examine and CIP
Posted By: Anonymous
examine and CIP - 05/08/05 04:37 AM
Has anyone experienced an examine that covered CIP? One of the findings in our exam was that we were not documenting how we verified the identity of a customer. We did have copies of identification, such as a driver's license, in new account files. But, the examiners were saying that we need to go a step further by documenting (writing a comment or completing a form) HOW we verified a person's identity. We thought we were doing that by taking a copy of the DL. The comment was that anyone can put a DL in a copy machine but not really look at it. That sounds totally nuts to me. Can't anyone also just write a comment or mark a box too. Apparently this is recent interagency guidance.
That sounds nuts to me too. The DL is the verification and you are retaining the verification (as CIP requires). A comment is NOT necessary.
However, if the DL contains info that doesn't match the ID info (for instance, if the address on the DL doesn't match the ID because they recently moved), then you must document the resolution of this discrepancy. We are seeing this cited a lot.
Could this be what the examiners were saying?
That sounds nuts to me too. The DL is the verification and you are retaining the verification (as CIP requires). A comment is NOT necessary.
However, if the DL contains info that doesn't match the ID info (for instance, if the address on the DL doesn't match the ID because they recently moved), then you must document the resolution of this discrepancy. We are seeing this cited a lot.
Could this be what the examiners were saying?
Posted By: Anonymous
Re: examine and CIP - 05/09/05 03:29 PM
We did have a one exception where the PB did not document how they verified the address of the individual when the DL was out of state. Okay, further identification was required. However, even when the information on the DL did match it was an exception. The examiners did mean that we must document how we verified the identification of the individual.
Here is the their source: 31 CFR 103.121 (b)(3)
(I think it is specifically the (C) section that they are saying points to the need for documenting how you verified).
(3) Recordkeeping. The CIP must include procedures for making and maintaining a record of all information obtained under the procedures implementing paragraph (b) of this section.
(i) Required records. At a minimum, the record must include:
(A) All identifying information about a customer obtained under paragraph (b)(2)(i) of this section;
(B) A description of any document that was relied on under paragraph (b)(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 (b)(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.
Posted By: DawgFan
Re: examine and CIP - 05/09/05 08:32 PM
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Hogwash!
David, please be more brief next time. It's taking too long to read your replies. 
Well - perhaps to make the examiner happy you write on the copy of the DL:
ID verified by DL license - the copy herewith so referenced.
Below that, perhaps you can write the phrase cogitor ergo sum or write in the definition of "is."
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Well - perhaps to make the examiner happy you write on the copy of the DL:
ID verified by DL license - the copy herewith so referenced.
Seriously, is that what the examiners wants from you Anon?
We detail our procedures for CIP in our BSA policy. We were just examined and the examiners were happy with how we were handling CIP.
Posted By: Anonymous
Re: examine and CIP - 05/10/05 07:36 PM
Anonymous
You said "did have copies of identification, such as a driver's license, in new account files."
Now I am confused ---- I thought COPIES of Drivers Licenses was a no-no as far as regulators are concerned.
Posted By: deppfan
Re: examine and CIP - 05/10/05 07:54 PM
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I thought COPIES of Drivers Licenses was a no-no as far as regulators are concerned.
Only if you keep them in consumer loan files.
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I thought COPIES of Drivers Licenses was a no-no as far as regulators are concerned.
Only if you keep them in consumer loan files.
No, no, no!!! It is not a problem to have DL's in loan files - whether consumer loans or not. This was addressed in the CIP FAQ's that were originally released in January 2004 and again on April 28, 2005. [refer to Q&A #2 on page 11 under 31 CFR §103.121(b)(3)(i)].
You should also do a search for "Copying drivers licenses" here at BOL. We have discussed this several times in the past. All of the regulators have announced that it is NOT a violation to copy DL's for CIP purposes.
Posted By: Anonymous
Re: examine and CIP - 06/04/05 07:04 PM
David, your CIP download file on your web site has the following statement:
If you obtain copies of driver’s licenses to verify information collected from the customer, copies of
the license should "be not be" retained in the credit file. Just FYI. It sounded confusing...
Posted By: Anonymous
Re: examine and CIP - 06/06/05 09:28 PM
I was under the impression that you did not have to verify every piece of information you collected so long as you could form a reasonable belief that you knew the true identity of the person. So, why would you have to document why the address on the account is different from the driver's license if you are confident with the customer's identity? Is this a best practice or a requirement?
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David, your CIP download file on your web site has the following statement:
If you obtain copies of driver’s licenses to verify information collected from the customer, copies of
the license should "be not be" retained in the credit file. Just FYI. It sounded confusing...
Thanks for pointing that out. It is amazing how many times we proof read these articles, yet typos still get out.
Thanks again.
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I was under the impression that you did not have to verify every piece of information you collected so long as you could form a reasonable belief that you knew the true identity of the person. So, why would you have to document why the address on the account is different from the driver's license if you are confident with the customer's identity? Is this a best practice or a requirement?
You don't have to verify everything, but if you have a verification document that differs from the identification information, you now have a discrepancy. Section 326 says you must resolve discrepancies.
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I was under the impression that you did not have to verify every piece of information you collected so long as you could form a reasonable belief that you knew the true identity of the person. So, why would you have to document why the address on the account is different from the driver's license if you are confident with the customer's identity? Is this a best practice or a requirement?
You don't have to verify everything, but if you have a verification document that differs from the identification information, you now have a discrepancy. Section 326 says you must resolve discrepancies.
Talk to my sister who recently got married and moved! Our country is safe from newlyweds getting a bank account. 
Posted By: Anonymous
Re: examine and CIP - 06/06/05 10:55 PM
Ken, where are you?? Do you agree that address discrepancies have to be resolved and if so, how?
Posted By: Anonymous
Re: examine and CIP - 06/07/05 10:22 PM
Any other opinions on this topic?
Address discrepancies are supposed to be resolved. Remember, physical address is one of the components of the CIP information. If your customer gives you one address, but your documentary and/or non-documentary verification has a different address, you need to resolve it.
The same would apply if your customer gave you a name, and your verification came up with a different name. Ditto for date of birth and tax payer ID number.
As Bonnie and David have said, if there is a discrepancy the record retention requirements indicate you should show how it was resolved. If the address the customer gave you does not match the address on the drivers license you used to verify his DOB and name, then you need another source, documentary or non documentary to support the address he offered.
It is true that you are not required to verify all four of the key pieces of information, but if you find a discrepancy in any one of them you cannot ignore it and still reach the conclusion that you have a reasonable belief of the customer's identity.