Bank and credit union 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 or credit union auditor’s or examiner’s job is to ensure that the rules are being followed.

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

  1. Subpoena Requests: First, if a bank or credit union 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 and credit unions boxed up paper files and sent them to an off-site facility. Or, if the space were available, some or all documents would be kept on-site. Under either model, institutions 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 and credit unions use digital storage systems to save time and money, while remaining compliant with record retention requirements. Electronic document imaging software, such as AccuAccount, allows banks and credit unions 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 and credit union record retention requirements. When a document is initially entered into the system, the purge date is automatically assigned (based on the financial institution’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 Innovation Hub with free spreadsheets, whitepapers, and eBooks.

Browse our banking definitions page for more terminology.

Explore more resources

eBook: NXT Level Optimization in Digital Banking

Future Proof your Digital Channels Many digital banking solutions fall short of today’s user experience expectations, opening the door for larger, digital only players and jeopardizing your established banking relationships for both consumer and business...
Read More »

AccuAccount: Solution Overview Brochure

Track and manage every loan document in one system and streamline loan management from application through servicing with our core-integrated software platform. From loan application automation, to drag-and-drop document imaging, to document tracking, and five...
Read More »

Related articles

Wednesday 7 June 2023

Enterprise Information Management (EIM) Solutions and their Role in Safeguarding Data Privacy at your Financial Institution

Data privacy remains a top priority for banking leaders across the globe and unfortunately, there isn’t a single solution or tactic that will stop a…

Learn More »

Monday 5 June 2023

The Savings Boost: 3 Ways a Modernized Deposits Platform Cuts Costs in the Back Office

Are item processing operations costing financial institutions more than the revenue they generate? Many industry experts say yes. With check volumes decreasing, the cost to maintain…

Learn More »

Wednesday 31 May 2023

4 Reasons an Enterprise Content and Information Management Strategy is an Investment in Growth for your Financial Institution

An emphasis on digital engagements is pushing financial institutions to take a step beyond simply acquiring data, but to utilize that intelligence and incorporate transformative…

Learn More »

Thursday 25 May 2023

[Playbook] Enabling a “Decentralized” Strategy for Electronic Documents

Here’s the situation: Your commercial lenders feel overwhelmed by the amount of electronic documents that land in their inboxes each day. Financial statements, collateral documents…

Learn More »

Tuesday 23 May 2023

Business Banking: Understanding Account Takeover Fraud and the Importance of Dual Control within your Digital Banking Platform

Corporate account takeover can be costly for an organization to repair, which is why it's crucial for banks and credit unions to rely on modern…

Learn More »

Tuesday 16 May 2023

Which Cloud Deployment Model is Right for Your Financial Institution?

The American Bankers Association (ABA) estimates that more than 90% of financial institutions maintain at least some data, applications, or operations in the cloud today. If…

Learn More »

Wednesday 10 May 2023

The Employee Side of Digital Banking: Administrative Tools You Need to Easily and Effectively Manage your Digital Banking Platform

Launching a new digital banking solution is exciting for banks and credit unions, but this isn’t the end of the journey, it’s just the beginning…

Learn More »

Wednesday 19 April 2023

Cloud Banking: A Strategic Business Objective, Not an IT Project

Cloud adoption in the banking industry has proven tangible results for institutions of all sizes, showing positive growth in the adoption of hosted environments versus…

Learn More »