Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
by
Gene E. Goodrich
Zions Bank
2460 South 3270 West
West Valley City, Utah 84119
gene.goodrich@zionsbank.com
Submitted in partial fulfillment of the requirements of the Pacific Coast Banking School
conducted at the University of Washington
Seattle, Washington, April, 2007
Executive Summary
Successful Conversion to Document Imaging in Commercial Lending
by Gene E. Goodrich
Banks recognize the need to utilize electronic solutions to manage substantial volumes of
paper documents, but many delay taking action to adopt imaging systems due to uncertainties of
how to tackle the project and whether or not imaged documents will withstand legal scrutiny.
This paper, focusing on a commercial lending department, identifies the components of an
imaging operation, provides guidance for successfully conducting a conversion project and
explores the enabling laws and risks of using electronic documents.
Sources of research are from a nationally recognized imaging association, articles by
imaging professionals and state and federal laws. Interviews include a records manager, system
owner, and attorney. Two surveys were conducted, one to determine the activities of other
lenders and the second to determine the attitude and opinions of commercial loan relationship
managers (LRM) within Zions Bank.
Analysis of the research indicates that electronic document management allows a bank to
be more competitive, streamlines workflows, effectively shares document information assets,
results in long-term cost savings and reduces document management risk. Analysis (or research)
also establishes that electronic documents are legally enforceable when coupled with correct and
consistent procedures. This paper gives some specific recommendations for the conversion
project currently in progress at Zions Bank and additionally will be of interest to other banks
who are investigating or in progress with an imaging project.
ii
Table of Contents
Page
Executive Summary
ii
List of Graphs
List of Exhibits
vi
Chapter
I.
Introduction
II.
Taxonomy or Indexing
Metadata
The Unique Requirements of Imaging Commercial Loan Documents
Integration of Imaging with an Up-Front Loan Origination System
III.
4
5
6
6
9
9
10
12
15
IV.
16
V.
18
18
18
19
21
VI.
22
VII.
25
iii
VIII.
27
27
27
28
30
31
34
35
IX.
38
X.
40
Graphs
43
Exhibits
45
Bibliography
52
55
iv
Graphs
Graph
Page
43
44
Exhibits
Exhibit
Page
45
46
47
48
49
50
51
vi
I. Introduction
The management of exponentially increasing volumes of paper documents, particularly in
the banking industry that is subject to extensive regulatory requirements and increasing litigation
is the beast within our business. Although paper files will continue to exist in the near future,
Records Management (RM) professionals recognize that electronic imaging is a solution for
taming the beast. Paper is still growing but losing share to electronic records, states Ken
Rubin, senior vice president at Iron Mountain, a large records management storage and solutions
company. Rubin has seen Iron Mountains paper records storage business grow at approximately
8 percent each year during the last decade. The growth of electronic solutions eclipses that
growth at about 50 percent in recent years, Rubin says. 1
Many organizations are turning to Electronic Content Management (ECM) solutions to
manage their records. The Association for Information and Image Management (AIIM), an
internationally recognized authority states, ECM denotes the technologies used to capture,
manage, store, preserve, and deliver content and documents to organizational processes. 2 ECM
solutions are not only a method to manage the storage beast, but additionally are a way to
manage and utilize valuable information assets. A representative of Tower Software explains
how ECM solutions manage information assets within an organization.
Imagine if every time an employee of an organization had to make a decision they could
easily get their hands on the appropriate information in a timely fashion or, it was
delivered as part of the business process. The organization would make far fewer
mistakes and far more accurate and timely business decisions. An organization that is
able to continually act in its own best interest will continue to succeed. An organization
that constantly fails to utilize the resources at hand (either because they are unaware they
exist or the process for retrieving those resources is time consuming or confusing), will
1
Marcia Judd, Dont Forget the Paper, AIIM E-Doc Magazine, May/June 2006, p.44.
Tower Software, What is an ECM Solution Going to do for My Organization, The AIIM Guide to ECM
Purchasing, p. 8.
2
retrieve the wrong information or the timeliness of information will be poor. Successful
organizations manage all of their assets. 3
As stated, successful organizations manage all their assets. Documents created and used in
commercial lending are information assets used to make ongoing business decisions and to
service customer relationships.
Based on interviews, investigation, research and surveys, this paper will provide guidance
for a successful conversion to document imaging in a commercial lending operation. The subject
bank used for this paper is Zions First National Bank, N.A. (Zions Bank or Zions). The
asset size of Zions Bank is $12.65 billion, with 134 banking offices and 178 ATMs located in
Utah and Idaho and one office located in the Cayman Islands. 4 Zions Bank is a subsidiary of
Zions Bancorporation, a $42.78 billion bank holding company. 5 The commercial lending
division of Zions Bank, exclusive of several specialty commercial lending departments
originated 10,174 loans in 2006. Total commercial loans serviced as of December 31, 2006,
including loans of other specialty departments, were 28,544. Serviced loans, exclusive of the
specialty departments were 16,180. In November 2006, Zions Bank created a small department
to image the 16,180 files originated by the commercial lending division.
Although the primary market of Zions Bank is Utah and Idaho, the bank originates loans
on collateral or to borrowers in any state. Loan documents however stipulate that contract law
Tower Software, What is an ECM Solution Going to do for My Organization, The AIIM Guide to ECM
Purchasing, p. 8.
4
Zions Bancorporation, Annual Report 2005, p. 26-47.
5
shall be according to the laws of Utah or Idaho, depending on the origination office, and that
litigation, likewise, shall occur in Utah or Idaho. Discussions in this paper about laws affecting
electronic documents focus on the states of Utah and Idaho.
Regli, Theresa, Build It So They Can Find It, AIIM E-Doc Magazine, March/April 2005,
http://www.edocmagazine.com/archives_articles.asp?ID=30087
7
Ibid.
Metadata
In addition to indexing, additional descriptive information or metadata, must be recorded
and associated with each image to provide additional information about the image.
Metadata literally means data that describes other data. While true, that
definition isnt very useful. The ISO Records Management standard, (ISO 15489),
defines metadata as data describing context, content, and structure of documents and
records and their management through time.
A primary use of metadata is to permit locating a specific item and then its
retrieval and display. Metadata is also used to ensure the authenticity, reliability,
integrity, and usability of a document as a record.
There are a number of metadata standards in use. The Dublin Core Metadata
Initiative has released a number of recommendations focused on standardizing the
structure and vocabularies used across a number of applications. ISO 15836:2003 and
ANSI/NISO Z39.85 - 2001 represent integration of these recommendations into formal
standards. Many industry associations have produced standards for the information
associated with their documents. 8
Metadata in some instances is saved within a document, as is done through headers being
included in an e-mail message. Taxonomies of greater complexity require saving the metadata in
a separate catalog or database. The database storing the metadata may be within the repository
where the images are stored or, for commercial lending purposes, could be within an upfront
loan origination system--as long as the metadata includes an electronic identification or link to
the documents location on the image repository. A risk to saving metadata to a separate
database is that the metadata and its links to the imaged item could be lost. The creation of
backup or restore copies of the database will mitigate this risk. The preservation of metadata is
an essential requirement of a records management system.
A lending relationship may include a major or master commitment with multiple attached
minor commitments.
