The electronic approach to motor vehicle financing: an emerging road map

INTRODUCTION

Although Internet technology is transforming the ways consumers shop, select, and negotiate their purchase or lease of motor vehicles, the electronic financing of motor vehicles is yet to be conducted on a wide-scale basis. In October 2001, Zions Bank in Salt Lake City, Utah claimed to have completed the first automobile purchase and financing entirely on-line. (1) A promissory note in this transaction was signed electronically by the borrower using iLumin’s Digital Handshake technology. (2) But the start has been slower than some expected.

The relatively slow acceptance of electronic delivery of automotive financing can be attributed to a number of factors, including the lack of electronic signature capability at the point of contract origination and the lack of clear guidance under federal and state law. This Article will identify the advantages and disadvantages of electronically documenting the major types of auto finance products and will explain how federal and state laws may ultimately impact this process. (3)

FINANCE PRODUCTS

As a starting point in the electronic delivery of automotive finance products, finance companies must weigh the relative advantages of offering consumer loans, (4) credit sales, (5) and leases (6) of motor vehicles. In evaluating which finance product will be best suited for the electronic process, three key factors must be analyzed: (i) the complexity of the disclosure document

CONSUMER LOANS

With respect to a consumer loan, the disclosure document may be viewed as the least complex alternative compared to credit sale and lease documents for a variety of reasons. First, the consumer loan is a two-party transaction (i.e., borrower and lender), and will likely be evidenced by a promissory note executed only by the borrower. (10) There will typically be no subsequent assignment by an originating motor vehicle dealer to a lender. (11) Second, state consumer loan disclosures are generally not as comprehensive as state motor vehicle retail installment sales disclosure laws in connection with such things as the itemization of amount financed, fee limitations, insurance issues, and notices to the borrower. (12) Third, and perhaps most important, if the lender is able to export interest rates from its home state or a host state, (13) it is possible to structure one multistate promissory note to cover all fifty states. (14) A lender who only has to produce one document electronically may have a great administrative advantage over a lender who has to produce fifty different sets of documents.

Assuming a lender uses a national bank, state-chartered bank, or federally chartered savings bank as the lending platform, it will be able to “export” interest rate limits from its home state or a host state. (15) The option of exporting interest limits should provide the lender with flexibility in choosing a state where interest rates are not subject to low ceilings. (16) If a lender uses a non-bank lending platform, however, the interest rate limits of the state usury and consumer loan laws of the borrower’s state may apply. (17)

From a licensing standpoint, the consumer loan approach may be very advantageous for banks because such entities will likely be exempt from consumer loan licenses in most jurisdictions. (18) This exemption should extend to promissory notes delivered electronically. For non-bank lenders, consumer loan licensing requirements will be significant in a number of jurisdictions. (19) If a non-bank lender attempts to transform itself into a bank or purchase a bank charter, the process will probably involve at least one year of regulatory review. (20)

CREDIT SALES

Credit sales documents may offer the most complex challenge in establishing electronic financing. Because most states regulate the retail installment sale of motor vehicles, individual credit sale forms are needed on a state-by-state basis. (21) Furthermore, the scope of the disclosures under these laws tends to be more comprehensive than those for both consumer loans and leases. (22) As state laws emerge that address the substantive requirements of electronic credit sale documents, there is a strong likelihood that they will pattern themselves on the requirements for paper disclosures.

The range of interest rates chargeable in the context of credit sales should not deter creditors. With the exception of Arkansas, most states will allow interest rates at flexible levels, (23) with even greater flexibility afforded to the credit sale financing of used motor vehicles. (24) Nevertheless, creditors will have to administer, program, and monitor a more extensive set of interest rate limits (25) for electronic credit sale documents compared to consumer loans. The licensing requirements will once again depend on the form of the lending platform. For bank lenders, sales finance licenses will generally not be required, (26) while for non-bank lenders sales finance licenses will be required in a majority of states. (27) Whether the credit sale product is delivered electronically will not alter the licensing requirements.

