Internet Banking News

September 26, 1999

TEXAS BANKERS - Effective September 1, 1999, contracts made over the Internet with out-of-state parties are subject to Texas laws. Check with your legal council for the wording they would recommend, but I would suggest making the statement on any contract "That this contract is subject to the laws of Texas." even though the law will cover without the statement. You will find a copy of the new law at

INTERNET COMPLIANCE - Financial institutions that advertise deposit products and services on-line must verify that proper advertising disclosures are made in accordance with all provisions of 230.8. Institutions should note that the disclosure exemption for electronic media under 230.8(e) does not specifically address commercial messages made through an institution's web site or other on-line banking system. Accordingly, adherence to all of the advertising disclosure requirements of 230.8 is required.

Pursuant to 230.3(a), disclosures generally are required to be in writing and in a form that the consumer can keep. Until the regulation has been reviewed and changed, if necessary, to allow electronic delivery of disclosures, an institution that wishes to deliver disclosures electronically to consumers, would supplement electronic disclosures with paper disclosures.

FYI - Truth-in-savings requires that disclosures be delivered prior to an account being opened. If you are opening accounts and/or taking deposit applications, you should have a link to the bank's truth-in-savings disclosures. Even with the link, you should indicate that you will mail the proper disclosures when the deposit application is received by the bank.

INTERNET SECURITY - There is a book entitled "Intrusion Detection: An Introduction to Internet Surveillance, Correlation, Trace Back, Traps, and Response " by Edward Amoroso that should be required reading for Security Administrators. This book can be read by persons that do not have a computer background but want to obtain a basic knowledge of network and Internet security. Dr. Amoroso works for AT&T Laboratories. He covers many of the issues discussed in the FDIC Issues Paper on Information System Security Issues dated July 7, 1999.

WEB PAGES - Web pages are a form of advertisement of your bank's products. The web site provides information to attract new business and for current customers. I believe that web pages should be fast loading and to the point. I have read that within 20 seconds a visitor will move on to another site because the home page takes too long to load. So once the visitor has found your site, you do not want them leaving because they get bored waiting for the page to load.

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