Multiple documents, such as multiple Guarantees, may tie to one loan; one document
such as a Loan Agreement may be applicable to many loans.
Satisfying these varied document relationships will require the creation of more complex
metadata, either by loading the relationships to the imaging system as imaging occurs or by
working within a loan application system that creates the associations within the application.
Integration of Imaging With an Up-front Loan Origination System
Commercial loan origination procedures have historically lacked system automation;
rather, they have used text documents and Excel worksheets to prepare the credit presentation
and underwriting documents. Recognizing the need for automation of the loan origination
process, a few years ago Zions Bank embarked on the in-house development of loan origination
software named the Commercial Lending Automation System Solution (CLASS ). For
confidentiality reasons, I will not recite all the features and benefits of CLASS, but indicate
the following features that pertain to a document imaging solution.
CLASS was designed to address the described complexities of one to many and
many to one associations, and enables the linking of documents to the same
associations.
CLASS is not the image repository, but links to the image repository and enables quick
viewing of documents within CLASS without loading separate image viewing
software.
CLASS includes the ability to attach Microsoft Word, Microsoft Excel, Adobe
documents, e-mail text or other electronic files to the record. The attached files, locked
from editing, preserve the original document content. This feature prevents the
production and handling of paper when the content is already in electronic form and
facilitates the future implementation of digital signatures on electronic documents.
CLASS enables document capture at a central servicing location using high volume
scanning equipment, or low volume scanning at every branch location using
Multifunction Peripherals (MFPs).
A page within each loan record titled the Documents Page displays an icon and
description for each imaged document and when clicked, opens the document for
viewing. Icons exist in each loan record for documents related only to the specific loan,
and additionally for all documents that relate to multiple loans. An image created within
a loan record and identified as having multiple associations, will automatically create an
icon within all associated records. For example, borrower tax returns imaged under any
individual record, although imaged only once, are viewable while within any transaction
to that borrower.
Duhon, Bryant Capture On-Ramp to ECM, AIIM the ECM Association, January 20, 2007,
http://www.aiim.org/viewpdfa.asp?ID=32260
10
Interview with Donald Walk, CLASS Business Owner and Manager for Zions Bancorporation, January 19,
2007
For example, loan policy requires three years of financial statements and tax returns for larger
dollar loans, so the bank images only three years rather than all that may be in the credit file.
The relationship manager will destroy un-imaged and outdated origination documents according
to normal destruction guidelines.
In late 2006, Zions Bank started document imaging and delivery of CLASS to one
regional cluster of loan relationship managers. Four months of imaging activity within the
designated cluster has achieved the first and second objectives stated by Mr. Walk for the
completed branches. Meeting the third objective to quickly deliver CLASS to all relationship
officers is occurring slower than desired because the work capacity of the imaging department
controls the speed of CLASS deployment. Early indications are that Zions must substantially
increase the imaging staff to speed up project completion or disconnect the deployment of
CLASS from imaging activities and develop a revised conversion strategy.
Choosing the Location
Imaging may occur at the existing and possibly decentralized location of the files, at a
central department, or at the location of a third party vendor if imaging is outsourced. High
volume scanning requires specialized equipment that is not easily moved from location to
location making central imaging more feasible for large back file projects. Multi-function copy
machines are suitable for low volume scanning that may be typical of remote locations.
If files are shipped to a central location, consideration should be given to whether or not
the documents could be restored if lost or damaged during transportation. The transportation
company should be bonded and under an agreement to protect the privacy and confidentiality of
documents they transport. Regardless of bonding and confidentiality agreements, tax returns
10
and financial statements scattered across the freeway would be an embarrassing and damaging
situation for a bank.
Zions Bank maintains two file types that are stored at different locations. Credit files,
containing tax returns, financial statements, collateral valuation documents and other items
related to underwriting and loan approval are stored at each branch location. Branches span the
geographic boundaries of Utah and Idaho. Collateral files, containing legal closing documents
such as the note, loan agreement and security agreements are stored at a central location in West
Valley City, Utah.
Zions Bank made the decision to ship credit files to the same central location as the
collateral files and image both file types together. Reasons for this decision are as follows:
Management did not want the production capabilities of loan relationship managers and
their staff impaired by requiring them to conduct imaging activities. Additionally, the
salary of an imaging specialist is much lower than that of loan relationship managers.
Use of a central department will result in greater consistency in indexing the documents.
Processing of the credit and collateral files together results in a more efficient and time
saving workflow.
One disadvantage of imaging centrally by a dedicated staff is that relationship managers have
greater knowledge of the purpose and intent of certain document or file memos than an imaging
specialist who is untrained in lending. If may be found that loan relationship managers or their
staff need to be involved in organizing their files and identifying specific documents and how
11
they should be indexed. Another disadvantage is that by transporting and imaging files centrally,
Zions Bank is assuming the risk of damage, loss, or exposure of confidential documents.
Are You In or Out?
Whatever the conversion type and location chosen, a conversion project may be
completed in-house or outsourced. In an AIIM article written by Michael Glass, a senior
consultant with eVisory (www.evisoryconsulting.com), Mr. Glass summarizes the In or Out
question by stating: When making the decision to outsource or in-source, it's key to do a
thorough financial analysis. Sometimes it's better to do it yourself. 11
Mr. Glass states, The benefit most often cited for outsourcing, regardless of what is
being outsourced, is cost savings. Customers are looking for significant savings; many
expect to save between 40 percent and 50 percent of their current costs through
outsourcing (and do). What we don't know is how many of these same companies might
have saved 60 percent to 80 percent if they had redesigned their processes and updated
their technology rather at how they can regain control of these outsourced functions while
retaining the original cost benefits. 12
Bill Neale, a partner in eVision identifies the typical components of outsourcing pricing:
11
Glass, Michael, Are You In or Out?, AIIM E-Doc Magazine, January 2003, http://www.aiim.org/articledocrep.asp?ID=25526
12
Ibid.
Neale, Bill, To Scan or Not To Scan?, AIIM E-Doc Magazine, November/December 2002,
http://www.edocmagazine.com/archives_articles.asp?ID=25527
13
12
To finalize the In or Out decision, compare outsourcing costs and benefits to in-house
costs and benefits, but first optimize your in-house operation. To optimize the in-house
operation first means to re-engineer outdated manual or automated processes and consider the
cost and benefits of updating your current technology and systems, then compare your optimized
cost to outsourcing costs.
Although imaging activities may be outsourced, the records are still yours and regulatory
compliance belongs to you. High-level quality control testing and assurance must be a part of
your project and be performed by both the outsourcing vendor and independently by you.
Pricing by a vendor typically includes the level of quality control testing you have specified, so it
is important to clarify the quality control expectations up-front.
Earned trust is the foundation of an outsourcing relationship. Mr. Neale sums it up by
stating, You clearly must trust the outsourcers before you give them some of your
organizations most valuable assets your documents. 15
14
Julien, Janelle, Outsourcing Faux Pas, AIIM E-Doc Magazine, November/December 2006,
http://www.edocmagazine.com/archives_articles.asp?ID=32222
15
Neale, Bill, To Scan or Not To Scan?, AIIM E-Doc Magazine, November/December 2002,
http://www.edocmagazine.com/archives_articles.asp?ID=25527
13
Regarding outsourcing for back- file conversion, quality, not price, should be the
determining factor. From our experience on this project, outsourcing vendors
emphasize throughput. [Outsourcing] didnt achieve the same quality as we do inhouse, where were willing to scan a document two or three time and do 100
percent quality checks to get it right. Because our focus was on back file instead
of current work, if we didnt check every document as it was converted, an error
might not be noticed until it was too late to correct.
