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#2249840 - 02/26/21 04:08 PM CIP on joint accounts
CIPpy Cups
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For CIP, regarding joint consumer accounts, which of these do you think best describes the actual legal requirement?

A. CIP applies to “a person seeking to open a new account” or
B. CIP applies to “every person who will be an accountholder”?

To phrase that another way, does CIP apply to both people on a joint account, or only the one of them that was our primary contact for it?

I’m asking about legal requirements rather than policy requirements, because I can get policy changed if ours is overly strict. (Ours says “B” at the moment...which I'm thinking may be unusual, based on how I've seen other financial institutions treat CIP a little more laxly than I do.)

I may be over-thinking it, but picture a joint account where Mr. Customer applies in person while Mrs. Customer is at work and never makes an appearance at the branch. Does the law actually require us to apply CIP to the non-present joint owner, Mrs. Customer?

Obviously, for customer service and operational needs, we are going to want to gather CIP-style info on Mrs. Customer regardless. I'm not asking about best practices or what is necessary other than what the law requires. In terms of what our written policy actually must cover by law, is Mrs. Customer somehow less subject to CIP than Mr. Customer, in that she (arguably) wasn’t the person who was “seeking to open a new account”?

Do you, at your institution, routinely apply CIP only to the "first" person listed on a joint account? Do you routinely verify it only for the first person listed?

(Tip: Have a look at the reports your institution uses for this. If you only see one name on each row, well...you might be in the option "A" camp anyway, regardless of what written policy requires.)

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#2249845 - 02/26/21 04:14 PM Re: CIP on joint accounts Anonymous
rlcarey Online
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rlcarey
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Galveston, TX
Unless the joint accountholder is not a customer and I have no idea how your could justify that, you need to follow your CIP on every accountholder on the account.

1020.220(a)(2)(i) Customer information required —(A) In general. The CIP must contain procedures for opening an account that specify the identifying information that will be obtained from each customer.
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#2249846 - 02/26/21 04:17 PM Re: CIP on joint accounts Anonymous
RockChucker, CAMS Offline
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Joined: Jul 2013
Posts: 1,526
The Country
We also understand it to mean all joint owners are considered "customers" of the bank.
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#2249859 - 02/26/21 07:13 PM Re: CIP on joint accounts Anonymous
Anonymous
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Op here. Thanks. Still, to me the definition of customer in part 1020 seems to be worded such that it does not necessarily capture all account owners, but just the person who opened the account. Has the non-present, joint account owner "opened" an account? They have access to it, and own it, but I wonder if some banks think they are not included in the definition of "customer" for CIP purposes. .

"(b) Customer. For the purposes of §1020.220:
(1) Customer means:
(i) A person that opens a new account; and
(ii) An individual who opens a new account for:
(A) An individual who lacks legal capacity, such as a minor; or
(B) An entity that is not a legal person, such as a civic club."

Part of what makes me think this has multiple interpretations is the common practice at multiple local banks of not requiring the joint account holder to appear in person to open an account, for an account opened in person by one of the account owners (commonly, they'll send home signature cards while telling the new customer they "aren't supposed" to do that; they'll accept a photocopy of the other person's ID without ever seeing the other person, meaning CIP hasn't really happened since they never matched up the joint owner's human face to the image on the ID...or, they'll just fail to ever get that photocopy at all, instead recording ID info in the appropriate fields without verifying it against a document (for the joint owner only) which again makes me believe they think they are doing CIP as long as they are applying it to the person who appeared before them. There is also the common practice of referring to one joint account owner as "primary" in customer communications, when that designation would seem to be nonsense in the case of a joint checking account.

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#2249860 - 02/26/21 07:23 PM Re: CIP on joint accounts Anonymous
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 5,806
Illinois
The FinCEN CIP FAQs should put this discussion to rest.

2. Is a person who becomes co-owner of an existing deposit account a “customer” to whom the CIP rule applies?

Yes, a person who becomes the co-owner of an existing deposit account is a “customer” subject to the CIP rule because that person is establishing a new account relationship with the bank.


Account owner = customer. CIP applies to all customers including joint owners.
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#2249899 - 03/01/21 05:28 PM Re: CIP on joint accounts Anonymous
CIPpy Cups
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Ah. Thanks, all!

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