why is BOA asking citizenship?

Posted By: Burgess

why is BOA asking citizenship? - 07/30/18 01:15 PM

So per this article https://www.kansas.com/latest-news/article215688615.html

BOA is asking Existing customers what their citizenship status is....am I missing something here, there is no requirement for this question is there assuming you have on file the address, drivers license and ss#.
Posted By: ACBbank

Re: why is BOA asking citizenship? - 07/30/18 01:26 PM

You require clients to provide any information you desire as part of your onboarding package. This request makes more sense for certain types of business units (Private banking, wealth management, etc.).
Posted By: Darth HMDA, CRCM, CAMS

Re: why is BOA asking citizenship? - 07/30/18 06:07 PM

Saw that... hope theyre not doing that in California or they are going to be in court..
Posted By: Lestie G

Re: why is BOA asking citizenship? - 07/30/18 06:15 PM

MSN article says they were long time customers. Thought the request was a scam, so they threw the letter away. Then B of A restricted their access to their account.

I sure hope there's more to this that we don't know, because if not, this is scary.
Posted By: Buddy the Elf

Re: why is BOA asking citizenship? - 07/30/18 06:29 PM

Originally Posted By Burgess
So per this article https://www.kansas.com/latest-news/article215688615.html

BOA is asking Existing customers what their citizenship status is....am I missing something here, there is no requirement for this question is there assuming you have on file the address, drivers license and ss#.


There is a BSA expectation/requirement to identify, monitor, and mitigate the risk associated with Non Resident Aliens. I wonder if this "outreach" was possibly in response to an exam or audit finding that they needed to enhance their NRA monitoring. If they have existing customers, I'm not sure how they would determine if they were US Citizens or not without straight out asking them.

As far as restricting access, I'm not sure I agree with that but sometimes the only way to get a response is with drastic measures.
Posted By: HappyGilmore

Re: why is BOA asking citizenship? - 07/30/18 07:29 PM

Quote:
“If we don’t hear from a customer in response to our outreach,” she said, “as a last resort, we may restrict the account until we can confirm it is in compliance with regulatory requirements” and safe from identity thieves.


ahh, it was frozen for their own good, to protect them from identity thieves...
Posted By: MyBrainHurts

Re: why is BOA asking citizenship? - 08/01/18 03:23 PM

What I don't understand is that they asked for his driver's license and then unfroze the account. A DL doesn't prove citizenship. My daughter-in-law has a DL and is not a citizen. She had a DL when she just had a student visa.
Posted By: Valley girl

Re: why is BOA asking citizenship? - 08/01/18 03:56 PM

Maybe they figured out that it's not a regulatory requirement and that freezing an account to get information was probably not the best way to handle the situation.
Posted By: Elwood P. Dowd

Re: why is BOA asking citizenship? - 08/02/18 05:43 PM

Quote:
You require clients to provide any information you desire as part of your onboarding package.


Engrave that in granite. If potential customers don't like it, they can vote with their feet. "Citizenship?" is not part of CIP, but it's the first due diligence question banks should ask consumers at account inception.

After the account is on the books, you can still ask questions and,if you don't get answers or you don't like the answers you get, you can unilaterally terminate a deposit relationship relying on contract terms and proper notice.

What you cannot do is "freeze" the account. "We are all powerful!" is the banking mantra that spawned most consumer protection regulations.
Posted By: Valley girl

Re: why is BOA asking citizenship? - 08/02/18 08:03 PM

We have an account at Bank of America - our mortgage was there up until a year ago, and my husband's business account is there. I do not use the Bank of America account much, so I asked my husband last night if we had received notification on this. He said yes. He actually filled out their form because it would not let him into the online banking program until he did it. Hopefully this is a one and done situation.
Posted By: edAudit

Re: why is BOA asking citizenship? - 08/14/18 02:43 PM

Not to take the side of a bank that I have no knowledge of but who know what the regulators are asking of BoA as part of their Due Diligence.
Posted By: LiveFunLife

Re: why is BOA asking citizenship? - 08/14/18 03:43 PM

I lean towards Ken's thoughts. Putting a "freeze" on the account in place of other means seems over inflated.
Posted By: HappyGilmore

Re: why is BOA asking citizenship? - 08/15/18 06:56 PM

Originally Posted By LiveFunLife
I lean towards Ken's thoughts. Putting a "freeze" on the account in place of other means seems over inflated.
of course, it did get the information that previous requests for were ignored...and it also garnered a lot of negative publicity...
Posted By: LiveFunLife

Re: why is BOA asking citizenship? - 08/15/18 07:16 PM

I cannot argue the efficiency of the freeze that is for sure
Posted By: Elwood P. Dowd

Re: why is BOA asking citizenship? - 08/16/18 09:50 PM

When CIP took effect my Mom's bank, a super regional, wanted some information in connection with the automatic renewal of a time deposit. They letter they wrote her said they would freeze all of her accounts if she did not provide the information by their deadline.

