Topic: Record Retention
-
We are considering moving from paper loan files to scanned loan files on our core system. Besides the original promissory note and security agreement, what other loan documents should we keep in paper form?
—
by
Generally, you do not need to retain hard copies of documents that have been scanned electronically, but there are important exceptions to this general rule. We do not recommend shredding originals of certain negotiable instruments, including documents that qualify as notes under Article 3 of the Uniform Commercial Code (UCC) — such as negotiable mortgage…
-
We are beginning to image our in-house loan files (including notes and mortgages) and our deposit-related records, such as signature cards. Once a document has been scanned, can we destroy the original, or should we retain it for a certain period of time? Should we stamp the documents with a “scanned” stamp or “true and certified copy” stamp?
—
by
Generally, you do not need to retain hard copies of documents that have been scanned electronically, but we do not recommend scanning and shredding certain negotiable instruments, including documents that qualify as notes under Article 3 of the Uniform Commercial Code (UCC) — such as negotiable mortgage notes. The general rule under Illinois law is…
-
How long are we required to keep “Notice of Delayed Availability” forms when we put a hold on a customer deposit?
—
by
We believe that you must retain a record of these notices for no less than two years. Regulation CC requires banks to give customers written notice whenever they invoke an exception to the availability schedules (other than the new account exception) and extend the time when funds will be available for withdrawal. Regulation CC also…
-
We are a small servicer under Regulation X. How long we are required to keep escrow account analysis statements?
—
by
We believe that Regulation X requires you to maintain evidence of escrow account analyses and escrow account statements for a minimum of two years. Regulation X requires creditors to retain evidence of actions required to be performed and disclosures made for two years. As Regulation X requires escrow account analyses to be performed and escrow…
-
Are we required to retain undeliverable mail that has been returned by the post office? If so, what kind of mail should we be retaining and for how long? We have read that if we can reproduce the mailing (such as an account statement) on request, then we can shred it immediately.
—
by
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 recordkeeping requirements specifically for mail that has been sent to…
-
We are shredding loan files related to loans that have been paid off for five years or more. Do we need to keep records of loan files that are destroyed?
—
by
No, we are unaware of a requirement under Illinois or federal law to retain a record of the loan files that your bank has destroyed. The IBA Guide to Bank Record Retention includes sample policies and procedures that provide for a “destruction notice” or “certified destruction,” particularly for documents containing account numbers and sensitive information,…
-
Are we required to delete copies of driver’s license images used to verify customer identities for online account openings? Are there any exceptions that apply under the Bank Secrecy Act (BSA)? If we are required to delete them, can we request that customers provide us with another image after account opening that we can retain? The retention of licenses or identification is currently part of our BSA policy.
—
by
Yes, we believe that you are required to delete images of driver’s licenses or personal identification cards used to verify customer identity for the purposes of online account opening. Further, we do not believe that you may request and retain those images again after account opening. The 2018 Economic Growth, Regulatory Relief and Consumer Protection…
-
What documents should we be retaining for charged-off loans that are over ten years old now? Also, do you have any guidance available for loan record retention?
—
by
We do not believe that you need to retain any records for charged-off loans that are over ten years old. The Illinois Code of Civil Procedure contains a ten-year statute of limitations to initiate collection proceedings for written contracts (with some exceptions), and the Federal Financial Institutions Examination Council (FFIEC) recommends that banks maintain supporting…
-
We recently discovered that we overcharged interest at various times during the term of an adjustable rate mortgage (ARM) loan originated over 25 years ago. Our system shows an interest rate floor for the ARM, but the note does not establish a minimum rate. As a result, we have charged interest at a higher rate (the floor shown in our system) rather than the rate agreed to by the customer in the note. How far back must we look when calculating the amount of overcharged interest to reimburse the customer? Is it in our best interest to reimburse the customer for overcharges that occurred outside of the three-year record retention period and our current exam cycle?
—
by
We recommend consulting with your bank counsel for advice in calculating restitution for your customer and crafting the best response for your bank. We have found some case law (discussed below) suggesting that your potential liability may be limited to the past ten years of overcharged interest, but this situation also requires consideration of regulatory…
-
Our phone system automatically records incoming calls to our bank’s phone number. Must we advise callers that we are recording their calls? We reviewed this issue when the phone system was installed and determined that recording these calls would not be considered “eavesdropping” under the Illinois Criminal Code, since the calls meet the exemption for telephone solicitations. Have the eavesdropping provisions of the Criminal Code been amended in the last seven years?
—
by
No, the relevant exemption to eavesdropping related to telephone solicitations has not been modified in the last seven years. However, we recommend that your bank consider notifying customers that their calls are being recorded, since your telephone system is recording all calls, regardless of the participants or topics discussed on the calls. The Illinois Criminal…