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02-029
CHAPTER 101
Regulation #1 RETENTION OF RECORDS - FINANCIAL INSTITUTIONS

SUMMARY: On October 19, 1977, the Bureau of Banking promulgated Regulation #1 (Retention of Records - Trust Companies and Savings Banks), Regulation #2 (Retention of Records - Savings and Loan Associations), and Regulation #3 (Retention of Records - Credit Unions), which replaced regulations issued in February, 1961 that were printed in December, 1975. These regulations were promulgated to prescribe the minimum periods for which records in financial institutions must be retained. Since the promulgation of Regulations #1, 2, and 3, there have been many new products and services developed by the financial industry. Computerization of banking transactions has produced many other types of records. Because of these changes, retention schedules embodied in the 1977 rules have become somewhat outdated and do not specifically address a variety of new documents essential to comprehensive recordkeeping.

Throughout the last decade, many of the same types of products and services are being offered by all types of financial institutions. Therefore, in the interest of simplicity, the Bureau proposes to expand Regulation #1 retention schedule to include documents utilized by all types of financial institutions during the course of business and Regulations #2 and #3 will be repealed. Any such amendment or repeal shall not affect any action taken prior to such amendment or repeal.

I. AUTHORITY

Title 9-B MRSA Section 225 requires that all records of financial institutions be retained for such minimum periods as the superintendent may prescribe.

31 CFR 103 sets forth the retention of records requirements for financial institutions and credit unions as established by the Secretary of the

12 CFR Part 749 addresses other recordkeeping requirements for federally insured credit unions subject to the supervision of the National Credit Union

II. PURPOSE

To classify records kept by financial institutions operating in Maine and to prescribe the minimum period for which these records shall be maintained.

III. DEFINITIONS

  1. "Financial institution" means a financial institution as defined by Title 9-B MRSA Section 131(17-A), or a credit union as defined by Title 9-B MRSA Section 131(12-A).
  2. "Media reproduction" means recording, copying, or reproducing records by any photographic, photostatic, microfilm, micro-card, miniature photographic, optical disk that is not erasable, or other process which accurately reproduces or forms a durable medium for so reproducing the original, the reproduction or copy, when satisfactorily identified, is as admissible in evidence as the original itself in any judicial or administrative proceeding.
  3. "Record" means all documentary material, regardless of media or characteristics, made or received and maintained by a financial institution in accordance with law or regulation or in the transaction of its official business.
  4. D. "Deposit account" means a deposit account as defined in Federal Reserve Regulation D, "Reserve Requirements of Depository Institutions" (12 CRF 204) and members accounts of credit unions as defined in the National Credit Union Administration Rules and Regulations (12 USC).

IV. AUTHORIZATION AND LIMITATIONS

Financial institutions shall retain records for such minimum periods as prescribed by the following schedule, insofar as it does not contravene federal law. The Records Retention Schedule, which is contained in Section VI of this rule, is organized by function and is representative of those records utilized during the course of operation of a financial institution. All records may not be specifically addressed in this rule; financial institutions are encouraged, although not required, to supplement this schedule to meet their operational needs. All records, with the exception of those that are considered to be of a permanent nature, may be retained in media reproduction format for the periods of time designated in Section VI of this rule. Records designated for permanent retention must be held in original form.

V. FEDERAL REGULATIONS

It is recognized that the retention of certain financial institution records may be governed by federal rule/statute. It is further recognized that there may exist differences in scope and coverage between this regulation and federal rules governing retention of those records. All records of financial institutions shall be maintained in accordance with the Records Retention Schedule found in Section VI of this regulation insofar as such retention schedule does not contravene paramount federal law. Those records that are not addressed in Section VI of this regulation, and for which there is a retention schedule required under federal law, shall be retained for the period of time specified in said federal law.

