Digital Transformation: eSignature and ePayment News and Trends - 30 December 2020

A fact of business today is that customers – both consumers and other businesses – and employees expect to transact digitally. To remain competitive, companies find themselves increasing their efforts to digitally transform their businesses.

 

Successfully implementing this transformation requires careful planning to ensure regulatory compliance, a smooth integration with existing business technology and a positive customer experience.

 

This edition includes links to all our prior newsletters for 2020 and reports on federal regulatory activities and fresh judicial precedent. We thank you for reading and we wish everyone a happy New Year.

 

For related information regarding blockchain and digital assets, please see our monthly bulletin Blockchain and Digital Assets News and Trends.

COMPILATION OF 2020 NEWSLETTERS

• January 2020, with insights on the California Consumer Privacy Act
• February 2020, with insights on a February House Task Force on AI hearing
• March 2020, COVID-19 Special Edition
• April 2020, with insights on key considerations for online lenders
• May 2020, with insights on digital transformation
• June 2020, with insights on National ESIGN Day
• July 2020, with insights on OCC cryptocurrency custody services
• August 2020, with insights on IRS 4506-T electronic signature requirements
• September 2020, with insights on CFPB innovation initiatives
• October 2020, with insights on disputed electronic signatures
• November 2020

REGULATORY DEVELOPMENTS

FEDERAL

CFPB finalizes additional requirements regarding debt collection: On December 18, 2020, the CFPB issued a final rule amending Regulation F, which implements the Fair Debt Collections Practices Act. This final rule provides additional requirements to those addressed in the October final rule (covered here). The rule takes effect November 30, 2021 and includes additional requirements regarding validation information and disclosures provided at the outset of debt collection communications. Regarding the electronic delivery of such items, the final rule states the following:

• If a debt collector provides the validation notice in the initial communication, the debt collector can provide the required information in whichever method the debt collector chooses for that initial communication. If provided electronically, the debt collector does not need to comply with the ESIGN consent requirements but must comply with the general disclosure delivery requirements in the October 2020 rule, including its requirements related to electronic disclosures.
  
  
• If the debt collector does not provide the validation notice in the initial communication, the debt collector must provide the notice no more than five calendar days after the initial communication. If provided electronically, the debt collector must meet the ESIGN consent requirements and the October 2020 rule requirements related to electronic disclosures.
  
  
• If the validation information is provided electronically, the debt collector may vary the format or content of the notice in certain places to accommodate electronic delivery, such as by including hyperlinks or formatting consumer responses into fillable fields.
  
  
• Before furnishing information to a credit reporting agency, the debt collector must convey information about the debt to the consumer. If the debt collector provides such information in a letter or electronically, the debt collector cannot immediately furnish information to the CRAs. Instead, the debt collector must wait a reasonable period of time, which is 14 calendar days after sending the letter or electronic message. During that time, the debt collector must monitor for notifications of undeliverability. If the debt collector does not receive a notice that the letter or electronic message was undeliverable during that reasonable waiting period, then the debt collector can furnish information to the CRAs even if the debt collector later receives a notice of undeliverability.

IRS extends ability of IRS employees to accept electronic signatures and receive documents via a secured messaging system: On December 1, 2020, the Internal Revenue Service published a memorandum that extends the expiration date to June 30, 2021 for which IRS employees can accept electronic signatures and records in the following circumstances:

• IRS employees can accept images of signatures (scanned or photographed) and digital signatures on documents related to the determination or collection of tax liability.
  
  
• IRS employees can accept documents via email and transmit documents to taxpayers using some secured messaging systems.

The categories of documents included in the scope of this memorandum are extensions of the statute of limitations on assessment or collection, waivers of statutory notices of deficiency and The categories of documents included in the scope of this memorandum include extensions of the consents to assessment, agreements to specific tax matters or tax liabilities (ie, closing agreements) and any other statement or form that requires the signature of a taxpayer or representative traditionally collected by IRS personnel outside of standard filing procedures.

 

RECENT EVENTS

 

In the 2021 edition of Chambers FinTech, Chambers and Partners identified DLA Piper as “one of the foremost firms in the country for transactional FinTech matters.” US partners Margo Tank and David Whitaker were recognized individually for their work in fintech.

 

See recent events in the ESRA Digital 2020 Education Series, including webinars on mortgage eclosings, remote online notarization and digital transformation in automotive selling and lending.

 

DLA Piper was ranked second by the Financial Times as both the Most Innovative and Most Digital law firm in the FT North America Innovative Lawyers 2020 report. The publication highlighted the firm’s pro bono legal counsel to the UN’s World Food Programme, with which the authors of this newsletter assisted.

 

RECENT PUBLICATIONS

Thomson Reuters’s The Law of Electronic Signatures, 2020-2021 Edition is a detailed 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 publication is prepared by authors, including Margo Tank and David Whitaker, with more than 30 years combined experience that includes involvement with the drafting and passage of 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 insights they provide will be valuable to anyone seeking to understand the impact of, and the liability associated with, using electronic signatures and electronic records. These insights 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 and
  
  
• Identification and summaries of recent legal developments and court cases impacting electronic signatures and records.

The MBA Compliance Essentials Remote Online Notarization State Surveys, developed by DLA Piper, provides a comprehensive look at 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. Alternatively, companies can purchase information about individual states as needed. Read more.

 

For more information

 

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Contacts

 

Learn more about our eSignatures and ePayments practice by contacting:

 

Margo H.K. Tank

 

David Whitaker