The project team found that the business units needed to pre-prep their documents
because only they had the required business knowledge to determine the function
of the documents (document type). 16
Two business units of Zions Bank, the National Real Estate Group and the Commercial
Lending Division (the subject of this paper), made a decision to perform imaging in-house. The
consumer lending division made a decision to outsource. The units choosing an in-house project
made that decision not only because of the complexities of preparation and indexing of the
documents, which requires knowledge of the document type and its use in the transaction, but so
they would have direct control of the quality of the project. An additional reason that the
commercial lending division kept the project in-house is because of the use of CLASS to
create the loan transactions, create imaging barcodes and store the metadata associated with the
images. It would be difficult to provide CLASS to an outsourcing vendor and maintain the
confidentiality and security of business information and systems.
14
The preferred project type at 62.5 percent is a back file conversion, with 37.5 percent
choosing to image going forward.
A central imaging location was the choice of 50 percent with 25 percent imaging at both
central and branch locations, and only 12.5 percent outsourced their project. Of those
who outsourced, the outsourcing applied only to their back file project and ongoing
imaging was retained in-house.
16
Duhon, Bryant, Healthy Imaging, Monica Crocker talks about what it took to convert documents for 12
business units and shares some best practice tips, AIIM E-Doc Magazine, November/December 2006,
http://www.edocmagazine.com/archives_articles.asp?ID=25527
15
IV. Determining the Volume, Time and Cost to Image Documents in Storage
How do you measure the size of the beast in your organization and then determine how
long it will take and how much it will cost to complete the project? I did not find any written
resources on this topic and developed my own methods.
The volume and cost of imaging documents for the Commercial Lending Division of
Zions Bank, shown as Exhibits A and B, were determined through the following steps:
1. Actual measurements in linear inches determined the volume of centrally stored
collateral files.
2. Credit files stored at de-centralized branch locations were categorized by size as
small, medium or large based on the total dollar amount of the customer relationship.
Numerous files from each size category were measured and an overall average file
size was computed and multiplied by the total number of relationships on the
servicing system to determine the total linear inches of files in de-centralized storage.
3. From multiple samplings we determined the average pages per inch, average percent
of documents that are two sided, and the average percent of documents from each file
type that are actually imaged. Although Zions did not request proposals for
outsourcing, the calculations determining total pages and images are required for an
outsourcing proposal.
4.
From actual imaging activities over a period of sixty days, an average handling time
per inch and average gross inches processed per day per person was developed.
5. The total inches of documents multiplied by the processing time per inch, equals the
total minutes required to complete the project.
16
6. Total minutes to complete the project, divided by the average work minutes in a day,
divided by the total number of imaging employees, equals the number of days to
complete the project.
7. Salary over the project duration was calculated and added to other fixed costs to
determine the total project costs.
After calculating time and cost estimates, I propose four project options to Zions Bank:
As shown in Exhibit A, conduct a back file project with the existing four
employees. With a completion period of 8.29 years, this is likely not an
acceptable choice.
As shown in Exhibit B, limit immediate imaging to the most used or needed files,
by excluding relationships with no activity for the past two years and excluding
relationships less than $100,000. Under this proposal, the estimated time to
image the targeted files with a staff of twelve is 1.45 years. Initially excluded
files, if desired, could be imaged after the full rollout of CLASS .
The first three options are based on imaging each LRMs loan files before the
delivery of CLASS, and that new loans originated on CLASS will be imaged
going forward. A fourth proposal is to disconnect imaging and the delivery of
CLASS, allowing CLASS to be delivered as quickly as possible, with new
originations in CLASS being imaged going forward while the back file project
continues under the time and costs associated with a staff of twelve and a
completion time of 2.76 years.
17
18
volume project are: ultrasonic double feed detection that will stop the scanner if a double feed or
paper jam occurs and capability to duplex or read both sides of a page in a single pass through
the scanner.
New generation Multifunction Peripherals (MFPs) that copy, scan, or print documents,
have image handling features that, with the exception of speed and capacity equal desktop
scanners. When connected to the corporate computing network and integrated to business
applications the MFP enables scanned information to be immediately available so users can
fully participate in a business workflow by bringing in high-value documents at the point of their
choosing. They do not have to wait for documents to be captured by someone else. 17 Most
commercial lending operations require both de-centralized and centralized functions. The use of
MFPs has substantially improved workflow within Zions Bank by making a document,
regardless of where it originated, immediately available to a loan officer, underwriter, loan
committee, and loan processor or documentation officer.
Image Enhancement and Management Software
Imaging software works in companion with the scanner to convert the scanned image into
a digital format, to sharpen, brighten or otherwise improve the image, to create the desired DPI
resolution and to compress the image to take up less space on the storage media. The three most
common digital formats created by imaging software are Portable Document Format (PDF),
Tagged Image File Format (TIFF), and JPEG, named after the Joint Photographic Experts Group,
a committee that developed the format. 18 Text documents are generally stored in the PDF or
17
DeStefanis, Bill, MFPs for Capture, AIIM E-Doc Magazine, January/February 2007,
http://www.edocmagazine.com/archives_articles.asp?ID=32712
18
Digital format long names were searched on Wikipedia, The Free Encyclopedia, February 24, 2007,
http://en.wikipedia.org/
19
TIFF format and at not less than 300 DPI. The PDF format allows for word searching within the
imaged document, but requires more electronic storage space than the TIFF image.
Imaging software includes optionally used Optical Character Recognition (OCR)
technologies. When using OCR, text within a document is recognized and converted into text,
rather than an image format. OCR technology will auto orient or turn a document fed through
the scanner backwards, speeding up the scanning process.
Purchased separately, advanced or Super OCR goes beyond early OCR technology,
allowing for training or programming of the software to perform additional functions. Super
OCR searches text within identified locations, looks for key words or text before or after key
words, or finds other defined landmarks to capture text. Captured text may be exported to
additional systems for use in other workflow processes. For example, text within a loan
application could be exported to third party vendors to order an appraisal, a title report or a flood
certification. Additionally, Super OCR will fully automate document identification and indexing
for an imaging system, eliminating the use of barcodes or manual indexing. Additional
information on Super OCR is in the online version of AIIM e-Documents Magazine at
http://www.edocmagazine.com/archives_articles.asp?ID=32714.
The management module of the imaging software enables the creation and naming of
batches according to user preference. Each identified batch, once captured by the scanner, is
reviewed on screen to check for poor image quality, skewed documents, missing pages or other
errors. After the completion of the quality control review and correction of any errors, the user
authorizes release of the batch to the image repository.
