Question: I was reading (and using through our training) CIP matrix requirements by type of customer and account that I found on BankersOnline, and it states on several types that primary I.D. is required for authorized signers. Yet I read in the question and answer section that “signatories are not account owners; therefore, officials are not required to identify or verify other signatories.” I am looking for guidance on loans and business accounts.
I thought under the final rule, depending on risks, signers on the account did not apply to CIP regulations. Could you clear this up for me, please? I am having a very difficult time getting certain officers on board with the proper CIP requirements, so I want to have everything I can to back me, and make sure I understand it correctly.
Answer: The CIP rules indicate who is considered the “customer” for CIP purposes, and that is the person or entity whom you need to identify. While it is true that the proposed provision was deleted (i.e., not included in the final rule) that would have defined “customer” to include a signatory on an account, the final rule instead requires a bank’s Customer Identification
Program to address situations when the bank will take additional steps to verify the identity of a customer that is not an individual by seeking information about individuals with authority or control over the account, including signatories, in order to verify the customer’s identity.
So, on an entity account, you typically do not need to verify the identity of the individuals setting up the account or thosewill be signing on the account, but there may be instances where, under your institution’s CIP, it is necessary to verify the identity of the signatories as an additional step toward verifying the identity of a customer that is not an individual.
First published on BankersOnline.com BankersOnline.com on 06/28/04. This previously appeared in the OBA Compliance Informer.
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