Another New Year's Resolution: Destroy old forms
It's that time of year again. Time for resolutions - and time for updating lots of forms. A common cause of compliance violations is the use of forms that are outdated and should have been thrown away or shredded. Disclosures for adjustable rate mortgages, home equity plans, and sale of servicing need to be updated each year. Old forms automatically fall out of compliance but there is always someone in the bank who saves them for a rainy day. It will definitely rain violations when they reach into a drawer, pull out and use that old form!
If you are having trouble persuading branch staff to destroy old forms, try this analogy. What if, when the bank issues new payment coupons, or sells the servicing of a loan, the customer decides to keep the old payment coupon packet - just in case. Someday, they'll use it, and where will the payment go? Saving old - outdated - disclosure forms isn't much better. So tell them to shred them!
Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 3, 1/96
First published on 01/01/1996