I sent the CEO a certified letter saying they could certainly refuse to renew the time deposit if they chose to, but if they froze unrelated accounts I would make certain she sued them by the next day. (All her sources of income were directly deposited to her checking account and all of her recurring bills were directly debited to the same account.) I asked him to consult with the bank's legal counsel and please call me so I would know how to proceed. He called to apologize.

Banks cannot just freeze a customer's account because it pleases them to do so.
Posted By: thomasj

Re: why is BOA asking citizenship? - 08/17/18 04:38 PM

In reading the article, of course it is misleading. No, CIP does not require you to obtain citizenship details, nor is it something that is required to be updated. The citizenship question is something that you need to ask for customer due diligence and I would imagine any bank that has not already done so would fall under scrutiny for that decision. If it is a big enough risk, I can see regulatory pressure to do so for existing customers.

The article did not say that B of A froze the customer's account, it sounds like they turned off the customer's debit card. Could this be considered a jerk move - absolutely but it is different from freezing the account entirely. Is it an effective way to get a customer's attention - absolutely. I may or may not have hot carded a customer or two who were unresponsive when trying to investigate suspected fraud - few things will get them to call quicker than shutting off their debit card.
Posted By: Elwood P. Dowd

Re: why is BOA asking citizenship? - 08/19/18 10:24 PM

If my bank threatens to cut off my ATM/debit card for any reason not recited in its disclosures I'll channel Dirty Harry and say: "Make my day." grin

Navy Federal Credit Union?
Posted By: ACBbank

Re: why is BOA asking citizenship? - 08/20/18 12:40 PM

When you have to undergo some type of remedial action at larger FI's this may be the only way to get a response from a client other than sending a closure letter. Many of the posters here work at community banks but imagine trying to remediate 500M accounts? How about 1MM? Many clients do respond, but there is always a population that don't. I can't say for sure, but I would opine this is probably a last ditch effort to get a response from a subset of clients.
Posted By: thomasj

Re: why is BOA asking citizenship? - 08/20/18 01:38 PM

Originally Posted By Ken_Pegasus
If my bank threatens to cut off my ATM/debit card for any reason not recited in its disclosures I'll channel Dirty Harry and say: "Make my day." grin

Navy Federal Credit Union?


Certainly this is easier to justify when you are dealing with fraud and is not something I would encourage to get someone to respond to a CDD question. I guess the alternative would have been to send them a closing letter - telling them if they didn't respond by a certain date their account would be closed. If they did not respond or read the letter, the result would be similar with the exception of them receiving a cashier's check for their balance. I agree that refusal to answer a CDD question should not be dealt with by denying access to funds - the most you could do would be to close the account and send them a check. What could be done with loans if the customer is unresponsive?

I think the public and media perception is that they have the right to not answer some of the questions that banks are expected to ask in order to comply with CDD expectations without repercussion of any kind. I'm guessing that had BofA closed the customer account, the media story would not have been much different. I think the underlying theme of the story was pointing towards profiling of the customer due to her name.

Most institutions that I have talked to who have had to gather this kind of CDD on existing customers flagged the customer to be updated, then would prompt the customer facing employees to ask the questions when the customer comes to the institution. I guess the problem is that people don't go to the bank anymore - most things are done online or through other electronic channels.

Imagine if when you logged into your online banking there was a pop up asking you to confirm your citizenship (or enter another CDD question) before allowing you access. Perhaps that is where this is all heading.
Posted By: Burgess

Re: why is BOA asking citizenship? - 08/20/18 02:26 PM



Article in todays American Banker about this.

House Democrat calls for hearing on banks' citizenship requirements
Posted By: John Burnett

Re: why is BOA asking citizenship? - 08/20/18 03:02 PM

Originally Posted By thomasj
I think the public and media perception is that they have the right to not answer some of the questions that banks are expected to ask in order to comply with CDD expectations without repercussion of any kind.


And that's one significant reason for making sure this soliciting of information is ideally done before opening the customer relationship. It's the one time you have any effective leverage.
Posted By: thomasj

Re: why is BOA asking citizenship? - 08/20/18 05:20 PM

Originally Posted By John Burnett
Originally Posted By thomasj
I think the public and media perception is that they have the right to not answer some of the questions that banks are expected to ask in order to comply with CDD expectations without repercussion of any kind.


And that's one significant reason for making sure this soliciting of information is ideally done before opening the customer relationship. It's the one time you have any effective leverage.


