Don’t forget the physical files in a credit union merger or acquisition! (Part 2)

Posted by TAB on
In last week’s blog post, we outlined why it is so important for credit unions to properly manage the physical files involved in a merger or acquisition.

First and foremost, acquired files have the potential to create legal and compliance issues. If not handled well, the physical files can also hamper the efficiency of your operations and have a negative impact on member service.

In order to avoid these issues, you need to look closely at the files involved and carefully plan for their onboarding.

Getting a Handle on the Records Management Program

Prior to the deal being signed, you may need to engage in some preliminary discovery of the files involved. However, once the transaction is approved, you should start to explore the state of the records management program as a whole, as well as the file collections themselves.

To get a handle on the records management program, you can ask questions such as:

  • Is a documented records management program in place?
  • Does a records database exist? How is it updated, and how current is it?
  • Does the records management program include some sort of corporate records classification scheme?
  • Does the scheme apply to all corporate records or just some of them?
  • Does the records management program include a records retention schedule or other tool that specifies how long records should be retained? Are records tracked or managed with software tools? Which one(s)?
  • Are the software tools compatible with those already used by the acquiring organization?
  • Are any records currently being processed or stored with a third-party provider? What is the working arrangement and what service standards are in place for security and member service?
  • Does the current records management program provide for employee training? How often is the training program conducted and updated?

Exploring the File Collections

Now that you understand the program as a whole, you can start to explore the current state of the individual records collections.

Here are the key questions to guide you as you audit each collection:

  • Do individual files contain all the documents required for operations and for legislative compliance?
  • Do individual files contain duplicate copies or unneeded past versions of documents?
  • Are the contents of files subdivided or arranged in a manner consistent with user needs and filing best practices?
  • Are physical file labels (content and format) consistent with user needs and best practices?
  • If the collection was subject to a retention schedule, do any of the records exceed the required retention periods? Can they now be destroyed?
  • Is there a record of all destroyed documents showing dates and authorization?
  • Do any files contain personal information and a record of how it was acquired?
  • Is the continued storage and use of that personal information justified and permitted by applicable privacy legislation?
  • Are naming conventions for electronic folder structures and documents consistent with user needs and best practices?
  • Do the cabinets, shelves and filing supplies sufficiently protect records and other media, and do they make optimal use of physical space?
  • Are filing equipment and supplies compatible with those already in use at your company?

As you inventory each collection, make a note of what you find and what actions need to be taken. When you are finished you should have a clear idea of:

  • what you are working with and what may be required during integration
  • any recordkeeping gaps that need to be addressed
  • potential privacy or compliance risks that need to be managed.

At this point, you probably still have a lot of work to do to physically integrate the collections, but the groundwork so far will help you avoid some the most common issues related to credit union mergers and acquisitions. If you are overwhelmed, an experienced provider such as TAB can make the discovery and onboarding process run faster and more smoothly.

Next Steps

Get more help with mergers and acquisitions.

Learn about TAB FusionRMS, our loan inventory management solution.

Need help? Get in touch with our experts.

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