Adverse Action List for the Examiner

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Question:

In preparation for an upcoming exam we have been asked to provide a list of customers or potential customers for whom the bank took adverse action on the basis of its CIP. The adverse action is causing confusion. Under what requirements do we consider it adverse action and put the customer or potential customer on this list?

Answer:

Answer by Jim Bedsole: I've not heard that terminology (adverse action) used in this context before, but I would guess they are looking for any accounts you have either declined to open or opened with transaction limitations because appropriate identity could not be verified. For those you opened with transaction limitations, they will be looking for your follow-up procedures to ensure proper identity verification was obtained within a reasonable amount of time.

Answer:

Answer by Kathleen Blanchard: I have seen this asked of banks in their exams. The regulators want to see a list of accounts that were declined because of inability to appropriately identify the customer under the bank's CIP program. For accounts opened without full CIP, they want to see how the bank made sure it followed up to obtain the required documentation.First published on BankersOnline.com 12/01/08