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Relying Upon a Third Party for Verification
by Mary Beth Guard, BOL Guru

In some instances, you will be able to rely on the customer ID verification performed by another financial institution, including an affiliate.

If a customer of your bank is opening, or has opened, an account with another financial institution, you can rely on the other financial institution to obtain and verify customer identity information, so long as three conditions are satisfied:

  1. the reliance must be reasonable under the circumstances;
  2. the other financial institution must be subject to a rule implementing 31 U.S.C. 5318(h) [the requirement to establish an AML program] and must be regulated by a Federal functional regulator; and
  3. the other financial institution must enter into a contract requiring it to certify annually to your bank that it has implemented its anti- money laundering program, and that it will perform (or its agent will perform) the specified requirements of the bank's CIP.

    The original version appeared in the April 2003 edition of the Oklahoma Bankers Association Compliance Informer.

    First published on BankersOnline.com 9/8/03


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