Here's more info about online bank statements.

kelly

The Wall Street Journal

    August 18, 1999



Dow Jones Newswires

Fed To Allow Bank Statements To Be Sent Electronically

   By JONATHAN NICHOLSON

   WASHINGTON -- The Federal Reserve Board approved Wednesday an interim
   rule that could put an end to the monthly bank statement that arrives
   in the mail, to be replaced by an electronic version.

   In a 5-0 vote, the Fed voted to allow banks to send periodic customer
   account statements in electronic form and also proposed a framework
   for other disclosures to be delivered electronically as well.

   For banks, allowing the "fine print" of customer transactions to be
   delivered by e-mail or on the World Wide Web could save money and
   time. For consumers, electronic delivery could ease paperwork hassles
   but also raises questions of consumer awareness and possible abuse.

   Fed Governor Edward Gramlich described the proposed electronic
   disclosure rules as an attempt to tread a middle path between
   competing business and consumer interests.

   After the rules were originally proposed in March 1998, banking trade
   groups said they did not give enough guidance in allowing banks to
   substitute cheaper electronically delivered materials, and consumer
   advocacy groups worried about the potential for abuse.

   "Overall, the modified proposal tries to balance the various
   concerns," Gramlich said.

   The interim rule, to become effective when published in the Federal
   Register, broadens the authority for banks to electronically deliver
   routine periodic account statements and disclosures. Previously,
   electronic delivery had been limited to disclosures involving
   electronic fund transfers.

   "The Board believes that, in addition to reducing paperwork and costs
   for institutions, the interim rule may benefit many consumers by
   allowing them to receive their periodic account statements, including
   required disclosures, more quickly and in a more convenient form," the
   Fed said.

   Other, less routine disclosures, such as account-opening notices and
   change-in-terms notices, would be addressed by the proposed rules
   issued for comment Wednesday.

   Congressional Involvement Remains A Possibility

   Under the proposal, banks could deliver disclosure information by
   sending it to an e-mail address specified by the customer or by making
   it available on the bank's World Wide Web site.

   Institutions would have to identify what types of disclosures would be
   affected and the address or location where the disclosures could be
   found; technical requirements for receiving and retaining the
   information and also provide a means for customers to respond
   affirmatively they they've agreed to electronic delivery.

   Banks that post disclosure information on their Web sites would have
   to separately notify customers when the information was posted.

   Consumers signed up for electronic delivery would be able to respond
   in kind. For example, customers could give notice of an error in their
   account via e-mail, instead of having to send a paper notice.

   Some transactions usually done in person would still be required to be
   approved in writing, such as mortgage loan closings, auto loans and
   leases and door-to-door credit sales.

   The Fed seeks comments on the proposals by Oct. 29.

   While the Fed moves ahead with possible rules, Congress could still
   get involved in the process.

   Democrats in the Senate and the House urged the Fed to move
   "cautiously and carefully" on the issue. However, Rep. David Dreier,
   R-Calif., chairman of the House Rules Committee, encouraged the Fed to
   approve the interim rule and to move forward on the issue of
   electronic disclosure.

   "Timely release of the Board's electronic disclosure initiatives could
   play a significant role in promoting the development of e-commerce,
   while further delay could chill such development, to the detriment of
   consumers and financial institutions alike," Dreier said in a May 19
   letter to Fed Chairman Alan Greenspan.

   -By Jonathan Nicholson; 202-862-9255


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