CUNA Comment Letter

NCUA's Proposed Records Preservation Program

April 24, 2001

Ms. Becky Baker
Secretary of the Board
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3428

Dear Ms. Baker:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the changes to the regulations regarding the records preservation program that were published in the Federal Register on February 23, 2001. As a national trade association, CUNA represents more than 90 percent of the nation’s 10,600 state and federal credit unions.

This proposal, clarifies that credit unions may preserve their records in an electronic format that is accurate, accessible and capable of being reproduced by printing, transmittal or other methods, as authorized by the Electronic Signatures in Global and National Commerce Act. The proposal also allows a credit union's board of directors to determine which employee will be responsible for duties under the vital records preservation program. Currently, the credit union's Chief Financial Officer is responsible for conducting vital records preservation duties. NCUA proposes to make the regulation more user friendly by adding an appendix to the rule that incorporates record retention guidelines and converting the regulation into a question and answer format.

CUNA supports providing flexibility to credit unions so that they may assign vital records preservation duties to appropriate personnel. Therefore, we agree with the proposal's intention not to mandate that a Chief Financial Officer be responsible for a credit union's records preservation program. However, we believe the proposed requirement is too rigid and may impose a burden on the board of a credit union which is generally somewhat removed from the daily operations of a credit union. Instead, the final rule should give a credit union the option of allowing its board or the credit union's manager, who is responsible for day-to-day operations of the credit union, the authority to select the records preservation officer.

CUNA also believes that the final rule should define what constitutes a vital record. The section that identifies vital records only provides a short list of what is included as a vital record. This list does not provide sufficient guidance to credit unions on what constitutes a vital record. We urge NCUA to look to resources such as the Federal Financial Institutions Examination Council to provide credit unions with guidance in this area. Any definition should also be supplemented by a longer list of examples of vital records. In addition, the rule should also provide examples of what records are not vital.

CUNA also asks the Board to consider whether the question and answer format does make the rule more legible and easier to comprehend.

CUNA supports updating the records preservation requirements, and it strongly recommends the changes to the proposal mentioned above. In particular, CUNA requests that NCUA modify the proposal to allow credit union managers as well as the board to select records preservation specialists. If you have any further questions, please contact Michelle Profit at (202) 682-4200.

Sincerely,

Michelle Q. Profit
Assistant General Counsel