CONSUMER LEASES

Consumer lease documents will be more complex than promissory notes evidencing consumer loans, but less complex than credit sales. Like credit sales, consumer leasing will be subject to state-specific disclosure laws but only in a limited number of states. (28) Accordingly, a multistate electronic lease document can be used. Interest rates technically do not apply to consumer leases, and accordingly the lease product may offer a greater range of flexibility than its consumer loan or credit sale counterparts. (29) Motor vehicle lessor licenses will be required in at least thirteen states and will apply to both bank and non-bank lenders. (30) No licensing distinction exists for electronic versus non-electronic lease transactions.

APPLICATION OF ESIGN, UETA, AND FEDERAL AND STATE DISCLOSURE LAWS

INTERRELATIONSHIP AMONG THE LAWS

Once a creditor has determined the automotive finance products it will offer, it must ascertain how to convert the required documentation into electronic form. Currently, consumer loans, consumer credit sales, and consumer leases are evidenced by multi-part paper forms executed by the creditor and consumer. While substantive law such as the Truth in Lending Act (TILA) (31) dictates the form, timing, and content of the documentation, (32) the federal Electronic Signatures in Global and National Commerce Act (ESIGN) (33) and its state law counterpart, the Uniform Electronic Transactions Act (UETA),(34) allow the parties to take advantage of modern technology and conduct business electronically, by giving legal validity and enforceability to contracts formed, evidenced, and executed in electronic form. (35) UETA has been enacted in thirty-seven jurisdictions as of this writing. (36) Both ESIGN and UETA attempt to provide flexible ground rules for the creation and management of electronic transactions, while neither affects the substantive law regulating motor vehicle financing. (37)

ESIGN specifically allows state law to modify, limit, or supercede certain provisions of ESIGN if certain conditions are met. (38) It is clear from the text of ESIGN that if a state adopts the uniform version of UETA as recommended by the National Conference of Commissioners on Uniform State Laws, (39) UETA would be the controlling law, at least for state law issues. (40) ESIGN also provides a test to determine if ESIGN will preempt the enactment of a non-uniform provision of UETA or other state law governing electronic transactions. (41) The test basically analyzes whether the non-uniform provision of UETA or other state law is inconsistent with ESIGN and if so it is preempted. (42) Finally, in addition to these issues under ESIGN and UETA, a creditor must also determine if the traditional federal disclosure laws such as Regulations B, M, and Z (43) affect the proposed electronic transactions, and must also consider the impact of traditional state disclosure laws such as motor vehicle retail installment sale acts, consumer leasing statutes, and consumer loan laws. Generally, even in a UETA state, ESIGN will apply to most federal law requirements including federally required consumer disclosures.

The interrelationship between ESIGN and UETA and the interrelationship between these statutes and other federal and state laws must be carefully explored. The following four-step analysis should be undertaken to delineate the timing, form, execution, and delivery of electronic disclosures:

(i) Does ESIGN address these issues?

(ii) If the UETA has been adopted in a state, does that UETA preempt all or part of ESIGN and does the UETA address these issues?

(iii) Do Regulations B, M, and Z and traditional state disclosure laws address these issues? Are they governed by UETA or ESIGN?

(iv) Are there any unique state laws?

TIMING OF DISCLOSURES

If ESIGN is the governing statute, one critical timing issue arises. Under ESIGN, a creditor must obtain the consumer’s consent to electronic disclosure prior to delivery of any such disclosure. (44) The core of the consent process is to ensure that the consumer desires to transact electronically, has the ability to transact electronically, and is aware of the scope and terms of transacting electronically. (45) Before transacting electronically, the consumer must: (i) be provided with a statement of the hardware and software needed to access and retain the electronic records

UETA stipulates that if other law designates specific timing requirements for disclosures, the electronic disclosures must comply with those requirements. (49) UETA also does not provide any guidance on compliance with timing issues under federal and state substantive law. In addition, UETA does not contain a specific consent procedure analogous to ESIGN. UETA only requires that the parties “agree” to conduct the transaction electronically. (50) According to the UETA, “[w]hether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct …,” (51) which can include an oral agreement, unlike ESIGN. Under UETA, the consumer also does not have to prove his or her ability to transact business electronically. (52) If state law also requires consumer contracts to include the disclosures required under the TILA, however, a creditor may still have to comply with the ESIGN section 101(c) consent and disclosure provisions in order to deliver the disclosures electronically. (53)

