AFSA Plans to Create Standards For Electronic Consumer Contracts
American Financial Services Association, a trade group for many of the nation's largest consumer credit companies, has announced plans to develop voluntary standards for the transmission, storage, service and certification of electronic contracts.
The group hopes to develop standards that will provide guidance to lenders for establishing secure and uniform electronic "links" between phases of a consumer credit transaction, said Randy Lively, the association's president and chief executive officer. These links will allow instant transmission of electronic contracts from points of origination (such as branch offices or dealerships) on to lenders, to investment bankers that prepare assets for securitization, and ultimately to investors in the public markets.
"The AFSA standards will embrace the excellent work already underway by various groups to create e-documents or automate certain processes within consumer credit transactions," said Mr. Lively. "Our intent is to allow seamless interaction among these advancements in technology, with full attribution to their developers."
Auto finance will be the first consumer finance sector for which the AFSA standards will be developed. It will serve as the "backbone" standard for overlay standards to be developed for all other industry segments, including mortgage and home equity credit, credit cards and personal loans.
A task force of e-commerce, marketing and legal executives from AFSA companies will work with the association to develop the standards, with the first components to be published early next year. The current timetable calls for a complete set of standards for the auto finance industry by the end of 2003.
According to Gabe Minton, vice president of industry technology for the American Bankers Association and head of the Mortgage Industry Standards Maintenance Organization, the standard will not compete with the work his organization has already completed.
"MISMO is really targeted at B2B, back-office transactions during the origination, secondary marketing and servicing of the mortgage. We can work together with consumer-based standards," Mr. Minton said.
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