We believe that Regulation X requires you to maintain evidence of escrow account analyses and escrow account statements for a minimum of two years.

Regulation X requires creditors to retain evidence of actions required to be performed and disclosures made for two years. As Regulation X requires escrow account analyses to be performed and escrow account statements to be disclosed upon establishing an escrow account and at completion of the escrow account computation year, we believe evidence of these analyses and disclosures should be retained for two years.

Note that Regulation X’s Official Interpretations state that you are required to retain only enough information to reconstruct required disclosures and records. Thus, copies of escrow account analyses and disclosed escrow account statements would not necessarily need to be retained under Regulation X’s record retention requirements, provided that you can accurately reproduce the items (for example, by using a computer program).

For resources related to our guidance, please see:

• Regulation X, 12 CFR 1026.25(a) (“A creditor shall retain evidence of compliance with this part (other than advertising requirements under §§ 1026.16 and 1026.24, and other than the requirements under § 1026.19(e) and (f)) for two years after the date disclosures are required to be made or action is required to be taken. The administrative agencies responsible for enforcing the regulation may require creditors under their jurisdictions to retain records for a longer period if necessary to carry out their enforcement responsibilities under section 108 of the Act.”)

• Regulation X Official Interpretations, Paragraph 25(a), Comment 1 (“The creditor must retain evidence that it performed the required actions as well as made the required disclosures. . . .”)

• Regulation X, 12 CFR 1024.17(f) (“For each escrow account, the servicer shall conduct an escrow account analysis to determine whether a surplus, shortage or deficiency exists.

(i) As noted in § 1024.17(c)(2) and (3), the servicer shall conduct an escrow account analysis upon establishing an escrow account and at completion of the escrow account computation year.

(ii) The servicer may conduct an escrow account analysis at other times during the escrow computation year. If a servicer advances funds in paying a disbursement, which is not the result of a borrower’s payment default under the underlying mortgage document, then the servicer shall conduct an escrow account analysis to determine the extent of the deficiency before seeking repayment of the funds from the borrower under this paragraph (f).”)

• Regulation X, 12 CFR 1024.17(g)(1) (“As noted in § 1024.17(c)(2), the servicer shall conduct an escrow account analysis before establishing an escrow account to determine the amount the borrower shall deposit into the escrow account, subject to the limitations of § 1024.17(c)(1)(i). After conducting the escrow account analysis for each escrow account, the servicer shall submit an initial escrow account statement to the borrower at settlement or within 45 calendar days of settlement for escrow accounts that are established as a condition of the loan.”)

• Regulation X, 12 CFR 1024.17(i) (“For each escrow account, a servicer shall submit an annual escrow account statement to the borrower within 30 days of the completion of the escrow account computation year. The servicer shall also submit to the borrower the previous year's projection or initial escrow account statement. The servicer shall conduct an escrow account analysis before submitting an annual escrow account statement to the borrower.”)

• Regulation X Official Interpretations, Paragraph 25(a), Comment 2 (“Adequate evidence of compliance does not necessarily mean actual paper copies of disclosure statements or other business records. The evidence may be retained by any method that reproduces records accurately (including computer programs). Unless otherwise required, the creditor need retain only enough information to reconstruct the required disclosures or other records. Thus, for example, the creditor need not retain each open-end periodic statement, so long as the specific information on each statement can be retrieved.”)