We just had the OCC in for a follow up review. They requested to look at our CIP program. We were trying to get by without insiting that an Amish customer obtain a SS#. No way, each instance will be considered a violation, if SS# not included. We have now changed our policy to require the SS# for any new Amish customers, or we won't open the account. Just an FYI for those who might have been riding the fence on this one.

We don't have to agree with the regulation, but non-compliance is a dangerous (and potentially expensive) alternative!

Did you make an exception in your CIP policy forthis situation? Our bank did as we are in the heart of Amish country. This pasted our OCC examiners in reviewing our CIP procedures. We do attempt to get the SS# but if not possible then we have exception rule and procedures.

You cannot create an exception for obtaining name, date of birth, address or identifying number. All must be obtained prior to opening the account. Your CIP may contain an exception for a person who has applied for, but not yet received a TIN. However, that exception is temporary and has no application to people who simply do not intend to obtain a TIN.

If your examiners said otherwise they are incorrect. Please contact your regulatory agency at the management level for confirmation.

An interesting idea, and frankly, one that I wish banks could use. But the plain text of the regulation does not permit a bank to waive the SSN requirement for U.S. citizens, regardless of any religious convictions. I do not agree with the requirement, but I recognize it's there.

Any bank that includes such a waiver possibility in its CIP and fails to require a SSN for a member of the Amish or Mennonite communities risks being cited by examiners for a violation of the BSA regulations. Candidly, as much as I disagree with the regulation on this issue, I could not knowingly put my bank at risk of such a violation. I am frankly surprised that an OCC examiner would allow such an exception, even in Lancaster County.

I see a conflict here between CIP and Reg B. If a new Amish customer comes in to apply for a loan, and a bank refuses to open the loan because the customer does not have a SSN, is there a fair lending issue?

I remember one of the "big" fair lending cases involved a bank that would not make "car" loans secured by Amish buggies. The bank was concerned that their loan would not be adequately secured if the collateral was a buggy instead of an automobile. The bank was subject to a fair lending prosecution for discriminating against a class of borrowers of a particular religion since the Amish don't drive cars, they drive buggys.

So - if the Amish, because of their religion, do not have SSN, and a bank refuses to grant a loan to a new Amish customer because of the lack of an SSN, is this discrimination based on religion?

BTW - I forsee a number of clashes between CIP and Reg B and CRA.

I see your conflict. I would guess that the liability would go toward the federal government. In the previous case you mentioned, it was a bank policy decision. In this case, the government is mandating that we cannot open an account for a U.S. person unless we at opening, or within a reasonable time thereafter, obtain a SSN. Maybe the answer is for the Amish to secede and set up diplomatic relations with us, then we could open accounts after obtaining their passport or matricula.

Good point - it will be easier for an illegal immigrant to open a bank account than an Amish person whose family has been in this country for several generations.

As far as the liability, I don't think that the existance of a government mandate can stop a civil lawsuit. Hopefully the DOJ will stay out of it this time.

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...it will be easier for an illegal immigrant to open a bank account than an Amish person whose family has been in this country for several generations.

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Damn straight. The draftsmen knew this was a problem before they published the final regulation. I know it would have been hard to resolve, but respect for religious beliefs should have outweighed the difficulty.

You may very well be right about the civil suit. I guess I was thinking about the peyote cases where the rule about generally applicable laws and regulations aren't discriminatory just because they affect a particular religion more than others. Kind of like the case in Fla. where the muslim woman wanted her driver's license taken with the burqua (spelling? and correct terminology?) covering her face. I would have to at least try to argue that we are not discriminating, just following generally applicable law enacted for a compelling national interest. You never know how such things come out though, and this may well be one more thing that comes right around and bites us on the a##.

I hate to add fuel to the fire, but I understand that self-employed Amish are exempt from social security taxes, but those employed by outsiders have to pay social security taxes, therefore a SSN would be required. I also understand that income earned by the Amish is not exempt from federal income taxes, therefore a taxpayer id number would be required when filing tax returns. Go to www.holycrosslivonia.org/amish/amishfaq.htm and scroll down to "Amish and the government". There is more information at http://amish.net/faq.asp which says Amish children over 5 must obtain SSNs.

Anon,
I am certain everything you say is correct, but it does not add fuel to the fire. If an Amish person does have a SSN and they give it to the financial institution, there is no problem. The problem comes if they do not have a SSN. While I am certain that some Amish do have SSN's, I am equally certain that some do not. In the latter cases, banks cannot make an exception and open the account without the TIN.

Thanks Ken. I certainly appreciate your position, and I agree with you 100%. I just wanted to point out that a blanket statement that the Amish are not required to have social security numbers simply is not true. In other words, just because you have an Amish customer does not automatically mean they do not have a social security number. I have had enough experience with new accounts clerks to know that some would not even ask an Amish customer for a SSN because they assume the Amish are exempt from having a SSN.

Ken, you stated "banks cannot make an exception and open the account without the TIN." Doesn't the regulation allow us to open an account for an Amish person without a SSN as long as they can evidence they have applied for one and we get it after they receive it?

Yes, if your CIP provides for it, that exception can be made for anyone; it is not limited to the Amish. You would also need some tangible evidence that they had done so and some short term follow up process to assure that it was obtained.