If a customer is unable to provide proof of physical address (because they use a P.O. Box for all their mail)we should refuse to open the account? What if the address they say they live at does show up on their Chex Systems report? Is that enough proof? I think we've made a couple of exceptions for people who have recently moved.

Is the customer unwilling to or does not have such an address? The BSA/AML Manual states the following in footnote #47 on page 47 -
For an individual: a residential or business street address, or if the individual does not have such an address, an Army Post Office (APO) or Fleet Post Office (FPO) box number, the residential or business street address of next of kin or of another contact individual, or a description of the customer’s physical location. For a “person” other than an individual (such as a corporation, partnership, or trust): a principal place of business, local office, or other physical location.

Your BSA policy has to address this situation.
We would accept the PO Box as a mailing address but the customer has to provide a physical address.
We would ask for a cable or electric bill to prove the address given.

Your bank cannot make exceptions, only errors.

Most states require people to notify the drivers license bureau of a change of address within a specific period of time. (My home state gives them 10 days.) Assuming the customer really cannot give you anything to validate the address, send him to the license branch to get a corrected license - he is going to have to go anyway.

Most city utility bills include the residence location even though it may be mailed to a PO box. If a homeowner, how about a statement from the mortgage company?

Our CIP addresses this situation.

The situation I am thinking of was a lady who had recently moved in with her brother and the only thing in her name was a P.O. Box. A utility bill wouldn't have worked, and she hadn't lived there long enough for anything else to have been changed. Our policy does state we need a utility bill etc., however, in this case the utility bill wasn't going to have her name on it. I guess we should have made her change her license and then accepted that.

Compliance Lover, in that case wouldn't you accept the address of the next of kin? It's allowed in the regulatory side of things... maybe gives some room for your internal policy/procedures to allow for that?

I agree with beachgirlatheart. Our procedures indicate that the residential address of next of kin or other contact individual is acceptable only if unable to provide any other address. I believe that comes right out of the BSA Manual (I think).

You are correct. beachgirl said it - Page 47 of the manual.

You can even have a description of the address. We've literally had someone recorded as:

"HWY ##, Third driveway on the right from XXXXXX Street"

Don't forget that the regulation even allows you to accept a business street address. Some folks are just plain scared to give out a residence address, even to their banker.

I don't know about other states, but California does NOT issue a new Drivers License just because you have moved. These are the instructions from California DMV (really handy for those folks who have moved due to eviction/foreclosure...)

How to notify DMV when I change my address
Law states that you must notify DMV within 10 days of changing your address. There is no charge to change your address, and you may notify DMV by any of the following ways:

Complete your change of address online.
Call any DMV office at 1 (800) 777-0133 and request that a change of address form be mailed to you. It will take 5 days for you to receive it. Complete the information required on the form, then mail it to the address listed at the top of the form.
Download the Change of Address form DMV 14, complete the information, and mail it to the address listed at the top of the form.
Visit any DMV office, complete a change of address form, and give it to a technician. The technician will give you a Change of Address Certificate card (DL 43) to complete and carry with your license.
If you do 2 or 3 above, type or write in ink your new address on a small piece of paper, sign and date it. Carry this piece of paper with your license. Do not tape or staple the change of address information to your driver license.

Yeah - so basically your new address is written on a piece of paper that you get to carry with your license. Whup-de-doo!

I remember my sister having problems when she bought her very first new car. She shared an apartment with 3 other roommates, the lease and utilities were not in her name. The address was different than the one on her license because she moved about 6 months after her license was renewed. All of her mail (paycheck, bank account, etc.) went to a Post Office box because she had experienced problems about a year earlier with a former room mate who stole her mail.

She finally wound up getting her employer to issue a duplicate paystub with her new address so that the dealer loan would finally go through now that she had "proof" of her address.

I'm not sure that our banking system or country is any safer because an employer had to rig up a duplicate paystub so their employee could get a vehicle to get to work. (The engine in my sister's previous car went kablooey - and in Southern California, if you don't have a car, you probably ain't getting to work!)