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#2257073 - 07/22/21 06:43 PM CIP for Purchased Loans
DingoJ Offline
Member
Joined: Sep 2012
Posts: 75
If our bank purchases loans and takes on the servicing of those loans, CIP says that those are now customers of the bank because they have a new banking relationship with us, and so CIP is required.

I also feel like the requirements of 103.121(b)(6) which speaks to reliance on another FI for CIP may not apply 100% in a purchased loan situation. My main concern with the “reliance” section is that it seems to be written with the assumption of a continued relationship between the two banks, which is not the case here.

Am I correct that CIP is required for loans the bank might purchase and service, and how would you recommend meeting the requirements of CIP for those customers? I must be overthinking the situation because I know others must have come across this scenario (couldn’t find any posts by searching though).

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#2257076 - 07/22/21 06:52 PM Re: CIP for Purchased Loans DingoJ
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
1020.100(a) Account. For purposes of §1020.220:

(2) Account does not include:

(ii) An account that the bank acquires through an acquisition, merger, purchase of assets, or assumption of liabilities; or
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#2257077 - 07/22/21 06:54 PM Re: CIP for Purchased Loans DingoJ
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
Quote
If our bank purchases loans and takes on the servicing of those loans, CIP says that those are now customers of the bank because they have a new banking relationship with us, and so CIP is required.

CIP doesn't say this.

§1020.100(a)(2) (ii)
Account does not include:
(ii) An account that the bank acquires through an acquisition, merger, purchase of assets, or assumption of liabilities;
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#2257082 - 07/22/21 08:07 PM Re: CIP for Purchased Loans DingoJ
DingoJ Offline
Member
Joined: Sep 2012
Posts: 75
Wow - thanks guys. Not sure how I missed that!

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