Source: https://www.severson.com/consumer-finance/district-court-tenn-says-auto-finance-companys-pay-phone-complied-efta/
Timestamp: 2019-12-09 07:11:33
Document Index: 610131773

Matched Legal Cases: ['§ 7001', '§ 7001', '§ 7001', '§ 7001', '§ 1693', '§ 7001', '§ 7001']

District Court (Tenn.) Says Auto Finance Company's Pay-by-Phone Complied with EFTA | Severson & Werson
In Blatt v. Capital One Auto Finance, Inc., 2017 WL 660677, at *3–4 (M.D.Tenn., 2017), Judge Sharp granted summary judgment to an automobile finance company on a Plaintiff’s EFTA claim.
First, Blatt claims that his authorization over the phone does not equate to written authorization as contemplated in the EFTA. (Docket No. 38 at 4). Blatt acknowledges that the EFTA and the E–SIGN Act in conjunction allow written signatures to be obtained electronically. (Docket No. 38 at 5). Blatt has also stipulated to facts establishing that his May 6, 2014 phone call created an “electronic signature” under the E–SIGN Act. (Docket No. 32 at 2). Furthermore, a 2015 Compliance Bulletin issued by the Consumer Financial Protection Bureau (“CFPB”), the government agency in charge of implementing the EFTA, states that the EFTA “does not prohibit companies from obtaining signed, written authorizations from consumers over the phone if the E–Sign Act requirements for electronic records and signatures are met.” Requirements for Consumer Authorizations for Preauthorized Electronic Fund Transfers, CFPB Compliance Bulletin 2015–06, 11232015, 2015 WL 10372389. Corresponding to this agency interpretation of the EFTA, the legislative history of the E–SIGN Act shows that it was enacted with phone systems in mind: “Today, a system that creates a digital file by means of the use of voice, as opposed to a keyboard, mouse or similar device, is capable of creating an electronic record, despite the fact that it began its existence as an oral communication.” Regulation E Electronic Signatures in Global and National Commerce Act–Conference Report–Resumed, 146 Cong. Rec. S. 5281, 5284. Nonetheless, Blatt argues that COAF failed to comply with a different portion of the E–SIGN Act, § 7001(c), concerning consumer disclosures. Blatt believes that because COAF did not comply with the entire E–SIGN Act, then his electronic signature is invalid for purposes of the EFTA. (Docket No. 38 at 4–5).Under a plain reading of § 7001(c), the E–SIGN Act section in question, COAF is not required to make the consumer disclosures as Blatt argues. Section 7001(c) states that “if a statute … requires that information relating to a transaction… be provided or made available to a consumer in writing, the use of an electronic record to provide or make available … such information satisfies the requirement that such information be in writing” if COAF provides the consumer with certain disclosures. 15 U.S.C. § 7001(c)(1). This section does not apply to Blatt’s situation, however, because COAF did not provide any information in electronic form. COAF obtained Blatt’s signature electronically and then provided a copy of that authorization to Blatt in paper form. If COAF had chosen to provide Blatt with a copy of his authorization in the form of an electronic record, it may have been required to comply with this section’s consumer disclosure requirements, but that is not the situation in front of the Court.Blatt attempts to explain around this reading with a number of conclusory statements. For example, Blatt claims that “§ 7001(c) is the only subsection [of the E–SIGN Act] logically associated with § 1693e(a) of the EFTA, because it deals with the provision of information to consumers.” (Docket No. 38 at 6). Blatt’s assertion that § 7001(c) is the only subsection of the E–SIGN Act to apply to Blatt’s EFTA claim is unsurprising, seeing as he has already stipulated to facts definitively establishing that his May 6, 2014 phone call created an “electronic signature” and “electronic record” in compliance with the E–SIGN Act. (Docket No. 32 at 2). *4 Because § 7001(c) of the E–SIGN Act does not apply to Blatt’s situation, and the parties have stipulated to facts establishing that Blatt’s May 6, 2014 phone call created an electronic signature in accordance with the applicable portions of the E–SIGN Act, the Court finds that COAF met the written authorization requirement as contemplated in the EFTA.