Who is the Customer of a Group Account?
by Mary Beth Guard, BOL Guru
Question: An association (bowling league, local 4-H club, church group) account is being opened as a brand
new account. Who is identified (name, address, SSN & photo I.D.) at account opening? The Operations Officer and I (compliance) both say we need to identify the individual who walks in the front door to open the account. One of our supervisors is conducting training
and wants this in “black and white.” I feel that it is in the regulation, but would like you to verify for us, please. In addition to the person walking in the door to open the account, would it be wise to also fully I.D. anyone with authorization to conduct transactions with the account (other signatories)?
Answer: The term “customer” under the CIP rules means “an individual who opens a new account for (1) an individual who lacks legal capacity, such as minor; or (2) an entity that is not a legal person, such as a civic club.” In the examples you are asking
about, the organizations would typically be an entity “that is not a legal person.” In other words, the entity would not be incorporated, would not be a partnership, a trust or an LLC. If that is the case, the person whose identity you must verify, and the person who would be considered the customer for CIP purpose,s would be the individual who opens the account.
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