Guidance on records preservation for credit unions concerning the length of time credit unions should retain various types of operational records was removed from the federal regulator’s regulations under a final rule adopted Monday.
According to the one-man board of the National Credit Union Administration (NCUA), the final rule eases “unnecessary and overly prescriptive preservation requirements, while ensuring that credit unions retain the critical documents needed in instances of disaster.”
The rule was approved by NCUA Board Chairman Kyle Hauptman, the sole sitting member of the NCUA Board.
The agency, in a release, asserted the rule clarifies the purpose of the regulation, removes Appendices A and B of the existing rule, and updates certain definitions used in the rule. The portion holding the guidance, and which was removed, was in Appendix A. Appendix B provided guidance for developing a program for responding to a catastrophic act. Those changes were proposed by the board in March.
Two other changes were made in the final that were not part of the proposal, NCUA said. First, NCUA said the final rule provides more flexibility in determining the content of the vital records preservation log rather than adhere to a prescriptive list of factors. Second, the final rule does not include any reference to consulting with legal counsel on record retention periods.
Other portions of the new rule, also contained in the proposal, are that it:
- Defines vital member services and vital records, currently only addressed in the rule by examples.
- Adds the term “vital” to the regulation’s heading so that it will read “Vital Records Preservation Program.” The term “vital” would also be added to the regulation to further clarify the scope of part 749, which is vital records.
- Makes clear that a records preservation log may be in electronic format. The agency said this will create more flexibility for credit unions to manage and store vital records.
- Permits destruction of older versions of records unless required by other law or regulation. The agency says this “will allow credit unions to get rid of and no longer be responsible for unnecessary records.”
- States clearly NCUA’s expectation that, if a credit union contracts with a third-party service provider to maintain its vital records, the credit union must maintain effective oversight of the third-party service provider to ensure the credit union meets its obligations under part 749. “This change would provide clarity about the meaning of the
The rule takes effect 30 days after its publication in the Federal Register.
NCUA Board Approves Final Rule on Vital Records Preservation
Leave a Reply