The E-Signatures Act and eConsent

Karin FuogNelnet Policy Services

November 6, 2006

Agenda• E-Signatures Act

• Electronic signatures• Electronic record retention• Disclosures and consents

• Department of Education’s “safe harbor” standards

• eConsent

E-Signatures Act

• 15 USC 7001—June 30, 2000

• A signature cannot be denied as legal simply because it is in electronic rather than wet-signed form

• Act allows marketplace to develop standards appropriate to the transaction

E-Signatures Act

• Does not require the use of any particular technology

• Does not specify what makes an e-sign process enforceable

• Department of Education developed “safe harbor” standards

What is an e-signature?

• A sound, symbol or process attached or logically associated with a record

• Executed or adopted by a person with intent to sign and to be bound by the record

• Must be in a form that is capable of being retained and accurately reproduced for later reference by all parties

How is an e-signature made?

• Digitized image of a signature (not a photocopy)

• Password or Personal Identification Number—PIN

• Digital signature (Public Ken Infrastructure—PKI)

• Biometrics

Electronic Record Retention

• Records are retained electronically and can be accurately reproduced upon request

• Accessible to all who are legally entitled to access, for period of time required by law or client

• Record of a check is satisfied by e-record of information on front and back

Electronic Record Retention

Transferable records• Defined as a note under Article 3 of the

Uniform Commercial Code• Must have single, authoritative copy that is

unique and identifiable• This copy cannot be altered

• Without consent of person who has control of the copy• Revision is tracked on the record and identified as

authorized or unauthorized• Any copies of the authoritative copy are identified as such

Disclosures and consents

Prior to consenting, consumers must be provided with a statement informing them of:

• Option for paper or non-electronic record

• Right to withdraw consent for electronic record and any conditions, consequences, or fees associated with withdrawal of consent

Disclosures and consents

Prior to consenting, consumers must be provided with a statement informing them of:

• Whether consent is for a particular type of transaction or to identified categories of records

• Procedures consumer must use to withdraw consent

Disclosures and consents

Prior to consenting, consumers must be provided with a statement informing them of:

• After giving consent, how a consumer may obtain a paper record and any fees associated with this

• Hardware and software requirements for access to and retention of electronic records

Disclosures and consents

Consumers must consent electronically in a manner that demonstrates they can access information in the same form in which the records will be provided• Computer and operating system• Internet access and browser• E-mail• Adobe Acrobat Reader®• Printer

Disclosures and consents

After consumers provide consent, if software or hardware requirements for electronic records change, business must provide:• Statement of revised hardware or software

requirements• Right to withdraw from electronic records

without any fees• New consent demonstrating ability to use

new hardware or software

ED’s safe harbor standards

• Encompass general e-sign rules

• Establish additional standards for e-signatures• PIN process (shared secret through a trusted

third party—STAN)• PIN must be authenticated through third party• Define how to establish borrower intent• Record retention requirements

ED’s safe harbor standards

• Provide for a loan guarantee if a court determines the note to be unenforceable based on the Department’s e-sign process

• Not using the Department’s standards does not automatically deny insurance, even in the event of a court ruling against the lender’s proprietary e-sign process

• Not developed for eConsent

eConsent

Process of getting student’s permission through electronic means, to provide the student’s records to him or her via electronic means

eConsent

Advantages

• Less mailing, as everything available over the Internet

• Lower costs for school

• Shorter wait time for student

• Easier to maintain all records electronically

eConsent

Types of student records available:

• Admission acceptance

• Financial aid award notice

• Promissory notes• Accept, decline, reduce loan amounts

online• Complete promissory notes online

eConsent

Types of student records available:

• Work study applications

• Grades and transcripts

• Letters of recommendation from professors

• Diploma

eConsent

Bound by E-Signatures Act

• Must follow requirements for

• Electronic signature

• Electronic record retention

• Disclosures and consents

• Consider Department’s safe harbor standards

Questions?