Is it a mandatory that a secondary form of ID must be required during the CIP process for a new customer? If so, can this be a Chexsystems report?

Bank down the street is only requiring a drivers license as the primary ID and they use the chexsystems report as their secondary form of ID as well as their check against terrorist list. I just can't remember if that is acceptable or not.

CIP doesn't require any number of ID's. It only says you should use documentary or non-documentary verification, and a risk based approach, to form a reasonable belief that you know the true identity of the customer.

I know of numerous banks that only use 1 verification ID (typically, a DL) for the standard consumer deposit account. If everything on the DL agrees with the identification info, why go further?

Don't forget to ensure that your CIP policy reflects whatever you decide to be appropriate, based on your assessment; - as David said - it is "a risk based approach, to form a reasonable belief that you know the true identity of the customer."
If you elect to go with one ID only, your policy should also state what you would take should someone not have the single ID that you have chosen.

Our program has a list of primary IDs (local DL, local State ID card, passport, etc.) and a list of secondary IDs. We only require 2 pieces of ID if the person ONLY has secondary ID documents and NO primary. We pull Chex and/or credit bureau with both primary and secondary.

Anon,
No, the CIP regulation does not require you to require more than one piece of identification, but the supplementary information accompanying the regulation encouraged it. It also encouraged banks to use a combination of documentary and non documentary verification.

So, on its face, what your competitor is doing is "CIP lite," but it's fine.

I am with David and Ken. With regards to Check Systems, that would be a non-documentary form of identification but not a secondary form of identification. It is my understanding that Primary and Secondary forms of identifcation would be provided by the customer, and non-documentary would be obtained by the account opener or bank. That last sentence is more of an observation, I don't know the legal definition of secondary and non-documentary off the top of my head.

Do you think a credit report would be acceptable as the only form of required documentation (either for accounts opened in-person or through the mail)?

Acceptable forms for your institution should be found in your policy. Personally, we do accept Credit Reports as a non-documentary form of identification. So long as the report is not just obtained, but it is used to verify information provided by the customer or consistant with the customer.