What is a "Customer". We have on-us checks being cashed periodically that are within the realm ($3,000 or more) where our policy is to gather information on the conductor via our Teller Software. Call it the BSA Screen. I would like to hear your thoughts on how these transactions should be recorded - depending on how Customer is defined.

So, a former owner of a loan that paid off five years ago comes in the cash an on-us check for $7,000. He has no other relationships with the bank. His driver's license used originally for the old loan (which is on our system for quick reference) is now expired. We have no idea if the data listed in the system is accurate, except for his SSN, birthday and name.

I do not consider this person a "customer" for BSA purposes because he no longer has a relationship with the bank. We do have information on him, but we have no idea if it is current. Every time I query a teller, and ask them about customer status, they answer that if they are in the core system, then they are customers. I whole heartedly disagree. I think they should be entering the data as an on-us check being cashed by a non-customer.

Now this doesn't make a huge difference in our daily life at the bank, except I have to unravel who did what and make sure CTR data (if a CTR were ever required) is accurate. But I would like to settle the definition of Customer once and for all.

For CIP, if the account has been closed for more than 12 months then the individual is no longer a customer. If they open an account again after the 12 month period then you must do CIP on that individual again.

I don't believe there's a time limit of 12 months. Once you no longer have any active accounts with a bank, you are no longer a customer, even if you closed the account yesterday.

For CTR purposes I think it's expected that you have all information current as at the time of the transaction.

I didn't look up anything in the reg, but at our bank you are not a customer as soon as you have no active accounts.

Ditto

In general, any individual that doesn't have an open personal account/loan with the bank is not a customer. A signer on a corporation, regardless if we have their personal info is not a customer. And if they don't have a DDA or SAV account, remember they are a "non-customer" for monetary instrument purchases as well. I think if you try and carve out different definitions for CIP, check cashing, whether you have info on the core, etc, then you are going to create confusion and more room for error. IMHO, keep it simple.

When dealing with different regulations, one has to be careful about definitions. For instance, the definition of a customer for CIP is different than the "general" definition of customer in FinCEN regulations.

FinCEN - General Provisions


FinCen - Rules for Banks


For purposes of requiring your CIP process, the definition of a customer is different than it is for all other areas of BSA. An item to consider would be to define that in your Bank's policy using the "general" definition for anything other than your CIP process. For instance, if you are providing financial services and are relying on information that you have on file in providing those services, then that person is your customer.

In the case of cashing a check for a "former" customer, this is where your policy and procedure should be clear to front-line staff - are you relying on old information you still have in your system to cash the check? Or do you require the person to present a current form of identification before cashing the check?

Good Stuff. Thanks.