20
21
19
Porter_Roth, Bud, Is Return on Investment Necessary?, AIIM E-Doc Magazine, September/October 2005,
http://www.edocmagazine.com/article_new.asp?ID=30579
22
Ashenden, Angela and Pelz-Sharpe, Alan, Return of Investment Building a Business Case for ECM, AIIM EDoc Magazine, September/October 2003, http://www.aiim.org/article-docrep.asp?ID=27207
22
Angela Ashenden and Alan Perlz-Sharpe, officers with Ovum, a business advisory
Service Company based in Boston, provide a summary of the method they recommend be used
to determine the benefits of an ECM system:
Hard and soft benefits need to be listed and then individually costed. The benefits can be
measured in the following ways: a 20 percent reduction in printing, a 35 percent
reduction in the need to contract staff, or a 75 percent reduction in the cost of
disseminating information to employees or external sources.
Once these percentages are calculated, monetary values need to be attached to each
benefit; "time-saved" calculations often provide the clearest cost benefits in any
implementation. The actual equation is straightforward to define:
(Number of employees) x (salary) x ( percent time savings) x (productivity rating*)
*The actual percentage of time spent on productive work-generally taken to be around 60
percent. 23
Hard benefits refer to tangible dollars saved; soft benefits refer to intangible savings
achieved through greater efficiencies, better customer service or faster delivery. Exhibits E and
F provide ideas for consideration that may result in both hard and soft cost savings.
Most organizations do not fully recognize the substantial cost of managing paper and the
potential savings of ECM systems. IKON Office Solutions, in partnership with Jan Casper, a
leading office efficiency consultant, developed a guide titled, The Efficient Office. The guide
identifies the following costs of managing paper:
23
Ashenden, Angela and Pelz-Sharpe, Alan, Return of Investment Building a Business Case for ECM, AIIM EDoc Magazine, September/October 2003, http://www.aiim.org/article-docrep.asp?ID=27207
23
U.S. businesses spend more than $25 billion a year on filing, storing, and
retrieving paper documents. 24
IKON Office solutions also provides a document expense and potential savings calculator
located on the intranet at http://idea.ikon.com/IKON/customer.php. Exhibit G is an example of
the IKON calculator, using information on Zions Bank.
A concluding consideration on ROI and building a business case is that an organization
must consider the cost of not taking action to develop an imaging or ECM system. Henry Ford
once said, If you need a machine and dont buy it, you pay for it without getting it. 25
24
Casper, Jan and IKON Office Solutions, The Efficient Office March 2007,
http://www.ikon.com/DocumentEfficiency/download/efficiency_guide.pdf
25
Porter-Roth, Bud, ROI Chicken or Egg? AIIM E-Doc Magazine, May/June 2005,
http://www.edocmagazine.com/article_new.asp?ID=30150
24
LRMs (69.3 percent) want to receive and begin using CLASS independent of the imaging
of credit and collateral files.
26
Edelman, Russ, Content In Place, The AIIM Guide to ECM Purchasing, p. 75.
25
imaged. If the deployment of CLASS had not been a connected issue and one of the
survey questions, it is likely that more would have preferred imaging of the entire back file.
Imaging by a dedicated team, whether conducted centrally or at the branch, received about
equal responses. However, by combining the two questions, 74.56 percent of respondents
want the imaging completed by a specialized team, while only 25.44 percent want to be
involved in the imaging activities themselves. This response appropriately indicates that
LRMs need and want to be involved in new loan production activities rather than unproductive activities of imaging their existing portfolios.
After imaging of the credit files, 49.12 percent want the files retained by the branch for a
later shredding decision and 35.96 percent want the files retained by the branch for later
shipment to off-site storage. Combining the two, 85.08 percent want the disposition of the
files left up to the branch.
Those not comfortable giving up paper is a small 11.4 percent, but when combined with
58.77 percent who will be comfortable giving up paper only upon proof that the imaging
system is functional, there is a total of 70.17 percent that will require some level of
convincing to give up paper.
Considering the two prior bullet points, it appears that LRMs are uncomfortable losing
access to current paper documents. Comfort will increase as confidence in the imaging
system and CLASS grows, but it will also be essential that training and specific
instruction be given to break old habits and stop the copying and retention of paper
documents.
26
The Electronic Signatures in Global and National Commerce Act (E-Sign), signed into
federal law by then-President Clinton on June 30, 2000, 15 U.S.C. 7001 et. seq.
(2000).
The Uniform Electronic Transactions Act (UETA), drafted as a model law by the
National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1999.
each other and how each enables the use of electronic documents.
E-SIGN
E-SIGN is an "overlay" law in that it does not amend any laws specifically but
provides that a signature, contract, or other record relating to a transaction may not be
denied validity solely because it is in electronic form, 15 U.S.C. 7001. Therefore, if a
state statute requires a "writing," the simple fact that the record or signature is in
electronic form would not affect the validity of the record or signature. 27
E-SIGN also contains records retention standards. It states that if law or
regulation requires the retention of records for a particular transaction, the retention
requirement may be met by retaining an electronic record, provided certain conditions are
met. Id. 101(d). One requirement is that the record remains capable of being reproduced
for later reference. Id. Therefore, it is important to ensure that the document remains
retrievable despite changing technology. 28
27
Sigfried, Susan Hepner, The E-Commerce Revolution: E-SIGN and UETA, Virginia State Bar Online,
February 3, 2007, http://www.vsb.org/sections/rp/articles/ESign.siegfried.html
28
Ibid.
27
29
Sigfried, Susan Hepner, The E-Commerce Revolution: E-Sign and UETA, Virginia State Bar Online, February
3, 2007, http://www.vsb.org/sections/rp/articles/ESign.siegfried.html
28
Since the objectives of E-Sign and UETA are the same, some have wondered why we
have both laws. According to one speaker on the topic, Congress was concerned that it might
take several years for all of the states to pass UETA, and therefore wanted to enact a very broad
law that would give nationwide validity to electronic records and signatures. 30
Idaho adopted UETA in its original form, effective July 1, 2000 as Senate Bill 1334. The
full text of the bill is on the Internet at: http://www3.state.id.us/oasis/2000/S1334.html#daily.
Utah adopted UETA with minor amendments, effective May 1, 2000 as Senate Bill 125. The
full text of the Utah Senate Bill is on the Internet at:
http://www.le.state.ut.us/~2000/htmdoc/sbillhtm/SB0125.htm.
The following provisions, following the original language of UETA, are found in the
Utah Code and Constitution and additionally, the exact language is found in the Idaho
Constitution:
(1) A record or signature may not be denied legal effect or enforceability solely because
it is in electronic form.
(2) A contract may not be denied legal effect or enforceability solely because an
electronic record was used in its formation.
(3) If a law requires a record to be in writing, an electronic record satisfies the law.
(4) If a law requires a signature, an electronic signature satisfies the law. 31
Rules of Evidence
30
Sigfried, Susan Hepner, The E-Commerce Revolution: E-Sign and UETA, Virginia State Bar Online, February
3, 2007, http://www.vsb.org/sections/rp/articles/ESign.siegfried.html
31
29
Rules of Evidence, as adopted by each state, are generally consistent with the Federal
Rules of Evidence enacted by the Congress of the United States, effective July 1, 1975. A state
has the right to modify a Rule of Evidence in instances when a state rule is determined to be
superior. Numbering of the rules generally remains consistent with the federal rules. Rules
pertaining to electronic or paper copies of documents are within Article 10, Rules 1001 through
1004. 32 The Utah and Idaho Rules of Evidence conform to the Federal Rules of Evidence.
