Authority for Imaging - Mary Beth Guard

Authority for Imaging
by Mary Beth Guard
Guru BIOS

At a seminar, I asked for a show of hands so we could see how many banks were providing imaged statements to their customers. The percentage was quite large. I then asked a follow-up question about the length of time they retain their customer's original checks before they destroy them. The most surprising answer came from a banker in the back of the room who said, "We have a shredding party every Wednesday!"

Perfectly legal, of course, since the UCC simply requires an institution to be able to produce the checks or a legible copy thereof for a seven year period after the statement is furnished, but shocking, nonetheless, because that bank's "retention period" was significantly shorter than those claimed by other banks. When asked what motivated them to choose such a quick destruction schedule, the answer made perfect sense. "We ran out of room."

If space issues are causing you to reevaluate all the paper you're storing, and you are considering creating images of a wide array of bank records, one of the first issues that may arise in your internal discussion is the issue of whether the imaged copy will be sufficient for legal purposes, or whether you will need to stick the paper away and keep it somewhere.

As always, please note that your state may have a statute that would make the answer different for your institution, so check state law to be sure. Other than that, image away!

The original version appeared in the August/September 2004 edition of the Oklahoma Bankers Association Compliance Informer.

First published on BankersOnline.com 1/10/05