Use of eSignatures for wire transfers needed for safe, sound CU operations

April 15, 2020

Permitting electronic signatures on wire transfer documents would allow credit unions to continue member service during the coronavirus disease (COVID-19) pandemic in a safe and sound manner, CUNA wrote to the National Conference of Commissioners of Uniform State Laws Tuesday. As credit unions have shifted to more electronic and distance services, members have been unable to provide a live signature for wire transfer requests if one was not previously on file.

“Because the wire transfer, in most cases, is needed almost immediately, there is not sufficient time to transmit a signed form through the mail. The Uniform Commercial Code Article 4A for fund transfers does not permit electronic signatures on wire transfer agreements and/or wire transfer request forms,” the letter reads. “Furthermore, the federal ESign Act and state Uniform Electronic Transactions Act laws do not apply to UCC Article 4A. Thus, credit unions are left with several poor options: an inability to serve their members or taking on the liability in the case of incorrect wiring instructions.”

The Uniform Commercial Code has been modified by many states to allow electronic signatures for certain secured transactions and stop payment requests, replacing the terms “sign” with “authenticate,” or “writing” with “record.”

“We ask that a similar modification be made to the terminology of Article 4A to allow some flexibility for credit unions to continue supporting members with wire requests where a live signature cannot be obtained,” the letter reads.