Compliance Blog

Earlier this week, NCUA released three legal opinion letters.  I've discussed the first two in earlier posts.  Today, I'll tackle NCUA Legal Opinion Letter 07-0812 (January 11, 2008).  You may access it here.

NCUA's record retention regulation, which you can locate at Part 749 of its rules and regulations, is a clearly-written regulation that gives credit unions the ability to maintain documents in several different formats.  In its letter, NCUA states:

You asked for our opinion on the permissibility of a federally insured credit union retaining records, specifically original loan documents for outstanding loans to members, in an electronic format instead of a paper format. Under federal law and NCUA's record retention regulation, records can be preserved in any format that can be used to reconstruct the records, including in an electronic format.

This legal opinion supersedes an older legal opinion letter, NCUA Legal Opinion Letter 99-0043, which recommended that credit unions maintain original loan documents until the loan was paid off.

That being said, NCUA clarified that its regulation and legal opinion letter cannot speak to the admissibility of electronic documents in a court proceeding.

Records retention guidance for federally insured credit unions is provided in Appendix A to Part 749 in NCUA’s regulations and it specifically addresses the question of formats credit unions can use for retaining records stating that “NCUA does not recommend a particular format for record retention.” 12 C.F.R. Part 749, Appendix A, Section A. This section also discusses the criteria regarding accuracy and accessibility of which credit unions should be mindful and notes that, as far as relying on copies or reproductions of records, credit unions “should also ensure that the reproduction is acceptable for submission as evidence in a legal proceeding.” Id. Whether a reproduction will be acceptable in a legal proceeding may vary with state law requirements and, therefore, we encourage credit unions to consult with their own legal counsel on this aspect of their record retention policy. (Emphasis added.)