Selected portions of rules 1001-1004 that relate to photocopied or electronic documents are as
follows:
If data are stored in a computer or similar device, any printout or other output readable
by sight, shown to reflect the data accurately, is an "original."
The original is not required, and other evidence of the contents of a writing,
recording, or photograph is admissible if: (1) Originals lost or destroyed. All originals
are lost or have been destroyed, unless the proponent lost or destroyed them in bad
faith. 33
The Rules of Evidence also establish a best available theory. If it is the standard
practice of an institution to image documents and destroy the original, then the image is the best
available.
Jay B. Simmons, legal counsel and specialist on document imaging law for Zions
Bancorporation, provides some specific clarifications about the three laws discussed.
32
Interview with David Fleming, Corporate Records Program Manager for Zions Bancorporation, January 12, 2007
30
E-Sign and UETA state that they do not apply to certain types of documents and
transactions, including wills, family law documents (UETA only), and others, but most
notably secured transactions covered by Article 9 of the Uniform Commercial Code
(UCC). Therefore, E-SIGN and UETA do not permit electronic retention of security
agreements. However, neither is there any statute or rule that prohibits the destruction of
originals and retention of electronic copies. The bank has probably enforced security
agreements in the past where all the bank has is a copy of the original, without E-SIGN or
UETA telling the court that electronic copies are okay. Typically, under the best
evidence rule in each state, an electronic copy of a document will be admissible as
evidence in court. 34
The document was changed by the bank before it was imaged and destroyed. 35
In response to the first challenge, as stated earlier by Mr. Simmons, although E-SIGN and
UETA do not include security agreements subject to UCC article 9, neither do any laws prohibit
the imaging and destruction of security agreements. Additionally, the Rules of Evidence support
the right to image and destroy originals as long as the destruction was not done in bad faith.
The second challenge of signature forgery also exists with paper documents but is much
greater with imaged documents because of the inability to conduct the same level of detailed
handwriting analysis. However, during an interview with Mr. Simmons he stated: In a lending
environment there is sufficient extrinsic evidence to support validity of loan documents. Issued
33
31
checks, advances, draws, repayments, conversations, witnesses and other activities establish that
the signer had knowledge of the contract. The exception to this argument could come from a
guarantor who may not have been a direct participant of the extrinsic activities. Mr. Simmons
stated that he is only aware of one instance within [his] seven years of experience with the bank
in which a guarantor claimed not having signed a guaranty and in that instance, it was
established that the signature had been forged. 36
The third challenge of document alteration also exists in a paper environment. One may
claim post-signing alteration occurred on pages other than the signature page. In fact, it is a
valid argument that there is greater opportunity to alter an original paper document than there is
to alter an imaged document. An original document during its life cycle is accessible to
numerous individuals and is accessible for alteration at almost any time during the document
lifecycle. A document once surrendered to an imaging department is in a controlled
environment to which only a few individuals have access and the document will follow strict
quality control imaging procedures. Once a document is imaged, most imaging technologies
prevent alteration of the document, or even if alterable, only a very few individuals would have
security access and knowledge of how to alter the document.
Texas-based Amegy Bank, a subsidiary bank of Zions Bancorporation, images its
commercial loan documents placing the following imaging disclosure language into certain
documents:
Borrower [or Maker, Guarantor or Pledgor, as applicable] understands and agrees that (i)
Lenders [Banks] document retention policy involves the imaging of executed loan
documents and the destruction of paper originals, and (ii) Borrower [or Maker,
36
Interview with Jay B. Simmons, Legal Counsel, Zions Bancorporation, January 19, 2007
32
Guarantor, or Pledgor, as applicable] waives any right that it may have to claim that the
imaged copies of the loan documents are not originals. 37
I inquired of Mr. Simmons as to his opinion about the use of the imaging disclosure
language and incorporating its use in Zions Bank loan documents. He responded, It certainly
could not hurt, although it also should not be considered effective in refuting any legal
challenge. 38
I have reviewed the operation of the Zions Bank developed CLASS software and its
controls in preserving the integrity of imaged documents. The barcodes used to index and link
imaged documents to the respective loan(s) or customer(s) is prepared by CLASS . If a second
barcode is printed for the same document, then the second document will be imaged as a
version of the first document, thus preserving the original integrity of each document. In
addition, the image repository software named File Net will not allow alteration of the image.
However, the current CLASS design allows document alteration if users do not follow
proper procedures. When an original or version barcode is re-used, the document following the
barcode will replace the respective original or version document. This function enables the
correction of errors in placing the wrong document behind the barcode, but creates a legal
argument that the banks procedures allow for the alteration of an original. Such an argument is
further supported by that fact that the current procedure of the imaging department is to retain the
original or version barcode and leave it in the file placed on top of the document; it acts as a
separator and retains the identifying information printed on the barcode page. Zions Bank
should reconsider allowing the re-use of a barcode as currently enabled by CLASS .
Shredding of the barcode would prevent its re-use but would also eliminate the page
separator and identification value of the barcode. Another method to prevent re-use is to make
37
Provided by Debbie Matula, Commercial Loan Operations Manger for Amegy Bank, February 2007.
33
the barcode unreadable by using a marker to black out a portion of the barcode. Either of these
two mentioned methods is subject to procedural errors. The most effective method is to program
the image capture software and CLASS so they will not accept barcode identifications already
recorded in FileNet and CLASS .
Should the Original be Retained or Shredded after Imaging?
Prior discussion has established that law enables digital images and that laws do not
expressly prohibit the destruction of original documents unless the destruction was in bad faith.
Regardless, six of eight (75 percent) lenders responding to an imaging survey, and including
Zions Bank, retain originals after imaging. (See graph I, item B) This reluctance to shred, or
comfort in retaining originals, stems from the current lack of a precedent coming from judges,
juries, and governmental entities.
When banks retain originals, the best evidence rule established under the Rules of
Evidence makes the original document the best evidence. Being the best evidence, the
original documents must still be stored and managed for quick and correct access in the event of
litigation. This defeats the cost savings and document control benefits intended by having an
imaging program. Further, retention of both images and originals may create increased liability
due to having multiple sources of information that possibly are not in exact agreement or
uniformity with each other. David Fleming, Corporate Records Program Manager for Zions
Bancorporation stated, There is risk in simply correctly filing and retrieving paper documents,
either internally or at off-site storage that will be prevented if the documents are destroyed. 39
When a bank begins an imaging operation, it makes a lot of sense to continue to retain
originals for a period until the imaging and quality control procedures have been thoroughly
38
39
Interview with Jay B. Simmons, Legal Counsel, Zions Bancorporation, January 19, 2007
Interview David Fleming, Corporate Records Program Manger, Zions Bancorporation, January 12, 2007.
34
established and proven effective. The long-term plan should be to maximize the benefits of
imaging and destroy all except selected originals.