Finally, traditional federal and state disclosure laws must be examined in the context of the timing of electronic disclosures. In March and April of 2001, the Board of Governors of the Federal Reserve Board (FRB) published interim final rules (Interim Rules) governing electronic disclosures under federal consumer protection regulations, (54) but lifted the October 1, 2001 mandatory compliance date in August 2001. (55) Even though the FRB lifted the mandatory compliance date, it stated that creditors may continue to use their existing policies and procedures or they may follow the Interim Rules regarding disclosures under federal consumer protection regulations. (56) Regulations B, M, and Z require that certain disclosures must be given to consumers in a form that they may keep before the transaction is consummated or the credit application is submitted. (57) The Interim Rules allow a creditor to send the required disclosures to the consumer’s electronic address (e-mail account) or post such information at another location, such as an Internet site, with some restrictions. (58) The FRB Official Staff Commentary explains that if a creditor allows a consumer to complete a transaction or submit a credit application on-line, then the consumer must have access to the disclosures before the transaction is consummated or the application is submitted. (59) “A link to the disclosures satisfies the timing rule if the consumer cannot bypass the disclosures before becoming obligated.” (60) Unfortunately, no state motor vehicle retail installment sales act, consumer loan act, or consumer lease statute has addressed the issue of electronically complying with its timing requirements.

FORM OF DISCLOSURES

Neither ESIGN nor UETA provides any practical instruction on compliance with federal or state requirements regarding the form of required disclosures. ESIGN stresses that it does not affect the form of any disclosure required by any statute, regulation, or other rule of law. (61) UETA mandates that if information must be displayed, posted, sent, communicated, or formatted in a specific manner by other law, then the electronic information must comply with these requirements. (62) Therefore, by the plain language of the UETA, if a creditor cannot reproduce the required information in the specific manner mandated by the relevant substantive law, then the transaction presumably cannot be conducted electronically. (63)

The last avenue where creditors can seek guidance on the form of disclosures is federal and state substantive law. First, the FRB Interim Rules for Regulations B, M, and Z reinforce that electronic disclosure must comply with the clear and conspicuous requirements of the respective regulations. (64) For example, as applied to the “federal box” of Regulation Z, creditors should not have a difficult time formatting the electronic disclosures as they would on paper. (65) Similarly, the Interim Rules under Regulations B and Z allow creditors to transmit the required disclosures electronically in foreign languages if an English version is available upon request. (66) Second, creditors must also understand that Regulations B, M, and Z require certain disclosures be made to the consumer in writing before the consumer becomes obligated or submits the credit application, “in a form that the consumer may keep.” (67) The Interim Rules and FRB Official Staff Commentary provide that creditors can meet the requirement that the disclosures are in a form the consumer can keep if the electronic disclosures are capable of being printed or electronically retained by the consumer. (68)

Unlike the FRB Interim Rules and the FRB Official Staff Commentary, the related state consumer loan, consumer credit sale, and consumer lease statutes generally provide no guidance for electronically complying with state substantive law requirements. Even though federal laws provide the basic disclosure framework, state statutes extensively add to this framework. Most of the state substantive law issues should not create major formatting problems for electronic transactions. (69) Such issues include: type, type size, color, location and size of consumer notices, waiver provisions, liability insurance notices, acknowledgments of contract receipt, vehicle descriptive information, disclosure sequences for the itemization of amount financed, plain language requirements, foreign language translations, and notices to co-signers. UETA is designed to facilitate resolution of such issues. Formatting uncertainties will undoubtedly arise, however, especially in those states that require consumer transactions to be contained in a “single document.” (70) What constitutes a single document on a computer screen? How would the creditor provide a “single document” electronically? Does a computer diskette, word processing file, or a continuous computer screen comprise a single document? ESIGN, UETA, and state law generally leave these questions unresolved.

