Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS Chapter 286, 12 C.F.R. Part 749
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
286.3-375(4) requires the
commissioner to promulgate an administrative regulation classifying all records
kept by a bank and prescribing the time period for which records of each class
shall be retained.
KRS
286.1-020(1) and
286.6-070
authorize the commissioner to promulgate administrative regulations for the
proper conduct and regulation of credit unions.
KRS
286.8-160(2) authorizes the
commissioner to promulgate administrative regulations establishing preservation
requirements for records governed by KRS Chapter 286.8.
KRS
286.4-610(1) authorizes the
commissioner to promulgate administrative regulations for the proper conduct of
the consumer loan businesses licensed under KRS Chapter 286.4.
KRS
286.7-530 authorizes the commissioner to
promulgate administrative regulations for the proper conduct of the industrial
loan corporations licensed under KRS Chapter 286.7. This administrative
regulation establishes recordkeeping requirements for department
licensees.
Section 1. Definition.
"Record" means any books of account or other books, journals, ledgers,
statements, instruments, documents, files, messages, writings, or other
internal data or information, made or received by a financial institution in
the regular course of the financial institution's business or otherwise,
regardless of the mode in which it is recorded.
Section 2. Preservation Period for Records.
(1) Unless a longer period is required by
federal law or federal regulation, a Kentucky Revised Statute, or an
administrative regulation, licensees shall maintain records in accordance with
the Record Retention Schedule.
(2)
Credit Unions' Record Retention Schedule.
(a)
Unless a longer retention period is required by subsection (b) of this section
or other law, credit unions shall comply with the records retention
requirements in Appendix A to 12 C.F.R. Part 749 .
(b) A credit union shall retain all records
for at least twenty-four (24) months after the close of the calendar year
during which the record was generated.
(c) Credit unions shall maintain a vital
records preservation program in compliance with 12 C.F.R. Part 749 .
Section 3. Form of
Records. All records required to be retained by licensees shall be:
(1) Current and accurate;
(2) Retained in a format capable of being
transmitted or reproduced; and
(3)
Immediately accessible and retrievable for examination upon request by the
commissioner or any person designated by the commissioner for examination,
investigation, or other authorized purposes.
Section 4. Loan Licensee Records.
(1) Industrial loan and consumer loan
licensees shall keep and maintain the following specific accounting records:
(a) Loan register or its equivalent record,
which shall be the book of original entry and permanent record, and shall
properly identify each account by:
1.
Number;
2. Date of loan;
and
3. Amount of loan;
(b) An individual account ledger
card with borrowers that shall:
1. Show the
name and address of the borrower, the loan number, the amount and date of the
loan and of its maturity, rate of interest, terms of repayment, the nature of
the security, if any, for the loan, and the dates of receipt and payment of
recording fees together with the amount;
2. Provide separate columns for payments of
principal;
3. Be kept in a manner
that clearly shows the balance due on principal;
4. Have all payments credited
promptly;
5. Have loan or payment
cards for consumer loans, industrial loans, and sales finance loans maintained
in separate files at all times; and
6. If an error is made on the individual
account ledger or card, be appropriately corrected without erasures;
(c) An appropriate filing system,
which shall contain all the current evidences of indebtedness or security that
have been signed by the borrower; and
(d) An individual index record that shall be
maintained for every endorser, accommodation comaker, or surety, except a
spouse listed on the record of the borrower.
(2) If a note has been reduced to judgment by
a consumer loan company, the face of the account ledger or card shall show the:
(a) Name of court;
(b) Date of judgment;
(c) Amount of judgment;
(d) Court costs; and
(e) Defendant against whom judgment
obtained.
(3) In case of
the sale of mortgaged property by a consumer loan company:
(a) The face of the account ledger or card
shall show:
1. How possession of security was
obtained, and when; and
2. When and
how sold (public or private sale), including:
a. If all the security is sold; and
b. Proper identification of all
credits from proceeds of sale;
(b) The files of the licensee shall include:
1. A copy of the notice of the
sale;
2. A copy of the statement of
final account, the original of which shall have been sent to the borrower after
the sale; and
3. If the property is
abandoned and the address of the borrower is uncertain or unknown, notice of
sale and statement of final accounting sent to the last known address by
certified mail or registered mail, return receipt requested.
Section 5.
Cessation of Business. At least ten (10) days prior to the cessation of
business, a mortgage loan licensee shall submit a completed Notification of
Cessation of Business, Location of Physical Records and Records of Custodian
Disclosure. The information in the disclosure shall be kept current for at
least as established in the Mortgage Licensee Record Retention
Schedule.
Section 6. Incorporation
by Reference.
(1) The following material is
incorporated by reference:
(a) "The Record
Retention Schedule", July 1, 2006;
(b) The "Notification of Cessation of
Business, Location of Physical Records and Records of Custodian Disclosure",
08/2010; and
(c) "Mortgage Licensee
Record Retention Schedule", March 2019.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Office of Financial
Institutions, 500 Mero St 2SW19, Frankfort, Kentucky 40601, Monday through
Friday, 8 a.m. to 4:30 p.m.
STATUTORY AUTHORITY:
KRS
286.1-020(1),
286.3-375,
286.4-610(1),
(3),
286.6-070,
286.7-530,
286.8-140(1),
286.8-160(2)
