Can someone give me a brief answer as to record retention requirements for early disclosures as follows:

Reg Z ETIL
Reg B Notice of Right to Appraisal
RESPA - GFE, Mortgage Servicing Disclos Statement, HUD Booklet

INSTRUMENT TIME
Reg Z

Promissory Notes 2 years after the date
Disclosures of disclosure, or 2 years
Right of Rescission after the date any required Notices-Changes in Terms action is taken.
Other Notices



REG B

Applications, Consumers & Debit Card Apps 25 months
Applications, Business 12 months
Adverse Action, Consumers 25 months
Adverse Action, Business 2 months

Bank Secrecy

Statement of Purpose on Loans 5 years
over $10,000 not secured byrea property (Copy of Note)

Reg H

Standard Flood Hazard Until Repaid
Determination form

Reg C (MSA Banks Only)

HMDA LAR 5 years

Reg DD

Disclosures 2 years
Advertisements 2 years


Reg X

HUD 1 5 years
HUD1A 5 years
Good Faith Estimate 5 years
HUD2 5 years
Transfer Servicing Disclosure 5 years

Appraisal Guidelines
Appraisal Notice Until Paid


CRA

Comments 2 years
Responses 2 years
CRA Statements 2 years
CRA Performance Evaluation 2 years

INSTRUMENT TIME
Reg Z

Promissory Notes 2 years after the date
Disclosures of disclosure, or 2 years
Right of Rescission after the date any required Notices-Changes in Terms action is taken.
Other Notices



REG B

Applications, Consumers & Debit Card Apps 25 months
Applications, Business 12 months
Adverse Action, Consumers 25 months
Adverse Action, Business 2 months

Bank Secrecy

Statement of Purpose on Loans 5 years
over $10,000 not secured byrea property (Copy of Note)

Reg H

Standard Flood Hazard Until Repaid
Determination form

Reg C (MSA Banks Only)

HMDA LAR 5 years

Reg DD

Disclosures 2 years
Advertisements 2 years


Reg X

HUD 1 5 years
HUD1A 5 years
Good Faith Estimate 5 years
HUD2 5 years
Transfer Servicing Disclosure 5 years

Appraisal Guidelines
Appraisal Notice Until Paid


CRA

Comments 2 years
Responses 2 years
CRA Statements 2 years
CRA Performance Evaluation 2 years

I'd like more clarity on the record retention requirements under Z and X, please.

In 1026.25(a), the retention requirement is "two years after the date disclosures are required to be made or action is required to be taken." What does "action is required to be taken" mean?

In 1024.38(c), the retention requirement is more straight forward: "until one year after the date a mortgage loan is discharged or servicing of a mortgage loan is transferred by the servicer to a transferee servicer." However, I'm wondering if this only refers to mandatory Regulation X documents or the entire loan servicing file?

Thank you for the assistance.

Here is an example, using Section 1026.17(b):
(b) Time of disclosures. The creditor shall make disclosures before consummation of the transaction. In certain residential mortgage transactions, special timing requirements are set forth in § 1026.19(a). In certain variable-rate transactions, special timing requirements for variable-rate disclosures are set forth in § 1026.19(b) and § 1026.20(c) and (d). For private education loan disclosures made in compliance with § 1026.47, special timing requirements are set forth in § 1026.46(d). In certain transactions involving mail or telephone orders or a series of sales, the timing of disclosures may be delayed in accordance with paragraphs (g) and (h) of this section. This paragraph (b) does not apply to the disclosures required by § 1026.19(e), (f), and (g) and § 1026.20(e).

Wherever this section says or refers to "timing requirements", you must be able to prove that the necessary action was taken within the allotted time. The same obligation exists with regard to RoR, credit balances, oral quotations of rates, error resolution, avoiding prohibited practices, etc., etc., etc.

State law usually dictates retention requirements over and above the regulatory requirements for a loan file - usually in the range of five to seven years after payoff.

For Regulation Z, you need to be looking at 1026.25(c) and not .25(a) for mortgage loans..

Interesting, thank you, Richard and Randy.

Based upon the examples you provided and citation above, we only have to prove we met the timing requirements for three years (per 1026.25(c)) and can then destroy the relevant documents? I thought there was a life of loan retention requirement federally; is this not the case for Z and X?

I stayed away from state law specifics, since I know that varies drastically amongst the states.

Careful. It's rarely the case that you only have to think about one set of rules at a time. Consider all risks, assume you're in court dealing with the worst possible scenario, and then decide what exhibits your attorney will need in order to get you off the hook. Remember--even though Section 1026.25 is titled "Record Retention", the thrust of that section is creating and maintaining "evidence."

You screw up on the TILA disclosures on a mortgage loan and the loan is subject to rescission, the right of rescission is extended indefinitely in the event of a foreclosure. I am not sure what bank in their right mind would destroy any documentation from a mortgage loan file until long after the loan no longer exists. With today's imaging systems - is someone planning to go into the cumulative loan file and start deleting specific docs after a period of time?

I am a little confused as to where this is all going.

No arguments from me - I understand both of your points. I'm just trying to determine the regulatory record retention requirements; however, as a practical matter we will be retaining documents much longer than 3-5 years after a triggering event.

Thank you again for the information.

We have the space so we hold almost everything for 10 years. We also scan everything and retain digitally forever (or something similar).

Could be overkill but if you are able why not. I would assume a few institutions this would not be as easy.

Could be overkill but if you are able why not.

You might want to talk to the bank's attorney about that. If you get a subpoena request for all information for a specific account you will have to provide all documentation that you have whether that is 1 day's or 10 year's of information.

I completely agree with Dan!!!! Experienced this recently. We were asked for supporting documentation on a SAR we had filed and had been filing forever (why we didn't close the account is a different story for another day.....) We kept all the files because of the history of the customer, didn't really thing about it too much. Well guess what, they wanted back-up documentation for every SAR we still had in our possession. OMG, what a total PITA and soooooooo much copying we had to do. Guess what, I shred anything that is a week past it's retention requirements for this very reason.

This is the perfect case to illustrate why troublesome accounts should be closed aggressively.

"Could be overkill but if you are able why not. I would assume a few institutions this would not be as easy."

Bank being examined by FSLIC (a while ago). Clean audit and examiners hanging around for end. Boss coming to visit them in the field and they decided to pull some files to look busy. Pulled some over 25 months old that happened to be in the vault and found a slew of violations which made it to the report.

Another bank had some issues with commercial approvals vs denials. Exam beginning following week. Decided to shred all commercial (i.e. not consumer purpose) files per ECOA retention requirements - over 1 year. All involved slept better.

Following a retention schedule is ideal. Unfortunately, it can be a challenge with information being attached to e-mails, etc., that could be retained for longer periods.

I don't disagree in the least Richard, why I said it was a story for another day....I've tried for years....

fair enough

I will bring it up that we change our methods for good reasons. Unfortunately I do not have adequate weight to change the SVP in charge of the "junk room" just yet.

LFL - ask the SVP of junk to have a conversation with bank consul about "Discovery" during litigation.

Are pipeline reports, non-origination reports, or reports of loans in a flood zone, to name a few examples, subject to federal record retention requirements as well? Or are just application and/or loan file documents subject to record retention?

Thank you.

What are pipeline reports and non-origination reports? You mean something off of your application system. Since you are not required to have one - no. Not sure what flood reports you are talking about. But probably no. You either comply or you do not.