EXECUTION AND DELIVERY

Neither ESIGN nor UETA gives any clear guidance on the acceptable way to execute an electronic transaction. ESIGN’s and UETA’s definition of “electronic signature” broadly encompasses and validates almost any means of “signing” an electronic transaction, subject to evidentiary constraints. (71) Both laws provide that, if a statute or regulation requires an authenticated writing, i.e., a signature, the electronic record evidencing such authentication must be retained and subject to reproduction. (72) UETA, unlike ESIGN, includes an attribution provision, which provides for a fact-based test to determine whether an electronic record or electronic signature is attributable to a person. (73) Both statutes refer questions such as agency, forgery, and capacity regarding execution to traditional substantive law. (74)

ESIGN does not offer instruction on when an electronic record is delivered or “sent.” Thus, it is not clear under ESIGN when a disclosure is actually made. Does sending an e-mail constitute delivery? Does the consumer have to read the e-mail to qualify as a delivery? UETA does, however, address the delivery issue. An electronic record is deemed “sent” if it is properly addressed to a designated information processing system in a form capable of being processed by that system and enters the system outside the control of the sender. (75) Therefore, under UETA, if a creditor sends information to the consumer via e-mail, the information would appear to be “sent” when the creditor clicks the send button on its e-mail application. Given that every state consumer loan, consumer lease, and consumer credit sale statute requires the creditor to provide the consumer with an executed copy of the consumer contract, (76) how a creditor complies with the delivery requirement is essential. Creditors who fail to provide an executed copy of the consumer contract can end up holding a voidable or unenforceable contract.

Definitive guidance offered through traditional federal and state laws in connection with the execution and delivery of electronic documents is far from complete. The FRB Interim Rules do not address the issue of execution. The Interim Rules for Regulations B and Z only adopt ESIGN’s definition of electronic signature. (77) The Federal Trade Commission (FTC) opined on the execution issue in relation to the Fair Credit Reporting Act (FCRA) (78) and ESIGN. (79) In this opinion letter, the FTC examined whether a “mouse-click” would satisfy the FCRA’s written authorization requirement for the release of a consumer report. (80) The FTC (looking to ESIGN) stated that a “mouse-click” could meet the FCRA requirement if it could be retained and reproduced. (81) Presumably this logic could be extended to apply to mouse-click authorization by a borrower, buyer, or lessee electronically executing a finance document. The FRB Official Staff Commentary did, however, answer the question of delivery in the context of finance products. Disclosures provided by e-mail are effective based upon when they are sent by the creditor. (82) Further, creditors have no obligation to verify that the consumer has received or read the e-mail disclosure. (83) Only if the e-mail is returned to the creditor undelivered does the creditor have an obligation to redeliver the disclosures. (84) State substantive law does not provide any guidance on how a creditor electronically executes and delivers consumer disclosures.

SPECIAL RESTRICTIONS UNDER STATE LAW

As of this writing, one state, Arizona, prohibits a manufacturer or its captive finance subsidiary from providing direct financing to consumers. (85) Many states prohibit the manufacturer from owning dealerships and directly competing against franchisees, but only Arizona also bars direct financing. (86) The Alliance of Automobile Manufacturers and the Association of International Automobile Manufacturers filed suit against the state of Arizona claiming that the Arizona statute violates their constitutional rights. (87) The U.S. District Court for the District of Arizona denied the plaintiffs’ application for a preliminary injunction. (88) The plaintiffs applied for a reconsideration of the denial of the preliminary injunction, which was denied again by the district court. (89) Both denials were appealed to the U.S. Court of Appeals for the Ninth Circuit, which entered a stay as to one portion of the statute dealing with wholesale pricing of vehicles from manufacturers to Arizona motor vehicle dealers. (90) The financing aspects of the statute were not addressed. Therefore, pending the final adjudication of this matter, captive finance companies may not offer direct loans to consumers in Arizona, either electronically or in paper form.

CONCLUSION

Creditors will need to review the complexity of the documentation requirements, consider the flexibility of interest rates under various scenarios, and contemplate the burdens of state licensing laws when selecting an optimal platform for electronic financing of motor vehicles. Consumer loans will most likely be the easiest of these transactions to document and administer electronically, especially if the loans are originated by a national bank, state-chartered bank, or federally chartered savings bank. Credit sales transactions may be regarded as the most difficult to document and administer, while consumer leases fall within a middle ground. Once the appropriate finance product is selected, the creditor must examine the relevant ESIGN and UETA provisions, traditional federal and state disclosure laws, and any special state restrictions. The bulk of the substantive guidance in this area arises from the ESIGN consumer consent provisions, the ESIGN and UETA signature provisions, the FRB Interim Rules, and the FRB Official Staff Commentary to Regulations B, M, and Z. As the contours of this regulatory road map continue to emerge, an increasing number of creditors will be able to drive their motor vehicle financing transactions on an electronic path.

