Is there a record retention requirement for the file on a loan where the borrower exercised his right to rescind? In my 38 years in banking, this is the first time I have ever had a borrower rescind!

Georgia, there is no Virginia statute governing retention that would extend to this situation (I worked there for 9 years).

Treat the loan as a paid out credit and retain for the applicable period. Remember, under the terms of CIP, you need to retain that data for at least 5 years.

Thanks! That's where I was heading!

Hi, I'd like to bring this thread back to life. Is the record retention requirement for a rescinded loan still five years as indicated above?

Regulation Z contains a three year record retention requirement, which is what I believe is required. Since the loan is rescinded, we have no customer and therefore I do not believe CIP would apply.

Thoughts, please? Thank you.

I would keep all documentation for the statutory length of time that the applicants could bring suit against the bank - regardless of any regulatory requirements.

You HAD a customer who rescinded. You had CIP duties and presumably completed them. You are required by FinCEN regulations to retain the identifying information about the customer (Name, DOB, Address at the time, SSN or other ID number) for five years after the account is closed. You also have to retain for five years after the record is made, the description of the document(s) relied on for verification of the customer's identity, a description of the methods and results of any measures taken to verify identity using non-documentary or other methods, and a description of the reslution of any substanative discrepancy discovered when verifying the ID information.

See FinCEN's CIP regulation at 31 CFR 1020.220(a)(3)

The recordkeeping requirement doesn't evaporate with the customer's rescission.

Excellent points, John. Thank you and Randy for your advice.