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USA PATRIOT Act Confusion

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We are having a misunderstanding at my financial institution about the USA PATRIOT Act. We were first opening corporate accounts and gathering identification documentation and social security numbers on all the signers on corporate accounts. We were then instructed that it was unnecessary to obtain this information on the signers. Then about a year later we were instructed that the USA PATRIOT Act does require us to get this information. Does BSA or the PATRIOT Act require financial institutions to get ID for signers on corporate accounts as of 2007? If it does not, where can I find this information?

First, background. Section 326 of the USA PATRIOT Act is implemented by Section 103.121 of the so-called "BSA Regulations" found at 31 CFR Part 103. That section and section 326 are often called the "CIP rule." The confusion you describe has nothing to do with changes to Section 326 of the law or Section 103.121 of the regulation, because there have been no changes since October 2003, when Section 103.121 became effective. The likely source of confusion is the relationship between the legal and regulatory minimum requirements for a customer information program (CIP) and the requirements of the CIP adopted by your bank's board of directors. In many, if not most, cases, bank CIPs are stricter (have tighter requirements) than the minimum standards found in the regulation.

As for signatories on corporate accounts, the regulation does not require that you consider them "customers" for the purpose of your CIP. As non customers, these individuals do not have to be be subjected to your bank's CIP requirements (four ID factors and verification). However, many bank CIPs require that ID information be collected from corporate signatories and that the ID data be verified. If your bank's CIP has such a requirement, it must be adhered to, or your bank can be cited for non compliance with your own policies. In short, you need to familiarize yourself with what your bank's board-approved CIP and procedures require. That is the standard you should be following.

First published on 7/09/07

First published on 07/09/2007

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