I searched the threads and didn't see this anywhere, but can anyone point me to a reference in CIP that speaks to the acquiring banks responsibility with regard to CIP requirements that were not met by the bank being acquired? Does that make sense? Any help is appreciated.

Thanks,
Kelli

Never mind...found it

You need to review the CIP FAQ issued by the federal agencies. Here is the link for the FDIC's FIL-4-2005 (http://www.fdic.gov/news/news/financial/2005/fil3405a.html). Here is the question and answer of interest to you:

Q: Are loan participations purchased from third parties and loans purchased from a car dealer or mortgage broker within the exclusion from the definition of “account” for loans acquired through an acquisition, merger, purchase of assets, or assumption of liabilities?

A: Yes, this exclusion is intended to cover loan participations purchased from third parties and loans purchased from a car dealer or mortgage broker. If, however, the bank is extending credit to the borrower using a car dealer or mortgage broker as its agent, then it must ensure that the dealer or broker is performing the bank’s CIP. (January 2004)

I'm not certain what it is that you might have found...there is no specific guidance for an acquiring bank's liability for CIP. Any bank acquiring another buys and becomes responsible for the acquired institution's BSA violations. If they failed to file CTRs and SARs, the violations are now yours. If they failed to perform CIP, the violations are now yours and can be cited to you in both regulatory and independent examinations.

That's why due diligence in the acquisition process now focuses more and more on BSA/AML considerations. A Florida bank with massive BSA problems recently sold its assets and liabilities because its charter was simply unmarketable.

If you bought the assets; e.g. the loans, the guidance from the Q & A's is applicable. However, if you bought the whole bank it is not.