Is there a regulation that governs whether we have to open accounts for people?

In other words, can we just decide that we are not going to open an account for a Non-Resident Alien from Hungary because we heard that there may be other NRA's opening bad accounts at other banks.

If this person had all of the proper documentation for CIP/BSA, are we obligated to open the account or can we just arbitrarily tell him sorry we can't open your account?

If there is a reg, can you tell me which one please.

What type of account? There are no fair deposit laws and Regulation B has this to say:

Paragraph 6(b)(7)

1. National origin—immigration status. The applicant's immigration status and ties to the community (such as employment and continued residence in the area) could have a bearing on a creditor's ability to obtain repayment. Accordingly, the creditor may consider immigration status and differentiate, for example, between a noncitizen who is a long-time resident with permanent resident status and a noncitizen who is temporarily in this country on a student visa.

2. National origin—citizenship. A denial of credit on the ground that an applicant is not a United States citizen is not per se discrimination based on national origin.

Assuming you are talking about deposit accounts, at least put some logic and predictability behind your decisions. Saying that you don't open accounts for Hungarians simply makes no sense.

Saying that you only open accounts for non U.S. persons who have a U.S. TIN gives your employees an objective standard and does not discriminate based on national origin; i.e. if she's got a TIN you don't care what country she's from.

They were asking to open either a checking account or a savings account. They verbally confirmed that they had all of the proper documentation required for the account. However, the CSR didn't get far enough to inspect the documentation. CSR called the operations department to ask a technical system question and was told that there were Hungarian NRA's opening bad accounts so tell them we can't open the account. The reason given to the customer was "we don't open this type of account".

Last week we opened a checking account for a Mexican NRA and we have procedures in our procedure manual. What is the justification for not opening this account? I don't get it

I think you would need to ask your operations department. It sounds like they made the decision.

That's why I was posting in here. I did ask my Operations Dept and the answer they gave me was "Because he is Hungarian and there has been some bad activity in the area involving Hungarian students". I posted here to see if it is OK for a Lending Institution to decide that they won't open an account simply because of a Nationality, disability, skin color, hair color, etc etc.

Before worrying about a regulation, you need to determine what your procedures state regarding opening accounts for a NRA. If you have such procedures, where they followed? If your procedures were not followed, you need to ask why there was a breakdown in your procedures. If you do not have any procedures, you need to fix that. I would imagine that procedures simply denying accounts to NRAs from Hungary would be pretty inefficient. Ken's suggestion is much more along the lines of what you would want to have in terms of procedures.