Digital Transformation: eSignature and ePayment News and Trends - March/April 2025
Today’s ever-shifting business environment means that consumers, businesses, employers, and employees all expect to transact digitally. To remain efficient and competitive, companies must digitally transform their businesses. Successful transformation and maintenance require careful planning and up-to-date knowledge to ensure smooth integration with existing business technology, positive customer experience, and ongoing regulatory compliance.
This newsletter includes legal insights and brief summaries of recently enacted federal and state laws, federal and state regulatory activities, fresh judicial precedent, and other important news to keep you up to date in the ever-evolving electronic environment.
If you would like to discuss one of these items, or a project you are considering, please contact any of the editors – and, if there is a topic you would like us to cover in a future alert, we would love to hear from you.
Mitigating risks for banks, fintech companies, and payment processors: Emerging issues under the Electronic Fund Transfer Act, Regulation E, and the UCC
By: Austin Brown, Michael Essiaw, Dillon Guthrie, and Margo Tank
As banks, fintech companies, and payment processors continue to innovate and partner on payment and wallet solutions, they must navigate the intricate framework established by the Electronic Fund Transfer Act (EFTA) and its implementing regulation, Regulation E. Increasingly, these and other covered financial institutions find themselves the subject of regulatory scrutiny or litigation relating to their compliance with EFTA and Regulation E error resolution requirements, shining a spotlight on several potentially ambiguous provisions in the law.
Court action has further blurred the line between the EFTA (which applies only to consumer funds transfers) and Article 4-A of the Uniform Commercial Code (UCC, or Article 4-A) (which typically governs wires and other commercial payments), creating additional uncertainty. A recent decision in the Southern District of New York – where the court held that the EFTA and Regulation E governed a portion of a wire transaction – reflects the changing landscape.
This alert, previously posted on Lexology, discusses these developments in EFTA, Regulation E, and Article 4-A litigation and highlights key considerations for mitigating risks associated with electronic transactions. Read more.
REGULATORY DEVELOPMENTS
FEDERAL
White House
President Trump challenges the use of autopen. On March 17, 2025, President Donald J. Trump claimed some of former President Joe Biden’s pardons were void and had no effect because they were signed using an autopen. Autopens are devices used to reproduce an authentic signature and have been used by presidents in the past. The Office of Legal Counsel at the Justice Department issued an opinion in 2005 that laws can be signed by autopen. President Trump's claim sparked new discussion on signature requirements, and Georgia Representative Earl L. Buddy Carter introduced proposed legislation (HR 2248) on March 21, 2025 that would require physical signatures on all presidential pardons.
Federal disbursements transition to electronic payments. On March 25, 2025, President Trump issued an Executive Order (EO) titled, “Modernizing Payments To and From America’s Bank Account,” which would accelerate the federal government’s transition from paper-based to electronic payments and receipts. Under the EO, effective September 30, all federal disbursements – including benefits, vendor payments, tax refunds, and intragovernmental transfers – must be made electronically, using methods such as direct deposit, prepaid cards, digital wallets, and real-time payment systems. Similarly, all payments made to the federal government (such as fees, fines, loans, and taxes) are to be processed electronically wherever possible. Stated aims are enhanced efficiency, reduced costs, and improved security by way of minimizing the risks associated with paper checks, such as fraud, theft, and lost payments. The EO provides for limited exceptions where electronic payments are not feasible, including individuals without access to banking services, certain emergency payments, and specific national security or law enforcement activities. The Secretary of the Treasury is tasked with revising procedures for granting these exceptions and ensuring alternative payment options are available. The EO mandates a comprehensive public awareness campaign and coordination with financial institutions and consumer groups to address the needs of unbanked and underbanked populations, and agencies must submit compliance plans and work closely with the Treasury to ensure a smooth and secure implementation.
President Trump establishes strategic bitcoin reserve and US digital asset stockpile. On March 6, President Trump signed an Executive Order to create a Strategic Bitcoin Reserve and a US Digital Asset Stockpile (DAS) to manage and control custodial accounts for digital assets in connection with the President’s stated goal of making the US a global leader in digital asset strategy. The Strategic Bitcoin Reserve will be funded with bitcoin forfeited in criminal or civil proceedings and will not be sold, ensuring that it remains a store of value. Additionally, the DAS will consist of other digital assets obtained through forfeiture, with strategies for responsible management to be developed by the Treasury. The order requires agencies to review their authority to transfer these assets to the respective custodial accounts and report their findings within 30 days. The Treasury and Commerce Departments are tasked with developing budget-neutral strategies for acquiring additional bitcoin, although no further digital assets are to be acquired beyond forfeiture proceedings without additional executive or legislative action. Under the order, the Treasury will also evaluate legal and investment considerations for managing these reserves and provide a full accounting of all government-held digital assets within 60 days.
