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CIP Rules for ID

Question: While I have read the CIP rules I don't know how many times, I'm still a bit vague in one area. If a corporation changes signers on an account, are we not required to obtain the four pieces of information under the CIP since these signers have no previous existing relationship with our bank? We obtain information (identification) on all new signers on corporate accounts or new corporate accounts altogether. We are a small bank with nine branches. We have opened a few nationally known stores defined as corporations and have only had one corporation not want to provide information on the signers (which the signers are usually the CEO and other senior administration of which our employees would never see or meet). Can our bank have in its CIP that our policy is to obtain the identification on any signer on any type of account? We want to have uniform consistency when it comes to obtaining identification requirements on any customer, whether it's an individual account or whether they're signers on a business account.

Answer: According to the requirements of the USA Patriot Act, if you have a resolution signed by the secretary of the corporation, it is not necessary to get the personal identification of the signers, either original, add on's or changes UNLESS you have reason to suspect the account opening in the first place. You will want to include a guarantee of existence - i.e. proof the company actually does exist. The signers on those accounts are just that - authorized signers - not the owners of the account. In the case of a personal corporation, one signer - one owner - not a public corporation - of course, your reasoning would be different, as would your requirements.

You can choose to have stricter requirements than the Patriot Act has spelled out, but you may find it cumbersome and unnecessary. It certainly could discourage some business accounts from opening. You might want to carefully consider when and under what circumstances you would want to require identification from all.

Copyright © 2004 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 1, 3/05




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