We have recently went to Electronic Loan Application Platform which does away with the paper loan application (branch lobby applications that the consumer can take with them). If an applicant completes a paper application the information is transfered into our Loan Platform and submitted to our loan decision department. We have always requested the branches to send the paper application to our loan department which is filed in the consumers loan file. Now that we are going paperless, would we have to continue to keep the paper application or could we have the branch destroy it? Our loan department has stated since we have an electronic system, why should we go through this paper exchange?

I tend to err on the conservative side, but I would opt to retain the original application that is in the applicant's own writing if you have obtained it. There's nothing wrong with retaining an electronic copy of it (i.e. scanning). My reasoning is that if you ever went to court on that loan and the applicant said something like, "Well, I didn't state that on my application..." you'd be able to go back to the original application. People make typos all the time, and I just don't know that I'd want to rely on that electronic version of the applicants written application.

I'm sure someone else will come back and say this is far too conservative a view especially from a risk management stanpoint - how often do you think you will really go to court on a loan where you would need to produce an application that the applicant filled out himself/herself?

As an aside...how do your customers now complete an application from the comfort of thier own home/office if they can't take a paper one with them? Do they just type the information via phone or PC? Do they have to call during office hours and talk to a live person that they give the information to?

Vic - we scan the applications, keep the image of them, and then shred the paper.

Retaining scanned images is the same thing as retaining the paper itself. Keying info into a database system from the original app is not the same thing. Typos, omissions and interpretive errors will creep into this process.