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#2209338 - 03/22/19 09:40 PM HMDA Adverse Action File Retention
Chelsea C Offline
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Joined: Nov 2018
Posts: 14
In Reg C it states "The financial institution shall retain a copy of its annual loan/application register submitted for its records for at least three years." The Reg B requirement states "For 25 months (12 months for business credit, except as provided in paragraph (b)(5) of this section) after the date that a creditor notifies an applicant of action taken on an application or of incompleteness, the creditor shall retain in original form or a copy thereof: (i) Any application that it receives, any information required to be obtained concerning characteristics of the applicant to monitor compliance with the Act and this part or other similar law, any information obtained pursuant to ยง 1002.5(a)(4), and any other written or recorded information used in evaluating the application and not returned to the applicant at the applicant's request."

Is there any concern from an exam stance if we get rid of information after 25 months and yet we're expected to keep LAR information for 3 years? Would safe practice be to keep all information for 3 years?

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#2209339 - 03/22/19 09:43 PM Re: HMDA Adverse Action File Retention Chelsea C
raitchjay Offline
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Joined: Oct 2009
Posts: 8,835
OK
I would never get rid of an AAN notice that was HMDA reportable until at least that exam cycle had passed.
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#2209416 - 03/25/19 06:12 PM Re: HMDA Adverse Action File Retention Chelsea C
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Chelsea: First, welcome to BOL!
Second, I want to clarify that you don't want to mix up regulatory requirements. You need to retain documents for the longest regulatory requirement (or longer for civil liability).

Reg B requires you to retain the application and supporting documentation for 12 or 25 months after the action taken occurred.
Reg C requires you to keep everything to support all HMDA fields for 3 years following submission. That can be as long as 4+ years (action on 1/1/19 but submitted on 3/1/20).
Most BSA requirements are 5 years. Same with RESPA.
Check your state laws too.

So, yes, there are concerns of getting rid of info after 25 months.
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#2209913 - 03/29/19 07:47 PM Re: HMDA Adverse Action File Retention Chelsea C
Chelsea C Offline
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Joined: Nov 2018
Posts: 14
Thank you Dave for that guidance. What specifically would we need to retain from a BSA perspective for a denied application in which the applicant does not end up becoming a "customer"?

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#2209920 - 03/29/19 08:29 PM Re: HMDA Adverse Action File Retention Chelsea C
JWills, CRCM Offline
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JWills, CRCM
Joined: May 2013
Posts: 1,759
The Mitten State
We have a CRA exam in process, and the examiners have reviewed 2016 and 2017 data. Is it safe to shred the denied applications after the exam is finished in June?
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#2210393 - 04/04/19 07:15 PM Re: HMDA Adverse Action File Retention Chelsea C
David Dickinson Offline
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David Dickinson
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Central City, NE
Quote:
Thank you Dave for that guidance. What specifically would we need to retain from a BSA perspective for a denied application in which the applicant does not end up becoming a "customer"?

I wasn't trying to be specific to denied apps (although I realize that's the context of this conversation). I was simply trying to point out that Reg B has a 25 month retention requirement, but other regs have longer retention requirements. If you made the loan, BSA has a 5 year requirement. Sorry for the confusion.
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#2210394 - 04/04/19 07:17 PM Re: HMDA Adverse Action File Retention Chelsea C
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:
We have a CRA exam in process, and the examiners have reviewed 2016 and 2017 data. Is it safe to shred the denied applications after the exam is finished in June?

If any of the denied apps were subject to HMDA, then you must keep all of the info necessary to support the HMDA data entries for 3 years following submission. IOW, 2017 data would submitted by 3/1/18, so you need to retain it until 3/1/2021.
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http://www.bankerscompliance.com

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#2212962 - 05/07/19 01:43 PM Re: HMDA Adverse Action File Retention David Dickinson
Chelsea C Offline
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Joined: Nov 2018
Posts: 14
Thank you Dave. That was the validation I was looking for!

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#2213045 - 05/08/19 12:00 PM Re: HMDA Adverse Action File Retention JWills, CRCM
Rocky P Offline
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Joined: Jun 2003
Posts: 7,441
Florida
You can shred the adverse action letters (and files) anytime you want to (unless contrary to state law). Instead, you can retain the information electronically. Many examiners will request electronic access to documents rather than paper copies. As mentioned above, for ECOA, you must retain documents for 25 months, so the 2017 data less than 25 months still needs to be retained.
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