Record Retention Requirements, 63585-63591 [2014-25338]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 79, Number 206 (Friday, October 24, 2014)]
[Proposed Rules]
[Pages 63585-63591]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25338]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 380

RIN 3064-AE25


Record Retention Requirements

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') is 
proposing a rule with request for comments that would implement section 
210(a)(16)(D) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act). This statutory provision requires the 
promulgation of a regulation establishing schedules for the retention 
by the FDIC of the records of a covered financial company (i.e., a 
financial company for which the FDIC has been appointed receiver 
pursuant to title II of the Dodd-Frank Act) as well as the records 
generated by the FDIC in the exercise of its title II orderly 
liquidation authority (title II) with respect to such covered financial 
company.

DATES: Written comments on the proposed rule must be received by the 
FDIC no later than December 23, 2014.

ADDRESSES: You may submit comments by any of the following methods:
     Agency Web site: https://www.fdic.gov/regulations/laws/federal. Follow instructions for Submitting comments on the Agency Web 
site.
     E-Mail: Comments@FDIC.gov. Include ``RIN 3064-AE25 '' in 
the subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW., 
Washington, DC 20429
     Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7 a.m. and 5 p.m. (EST).
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    Public Inspection: All comments received will be posted without 
change to https://www.fdic.gov/regulations/laws/federal including any 
personal information provided. Comments may be inspected and 
photocopied in the FDIC Public Information Center, 3501 North Fairfax 
Drive, Room E-I002, Arlington, VA 22226, between 9 a.m. and 5 p.m. 
(EST) on business days. Paper copies of public comments may be ordered 
from the Public Information Center by telephone at (877) 275-3342 or 
(703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Legal Division: Elizabeth Falloon, 
(703) 562-6148; Jerilyn Rogin, (703) 562-2409. Division of Resolutions 
and Receiverships: Teresa J. Franks, (202) 898-7007; Manuel Ramilo, 
(202) 898-3781. Federal Deposit Insurance Corporation, 550 17th Street 
NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: 

I. Background

    Title II of the Dodd-Frank Act provides for the appointment of the 
FDIC as receiver for a financial company to conduct an orderly 
liquidation of the company if, among other things, resolution of the 
company under bankruptcy (or other applicable insolvency regime) would 
have serious adverse effects on U.S. financial stability. Once 
appointed, Title II confers upon the FDIC as receiver for the company 
(the ``covered financial company'') certain powers and authorities to 
effectuate an orderly liquidation of the covered financial company in a 
manner that is consistent with the statutory objectives. For example, 
upon appointment of the FDIC as receiver for a covered financial 
company, the FDIC succeeds to all rights, titles, powers and privileges 
of the covered financial company including title to the books and 
records of the covered financial company.\1\
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    \1\ 12 U.S.C. 5390(a)(1)(A).
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    In addition, the FDIC necessarily will generate its own records in 
exercising the authorities conferred upon it by Title II. Section 
210(a)(16)(D) of the Dodd-Frank Act (12 U.S.C. 5390(a)(16)(D), 
hereafter ``section 210(a)(16)(D)'') sets forth the outlines of the 
FDIC's responsibilities regarding the retention of both of these 
categories of records--the records of a financial company in existence 
at the time the FDIC is appointed receiver, as well as those generated 
by the FDIC in connection with its appointment as receiver and the 
exercise of its orderly liquidation authority as receiver. Section 
210(a)(16)(D) provides guidance as to types of records that must be 
retained, and requires the FDIC to prescribe such regulations and 
establish such retention schedules as are necessary. Specifically, 
section 210(a)(16)(D)(i) requires that the FDIC prescribe the 
regulations and establish schedules for retention of these records with 
due regard for the avoidance of duplicative record retention and for 
the evidentiary needs of the FDIC as receiver and for the public. Once 
such regulations and retention schedules are prescribed, section 
210(a)(16)(D)(ii) prohibits the destruction of records to the extent 
that they must be retained in accordance with the promulgated 
regulations and retention schedules. The proposed rule provides 
separate rules and retention schedules for inherited records of the 
covered financial company and for the records generated or maintained 
by the FDIC in connection with its receivership function. ``Generated 
or maintained'' refers in this context to records the FDIC creates, as 
well as records the FDIC receives and retains in connection with its 
Title II responsibilities.
    Section 210(a)(16)(D)(iii), entitled ``Records Defined,'' describes 
the forms of documentary material to be addressed in the regulations 
and schedules, specifying that any document, book, paper, map, 
photograph, microfiche, microfilm, computer or electronically-created 
record is included. In addition, that section specifies that the 
records inherited from the failed company are those that were generated 
or maintained by the covered financial company in the course of and 
necessary to its transaction of business. The proposed rule clarifies 
the definition of ``records'' by including factors to be considered in 
determining whether documentary material was generated by the company 
in the course of and necessary to its transaction of business, as well 
as by providing examples such as general ledger and financial reports 
and qualified financial contracts.
    In addressing records generated by the FDIC, the proposed rule uses 
the same broadly inclusive description of documentary material provided 
in the statute and includes those records that the FDIC created or 
received in exercising the authorities of title II as required by 
section 210(a)(16)(D). This definition is also clarified in the 
proposed rule by including factors to be considered in determining 
whether documentary material was generated or maintained by the FDIC in 
the exercise of its title II authorities as well as by providing 
examples such as documentary material relating to the appointment of 
the FDIC as receiver and documentary material relating to the 
administration, determination and payment of claims against the FDIC as 
receiver.

