What are Bank Record Retention Requirements?

Bank record retention requirements detail the mandatory minimum length that financial institutions must keep various documents.

For example, check out the Federal Insurance Corporation’s schedule or this state’s guidelines.

Goal: Purge Records as Soon as Possible

Financial institutions must work to remain compliant with record retention requirements, and part of a bank auditor’s or examiner’s job is to ensure that the rules are being followed.

However, once a financial institution has fulfilled the obligation, a best practice is to purge those documents. This is for two main reasons.

1. Subpoena Requests: First, if a bank is still storing files beyond their necessary retention period, it may be required to supply documents if subpoenaed.
2. Storage Limitations & Costs: A second reason for destroying documents that have gone past their legal retention requirement is simply due to storage considerations.

Paper vs. Electronic Storage

Traditionally, banks boxed up paper files and sent them to an off-site facility. Or, if the space was available, some or all documents were kept on-site. Under either model, banks had to develop a cataloging system (hard copy lists, spreadsheets, etc.) for tracking where their files were located. After a financial institution fulfilled its retention period for a document, the document was then identified in storage and shredded.

Today, some banks use digital storage systems to save time and money while remaining compliant with bank record retention requirements. Electronic document imaging software, such as AccuAccount, allows banks to scan in a paper file and then immediately shred the hard copy. Administrators can set up rules in the software to comply with and track in alignment with bank record retention requirements. When a document is initially entered into the system, the purge date is automatically assigned (based on the bank’s predefined rules) so that the document is flagged to purge at exactly the right moment in the future. The institution can then run an annual purge and remove all files flagged for deletion.

Banking Resources

For more information about document management best practices in financial institutions, be sure to check out our extensive resource library with free spreadsheets, whitepapers, and ebooks.

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