Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021.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 do not believe that financial institutions need to retain hard copies of documents that are stored electronically, with a few exceptions (for example, original loan agreements, mortgages, and other documents recorded with a county recorder). However, many financial institutions do prefer to retain hard copies of customer’s signatures, even if not legally required.

The Illinois Financial Institutions Electronic Documents and Digital Signature Act states that if a bank stores documents in electronic form in the regular course of business, then an electronic version of a document has “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.” 205 ILCS 705/10(a). Similarly, the federal Electronic Signatures in Global and National Commerce (ESIGN) Act states that “a signature, contract, or other record . . . may not be denied legal effect, validity, or enforceability solely because it is in electronic form.” 15 USC 7001(a)(1).

The Illinois Electronic Commerce Security Act (“ECSA”) has more specific provisions regarding electronic documents. It states as a general rule that “information, records, and signatures shall not be denied legal effect, validity, or enforceability solely on the grounds that they are in electronic form.” 5 ILCS 175/5-110. However, that law has several exceptions, including “negotiable instruments and other instruments of title” (unless your electronic storage system “allows for the existence of only one unique, identifiable, and unalterable original with the functional attributes of an equivalent physical instrument, that can be possessed by only one person, and which cannot be copied except in a form that is readily identifiable as a copy”). 5 ILCS 175/5-115(b)(3)5-120(c)(3)5-125(c).

Importantly, ECSA provides for the admissibility of electronic records and electronic signatures into evidence in court proceedings. 5 ILCS 175/5-130. Where a rule of law specifically requires that certain records be retained, the law sets out three record retention requirements (5 ILCS 175/5-135):

(1) the electronic record and the information contained therein are accessible so as to be usable for subsequent reference at all times when such information must be retained;  

(2) the information is retained in the format in which it was originally generated, sent, or received or in a format that can be demonstrated to represent accurately the information originally generated, sent or received; and  

(3) such data as enables the identification of the origin and destination of the information, the authenticity and integrity of the information, and the date and time when it was sent or received, if any, is retained.  

Also, while the OCC is not your primary regulator, you may want to look at this OCC Advisory Letter, which discusses the federal E-SIGN Act and the legal risks that need to be taken into account when developing an electronic record retention policy.