[[Page 63586]]

    Exclusions from both categories of records addressed in the 
proposed rule include items such as duplicate copies, drafts superseded 
by later revisions, and non-publicly available confidential supervisory 
information.
    In keeping with the statutory mandate, retention schedules are 
created for both receivership and inherited records. The retention 
schedule for inherited records of the financial company that existed at 
the time of appointment of the receiver was modeled after the treatment 
of such records upon the appointment of the FDIC as receiver for a 
failed insured depository institution. That regulation, entitled 
``Records of Failed Depository Institutions'' \2\ (hereafter the ``FDIA 
final rule''), addressed the retention of records of failed insured 
depository institutions pursuant to section 11(d)(15)(D) \3\ of the 
Federal Deposit Insurance Act (hereafter the ``FDIA provision''). 
Although certain aspects of the FDIA final rule provided guidance for 
this proposed rule, there are significant differences because the 
respective statutory underpinnings are different; in contrast to 
section 210(a)(16)(D), the FDIA provision contains neither a definition 
of records nor factors for the identification of records. In addition, 
the FDIA provision addresses only the retention of records of a failed 
insured depository institution and does not address the retention of 
the records generated or maintained by the FDIC in connection with its 
receivership functions. Accordingly, the FDIA final rule and this 
proposed rule promulgated under the Dodd-Frank Act each should be 
viewed and interpreted independently of each other.
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    \2\ 12 CFR 360.11, 78 FR 54373 (September 4, 2013).
    \3\ 12 U.S.C. 1821(d)(15)(D).
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II. Proposed Rule

Authority and Purpose

    Title II of the Dodd-Frank Act sets forth the orderly liquidation 
authority over covered financial companies. Section 210(a)(16)(D) 
specifically requires the FDIC to prescribe such regulations and 
establish such retention schedules as are necessary to maintain the 
records of the FDIC generated in exercising the authorities of title II 
and the records of a covered financial company for which the FDIC is 
appointed receiver.
    The purpose of this proposed rule is to fulfill the statutory 
mandate contained in section 210(a)(16)(D) by providing the factors 
necessary to identify such records and to establish retention schedules 
for those records in order to enable the FDIC to properly manage the 
records of that covered financial company \4\ as well as the records 
generated or maintained by the FDIC in the course of its function as 
the receiver for that covered financial company.
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    \4\ A ``covered financial company'' is a financial company 
(other than an insured depository institution) for which the 
necessary determinations have been made for the appointment of the 
FDIC as receiver. 12 U.S.C. 5381(8). ``Financial company'' is 
defined in the Dodd-Frank Act at 12 U.S.C. 5381(11) and the 
regulations promulgated thereunder.
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Section-by-Section Analysis

