Removing Barriers Blog

Letter sent to National Conference of Commissioners of Uniform State Laws
Posted April 16, 2020 by CUNA Advocacy

Earlier this week, CUNA wrote to the National Conference of Commissioners of Uniform State Laws in regards to permitting electronic signatures on wire transfer documents.  This would allow credit unions to continue member service during the coronavirus disease (COVID-19) pandemic in a safe and sound manner.

Credit unions are committed to continuing to serve their members throughout the COVID-19 pandemic in a safe and sound manner that protects employees and members by complying with federal and state health and safety guidance. This has resulted in a technological shift away from in-person service of credit union members to electronic service as a result of stay-at-home orders and mandated social distancing.   

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.