Congress
House passes resolution to overturn CFPB overdrafts rule. On April 9, 2025, the House passed a joint resolution disapproving the Consumer Financial Protection Bureau (CFPB)'s rule on "Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications." The resolution nullifies the CFPB's final rule published on December 10, 2024, which subjected "larger participants" to CFPB supervisory authority. The final rule defined larger participants in the digital consumer payment application market as nonbanks with an annual volume of at least 50 million transactions and not classified as small business concerns. For more information on the "larger participant" rule, please see our previous alert. The resolution was previously approved by the Senate and is now pending President Trump’s approval or veto. If signed into law, this resolution will invalidate the CFPB rule and prevent the future issuance of similar regulations.
FDIC
FDIC updates guidance on crypto-related activities for supervised institutions. On March 28, 2025, the Federal Deposit Insurance Corporation (FDIC) issued new guidance allowing FDIC-supervised institutions to engage in crypto-related activities without prior notice or approval from the FDIC. This update, detailed in Financial Institution Letter (FIL-7-2025), rescinds the 2022 requirement for pre-notification and approval, provided that institutions manage associated risks and conduct activities safely and in compliance with applicable laws. The guidance covers a range of crypto-related activities, including acting as custodians, maintaining stablecoin reserves, issuing digital assets, and participating in blockchain-based systems. The FDIC emphasized the importance of managing risks related to the market, liquidity, operational, cybersecurity, consumer protection, and anti-money laundering (AML). This policy change aligns with a similar reversal by the Office of the Comptroller of the Currency (OCC) earlier in March 2025 (discussed below), reflecting a broader regulatory shift towards facilitating the integration of emerging technologies in the financial sector.
FCC
FCC seeks public comment on TCPA petition for declaratory ruling. On March 11, 2025, the Consumer and Governmental Affairs Bureau of the Federal Communications Commission (FCC) issued a public notice inviting comments on a petition for declaratory ruling submitted by the Ecommerce Innovation Alliance (EIA) and other petitioners. The petition requests a ruling on whether consumers who have given prior express written consent to receive text messages can seek damages under the Telephone Consumer Protection Act (TCPA) for telemarketing texts sent outside the hours of 8:00 am to 9:00 pm. Additionally, the petition seeks a waiver of the FCC's rules regarding mobile phone solicitations to wireless numbers or, alternatively, a clarification that there is a non-rebuttable presumption that the NPA-NXX code indicates the called party's location for wireless numbers. Comments were due by April 10, 2025, with replies due by April 25, 2025.
FTC
FTC releases annual privacy impact assessments. The Federal Trade Commission (FTC) published their February 2025 annual Privacy Impact Assessments (PIAs) of electronic services and platforms used by the FTC, including electronic signature platforms, secure file transfer systems, and other e-filing platforms. PIAs are required by the E-Government Act of 2002, which was enacted by Congress in order to improve the management and promotion of federal electronic government services and processes. PIAs allow the FTC to communicate more clearly with the public about how the FTC handles information, including how it addresses privacy concerns and safeguards information.
SEC
SEC staff issues statement on stablecoins. On April 4, 2025, the Security and Exchange Commission (SEC)'s Division of Corporation Finance issued a public statement clarifying that the offer and sale of "covered stablecoins" do not constitute the offer and sale of securities, thus exempting those involved in minting such stablecoins from SEC registration requirements. The statement outlines specific characteristics for "covered stablecoins," including being backed by high-quality reserve assets, exchangeable one-for-one with fiat currency, and marketed for use in commerce rather than as investments. The guidance also analyzes these stablecoins under the Supreme Court's Howey and Reves tests. However, the statement does not address nuances among different stablecoin varieties or the status of reserve funds under the Investment Company Act of 1940. SEC Commissioner Caroline Crenshaw issued her own statement in which she criticized the analysis, and with ongoing legislative efforts in Congress, further regulatory developments on stablecoins are anticipated.