Scope and Definition
    Paragraph (a)(1) sets forth the scope of the proposed rule. It 
makes clear that the proposed rule would apply to those records that 
are addressed by section 210(a)(16)(D), i.e., those records of a 
financial company that are inherited by the FDIC upon its appointment 
as receiver, as well as those generated by the FDIC in connection with 
its appointment as receiver and the exercise of its orderly liquidation 
authority.
    Paragraph (a)(2) sets forth the definition of ``documentary 
material.'' This definition is taken directly from text of section 
210(a)(16)(D)(iii) and describes the universe of forms and formats in 
which ``records'' (determined pursuant to the proposed rule's criteria) 
may appear, including books, paper, maps, photographs, microfiche, and 
electronically-created records, regardless of medium or business value 
and regardless of whether they are user-created or system-generated.
    The definition in the proposed regulation clarifies that only those 
documentary materials that are ``reasonably accessible'' are included 
in the scope of the rule in order to incorporate the policy behind 
Federal Rule of Civil Procedure 26(b)(2)(B), which provides that a 
party from whom discovery is sought need not provide electronically-
stored information from sources that are not reasonably accessible 
because of undue cost or burden. For example, a party may be excused 
from restoring electronically-stored information from aging back-up 
tapes in order to produce it in response to a discovery request. Thus, 
the use of the phrase ``reasonably accessible'' would align the concept 
of ``records'' in the proposed rule with the discovery standard and 
would protect the FDIC as receiver from incurring expenses associated 
with restoring or maintaining the legacy system of a covered financial 
company in order to extract documentary material from those systems 
that is not otherwise needed by the FDIC to carry out its receivership 
functions.
    Part 380 of the Code of Federal Regulations concerns the FDIC's 
orderly liquidation authority conferred by title II of the Dodd-Frank 
Act. Section 380.1 contains the definition of the term ``covered 
financial company'' which is defined as a ``financial company'' for 
which the FDIC has been appointed receiver. Accordingly, it is not 
necessary to repeat the definitions of the terms ``covered financial 
company'' and ``financial company'' in this proposed regulation.
Records of a Covered Financial Company for Which the FDIC Is Appointed 
Receiver
    Paragraph (b) of the proposed rule addresses the records of the 
failed company that are inherited by the FDIC upon its appointment as 
receiver. The statute specifies that these records must be those that 
were generated or maintained by the financial company in the course of 
and necessary to its business. The proposed regulation provides 
additional guidance with respect to determining what documentary 
material constitutes a record that must be retained. It sets forth four 
factors which the FDIC will consider in determining whether documentary 
material, as defined in paragraph (a)(2), was generated or maintained 
in the course of and necessary to its business as a financial company.
    The first of these factors is the extent to which the documentary 
material related to the business of the financial company prior to the 
appointment of the FDIC as receiver. In making its determination, the 
FDIC would consider the extent to which the particular documentary 
material relates to the business purpose of the financial company.
    The second factor is whether the documentary material was generated 
or maintained in accordance with a financial company's recordkeeping 
practices and procedures or pursuant to standards established by the 
financial company's regulators. In general, a company's own 
recordkeeping policies and procedures will reflect the significance of 
its records to its business and regulatory requirements and the 
importance of documentary material created or maintained by a financial 
company. Thus, the FDIC will consider whether documentary material was 
retained pursuant to the financial company's recordkeeping practices 
when determining whether specific documentary material is a record for 
the

[[Page 63587]]