Recommended documents to hold in original paper form include all negotiable debt
instruments such as the note and credit agreement, vehicle titles and real estate trust deeds or
mortgages. Retaining original vehicle titles and real estate mortgages is for matters of
convenience to release the lien in the future, as well as the requirements or preference of the
respective governmental agencies. Most motor vehicle departments require the original or the
use of an affidavit of a lost original to transact ownership or lien changes. Rules for the retention
of an original real estate mortgage document vary by state and county. Colorado, for example,
specifically requires an original mortgage or a lost document bond if the original is lost. Due to
the variances and the convenience of releasing liens on the original document, the best approach
is to keep the original for states other than Utah and Idaho, which do not require retention of the
original.
The Protection of Establishing and Following Written Policy and Procedures
In law, Discovery is the pre-trial phase in a lawsuit in which each party through the
law of civil procedure can request documents and other evidence from other parties or can
compel the production of evidence. 40 For evidence that is contained in electronic form the
discovery process is referred to as e-Discovery.
The greatest fear of Zions Bank in regards to either paper or electronic documents is to
have a judge give a bad faith or adverse inference instruction to a jury. This means that the
40
35
judge advises the jury that they may assume bad faith or bad intent on the part of the bank
regarding its delivery and presentation of documents used in the trial. 41
In my interview with Mr. Simmons, he identifies the four greatest risks and contributors
causing a judge to give an adverse inference instruction.
Un-timely delivery of documents during the discovery process
Failure to follow established document control and retention procedures
Improper timing of procedure changes, if such changes occur
Inconsistency with our peers and apparent best practices 42
Properly administered policy and procedures will mitigate each of the four stated risks.
If an organization can demonstrate to an investigator, regulator, court or even the media
that they had a policy in place and trained employees to follow the policy, then isolated
failures are much more likely to be seen as individual accidents rather than organizational
failures. 43
Policies and procedures are formal, written documents that are carefully managed and
disseminated to ensure that their contents stay up-to-date and accurate. There is reason
for this formality.
Policies and procedures serve to formally document and provide proof of an
organizations commitment and practices at a particular time, should there be a dispute in
the future about its intent. 44
Policies and procedures not only provide standards for how employees should behave
when acting on the organizations behalf, they tell a story about the organizations
priorities, commitment, and actions, which is important in the legal context. 45
41
42
Interview David Fleming, Corporate Records Program Manger, Zions Bancorporation, January 12, 2007.
Interview with Jay B. Simmons, Legal Counsel, Zions Bancorporation, January 19, 2007
43
Randolph A. Kahn, Esq. and Barclay T. Blair, Information Nation Seven Keys to Information Management
Compliance, Silver Springs, Maryland: AIIM Publications, 2004, p.81.
44
Ibid, p. 84.
45
Ibid, p. 85.
36
follow them with precision, and test them with a strong and consistent quality control program.
The indexing process must be uniform and the imaging software program must record sufficient
data to enable correct and timely retrieval and re-printing of documents.
As procedures change, the imaging department may not be able to apply the changes to
loans currently in litigation. For example, if a bank currently retains rather than shreds
documents after imaging and decides to move to a shredding policy, opposing parties to current
litigation may consider the destruction of information under litigation as completed in bad faith.
An example of inconsistent procedure management and change occurred within the accounting
firm representing Enron Corporation. Although a policy existed for the destruction of outdated
documents, the accounting firm did not follow the policy. In the midst of the discovery phase of
the trial, the firm started to enforce the policy and the subsequent destruction of documents was
determined to have occurred in bad faith.
The activities of peers and apparent industry best practices also affect the opinion of
judges and juries. It is advisable that imaging managers become aware of what their peers are
doing and are actively involved in the establishment of industry standards. Participation in
national or local chapters of imaging associations such as AIIM achieves this objective.
37
Only 50 percent of the respondents have procedures in place to destruct and place legal
holds against electronic documents as required by their own policy. The placement of
legal holds means to flag documents that are the subject of litigation or investigation and
hold them from destruction until completion and release of the litigation or investigation.
The banks that shred original documents (with the exception of certain originals that are
best retained in the original paper format) after they have been imaged is 25 percent,
while 75 percent continue to store and hold the original documents until the destruction
date defined in bank policy.
Given that there is a loss of efficiency and cost savings and increased risk by retaining
both the paper and electronic versions of documents, why do the banks surveyed continue to hold
both document versions? Reasons stated or concluded are as follows:
Imaging departments are in their infancy, still developing and putting procedures in
writing.
38
The inability of processes or systems to enforce destruction and legal hold policies
against electronic records results in the retention of paper as a safety backup until the
proper management of electronic records occurs.
There is a fear of being able to defend electronic document reproductions used for
litigation and a feeling of safety in retaining the paper version.
Zions Bank is included among those banks that maintain both paper and electronic
images and do not apply legal holds and destruction policies against electronic records.
Regulatory agencies are exercising some patience and tolerance because EMC systems and
procedures are still new, however, at some point regulators will require full compliance with
destruction policies, whether in paper or electronic form. Zions Bank can only expect
criticism, possible sanctions from regulators, and negative legal implications if full document
retention compliance is not achieved.
39
40
41
12. Using the same data inputs described in suggestion eleven, purge outdated records
from CLASS .
13. After imaging, retain originals of any negotiable instruments, vehicle titles, aircraft
titles and real estate trust deeds or mortgages for all states other than Utah and Idaho,
whicht do not require surrender of the original to complete a release of the collateral.
14. Work through the legal department to identify other states that do not require the
retention of the original trust deed or mortgage.
15. Review and update written imaging procedures every three months during the current
start-up phase and annually thereafter.
16. The imaging department should seek management and corporate records manager
approval to begin the destruction of original documents after imaging. According to
David Fleming, Before a department is authorized to shred documents, Zions
Bancorporation requires a review by the Corporate Records Manager to determine
that department controls and imaging quality are adequate and that systems and
procedures enable the destruction of electronic records according to corporate
policy. 46 This correlates with recommendation eleven, which is a prerequisite to
shredding approval.
17. Request that the imaging department manager join the local chapter of AIIM and
actively participate in chapter meetings and activities.
I recommend to other banks considering an imaging project, that further analysis will
show that the project is cost justified and will greatly benefit your organization.
46
Meeting with David Fleming, Corporate Records Program Manger, Zions Bancorporation, February 22, 2007
42
Graph I
Survey of the Imaging Activities of Other Lenders
A. File Types Imaged
B. Conversion Type
70.00%
62.50%
80.00%
60.00%
70.00%
70.00%
50.00%
60.00%
50.00%
37.50%
40.00%
40.00%
30.00%
30.00%
20.00%
20.00%
20.00%
10.00%
10.00%
10.00%
0.00%
0.00%
0.00%
0.00%
Consumer Only
Commercial Only
Consumer and
Commercial
survey is N/ A)
