When we open a business account for a homeowner or condo association we CIP the association and the principals of the association (which normally are the officers of the association). Are other banks also performing CIP on these individuals? We have a request to make an exception for these customers. However, I feel that we cannot justify why we want to exclude these customers, except for the fact that the principals change annually upon elections and have no vested interest in the association. Any thoughts?

Hi Belle, Condo and HOA's are always an issue and I can never understand why. Our policy is to CIP the association and the signers but it is always a challenge to obtain all the ID on the signers. If your policy says you have to CIP all signers as ours does, then you must do it or you will be written up for breaking your own policy. Since the program is risk-based I assume you can have a policy that says you will ID the association only. Good luck with it and hope this helps you a little.

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...the principals change annually upon elections and have no vested interest in the association...

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That analysis applies to church accounts as well as many others. I'm not certain why condo associations should be given preference in this regard.

Perhaps condo associations are low risk enterprises for money laundering and terrorist financing, so an exception for identifying all signatories can be justified. If your CIP does not provide for exceptions, it will be necessary for you to go back to the board and have it revised. Is it really worth the board's time?

Finally, I've also heard a number of stories about condo associations imploding. Personally, I would rather have the greatest amount of quality documentation I can get and be absolutely certain of who I am dealing with in that circumstance.