purposes of section 210(a)(16)(D) and the proposed rule. Likewise, the 
FDIC will consider whether documentary material was retained pursuant 
to standards imposed by the financial company's regulators when 
determining whether specific documentary material is a record for the 
purposes of section 210(a)(16)(D) and the proposed rule.
    The third factor is whether the documentary material is needed by 
the FDIC to carry out its functions as receiver. This inquiry would 
permit the classification of documentary material as a record if it 
would be used by the FDIC in carrying out its functions as receiver in, 
for example, transferring the financial company's assets or 
liabilities, assuming or repudiating the financial company's contracts, 
determining claims, or collecting obligations owed to the financial 
company.
    The fourth factor used to determine whether documentary material 
should be classified as records is the expected evidentiary needs of 
the FDIC and the public. Some records generated or maintained by the 
financial company may be used to support enforcement actions and 
litigation. Certain information may be necessary for reports to 
Congress and the public that are required under the Dodd-Frank Act. 
This factor reflects the statutory text of section 
210(a)(16)(D)(i)(II), which requires the FDIC to prescribe a records 
retention regulation with due regard for the expected evidentiary needs 
of the FDIC as receiver for a covered financial company and the public 
regarding the records of covered financial companies.
    Paragraph (b)(2) of the proposed rule establishes the record 
retention schedule for the records of a covered financial company 
described in paragraph (b)(1). The retention and disposition schedule 
set forth in the proposed rule is modeled after that contained in the 
FDIA provision and the FDIA final rule: After the end of the six-year 
period beginning on the date of its appointment as receiver, the FDIC 
may destroy any records of a failed covered financial company that the 
FDIC determines to be unnecessary to maintain unless otherwise required 
by applicable law. In addition, the FDIC may at any time destroy any 
records that are at least 10 years old as of the date of its 
appointment as receiver. Also, similar to the FDIA final rule, 
paragraph (b)(2) of the proposed rule expressly provides that the FDIC 
will not destroy records subject to a litigation hold \5\ imposed by 
the FDIC in order to ensure retention of documentary material that is 
relevant to ongoing litigation matters. By including litigation holds, 
the proposed rule implements the policy of the FDIC to preserve 
information (both electronically-stored information and paper) that the 
FDIC may be required to produce in litigation or when otherwise subject 
to a legal requirement to produce information.
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    \5\ A litigation hold (also known as a ``preservation order'', a 
``legal hold'' or a ``hold order'') is a stipulation requiring a 
party to preserve all data that may relate to a legal action 
involving that party. When in place, it requires that parties 
preserve records when they learn of pending or imminent litigation, 
or when litigation is reasonably anticipated. This requirement 
ensures that documentary material will be available for the 
litigation's discovery process.
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    Paragraph (b)(3) provides a non-exclusive list of examples of 
material that would constitute records of financial companies to 
provide additional guidance and clarity with respect to the sorts of 
documentary material that are subject to the retention requirements of 
the rule. Included examples are correspondence, tax and accounting 
forms and work papers, internal audits, inventories, board of directors 
or committee meeting minutes, personnel files and employee benefits 
information, general ledger and financial reports or data, memoranda, 
litigation files, loan documents including records relating to 
intercompany debt, contracts and agreements to which the financial 
company was a party, customer accounts and transactions, qualified 
financial contracts and related information, and reports or other 
records of subsidiaries or affiliates of the financial company that 
were provided to the financial company.
Transfer of Records
    Paragraph (b)(4) addresses the transfer of the records of a 
financial company to a third party acquirer (including a bridge 
financial company) and is also modeled on a similar provision in the 
FDIA final rule. In a resolution of a covered financial company, the 
FDIC may transfer the records of a covered financial company to the 
custody of a third party including a bridge financial company in 
connection with a transaction involving the purchase and assumption of 
the assets and liabilities of the covered financial company. Paragraph 
(b)(4) of the proposed rule provides that such a transfer will satisfy 
the records retention obligations under paragraph (b)(2) and section 
210(a)(16)(D) so long as the transfer is made pursuant to a purchase 
and assumption agreement under which the transferee agrees that it will 
not destroy the transferred records for at least six years from the 
date of the appointment of the FDIC as receiver for a covered financial 
company, unless otherwise notified in writing by the FDIC.
Records of the FDIC as Receiver for a Covered Financial Company
    In fulfilling its duties and responsibilities as receiver for a 
covered financial company pursuant to title II of the Dodd-Frank Act, 
the FDIC itself would generate, receive and maintain documentary 
material in connection with and after its appointment as receiver that 
would be separate and apart from the records that it inherited from the 
failed company. Section 210(a)(16)(D) requires retention of records 
generated by the FDIC in exercising the authorities of title II. 
Paragraph (c) of the proposed rule provides guidance with respect to 
the evaluation of whether documentary materials generated or maintained 
by the FDIC are subject to the retention requirement.
    Paragraph (c)(1) sets forth three factors that will be considered 
by the FDIC to evaluate if documentary material was generated or 
maintained by the FDIC in the course of and necessary to the exercise 
of its title II authorities. The first factor is the extent to which 
the documentary material related to duties and functions of the FDIC as 
receiver in exercising its authorities under title II of the Dodd-Frank 
Act. These would include documentary material generated or maintained 
by the FDIC as receiver with respect to its appointment under section 
202 of the Dodd-Frank Act, as well as documentary material generated or 
maintained by the FDIC as receiver for a covered financial company in 
connection with the exercise of its orderly liquidation authority. In 
making its determination, the FDIC would judge the degree to which 
particular documentary material is related to the duties and functions 
of the FDIC receiver and the exercise of its orderly liquidation 
authority.
    The second factor is whether the documentary material was generated 
or maintained in accordance with the record retention policies and 
procedures of the FDIC. The FDIC will look to its internal procedures 
for maintaining its own corporate records and use them as a guideline 
to determine whether documentary material generated or maintained as 
receiver for a covered financial company comports with these procedures 
for retention and, thus, should constitute records. Like private 
companies and other governmental organizations, the FDIC has 
established protocols for the efficient and effective maintenance of 
files, records and non-

[[Page 63588]]