Department of State
State Department identifies digital currencies as a growing threat in AML efforts. In March 2025, the US State Department’s Bureau for International Narcotics and Law Enforcement Affairs published its International Narcotics Control Strategy Report. Volume two of the report provides a comprehensive overview of global AML efforts. The report evaluates the legislative frameworks, methodologies, and involvement of various US government agencies in addressing narcotics-related money laundering. It also details the vulnerabilities and money laundering tactics deployed in various countries. The report places significant emphasis on the growing risks associated with the illicit use of digital currencies, noting that the lack of supervisory oversight and control over these technologies poses new challenges for money laundering. According to the report, several countries, including Algeria, The Bahamas, Turkey, and Uzbekistan, have enacted legislative changes or issued regulatory guidance to address these risks. The report specifically highlights countries that have included Virtual Asset Service Providers (VASPs) in AML reporting regimes, such as Argentina, El Salvador, Peru, and Taiwan. Additionally, the report discusses the vulnerabilities associated with virtual currencies in various jurisdictions, such as the use of cryptocurrencies for money laundering in China, the Philippines, and Vietnam. Ultimately, the report recommends international cooperation to ensure compliance with global AML standards.
OCC
OCC issues interpretive letter 1183 on crypto-asset activities for national banks. On March 7, 2025, the OCC issued Interpretive Letter 1183, which withdraws previous interpretive letters that restricted national banks' engagement in various crypto-asset activities. Specifically, it rescinds Interpretive Letter 1179 and reaffirms the permissibility of crypto-asset custody, distributed ledger, and stablecoin activities as discussed in earlier letters from 2020 and 2021. These include providing crypto-asset custody services, holding dollar deposits as stablecoin reserves, and acting as nodes on distributed ledgers.
OCC conditionally approves fintech business model for national bank. On March 17, 2025, the OCC announced its conditional approval for fintech company SmartBiz Loans to change the business model of CenTrust Bank, NA, following its acquisition. Renamed SmartBiz Bank, NA, the institution will now focus on small business lending activities nationwide. The OCC's approval came after a review of SmartBiz's operations in which the OCC indicated that it applied standards consistent with those for all new entrants to the federal banking system. In issuing the approval, Acting Comptroller Rodney E. Hood emphasized the OCC's commitment to fostering a regulatory framework that supports innovative banking models, enhancing access to financial services for consumers and communities.
OCC launches digitalization resource page for community banks. On March 19, 2025, the OCC announced the creation of a new digitalization page on its website designed to support community banks in achieving their digitalization goals. The page is a resource hub designed to provide access to relevant OCC rules, statements, and guidance related to helping community banks leverage new and emerging technologies to meet customer demand, increase revenue, improve efficiencies, and stay competitive. The OCC maintains a technology-neutral stance and does not endorse any specific digitalization strategy.
STATE
Digital assets
California DFPI issues proposed regulations on DFAL. On April 4, 2025, the California Department of Financial Protection and Innovation (DFPI) issued proposed regulations to implement the state Digital Financial Assets Law (DFAL), which requires digital asset companies operating in the state to obtain a license, maintain records, and submit reports to the state. Among other things, the regulations exempt from the state money transmission act "any money transmission of legal tender occurring in, associated with, or related to the normal, typical, or customary performance of digital financial asset business activity." Comments must be submitted by May 19, 2025.
Kentucky authorizes digital assets staking and for use as payment. On March 24, 2025, Kentucky enacted HB701, which defines blockchain and digital assets; provides that individuals cannot be prohibited from accepting digital assets for payment or the use of a wallet; and provides that digital assets used as payment are not subject to additional taxes, withholdings, assessments, or charges based solely on the use of the digital asset as the method of payment. The law further permits businesses to provide staking as a service without being deemed to be offering or selling a security. However, the law does not require any person to accept digital assets as payment for goods or services.
Nebraska enacts digital asset fraud legislation. On March 11, 2025, Nebraska Governor Jim Pillen signed LB 609, a bipartisan bill to protect against digital asset fraud, particularly targeting digital asset ATMs. The “Controllable Electronic Record Fraud Prevention Act” aims to safeguard digital asset ATM users by requiring ATM operators to be licensed under the state's Money Transmitters Act and registered with the state’s Department of Banking and Finance. The legislation mandates quarterly reports on kiosk operations, enforces transaction limits, and requires the display of fraud warnings. In signing, the governor emphasized the importance of these measures in establishing Nebraska as a leader in the cryptocurrency industry while protecting its citizens.
