I'm not sure there is a direct answer to this but I am interested in any opinions. I'd like to only require a primary form of ID from beneficial owners. My thought process; taking a risk based approach, the chance of an "evil doer" trying to pull one over on the bank by having a fake primary source of identification but then not having a secondary form of identification seems like basically zero. So asking for a 2nd form of ID really provides the bank no extra benefit. Not to mention that the "evil doer" would really just state that no individuals own more than 25% of Evil Doers, LLC and we wouldn't even get any information on beneficial owners. I have read many threads on here and see the term CIP lite used often. Is just requiring a primary source of ID too lite? I really don;t need to have an un-needed fight with examiners but it would simplify things if we didn't try to get a 2nd form of ID from non-customer beneficial owners.

There is no regulatory requirement to obtain two pieces of ID for regular CIP. We do not have that requirement today for our customers, in most cases.

Maybe that is where we went wrong. Our current CIP requires it for our customers so I am worried it'll be expected of Beneficial Owners. Maybe it is time I revise the CIP program...

It was the same for me at my last bank--they had always required two forms of ID. But the one form of ID (for most) had always been in effect at my current bank and I've seen no ill effects from it.

Mostly ignored and long forgotten:

(2) Identity verification procedures. The CIP must include risk-based procedures for verifying the identity of each customer to the extent reasonable and practicable. The procedures must enable the bank to form a reasonable belief that it knows the true identity of each customer. These procedures must be based on the bank's assessment of the relevant risks, including those presented by the various types of accounts maintained by the bank, the various methods of opening accounts provided by the bank, the various types of identifying information available, and the bank's size, location, and customer base. At a minimum, these procedures must contain the elements described in this paragraph (a)(2).

This is a good time for banks to formally update their CIP risk assessment (assuming they ever did one) and establish a CIP with specific requirements and, perhaps a beneficial owner identification program (BOIP) with lesser requirements.

Suggestion: If you combine the use of one piece of identification with nondocumentary verification, there is no need to get the second piece of ID for CIP purposes. For beneficial owners, a photocopy of identification is fine, just make sure you require something with at least 3 of the 4 markers; e.g. a drivers license, not a passport.

From the FFIEC Exam Manual:

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 ...

Ken,
Why are you saying NOT a passport?

Not Ken, but a passport will only have a name and a picture. You can't verify an address and a birthdate using it and since you aren't getting secondary ID or using non-documentary verification, we will have only verified 1 of the 4 pieces of information instead of 3 of 4 as we can with a driver's license.

My passport contains my birthday? I think all do, regardless of the country of issue. What you are missing is address and for a US person, a TIN.

Brian's got the rationale. Some banks have accepted the fact that there is no practical way to verify the name/SSN combination as they cannot legally pull a consumer report on a beneficial owner. A drivers license would at least allow them to verify the other three markers. A passport will not.

A U.S. passport or passport card only includes two of the markers, name and date of birth. If you accept either for a beneficial owner you are down to verifying only two of the four markers. If you are not TSA, it may be hard to say you have "a reasonable belief of the person's identity."

Glad I asked. Excellent information! Thanks guys!

Sorry, I keep re-reading this thread and still have some questions. If it's a non-US person, are you saying we would want a drivers license or state-issued ID instead of a passport or passport card? We don't generally require a secondary ID either.

NRA's are probably unlikely as beneficial owners in most banks. If it's feasible in yours, then, for that select group, the foreign passport will be your best choice. You should acknowledge its acceptability for non U.S. persons. Because Appendix A allows you to use a passport number as the identifying number for a non U.S. person, a passport from a Brit allows you to verify 3 things.

A U.S. passport or passport card only includes two of the markers, name and date of birth. (You cannot use a passport number as the identifier for a U.S. person. The SSN is required.)