The problem is that regulators expect you to have the level of CDD information that is acceptable today for customers who were onboarded 25 years ago. You have to come up with a plan to gather that information (gathering it when new accounts are opened or when CIF maintenance is done) but usually regulators are not patient enough to allow that to run it's course. So you end up flagging customers so that when they come in to conduct a transaction a front line employee is prompted to gather it. I'm guessing that once those avenues are exhausted, the institution has to resort to sending out letters requesting the information which probably is very ineffective since customers never read the correspondence that's sent to them. In response then the bank takes the controversial stance to restrict access until the customer responds. I never have felt sorry for BofA since most of their misdeeds are of their own making; however, I understand how this particular one evolved.
Posted By: edAudit

Re: why is BOA asking citizenship? - 08/21/18 10:54 AM

https://www.thenation.com/article/why-is-bank-of-america-asking-clients-about-their-citizenship/

The official non-answer
Posted By: RockChucker, CAMS

Re: why is BOA asking citizenship? - 08/21/18 03:01 PM

Hey ed, any chance I could get the cliff notes on the article you posted. Our IT system is pretty tight so I can't get it.
Posted By: HappyGilmore

Re: why is BOA asking citizenship? - 08/21/18 03:28 PM

it is a fairly biased article implying they are asking for citizenship so that non-citizens can be reported to the government by banks and that illegal aliens can be treated poorly and discriminated against...
Posted By: edAudit

Re: why is BOA asking citizenship? - 08/21/18 04:17 PM

Better known as the usual bank bashing without any facts
Posted By: RockChucker, CAMS

Re: why is BOA asking citizenship? - 08/21/18 04:48 PM

Ahh! Thanks for the clarification. Remind me not to subscribe to thenation.com
Posted By: thomasj

Re: why is BOA asking citizenship? - 08/21/18 08:03 PM

It's one of those things where the general population of consumers have not been privy to the fact that banks are required to apply enhanced due diligence to certain high risk groups. I can sense the outrage that could erupt if the story of how the big bad bank has decided to apply a different level of due diligence to the accounts of certain non-resident aliens breaks. There will likely be no mention that this due diligence is a regulatory expectation and how failing to comply is not an option, it will be viewed as oppressive, profiling, and discrimination. Of course if a story broke about a bank who failed to detect terrorist financing, there would also be outrage. Being in banking is a no win proposition no matter what you do it will be wrong.
Posted By: John Burnett

Re: why is BOA asking citizenship? - 08/21/18 08:13 PM

Anyone alive in this discussion (besides me) who remembers the big KYC proposal that went down in flames after the FDIC got thousands of angry comments? Pre-9/11.
Posted By: rlcarey

Re: why is BOA asking citizenship? - 08/21/18 09:31 PM

I do - however at my age remembering anything in detail from that long ago is a challenge.
Posted By: Princess Romeo

Re: why is BOA asking citizenship? - 08/21/18 10:30 PM

Originally Posted By John Burnett
Anyone alive in this discussion (besides me) who remembers the big KYC proposal that went down in flames after the FDIC got thousands of angry comments? Pre-9/11.


Yep - and the regulators then shifted the KYC components into SAR filing expectations and and non-SAR filing explanations - i.e. how can you explain that these activities are suspicious or are NOT suspicious if you don't know your customer?

Then 9/11 happened and all H-E-double-hockey-sticks broke loose.

And you know, I still hear people talk about how their uncle or accountant has told them to always be sure to deposit less than $10,000 in cash because otherwise the bank files a report with the IRS that will trigger an audit. For reals.
Posted By: thomasj

Re: why is BOA asking citizenship? - 08/22/18 12:50 PM

Originally Posted By John Burnett
Anyone alive in this discussion (besides me) who remembers the big KYC proposal that went down in flames after the FDIC got thousands of angry comments? Pre-9/11.
I remember this also. I wonder what those people think now... Basically after 911 they re-branded KYC into CIP and nobody said a word.

It's a no win situation. People will complain about invasion of privacy, profiling, and discrimination as we try to comply with CDD expectations; however, in the event that a money laundering or terrorist financing operation is uncovered, the bank will also be crucified for not recognizing it sooner.
Posted By: RockChucker, CAMS

Re: why is BOA asking citizenship? - 08/22/18 03:51 PM

Perfect example of "Never let a good crisis go to waste"
Posted By: P*Q

Re: why is BOA asking citizenship? - 08/22/18 04:18 PM

Originally Posted By John Burnett
Anyone alive in this discussion (besides me) who remembers the big KYC proposal that went down in flames after the FDIC got thousands of angry comments? Pre-9/11.
Yup! And I'm young! grin wink
Posted By: John Burnett

Re: why is BOA asking citizenship? - 08/22/18 05:52 PM

From where I sit, you are, Pam.
Posted By: P*Q

Re: why is BOA asking citizenship? - 08/22/18 06:38 PM

I was only messin' my friend! But I totally remember the outrage when KYC came out!
Posted By: McGruff

Re: why is BOA asking citizenship? - 08/22/18 08:55 PM

I remember one particular customer (one of those who exists in a state of perpetual outrage) urging me to write my congressman and stop KYC.