Our operations department wants to purge old closed accounts from our system through end-of-year processing tomorrow and asked me if there was any regulatory issues with that. I can't think of any, so long as we can access our CIP and account documentation for the required retention period. Does anyone know of any regulatory issues?

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It depends on how old is old. I remember back in the day when we could not purge a closed account that had closed during the year because a 1099int would not be created. You might wish to consider account history...if you offer your customers the ability to access their account online and say offer 18 months of history, they may be depending on that availability for their own tax reporting or recordkeeping.

From a BSA perspective, what about the 314(a) searches. Typically you have to search your records going back 6 months. Is it possible that accounts will be purged that were closed less than 6 months ago?

I spoke with the ops manager this morning. He wants to run the purge for any closed account that was closed "X" number of years ago or more. He didn't give me a number that he was thinking. I may recommend that he not purge anything that has closed less than 2-3 years ago. Any thoughts on that?

We purge every July. Any account closed longer than 18 months is purged. We do this for every application - DDA, Savings, CD, Loans and CIF accounts. Our system produces a Purge Report by application listing name, account, short name, TIN, date open, date closed....and other pertinent information based on that application. These reports are in our report system, which we have access to for years and years.

We did this for a long time on DDA, SAV, Loans but we did our first CIF purge just a couple of years ago. It was huge, because we'd been doing indirect loans for many years.

Thanks everyone!

31 CFR 103.100(b)(2)(i) regarding 314(a) searches:

...a financial institution shall only be required to search its records for:
(A) Any current account maintained for a named suspect;
(B) Any account maintained for a named suspect during the preceding twelve months;

This is not a record retention requirement. BSA's record retention requirements are for 5 years and the concept of "purging" should not include eliminating records required by the regulation. For 314(a), your concern is simply facilitating an automated search.

Thanks Ken.