I'm looking for how other banks CIP programs deal with the following scenario:

Person with no accounts comes into the bank to open a checking account. The person tells the CSR that they live at 123 Main Street, Anytown, PA but the driver's license they provide lists 789 Maple Street, Othertown, PA. The person says they just moved last week. At this time, they have no utility bills connected to the new address. We currently do not use any third party verfication services (i.e. - credit reporting agencies). How do you form a reasonable belief that you know the person's true identity and therefore allow the person to open an account?

You must be reasonably satisfied they are who they say they are. You don't have to specifically verify the address - just enough to satisfy the first sentence.

You could pull a CR and if it matches the previous address, they're probably telling the truth. You could have them fill out an application for the account. On it list "previous address". If it matches, they're probably telling the truth. You can mail a "thanks for opening an account with us" letter to the new address. If it doesn't come back, they're probably telling the truth.

You could do a combination of any/all of these things.

I guess I'm also getting hung up on the ID theft red flag, "Other information on the identification is not consistent with the information provided by the person opening a new covered account or customer presenting the identification".

What procedures do we use to effectively resolve this red flag? The same types of things mentioned above?

Precisely. The ID Theft Red Flag rule doesn't operate in another dimension where customers never move. It's a red flag and you have to address it, but you can do so reasonably. In other words, it's not a deal-breaker if you can come up with something that explains it that makes sense.

...your CIP will require you to keep a record of how you resolved the discrepancy. If you do indeed resolve it, you clear both hurdles. If you simply right down "customer moved recently" you will learn how much those little black cinders hurt when you get them in your hands and knees.

You must verify identity "within a reasonable time after opening the account." In my state, you must notify the DMV within 10 days of an address change; i.e. that's a legal requirement, not a bank requirement. It would not bother me to ask them to come back with a new DL or something else with the "corrrect" address.

I just read that PA requires reporting a new address to the department of transportation within 15 days of moving. In my way of thinking, if a person comes in with a drivers license showing an outdated address, then the document is invalid for use in CIP. If they can't come up with other documents, we don't open the account. Changing the address can be done online or via mail. Shouldn't be that difficult for people to comply!

Caution -- Just because one is required to report a change of address to the Registry of Motor Vehicles or Department of Transportation or whatever your state calls that bureaucracy with unending queues and curmudgeonly staff, does not mean that one's driver's license gets update with same. It might mean that one writes one's new address on a sticky label and affixes it to the license (now THAT's secure, right?) or that one simply gets the renewal notice for the license addressed to a more current address when the license expires five years from now.

That's not the case when one moves from one state to another and has to get a new license, but it sure is the case when one makes an in-state move.

In PA, the DMV mails an "Address Update Card" that needs to be kept with the DL until it's up for renewal and is corrected on the actual license. People should have this if they have changed their address as required by the State.

If they just recently moved do they have a mortgage deed or lease agreement that they could show you?

Unless they are living under a bridge or with a relative, they have change of service for utilities, rental agreement, employer records, something.

FYI - I live in PA and I moved five years ago and never got an update card when I changed my address at DMV. My old address was on my license until I got a new one. Maybe it's changed since then though, I can't say for sure.

Verifying the old address, however, isn't what you are attempting to do. Asking a question about some other piece of information from a credit report (something other than a previous address, which we've conceded may be on that ID the customer just flashed) may help confirm for you that your customer is the person identified in the credit report. Prior employment, a mortgage lender or payment amount -- things like that.

The "thank you" letter to the current address can sometimes work to identify bogus addresses (empty lots, cemetery plots, etc.). In my region, you can't rely on the post office to return a letter with a legitimate address, even if the addressee doesn't live there, though.

When management won't allow obtaining a credit report or using another third-party verification service when opening deposit accounts (they feel it's too costly), its not easy to validate someones information provided when opening an account and to resolve a discrepancy.

I live in PA, moved 2 months ago and have an update card to keep with my license. My car insurance documents were sent to my new address a month before I moved there! So I agree they should have something.

in my state, you get nothing to change your current license. a sticky or a new ID, unless you pay the fee to get a new DL. They update the state records for state public safety/travel/ law enforcement at the time of your address change. Then when your CL expires, after paying your fee, you get a new one with your current address.

FYI - we ask them to bring in something with current address. (Utility Contract, lease agreement, even had one with a newspaper mailing label with her name on it.).

We also send Thank you letters. When they bounce, we escalate the issue to higher management.

I disagree (sort of). I'm trying to determine if they are who they say they are. CIP does NOT require me to verify all 4 (name, TIN, address and DOB). I must verify enough to form a reasonable belief they are who they say they are. That could be 1, 2, 3 or all 4. People seem to get hung up on the idea that they must verify all 4. If I have a way to verify the other 3 and the address is wrong on the DL, I still have a discrepancy that I must resolve, but I don't have to verify it (prove it).

If I'm able to verify their DL against something (that "proves" to me they used to live there), I can reasonably believe they just moved.

I believe a lot of banks are stuck on this and miss out on a lot of new business or, at a minimum, make it a pain to open a new account (unnecessarily). When I first moved to my new town, I opened a bank account BEFORE I had anything with the place I was going to rent. I didn't have anything in stone yet. Does that mean I'm not who I say I am? If my new bank would have adopted the procedures mentioned by most posts above, I would have simply went down the street to another bank.

David, I agree that we don't have to verify every one of the 4 required pieces of information. What I'm saying, is that given the tools we have to work with, I don't have any way to verify even one piece of information. Am I overlooking ways to verify TIN, name, and DOB?

I really think a credit report is the best way to verify info. No one can falsify your credit report. I know you indicated management won't pay for it. That's too bad, because it's an excellent verification source as well as a good indication how they handle credit which is highly correlated to how they will handle their deposit account.