NC NC AG Advisory Opinion (1994-08-12) 1994-08-12

If a savings bank applies to convert from mutual to stock form and then withdraws the application, is the withdrawn application still a public record the state agency has to show to the public?

Short answer: Yes, but only as long as the agency keeps it. The AG concluded that the public-information portion of a conversion application becomes a public record the moment the Savings Institutions Division (SID) receives it. Withdrawal does not change that. However, if SID destroys the withdrawn application or returns it to the applicant without keeping a copy, SID no longer has custody and has nothing to disclose. SID may destroy or return withdrawn applications case-by-case with Department of Cultural Resources consent under G.S. 121-5(b), or under a records-retention schedule pre-approved with the Records Services Branch.

Disclaimer: This is an official North Carolina Attorney General advisory opinion. AG opinions are persuasive authority but not binding precedent like a court ruling. This summary is for informational purposes only and is not legal advice. Consult a licensed North Carolina attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page) is the authoritative source for any reliance.

Plain-English summary

David C. Worth, Jr., counsel to the NC Savings Institutions Division, asked the AG three intertwined questions about withdrawn applications. SID receives applications when savings institutions want to convert from mutual to stock organizational form. Sometimes an applicant withdraws the application before SID acts. If SID still holds the withdrawn application, is it a public record? Does the law require SID to retain it? May SID return it to the institution?

Senior Deputy AG Wanda G. Bryant and Associate AG Daniel D. Addison answered these in sequence.

Public record status. N.C. Gen. Stat. § 54C-60(c) makes the information in a conversion application public information, except the incorporators' financial statements and any other information the SID Administrator deems confidential. N.C. Gen. Stat. § 132-1 defines public records as documents received pursuant to law in connection with the transaction of public business by an NC government agency. Read together, the public-information portion of a conversion application is a public record subject to disclosure under N.C. Gen. Stat. § 132-6.

The AG saw nothing in either the savings bank statute or the public records statute making public-record status depend on whether SID had acted on the application or whether the applicant had asked SID to stop considering it. Section 132-1's intent is that a document becomes a public record when "received" by the state agency. So a withdrawn conversion application, as long as SID has it, is a public record. Withdrawal does not change that.

Custody is the key. The framework changes if SID no longer has the record. If the applicant withdraws and SID destroys the application materials or returns them to the applicant without keeping a copy, SID no longer has custody. With nothing to disclose, SID has no obligation under Section 132-6 to permit inspection.

Destruction or return rules. N.C. Gen. Stat. § 132-3 says no public official may destroy or dispose of any public record (except as G.S. 121-5 allows) without the consent of the Department of Cultural Resources. N.C. Gen. Stat. § 121-5(b) allows destruction or disposal when the records' custodian and the Department of Cultural Resources jointly certify that the records have no further use or value for official, administrative, research, or reference purposes. Alternatively, agencies may set up retention and disposition schedules with the Department's Records Services Branch (Division of Archives and History) to handle routine categories without case-by-case review.

So SID may destroy or return withdrawn conversion applications either through case-by-case certifications with the Department of Cultural Resources, or pursuant to a pre-approved retention and disposition schedule.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

NC's public records framework in Chapter 132 has been amended several times since 1994, including the addition of trade-secret and other confidentiality categories. Chapter 54C has likewise been amended. The Department of Cultural Resources became the Department of Natural and Cultural Resources in 2015. The records management framework remains substantially similar, but specific schedules and procedures may have changed. Any current question about records retention should consult current Chapter 132, current Chapter 54C, current Department of Natural and Cultural Resources records policies, and counsel familiar with NC public-records law.

Common questions

Q: Why does an application become a public record before any decision?
A: Because NC's Public Records Act, like most state public-records laws, defines a public record by what the agency holds, not by what the agency has decided. As soon as SID has the document, it is a record. The agency's later action or inaction does not change that.

Q: Can SID just refuse to keep withdrawn applications, to avoid the disclosure obligation?
A: Only through proper channels. SID would need either case-by-case certification with the Department of Cultural Resources (now Natural and Cultural Resources) or a pre-approved retention and disposition schedule. Agencies cannot simply destroy records on their own to avoid disclosure.

Q: What about the confidential parts of the application?
A: G.S. 54C-60(c) carves out incorporators' financial statements and other information the SID Administrator deems confidential. Those parts are not subject to disclosure. The public-information portion is.

Q: If SID returns the application to the institution, can someone still get it from the institution?
A: Probably not, because private institutions are not subject to the Public Records Act. The applicant institution can keep or destroy its own copy as it sees fit. The Public Records Act regulates agency custody, not what private parties do with their own papers.

Q: What if SID makes a copy before returning the original?
A: Then SID has custody of the copy, and the public-record analysis applies to that copy. Returning the original to the applicant does not extinguish the agency's records-management responsibilities for a copy it kept.

