OLYMPIA, Wash. (10/21/09)--Credit unions may want to keep paper copies of an original note, deed or loan agreement in addition to an electronic copy in case a document is needed for litigation, said the Washington State Department of Financial Institutions (DFI). Many credit unions have adopted electronic record storage systems, consistent with some state and federal laws, such as the federal Electronic Signatures in Global and National Commerce Act of 2000, which provides that a signature, contract or other record may not be denied legal effect because it was signed electronically. However, the laws do not resolve all legal or practical issues necessary to make sure the records comply with requirements. Therefore, credit unions should design and operate their electronic record systems to serve:
* Potential use in litigation support; * Internal and external audits and controls; and * Compliance with regulatory requirements.
Credit unions adopting electronic record systems should address the risks of inadequate record retention. Failing to maintain adequate record retention systems can create risk, the DFI said. For more information, use the link.