Utah enacts blockchain and digital innovation amendments. On March 25, 2025, Utah enacted HB230, which prohibits state and local governmental entities from restricting the acceptance or custody of digital assets; establishes the right to operate nodes, develop software, transfer digital assets, and participate in staking on blockchain protocols; creates exemptions from money transmitter licensing requirements for certain blockchain and digital asset activities; and restricts the ability of political subdivisions to impose sound limitations or zoning restrictions on digital asset mining businesses in industrial zones. The bill notably excluded a provision that would have allowed the state treasurer to invest in cryptocurrency.
Wyoming stable token enters testing phase. On March 26, Wyoming Stable Token Commission Executive Director Anthony Apollo announced that the Wyoming Stable Token (WYST) entered its testing phase across several blockchain networks. Executive Director Apollo notes that the testing is "a key step towards launching the first fiat-backed and fully reserved stable token issued by a public entity in the United States." Testing is expected to occur throughout the second quarter of 2025, with a potential launch in July 2025. These announcements were made during a fireside chat with Governor and Commission Chairman Mark Gordon at the DC Blockchain Summit. Governor Gordon also highlighted the benefits of WYST for both the state and its users, including a statutory requirement to over-collateralize the stable token’s backing with cash and US Treasuries to mitigate the risk of de-pegging, and the deposit of interest derived from those treasuries into the state’s school foundation fund.
NYDFS issues notice regarding meme coins. On January 16, 2025, the New York Department of Financial Services (NYDFS) issued a notice regarding the rapid proliferation of sentiment-based virtual currencies (often called meme coins). The notice reminds NYDFS-licensed virtual currency businesses of their obligation to follow all applicable NYDFS guidance, and particularly references the Department’s prior guidance on coin-listing and on market manipulation.
Digital identity
Utah and Arkansas adopt digital IDs.
- On March 25, 2025, Utah adopted SB260, which outlines the state digital identity policy and establishes the duties of the state’s Department of Government Operations regarding implementation of a state-endorsed digital identity program, including to study and make recommendations for the implementation of a state-endorsed digital identity program.
- On February 6, 2025, Arkansas adopted HB 1135, allowing the issuances of digital drivers licenses and identification cards and amending current law to include provisions for application for digital IDs. Under this law, digital driver's licenses and IDs will be accessible on mobile devices.
eFilings and eSignatures
Kansas permits electronic signatures, electronic records, and electronic transmission for LLC documents. On April 8, 2025, Kansas enacted HB 2371, which modified the state limited liability act to permit the use of electronic signatures, electronic records, and electronic transmission with respect to all documents required or permitted under the act; however documents filed with the secretary of state, a state court, or other judicial or governmental body are excluded.
Consent requirements for signatures are now in effect in Ohio. Effective January 17, 2025, new consumer safeguards have been implemented in Ohio to protect individuals from the unauthorized use of their signatures, as announced by Attorney General Dave Yost. The new rule added to the Ohio Administrative Code requires businesses to obtain explicit affirmative consent before using a person's signature in any communications unrelated to transactions. This rule applies to both handwritten and electronic signatures and mandates that businesses disclose how the signature will be used, including the message content, instances of use, the author, and recipients. Violations of this rule are considered deceptive acts under Ohio's Consumer Sales Practices Act and can lead to legal action by the Attorney General's Office. The rule was proposed in response to numerous complaints and received strong public support during the comment period.
Money transmission
Additional states adopt the Money Transmission Model Act.
- Virginia’s HB 1942, a full adoption of the Money Transmission Model Act, was approved by the Virginia Governor as Chapter 214 on March 21, 2025 and will be effective July 1, 2026.
- Mississippi enacted HB 1428/SB 2507, known as the Mississippi Money Transmission Modernization Act, on April 10, 2025.
- Colorado passed HB 25-1201, which was signed into law by the Colorado Governor on April 18, 2025.
NY joins multistate money transmitter enforcement action for license violations. On March 19, 2025, the NYDFS joined a multistate enforcement action against a money transmitter, Sigue Corporation, coordinated by the Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA). The action followed Sigue's disclosure of financial distress and inability to meet consumer obligations. Regulators found that Sigue failed to satisfy outstanding transmission liabilities, did not maintain the required net worth, and lacked sufficient permissible investments, which were all in violation of state money transmission laws. Sigue ceased operations, began surrendering its licenses, and still owed significant liabilities without enough assets to compensate consumers. Under a consent order, Sigue agreed to permanently exit the money transmission business, surrender its licenses, and pay a one-million dollar administrative penalty – stayed for two years and potentially waived if it meets consumer protection requirements.