Q: Does this analysis apply to other regulatory applications (insurance, banking, securities)?
A: The same framework applies generally: a document is a public record once received by an NC agency, subject to specific statutory exemptions; destruction requires Department approval through certification or schedule. Each regulatory regime has its own confidentiality carveouts (like § 54C-60(c) here), so the specific scope of what is public depends on the underlying statute.

Background and statutory framework

NC's Public Records Act, Chapter 132, is broad: documents received by state agencies in the transaction of public business are public records absent specific exemption. Disposal of public records goes through Chapter 121 (Archives and History), specifically Section 121-5(b), which requires agency-and-Department joint certification or a pre-approved schedule before destruction.

This framework prevents agencies from making records disappear to defeat disclosure requests. It also creates administrative load: agencies that receive volumes of routine documents (applications, complaints, correspondence) must work with the State Archives to set up retention schedules that authorize routine destruction.

The 1994 opinion is a clean example of the framework's application to a withdrawal scenario. The bottom line: as long as the agency has the document, it is a public record; agencies may not invent ad-hoc destruction rules to manage their disclosure exposure; proper retention scheduling is the lawful path.

Citations

N.C. Gen. Stat. § 54C-60(c) (information in savings bank conversion applications is public information, except incorporators' financial statements and information deemed confidential by the SID Administrator)
N.C. Gen. Stat. § 121-5(b) (Department of Cultural Resources approval required for destruction of public records, by case-by-case certification or pre-approved retention schedule)
N.C. Gen. Stat. § 132-1 (definition of "public record"; documents received pursuant to law by an NC agency in the transaction of public business)
N.C. Gen. Stat. § 132-3 (no public official may destroy or dispose of public records without Department of Cultural Resources consent except per § 121-5)
N.C. Gen. Stat. § 132-6 (right of public inspection of public records)

Source

Landing page: https://ncdoj.gov/opinions/public-records-status-of-withdrawn-applications-for-conversion-from-mutual-to-stock-organization/

Original opinion text

August 12, 1994

Mr. David C. Worth, Jr., Counsel
North Carolina Savings Institutions Division
1110 Navaho Drive, Suite 301
Raleigh, North Carolina 27609

RE: Advisory Opinion; Public Records Status of Withdrawn Applications for Conversion from Mutual to Stock Organization; N.C. Gen. Stat. §54C-60; N.C. Gen. Stat. §§132-1, 132-3 and 132-6; N.C. Gen. Stat. §121-5.

Dear Mr. Worth:

This is in response to your request for an opinion on whether a savings institution's withdrawn application for conversion from a mutual to a stock organization is subject to disclosure as a public record. Specifically, you asked if the Savings Institutions Division (SID) retains a withdrawn application, is the retained application subject to disclosure as a public record. You also asked whether the public records law requires SID to retain a withdrawn application, and whether SID may return the withdrawn application to the institution.

N.C. Gen. Stat. §54C-60(c) states that the information contained in an application for conversion is public information, with the exception of the financial statement of the incorporators and any further information deemed by the Administrator of SID to be confidential. N.C. Gen. Stat. §132-1 defines public records as documents received pursuant to law in connection with the transaction of public business by any agency of North Carolina government. These statutes indicate that the public information portion of conversion applications is a public record, subject to the disclosure requirements of N.C. Gen. Stat. §132-6.

Nothing in either the savings bank statute or the public records statute indicates that the public nature of a conversion application is dependent upon whether SID has acted upon the application, or whether the applicant has asked SID to discontinue its consideration of the application. The clear intent of Section 132-1 is that a document becomes a public record when "received" by the state agency. We conclude, therefore, that once a conversion application is received by SID, the public information portion of the application is subject to the disclosure requirements of Chapter 132, regardless of whether SID has taken action on the application or whether the applicant has asked SID to discontinue its consideration of the application.

However, if the applicant withdraws the application and SID either destroys the application materials or returns them to the applicant without retaining a copy, SID can no longer be considered to have custody of a record of the application at all. In such a situation there would no longer be any records for SID to disclose, and SID would have no responsibility to permit inspection pursuant to G.S. 132-6.

The remaining question is whether SID may destroy or return a conversion application when an applicant withdraws it. N.C. Gen. Stat. §132-3 states that no public official may destroy or dispose of any public record, except in accordance with G.S. 121-5, without the consent of the Department of Cultural Resources. N.C. Gen. Stat. §121-5(b) indicates that public records may be destroyed or disposed of when the records' custodian and the Department of Cultural Resources certify that the records have no further use or value for official, administrative, research, or reference purposes. State agencies may routinely dispose of categories of records in their offices without individual review by the Department of Cultural Resources if they have established a retention and disposition schedule for those categories of documents with the Department's Records Services Branch, Division of Archives and History.

Thus, SID may destroy or return withdrawn conversion applications either upon case-by-case certifications by SID and the Department of Cultural Resources, or pursuant to a retention and disposition schedule established with the Records Services Branch.

We hope that this fully answers your request. Should you have further questions regarding this issue, please do not hesitate to contact us.

Wanda G. Bryant
Senior Deputy Attorney General

Daniel D. Addison
Associate Attorney General