Record Retention Tip -
Treat Electronic Records The Same As Paper
Persuade examiners with watertight documentation

Question: "Are there any record retention requirements for Internet banking and/or electronic bill pay? If so, do these requirements differ from regular paper transactions with regard to retention?"

Answer: Federal law doesn't specify how you should retain electronic records as opposed to paper records, so check with your state banking department to ensure you're doing things properly, advises Doug Johnson, senior policy analyst with the American Bankers Association.

The OCC published an advisory letter on electronic records, click here, back in March of 2004 that states, "until more specific standards are developed, banks should design, implement, and operate their electronic records systems so that they are adequate to serve the following purposes and functions according to the nature of the retained records: potential use in litigation support, internal and external audits and controls, bank supervision, and compliance with regulatory requirements."

"If this sounds familiar (and somewhat vague), it is because the retention of most electronic records generally should not be treated differently from paper records," Johnson tells Eli. In the letter, the OCC notes that failure to maintain adequate record retention systems can create significant reputation, transaction, credit and compliance risks, and makes no distinction between paper and electronic records when making that statement. Within the states, record retention requirements vary. "Bankers should check with their state regulator to ensure their institution is in compliance with state law," he adds.

The Bottom Line: Federal law does not define how you should maintain your email (and electronic) records, but does provide guidelines until the OCC issues further guidance. Until that time, contact your state banking department to ensure you're in compliance with any state laws concerning retention of electronic records.