Customer has recently moved to our area and wants to open an account. The address on the driver's license is from former location. Customer gives us his current address. Are we required to get something from him (utility bill, etc) that proves current physical address? How do we verify physical address?

Look to your policy. CIP requires you to resolve substantive discrepancies...I would say address is one of them. You need to see what is acceptable as per your policy. With that being said, items such as lease agreements, utility bills, etc, that show the current new address, should suffice.

We are in the process of reviewing all policies and procedures. I want to be able to be in compliance but also want to be able to help a new customer. Do you require some proof of address verification before the account can be opened?

We do.

We do not verify address before the account is opened (although if ID is presented that includes an address, that must match the address the customer is verbally telling us otherwise we have a discrepancy that needs to be resolved prior to opening the account.)

We do send a new account welcome letter to the address of record. If that gets returned as undeliverable, there are processes in place to research, and take subsequent action (I do not remember exactly what is done, perhaps a hold until resolved).

our CIP procedures are the same as happyauditor.

In the past if the address did not match, we made a notation of "recently moved" in the CIP documentation and that was sufficient with examiners. For some reason, it was switched that we were requiring proof of physical address. The CEO is thinking this may be too strict and if examiners are okay with documenting the difference, we should be good.

Good luck with that. How you might think that a statement by the bank or the customer that "don't worry that the my address doesn't match my government ID because I recently moved" clears a substantive discrepancy is a little beyond me. If your examiners have been OK with it, there will come a time when they are not.

1020.220(a)(3) Recordkeeping. The CIP must include procedures for making and maintaining a record of all information obtained under the procedures implementing paragraph (a) of this section.

(i) Required records. At a minimum, the record must include:

(A) All identifying information about a customer obtained under paragraph (a)(2)(i) of this section;

(B) A description of any document that was relied on under paragraph (a)(2)(ii)(A) of this section noting the type of document, any identification number contained in the document, the place of issuance and, if any, the date of issuance and expiration date;

(C) A description of the methods and the results of any measures undertaken to verify the identity of the customer under paragraph (a)(2)(ii)(B) or (C) of this section; and

(D) A description of the resolution of any substantive discrepancy discovered when verifying the identifying information obtained.

You are directed to verify the address, not explain why you cannot verify the address. It's irrelevant, but I've seen banks criticized in written reports of examination for using "customer recently moved" as the excuse for not verifying an address. It's sad that there has to be a regulation that says this is required...

Maybe this is specific to my area, but verifying addresses is somewhat of a challenge in NYC, as purchasing an apartment is beyond what most people can afford. We typically see a DL that doesn't match an address. We require a copy of a utility bill as verification of the new address. Given that you can obtain a copy of this document online, it's not really an issue.

I think the point is that you see an address discrepancy and you have to reconcile it. What documentation you will accept to accomplish that step is part of your CIP procedures, if not the policy itself. But "customer recently moved" doesn't document anything by itself.