CIP: Account Opening by Mail or Fax

by Mary Beth Guard
Guru BIOS

Question: I have a question regarding identification and verification procedures when the person is not in the bank to give you the ID. We have a long time customer that needs to help his son open a checking account to set up his payroll direct deposit. The son is in Iraq, in the war. The son does not have any accounts with us, but the father does. Can we have the son fax or mail the ID to us and rely on the father to verify that this is his son, since the father is a long time customer? We are unsure of what to tell the father. We also want to run a ChexSystems on the son, but he hasn't signed the new account application. Where do we stand on this?

Answer: Since the son obviously cannot come into the bank, your first step will be to look to your internal CIP program and policy. Have you provided for this type of eventuality? What do your CIP procedures say you should do in this instance? Even if the regulations would allow you the flexibility to deal with this type of situation, if your policy and procedures do not, you would incur a violation if you exceeded the limits of your own CIP program.

Assuming that your policy/program provided the necessary flexilibility, inquire whether it would be possible for the son to fax or mail a copy of the IDs that you would normally require, copied front and back, at a large size so they are readable. In addition, it would be wise to have the him get a notarization of his signature on the signature card.

I would not rely on the father to verify the son's identity. That is like having someone "vouch" for someone else's identity, and you can't even do that with an employee vouching for a new customer.

You could use a third-party database to doublecheck the identity information, but what you really want is to make sure that the son is voluntarily opening the account. That's why I suggest a notarized signature card. You must obtain the four pieces of identifying information required by the regulations: the son's name, SSN, address, and date of birth. You can verify those four things through a third-party database (although I would use a copy of the ID as a backup), but do take steps to ensure the son is truly authorizing the opening of an account in his name.

The original version appeared in the June 2004 edition of the Oklahoma Bankers Association Compliance Informer.

First published on BankersOnline.com 1/10/05