Retention of Recorded Telephone Calls with Borrowers

As all licensees under the Consumer Loan Act (Act) should be aware, “[e]very licensee shall preserve the books, accounts, records, papers, documents, files, and other information relevant to a loan for at least three years after making the final entry on any loan.” As further described in WAC 208-620-520(1): “Each licensee must maintain electronic or hard copy books, accounts, records, papers, documents, files, and other information relevant to making loans or servicing residential mortgage loans.” The Department has consistently interpreted “electronic records” to include electronically recorded telephone calls with borrowers. To be compliant with the Act, then, electronically recorded telephone calls with borrowers must be retained for at least three years after the last entry on a loan.

The Department recognizes that in the context of servicing residential mortgage loans this requirement could become burdensome and, potentially, cost prohibitive. The Department also recognizes, however, the benefits of recording telephone calls with borrowers for quality assurance and borrower protection purposes. Consequently, in an effort to balance these potentially conflicting interests, the Department has informally determined that it will likely not find a violation of the records retention requirement of the Act if licensees retain recorded telephone conversations with borrowers for at least three years from the date of the call. The Department intends to follow this informal determination with an amended rule.