Back File
On Demand
Go Forward
C. Im aging Location
80.00%
75.00%
60.00%
70.00%
50.00%
50.00%
60.00%
50.00%
40.00%
40.00%
30.00%
25.00%
30.00%
20.00%
25.00%
20.00%
12.50%
12.50%
10.00%
10.00%
0.00%
0.00%
0.00%
Immediat e Shredding
Br anch
Cent ral
Bot h
Delayed Shredding
St or ed Unt il End of
Ret ent ion Period
50.00%
Yes
No
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
43
Graph II
Survey of Loan Relationship Managers at Zions Bank
A. Imaging Conversion Type
50.00%
39.47%
42.98%
45.00%
40.00%
35.09%
40.00%
35.00%
34.21%
35.00%
30.00%
25.44%
30.00%
25.00%
22.81%
25.00%
20.00%
20.00%
15.00%
15.00%
10.00%
10.00%
5.00%
5.00%
0.00%
0.00%
On Demand
Branch Personnel
Go Forward
D. Give Up Paper?
60.00%
49.12%
58.77%
60.00%
50.00%
50.00%
40.00%
35.96%
40.00%
30.00%
29.82%
30.00%
20.00%
14.91%
20.00%
11.40%
10.00%
10.00%
0.00%
Immediat e Of f Sit e
St orage
Delayed Shredding
0.00%
Not Comf or t able
44
Upon Pr oof
Comf or t able
Exhibit A
Back file Imaging Calculations Imaging Team of 4
Storage Information:
Credit
Collateral
Number of files
11416
16180
Average file size in inches
5.1723 0.9078092
Gross inches of files in storage
59047
14688
Average pages in an Inch
n/a
n/a
Number of pages in storage
13,462,711 3,348,864
Percent of pages that have text on two sides
1.00%
13.00%
Page and Image Calculations
Credit
Collateral
Gross pages (Including two-sided text pages)
13,597,338 3,784,216
Percent of file actually imaged
37.00%
99.00%
Net images sent to FileNet
5,031,015 3,746,374
Employees and Capacity Calculations
Employees available to image (excludes the shipping coordinator)
Annual salary, & benefits, (Including the shipping coordinator)
Work minutes per day
Minutes per gross inch for QLS, preparation, imaging, QC
Gross inches processed per day per imager
Equipment, Software, Licenses and Transportation Costs
Transportation cost to image credit files centrally:
First year imaging equipment and licenses:
Additional image licenses for the duration of the project
Additional equipment cost if staff is increased
*Projection - Based on Measured Average Time to Complete a Loan, Times Total Loans
Minutes of time for QLS, preparation, imaging, QC
Time to image the back file
Work Days:
1972
Years:
Total Cost
Total
27596
6.0801092
73735
228
16,811,575
n/a
Total
17,381,554
n/a
8,777,389
4
$175,760.00
417
44.5992
9.35
Total
$8,000
$78,979
$16,500
$900
Total
3,288,521
8.29
$1,560,597.22
45
Total
27596
6.0801092
73735
228
16,811,575
n/a
Total
17,381,554
n/a
8,777,389
12
$456,976.00
417
44.5992
9.35
Total
$8,000
$78,979
$16,500
$8,100
Total
3,288,521
2.76
$1,373,634.81
Exhibit B
Modified (Reduced Volume)
Back file Imaging Calculations Imaging Team of 12
Excluding Imaging the Credit & Collateral Files of Inactive Loans
and Excluding Imaging of the Credit File on Relationships $100,000 or Less
Storage Information:
Credit
Collateral
Relationships in which all loans have had no activity for 2 years
716
780
Relationships $100,000 or less
6049
6658
Files Excluded from Imaging under this proposal
6765
780
Number of files to be imaged under this proposal
4651
15400
Average file size in inches
5.1723 0.9078092
Gross inches of files to be processed under this proposal
24056
14688
Average pages in an Inch
n/a
n/a
Gross number of pages to be processed under this proposal
5,484,852 3,348,864
Percent of pages that have text on two sides
1.00%
13.00%
Page and Image Calculations
Credit
Collateral
Gross pages (Including two-sided text pages)
5,539,700 3,784,216
Percent of gross pages actually imaged
37.00%
99.00%
Net images sent to FileNet
2,049,689 3,746,374
Employees and Capacity Calculations
Employees available to image (excludes the shipping coordinator)
Annual salary, & benefits, (Including the shipping coordinator)
Work minutes per day
1. Minutes per gross inch for QLS, preparation, imaging, QC
2. Minutes per customer for QLS, prep, imaging, QC
Gross inches processed per day per imager
Equipment, Software, Licenses and Transportation Costs
Transportation cost to image credit files centrally:
First year imaging equipment and licenses:
Additional image licenses for the duration of the project
Additional equipment cost if increase over current staff
*Projection - Based on Measured Average Time to Complete a Loan, Times Total Loans
Minutes of time for QLS, preparation, imaging, QC
Years:
Time to image the back file
Work Days:
345
Total Cost
46
Total
1496
12707
7545
20051
6.0801092
38744
228
8,833,716
n/a
Total
9,323,917
n/a
5,796,063
12
$456,976.00
417
44.5992
181.1842
9.35
Total
$8,000
$78,979
$16,500
$8,100
Total
1,727,968
1.45
$774,731.81
Exhibit C
Survey of the Imaging Activities of Other Lenders
This survey seeks to gather information about the practices of banks regarding the imaging of consumer
and commercial loan files. Consumer lending means, installment, home equity, vehicle and other
consumer loan types, but is not inclusive of bankcard products. Completion of the survey should only take
three to five minutes.
A. What loan file types do you currently image?
1. Consumer Only
2. Commercial Only
3. Consumer and Commercial
2. Neither (You may disregard all other questions on the survey)
B. What type of imaging conversion did you conduct?
1. Back file = to image all files held in storage and to continue to image all files going forward.
2. On Demand = to image existing stored files only as they are needed to perform a function, such
as a renewal or audit and to image new files going forward.
3. Go Forward = to image files only for new loans or renewals originated after a specified starting
date.
C. Where do you conduct your imaging activities?
1. Branch = imaging occurs at the branch location using capture devices such as an imaging
workstation, a multi-function copy machine or fax machine.
2. Central imaging = files are sent to a central location for imaging.
3. Both = files are imaged from both the branch and central locations.
4. Outsourced = files are sent to an outside vendor to be imaged.
D. After imaging, what do you do with the original documents?
1. Immediate shredding = original documents are shredded.
2. Delayed shredding = original documents are retained for a short period then shredded.
3. Stored = original documents are stored and not shredded until the end of a specified retention
period or until your bank later adopts a shredding policy.
E. If you conduct delayed shredding, how many days do you hold files before shredding?
F. If you shred original documents, regardless of a shred policy your bank may be retaining selected
originals, for example, a note or vehicle titles. If you do retain selected originals, please indicate four or
five of the documents you retain.
G. Do you currently apply legal holds and destruction policies to your electronic records?
Yes
No
H. Comments:
If you are interested in receiving a copy of these survey results, please provide your e-mail address: (Your
e-mail address will not be shared with others.)
47
Exhibit D
Survey of Loan Relationship Managers
Document Imaging and Rollout of the Commercial Lending Automation System Solution (CLASS )
CLASS provides a single point of data entry to originate commercial loans. Functions include the following:
Preparation of the Credit Presentation and Transmittal. An import from the Customer Information System (CIR) used
for quick customer setup. Tools used for automated scoring and underwriting of Small Business Loans. An interface to
Laser Pro used for quick and accurate document preparation. Links to the FileNet image repository enabling the
viewing of both credit and collateral document. Users may view loan specific documents while within the specific loan
in CLASS and may view cross-linked customer documents while within any loan to that customer. Additionally, a
future interface will enable automatic boarding of loans to Shaw. Questions on this survey are for survey purposes only
and do not represent the decisions of management regarding document imaging or the CLASS rollout. Please select
one of the responses provided. An input for comments is at the end of the survey form.
