On Compliance: 2014 record retention rules (and guidelines)

Some specific examples, a comprehensive list and a call to have a solid policy.

by. Coppelia Padgett

A major stumbling block to effective record retention is getting a firm grip on which records a credit union should keep and which ones are safe to destroy. Whenever I’m asked about the “rules” for how long to retain various credit union records, I’m reminded of a scene in the first “Pirates of the Caribbean” movie.

It involves a negotiation between Elizabeth Swann played by Keira Knightley and the pirate captain Barbossa played by Geoffrey Rush. When the negotiation doesn’t quite go according to Elizabeth’s plan, she appeals to Barbossa’s allegiance to the “code of the order” of the pirate brethren, to which Barbossa replies, “the code is more what you’d call ‘guidelines’ than actual rules.”

When it comes to regulations, which typically spell out in great detail what a financial institution can and can’t do, there is a surprising amount of vagueness concerning how long to retain those records called for in the regulations themselves.

For some records, the regulations are specific (for example, 25 months in the case of adverse action notices, according to Regulation B: ECOA section 202.12). Some institutions may elect to keep them for the maximum period of time within which the consumer can bring a claim under the Equal Credit Opportunity Act or the Fair Credit Reporting Act, which is five years. However, the real challenges arise when dealing with the “gray areas,” regulations where the specific record retention requirements aren’t spelled out in black and white, but may be implied.

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