I have a question regarding CIP on an existing customer. The example I will give is as follows:

Customer opened a checking account in October 2004. He gave all necessary CIP information to the bank. Issue Date on driver license and expiration date on license. The expiration date on license was 10/12/2005. Same customer comes in bank in June 2006 and opens a savings account. We verify that this is an existing customer and we confirm on our system that we received the proper CIP info back in October 2004. Are we required by law to update the CIP information to show the driver license has not expired.

Am I correct in saying that if our policy spells out properly on existing customers that we do not have to update our records we are ok.

Our compliance director is saying we have to update the records and I am saying by law we do not. I want to update the policy to say we do not. I want to do this so we do not take the chance to have exceptions.

Also would any of you share your CIP Policy with me. If so send PM me and I will give you my e-mail address.

Thanks

You have completed proper CIP as required by law. There is no requirement to update once you have it. If any of the information changes, (ie name change that might cause the ID number to change) then you would need to get updated information.

If your policy states that existing customers are exempt from CIP, then there is no need for updating. IF you policy requires updated information, then yes, but according to your policy and not required by regs.

Once you have verified someone's identity it is not going to change. Any requirement to reverify, update drivers license info, etc. is a self inflicted wound.

Amen.

Our requirement is only that we determine that the driver's license is not expired at the time of account opening - we do not enter the expiration date on the system - just number and state of issue.

Sue,

I recommend revisitng this practice, as the CIP reg requires documenting any issueance and/or expiration dates listed on any id that you use.

In general, do bank's require their bankers to go back into the CIP records for existing customers to be sure they have everything.

For example, you open a business account in 2005. Your policy is that you should have gotten a copy of their Articles of Incorporation. They come in today to open another account. Do you go back to your files and determine if you have a copy of the articles of incorporation?

And if you didn't keep a copy of the Articles (right or wrong) would you ask a customer you've worked with for two years for the Articles again?

We do require our branches to collect missing information when a new account is opened for an existing customer. For items such as corporate docs, we created a field on our CIF where the back office folks note which documents we have already received, so the branch doesn't have to do alot of digging- they simply need to look at the CIF to determine if anything is missing.

Isn't it required by law if you did not get all the required CIP information after 5 weeks you close the account?

There is no five week requirement in the regulation.

Your bank must obtain the name, address, identifying number and DOB prior to opening the account. If your policy allows you to open an account for a customer who has applied for, but not received a TIN and you do not receive it, you will close the account within a reasonable time after the account is opened.

You also have a reasonable time after the account is opened to verify the four pieces of information you received above. You must establish that time frame as well.

What about those non-documentary verifications...i.e. Articles of Incorporation or even a D.L number?

So you get the four key pieces of info required by CIP before opening the account but did not have a piece of non-documentary evidence (or didn't keep a copy of it), do you have to go back and get that on an existing customer (i.e. account opened after 2003)?

The regulation does not require you to perform CIP on existing customers as long as the institution has a reasonable belief that it knows the true identity of the customer.

As a matter of policy, your bank may require some or all components of CIP to be applied to existing customer. So the answer to your question will be found in your policy.

JacFSB is correct, but I am reading your question a little differently. I am taking it to say that you know you have missing pieces in some accounts opened after the effective date of CIP and you are asking if that same customer opens a new account now are you required to conduct those verifications now. The short answer is, "Yes."

The pre-examination questionaire contains this request for documents:

List of any accounts opened in which verification has not been completed or any accounts opened with exceptions to the CIP.

Thus, there is an expectation that you will have a list of all accounts for which you did not obtain and record documentary and non documentary verficiations as required by your CIP. If you have such a list, what the regulators will do with it is braid it into a rope and hang you with it.

Accounts opened as far back as October 1, 2003 where the verifications required by your CIP were not conducted are nothing but individual violations of law; i.e. they should all be corrected right now. I would not advise you to wait until the customer opens a new account, but if the customer is opening a new account and you know something is missing you should obtain it now.

Thanks for the info (I like the quote about braiding, it made me chuckle!)

We don't know if in fact that we are missing information; however, the question has come up, do we need to go back and check our documentation each and every time an existing customer opens a new account to make sure our paper file has the correct information. This is not an efficient process so we are trying to balance the risk here. I know we employ humans at our bank so I'm sure somone forgot to write down a D.L. number or make a copy of the articles of incorporation as some point, but I'm just not sure how far to push the going back to the original file to verify.

We are in the process of updating our CIP policy, so this is what item I want to specifically address.