Section 226.25 of Regulation Z says I don't have to keep copies of loan ads, but I've heard that the regulators require it anyway. Can someone point me to the FILs, Banking Bulletins, or whatever it is that I should know about?

I don't know where/if it is written that you must keep loan ads, but without keeping them it is difficult to demonstrate compliance.

And when you want to audit yourself or demonstrate compliance in a regulatory exam, retention will be a self-imposed requirement.

So the answer is that Marketing can toss out loan ad copy whenever it pleases and the examiners can't cite any violations?

As part of our current CRA exam, we were asked to provide loan ads back to the last CRA exam (1997). Fortunately, ours is a corporate culture where we don't throw out much (don't advertise much, either). They also were asking for denial info back to 1997, despite the 25 month retention period.

Asking is OK. If they are favorable, I probably still have them. Was there a threat of record retention violations?

I don't see how they could cite you, at least on that. Not having ads to review though, may give them more time to focus on something else you'd rather they not go into.

Also, I heard once of a bank that kept its denials way beyond the 25 month retention. When a fair lending issue came up, they were asked to go back as far as they could, since they had them. Keeping items too long can be a bad thing.

I too do not know of any citation that requires keeping ads. However, as Andy pointed out, it is hard for anyone to assess compliance without evidence to review. I have always treated this as a “control” issue when writing reports.

FYI - If you are an FDIC examined bank, the FDIC will soon be changing their method of examination to focus more on the compliance program. Of course, “controls” play a big part in any compliance program.


Disclaimer: My opinion above is not intended as legal advice because I am not a lawyer. If I were, I would be charging for my thoughts at the rate of $300 per hour in addition to fees for phone calls, copies, faxes etc. My ramblings are certainly not the opinion of my employer and, if you ask my wife, not worth 2¢.

Keeping the adds that pertain to CRA efforts is always worthwhile. I ask marketing for copies of all their efforts annually. I then weed through them for targeted audiences or areas which will boost my CRA services exam. This is what the regulators want to see. (and is part of their pre exam request typically)

Not having the information wouldn't have caused me a penalty, but it would have affected by ability to support the efforts we've made to target some audiences. Word of mouth (especially my big mouth) isn't enough even for the OCC...they want proof!

When speaking of the retention of loan files, I understand that the retention for denials is 25 months (real estate loan files).

Do 'approved, but not accepted' and 'withdrawn' apps fall into the same category as denials for this purpose?

And doo we only have to worry about keeping CIP info if the loan is originated?

Thanks!

Bump...

I'm not sure about "approved not accepted", but the commentary states this about withdrawals:

"Withdrawn and brokered applications. In most cases, the 25-month retention period for applications runs from the date a notification is sent to the applicant granting or denying the credit requested. In certain transactions, a creditor is not obligated to provide a notice of the action taken. (See, for example, comment 9-2.) In such cases, the 25-month
requirement runs from the date of application, as when:

i. An application is withdrawn by the applicant."

CIP is only for customers, so if the loan doesn't originate then you wouldn't need CIP information though (however, we do keep everything anyway).

Hope that helps a little!

Thanks, it helped a lot!