If a potential customer has a hole punched in his driver's license (the license is not expired, and all the numbers are clearly visible), and wants to open new account at the bank, can such license be used as a photo ID for CIP purposes? DL is from PA.

When a hole is punched in the license, it is usually because that person has a driver's license from another state and you can't have two.
I understand where you are coming from since it is unexpired. I would classify it as invalid ID for CIP.

PA DMV uses a hole punch to mark a license as invalid. The most common time this is done is when you renew your license, and they punch the old one. Since the one you're looking at is not expired, it's been invalidated for another reason. Most likely, the license was suspended and the individual was issued a non-driver ID or a restricted DL in its place.

So the ID number may still be valid, but the document presented to you isn't.

Thank you so much for your opinions!

JacFSB, you are right. If you get one from another state, they take the other driver's license. I have several PA ones with holes.

If you obtain a license in another state, some of those states will punch a hole in the old one.

To play Devil's Advocate most procedures I have seen state "unexpired drivers license" and not valid drivers license.

and even
http://www.ffiec.gov/bsa_aml_infobase/pages_manual/olm_011.htm

A bank using documentary methods to verify a customer’s identity must have procedures that set forth the minimum acceptable documentation. The CIP rule gives examples of types of documents that have long been considered primary sources of identification. The rule reflects the federal banking agencies’ expectations that banks will review an unexpired government-issued form of identification from most customers.

I would not suggest that anyone accept ID that is not valid but would it be acceptable by policy?

A "hole punch" is nonverbal communication at its best...while something may have been implied, nothing has been said. As suggested, I would let it turn on the adjective in my CIP; e.g. "unexpired" vs. "valid."

The arguments are good enough to cover one occasional incident (since our procedures stand for "current" DL which corresponds to "unexpired" in BSA Manual), and also help establish practice going forward.

Thank you for you valuable input!

Dr. Ozya - you are in PA and the DL is from PA. These are rhetorical questions to think about.
1. Ken's guidance is my experience - the hole is nothing to me, but what about the person's address? Application address same as DL's with the hole? Is the address "current"?
2. If from PA and the hole implies they got another state's DL - why?
3. If your CS staff would ask a simple question, you wouldn't be left wondering - "Hey why the hole?"
4. Each State can do what it wants with it's DL's and other's if issuing a new one. I submit that the hole action is a licensing/law enforcement function that has no bearing on CIP other than to insert some doubt in the attempt to do BSA stuff and form "a reasonable belief as to the identity of the person".

I would ask a couple of questions, but wouldn't worry too much about it if the answers were forthright. Heck we can take a Government card issued by "Nicaragua", we should be able to take a current PA card with a hole in it - or the BSA would say so.

Maybe it means they donated $1,000 to the Toys for Tots program. In Hawaii a little red flower sticker means you are a "real" resident, vs someone without one.

Honestly, I think we navel gaze (second guess ourselves) too much about these regs. Just follow the letter of the law.

Maybe the customer punched the hole and wears it on a chain!

Kathleen, that's what my little girl did with my photo we clipped from my old military ID card.

KB,

That was my first thought too. (But I was thinking added to key chain.) That is what my daughter did.

why would a state punch a hole in a license that was suspended or not valid or from another state and then return the license to that person? Wouldn't they just keep it?

They may return it in some States, but the hole that they punch usually obliterates some section of the important data, like the expiration date or number.

In PA, they return hole-punched ID cards.

The hole goes in the upper right corner, where, as Randy suggested, it takes out a portion of the ID number, and also renders the magnetic stripe on the reverse useless.

In my case, the hole is in the middle of the left side, throught the word "license". Pretty ugly for chain wearing purposes. The CSR tried to ask the question, got a response "Not any of your business" accompanied with temper tantrums from the customer, and escalated the issue for compliance review. My guess would be DUI, based on customer's behaviour.

Thank you for all the comments!

Not any of your business" accompanied with temper tantrums

Well, in any bank that I have ever worked at the CIP process would have ended right there and the security guard would have been called for an out the door escort.

That way, it really doesn't matter why it was there.....

"Not any of your business" is NOT an adequate response to any question asked by a bank these days and IMHO is a perfect time to excersice your rights to not service a particular account or customer. I can just imagine the answers you'll get to questiones asked by the BSA department...

agreed, buh-bye