record documentary materials. These protocols reflect the importance of 
these materials to the work of the FDIC.
    The third factor used to determine whether documentary material 
should be classified as records of the FDIC as receiver is the expected 
evidentiary needs of the FDIC and the public. Records generated or 
maintained by the FDIC as receiver may be needed to support enforcement 
actions and litigation. In addition, records of the FDIC as receiver 
may be needed to provide required reports to Congress and the public. 
This factor is based on section 210(a)(16)(D)(i)(II) which requires the 
FDIC to prescribe a records retention regulation with due regard for 
the expected evidentiary needs of the FDIC as receiver for a covered 
financial company and the public regarding the records of covered 
financial companies.
    Paragraph (c)(2) of the proposed rule sets forth the record 
retention schedule for the records described in paragraph (c)(1). The 
requirement that these records be maintained for at least six years 
following the termination of the receivership reflects the time periods 
contained in the FDIA final rule with respect to records of a failed 
insured depository institution and is also similar to the proposed 
rule's retention schedule time period regarding the inherited records 
of a covered financial company. The FDIA provision and final rule 
promulgated thereunder measure the six-year period from the appointment 
of the receiver which marks the legal termination of a failed insured 
depository institution. In keeping with the FDIC's long experience with 
this six-year retention period,\6\ the final rule includes a six-year 
retention period for the records of the FDIC as receiver of a covered 
financial company measured from the termination of the receivership, 
which is the comparable date after which no new records will be 
created. As in the case of the retention of records inherited from 
covered financial companies, this minimum retention period is intended 
to ensure that these records are available for a long enough period to 
satisfy the evidentiary needs of the FDIC and the public in the 
aftermath of the receivership of a covered financial company.
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    \6\ The FDIC has been required to retain records inherited from 
failed insured depository institutions for six years since the 
enactment of the FDIA provision which was added to the Federal 
Deposit Insurance Act by section 212(a) of the Financial 
Institutions Reform, Recovery, and Enforcement Act (FIRREA) in 1989 
(Pub. L. No. 101-73).
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    Paragraph (c)(3) of the proposed rule sets forth a non-exclusive 
list of examples of documentary material that would constitute records 
of the FDIC in order to provide additional guidance and clarity with 
respect to the sorts of documentary material that are subject to the 
retention requirements of the rule. Included examples are: 
Correspondence; tax and accounting forms and work papers; inventories; 
contracts and other information relating to the management and 
disposition of the assets of the covered financial company; documentary 
material relating to the appointment of the FDIC as receiver; 
administrative records and other information relating to administrative 
proceedings; pleadings and similar documents in civil litigation, 
criminal restitution and forfeiture litigation matters and all other 
litigation matters in which the FDIC as receiver is a party; the 
charter and formation documents of a bridge financial company and 
contracts and other documents and information relating to the role of 
the FDIC as receiver in overseeing the operations of the bridge 
financial company; and reports or other records of the bridge financial 
company and its subsidiaries or affiliates that were provided to the 
FDIC as receiver; and documentary material relating to the 
administration, determination and payment of claims against the FDIC as 
receiver.
    Paragraph (c)(4) of the proposed rule makes clear that the records 
either generated or maintained by the FDIC as receiver do not include 
the inherited records that existed prior to the date of the appointment 
of the receiver by the covered financial company itself. The records of 
the covered financial company and the rules for their retention are 
addressed separately in paragraph (b).
Records Subject to the Record Retention Requirements of Section 
210(a)(16)(D) of the Dodd-Frank Act and the Proposed Regulation
    Paragraph (d) of the proposed rule applies to all records that fall 
within the scope of the retention requirements of the rule as that 
scope is described in paragraphs (b) and (c). Paragraph (d)(1) of the 
proposed rule makes clear that the FDIC's designation of documentary 
material as records pursuant to paragraph (b) or (c) is solely for the 
purpose of identifying documentary material subject to the retention 
requirements of section 210(a)(16)(D) and the proposed rule should have 
no effect on whether the documentary material is discoverable or 
admissible in any court, tribunal or other adjudicative proceeding, nor 
on whether such material is subject to the Freedom of Information Act, 
the Privacy Act or other law or court order. Thus, whether specific 
documentary material is a record pursuant to the proposed rule does not 
alter its status under evidentiary rules such as the Federal Rules of 
Evidence (``FRE''). For example, FRE 803(1) provides that ``records of 
regularly conducted activity'' (``business records'') are not excluded 
from evidence by the rule against hearsay, regardless of whether the 
declarant is available as a witness. If certain documentary material 
meets the requirements of a business record pursuant to FRE 803(1), 
then whether or not the FDIC determines that specific documentary 
material constitutes ``records of a covered financial company'' or 
``records of the FDIC as receiver for a covered financial company'' 
pursuant to the proposed rule will not affect the determination of 
whether the documentary material is a business record under FRE 803(1). 
In addition, whether specific material is or is not designated as a 
record for purposes of section 210(a)(16)(D) and the proposed rule is 
not intended to affect whether it may be subject to a litigation hold 
or a request under the Freedom of Information Act, the Privacy Act or 
other law.
    Paragraph (d)(1) also clarifies that any record designation made by 
the FDIC will not prevent full compliance with any applicable legal or 
regulatory requirement or court order that establishes particular 
requirements with respect to certain records, such as a requirement 
that specific records be preserved, maintained, destroyed or kept under 
seal.
Exclusions
    Paragraph (d)(2) of the proposed rule lists three categories of 
documentary material that will not qualify as records and thus will not 
be subject to the record retention requirements of section 
210(a)(16)(D) and the proposed rule. The first category includes 
duplicate copies, as required by the mandate in section 
210(a)(16)(D)(I) to accord due regard to the avoidance of duplicative 
record retention. Also in the first category is documentary material 
such as reference materials, drafts of documents that are superseded by 
later drafts or revisions, documentary material provided to the FDIC by 
other parties in concluded litigation for which all appeals have 
expired, and transitory information including personal notes, out-of-
office replies, routine system messages or system-generated log files 
or other documentary material not routinely maintained under the 
standard record retention policies and

