We do not recommend using a one general timeframe for all types of closed files.

Record retention requirements vary widely depending on many factors, including the type of document, when the document was created, why the document was created or collected, and any number of other criteria. Some documents, such as certain trust or custodial documents, check guarantees, corporate minutes, and bank stock and security records, may be required to be retained permanently.

In our view, attempting to provide one time period for all documents associated with closed files may result in greater work for the bank — particularly because you will end up retaining and storing unnecessary documents. With that in mind, the following are some record retention guidelines for certain documents associated with closed files:

• Loan Agreements.  We are not aware of any Illinois laws requiring you to retain these documents, but the statute of limitations for written contracts in Illinois is ten years. Consequently, we recommend retaining any loan agreements for ten years after the loan is paid off. This retention period also should apply to any documents that may be relevant in a dispute over the loan agreement.

• DDA Account Documents. FinCEN’s Bank Secrecy Act rules require banks to retain any identifying information required by their Customer Identification Program (CIP) for five years after the account is closed or becomes dormant. We recommend retaining other documents related to the account for this same time period.

• Loan Denials. Regulation B requires lenders to retain consumer loan applications for 25 months and business loan applications for 12 months after the lender notifies the applicant of the denial. This requirement also applies to documents used in evaluating loan applications, copies of any denial notice sent to the customer, and any written statement submitted by the applicant alleging a violation of ECOA.

For even more information about record retention policies, please visit our Record Retention Topic Page and our Record Retention Resources Page on GoToIBA.com.

For resources related to our guidance, please see:

• Illinois Code of Civil Procedure, 735 ILCS 5/13-206 (“Except as provided in Section 2-725 of the ‘Uniform Commercial Code’, actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing and actions brought under the Illinois Wage Payment and Collection Act shall be commenced within 10 years next after the cause of action accrued . . . .”)

• FinCEN Regulations, 31 CFR 1020.220(a)(3)(ii) (“The bank must retain the information in paragraph (a)(3)(i)(A) of this section for five years after the date the account is closed or, in the case of credit card accounts, five years after the account is closed or becomes dormant. The bank must retain the information in paragraphs (a)(3)(i)(B), (C), and (D) of this section for five years after the record is made.”)

• Regulation B, 12 CFR 1002.12(b)(1) (“For 25 months (12 months for business credit, except as provided in paragraph (b)(5) of this section) after the date that a creditor notifies an applicant of action taken on an application or of incompleteness, the creditor shall retain in original form or a copy thereof: Any application that it receives, any information required to be obtained concerning characteristics of the applicant to monitor compliance with the Act and this part or other similar law, and any other written or recorded information used in evaluating the application and not returned to the applicant at the applicant's request; A copy of the following documents if furnished to the applicant in written form (or, if furnished orally, any notation or memorandum made by the creditor): The notification of action taken; and The statement of specific reasons for adverse action; and Any written statement submitted by the applicant alleging a violation of the Act or this part.”)

• Record Retention Topic Page

• Record Retention Resources Page