August 25, 1998
Robert N. Buck, President
Red River Federal Credit Union
P.O. Box 5909
Texarkana, TX 75505-5909
Red River FCU is studying the feasibility of implementing an optical
disk imaging computer system. You wrote to ask if the use of
an optical disk imaging system for storage of key records such
as applications for membership and joint share account agreements
would be an acceptable substitute for microfilm. You also asked
whether you would be required to retain the original hard copy
forms for current members. Computer imaging is an acceptable
substitute for microfilm, as long as the records remain accessible
for reading and printing by auditors and examiners. In response
to your second question, you need not treat the records of current
members differently from those of former members. Records for
both current and former members which have been microfilmed or
imaged, may be destroyed following the next examination by NCUA
and the next comprehensive annual audit by the supervisory committee,
provided the individual share and loan ledgers are in balance
with the general ledger control accounts. If any of the records
pertain to discrepancies or shortages that have been discovered,
such records should not be destroyed until the discrepancies or
shortages have been cleared.
The current NCUA Accounting Manual for Federal Credit Unions
(the manual), at section 5190, sets forth agency policies for
credit union record retention. It states that key records should
be retained permanently unless they have been microfilmed. The
purpose of microfilming records is to improve efficiency by limiting
the resources a credit union must expend to maintain records.
This goal may also be accomplished by use of an optical imaging
computer system.
The manual recommends that, before making the decision to microfilm,
the credit union obtain legal advice to ensure that microfilmed
records will be accepted in a court of law in the jurisdiction
where the credit union is located. This is also necessary for
records captured in an optical disk imaging system.
The manual also warns that all original loan documents should
be retained until the loan is satisfied and as required by other
record retention laws. Please note
Mr. Robert N. Buck
Page Two
that certain records, such as the credit union's charter, bylaws and amendments, are of such significance that the manual states that they must be permanently
retained. Notwithstanding your use of an imaging system, you
may not destroy the originals of those documents.
You must ascertain that any computer system under consideration
meets Year 2000 requirements. Additionally, you should consider
other applicable state and federal laws requiring record preservation
before you make a decision concerning an optical imaging computer
system. Finally, you should consult with your NCUA examiner to
ensure that there are no safety and soundness issues presented
by your plan.
Sincerely,
Sheila A. Albin
Associate General Counsel
OGC/DMS:bhs
SSIC 3500
98-0520