Earned wage access
Utah and Arkansas enact Earned Wage Services Acts.
- Utah: On March 25, 2025, Utah adopted HB 279, the Earned Wage Access (EWA) Services Act. Under this legislation, entities wishing to provide EWA services in Utah must register with the Division of Consumer Protection and adhere to a range of consumer protection requirements. The definition of "providers" under the Act specifically includes those in the business of offering earned wage access but excludes employers who directly advance a portion of earned wages to their employees or independent contractors. Under the law, providers of EWA services cannot have mandatory repayment, report to credit bureaus, collect debts, or charge interest/late fees; but they may accept voluntary payments (tips) under certain circumstances.
- Arkansas: On March 20, 2025, Arkansas adopted HB 1517, the Earned Wage Access Services Act. Annual registration with the Arkansas Securities Commissioner is required, and – similar to the Utah law – entities are exempt from usury laws so long as they do not charge interest, have mandatory repayment, report to credit bureaus, or collect debt. Optional tips may be permissible. The Arkansas law includes consumer disclosure requirements, complaints rights, as well as cancellation rights. Further, EWA providers are prohibited from sharing tips with employers, among other restrictions.
eTitling
Wyoming creates electronic lien and title system. On February 24, 2025, Wyoming enacted SF 25 to establish a statewide electronic lien and title system to process certificates of title for motor vehicles, and to manage the notification, maintenance, perfection, and release of security interests in motor vehicles. The new law also allows persons to apply for certificates of title either electronically or in person, but requires dealers, lenders, lienholders, and others to use the electronic lien and title system.
South Dakota creates electronic vehicle registration and title system. On March 17, 2025, South Dakota passed SB131 to establish an electronic system for vehicle titles and registrations on or before July 1, 2026. The system must permit electronic transmission of data and scans to or from the department in lieu of the transmission of paper documents, including the manufacturer's statement or certificate of origin and odometer disclosure information.
Kentucky permits electronic vehicle titles and electronic signatures. On March 21, 2025, Kentucky enacted SB 136, which amended state law to permit an electronic record of a motor vehicle title to be stored without the production of a paper copy of the title and to give titles held in the system electronically the same legal status as paper titles. The bill also establishes procedures for electronic submission of liens, security interests and satisfactions, and the use of electronic signatures on title lien statements.
New Mexico permits electronic signatures on vehicle registration applications and certain conveyances. On April 7, 2025, New Mexico enacted HB99, which allows the use of electronic signatures on applications for vehicle registration and title, and on documents used to convey ownership of a vehicle to an insurance company, for which documents also no longer require notarization.
Remote notarization
Georgia accepts electronic signatures and remote notarization on tax documents. On March 6, 2025, Georgia amended its regulations related to tax filings effective March 26, 2025 to permit the use of electronic signatures and remote notarial acts by taxpayers and authorized third-party representatives on certain forms and documents authorized by the State Revenue Commissioner. The remote notarial acts must be performed in compliance with the laws of a state which permits remote notarization by notary publics of that state.
Ohio seeks to amend rules related to online notarization acts. The Ohio Secretary of State issued a notice of hearing to be held on April 21, 2025 to solicit comments on proposed amendments to the Ohio Administrative Code. The amendments include changes to permit identity proofing during a remote online notarization using knowledge-based authentication, "or through another process approved by the Secretary of State."
Vermont adopts rules for IPEN and remote notarization. On February 10, 2025, Vermont adopted administrative rules for notaries public effective as of February 26, 2025. The new rules support notarial acts on electronic records (Part 7) and for remotely located individuals (Part 8). The rules for remotely located individuals allow for remote notarization of tangible or electronic records.
North Dakota permits technology fees in RON. On March 18, 2025, North Dakota enacted SB 2144, which modified the law to permit a remote online notary (RON) to charge a "technology fee" if the notary incurred fees for using technology to perform the notarial act. The notary and the person requesting the notarial act agree upon the technology fee in advance, and the notary explains that the technology fee is separate from the notarial act fee.
Tennessee dictates training for RON notaries. On April 2, 2025, Tennessee enacted SB1051 to be effective January 1, 2026. The law amends state notarial law to specify that a course of instruction for online notarization must minimally include notarial laws, technology procedures of online notarizations, and ethical requirements for online notaries.
Estates and trusts
North Dakota adopts Uniform Electronic Estate Planning Documents Act. On March 26, 2025, North Dakota enacted SB 2127, adopting the Uniform Electronic Estate Planning Documents Act in the state effective July 31, 2025.
