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#33906 - 09/20/02 09:52 PM CIP and Brokered Deposits
Michelle D Offline
Gold Star
Michelle D
Joined: Oct 2001
Posts: 313
Terminator Country
On occasion our bank accepts brokered deposits from places like Merrill, Solomon Smith Barney, etc. These deposits are a consolidation of many individual customers to make a single CD and we don't know who the underlying individuals are - there could be 4,000 to 7,000 unique individuals.

I'm struggling on what sort of CIP slot they fit into.

Can I treat them the same way I would a third party loan purchase? What is everyone else doing?

Thanks
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General Discussion
#33907 - 09/20/02 10:15 PM Re: CIP and Brokered Deposits
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
This was one of the issues I addressed in my comment letter. I hope we get some clarification in the final rules. I expect we should be able to rely on them to know their customers and we should just make sure we are selling brokered CDs to legitimately organized entities. Both of these you mentioned are well known, legitimate, regulated entities. I think normal corporate verification procedures should apply. We'll see!
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#33908 - 09/20/02 11:08 PM Re: CIP and Brokered Deposits
Anonymous
Unregistered

Michelle -

Since the underlying customers will not have signing authority they really do not have control of the funds on deposit with you. I think your only obligation is to "Section 326" the broker and all who can sign for them. The broker will have been obligated to Section 326 their customers.

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