I have written often about electronic signatures (Electronic Signatures, Do you have your electronic signature solution in place?), electronic transactions (Electronic Commerce and Doing Business Remotely!, From Touch to Text, or Conducting Business Electronically) and doing business electronically (Steps to Making Loans Electronically). What I have not addressed until now is electronic recordkeeping for regulatory purposes. I have not researched the laws and regulations of all states. However, I have reviewed Alabama’s record keeping requirements and I suspect that most states follow similar regimens.

Alabama does not have a specific regulation or interpretation that permits records to be maintained in electronic format. However, it seems apparent that if records contain the necessary elements and can be produced for examination at the loan office being examined, then electronic record keeping should be permissible. Also, Alabama’s State Banking Department Bureau of Loans Rules and Regulations does not use the word “paper” in the regulations.

The Alabama Bureau of Loans appears to be moving in the direction of permitting records to be maintained in electronic format even without the specific presence of such permissive language in the Regulations. Some of the Alabama Regulations speak in terms of records “maintained on a prepared sheet” and use the terminology “maintain adequate files.” But, in distinguishing record keeping for small loans from large loans (for those lenders having both licenses) the Regulation mentions records to be maintained “segregated” if computerized. This indicates to me that records may, indeed, be maintained electronically. 

The key ingredient seems to be that records must be easily accessible and reviewable to examiners within the individual loan office. So, if these records are accessible and downloadable from a computer file and contain all of the required detail that a paper record would provide, that should be sufficient.

Please Note: This is the two hundred-thirty-second blog in a series of Back to Basics blogs, in which relevant and resourceful information can be easily accessed by clicking Dentons - Consumer Finance Report.