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    Dodd-Frank Act Produces Recordkeeping Rules

    Jul 10, 2013
    This month’s Washington Policy Brief marks the beginning of ongoing reports that will highlight different aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Signed into law on July 21, 2010, and named after Senate and House Financial Services Committee chairmen Christopher Dodd (D-CT) and Barney Frank (D-MA), this law was the most sweeping reform of the financial industry since the post-Depression era.
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    This month’s Washington Policy Brief marks the beginning of ongoing reports that will highlight different aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Signed into law on July 21, 2010, and named after Senate and House Financial Services Committee chairmen Christopher Dodd (D-CT) and Barney Frank (D-MA), this law was the most sweeping reform of the financial industry since the post-Depression era.

    Dodd-Frank contains more than 300 provisions that require or permit new rules from federal government agencies and established government entities like the Consumer Financial Protection Bureau and the Commodity Futures Trading Commission (CFTC). It is reported by DavisPolk that just under 40% of the total required rulemakings have been finalized. As this rulemaking progresses, we will keep readers updated in this space about the issues that could or will affect them.

    For recordkeepers and information management specialists, these rules represent new challenges as well as new opportunities. Of the 300 new rules, more than 10 of them are specific to recordkeeping practices. Many of them instruct agencies to generate or retain records they may not have had to generate or retain before.

    All the rules apply to specific agencies. For example, three of the major rules affect the Federal Deposit Insurance Corporation (FDIC), two affect the Federal Reserve, two affect the CFTC, and one affects the Securities and Exchange Commission (SEC).

    One of the law’s provisions directed at the FDIC states that “the Federal primary financial regulatory agencies shall...prescribe regulations requiring that financial companies maintain such records…that the Federal primary financial regulatory agencies determine to be necessary or appropriate in order to assist the Corporation…”

    This provision is particularly interesting because it not only directs a federal agency to think about records management, it also puts a renewed emphasis on recordkeeping in the private financial sector.

    In establishing a regulation, the FDIC first had to define “record” for private companies. The agency published a paper discussing the issue within the context of the records of failed insurance companies. The analysis concluded that four factors should be considered to determine if a document is a retainable record:

    1. Whether the documentary material relates to the business of the failed insured depository institution
    2. Whether the documentary material was generated or maintained by the failed insured depository institution in accordance with its own recordkeeping practices and procedures or pursuant to standards established by the failed insured depository institution’s regulators
    3. Whether the documentary material is needed by the FDIC to carry out its receivership function
    4. The expected evidentiary needs of the FDIC as receiver of the failed insured depository institution

    The FDIC used those guidelines to develop a proposed rule that defines “records” by the above criteria and provides time frames for failed insured depository institutions to retain them.
    The proposed rule was published in the Federal Register in January; comments were open until March 25, 2013, but the FDIC has not published a final rule yet.

    The Washington Policy Brief is an online advisory that contains brief summaries of recent legislative and regulatory issues that may affect the records and information management profession. Further information about the issue is accessed by clicking on the link provided at the end of each summary.

     

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