[[Page 63589]]

procedures of the FDIC. The term ``transitory information'' or 
``transitory record'' is commonly used in record retention systems to 
describe records of temporary usefulness required only for a limited 
period of time for the completion of an action by an employee or 
official and that are not essential to the fulfillment of statutory 
obligations or the documentation of government or business 
functions.\7\
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    \7\ For example, the Texas Administrative Code, Title 13, 
Chapter 6, Section 6.91 (2005) defines ``transitory information'' in 
the context of the state's electronic record as ``[r]ecords of 
temporary usefulness that are not an integral part of a records 
series of an agency, that are not regularly filed within an agency's 
recordkeeping system, and that are required only for a limited 
period of time for the completion of an action by an official or 
employee of the agency or in the preparation of an on-going records 
series. Transitory records are not essential to the fulfillment of 
statutory obligations or to the documentation of agency functions.'' 
The National Archives and Records Administration (NARA) Bulletin 
2013-02 (August 29, 2013), ``Guidance on a New Approach to Managing 
Email Records'' provides that agencies must determine whether end 
users may delete ``. . . non-record, transitory, or personal email 
from their accounts.'' The Sedona Conference Commentary on 
Information Governance (December 2013) refers to the ``. . . 
defensible deletion of transitory, non-substantive or non-record 
content.'' A World Health Organisation publication refers to the 
need to differentiate between records of ``. . . substantive, fixed-
term and transitory value.'' Deserno, Ineke and Kynaston, Donna, A 
Records Management Program that Works for Archives, The Information 
Management Journal, May/June 2005.
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    The second category of exclusions from record designation entails 
the documentary material generated or maintained by a bridge financial 
company \8\ or by a subsidiary or affiliate of a covered financial 
company. The exclusion of this documentary material emphasizes the 
separate legal status of the covered financial company and its 
subsidiaries and of the FDIC receiver and any bridge financial company 
the FDIC may organize for the purpose of resolving a covered financial 
company. The proposed rule addresses only the records of a covered 
financial company and of the FDIC as receiver for a covered financial 
company. Information provided to the FDIC in connection with the 
formation or oversight of the bridge financial company or its 
subsidiaries would be within the scope of the regulation; however, 
documentary material generated or maintained by a bridge financial 
company or its subsidiaries or affiliates in the ordinary course of 
business that is not provided to the FDIC would fall outside the scope 
of the retention requirements of the proposed rule.
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    \8\ This term is defined in 12 U.S.C. 5381(a)(3) and 12 CFR 
380.1.
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    The third category of exclusions from the purview of the proposed 
rule and section 210(a)(16)(D) is non-publicly available supervisory 
information, operating or condition reports that were prepared by, on 
behalf of or at the requirement of any agency that may regulate 
financial companies or their subsidiaries. This is consistent with the 
FDIC's long-standing policy that reports of examination or other 
confidential supervisory correspondence or information prepared by FDIC 
examiners or for the use of the FDIC and other regulatory agencies with 
respect to a financial company or an insured depository institution or 
other regulated subsidiary of a financial company belong exclusively to 
such regulators and not to the institution, even though institutions 
may retain copies.
Policies and Procedures
    Paragraph (d)(3) of the proposed rule provides that the FDIC may 
establish policies and procedures with respect to the retention and 
destruction of records that are consistent with the proposed rule. It 
is expected that these policies and procedures will address specific 
matters related to the capture, processing, and storage of the records 
of covered financial companies such as collecting computer hard drives, 
email databases, and backup and disaster recovery tapes, as well as 
establishing standard policies with respect to the retention of 
information generated by the FDIC on its own files, information 
systems, and databases.

III. Request for Comments

    The FDIC seeks comments on all aspects of the proposed rule. 
Comments will be considered by the FDIC and appropriate revisions will 
be made to the proposed rule, if necessary, before a final rule is 
issued. All comments must be received by the FDIC not later than 
December 23, 2014.

