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How long should credit applications, adverse action notices by kept?

October 14, 2011
By Dennis M. O’Keefe, CATA General Counsel

The Equal Credit Opportunity Act (ECOA) requires you to keep a copy of a credit application for 25 months after notifying a consumer about the action to take on the application. The Fair Credit Reporting Act (FCRA) does not impose a specific record-retention requirement related to adverse action notices.
However, it is advisable for you to keep records of your procedures and the actions you took to comply with both the ECOA and the FCRA, as they can help you defend against customer complaints and lawsuits.
For example, if you can show that you maintained reasonable procedures to comply with adverse actions notice requirements under both statutes, you will be better prepared to defend yourself if a customer claims you failed to give one in his case.
Because your records can be useful in defending a lawsuit, you should keep them for the maximum time period within which a consumer can bring a claim under the ECOA and the FCRA, which for both statutes is five years (emphasis added) after the date on which the alleged violation occurs.