- Banking: Electronic Storage of Bank Records
- October 2, 2007 | Author: Mark Lance Miller
- Law Firm: Baker, Donelson, Bearman, Caldwell & Berkowitz, PC - Nashville Office
The Electronic Signatures in Global and National Commerce (E-SIGN) Act provides banks with the option of storing records of loans, accounts and other transactions in electronic format. The E-SIGN Act requires electronic storage systems to maintain the accuracy, integrity and accessibility of these records, but does not set technical system requirements.
Banks implementing an electronic storage system should seek the advice of legal and auditing counsel on structuring the system for litigation discovery, audit support and bank examiner access. There should be adequate controls on access and personal data privacy, to maintain record integrity and comply with the Bank Secrecy Act, the Gramm-Leach-Bliley Act and similar statutes. An acceptable electronic storage system should pass these tests:
• Be consistent with the bank’s general records management and retention policy.
• Have adequate security to prevent cybercrime and other unauthorized access.
• Provide for effective backup and recovery.
• Make electronic records fully available for discovery during litigation, and for bank examiners and auditors.
Beyond this, banks should implement electronic record systems that are designed for maximum flexibility as data storage methods evolve to provide for continuing accessibility despite such changes. Finally, although federal and most state laws say that electronic copies are sufficient for most purposes, small community banks are well advised to store at least one paper copy documenting their most important transactions as defined by dollar amount or specific customer.