FEC Updates Regulations to Address Technological Advances

FEC Updates Regulations to Address Technological Advances

On March 1, new rules from the Federal Election Commission (FEC) addressing technological advances in communications, recordkeeping, and financial transactions went into effect. These rule changes help clarify outdated terminology, and all those involved in managing political committees should review these changes and make certain they are capturing the information required by the FEC. 

Revised Definitions

The new rules provide new definitions for the terms “record,” “writing,” “signature,” and “file” as used in the regulations to address the use of electronic communications.

Record

The amended regulations:

• Broaden the definition “record” to encompass all “information that is inscribed on a tangible medium or that is stored in an electronic or other medium from which the information can be retrieved.”
• Require any person who provides an electronic record to the FEC to provide any equipment and software necessary to review the information in the record.
• Alter the requirement for political committees receiving contributions via check or written instrument that are designated for a particular election. Before, committees had to retain “a full-size photocopy” of the instrument. Now, must committees simply retain a record that contains a complete image of the instrument.

Writing

• The revised regulations define “writing” to mean “consisting of letters, words, numbers or their equivalent” in any form including “paper, email, or other electronic message, computer file, or digital storage device.”

Signature

The amended regulations:

• Clarify that signature requirements can generally be satisfied electronically. Accordingly, regulatory language defines “signature” as “an individual’s name or mark on a writing or record that identifies the individual and authenticates the writing or record,” and states that “signature” includes “electronic signature,” unless otherwise specified.
• Defines an electronic signature as “an electronic word, image, symbol, or process that an individual attaches to or associates with a writing or record to identify the individual and authenticate the writing or record.” Electronic signatures can, for instance, include “a digital image of a handwritten signature” or “a secure, digital code attached to an electronically transmitted message that uniquely identifies and authenticates the sender.”
• Provides that “a writing or record may be certified or verified under penalty of perjury by electronic signature. A writing or record may also be notarized electronically pursuant to applicable State law.”

File

The amended regulations:

• Give the FEC with more flexibility to accept documents electronically. They state that documents may be filed in person, by mail, “or by any alternative means, including electronic, that the Commission may prescribe.”
• Amend other requirements relating to communications by mail to allow for electronic communications.
• Permit electronic filing, notice, and service of documents and records in the Commission’s enforcement process.

Electronic Contributions

The new rules revise FEC regulations to address the use of electronic contributions.

When a Contribution is “Made”

• The revised regulations clarify that an electronic contribution “is considered to be made when the contributor authorizes the transaction.”

Forwarding Rules for Payment Processors

• The new regulations clarify that payment processors also satisfy FECA’s forwarding requirement within 10 or 30 days of receiving a contributor’s authorization of a contribution, even if the processor has not yet received the contributor’s funds. This is accomplished by transmitting funds and contributor information to the recipient political committee.

Depositing Contributions

The amended regulations:

• Provide that contributions deposited in a payment processor’s merchant account in the ordinary course of business are not “receipts” of the recipient political committee. Rather, they are contributions to be forwarded by the processor. Notably, if a political committee controls a merchant account, that account must still be reported as a campaign account.
• Require political committees to maintain a “record” of each contribution received that includes sufficient information associating that contribution with its deposit in the political committee’s campaign depository, such as a batch number. Similarly, the rules revise the regulations on bank documentation of deposits of publicly matched contributions to require that electronic deposits be accompanied by a batch number or equivalent information.

Updating references to contributions and disbursements by check

The amended regulations:

• Provide that campaigns and political committees may provide disbursements and refund contributions via electronic transfer.
• Require conduits and intermediaries to report earmarked contributions that are forwarded by electronic transfer.
• Allow contributors to make electronic payments representing both a contribution to a Separated & Segregated Fund (SSF) and a payment of dues or other fees. As is required for such payments via check, combined payments by credit card or electronic payment still have to be made from the contributor’s personal account.

Electronic contributions to publicly funded committees

The amended regulations:

• Permit participation the Funding Acts’ primary matching fund program via contributions by credit and debit card. However, such contributions may not be made over telephone.
• Remove the requirement for recipients to retain contributors’ debit and credit card numbers.
• Require committees to provide the FEC with a list of credit/debit card chargebacks (i.e. the equivalent of contribution checks that bounced).

Designation, redesignation, and attribution of contributions

• The regulations defining when contributions are “designated in writing” are revised to ensure that they apply uniform to electronic and non-electronic transactions.
• The regulation governing attribution of joint contributions is revised to allow for electronic payments, thus only requiring that the contribution be “indicated by the signature or each contributor in writing.”
• The regulations for matching funds are amended to address contributions made by credit and debit cards. Such contributions must be accompanied by a signed written statement indicating the amounts that were contributed from each individual’s personal funds.

The revised regulations include other updates to reflect technological advances and remove certain references to outmoded technologies. You can find the full FEC post here.