The Form Disclosures Must Take

General requirements

The Regulation E disclosures must be in writing, in a form that the consumer can keep, and must be clear and readily understandable. [12 CFR 1005.4(a)] There are no requirements as to type size, segregation from other material, number of pages, or relative conspicuousness of terms disclosed. You can, therefore, combine the disclosures with other material, have inserts with your disclosures, or arrange the disclosures in any other format you want, so long as the disclosures remain clear and readily understandable and in a form the consumer can keep. [12 CFR 1005.4(b)]

Spanish language disclosures satisfy the Regulation, but you must provide English language disclosures to consumers who request them. [Commentary, 12 CFR 1005.4(a)-2]

Special rules for electronic disclosures

Since March of 1998, Regulation E has allowed institutions to make disclosures by electronic communication—if the consumer agreed. (See the Federal Register for March 25, 1998, beginning at page 14527.) In June of 2000, President Clinton signed the Electronic Signatures in Global and National Commerce Act (E-SIGN). [15 USC 7001 et seq.] E-SIGN provided that signatures, contracts, and other records could not be denied validity solely because they are in electronic form. E-SIGN also provided that laws or regulations requiring written disclosures could be satisfied by electronic disclosures—if the consumer affirmatively consents. In April 2001, the Federal Reserve Board (FRB) published revisions to Regulation E to take into account the provisions of E-SIGN. (See the Federal Register for April 4, 2001, beginning at page 17786.) The April 2001 revisions were effective March 30, 2001.

Let’s look first at the statutory provisions, then at the Regulation E provisions.

E-SIGN authorizes a person who must provide consumer disclosures in writing to provide the disclosures by electronic communication. [15 USC 7001(c)] However, this authority is subject to conditions. The conditions—all of which must be met—are:
  • The consumer has affirmatively consented to the use of electronic communication and has not withdrawn that consent. Affirmative consent means the consumer communicates “yes.” It does not include what you might call passive or presumed consent, where a consumer consents by not objecting.
  • The person providing the disclosures has, before the consumer consents, given the consumer a clear and conspicuous statement of the following:
    • Any right that the consumer has to have the disclosure delivered in paper or nonelectronic form, as well as the consumer’s right to withdraw consent to the electronic delivery of the disclosure, and any conditions on, or fees or other consequences of, withdrawing consent.
    • Whether the consumer’s consent applies only to a specific transaction or to categories of records and which categories those are.
    • How the consumer can withdraw consent and how the consumer can update information the institution needs to contact the consumer electronically.
    • How the consumer, at any point after consent, can obtain a paper copy of any disclosure and any fees that might be charged for the paper copy.
  • The institution provides—before the consumer consents—a statement of the hardware and software requirements that enable the consumer to obtain and retain electronic disclosures.
  • The consumer either consents electronically, or confirms his or her consent electronically, in such a way that shows the consumer will be able to obtain disclosures in electronic form.
  • If the institution changes the software or hardware requirements that the consumer has to have to access and retain the disclosures, the institution should provide a statement of the new requirements and of the consumer’s right to withdraw consent without fees, conditions, or consequences that were not disclosed previously. The consumer must also either consent electronically, or confirm the consent electronically, in such a way that demonstrates the ability to obtain disclosures in electronic form.

[15 USC 7001(c)(1)]

More rules: If the consumer withdraws consent, the institution must treat the withdrawal as effective within a reasonable period of time after receiving the withdrawal. [15 USC 7001(c)(4)] Neither oral communications nor recordings of oral communications are electronic messages for purposes of E-SIGN. [15 USC 7001(c)(6)]