1. The E-Signatures Act and eConsent Karin Fuog Nelnet Policy Services November 6, 2006

2. Agenda E-Signatures Act Electronic signatures Electronic record retention Disclosures and consents Department of Education’s “safe harbor” standards eConsent

3. E-Signatures Act 15 USC 7001—June 30, 2000 A signature cannot be denied as legal simply because it is in electronic rather than wet-signed form Act allows marketplace to develop standards appropriate to the transaction

4. E-Signatures Act Does not require the use of any particular technology Does not specify what makes an e-sign process enforceable Department of Education developed “safe harbor” standards

5. What is an e-signature? A sound, symbol or process attached or logically associated with a record Executed or adopted by a person with intent to sign and to be bound by the record Must be in a form that is capable of being retained and accurately reproduced for later reference by all parties

6. How is an e-signature made? Digitized image of a signature (not a photocopy) Password or Personal Identification Number—PIN Digital signature (Public Ken Infrastructure—PKI) Biometrics

7. Electronic Record Retention Records are retained electronically and can be accurately reproduced upon request Accessible to all who are legally entitled to access, for period of time required by law or client Record of a check is satisfied by e-record of information on front and back

8. Electronic Record Retention Transferable records Defined as a note under Article 3 of the Uniform Commercial Code Must have single, authoritative copy that is unique and identifiable This copy cannot be altered Without consent of person who has control of the copy Revision is tracked on the record and identified as authorized or unauthorized Any copies of the authoritative copy are identified as such

9. Disclosures and consents Prior to consenting, consumers must be provided with a statement informing them of: Option for paper or non-electronic record Right to withdraw consent for electronic record and any conditions, consequences, or fees associated with withdrawal of consent

10. Disclosures and consents Prior to consenting, consumers must be provided with a statement informing them of: Whether consent is for a particular type of transaction or to identified categories of records Procedures consumer must use to withdraw consent

11. Disclosures and consents Prior to consenting, consumers must be provided with a statement informing them of: After giving consent, how a consumer may obtain a paper record and any fees associated with this Hardware and software requirements for access to and retention of electronic records

12. Disclosures and consents Consumers must consent electronically in a manner that demonstrates they can access information in the same form in which the records will be provided Computer and operating system Internet access and browser E-mail Adobe Acrobat Reader® Printer

13. Disclosures and consents After consumers provide consent, if software or hardware requirements for electronic records change, business must provide: Statement of revised hardware or software requirements Right to withdraw from electronic records without any fees New consent demonstrating ability to use new hardware or software

14. ED’s safe harbor standards Encompass general e-sign rules Establish additional standards for e- signatures PIN process (shared secret through a trusted third party—STAN) PIN must be authenticated through third party Define how to establish borrower intent Record retention requirements

15. ED’s safe harbor standards Provide for a loan guarantee if a court determines the note to be unenforceable based on the Department’s e-sign process Not using the Department’s standards does not automatically deny insurance, even in the event of a court ruling against the lender’s proprietary e-sign process Not developed for eConsent

16. eConsent Process of getting student’s permission through electronic means, to provide the student’s records to him or her via electronic means

17. eConsent Advantages Less mailing, as everything available over the Internet Lower costs for school Shorter wait time for student Easier to maintain all records electronically

18. eConsent Types of student records available: Admission acceptance Financial aid award notice Promissory notes Accept, decline, reduce loan amounts online Complete promissory notes online

19. eConsent Types of student records available: Work study applications Grades and transcripts Letters of recommendation from professors Diploma

20. eConsent Bound by E-Signatures Act Must follow requirements for Electronic signature Electronic record retention Disclosures and consents Consider Department’s safe harbor standards

21. Questions?