(1.) Totally Online Auto Purchase an E-Sign of the Times (Oct. 3, 2000), at www.bank technews.com/fso/newswire/100300_7.shtml.

(2.) Id.

(3.) This Article will focus on the major auto finance products offered to consumers by banks and finance companies and how these products will be documented. Documents supporting the transaction such as credit applications, guaranties, refinancing agreements, privacy notices, insurance agreements, collection, and repossession notices will not be addressed. See generally Kenneth J. Rojc & Elena A. Lovoy, Motor Vehicle Financing Via the Internet, 56 BUS. LAW. 1127 (2001).

(4.) Consumer loans include those subject to the Truth in Lending Act (TILA), 15 U.S.C. [subsection] 1601-1666j (2000), as well as those subject to installment loan, consumer loan, and small loan statutes under state law.

(5.) Consumer credit sales include those subject to TILA, 12 C.F.R. [section] 226.2(a)(16) (2000), 15 U.S.C. [section] 1603(3), as well as those subject to motor vehicle retail installment sale statutes under state law.

(6.) Consumer leases include those subject to the Consumer Leasing Act (CLA), 15 U.S.C. [subsection] 1667-1667e (2000), as well as those subject to consumer motor vehicle leasing statutes under state law.

(7.) Complexity of disclosure documents will involve several factors such as: (i) whether a unique form is needed in every state

(8.) Interest rates are only applicable to consumer loans and consumer credit sales. The rent charge component of a consumer lease is a financing element similar to, but not the same as, interest.

(9.) State licenses may be required to extend consumer loans and to purchase consumer credit sale contracts and lease contracts.

(10.) Promissory notes could be executed by both the borrower and lender, or in certain cases, executed by the borrower and acknowledged by the lender.

(11.) The originating dealer will not execute the promissory note because it is not extending the consumer loan and its role will ordinarily be limited to selling the vehicle to the consumer. The vehicle sale transaction between the dealer and the vehicle buyer (borrower) will be evidenced by a bill of sale.

(12.) Compare Illinois Consumer Installment Loan Act, 205 ILL. COMP. STAT. ANN. 670/1-670/27 (West 1999 & Supp. 2001), with Illinois Motor Vehicle Retail Installment Sales Act, 815 ILL. COMP. STAT. ANN. 375/1-375/26 (West 1993 & Supp. 2001).

(13.) 12 U.S.C. [section] 85 (2000)

(14.) Based upon the limited number of state law disclosure requirements in consumer loan laws, installment loan laws, and small loan laws, one multistate promissory note could incorporate unique state law disclosures, which are required beyond the standard TILA disclosures.

(15.) The “home state” of a national bank is where the bank has its main office. The “host state” is any state where the bank maintains a branch. See OCC Interpretive Ltr., supra note 13.

(16.) Id. The national bank lender still must choose between home state and host state.

(17.) Non-bank finance companies will be subject to individual state interest rate ceilings as generally no exemption from these ceilings is applicable.

(18.) For example, national and state-chartered banks are exempt from Arizona’s consumer lender licensing requirements. ARIZ. REV. STAT. ANN. [section] 6-602 (West 1999 & Supp. 2001).

(19.) Under state laws, independent finance companies and captive finance companies generally do not qualify for statutory exemptions from loan and credit sale licensing requirements. Similarly, non-bank finance companies may not always be able to piggyback off the bank exemptions.

(20.) As an example of the timing issue under state law, to obtain a Wisconsin state bank charter, it would normally take between six months to a year. Telephone Interview with Ann Collins, Applications Manager, Wisconsin Department of Financial Institutions (Nov. 6, 2001). With respect to a national bank charter, the license process would take approximately one year. Telephone Interview with Christopher G. Sablich, Senior Attorney, Office of the Comptroller of the Currency (Nov. 6, 2001).