VI. PERIOD OF RETENTION (IN YEARS UNLESS SPECIFIED OTHERWISE)

ACCOUNTING
Item Period of
Retention
(years)
Accounts Payable6
Accounts Receivable6
ATM Machine Settlement3
Branch Daily Statement3
Branch Petty Cash Checks6
Budgets1
Canceled Checks7
Cash Reserve Reports2
Corporate Tax Returns, Tax Liability Calculations7
Correspondent Bank Accounts Statements6
Currency Orders & Shipments1
FASB 91 Accounting Records (After termination of loan)6
Fixed Asset Records – annual record of depreciation expense7
Fixed Asset Records – detail of individual assets, including cost, method of depreciation, accumulated depreciation, net book value (After disposition/abandonment) 7
General Ledger Records10
General Ledger Tickers & Transaction Reports6
General Ledger Proof Sheets2
Inactive/Dormant Account Records10
Incoming Cash Letters3 Months
Invoices from Vendors6
Journal Entry Records6
On line Transaction Reports2 Months
Other Real Estate Owned (OREO) Records6
Outgoing Cash Letters3
Reconcilements of Bank (Due To/From)6
Regulatory Reports/Call Reports10
Semi annual Assessment Forms3
Teller Overs & Shorts3
Teller/Branch Proof Records3
Trial Balance End of Year6
Trial Balance Other than End of Year2 Months
AUDIT/SECURITY
Item Period of
Retention
(years)
Abandoned Property Reports10
Audit Reports External10
Audit Reports Internal6
Audit Workpapers Internal6
Documentation Relating to Fraud, EmbezzlementPermanent
Security Audio/Video Tapes (Not Used as Evidence)2 Months
CORPORATE RECORDS
Item Period of
Retention
(years)
Bank Owned Property Contracts/Leases, Deeds, Mortgages, (After disposition/abandonment)10
Board/Committee MinutesPermanent
BylawsPermanent
Canceled Stock & Bond Certificates & Expired Options7
CharterPermanent
Contracts and Leases (Expired)7
Dividend ReportsPermanent
Examination Reports/Regulatory AgreementsPermanent
Insurance Claims (After Settlement)7
Insurance Policies (Expired)3
Licenses & Permits (After Expiration)7
LitigationPermanent
Proxies6
Stock Transfer RecordsPermanent
Stockholders Certificates (Unissued)Permanent
Stockholders RegisterPermanent
CORRESPONDENCE
Item Period of
Retention
(years)
Attachments, Garnishments, Liens, Levies6
Date of Death Notification6
General Correspondence3
Letters of Appointment6
Name & Address Change Forms6
SubpoenasPermanent
Registered Mail:
Registered Mail Record (Incoming & Outgoing)3
Returned Mail (Excluding Promotional Material)1
Return Mail Register6
Return Receipt Cards3
CUSTOMER SERVICES
Item Period of
Retention
(years)
Broker’s Confirmations & Invoices6
Cash/Returned Items3
Foreign Currency Draft Log6
Night Deposit Contracts & Logs2*
Receipt Books2
Repurchase Agreements2*
Safekeeping Records & Receipts6*
Safety Deposit Records6*
Securities Buy/Sell Orders6
Travelers Checks Records2
Wire Transfers6
DEPOSIT SERVICES
Item Period of
Retention
(years)
Certificates of Deposit6*
Club Accounts3*
Collections Items3
Debit and Credit Adjustment Tickets6
Deposit Rate Sheets6
Deposit/Withdrawal Tickets6
Overdraft Reports6 Months
Paid Items6
Signature Cards6*
Statements (Copies of periodic)6
Stop Payment Orders1
Truncated Checks6
Undeliverable Statements & Canceled Checks6
* After date of final activity in account
HUMAN RESOURCES
Item Period of
Retention
(years)
Benefit Plans:
Pension Annual Reports40
Pension Plan Description40
Profit Sharing Plan Description7
Profit Sharing Plan Records7
Payroll Records:
Authorization of Deductions (After Termination of Employee or Cancellation/Revision of Deductions)1
Time Cards6
Garnishments6
INVESTMENTS
Item Period of
Retention
(years)
Bonds:
Amortization Records6
Confirmations1
Correspondence2
Safekeeping Receipts2
Brokers’ Securities:
Brokers’ Securities2
Brokers’ Statement2
Report of Lost or Stolen Securities3
Safekeeping Advice2
Taxpayer ID Number5
Commercial Paper:
Brokers’ Advices2
Purchase Orders2
Remittance Advices2
Investment Certificates:
Certificates7
Full Paid Share7
Interest Accrual Records7
Interest Remittance Advices7
Investment Purchase Orders2
Miscellaneous Maturities3
Safekeeping Receipts2
Securities Register10
Mortgage Backed Securities:
Buy & Sell Agreements3
Commitment Letters3
FHLMC/FNMA Loan Files7
GNMA Certificates7
Interest Accrual Records7
Monthly Remittance Reports7
LOANS
Item Period of
Retention
(years)
NOTE: Unless otherwise indicated, all loan records are to be kept for the time period indicated AFTER the date of final activity.
General:
Charge Off Records10
Charged Off Notes10
Loan Application File Denied25 Months
Loan Officer Committee Records6
New Loan Journal6
Overdraft Loan Agreements6
Paid Loan Journal6
Payment Tickets6
Periodic Customer Statements6
Rate Sheets6
Transaction Journal As Original Entry6
Transaction Journal By Product of Post2
W 9’s3
Commercial Loans:
Approved Loan File6
Applications6
Appraisals6
Bill of Sale6
Borrowing Resolutions6
Business Annual Reports (Fiscal/Yr End) (After date of report)3