Georgia permits electronic signatures on trust documents. On April 9, 2025, the Georgia legislature passed HB 327, which, in part, permits electronic signatures on trust documents and provides for electronic trust administration. The bill awaits signature by the governor.
Insurance
North Dakota implements email service of process by insurance commissioner. On March 18, 2025, North Dakota enacted SB 2125 modifying the state insurance code to permit the state insurance commissioner to serve process upon "any licensee in any action or proceeding instituted by the commissioner … by electronic mail to the electronic mail address maintained as required under [law] or United State mail." Service of process is complete upon "electronic mailing or United States mailing." The insurance producer is responsible for maintaining the email address for regulatory use and to "continually monitor" the email for regulatory communications from the commissioner.
INDUSTRY
MISMO seeks public comment on SMART Doc V3 security instrument specification. On March 31, 2025, the Mortgage Industry Standards Maintenance Organization (MISMO), the real estate finance industry's standards organization, announced a 60-day public comment period for the SMART Doc V3 Security Instrument Specification, ending on May 24, 2025. This new specification enhances the SMART Doc V3 Verifiable Profile by allowing document data to travel with the PDF and be automatically verified with the document image for consistency and reliability. The specification aims to facilitate the seamless exchange of security instrument data and documents between trading partners. MISMO Acting President Rick Hill highlighted that this initiative is part of a broader effort to increase the adoption of SMART Docs beyond eNotes.
CASE LAW
FEDERAL
Court enforces click-wrap arbitration agreements. On March 26, 2025, the US District Court for the District of Maryland decided Gordon v. Zeroed-In Techs., LLC, No. 23-3284-BAH, 2025 US Dist. LEXIS 58032 (D. Md. Mar. 26, 2025), addressing the enforceability of arbitration agreements for current and former employees of Dollar Tree and Family Dollar following an alleged data breach. The court found that 22 of the 24 plaintiffs had entered into valid electronic arbitration agreements through online employment applications, which included conspicuous hyperlinks to the arbitration terms and "I agree" checkboxes, creating valid click-wrap agreements. Additionally, electronically signed onboarding documents were deemed valid for some plaintiffs, while factual disputes regarding manager control during the onboarding process required a jury trial for two plaintiffs. The court emphasized that continued employment after receiving notice of updated electronic agreements also constituted valid assent. However, for two plaintiffs, who claimed they did not knowingly agree to arbitration due to rushed onboarding processes, the court ordered a jury trial to resolve factual disputes. The motion to compel arbitration was granted for the remaining 22 plaintiffs.
Court approves settlement in Clearview AI biometric privacy litigation. On March 20, 2025, the US District Court for the Northern District of Illinois granted final approval of a class action settlement in the case of In re Clearview AI, Inc., No. 21-cv-00135, 2025 US Dist. LEXIS 51475 (ND Ill. Mar. 20, 2025), which addressed significant issues related to biometric privacy and facial recognition technology. The court's analysis focused on Clearview AI's unauthorized collection of billions of facial images from the internet to create a facial recognition database, a practice that raised substantial privacy concerns under the Illinois Biometric Information Privacy Act (BIPA) and other state privacy laws. The settlement, which provides the class with a 23-percent equity stake in Clearview AI, valued at approximately $51.75 million, was deemed fair and reasonable given the company's financial constraints and the strength of the claims. The court also acknowledged the importance of existing restrictions from a prior ACLU settlement in mitigating the need for additional injunctive relief.
Tennessee court finds insufficient evidence of attribution. In William Steven Gilliam v. Prince Health Group LLC, 2025 WL 1126545 (MD Tenn. Apr. 16, 2025), the court addressed the issue of whether an electronic signature and consent to an arbitration agreement were valid. Prince Health Group LLC sought to compel arbitration based on an electronic signature purportedly provided by Gilliam when he submitted his personal information on a website. However, Gilliam denied visiting the website or providing consent, and the court found that Prince Health did not provide sufficient evidence to conclusively prove that Gilliam was the individual who entered the information. The court held that the validity of the arbitration agreement was "in issue" and denied the motion to compel arbitration, emphasizing the need for clear evidence linking the electronic signature to the actual user.
