What should happen to loan files after their retention period ends?

After the retention period for loan files ends, the appropriate action is to dispose of them securely, which aligns with the correct answer. This practice is essential for several reasons, including safeguarding sensitive borrower information and complying with regulatory requirements. By destroying or disposing of these files, lenders minimize the risk of data breaches and uphold privacy standards set forth in laws like the Gramm-Leach-Bliley Act.

The importance of properly managing the lifecycle of loan files also reflects the need for organizations to maintain efficient records management practices, ensuring that only necessary data is retained while obsolete or unnecessary information is safely eliminated. This not only aids in maintaining order within the organization but also helps reduce the overall costs associated with data storage.

To summarize, disposing of loan files after their retention period reinforces data security, compliance, and efficient records management within the lending industry.