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#25986 - 07/30/02 08:26 PM New CIP requirements
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
First let me say that I am surprised by how quickly the regulators pulled together to get out the new CIP requirements! Secondly, I am curious if others are immediately revising their old BSA/KYC policy or waiting to see what the industry response to these requirements is going to be? I thought that there was usually a comment period before the effective date was set. ???? Now I read today that they have up to one year after the signing of the Act to write the regulation. I am getting confused. Can someone please clarify this issue? I am ready to begin our roundtable discussions with our department heads on how this will effect their operations, but I don't want to revise policy/procedures if there is a chance they may back down on this like they did the KYC.

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General Discussion
#25987 - 07/30/02 08:31 PM Re: New CIP requirements
JacF Offline

Power Poster
Joined: Nov 2001
Posts: 6,719
PA
The proposed rules are currently in comment period. My personal prediction is that little will change from the proposal to the final rule. It would be a good idea to at least get the major points (policy items) written soon, as they will require board approval. Once you have you board blessing and the final rules, go ahead with the procedures.

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#25988 - 07/30/02 08:33 PM Re: New CIP requirements
Lestie G Offline

Power Poster
Joined: May 2002
Posts: 3,608
Near the Land of Enchantment
Unfortunately, they can't back down - the USA Patriot Act is law, and requires that the regulators write regulations and have them effective by 10/26/02. The law is pretty explicit about what regulations have to be written, also.

I think the final rule (there is a 45 day comment period on the proposed regs) will probably be a little different, but not substantially so. It will be effective no later than 10/26. I'm not going to officially change my program right now, but I'm definitely working on plans and timelines to get this implemented on time!
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#25989 - 07/30/02 08:37 PM Re: New CIP requirements
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
What you have today is the proposal. I wouldn't finalize policies or procedures on this, but it is a good starting point.

They had one-year from last October 26 to have regulations in place. They're on time so far.

This is the comment period, now to 9-6-02. Once the comments are provided, they'll try to get something published and after that, enforcement may start. I wouldn't anticipate a rash of violations being cited unless the bank's attitude is hostile.
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#25990 - 07/31/02 08:20 PM Re: New CIP requirements
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
As noted, this is not like the KYC proposal that came from the agencies; it is a statutory requirement. It will not be withdrawn.

Final regulations rarely expand the requirements of proposed regulations, that would nullify the value of the legally required comment period. In looking at the proposal, you have a good idea what the final regulations will look like. Expect the final version to include additional detail and more supplementary or explanatory information, but there should not be any surprises.

It would be a good idea for you to begin formulating draft policies and procedures based on the proposal. Your roundtables and focus groups are timely. We suggest you do some testing of enhanced identification requirements to make certain that what you are asking for is reasonable in your area. Think also about where you are going to keep the new documentation; e.g. consider a dedicated filing system, electronic or paper. However, wait until you have seen the final regulations before you take anything to the board for approval.

Andy notes the comment period ends on 9/6. If the regulatory agencies take only 30 days (they usually take 60+) to review those comments, that means the final regulations could come out as soon (?) as October 6, yet they would be effective on October 25. If you wait until you see final regulations to begin your efforts, your timeframe for designing a program, obtaining board approval and implementing it throughout your institution based on final regulations would be quite short. It seems exceptionally charitable to suggest the agencies acted promptly...

The effective date is set in stone, but regulations are often issued with a later date by which compliance is mandatory. We will all see whether that is appropriate or even possible with a law enforcement statute.
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#25991 - 08/01/02 02:08 PM Re: New CIP requirements
Anonymous
Unregistered

I am still unclear on this CIP.. Do we make is a seperate section in our BSA policy?

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#25992 - 08/01/02 02:17 PM Re: New CIP requirements
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
Yes. Page 48292 of the FedReg proposal.

In addition, the proposed rule requires that the CIP be written and that it be approved by the bank’s board of directors or a committee of the board. This latter requirement highlights the responsibility of a bank’s board of directors to approve and exercise general oversight over the bank’s CIP.

Under the proposed regulation, the CIP must be incorporated into the bank’s anti-money laundering (BSA) program.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#25993 - 08/01/02 02:21 PM Re: New CIP requirements
Bear Collector, CRCM Offline
Diamond Poster
Bear Collector, CRCM
Joined: Nov 2000
Posts: 1,830
District of Columbia
We already address customer identification in our BSA policy, so I see the CIP replacing that portion and not as a separate section. Others may handle it differently depending on how their BSA policy is written. The only thing clear in the proposal is that the CIP has to be incorporated into your anti-money laundering BSA compliance program. How you do that may be up to you.
Leslie
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