Beyond Compliance: Why Record Retention Matters

It’s true that audits are more complex than ever and security threats lurk around every corner. But did you ever consider that the antidote to these risks is one thing you probably give the least amount of thought to? I’m talking about record retention, and why its importance goes beyond just compliance. In fact, it’s time to start thinking of it as a critical part of your overall risk strategy.

The Compliance Factor

As financial institutions, credit unions are highly regulated, particularly when it comes to record retention. Because of the nature of monetary assets credit unions handle on a daily basis and the frequency of fraud and risk factors that come along with them, accurate recordkeeping is extremely important. Just think of the chaos that would ensue if it weren’t for Suspicious Activity Reports (SARs) or Currency Transaction Reports (CTRs), just to name a few.

With regulatory requirements imposed by the FFIEC, SEC, FINRA, OFAC, NCUA, etc., there are several entities that may need access to your credit union’s records for purposes of reporting, accessibility and defensibility within a required timeframe.

OFAC Records Update: The Move From Five Years to 10

As you know, record retention timeframes made some headlines in 2024 and 2025 as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) updated their Reporting, Procedures and Penalties Regulations policy to extend recordkeeping requirements from five years to 10 years, which took effect on March 12, 2025. Per the update, “This amendment mirrors the recently increased statute of limitations for violations of sanctions, which was extended from 5 years to 10 years following the enactment of the 21st Century Peace through Strength Act (Public Law No. 118-50) on April 24, 2024.”

This update has been in place for several months now, but with more records to keep track of and a greater emphasis on record retention moving forward, the new year may be a good time to review your policy and procedures for handling records.

Components of Effective Record Retention

So, what should you review? With the many aspects of record retention in mind, here are a few key components that will help you create an effective process at your credit union that ensures both compliance and continuity:

• Create a Schedule – Recordkeeping rules are very specific, and adherence is crucial to protecting your credit union. It may be best to create a schedule of records within your organization that details what needs to be kept, who takes ownership of each record and a timeframe for retention and subsequent destruction.
• Consider Automation – Sure, paper records still exist but we live in a primarily digital world. Why not make the most of it with systems and software that can automate the record retention process for you? The case for automation grows even stronger when you consider how it can simplify organization and the search for records, should your budget and capabilities allow.
• Diversify Your Storage Facilities – In the case of emergencies, systems go down and paper copies of records may not be readily available. But if you diversify your storage to include a backup server or cloud solution, you’ll have access to otherwise unattainable records.
• Ensure Security – It goes without saying, but records are confidential to the credit union, so security at all levels is critical to retention. Utilize strong passwords, limit access to only those within the organization who need it, etc.
• Train Your Employees – Record retention isn’t limited to one department or individual, it’s a team effort across the credit union. Provide employee training so that the process of maintaining, storing and accessing records remains consistent.

When it’s time to review your records policies and procedures, or adjust processes based on new rules like the recent OFAC increase to 10 years of retention, try to reframe your perspective on the matter. If you start thinking of records as strategic assets – rather than documentation that is simply required – you can build a stronger foundation for your credit unions that goes beyond compliance to something even better…preparedness. And come audit season or an unexpected emergency, that is exactly where you want your institution to be.

Bryan Hoover is the product manager of compliance and risk for Vizo Financial. He is responsible for supporting the Corporate’s BSA and compliance efforts by monitoring emerging risk trends and issues, as well as assisting in developing and executing strategies that balance both risk and member experience. In addition, he conducts analyses and resolves complex issues by reviewing real-time payment activity in order to protect the integrity of both Vizo Financial’s and member credit unions’ financial transactions. He is also a Credit Union Compliance Expert (CUCE) and holds his Bank Secrecy Act Certification (BSACS) from the Credit Union National Association (CUNA).