IBA Compliance Connection

Your go to source for compliance!

Is there a retention period for bank policies that have been approved by our board and signed by an officer?

—

by

admin

Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021.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 not aware of any mandatory retention period for original drafts of board-approved bank policies, which may be retained electronically instead. Both Illinois and federal law provide that an electronic copy of a document (including a bank policy) may not be denied legal effect, validity or enforceability solely because it is in electronic form.

We also note that an officer’s signature on a board policy is neither necessary nor determinative. More importantly, your bank should retain a copy of the board resolution for the most recent iteration of the policy, and the policy should state the date of that board resolution (to avoid confusion with earlier versions, if any).

For resources related to our guidance, please see:

  • Electronic Signatures in Global and National Commerce (ESIGN) Act, 15 USC 7001(a)(1) (“A signature, contract, or other record . . . may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”)
  • Illinois 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.”)
  • Illinois 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.”)