WASHINGTON - The Electronic Financial Services Council today hailed the introduction of the Electronic Disclosures Delivery Act of 1999 as an essential building block in creating a viable online financial services industry for the 21st Century. The measure, introduced by U.S. Reps. Marge Roukema, R-N.J., Rick Lazio, R-N.Y., and Jay Inslee, D-Wash., will permit consumers to receive federally required disclosures via the Internet rather than through the mail. The EFSCouncil represents a variety of financial services and software companies that are currently offering products and services over the Internet. "The majority of consumer protection laws do not yet expressly permit online disclosures to borrowers," said Cameron King, president of the EFSCouncil and executive vice president for electronic commerce at Countrywide Home Loans, Inc. "The Electronic Disclosures Delivery Act seeks to amend consumer protection laws to allow online disclosures which will be an important first step in modernizing these laws so that everyone may benefit from new technologies sooner rather than later," he said. A recent Forrester Research, Inc. report indicates that by the year 2003, nearly $100 billion - or 10 percent - of the mortgage market will be generated online. Other surveys project the share could be as high as 30 percent by 2005. The measure will only affect borrowers who choose to do business online and who subsequently choose to receive disclosures online, noted King. "This may seem like a simple change but it's impact is considerable for consumers," King said. "Borrowers who choose to start and complete their loan applications over the Internet figure to save up to $500 on a typical $100,000 mortgage because of the lower overhead and hedging costs facing lenders. But without enactment of this legislation, those savings aren't possible." The bill would change the Truth in Lending Act ("TILA" and implementing Regulation Z), the Equal Credit Opportunity Act ("ECOA" and implementing Regulation B), the Fair Credit Reporting Act (FCRA), and the Real Estate Settlement Procedures Act ("RESPA" and implementing Regulation X) to allow for online disclosures. Catherine Valentine, General Counsel of Intuit and Vice President of the Electronic Financial Services Council, noted that online disclosures have additional consumer benefits beyond speeding the transaction to the consumer. "Unlike today's complex and confusing paper documents, online disclosures can help consumers better understand the application process and the important consumer rights being disclosed to them. We have the benefits of using 'hyperlinks' to help define technical terms or direct consumers to official government Internet sites where additional information can be found," she said. |