We recommend retaining deposit and loan rate sheets for at least two years, subject to the exception below. Both Regulation DD and Regulation Z generally require a two-year retention period for required disclosures made in connection with deposit accounts and consumer credit, respectively.
However, for a mortgage loan secured by a dwelling that includes prepayment penalties, your bank must provide a rate sheet offering the loan applicant an alternative transaction that does not include a prepayment penalty, which should be retained for at least three years.
For resources related to our guidance, please see:
- Regulation DD, 12 CFR 1030.9(c) (“A depository institution shall retain evidence of compliance with this part for a minimum of two years after the date disclosures are required to be made or action is required to be taken . . . .”)
- Regulation DD, Official Interpretations, Paragraph 9(c), Comment 3 (“Institutions must retain sufficient rate and balance information to permit the verification of interest paid on an account, including the payment of interest on the full principal balance.”)
- Regulation Z, 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 . . . . ”)
- Regulation Z, 12 CFR 1026.25(c)(3) (“Notwithstanding paragraph (a) of this section, a creditor shall retain evidence of compliance with § 1026.43 of this regulation for three years after consummation of a transaction covered by that section.”)
- Regulation Z, Official Interpretations, Paragraph 25(c)(3), Comment 2 (“If a transaction covered by § 1026.43 has a prepayment penalty, the creditor must maintain records that document that the creditor complied with requirements for offering the consumer an alternative transaction that does not include a prepayment penalty under § 1026.43(g)(3), (4), or (5). However, the creditor need not maintain records that document compliance with those provisions if a transaction is consummated without a prepayment penalty or if the creditor and consumer do not consummate a covered transaction. If a creditor offers a transaction with a prepayment penalty to a consumer through a mortgage broker, to evidence compliance with § 1026.43(g)(4) the creditor should retain evidence of the alternative covered transaction presented to the mortgage broker, such as a rate sheet, and the agreement with the mortgage broker required by § 1026.43(g)(4)(ii).”)
- Regulation Z 12 CFR 1026.43(g)(4) (“If the creditor offers a covered transaction with a prepayment penalty to the consumer through a mortgage broker, as defined in § 1026.36(a)(2), the creditor must: (i) Present the mortgage broker an alternative covered transaction without a prepayment penalty that satisfies the requirements of paragraph (g)(3) of this section; and (ii) Establish by agreement that the mortgage broker must present the consumer an alternative covered transaction without a prepayment penalty that satisfies the requirements of paragraph (g)(3) of this section, offered by: (A) The creditor; or (B) Another creditor, if the transaction offered by the other creditor has a lower interest rate or a lower total dollar amount of discount points and origination points or fees.”)
- Regulation Z, Official Interpretations, Paragraph 43(g)(4), Comment 1 (“Under § 1026.43(g)(4), where the creditor offers covered transactions with a prepayment penalty to consumers through a mortgage broker, as defined in § 1026.36(a)(2), the creditor must present the mortgage broker an alternative covered transaction that satisfies the requirements of § 1026.43(g)(3). Creditors may comply with this requirement by providing a rate sheet to the mortgage broker that states the terms of such an alternative covered transaction without a prepayment penalty.”)