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#346891 - 04/14/05 05:27 PM Existing Customers under the CIP rules
FSBT Offline
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FSBT
Joined: Apr 2002
Posts: 109
Texas
If you have an existing customer that opens a new account after October 1st, do the CIP rules apply? Would we treat this existing customer as a new customer? It's my understanding that we would not.

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#346892 - 04/14/05 05:32 PM Re: Existing Customers under the CIP rules
MagicCity Offline

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MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
It depends on what your policy says you would do, based on your percieved risk of doing it or not.
Some banks opted to do existing customers when they came in to open a new account.

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#346893 - 04/14/05 07:41 PM Re: Existing Customers under the CIP rules
Just Jean Offline
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Joined: Feb 2002
Posts: 582
USA
To consider: do you have the required four pieces of information on the proposed grandfathered customers? Do you have a reasonable belief that you do know the true identity of said existing customers? After you look at your risks and your customer base, which is greater, the risk of making good, long-term customers angry or the risk of having misidentified persons originally?

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#346894 - 04/14/05 07:55 PM Re: Existing Customers under the CIP rules
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
This is a decision your bank has already made at the board level...if your policy exempts existing customers, fine. If it does not, you run them through CIP.
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#346895 - 04/18/05 01:32 PM Re: Existing Customers under the CIP rules
banjo Offline
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Joined: Feb 2005
Posts: 299
Also, keep in mind that if you exempt existing customers, the new CIP exam procedures require you to give a detailed explanation as to why you did so.

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#346896 - 04/18/05 02:45 PM Re: Existing Customers under the CIP rules
Anonymous
Unregistered

Yikes, we did not do this......Does anyone have a sample of a detailed explanation of why we exempted them? Help!

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#346897 - 04/19/05 03:19 PM Re: Existing Customers under the CIP rules
Anonymous
Unregistered

I am posting anonymously because this is a question that I should know the answer to!!! What are the 4 pieces of info that we need?

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#346898 - 04/19/05 03:31 PM Re: Existing Customers under the CIP rules
happyauditor Offline
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happyauditor
Joined: Nov 2004
Posts: 812
NY
If you are referring to the minimum identifying information required under CIP, the 4 are:
1-name
2-address
3-date of birth
4-tax number (if not a US person and no tax number is available, then you must obtain a government issued ID number, such as passport number, which evidences nationality or place of residence.)
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#346899 - 04/20/05 02:58 PM Re: Existing Customers under the CIP rules
Angel Eyes Offline
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Angel Eyes
Joined: May 2001
Posts: 4,599
If you want to exempt existing customers you just need a statement in your policy to the effect of:
An existing customer is defined in this policy as a person or entity, with whom we have an existing banking relationship. These existing customers can be exempted from the CIP program if we have previously identified the customer and are confident that we "know the customer."

Ok that was fast typing and maybe not perfect but you get the idea. Then make a statement in your procedures on existing customers with information such as if they had been propertly identified using your policy in existence at the time of account opening, or that you must already have the four identifying pieces of information on file and if you do then no further verification is necessary.

You can not just make a blanket statement that all existing customers are exempt from CIP.

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