With the operations of credit unions becoming increasingly complex, it can be difficult to determine what types of operational records or information are critical and what are not.
NCUA recognizes that credit unions must strike a balance between the demands of space and resources with the desire to retain all of the records that they may need to conduct operations successfully. While NCUA does not specifically regulate record retention policies and practices, we have created the following guidelines to help credit unions.
What Records Should Always Be Retained?
Official records of the credit union that should be retained permanently are:
- Charter, bylaws and amendments; and
- 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.
Operational records that also should be retained permanently are:
- Minutes of meetings of the membership, board of directors, credit committee and supervisory committee;
- One copy of each financial report, NCUA Call Report and Credit Union Profile
- One copy of each supervisory committee comprehensive annual audit report and attachments;
- Supervisory committee records of account verification;
- Applications for membership and joint share account agreements;
- Journal and cash record;
- General ledger;
- A complete record of a member's account;
- Bank reconcilements; and
- Lists of records destroyed.
What Format Should Credit Unions Use?
NCUA does not recommend a particular record retention format over another. Whether stored in an electronic format like a portable document format, in hard copy onsite or even microfilm, the stored records must be accurate, reproducible and accessible to an examiner, including being available for the examiner's review in a reasonable amount of time. All credit unions should also ensure that a record's reproduction is acceptable for submission as evidence in a legal proceeding.
What Are the Recommended Minimum Retention Times?
NCUA doesn't have specific policy on this. Because each state can impose its own rules, it is prudent for a credit union to consider consulting with local counsel when setting its minimum record retention periods.
Record destruction may affect the credit union's legal standing to collect on loans or defend itself in court. A record pertaining to a member's account that is not considered a vital record may be destroyed once the supervisory committee verifies it. 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.
What Records Can Be Disposed?
Any record not listed in the items that should be kept permanently can be marked for periodic destruction, unless it needs to be kept to comply with consumer protection requirements. The items that can disposed of periodically include:
- Applications of paid-off loans;
- Paid notes;
- Various consumer disclosure forms, unless retention is otherwise required by law;
- Cash received vouchers;
- Journal vouchers;
- Canceled checks;
- Bank statements; and
- Outdated manuals, canceled instructions and nonpayment correspondence from NCUA and other governmental agencies.
What Are the Procedures for Destroying Records?
A credit union's board of directors must approve a record's disposal. However, a board can approve a schedule authorizing the disposal of certain records on a regular basis after their retention periods expire.
Additionally, credit unions should prepare an index of any records destroyed and retain that index permanently. Destruction of the records should be carried out by at least two persons, who must report and vouch for the destruction. Those documents, along with the staff persons' signatures, should be included in the destroyed records index.
Where Can I Find Additional Information?
Part 749 of NCUA's rules provides additional details on records retention. For more information, visit http://go.usa.gov/xqZCB.