Pursuant to the proposed rule, records of transactions in which the status of the transferee is unresolved after three business days have elapsed would be retained until either: 1) a final proceed or denied status is determined; or 2) the retention period of 90 days for unresolved transactions expires. The new immediate destruction rule makes the system more complicated and expensive since this new bifurcated treatment of “unresolved” transactions must be adopted and implemented. It also highlights the flaws in the proposed rule, because there have been and will continue to be cases where an initial approval is given, but subsequent disqualifying information comes to light. Under the proposed rule, such information will be of no use since the information about the disqualified purchaser will have been destroyed.
Recommendation: A uniform 90-day record-retention rule should be implemented. This would obviate the need for a separate rule for “unresolved” transaction.
