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Copy of Drivers License in the Credit File
Answer by Dan Persfull & Andy Zavoina, BOL Gurus
Guru Bios
Question: At one time we were not to copy drivers license and put them into the credit file. I understand a recent interagency agreement has changed that procedure. Do you have any knowledge of the change?
Answer by Dan: See footnote 40 on page 34 of the Bank Secrecy Act Anti-Money Laundering Examination Manual (June 2005).
Answer by Andy: As an update to Dan's reply, there is no requirement under CIP that you get a copy of any form of ID. More often than not the controversy here was whether this was a potentially dangerous practice of getting monitoring information improperly (wrong loan types) and it could be discriminatory.
Regulators have since said this wasn't automatically a discriminatory practice. But the now dated BSA exam manual noted that if you do keep copies of picture IDs, they should be separated from the loan files. This was changed in the June 2006 revised manual which now states:
Footnote 50: A bank may keep photocopies of identifying documents that it uses to verify a customer’s identity; however, the CIP regulation does not require it. A bank’s verification procedures should be risk-based and, in certain situations, keeping copies of identifying documents may be warranted. In addition, a bank may have procedures to keep copies of the documents for other purposes, for example, to facilitate investigating potential fraud. However, if a bank does choose to retain photocopies of identifying documents, it should ensure that these photocopies are physically secured to adequately protect against possible identity theft. (These documents should be retained in accordance with the general recordkeeping requirements in 31 CFR 103.38.) Nonetheless, a bank should be mindful that it must not improperly use any documents containing a picture of an individual, such as a driver’s license, in connection with any aspect of a credit transaction. See “Frequently Asked Questions Related to Customer Identification Program Rules” issued by FinCEN, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision, April 28, 2005.
First published on BankersOnline.com 11/06/06
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