Do the BSA or CIP requirements state that you have to have a government issued picture ID to open an account? We use documentary evidence to open accounts and have been using 1 primary and 1 secondary form. The question has come up if we are required by the Reg to obtain the primary or can we use other forms of ID that we see fit such as 2 secondary forms? We have procedures in place for minors or the elderly but I'm talking about other customers. Thanks.

From a fraud point of view if you have ID without a picture you have id that states that the person in question exists not that the person in front of you is that person.

Verification through Documents:

"The rule reflects the federal banking agencies’ expectations that banks will review an unexpired government-issued form of identification from most customers. This identification must provide evidence of a customer’s nationality or residence and bear a photograph or similar safeguard; examples include a driver’s license or passport. However, other forms of identification may be used if they enable the bank to form a reasonable belief that it knows the true identity of the customer. Nonetheless, given the availability of counterfeit and fraudulently obtained documents, a bank is encouraged to review more than a single document to ensure that it has a reasonable belief that it knows the customer’s true identity."

For what it's worth, if you're going to use documentary means as verification of a customer's identity and you don't obtain one form of unexpired government-issued, which contains a photo, you better have a really solid story for your regulator and auditor.

What the regulation says regarding verification procedures is this:
§ 1020.220 Customer Identification Programs for banks, savings associations, credit unions, and certain non-Federally regulated banks

(a) Customer Identification Program: minimum requirements

(2) Identity verification procedures.

(ii) Customer verification. The CIP must contain procedures for verifying the identity of the customer, using information obtained in accordance with paragraph (a)(2)(i) of this section, within a reasonable time after the account is opened. The procedures must describe when the bank will use documents, non-documentary methods, or a combination of both methods as described in this paragraph (a)(2)(ii).

So it goes back to - what does YOUR CIP program state that you will do? If your board approved program says you will use documentary verification, then you must obtain the verification that meets the standards for documentary verifcation as outlined in the regulation which is:

(A) Verification through documents. For a bank relying on documents, the CIP must contain procedures that set forth the documents that the bank will use. These documents may include:

(1) For an individual, unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard, such as a driver's license or passport; and

(2) For a person other than an individual (such as a corporation, partnership, or trust), documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument.

Now if you find that getting government issued ID for some people is difficult (i.e. elderly person, minor, disabled adult), then your program should described what alternate forms of doumentary and/or non-documentary verification you will obtain. For example - School ID, Medicare card, utility bill, third party bureau (i.e. Chexsystems, Experian, etc.), or anything else your bank can feel confident in using.

To summarize, it may be possible, but it's not a good idea. An exception like this could quite readily swallow the rule; your employees may prefer it because it's easier.

You could build in your policy that exceptions to government issued photo ID must be approved by the BSA Officer - or whatever chain of command makes sense for your institution.