In regard to the USA Patriot Act and the proposed methods of identifying customers.

When would this go into effect?

In the brief it indicates that you must maintain a copy of documents that you relied on to prove identify. I remember reading a article on BankersonLine that indicated you cannot make copies of driver license because it could indicate the possibility of profiling. Any comments

These are the proposed rules for review and comment. Final rules will contain the mandatory compliance date.

I'm sure the discriminatory concerns are the reason Treasury emphasized the other rules in section 103.121(b)(3) Recordkeeping.

The customer identification rules are required to be finalized by October 26, 2002. It's possible, but not likely, that they could be finalized before that time.

Some examiners had taken the position that you couldn't keep copies of a customer's ID because of the potential for discrimination in violation of Regulation B. If this new reg REQUIRES you to keep a copy, you can legally keep a copy.

It's really interesting that today's American Banker has an article in which fellow bankers are telling the world that these requirements are terribly burdensome and that Treasury must have had a real disconnect when they opined that most banks do this stuff (retaining copies of ID documents) already.

It would be interesting to know if Treasury even made contact with the "real world" before issuing this proposal. It will be our own darned fault if we don't let the T-persons know our true feelings on that piece of the proposal. We should make it plain that we are or are not doing it, and give a valid estimate of the costs of adding that procedure to our ID process.

As one banker quoted in the article suggested, one wonders whether beefing up the ID process will add to our customer knowledge in any way.

Unfortunately, the standards for verifying customer identity are now statutorily required by the USA PATRIOT Act. The regulators are merely writing implementing regulations for that. They don't have the discretion to ignore what the law requires when writing regulations. So I don't see where banker objections to this are going to do much good at this point, unless they are aimed at Congress. AR.

I guess it is worth it if it can deter identity theft, however, I think it is really underhanded how the USA Patriot Act was pushed throuigh after September 11th. It appears to me to be the government's "wish list" of things to do that the American public wouldn't stand for before. By taking advantage of September 11th they have it now!

I have a dreaded fear it is going to take away some rights from us American citizens.

My opinion.

I expect that the final rules will be issued with an effective date of October 26, 2002, but I suspect that they might have optional compliance as of that date with mandatory compliance at a later date. Of course, that's all pure speculation.

At worst, I'd believe that if the rules are in place and effective, they will not monetarily enforce them. In the past we have had the examiners review and advise, vs. review and enforce, some new requirements. They give us time to get up and running. To the largest extent the days of examiners playing "gotcha" are over.

The lunacy of the old "interpretation" of Reg B is in the fact that a copy of a driver's license doesn't give us anything more than we had if we met the customer face to face when interviewing for credit.

What is going to be interesting is how we as an industry deal with the increasingly remote dealings we have with applicants for new accounts -- I can just see the folks at Discover Card asking me to send a copy of my driver's license with my acceptance of their pre-approved credit card offer! As much as many of us on BOL (I'll count myself in the number) advocated for keeping license copies on file, now that it's a potential reality, I can see that (1) it's not an industry standard, and (2) it will cost the industry megabucks to implement.

Can you imagine the sales increases at Staples and Office Depot for filing cabinets? (Was that a stock tip? - Don't follow it!)

It seems that congress is trying to resurrect the KYC
rules that were BLASTED by the industry as being
"overly burdensome" and found the perfect cover to pass this
into law while the country was vunerable. Once again the banking industry is saddled with another overly burdensome law that adds little value to the bank customer while costing the banking industry $millions. Oh,well it keeps the lawyers coffers full, the printing companies busy and
ensures the perpetual survival of our species, bank compliance officer.

Opinions expressed are not necessarily those of this company
or board or management. (Do we really need to say this!
its getting really borrrrrrrring!)

Ditto! We on the fast trac to a government "be-all" and
"end all" to micro manage every phase of our lives. Too much and not enough in the right places!

Opinions are my very own (if we are still allowed to have any or maybe they'll pass a law, they're very good at that).

Did you notice that the proposed rule estimates an additional burden of only 10 hours per year per bank to meet the recordkeeping requirements? Does that include all the phone calls to the copier repairman to fix the fried copier?

Yeah, I would like to know where they came up with 10 hours a year! I guess that was the same bank that was already doing all of the things required in the new reg. We are a community bank and we are looking at this as a major undertaking, I have been charged with developing a task force to address the requirements. Now to come up with a clever name for the task force...... this could take 10 hours itself!