STATE
California court requires robust authentication for electronic signatures. In Garcia v. Pacific Sunwear Stores, 2025 Cal. App. LEXIS 2181 (Cal. Ct. App. 2025), an action by an employee for disability discrimination and retaliation against employer Pacific Sunwear, the employer moved to compel arbitration based on an electronic agreement. The appellate court affirmed the lower court's denial of the motion, finding that the employer failed to authenticate the electronic arbitration agreement allegedly signed by the employee. The court found that Pacific Sunwear did not provide sufficient evidence to demonstrate that the employee had signed the arbitration agreement, as the company failed to detail the security procedures in place to protect the electronic signature process. The court highlighted the importance of proper authentication of electronic signatures and the need for detailed evidence of security measures to ensure the integrity of electronic agreements.
Document with defective notarial signature ruled admissible. In Med. Supply of NY Corp. v. State Farm Mut. Auto. Ins. Co., 2025 NY Slip Op 50412(U) (Civ. Ct.), the Civil Court of the City of New York was tasked with deciding whether the inadvertent placement of the word “February” on the signature line above “Notary Public” rendered a document inadmissible. The court noted that a signature can take many forms for a lay person – including marks, typed names, or digital representations – so long as it is intended to authenticate a document. For notaries, however, the court stressed that their signature, whether handwritten or electronic, must be consistent with the version on file with the county clerk and capable of independent verification. This, the court found, rendered the notarial acknowledgement defective, but that technical defects in notarization – such as a missing or inconsistent notary signature – do not automatically invalidate notarization of a document if no party’s substantial rights are prejudiced.
Florida court enforces arbitration agreement through agency principles. In Miami Dolphins, Ltd. v. Engwiller, 2025 Fla. App. LEXIS 2748 (Fla. Dist. Ct. App. 2025), the Miami Dolphins football team (and their stadium) successfully appealed a court order denying arbitration by a woman who was injured during a fight while attending a Miami Dolphins home game. The woman entered the stadium using tickets purchased by her mother through a website that notified users that, by continuing to use the site, they agreed to the website’s terms of use. The Dolphins argued that the woman was bound by the ticket, stadium, and associated websites’ terms (including mandatory arbitration) under common law agency principles. However, the woman never accessed the website herself nor possessed her ticket (her mother handled all ticket-related actions). The appellate panel reviewed the terms and their presentation, considering jurisprudence surrounding “browsewrap.” The panel found that as to the first issue, the terms were binding as to the purchaser because the terms were presented in a way that provided “actual knowledge of the terms and conditions” or “the hyperlink to the terms and conditions [was] conspicuous enough to put a reasonably prudent person on inquiry notice.” As to the second issue, the appeals court stated further that the woman, as the attendee, was also bound by the arbitration provision, because the mother acted as her daughter’s agent when the daughter “allowed her [mother] to present the ticket on her behalf to enter the stadium and attend the game.”
DLA PIPER NEWS
Chambers FinTech Legal ranks DLA Piper in four categories, including Band 2 for Blockchain and Digital Assets, and Band 3 for Payments and Lending, with Margo Tank individually recognized in Band 3 in Blockchain and Digital Assets and Band 2 in Payments and Lending.
RECENT EVENTS
Margo Tank and Liz Caires co-presented at the Electronic Signatures and Records Association (ESRA) Spring Member Meeting, held virtually on April 28, 2025. They presented the Legal Update and Regulatory Review, a summary of key legal developments affecting electronic signatures and records, which covered federal and state activity and cases related to electronic signatures and records, websites, electronic payments, and remote online notarization; control structures under UCC Article 8; and changes to UCC Article 9 due to the 2022 UCC amendments.
Liz Caires presented on a webinar panel titled, E-Signatures and Electronic Documentation in Real Estate Finance: ESIGN and UETA, Interplay With UCC, on February 21, 2025.
RECENT PUBLICATIONS
Margo Tank, Liz Caires, Emily Honsa Hicks, and other DLA Piper attorneys co-authored the USA Law and Practice section of the Fintech 2025: Chambers Global Practice Guide, which covers nearly 40 jurisdictions and contains practical guidance on fintech markets and their regulation, including regulatory jurisdiction, sandboxes, AML rules, and financial action task force standards; robo-advisers, online lenders, and payment processors; marketplaces, exchanges, and trading platforms; high-frequency and algorithmic trading; insurtech and regtech; blockchain and DeFi; and open banking.
DLA Piper recently published its International Debt Finance Intelligence Report 2025, containing content on market evolution throughout the previous year. Topics include deal economics, delayed draw term loans, key trends in mid-market sustainability-linked loans, and more.
