An examiner told the bank to have a record retention schedule that is reproduced from the reg as an appendix to our BSA policy.
It wasn't in the written report was it? The poorest of examiner suggestions generally don't find their way to their employer's official communications.
Inserting explicit legal requirements into a policy is a poor practice. First, because they are what they are regardless of what your policy says. Second, because voting on them makes the board look ridiculous and, if they are incorrect, just plain dumb.
If you already agreed to do it, JerseyGirl's observation is a good one.