Business Cashflow Analysis (After date of report)3
Business Income/Expense Statements (After date of statement)3
Business Tax Returns (After date of return)3
Commitment Letters6
Committee Presentations6
Correspondence6
Declaration of Value (Transfer Tax Form)6
Disclosure Records6
Evidence of Insurance6
Guarantee6
Memos6
Mortgage Deed (Copy of)6
Personal Financial Statements (After date of statement)3
Promissory Note6
Purchase and Sales Agreement6
Security Agreement6
Supporting Corporate Documents Certificate of Good Standing6
Supporting Corporate Documents Corporate Vote6
Title Opinion6
Consumer Loans:
Approved Loan File6
Applications6
Collateral Records6
Commitment Records6
Correspondence6
Credit Report6
Disclosure Statements6
Evidence of Compliance with Fair Credit Reporting Act Resolution6
Hazard Insurance Records6
Invoices6
Life & Disability Insurance Records6
New Account Setup Records6
Promissory Note And Any Modification Agreements - Copy of6
Records of Credit Transactions6
Title - Copy of6
UCC Filings - Copy of6
Real Estate Loans:
Approved Loan File6
Application6
Appraisal6
Assignment of Escrow6
Assumption Letters6
Commitment Letters6
Correspondence6
Credit Report6
Deed6
Disclosure Records6
Escrow Records6
FHA Insurance Certificates6
Good Faith Estimate6
Hazard InsuranceLife of Loan
Promissory Note & Any Modification Agreements – Copy of6
Proof of Insurance Excluding Hazard6
Sales Contracts6
Settlement Sheet6
Survey6
Title Documentation6
VA Loan Guarantee6
Verification of DepositLife of Loan
Verification of EmploymentLife of Loan
Construction Loans:
Approved Loan File:
All Relevant Documents from Real Estate Loan File as Listed Above, Plus Any of the Following:
Certificate of Occupancy6
Construction Progress Reports6
Contractors Cost Breakdown6
Disbursement Documentation6
Inspection Reports6
Residential Construction Specifications & Materials List6
Credit Card Loans:
Consumer File:
Approved Loan File:
Application6
Correspondence6
Credit Reports6
Disclosure Statements6
Records of Credit Transactions6
Merchant File:
Approved Loan File:
Application6
Site Inspection6
Credit Report6
Merchant Agreement6
TRUST DEPARTMENT
Item Period of
Retention
(years)
Accounting Records:
Budget Work Papers4
Expense Checks6
Expense Sheets4
General Ledger10
Paid Bills, Statements, Invoices6
Reconcilements3
Tax Work Papers10
Administration:
Appraisal of Real and Personal Property10*
Correspondence, Important and/or Controversial10*
Correspondence, Routine and Memorandums3*
Decedents Personal Records Deliver/remaindermen0
Decrees or Receipts and Releases10*
Fee Records and Supporting Data 2*
Intermediate and Final Accounts 10*
Judgements, Court Orders, Legal Opinions, etc.10*
Paid Bills After paid3
Real Estate Insurance Policies After expiration1
Real Estate and Mortgage Documents10*
Receipts for Assets Received or Delivered10*
Records of Asset Tax Costs10
Scholarship Grants After distribution5
Summary Cards, Original Instruments, Agreements and Amendments, Letter of Appointment10*
Synopsis Sheets3*
Investments:
Annual Reports Common Trust and Pooled Funds10
Common Trust/Pooled Fund Valuations 10
Common Trust/Pooled Fund Workpapers7
Investment and Administrative Committee Minutes10
Investment Orders (Tickets) and Brokers Confirms7*
Investment Review and Related Material3*
Routine Correspondence and Memoranda (After date transaction or closing)2
Summary of Annual Account Activity10*
* After termination of fiduciary responsibility
Internal Operations:
Abandoned Property Reports After date filed10
Asset Trial Balances10
Brokers Monthly Statements6
Canceled Trust Checks10
Cash and Asset Blotter7
Cash Dividend, Stock Dividend, Split and Bond Interest Proof, Maps, Claims5
Copies of Cash and Assets Statements10
Copies of IRS Forms (1087, 1099, etc.) and Supporting Papers4
Daily Posting and Proving Media for Cash and Assets7
Duties Ticklers, Check Lists, Other Internal Records3
Fee or Commission Ledgers5
General Correspondence and Memoranda3
Paid Bills6
Proxies2
Registered/Certified Mail Receipts7
Rights Offerings, Tenders, Exchanges, Reorganizations, Name Changes, etc.5
Trust Check Registers and Stop Payment Orders6
Vault Deposit and Withdrawal Tickets10
Vault Entry Logs6
Worthless Securities Original DocumentPermanent
Employee Benefit/Corporate Trust:
Canceled Bond/Coupons/Supporting Transfer Papers Return to Issuing Corporation and Retain or Cremate and Retain Certificate of CremationPermanent
ERISA Annual Reports3
Inventory Record10*
Letters of Transmittal/Receipts of Transfer10*
Pension Payment Authorization10
Pension/Profit Sharing Allocation Reports7
Transfer Logs for Cancellation/Reissue of Certificate10*
Written and Telephone Logs with Monthly Recaps10
Taxes:
Federal/State Estate Tax Returns and Related Papers (After Account Closed)7
Federal/State Gift Tax Returns7
Federal/State Income Tax Returns and Work Papers7

