This question is a perennial favorite! On one hand, the BSA (and beginning in 2002 - the USA PATRIOT Act) requires you to exercise reasonable care when opening accounts or providing services for non-customers. On the other hand, the ECOA (and Reg B) prohibits inquiries about protected characteristics (race, age, gender, etc.) revealed by a DL and its photo. Over the years, regulators have taken conflicting positions on this question and neither the BSA regs nor Reg B adress the question formally.
The concensus among compliance addicts seems to be that it's:
- OK for staff to request and review a DL to confirm ID (even though lots of fraud losses have resulted from fake DLs),
- OK to photocopy a DL if the copy NEVER finds its way into a credit decision, and
- Risky (from the Reg B perspective) to photocopy the DL and hold copies in files that can be accessed by employees who make credit decisions--including decisions about paying overdrafts.
Stay tuned for the PATRIOT Act rulemaking on customer identification. The Treasury Department will request public comments on a proposal to implement Section 326, and that will be the perfect time to request a formal resolution of this conflict.
First published on BankersOnline.com 12/3/01