Topic: Record Retention
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For how long should we retain charged off loan files when the borrower has gone through the bankruptcy process, leaving no opportunity for collection?
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We recommend retaining documents related to a charged off loan for at least four years, and in some cases, for as long as ten years. The IRS requires you to report debt cancellations over $600 on Form 1099-C (or, for some secured loans, Form 1099-A) and imposes a four-year retention period for the form or…
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What are the retention periods for current employees’ insurance enrollment forms? What about forms for employees whom we have terminated? What is the retention period for information on a previous insurance provider after switching providers?
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We are not aware of any retention requirements for health insurance enrollment forms. We recommend retaining them at least until an employee’s employment with your bank has terminated. After switching insurance providers, you should retain the insurance plan and related information for at least one year after the plan’s termination date. The Age Discrimination in…
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When we issue a cashier’s check with a misspelling or incorrect amount, we mark the check as “void” and then issue a corrected cashier’s check. How long should we keep those “voided” checks?
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We are not aware of any requirement to retain “voided” cashier’s checks. The IBA Record Retention Guide recommends keeping cashier’s check receipts, records, and register entries for five years. However, for a cashier’s check that has been “voided” before issuance due to a typo or incorrect amount, we believe that it is not necessary to…
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What is the record retention requirement regarding loan documents with original signatures from the borrower? Does the original document need to be retained, or can it be scanned and retained electronically?
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Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021.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. The general rule under Illinois law is that electronic versions of documents have “the same…
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Over the last several years, we have acquired several banks through FDIC assisted acquisitions as well as in merger transactions. Many of the acquired banks themselves had acquired other banks in the past, with the result being that we have as many five sets of bank documents associated with a single purchase. What are the record retention requirements that apply to a bank’s corporate governance documents?
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Our guidance depends on the type of transaction. In general, our recommendation is to retain all corporate governance documents indefinitely, including bank charters, bylaws and their amendments, board minutes and resolutions, etc. Aside from taxation rules, we are not aware of laws or regulations that require banks to retain such documents, but we do recommend…
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We are looking at what time frame for record retention we need to observe for documents in our Trust Department. We are trying to create some space in our vault. What items can be imaged instead of keeping actual paper documents? What items do we need to retain as paper documents forever?
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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. The general rule under Illinois law is that electronic versions of documents have “the same…
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What is your recommended record retention period for stop payment orders on checks? My opinion is that we need to retain them for six months after they expire, but we have been holding them for six years.
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We believe that the standard industry practice is to retain stop payment orders on checks for six months after the order has terminated. This corresponds with the IBA Guide to Record Retention, which recommends retaining stop payment orders for six months after termination (unless the stop payment relates to a preauthorized electronic fund transfer, in…
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When we have a customer sign an indemnity bond for a lost CD, do we need to keep an original copy, or would an electronic version suffice?
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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. An electronic version of the indemnity bond should suffice. The general rule under Illinois law…
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We are implementing an electronic record retention system for our deposit and loan accounts. Do you recommend retaining hard copies of any documents?
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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. It depends on both the type of documents and your bank’s procedures. You should retain…
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For how long should we retain deposit account statements and copies of checks?
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You should retain deposit account statements for at least five years and copies of checks for at least seven years. The FinCEN’s Bank Secrecy Act regulations require you to retain deposit account statements for five years after they are created. The Uniform Commercial Code requires financial institutions to retain checks, or legible copies of checks,…