A. What type of imaging conversion project will be of the greatest assistance to you to enhance your origination of
loans and to help you begin using CLASS ?
1. Back file = to image all credit and collateral files currently held in storage and image all files going forward.
2. On Demand = to image files only as they are needed to perform a function, such as a renewal or audit.
3. Go Forward = to image the credit and collateral files only for new loans or renewals originated after a
specified starting date.
B. Considering cost, in addition to convenience, where do you recommend imaging of the credit files should occur and
who should complete the imaging activities?
1. Branch LSG team = imaging at the branch location and performed by a team from the Loan Servicing
group.
2. Branch personnel = imaging at the branch location and performed by branch lending personnel.
3. Central imaging = shipment of files to the Redwing Building for imaging by the Loan Servicing Group and
return of the files to the branch after imaging.
C. If imaging of the back file of credit files will not include every document in the file, rather only a list of documents
as approved by the executive management team, and if imaging of credit files will occur centrally at the Redwing
Building what do you recommend should happen to the credit files after imaging?
1. Immediate offsite storage = after imaging, ship the full file including both imaged and un-imaged documents
to offsite storage but make the file available for future recall from storage when necessary.
2. Delayed offsite storage = after imaging, ship both imaged and un-imaged documents back to the branch for
storage for 1-3 years after CLASS and imaging procedures have been in place, then, based on future
analysis shipped to offsite storage.
3. Delayed shredding = after imaging, ship both imaged and un-imaged documents back to the branch for
storage for 1-3 years after CLASS and imaging procedures have been in place, then, based on future
analysis shredded.
D. What is your comfort level to discontinue the retention of any paper documents or files and to work from image files
viewed through CLASS ?
1. Not comfortable = I will be inclined to copy documents and continue to keep a paper file regardless of
imaging capabilities.
2. Upon proof = I will be hesitant and will likely copy documents and continue to keep a paper file until I am
confident that CLASS and the imaging procedures produce consistent results.
3. Comfortable = I will be fully comfortable working from images once the imaging change is applicable to me.
E. What level of imaging do you recommend to occur before you begin using CLASS ?
1. None = Do not connect the imaging of existing credit or collateral files to CLASS rollout. Let me start
taking new originations and imaging new loan documents in CLASS immediately, and follow up with
imaging the back file as soon as it can occur.
2. Credit files first = I prefer to have all my credit files imaged before I start using CLASS .
3. Credit and Collateral files first = I prefer that both my credit and collateral files be imaged before I start using
CLASS .
Comments:
48
Exhibit E
Electronic Imaging vs. Traditional Storage
http://www.gensrv.ttuhsc.edu/Imaging/vstraditional.htm
Feature
Imaging
Paper
Accessibility
Indexing
Searching Text
Long range
Availability
Migration
System Security
Safeguards
None.
Cost
49
Exhibit F
Considerations for Cost Savings Opportunities
Prepared for AIIM E-Docs Magazine by Bud Porter-Roth, principal consultant at eVisory
Consulting - (www.evisory.com). The full article Dollars and Cents - Developing a Return on
Investment for a Document Imaging and Workflow System is available at
http://www.edocmagazine.com/pdf/ECMInsights_MarApr04.pdf
50
Exhibit G
IKON Office solutions
Annual Pages
2.7%
1,751,533
Office Copying
11.6%
7,648,457
Office Printing
36.6%
24,101,517
33,501,507
15,765
Employees: 2,125
Industry: 521 Monetary Authorities
- Central Bank
Revenue: $679,000,000 (USD)
1,303
Estimated annual printed pages
Production* Copying
15.1%
Production* Printing
34%
65,832,188
9,937,379
22,393,302
32,330,681
15,214
65,832,188
30,979
2,849
$2,235,925
0.33%
$335,389
$670,777
Contact IKON.
51
Bibliography
Books
Kahn, Randolph A. Esq. and Blair, Barclay T, Information Nation Seven Keys to Information
Management Compliance, Silver Springs, Maryland: AIIM Publications, 2004.
Periodicals
Marcia Judd, Dont Forget the Paper, AIIM E-Doc Magazine, May/June 2006, p.44.
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Guide to ECM Purchasing, p. 8.
Russ Edelman, Content In Place, The AIIM Guide to ECM Purchasing, p. 75.
Multiple authors and articles in a PDF publication, ECM Insights, Document Imaging ROI,
AIIM E-Doc Magazine, March/April 2005.
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Interviews
Walk, Donald, CLASS Business Owner and Manager for Zions Bancorporation, January 19,
2007.
Fleming, David, Corporate Records Program Manager for Zions Bancorporation, January 12,
2007.
Simmons, Jay B. Legal Counsel, Zions Bancorporation, January 19, 2007.
Correspondence
Simmons, Jay B, Zions Bank Inter-office Correspondence, Record Retention Requirements
Electronic Imaging of Documents, June 12, 2003.
52
Internet
Regli, Theresa, Build It So They Can Find It, AIIM E-Doc Magazine, March/April 2005,
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Duhon, Bryant Capture On-Ramp to ECM, AIIM the ECM Association, January 20, 2007,
http://www.aiim.org/viewpdfa.asp?ID=32260
Glass, Michael, Are You In or Out?, AIIM E-Doc Magazine, January 2003,
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Julien, Janelle, Outsourcing Faux Pas, AIIM E-Doc Magazine, November/December 2006,
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Duhon, Bryant, Healthy Imaging, Monica Crocker talks about what it took to convert
documents for 12 business units and shares some best practice tips, AIIM E-Doc Magazine,
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DeStefanis, Bill, MFPs for Capture, AIIM E-Doc Magazine, January/February 2007,
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The AIIM Guide to ECM Purchasing, AIIM E-Doc Magazine, January 2, 2007,
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53
Internet (Continued)
Porter-Roth, Bud, ROI Chicken or Egg? AIIM E-Doc Magazine, May/June 2005,
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http://idea.ikon.com/IKON/customer.php
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Utah Code and Constitution Title 46, Chapter 4: 101-503, (2000)
http://www.livepublish.le.state.ut.us/lpBin22/lpext.dll?f=templates&fn=main-j.htm&2.0
Utah Rules of Evidence, Utah State Courts,
http://www.utcourts.gov/resources/rules/ure/index.htm
Idaho Rules of Evidence, Idaho State Courts, http://www.isc.idaho.gov/rules/evididx.htm
Idaho UETA Legislation, Senate Bill 1324, July 1, 2000
http://www3.state.id.us/oasis/2000/S1334.html#daily
Utah UETA Legislation, Senate Bill 125, May 1, 2000
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Other Publications
Zions Bancorporation, Annual Report 2005.
54
Certificate of Originality
I hereby certify that the work contained in this paper is my own. Any work of others has been
placed in quotations and identified as such with appropriate citation(s) to the source(s). I have
not shared my completed work with any other PCBS student nor have I read the completed work
of any other student.
/s Gene E. Goodrich
Date: March 17, 2007
55