New E-Doc Retention Requirements:
Think Location, Location, Location
Andy Zavoina, BOL Guru
CD ROM - eCompliance
Presented by
Andy Zavoina
 If your bank has ventured into the electronic environment you have to understand the rules that apply to bits and bytes. Spend two hours and learn the basic laws affecting what and how you conduct business and contract, common website violations, a CAN SPAM overview, managing employee risk in today's internet environment and more. 
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The Federal Rules of Civil Procedure (FRCP) have changed and you need to prepare your bank because the changes indirectly result in a tracking and access requirement for electronic documents. The rules amend the process of discovery for federal court cases. Since it is not possible to discern when, if ever, your institution will be a party to a case in federal court, it is imperative that you be ready to comply when it occurs.
Amendments to Rules 26 and 34 are the ones to focus on. Those changes, effective December 1, 2006, involve identification, inventory, and production of electronically stored information whether it is in the form of Word, Excel, or Access files, email, instant messages, e-faxes, voice mail, or any other electronic form.
In the past, discovery of electronically stored documents has been expensive, time-consuming, and in some cases, not as reliable as it should have been. The FRCP amendments affect companies and other entities required to produce this electronically stored information when it is requested in a federal court case. The rules may work for you, or against you, depending on your position.
The FRCP will affect your bank. You should review your procedures for retaining/destroying electronic files and be able to locate those documents you retain.
In many cases employees are allocated a predetermined amount of storage space for electronic files. While some may reach the maximum capacity quickly, others may not even come close. The latter may have very old email, outdated policy drafts and customer correspondence that is not required to be retained. Server data may also be archived for longer than any retention requirement states. If not required, ask yourself why you want to keep these files.
The new rules also indicate that you need not provide discovery of electronic records from sources that are not reasonably accessible because of undue burden or cost (if the court accepts your arguments). Keep in mind that new technology for marshalling and organizing electronic documents may render such arguments ineffective.
Executive Steps:
Following the Gramm-Leach-Bliley Act you should already have an Information Security Policy and it if it already addresses these issues, you may have limited work to do. However, if you don't have a policy for the adequate retention and destruction of electronic records, then there is work to be done.
- Because your bank counsel will be the point of contact on discovery requests, ensure that counsel understands the mechanics and flow of your electronic records. Counsel should understand how and why you retain what you have and can advise you if you need to make policy changes.
- Work with Counsel to identify privileged information and ensure it is not discoverable. This also applies to information scheduled for destruction but retained longer because it is involved in litigation.
- Meet with the Information Technology department so that everyone, including IT, counsel and management understands:
- which electronic records are retained
- the time frame for destruction of those records in all forms - don't keep what you don't need
- which formats are kept, and if there are redundant backups
- how to locate any requested records based on your filing systems
- difficulties you have with your systems based on formats, media, locations, etc.
- Develop/update/train on your policy and procedure for retention so employees understand and comply with them.
Preparation in advance of being involved in a discovery request is an absolute necessity to save you time and money in retrieving information. The organization you achieve in this process will pay returns beyond those savings.
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First published on BankersOnline.com 2/08/07
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