Guidance on Electronic Signatures: Here's What You Need to Know
- By: Earl Cooke
- On: 03/14/2023 09:53:32
- In: Federal / National Posts
- Comments: 0
Recently, a dealer contacted TIADA about using electronic signatures because they heard conflicting guidance from other sources. Electronic signatures are generally allowed under Texas and federal law. The federal E-Sign Act, 15 U.S.C. §§ 7001–7006, includes electronic disclosures and signatures requirements. The E-Sign Act allows disclosure to be made electronically only if the consumer consents to an electronic disclosure using a specified procedure demonstrating the consumer's ability to receive the disclosure electronically. 15 U.S.C. § 7001(c)(1)(A).
Before consenting, the consumer must be given a clear and conspicuous statement of:
Any right or option to get the disclosure in non-electronic form;
The right to withdraw consent and the procedures for and consequences of doing so;
What transactions the consumer's consent applies to;
The procedures for updating the information needed to contact the consumer electronically; and
How, after consenting to electronic disclosures, to obtain a paper copy of any disclosures, and whether any fee will be imposed (15 U.S.C. § 7001(c)(1)(B)).
The consumer must be given a statement of the hardware and software requirements for access to, and retention of, electronic records and either give consent electronically to receive electronic disclosures or confirm consent electronically. 15 U.S.C. § 7001(c)(1)(C).
When disclosures are provided electronically, the E-Sign Act requires that the record be retained to " accurately reflect” the information in the record and “remain accessible” to all persons in a form capable of being accurately reproduced for later reference. 15 U.S.C. § 7001(d). This means that consumers must have a way to keep electronic disclosures for use later.
Specific Guidance from TxDMV
TxDMV has taken the position that an electronic signature may be used on any non-secure document submitted to a county tax assessor-collector's office or the department, whether submitted electronically through webDEALER (including webSALVAGE) or physically provided on the paper document. However, if the electronic signature is used on a secure document (i.e., ownership documents, 41-A, 271-A, 71-1), it must be submitted via webDEALER/webSALVAGE.
For an unsecured document, a system used to apply or capture an electronic signature or electronically sign a document must verify the identity of the user accessing the system to execute the document with an electronic signature. Access to the electronic signature system must be secure and use unique credentials for each user. The system used to capture electronic signatures must:
- be securely maintained;
- capture and retain the user information by providing the Internet Protocol address of the signer;
- indicate the area(s) electronically signed on any document; and
- retain all information provided to the system for a period of 5 years, which must be made available to the department upon request.
Finally, TxDMV will also accept a mix of wet ink, and electronic signatures on a document provided it still follows these guidelines for an electronic signature.
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