Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021. Please note that this change may affect the continued accuracy of this guidance as it pertains to the ECSA.

We are unaware of any law or regulation that sets a required retention period for trust account statements. However, the OCC has a more general rule for the recordkeeping of “fiduciary accounts” that requires “adequate records” that “are separate and distinct from other records of the bank” to be retained for three years after the termination of the trust account or litigation related to the account (if any), whichever is later. Generally, other paper or electronic records maintained by a trust department that cover the same information as these statements should constitute “adequate records” for this rule.  (We do note that you are a state bank and your primary federal regulator is the FDIC, which has not adopted a similar requirement, but we believe that the OCC rule provides helpful guidance in this regard.) 

However, since your bank does not maintain other records with the specific transaction and other information found in the periodic statements, the question for your bank becomes whether this information in the monthly statements would constitute part of what your customers, regulators and the courts (pick one) might expect with regard to your maintaining “adequate records.”  A strong argument could be made that any time the trust or a trust beneficiary (or a government agency or counterparty in litigation) needs transactional information relating to the trust, there will be an expectation that this information can be obtained from your trust department’s “adequate records” maintained for that trust.

For example, the Internal Revenue Service has three statute of limitations for tax audits: three years, six years, and indefinitely (the last being for willful tax evasion or the absence of tax filings). The Securities and Exchange Act of 1934 and the SEC’s Rule 10b-5 have a statute of limitations of two years after a fraud is discovered (up to five years after the fraud occurred). These are just some examples of timeframes for which your customers might have reasonable expectations that your trust department continues to have records.

Given that you do not have alternate sources for the information contained in these account statements, we believe it would be prudent to follow the OCC rule for fiduciary accounts and retain these statements for the life of the trust accounts plus three years. We note that you may continue to retain these statements electronically; you do not need to retain the physical statements.

For resources related to our guidance, please see:

• OCC Fiduciary Rules, 12 CFR 9.8 (Recordkeeping. “(a) Documentation of accounts. A national bank shall adequately document the establishment and termination of each fiduciary account and shall maintain adequate records for all fiduciary accounts. (b) Retention of records. A national bank shall retain records described in paragraph (a) of this section for a period of three years from the later of the termination of the account or the termination of any litigation relating to the account. (c) Separation of records. A national bank shall ensure that records described in paragraph (a) of this section are separate and distinct from other records of the bank.”)

• OCC Comptroller’s Handbook, Asset Management Operation and Controls, printed page 58 (“It is important to maintain those documents that substantiate fiduciary appointments and actions taken throughout the life of these accounts. . . . Banks should have policies and procedures that identify the proper retention periods for various records and should ensure that these records are stored, and at the appropriate time disposed of, with an appropriate level of information security. Record retention periods should conform to the requirements of applicable law. For example, OCC Regulation 12 CFR 9.8(b) requires a national bank to retain account records for a period of three years from the later of the termination of the account or the termination of any litigation relating to the account. . . .”)

• Internal Revenue Code, 26 USC 6501(a) (Three-year statute of limitations for tax returns.)

• Internal Revenue Code, 26 USC 6501(e)(1)(A) (Six-year statute of limitations for tax returns with significantly underreported income.)

• Internal Revenue Code, 26 USC 6501(c) (Indefinite statute of limitations for willful tax evasion or failure to file a tax return.)

• Securities and Exchange Act, 28 USC 1658(b) (Two- or five-year statute of limitations for violations of securities laws.)

• Financial Institutions Electronic Documents and Digital Signature Act, 205 ILCS 705/10(a) (“If in the regular course of business, a financial institution possesses, records, or generates any document, representation, image, substitute check, reproduction, or combination thereof . . . that accurately reproduces, comprises, or records the agreement, transaction, act, occurrence, or event . . . [it] shall have the same force and effect under the laws of this State as one comprised, recorded, or created on paper or other tangible form by writing, typing, printing, or similar means.”)

• Electronic Commerce Security Act, 5 ILCS 175/5-110 (“Information, records, and signatures shall not be denied legal effect, validity, or enforceability solely on the grounds that they are in electronic form.”)

• Electronic Commerce Security Act, 5 ILCS 175/5-115(b)(2) (“Where a rule of law requires information to be “written” or “in writing”, or provides for certain consequences if it is not, an electronic record satisfies that rule of law… The provisions of this Section shall not apply to any rule of law governing the creation or execution of a will or trust, living will, or healthcare power of attorney…”)