On March 21, 2016, the Banking Agencies, along with the Financial Crimes Enforcement Network (FinCEN), issued guidance to banking institutions on applying customer identification program (CIP) requirements when issuing prepaid cards. The guidance issued applies to banks, savings associations, credit unions, and U.S. branches and agencies of foreign banks. With regard to CIP requirements, the guidance indicates that a supervised financial institution’s CIP should “apply to the holders of certain prepaid cards issued by the institution as well as holders of such prepaid cards purchased under arrangements with third-party program managers that sell, distribute, promote, or market the prepaid cards on the bank’s behalf.” Moreover, the guidance directs supervised financial institutions to obtain certain information sufficient to verify the identity of the cardholder.
The guidance can be found at: http://www.occ.gov/news-issuances/bulletins/2016/bulletin-2016-10a.pdf.
