Thread Options
#1623400 - 11/02/11 03:50 PM CIP - Verification
Luvinit Offline
100 Club
Joined: Dec 2009
Posts: 173
We are having our BSA exit this PM and the BSA examiner is citing us for relying on our 3rd party dealer to verify the identification information. The examiner states that the reliance provision is only permitted on other financial institutions regulated by a Federal function regulator and is an apparent violation of Section 103.121(b)(3)(i)(A) through (D).

We have an agreement with this third party dealer that it will provide the notification, obtain the identifying information, verify the identifying information and document the information our our Worksheet. We have been doing this since 2003 and have had several exams by the FDIC and have never been cited on this.

My reliance has been on the section in FFIEC's BSA/AML Examination Manual's section on "Use of Third Parties" where a bank is permitted to arrange for a third party, acting as its agent in connection with a loan, to verify the identiy of its customer.

Has something changed or have we been incorrect all this time? I'm still of the opinion we are not incorrect, but would appreciate feedback!

Return to Top
BSA/AML/CIP/OFAC Forum
#1623425 - 11/02/11 04:13 PM Re: CIP - Verification Luvinit
J2C Offline
Diamond Poster
Joined: May 2004
Posts: 1,475
Big Brother knows and that's a...
As the guidance states, the bank is ultimately responsible for that 3rd party's compliance with the banks CIP.

It is permitted in relation to a loan, as you stated. What regulator is this? I would bring your FFIEC guidance with you and ask him where it says anything different. We have car dealers that we rely on to obtain CIP. But, we also perform non-documentary verification on our end.
_________________________
My opinion is mine only- not my employer's!


Return to Top
#1623447 - 11/02/11 04:22 PM Re: CIP - Verification J2C
Luvinit Offline
100 Club
Joined: Dec 2009
Posts: 173
That is exactly the cite that we rely on and have made copies to give to the examiner this afternoon during our exit.

Our regulator is the FDIC. Undoubtedly many other FI's rely on this same guidance.

Thank you, jennyfromthebloc, for the confirmation. I'll be sure to post the outcome after the exit review this afternoon!

Return to Top
#1623673 - 11/02/11 07:36 PM Re: CIP - Verification Luvinit
J2C Offline
Diamond Poster
Joined: May 2004
Posts: 1,475
Big Brother knows and that's a...
good luck!
_________________________
My opinion is mine only- not my employer's!


Return to Top

Moderator:  Andy_Z