I'm not sure where you're located, but I find that hard to believe for the US. My library has an app which is obviously storing data about me on a server somewhere. They certainly know which books I have out now and which are overdue.
This is at least common in US libraries. The San Francisco public library as well as the library system where I grew up both do not keep library records after you have returned the item. I know there is a lot of contention about their private partners keeping records (ex: Overdrive) but I haven't followed that conversation much.