Topic: Customer Identification Program (CIP)
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How long should we retain guardianship documents that we requested from customers to open checking and savings accounts after the accounts have been closed?
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We recommend retaining the guardianship documents for five years after the accounts have been closed or become dormant. FinCEN’s Bank Secrecy Act rules require banks to retain any identifying information required by their Customer Identification Program (CIP) for five years after the account is closed or becomes dormant. If the guardianship documents were not required…
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We have some Amish accounts. Our CIP/BSA policy requires that we obtain a copy of the customer’s birth certificate, as well as a letter from the customer’s church bishop. In addition, because the Amish do not have social security numbers, we search OFAC by name. Do you see anything here that will be an issue for the bank?
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Yes, we believe that your current policy presents a compliance issue for your bank. FinCEN customer identification program (CIP) regulations require banks to obtain a tax identification number (TIN) for each U.S. customer before opening an account. The rule includes an exception for customers who have applied for but not yet received a TIN. However,…
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What is the record retention timeframe for forms that bankers complete under Regulation GG to affirm that a business customer is not engaging in an internet gambling business?
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We recommend that you retain all information and documentation collected pursuant to Regulation GG for five years after the account is closed or becomes dormant. While Regulation GG is distinct from any other regulatory framework, and we are not aware of any specific record retention timeframes for Regulation GG, we believe it would be prudent…
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Does a customer’s matricula card verify their residency? If not, how else can we confirm a foreign customer’s residency?
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No, matricula cards (also called matricula consulars) do not confirm a customer’s residency, and you should request additional residency documentation, as discussed below. Under the Illinois Consular Identification Document Act, a “consular identification document” is an official identification card issued by a foreign government through its consular offices to identify a foreign national living in…
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Are we permitted to retain copies of driver’s licenses in our files for deposit accounts? Should we be retaining these copies?
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Yes, we believe that you may retain copies of driver’s licenses in deposit account files, although it is not required. There may be some risk when retaining copies of driver’s licenses or other IDs in loan files or with loan applications, as we discuss below, but those risks do not apply to deposit account files.…
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A 501(c)(5) organization applied to open a checking account with us. They provided an EIN but did not provide any other documentation for the organization. They apparently are affiliated with a separate 501(c)(3) organization and offered to provide that organization’s articles of incorporation and bylaws. What documentation should we obtain from the 501(c)(5) before opening the account?
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We recommend collecting your customary account opening documentation from the 501(c)(5) organization. We do not recommend accepting documentation from the 501(c)(3) organization. Your bank should collect any documents prescribed by its policies and procedures when opening a non-profit entity account, which may include the 501(c)(5) organization’s articles of incorporation, bylaws, a corporate resolution authorizing the…
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We have a customer who is refusing to enter a remitter for a cashier’s check. We believe that the customer should enter in a remitter, for BSA purposes. The customer is very upset and wants to leave the remitter line blank. Is there any regulation we can point to?
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We are not aware of any law or regulation that requires a bank to identify a remitter on a cashier’s check. However, both the Illinois Currency Reporting Act and FinCEN regulations require banks to obtain and record certain information for cashier’s checks issued for $3,000 or more, including the identity of the purchaser. In keeping…
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Under the Customer Identification Program (CIP) requirements for account openings, can we accept a temporary Illinois ID with the expired, hole-punched ID? Or should we ask customers to come back with their permanent ID when received?
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We believe that the CIP regulations permit a bank to accept Illinois temporary paper IDs as valid identity documents, but your bank also may choose to not accept temporary paper IDs as a matter of policy. The CIP regulations require your bank to verify an individual’s identity after account opening. If verifying an individual’s…
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We are getting ready to book a new loan where the borrower is a land trust. Two of the three beneficiaries of the land trust will serve as guarantors on the loan, and are existing customers of the Bank. How can we complete a CIP on the land trust, which has no tax ID number? Do we have to require the land trust to obtain a tax ID number for banking purposes? Is there any other way around that?
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We believe that you must obtain a tax ID number for a land trust, as you would for any other type of trust. The Customer Identification Program (CIP) rules require that you obtain a tax ID number from all customers, including trusts. Whether that tax ID should be a social security number or a separate…
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I seem to recall a speaker on the topic of Certifications of Trusts saying that if a trustee voluntarily provides a copy of a full trust instrument instead of submitting a Certification of Trust, we should document this fact. What type of documentation should we obtain in such cases?
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First, a clarification. If your bank requests that a trustee execute and submit a Certification of Trust form, and the trustee instead offers to provide the entire trust instrument, your bank is not required to accept the entire trust instrument. In fact, in most cases, accepting the entire trust instrument may not be desirable, since…