IV. Regulatory Analysis and Procedure

A. Paperwork Reduction Act

    No collections of information pursuant to the Paperwork Reduction 
Act, 44 U.S.C. 3501, et seq., are contained in the proposed rule.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, et seq., 
requires that each Federal agency either certify that a proposed rule 
would not, if adopted in final form, have a significant economic impact 
on a substantial number of small entities or prepare an initial 
regulatory flexibility analysis of the rule and publish the analysis 
for comment. For purposes of the RFA analysis or certification, 
financial institutions with total assets of $550 million or less are 
considered to be ``small entities.'' The FDIC hereby certifies pursuant 
to 5 U.S.C. 605(b) that the proposed rule, if adopted, will not have a 
significant economic impact on a substantial number of small entities. 
The proposed rule refines the definition of the term ``records'' under 
section 210(a)(16)(D) and establishes retention schedules that the FDIC 
must use in connection with its retention of these records. 
Accordingly, there will be no significant economic impact on a 
substantial number of small entities as a result of this rulemaking.

C. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

D. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 
Stat. 1338, 1471), requires the Federal banking agencies to use plain 
language in all proposed and final rules published after January 1, 
2000. The FDIC has sought to present the proposed rule in a simple and 
straightforward manner.

List of Subjects in 12 CFR Part 380

    Holding companies, Insurance companies, Records and records 
retention.

Authority and Issuance

    For the reasons set forth in the common preamble, the Federal 
Deposit Insurance Corporation proposes to amend chapter III of title 12 
of the Code of Federal Regulations as follows:

PART 380--ORDERLY LIQUIDATION AUTHORITY

0
1. The authority citation for part 380 is revised to read as follows:

    Authority:  12 U.S.C. 5389; 12 U.S.C. 5390(s)(3); 12 U.S.C. 
5390(b)(1)(C); 12 U.S.C. 5390(a)(7)(D); 5390(a)(16)(D); 12 U.S.C. 
5381(b), 12 U.S.C. 5390(r).

0
2. Add Sec.  380.14 to read as follows:


Sec.  380.14  Record retention requirements.

    (a) Scope and definition. (1) Section 210(a)(16)(D) of the Dodd-
Frank Act requires retention of records of a financial company for 
which the Corporation has been appointed receiver

[[Page 63590]]

