Records retention and canceled remittance transfer

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Question:

Regarding a cancellation request of a consumer foreign remittance transfer - are there any document retention requirements related to the canceled wire transfer request? Is the FI required to retain a copy of the wire transfer request form or any other documentation related to the transaction since it never occurred if canceled within the 30-minute window? Our bank has a log to record all canceled international wire transfer requests, but that is the only documentation.

Answer:

The records retention requirements are found in section 1005.13 of Regulation E. In summary, they require that your bank retain evidence of compliance for at least "two years from the date disclosures are required to be made or action is required to be taken." If the bank is on notice that it is the subject of an investigation or enforcement proceeding, it "shall retain the records that pertain to the investigation, action, or proceeding until final disposition of the matter unless an earlier time is allowed by court or agency order."

Although the transfers never took place, the bank will retain "evidence of compliance" with the disclosure requirements. It should also have records of cancellations of remittance transfer requests. It is not required that the cancellation records be maintained with the evidence of disclosure compliance (annotations on the disclosure records, for example). They can be maintained separately in the log you described, which could be expanded to include any remittance transfer requests that would not have been wire transfers.

As with any record retention requirement, the bank should avoid keeping significantly older records than required, unless it has some other need for the older records. That's because, if you retain records longer than required, those records can be subpoenaed for use in an investigation.