12 C.F.R. PART 749—RECORDS PRESERVATION PROGRAM AND RECORD RETENTION APPENDIX
Title 12 - Banks and Banking
Authority: 12 U.S.C. 1766, 1783 and 1789, 15 U.S.C. 7001(d).
Source: 66 FR 40579, Aug. 3, 2001, unless otherwise noted.
This part describes the obligations of all federally insured credit unions to maintain a records preservation program to identify, store and reconstruct vital records in the event that the credit union's records are destroyed. It establishes flexibility in the format credit unions may use for maintaining writings, records or information required by other NCUA regulations. The appendix also provides guidance concerning the appropriate length of time credit unions should retain various types of operational records. Vital records include at least the following records, as of the most recent month-end: (a) A list of share, deposit, and loan balances for each member's account which: (1) Shows each balance individually identified by a name or number; (2) Lists multiple loans of one account separately; and (3) Contains information sufficient to enable the credit union to locate each member, such as address and telephone number, unless the board of directors determines that the information is readily available from another source. (b) A financial report, which lists all of the credit union's asset and liability accounts and bank reconcilements. (c) A list of the credit union's financial institutions, insurance policies, and investments. This information may be marked “permanent” and stored separately, to be updated only when changes are made. The board of directors of a credit union is responsible for establishing a vital records preservation program within 6 months after its insurance certificate is issued. The vital records preservation program must contain procedures for storing duplicate vital records at a vital records center and must designate the staff member responsible for carrying out the vital records duties. Records must be stored every 3 months, within 30 days after the end of the 3-month period. Previously stored records may be destroyed when the current records are stored. The credit union must also maintain a records preservation log showing what records were stored, where the records were stored, when the records were stored, and who sent the records for storage. Credit unions, which have some or all of their records maintained by an off-site data processor, are considered to be in compliance for the storage of those records. A vital records center is defined as a storage facility at any location far enough from the credit union's offices to avoid the simultaneous loss of both sets of records in the event of disaster. Preserved records may be in any format that can be used to reconstruct the credit union's records. Formats include paper originals, machine copies, micro-film or fiche, magnetic tape, or any electronic format that accurately reflects the information in the record, remains accessible to all persons who are entitled to access by statute, regulation or rule of law, and is capable of being reproduced by transmission, printing or otherwise. Various NCUA regulations require credit unions to maintain certain writings, records or information. Credit unions may use any format, electronic or other, for maintaining the writings, records or information that accurately reflects the information, remains accessible to all persons who are entitled to access by statute, regulation or rule of law, and is capable of being reproduced by transmission, printing or otherwise. The credit union must maintain the necessary equipment or software to permit an examiner access to the records during the examination process. Credit unions often look to NCUA for guidance on the appropriate length of time to retain various types of operational records. NCUA does not regulate in this area, but as an aid to credit unions it is publishing this appendix of suggested guidelines for record retention. NCUA recognizes that credit unions must strike a balance between the competing demands of space, resource allocation and the desire to retain all the records that they may need to conduct their business successfully. Efficiency requires that all records that are no longer useful be discarded, just as both efficiency and safety require that useful records be preserved and kept readily available. A. What Format Should the Credit Union Use for Retaining Records? NCUA does not recommend a particular format for record retention. If the credit union stores records on microfilm, microfiche, or in an electronic format, the stored records must be accurate, reproducible and accessible to an NCUA examiner. If records are stored on the credit union premises, they should be immediately accessible upon the examiner's request; if records are stored by a third party or off-site, then they should be made available to the examiner within a reasonable time after the examiner's request. The credit union must maintain the necessary equipment or software to permit an examiner to review and reproduce stored records upon request. The credit union should also ensure that the reproduction is acceptable for submission as evidence in a legal proceeding. B. Who Is Responsible for Establishing a System for Record Disposal? The credit union's board of directors may approve a schedule authorizing the disposal of certain records on a continuing basis upon expiration of specified retention periods. A schedule provides a system for disposal of records and eliminates the need for board approval each time the credit union wants to dispose of the same types of records created at different times. C. What Procedures Should a Credit Union Follow When Destroying Records? The credit union should prepare an index of any records destroyed and retain the index permanently. Destruction of records should ordinarily be carried out by at least two persons whose signatures, attesting to the fact that records were actually destroyed, should be affixed to the listing. D. What Are the Recommended Minimum Retention Times? Record destruction may impact the credit union's legal standing to collect on loans or defend itself in court. Since each state can impose its own rules, it is prudent for a credit union to consider consulting with local counsel when setting minimum retention periods. A record pertaining to a member's account that is not considered a vital record may be destroyed once it is verified by the supervisory committee. Individual Share and Loan Ledgers should be retained permanently. Records, for a particular period, should not be destroyed until both a comprehensive annual audit by the supervisory committee and a supervisory examination by the NCUA have been made for that period. E. What Records Should Be Retained Permanently? 1. Official records of the credit union that should be retained permanently are: (a) Charter, bylaws, and amendments. (b) Certificates or licenses to operate under programs of various government agencies, such as a certificate to act as issuing agent for the sale of U.S. savings bonds. (c) Current manuals, circular letters and other official instructions of a permanent character received from the NCUA and other governmental agencies. 2. Key operational records that should be retained permanently are: (a) Minutes of meetings of the membership, board of directors, credit committee, and supervisory committee. (b) One copy of each NCUA 5300 financial report or its equivalent. (c) One copy of each supervisory committee comprehensive annual audit report and attachments. (d) Supervisory committee records of account verification. (e) Applications for membership and joint share account agreements. (f) Journal and cash record. (g) General ledger. (h) Copies of the periodic statements of members, or the individual share and loan ledger. (A complete record of the account should be kept permanently.) (i) Bank reconcilements. (j) Listing of records destroyed. F. What Records Should a Credit Union Designate for Periodic Destruction? Any record not described above is appropriate for periodic destruction unless it must be retained to comply with the requirements of consumer protection regulations. Periodic destruction should be scheduled so that the most recent of the following records are available for the annual supervisory committee audit and the NCUA examination. Records that may be periodically destroyed include: (a) Applications of paid off loans. (b) Paid notes. (c) Various consumer disclosure forms, unless retention is required by law. (d) Cash received vouchers. (e) Journal vouchers. (f) Canceled checks. (g) Bank statements. (h) Outdated manuals, canceled instructions, and nonpayment correspondence from the NCUA and other governmental agencies.
Title 12: Banks and Banking
PART 749—RECORDS PRESERVATION PROGRAM AND RECORD RETENTION APPENDIX
Section Contents
§ 749.0 What is covered in this part?
§ 749.1 What are vital records?
§ 749.2 What must a credit union do with vital records?
§ 749.3 What is a vital records center?
§ 749.4 What format may the credit union use for preserving records?
§ 749.5 What format may credit unions use for maintaining writings, records or information required by other NCUA regulations?
Appendix A to Part 749—Record Retention Guidelines
§ 749.0 What is covered in this part?
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§ 749.1 What are vital records?
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§ 749.2 What must a credit union do with vital records?
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§ 749.3 What is a vital records center?
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§ 749.4 What format may the credit union use for preserving records?
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§ 749.5 What format may credit unions use for maintaining writings, records or information required by other NCUA regulations?
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Appendix A to Part 749—Record Retention Guidelines
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