DLA Piper published its global financial services report, Financial Futures: Disruption in US and Global Financial Services, which surveys nearly 800 financial services decision-makers around the world about key disruptors impacting senior leaders in financial institutions and fintech. Check out our report and read about the challenges and opportunities that artificial intelligence (AI); digitization; and environmental, social, and governance (ESG) concerns pose for the financial services industry.
DLA Piper’s Tech Index 2024: Riding the next big wave: Is the tech industry buoyant or sinking? Our Tech Index 2024 explores this topic and more, drawing insights from 1,200 industry leaders and policymakers across the world. While our previous editions focused primarily on Europe, we have expanded the scope of this year’s Index to include all major regions, offering a more comprehensive view of the sector’s growth prospects, anticipated challenges, and emerging opportunities. Some key insights include the following:
- 63 percent of respondents view AI as the most important frontier for growth. Yet, AI adoption is not being driven by CEOs.
- 50 percent report that ESG is a higher priority now than in 2022. However, 61 percent do not have a comprehensive ESG framework – or any framework at all.
- 98 percent see opportunities in data monetization. Even so, only 38 percent employ data scientists to harness these opportunities.
Margo Tank co-authored The Law of Electronic Signatures, 2024 Edition (Thomson Reuters), a guide to electronic signatures and records laws, including the context in which the laws were adopted and the ways in which the authors believe the drafters intended them to be interpreted. The authors have more than 30 years combined experience, including involvement with the drafting and passage of the Electronic Signatures in Global and National Commerce Act (ESIGN), the preparation of the Uniform Electronic Transactions Act (UETA), the creation of the Standards and Procedures for electronic Records and Signatures (SPeRS™), and serving as counsel to the Electronic Signatures and Records Association. The guide is a key resource for anyone seeking to understand the impact of, and the liability associated with, using electronic signatures and electronic records.
Key resources and information offered in the guide include:
- Details on the legal requirements for using electronic signatures and records, including delivery, presentation, signing, and record retention.
- Comprehensive tables itemizing the state variations to the uniform UETA language.
- Special considerations for using electronic signatures and records in connection with emerging and evolving technology.
- Using electronic records and signatures in specialized transactions and documents, such as securities, chattel paper, and mortgages.
- Analysis of the interplay between ESIGN, UETA, and many other key laws and regulations.
- Identification and summaries of recent legal developments and court cases impacting electronic signatures and records.
David Stier, Emily Honsa Hicks, and Eric Hall co-authored the chapter on anti-money laundering, know-your-customer guidelines, and the Bank Secrecy Act and provided general editorial assistance on other chapters in Banking [on] Blockchain: A Legal and Regulatory Primer, a newly published book by the American Bar Association. The book is a comprehensive guide to the legal and regulatory landscape surrounding the use of blockchain technology, decentralization, and digital assets within the financial services industry. It explores the potential benefits and challenges of using these technologies and offers guidance on how financial institutions can navigate the complex regulatory environment.
Emily Honsa Hicks co-authored the “Electronic Signatures and Records” chapter in the Consumer Financial Services Answer Book, 2024 Edition, published by Practicing Law Institute.
Cryptocurrency and Digital Asset Regulation, published by the American Bar Association and co-edited by Deborah Meshulam and Michael Fluhr, includes chapters by Meshulam and Fluhr, as well as by Margo Tank.
The MBA Compliance Essentials Remote Online Notarization State Surveys, developed by Liz Caires and Margo Tank, provides a comprehensive look at Remote Online Notarization (RON) requirements in each state that has enacted RON legislation. These fully editable surveys are organized by category of requirements, including registration, technology, seal and signature, certificates of RON acts, journal, authentication, session, recording, and additional requirements. Companies can purchase the full package, which includes surveys for all states that have enacted RON legislation along with a matrix summarizing state requirements – otherwise, companies can purchase information about individual states as needed.
Read
Redeemable, USD-linked stablecoins are not securities – latest SEC staff guidance
Agencies ease crypto scrutiny as White House advances its digital assets policy
White House AI Executive Order sets its sights on free-market innovation
Congress deliberates legislation establishing a legal framework for stablecoins
In case you missed it
Read the latest issue of our bulletin Blockchain and Digital Assets News and Trends
Read the latest issue of our bulletin Bank Regulatory News and Trends
Contacts
Learn more about our Digital Transformation - eSignatures and ePayments practice by contacting:
The editors send their thanks and appreciation to Marc Aronson and Raymond Janicko for their contributions to this and prior issues.