and of records of the Corporation generated in connection with its 
appointment and function as receiver for that covered financial company 
in exercising its orderly liquidation authorities under title II of the 
Dodd-Frank Act. This section addresses retention of those records.
    (2) As used in this section, documentary material means any 
reasonably accessible document, book, paper, map, photograph, 
microfiche, microfilm, computer or electronically-created writing, data 
or file.
    (b) Records of a covered financial company for which the 
Corporation is appointed receiver--(1) Determination. In determining 
whether particular documentary material existing as of the date of the 
appointment of the Corporation as receiver was generated or maintained 
by a financial company in the course of and necessary to its 
transaction of business and thus constitutes records of a covered 
financial company, the Corporation will consider the following factors:
    (i) The extent to which the documentary material related to the 
business of the financial company;
    (ii) Whether the documentary material was generated or maintained 
by the financial company as records in the regular course of the 
business of the financial company in accordance with its own record 
retention practices and procedures or pursuant to standards established 
by the financial company's regulators;
    (iii) Whether the documentary material is needed by the Corporation 
to carry out its receivership function; and
    (iv) The expected evidentiary needs of the Corporation and the 
public.
    (2) Record retention and disposition schedule for financial company 
records.
    (i) Except as provided in paragraph (b)(2)(ii) of this section, 
after the end of the six-year period beginning on the date of the 
appointment of the Corporation as receiver, the Corporation may destroy 
any records of the financial company that the Corporation determines to 
be unnecessary unless subject to a litigation hold imposed by the 
Corporation.
    (ii) Notwithstanding paragraph (b)(2)(i) of this section, the 
Corporation may at any time after appointment of the Corporation as 
receiver for a covered financial company destroy any records of the 
financial company that are at least 10 years old as of the date of 
appointment unless subject to a litigation hold imposed by the 
Corporation.
    (3) Examples. Examples of financial company records include, 
without limitation, correspondence, tax and accounting forms and work 
papers, internal audits, inventories, board of directors or committee 
meeting minutes, personnel files and employee benefits information, 
general ledger and financial reports or data, memoranda, litigation 
files, loan documents including records relating to intercompany debt, 
contracts and agreements to which the financial company was a party, 
customer accounts and transactions, qualified financial contracts and 
related information, and reports or other records of subsidiaries or 
affiliates of the financial company that were provided to the financial 
company.
    (4) Transfer of covered financial company records to acquirer. If 
the Corporation transfers records of a covered financial company to a 
third party including a bridge financial company in connection with a 
transaction involving the purchase and assumption of assets and 
liabilities of a covered financial company, the record retention 
requirements of section 210(a)(16)(D) of the Dodd-Frank Act and 
paragraph (b)(2) of this section shall be satisfied if the transferee 
agrees that it will not destroy such records for at least six years 
beginning on the date of the appointment of the Corporation as receiver 
for the covered financial company unless otherwise notified in writing 
by the Corporation.
    (c) Records of the Corporation as receiver for a covered financial 
company--(1) Determination. In determining whether particular 
documentary material constitutes records that were generated or 
maintained by the Corporation in connection with its appointment and 
function as receiver for a covered financial company and in exercising 
its orderly liquidation authorities under title II of the Dodd-Frank 
Act, the Corporation will consider the following factors:
    (i) The extent to which the documentary material related to the 
duties and functions of the Corporation as receiver in exercising its 
orderly liquidation authorities under title II of the Dodd-Frank Act;
    (ii) Whether the documentary material was generated or maintained 
by the Corporation in accordance with the record retention policies and 
procedures of the Corporation; and
    (iii) The expected evidentiary needs of the Corporation and the 
public.
    (2) Record retention and disposition schedule for receivership 
records. Records generated or maintained by the Corporation as receiver 
for a covered financial company subject to the record retention 
requirements of this section shall be maintained for not less than six 
years after the date of the termination of the receivership.
    (3) Examples. Examples of records generated or maintained by the 
Corporation as receiver for a covered financial company include, 
without limitation, correspondence; tax and accounting forms and work 
papers; inventories; contracts and other information relating to the 
management and disposition of the assets of the covered financial 
company; documentary material relating to the appointment of the FDIC 
as receiver; administrative records and other information relating to 
administrative proceedings; pleadings and similar documents in civil 
litigation, criminal restitution and forfeiture litigation matters and 
all other litigation matters in which the Corporation as receiver is a 
party; the charter and formation documents of a bridge financial 
company and contracts and other documents and information relating to 
the role of the Corporation as receiver in overseeing the operations of 
the bridge financial company; and reports or other records of the 
bridge financial company and its subsidiaries or affiliates that were 
provided to the Corporation as receiver; and documentary material 
relating to the administration, determination and payment of claims 
against the Corporation as receiver.
    (4) Records generated or maintained by the Corporation as receiver 
for a covered financial company do not include records of a financial 
company described in paragraph (b) of this section.
    (d) Records subject to the record retention requirements of section 
210(a)(16)(D) of the Dodd-Frank Act and this section. With respect to 
all records described in paragraphs (b) and (c) of this section, the 
following applies:
    (1) Impact on discoverability, admissibility or release; compliance 
with court orders. The Corporation's determination that documentary 
material must be maintained pursuant to section 210(a)(16)(D) of the 
Dodd-Frank Act and this section shall not bear on the discoverability 
or admissibility of such documentary material in any court, tribunal or 
other adjudicative proceeding nor on whether such documentary material 
is subject to release under the Freedom of Information Act, the Privacy 
Act or other law. The Corporation will comply with any applicable court 
order concerning mandatory retention or destruction of any records 
subject to this section.
    (2) Exclusions. Documentary material not subject to the record 
requirements of

[[Page 63591]]

section 210(a)(16)(D) of the Dodd-Frank Act and this section includes, 
without limitation:
    (i) Duplicate copies, reference materials, drafts of documents that 
are superseded by later drafts or revisions, documentary material 
provided to the Corporation by other parties in concluded litigation 
for which all appeals have expired, and transitory information 
including personal notes, routine system messages or system-generated 
log files or other documentary material not routinely maintained under 
the standard record retention policies and procedures of the 
Corporation;
    (ii) Documentary material generated or maintained by a bridge 
financial company, or by a subsidiary or affiliate of a covered 
financial company that was not provided to the financial company or to 
the Corporation as receiver; and
    (iii) Non-publicly available confidential supervisory information, 
operating, or condition reports prepared by, on behalf of, or at the 
requirement of any agency responsible for the regulation or supervision 
of financial companies or their subsidiaries.
    (3) Policies and procedures. The Corporation may establish policies 
and procedures with respect to the retention and destruction of records 
that are consistent with this section.

    Dated at Washington, DC, this 21st day of October, 2014.

    By Order of the Board of Directors, Federal Deposit Insurance 
Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-25338 Filed 10-23-14; 8:45 am]
BILLING CODE 6714-01-P