That's not what the new regs will require. They will require that you have a policy (and procedures) addressing situations like this in which you cannot review original ID documents. Your bank will have to decide how to address this type of account. Perhaps you'll require something more than you would currently obtain.

I haven't yet addressed this issue in my bank. Anyone out there thought about how we can handle accounts like this, because almost all of us get them from time to time?

I see where the Treasury department has stated that "a bank may be unable to obtain original documents to verify a customer's identity when an account is opened by telephone, by mail, and over the Internet. Thus, when an account is opened for a customer who is not physically present, a bank will be permitted to use other methods of verification, to the extent set forth in the CIP"

So, sounds like the INFORMATION will still need to be obtained, however, ORIGINAL DOCUMENTS documents will not. We will also have to be very careful with our verification procedures for those not opened face-to-face.

Also sound to me like we must spell this out in our CIP.

Not necessarily. You will be required to gahter the information required under 103.121(b)(2)(i)(A). However, the rules as proposed give you the opportunity to make risk-based decisions in your program as to what verification of this information you will require, and under what circumstances.

For a publicly traded company, such as Wal-Mart, you might decide (rightly, in my opinion) that the risk of their personnle being engaged in money-laundering or terrorism is low, and therefore you do not need to verify the identification of the "customers" who are authorized signers on the account.

The rule does provide some flexibility for banks to desing their own programs.

pbrinker, would we have to spell this out in our CIP?

While it would be impossible to anticipate every contingency in your CIP, you should include those situations (like the Wal*Mart one) that are likely to occur. You will also want to include procedures for handling non-standard ID documents. Not everyone, for instance, carries a government-issued ID. There are many legitimate American citizens without a driver's license or state ID, and you need to know what you're going to do (or not do) when you confront one. What forms of alternate ID will you accept and with what corroboration?

Then, IMHO, you should include a provision for handling exceptions to your procedures. Something that allows for judgment, rather than rote adherence to a checklist. Perhaps if you hit a quandary, you refer the situation to a senior manager, or to your security officer or BSA officer. Then require that whoever is the final authority document his/her decision and reasoning.

Just some ideas. Food for thought.

Our internal auditor attended a seminar last night on this very topic. I think we will require notarized signatures on those accounts whose signers are not local. That's the only way to do it that I can see. I can't forsee some place like Dollar General Store giving check signing authority to its local managers. What a scary thought!!

These are proposed regs and haven't taken effect yet -- won't be final until October. With luck, your exam will be over by then. BUT, expect examiners to look hard at your anti-money laundering program. Making copies of IDs should'nt be an issue until the rule takes final effect. But before then, who are your customers and how do you know that?

John's comments are well taken. While you cant cover any eventuality, likely occurrences should be covered. As an example, perhaps reduced documentation is required on any account where the accountholder is eligiblr for a phase 1 exemption. I agree with John's points regarding non-standard IDs and exceptions, too.

I think there are a number of ways to skin this cat. You can classify your procedures by accountholders, or by classes of customers. You get to choose the method best for you.

That's a great idea about Phase 1 exemption eligibility.
I plan on attending the Consumer Compliance Seminar next month here in Birmingham and hope to get some other ideas then as well. I just hope all the pieces fall together in time to have the program ready for Board approval in October! Wish me luck.

Anonymous: No, you will still be able to open these accounts BUT you will have to have an adequate policy to identify and verify such signers.

I have a slightly different question. What about safe deposit boxes? If they are opened for customer, do the CIP rules apply? What about if you open for non-customers?

I don't think that safe deposit boxes are an "account" as described by the proposal, but would like some additional opinions.

The definition in section 311 says an 'account' is a formal banking or business relationship established to provide ongoing services, dealings, or other financial transactions. Because a safe deposit box relationship is governed by a contract, and does provide a service, I am including it in my CIP.

In lieu of a government id, could such documents as a utility bill, phone or other documents be included in your CIP. I'm thinking about our senior citizen population in our rural areas many of which do not have a DL or a pictured ID. Your thoughts welcome.

I agree with JacFSB. The proposed rules seem to cover all ongoing relationships, as opposed to individual transactions like money order purchases or wire transfers for those without ongoing accounts.

Review your guidelines for ID for completion of CTRs when customers don't have conventional ID. Treasury's guidelines there certainly seem to fit. The utility bill, copy of a social security check, some other confirmation of address, all lend bits of credibility to the customer's ID. Of course, none of these will be perfect (not that conventional IDs are, either ) but you add to your comfort level as you see more.

Thanks, John. In another post, your refer to "IMHO" in your response. What does "IMHO" refer to?

IMHO= In John's Humble Opinion. But only when John says it

IMHO, In my Humble Opinion

That is acceptable per the Treasury's proposal. Of course your CIP/Identification procedures are going to have to show these to be acceptable documents and for what class of customer they can be accepted. Such types of documents are already shown as acceptable for elderly/disabled customers as far as our Bank Secrecy Policy goes.

Look at the chat acronyms. There is other useful info there, such as the "old style" emoticons. Today it is too easy to click on the smiley faces BOL provides. Back in the olden days of the Net we had to work these out manually and turn our heads to the side to read them.

But wait - there's more:

http://www.randomhouse.com/features/davebarry/emoticon.html

My favorite, which I admit I've actually used in training, remains ~oE]:-|

"I.D. Checking Guide". I ordered and just received a good guide with color samples of all states' DLs, US Alien Registration Card, Matricula card, and more. Ken at Pegasus referred to it in an article on this site. Can't vouch for the vendor, but I got what I ordered and paid for. Looks to be a good tool for any branch, especially now with CIP. Their website is:
ID Checking Guide
BTW, where's David D this week?

Thanks for wondering about me Ken. I'm finishing week 1 of vacation with 1 more to go. I've out of the BOL loop for serveral weeks as I was on the road 2 weeks ago and couldn't get hooked up on the internet. I'll be back after 1 more week.