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Document Imaging Considerations

Has your bank been wondering what to do with all those old boxes of documents in storage? Perhaps you’ve decided to go digital, and scan all those old files, or perhaps you already have, and are now wondering what to do with the originals. WBA has recently received a number of questions regarding record retention, specifically, when it comes to deciding what to keep and what to destroy. While this decision is largely one that should be made as a business decision, there are some legal aspects to consider, as well as practical matters, that are discussed below. 
 
As a starting point, if your bank is considering scanning certain documents and destroying the originals, it should consider Wisconsin Statue sections 220.285. Within that section, you will find a rather broad grant that banks may use a variety of means to image any or all records, and dispose of the originals. Furthermore, the Wisconsin Department of Financial Institutions has given blanket permission to destroy its records, so long as reasonable precautions have been taken with respect to confidentiality, and the destruction is done in a manner consistent with prudent business practices (See DFI-Bkg 9.01). In summary, bank is permitted to make a business decision as to what originals it wishes to keep or destroy. 
 
So, theoretically, any document could be imaged, and the original destroyed. However, the analysis doesn’t end there. In making this assessment, bank should consider that at time of publication of this article, WBA is not aware of any Wisconsin case law which tests or otherwise discusses the admissibility of documents stored on electronic, optical disks, etc. after destruction of the original. This leaves open the possibility that a court may be persuaded in the future that the original paper document should be produced. For example, perhaps because a question may be raised about the authenticity of the original, about the validity or accuracy of the copy, or because it would be unfair to admit the duplicate in questions of fraud or in cases where the signature is at issue. 
 
Thus, a bank must make a risk-based business decision regarding whether it wants to destroy an original and rely on a reproduction from its imaging system. Banks might consider the matter on a per-document basis. For example, certain documents might carry higher risk, a higher chance of liability, or a higher probability of litigation, where bank should consider whether it would prefer to keep the original in order to prove an issue, or whether it would be comfortable relying on an optical image or duplicate as sufficient. 
 
As a practical matter, banks should also consider the aspect of how well it is able to reproduce an image. This will depend upon the quality of the original, the type of technology available, and the process used for reproduction. It should also consider what its policy covers. Staff will need to be trained to understand what should be destroyed and what should be kept, and how the technology is used, in order to create an accurate copy. For example, if some process or technology results in a blurry, distorted, or otherwise misrepresented image, that could create issues if the original was destroyed. 

In conclusion, the decision of whether to image and destroy documents, or to keep the original, is a matter of making a risk assessment on a per document basis. The thoughts above are presented as general considerations, but don’t necessarily consider every aspect of the decision. For that reason, banks should give careful thought to those originals they do decide to destroy. 
 
For additional record retention resources, WBA has created a revised, 2021 version of its Record Retention Guide here.

If you have any questions on this topic or other matters of compliance, contact WBA’s legal call program at 608-441-1200 or wbalegal@wisbank.com. 

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance. 

By, Cassie Krause