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Checking Your Customer Identification Program
by Lucy Griffin, BOL Guru
We are getting down to the wire for adoption and implementation of a customer identification program. There has been a lot of talk and more worry about what is or should be involved. This is a good time to step back and take a look at where your program is headed. Hopefully, it is headed in the right direction.
Under the new rules, a CIP must require the collection of certain basic information and steps taken to collect and verify that information. And that's about it, for the CIP. However, a true BSA program must have more to it, including account monitoring and identification and reporting of suspicious transactions. That is why CIP is only a part of the BSA program. So if you are looking right now at only the CIP requirements, you will miss some other elements of a BSA program, such as due diligence and monitoring.
But as of the implementation date, the key question is whether you have the required CIP elements in place. Listed below are the essential basics for any Customer Identification Program. Use the list to check your program to be sure that it includes everything that is required. Also use it to check training materials to be sure that you explain everything to those who will be collecting the information and considering its validity. Finally, remember that this list is the bare minimum of what you must do.
CIP Checklist
- Verify customer's identification with documents
- For an Individual or Person: Two forms of ID with pictures
- For a Business: Corporate documents, business license, and identification of all authorized signers.
- Verify or supplement identification with Non-documentary methods
- State whether or not the Bank will accept customers without documentary proof
- State what alternative methods of identification are acceptable
- State whether the Bank will open an account with documentation to be provided later - particularly tax reporting ID information, certificate of incorporation, and business license.
- Identify steps staff will take to verify or prove a customer's identity:
- Call the customer (and welcome them to the bank.)
- Visit the customer, or drive by location
- Verify the address using directories.
- Contact third parties to verify information.
- For non-persons, who will be identified in addition to the company and how these people will be identified.
- Business principals
- Authorized signers
- For customers who do not open the account in person
- State what documents will be required
- State steps you will take to verify the customer's identity and legal existence
- If the Bank cannot "form a reasonable belief" of the customer's true identity:
- Refuse to open account, or
- File SAR, or
- Open and monitor account (daily, weekly, monthly, by transaction amt).
- Record retention
- Make copy of business license
- Note documents used for identification, including name, address, and number
- Specify where these records will be kept.
- Comparison with government lists
- Compare new account names with required government lists when opening the account (when such list is published).
Copyright © 2002 Compliance Action. Originally appeared in Compliance Action, Vol. 8, No. 9, 9/03
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