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Pre-need funeral accounts

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We have a customer (a funeral home) that would like to open numerous "pre-need" accounts for their customers. The owner of the funeral home has his customer's name and social security number, but in a lot of cases, no identification (some of his customers are in nursing homes and the accounts are requested by family members.) The accounts would be titled "ABC Funeral Home FBO John Doe," using the person's SS#. Our question: To comply with the USA PATRIOT Act and our CIP policy, how do we positively identify the customer if they do no personally come into our bank AND if the funeral home does not have identification on file for them to present to us at the time of account opening? Since the account is set up in the name of the funeral home for benefit of the customer, as long as we positively identify the funeral home as a business and the funeral director as the signer of the account, have we met the requirements for positively identifying our customer? We hate to refuse to open the accounts but we don't want to violate our own CIP policy which states that all accountholders must present valid ID in person. Help please!

The beneficiaries of these accounts -- perhaps in this case we might best term them "clients" -- are not your customers, since they have no signing authority over the accounts. This is not a case of the clients' having appointed an agent/attorney to act on their behalf. The funeral home owns these accounts, and is itself accountable to their clients.

You hinted at the answer to your question in the first four words: "We have a customer..." The funeral home gets CIP vetting according to the Section 326 rules and your bank's board-approved CIP. Whether your bank's CIP calls for vetting the clients is another matter.

First published on 10/03/05

First published on 10/03/2005

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