(21.) See FLA. STAT. ANN. [subsection] 520.01-.013 (West 1997 & Supp. 2002)

(22.) Compare 815 ILL. COMP. STAT, ANN. 375/1-375/26 (West 1999 & Supp. 2001), with 815 ILL. COMP. STAT. ANN. 636/1-636/95 (West 1999 & Supp. 2001).

(23.) The maximum rate of finance charge permitted in Arkansas is governed by the Arkansas Constitution. ARK. CODE ANN. [section] 4-57-104 (Michie 2001). The Arkansas Constitution provides that the maximum lawful rate of interest on any contract shall not be more than five percent above the federal discount rate at the time of the contract, provided that the amount does not exceed seventeen percent on consumer contracts. ARK. CONST. art. XIX, [section] 13. Generally, the interest rate maxima range for consumer credit sales is between sixteen and twenty-five percent. See supra note 21.

(24.) See FLA. STAT. ANN. [section] 520.08(1)(c) (West 1997 & Supp. 2002)

(25.) Compare the ability to export interest rates for consumer loans in note 13 to the majority of states with motor vehicle retail installment sale acts with varying interest rate limitations. See supra notes 23-24.

(26.) See supra note 18

(27.) As of October 2001, there are approximately thirty-five states where a sales finance company license, a sales finance agency license, or a motor vehicle sales finance company license would be required.

(28.) As of October 2001, Arkansas, Connecticut, California, Hawaii, Illinois, Maryland, New Hampshire, New Jersey, New York, and Wisconsin had adopted comprehensive disclosure requirements for consumer lease contracts. Other states such as Colorado, Florida, Indiana, Iowa, Maine, Michigan, Oklahoma, Washington, and West Virginia addressed consumer lease disclosures in a very limited context.

(29.) In the context of a consumer lease, the rent charge represents the difference between the total of the base periodic payments over the lease term minus the depreciation and any amortized amounts. 12 C.F.R. [section] 213.4(f)(6) (2001). While rent charge is not technically interest, it represents the finance component of consumer leases.

(30.) These states include: Connecticut (motor vehicle lessor), CONN. GEN. STAT. ANN. [section] 14-15 (West 1999 & Supp. 2001)

(31.) 15 U.S.C. [subsection] 1601-1666j (2000).

(32.) TILA, 15 U.S.C. [section] 1604 (2000)

(33.) Electronic Signatures in Global and National Commerce Act (ESIGN), 15 U.S.C. [subsection] 7001-7031 (2000).

(34.) UNIF. ELECTRONIC TRANSACTIONS ACT (UETA), 7A pt. 1 U.L.A. 21 (Supp. 2001).

(35.) ESIGN, 15 U.S.C. [section] 7001(a)

(36.) As of November 2001, the following jurisdictions had adopted UETA: Alabama, Arizona, Arkansas, California, Delaware, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, Noah Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.

(37.) ESIGN, 15 U.S.C. [section] 7001(b)

(38.) ESIGN, 15 U.S.C. [section] 7002.

(39.) UETA, 7A pt. 1 U.L.A. 21.

(40.) ESIGN, 15 U.S.C. [section] 7002(a)(1).

(41.) Id. [section] 7002(a)(2)(A).

(42.) Id. See Jane K. Winn & Robert A. Wittie, E-sign of the Times, E-COMMERCE LAW REPORT 2 (July 2000)

(43.) See TILA, 15 U.S.C. [section] 1604 (2000)

(44.) ESIGN, 15 U.S.C. [section] 7001(c)

(45.) Id.

(46.) Id.

(47.) Id. [section] 7001(c)(6).

(48.) Id. [section] 7001(c)(2).

(49.) Id. [section] 7001(a)

(50.) UETA [subsection] 5, 8, 7A pt. 1 U.L.A. 40, 45.

(51.) Id. [section] 5, 7A pt. 1 U.L.A. 40.

(52.) Id. [section] 8, 7A pt. 1 U.L.A. 45.

