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#2268714 - 04/06/22 01:46 PM Commish and Deputies? CIP
praBSA Offline
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Need help with a weird situation our CIP Policy/Procedures does not address.

Individual A opens bank account.
Individual A is now incapacitated.
Commissioner of Family Services is appointed guardian. Added to account properly with correct paperwork and docs.

Commissioner has authority to appoint deputies to work for them and wants her deputies to be able to sign checks, etc on her behalf which their documents allow. Our attorneys said that is normal for this type of relationship and confirmed the authority.

I am unsure on what to do or how to setup the deputies. Is this a deposit risk or BSA risk? Or Both? Part of me believes this is simply a deposit risk which is mitigated by the commissioner's letter stating deputies have authority to act of her behalf. The other part of me thinks we might have some CIP obligations as those people are signing checks and transacting, but I also think we are OK as they are government employees. Does anyone have any input on this for me?

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#2268722 - 04/06/22 02:39 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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Edit: The Commissioner is even refusing to provide their SSN to us to be added to the account.

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#2268724 - 04/06/22 03:00 PM Re: Commish and Deputies? CIP praBSA
ColoradoAML Offline
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If it were me, I would approach this similarly to how we treat identification and authentication of signers on business accounts. We do collect CIP on signers, so I would expect that as well. It may not be required by regulation, but the bank has a right to know the identities of people transacting on the accounts it services.

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#2268726 - 04/06/22 03:04 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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I don't typically take kindly to threats. This is a situation where the lead county attorney stated she is going to subpoena the bank to appear and tell the judge why we won't add a court appointed guardian to an account. I am not sure how CIP rules come into play on this, but its a veiled threat in my opinion. I think as a government employee in that capacity, they are generally exempt from CIP, but it's not a government entity account so I am torn as to what to do at this point.

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#2268727 - 04/06/22 03:41 PM Re: Commish and Deputies? CIP praBSA
rlcarey Offline
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Galveston, TX
I am really confused. If this is a court ordered account, how is it not an account of the courts?
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#2268728 - 04/06/22 03:45 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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Court ordered guardianship. The money is here at the bank with an incapacitated party. The court ordered guardian is a government employee in that capacity.

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#2268731 - 04/06/22 04:03 PM Re: Commish and Deputies? CIP praBSA
rlcarey Offline
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Galveston, TX
And the why does Family Services not fall under:

(3) Any entity established under the laws of the United States, of any State, or of any political subdivision of any State, or under an interstate compact between two or more States, that exercises governmental authority on behalf of the United States or any such State or political subdivision;
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#2268732 - 04/06/22 04:09 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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It does in my opinion, but the exception exists for government entity accounts correct? Not necessarily gov. entity control people? Our procedures currently only speak to government entity accounts and don't get specific into individuals acting in a governmental capacity being added to an individual consumer account, a very specific situation.

Obviously I need to address the depth of CIP for gov employees on all accounts but we have never had a government entity refuse to provide documents for their employees and we have traditionally collected full CIP on all gov signors.

"Governmental entities are excluded from the CIP rule. However, upon establishing an account for a governmental entity, sufficient diligence should be performed to ensure that the entity seeking to open an account is in fact a governmental body and ensure that the individual representing the governmental entity has the authority to establish the account. Additionally, identification of the individual representing the governmental entity should be obtained to validate they are the authorized party. The collection of identification should apply to all signers on a governmental entity account."

Are you essentially saying, that the account would now be classified as a government account and the CIP Exception would apply?

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#2268735 - 04/06/22 04:18 PM Re: Commish and Deputies? CIP praBSA
BrianC Offline
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Illinois
CIP applies to the person with "legal capacity." In this example, legal capacity is the Commissioner of Family Services, a government entity. The government employee is acting in capacity of an agent of the Commissioner of Family Services, not as an individual. Since government entities are excluded from the definition of customer, CIP would not apply.

If the court had appointed a family member to be the guardian rather than a government entity, CIP would have applied to the family member, but that is not what happened here.
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#2268736 - 04/06/22 04:22 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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That's where I was headed with this. Thank you all.

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#2268738 - 04/06/22 04:27 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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If you were a regulator reading..
"Additionally, identification of the individual representing the governmental entity should be obtained to validate they are the authorized party. The collection of identification should apply to all signers on a governmental entity account."

This would typically be, look at an ID to make sure they are who they say they are. In this case, we have an official document from the Gov entity stating 8 individuals are deputies and can transact on behalf of this account. Would you want to see all of their IDs individually? Would you even go so far as add those 8 people to the account? I think it's not necessary.

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#2268756 - 04/06/22 07:22 PM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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How do you get around your system generating new signature cards and requiring all the signatures of those parties?

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#2268903 - 04/11/22 05:41 PM Re: Commish and Deputies? CIP praBSA
John Burnett Offline
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John Burnett
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Cape Cod
Originally Posted by praBSA
If you were a regulator reading..
"Additionally, identification of the individual representing the governmental entity should be obtained to validate they are the authorized party. The collection of identification should apply to all signers on a governmental entity account."

This would typically be, look at an ID to make sure they are who they say they are. In this case, we have an official document from the Gov entity stating 8 individuals are deputies and can transact on behalf of this account. Would you want to see all of their IDs individually? Would you even go so far as add those 8 people to the account? I think it's not necessary.

Yes, you have a document stating who the authorized agents are. What you don't have is any proof that the individual claiming to be Jedediah Jones, one of those agents, is who he says he is. YES, you have every right (and obligation, I would add) to verify the identity of those professing to be the appointees. At minimum, you should have a look at their credentials. And YES, you should have their signatures on file just as you would any other authorized signers.
Last edited by John Burnett; 04/11/22 05:43 PM.
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#2269004 - 04/13/22 11:34 AM Re: Commish and Deputies? CIP praBSA
praBSA Offline
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Perfect. Thank you everyone. This is exactly what we did, and our CIP Policy actually does say this, our branch procedures were silent and need some updating. We received all credentials and received a signed signature card.

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