the E-Sign consent requirements. The CFPB will not take enforcement action against a bank when it comes to the E-Sign consent requirements, as long as the bank, over the phone, is able to obtain verbal consent to provide disclosures electronically and confirms verbally over the phone that the customer is able to access and open those disclosures.

The bank should be sure to be able to document that the customer was asked those two questions over the phone, and received a verbal 'yes' from the customer. That could be through a recording of the phone conversation, through notes made by the bank employee on the phone with the customer, or through some other means of documentation under the bank’s internal policy that the bank would be able to provide to an examiner when asked during an exam. Banks should also be mindful of any state law requirements regarding recording phone calls. Some states require that both parties consent to the phone call, so it would be best practice to notify the customer that the call may be recorded and to obtain a verbal consent to recording the phone conversation from the customer.

That being said, it's still generally best practice to get E-Sign consent whenever possible before sending a customer electronic documents. The spirit and intent of the E-Sign Act is to be sure that the customer is actually able to receive the documents that the bank is sending in the manner that the bank is sending the documents. As a practical matter, it would behoove the bank to be sure that the customer can receive the documents the bank is sending. As such, the bank would want to be sure to thoroughly weigh the costs and benefits of the potential relief from the CFPB versus the potential repercussions or long term issues with customers potentially not receiving disclosures from the bank before making any changes, even if they are temporary, to the bank’s internal policy.