(53.) 15 U.S.C. [section] 1693q (2000)

(54.) Truth in Lending, 66 Fed. Reg. 17,329, 17,330 (Mar. 30, 2001) (to be codified at 12 C.F.R. pt. 226)

(55.) Truth in Lending, 66 Fed. Reg. 41,439, 41,440 (Aug. 8, 2001) (to be codified at 12 C.F.R. pts. 202, 205, 213, 226, 230).

(56.) Id.

(57.) Regulation Z, 12 C.F.R. [section] 226.18 (2001)

(58.) Truth in Lending, 66 Fed. Reg. at 41,440.

(59.) Truth in Lending, 66 Fed. Reg. at 17,341.

(60.) Id.

(61.) ESIGN, 15 U.S.C. [section] 7001(c)(2), (f)(2000).

(62.) UETA [section] 8, 7A pt. 1 U.L.A. 45 (Supp. 2001).

(63.) Id.

(64.) See Truth in Lending, 66 Fed. Reg. 41,439, 41,440 (Aug. 8, 2001).

(65.) Regulation Z, 12 C.F.R. [subsection] 226.17-.18 (2001).

(66.) Truth in Lending, 66 Fed. Reg. 17,329, 17,339 (Mar. 30, 2001) (to be codified at 12 C.F.R. pt. 226)

(67.) Regulation Z, 12 C.F.R. [section] 226.17 (emphasis added).

(68.) See supra note 54.

(69.) These issues are technical in nature and are beyond the scope of this Article. Experts in the field of computer programming are the best suited to determine if and how a particular disclosure can be accurately reproduced in electronic form as it would appear on a paper document.

(70.) See CAL. CIV. CODE [section] 2981.9 (West 1999 & Supp. 2002)

(71.) ESIGN, 15 U.S.C. [section] 7006(5) (2000)

(72.) ESIGN, 15 U.S.C. [section] 7001(e)

(73.) UETA [section] 9, 7A pt. 1 U.L.A. 47.

(74.) ESIGN, 15 U.S.C. [subsection] 7001(b)(1), 7002(a)

(75.) UETA [section] 15, 7A pt. 1 U.L.A. 55.

(76.) CAL. CIV. CODE [section] 2981.9 (West 1999 & Supp. 2002)

(77.) Truth in Lending, 66 Fed. Reg. 17,329, 17,339 (Mar. 30, 2001)

(78.) Fair Credit Reporting Act (FCRA), 15 U.S.C. [section] 1681 (2000).

(79.) FTC Staff Op. Ltr., from Clarke W. Brinckerhoff, Division of Financial Practices, to Walter Zalenski, Weil, Gotshal & Manges (May 24, 2001), available at www.ftc.gov/os/statutes/fcra/ zalenski.htm (non-binding advisory staff opinion) [hereinafter Zalenski Letter].

(80.) FCRA, 15 U.S.C. [section] 1681b(a)(2).

(a) In general Subject to subsection (c) of this section, any consumer

reporting agency may furnish a consumer report under the following

circumstances and no other:

(2) In accordance with the written instructions of the consumer to whom it

relates.

Id.

(81.) See Zalenski Letter, supra note 79.

(82.) Truth in Lending, 66 Fed. Reg. at 17,341.

(83.) Id.

(84.) Id. at 17,339.

(85.) ARIZ. REV. STAT. ANN. [section] 28-4460 (West 1999 & Supp. 2001).

(86.) Id.

(87.) Alliance of Auto. Mfrs. v. Hull, 137 F. Supp. 2d 1165, 1168 (D. Ariz. 2001).

(88.) Id. at 1177.

(89.) Telephone Interview with Daniel Joseph McAuliffe, partner, Snell & Wilmer, LLP (Oct. 22, 2001).

(90.) Id.

Kenneth J. Rojc and Gregory Eidukas *

* Kenneth J. Rojc is a partner with the law firm of Nisen & Elliott and manages the firm’s automotive financial services legal practice in Chicago, Illinois. Mr. Rojc has been extensively involved with federal and state regulators in connection with consumer lease and credit sale disclosure laws. He is a member of the Illinois Bar and the ABA Section of Business Law. Gregory Eidukas is an associate with Nisen & Elliott and concentrates his practice in automotive financial services. Mr. Eidukas is a member of the Illinois and New York bars.