My understanding is that once the CIP rules take effect an existing customer that opens a new account will have to be identified according to the new rules. It seems simple enough if they're opening a new DDA or SAV or getting a new car loan. But, how are we supposed to handle auto renew CDs? They aren't really a new account or are they? It seems like you could argue that one either way.

Personally, I would not include them in the 'new account' category. With an automatic renewal, the source of funds, owners/signers, and (in most systems) account number do not change.

§103.121(b)(2) Identity Verification Procedures - "While a bank's identity verification procedures set forth above, these procedures are to be risk-based. For example, a bank need not verify the identifying information of an existing customer seeking to open a new account, or who becomes a signatory on an account, if the bank (1) previously verified the customer's identity in accordance with procedures consistent with this regulation and (2) continues to have a reasonable belief that it knows the true identity of the customer."
So if you had identification verification procedures in place when the customer originally purchased the CD, then you should be covered. The only exception would be if you do not feel comfortable with the initial verifcation and that you are questioning the actual identity of the customer.

I agree with JacFSB. Unless the customer is changing something about the account (then it becomes a totally new account anyway), then I wouldn't sweat it. If your system changes account numbers, however, it may be a wise idea to "link" the two accounts. What I mean is to create some way to prove that you performed your customer identification when you originally opened the account.

My fear was that if the account was opened three years ago and it renews next year, we have not identified them under the new rules as required. We did probably look at their ID three years ago, but didn't record that fact or copy the ID. Since nothing really changes except the account has a new maturity date, I guess it's not a new account and I can find other things to worry about! My speciality!!

I have read that Sec. 326 is not retroactive, so accounts established prior to the effective date are not affected. In your case, you opened the account before the CIP regs went into effect, so I am of the persuasion that you should be covered, but that's just my opinion. Someone else may argue differently. I guess the ultra conservative position would be to complete the new CIP requirements at maturity, but I don't see that one going over real well with the customer.

By the way, should you have a hard time finding things to worry about, never fear. It appears that the Gov't is cranking out things to worry about as fast as they can! After all, it's their specialty !

In the past, we did not get copies of drivers license or other IDs. (we recorded the info) So, if an existing customer applies for a loan or opens a new account, do we have to now ask them for ID so we can copy it? I don't think they are going to be very happy. Plus, what if they are applying for a non-HMDA loan? We are copying a document that contains prohibited info (sex). I guess we copy it and send it to the new accounts department, where it is ok to have such stuff!

Section 103.121 a(3) "Any person seeking to open an account at the bank, on or after the effective date of the final rule, will be a "customer" regardless of whether that person already has an account at the bank." I think the rule is quite clear. If you don't know whether you have obtained and are retaining a copy of the identification you used previously to id your customer, you better get it even though your customers has had other accounts at your bank. New account=new customer unless you have already retained an id on the customer ie copy of drivers license attached to previous account signature card.

These are my opinions and not those of my employer.

According to Section 103.121(b)(3) Recordkeeping it states:

"Where a bank relies upon a document to verify identity, the bank must maintain a copy of the document that the bank relied on that clearly evidences the type of document and any identifying information it may contain."

Seems a bit crazy, but yes a copy is required. Also in the same section they mention the ECOA discrimination problems in this area.

Hope this helps