Regulatory Alerts

The Dodd-Frank Repeal

In May 2018, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act, commonly known as the Dodd-Frank repeal. While this law removes many of the regulations imposed on banks in the wake of the Great Recession, it also bears particular relevance to mobile banking and e-signatures.

The new law includes a provision called the MOBILE Act (Making Online Banking Initiation Legal and Easy). This provision makes it easier for banks to on-board new customers remotely without the need for the customer to travel to a branch to complete the process. Banks can now create an entirely digital on-boarding process by verifying a scan or digital copy of a new customer’s government-issued identification, such as a driver’s license. While some states already allowed banks to accept a scanned driver’s license as proof of identity, the Dodd-Frank repeal makes it legal at a national level. From there, the customer can complete the necessary forms and enter data online or via mobile and even sign documents using an electronic signature to finalize the process.

In addition, e-signatures can also play a role in verifying key customer information. When a prospective client tries to open a new account, the client must provide his or her name, date of birth and Social Security number. The back office verifies this information with the Social Security Administration (SSA) through a program called the Consent-Based Social Security Number Verification (CBSV). Before the Dodd-Frank repeal, neither banks nor customers were able to submit an e-signature to initiate this process. They would be forced to download, print and sign a hard copy of the form; scan and upload the form to their computer; and finally email the form to a third-party provider or upload it to a third-party portal. The Dodd-Frank repeal directs the CBSV to accept electronic signatures for this process. This process is extremely important for preventing identity and fraud attempts, and now with the Dodd-Frank Repeal, it will also provide convenience for the consumer and efficiency for the bank.

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