Required Beneficiary Info for CIP & KYC

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Question:

In regard to KYC and CIP, what personally identifiable information is the bank required to obtain for the beneficiary of an account? Full name, address, social security number and date of birth? We want to make sure that we are in compliance but a social security number and date of birth aren't always available for the beneficiary to the individual opening an account.

Answer:

The federal rule (31 C.F.R. 103.121) does not require that beneficiaries of an account be subjected to CIP requirements, they are not your customers under that rule. I have heard talk that the Florida Banking Department has directed that Florida banks consider the beneficiaries customers and obtain the requisite information, but I have not seen a copy of the directive. In any event, if your insitution's CIP program requires that you obtain the information, that's the rule you must go by, even if the federal rule doesn't require it.

UPDATE: We are delighted to hear that the Florida Bureau of Bank Regulation reads our weekly briefing. They were kind enough to let us know that the Bureau has not issued a directive that financial institutions consider the beneficiary of a deposit account a customer for CIP purposes. I am pleased to set the record straight, apologize for the error, and thank the Bureau's Chief for her speedy response.
-- John Burnett

First published on BankersOnline.com 11/27/06, updated 12/01/06