The mortgage crisis showed lawmakers that consumers don’t always get clear and up-to-date information about the status of their mortgages. To remedy this problem, the Consumer Financial Protection Bureau (CFPB) issued a rule change for Regulation Z (TILA) on January 17.
Now lenders have to send borrowers periodic statements with information about the status of their mortgages. The CFPB wants borrowers to be able to access the information they need to manage their mortgage without being overwhelmed by information, and that's why they made these changes to Regulation Z.
The good news, both for lenders and customers, is that the rule lets financial institutions send the statements electronically. But before a credit union or bank can send mortgage documents online, they have to get the customer’s consent.
The rule departs from the requirements of the federal ESIGN Act and allows for a “simpler process” that only requires that the customer consents (instead of the more complex process of identity verification required by the ESIGN Act). Also, the CFPB says that consent can be implied if a customer is already getting electronic records for an account from the lender.
But not all signatures under Regulation Z can be handled in this way. To learn more about which documents need a secure signatures, check out our free eBook about how digital signatures can ease the burden of compliance for your credit union.