BASIS STATEMENT

I. FACTUAL AND POLICY BASIS OF THE RULE

In 1977, the Bureau of Banking promulgated Regulations # 1 (Retention of Records – Trust Companies and Savings Banks), #2 (Retention of Records – Savings and Loan Associations), and #3 (Retention of Records – Credit Unions) which prescribed minimum periods for which records in financial institutions must be retained. Since that time, many new products and services have been developed by the financial industry. Additionally, many of the same types of products and services are being offered by all type of financial institutions. This rule is being expanded to include documents utilized by all types of financial institutions and updated to include records generated by new products and services.

Statutory basis found in Title 9-B MRSA Section 225 gives the Superintendent the authority with which to promulgate this rule.

II. RESPONSE TO COMMENTS

Pursuant to the provisions of Maine’s Administrative Procedure Act, a draft of Chapter 101 (Reg. #1) was promulgated on or about June 17, 1992 and comments were solicited for a period extending until July 17, 1992.

Comments were received from the Maine Bankers Association (MBA) on behalf of its member banks, Bar Harbor Banking and Trust Company (BHBT), Key Bank of Maine (KEY), and Saco & Biddeford Savings Institution (SACO).

MBA and KEY commented that the rule would require records with a "permanent" record retention requirement be retained as an original document, without regard to technological gains made in recent years to electronic document storage and retrieval systems; i.e. image processing, optical disk storage, etc. The Bureau agrees that significant improvements have been made in these types of systems in recent years. However, these various technologies are too recently developed to accurately determine the "shelf life" of documents stored using these methods. Therefore, records with a permanent retention schedule must be retained in original form as proposed.

KEY and SACO both expressed concern over the nature and volume of records required to be maintained permanently and provided suggested retention periods for some of those records. As a result, all records which were required to be maintained permanently were reviewed and most were changed from a permanent retention schedule to a finite retention period.

SACO questioned a 6 year retention period for business annual reports, cashflow analyses, and tax returns. The Bureau recognizes the voluminous nature of these documents and agrees that a shorter retention period is adequate. Therefore, the retention period for these items was shortened to 3 years.

SACO also requested clarification of "Depreciation schedule - fixed asset records". Accordingly, in addition to a reduced retention period, this category was renamed "Fixed asset records" and was split into two categories with more descriptive terminology. Financial institutions are encouraged to consult their income tax advisors regarding the retention period for fixed asset records, as records may need to be retained for longer periods in some instances.

MBA requested parity between this record retention rule and the FDI Act at Section 21, stating that the "FDIC allows records such as microfiche or other technological storage of the item for permanent retention". The coverage of Section 21 extends only to checks, drafts, or similar instruments drawn on, deposited to, or sent for collection by banks. The proposed retention schedule for these records would permit the use of technological storage; therefore, no change was deemed necessary.

BHBT commented that the rule did not specifically address record retention of electronic transactions, other than ATM machine settlements. A review of the various documents specified in the rule indicated that adequate primary or secondary records are required to be retained to allow for the reconstruction of electronic transactions. BHBT also commented that the retention schedule for security tapes is longer than necessary. In response, the retention period for the tapes has been shortened from 6 months to 2 months.

EFFECTIVE DATE: January 1, 1993

Last Updated: June 5, 2013