On July 31, the Fed, with the concurrence of FinCEN, issued an order exempting banks supervised by the Fed from a Customer Identification Program (CIP) rule implementing Section 326 of the USA PATRIOT Act. As previously covered by InfoBytes, the OCC, the FDIC, and the NCUA issued a nearly identical notice granting the same exemption. The exemption will permit banks to use an alternative collection method to obtain tax identification number (TIN) information from a third-party rather than from the customer. A bank must still otherwise comply with the CIP Rule, which requires written procedures for the bank to obtain TIN information prior to opening an account, assess relevant risks, and verify the identity of each customer.
The order followed from public input and agency analysis, citing how changes in consumer behavior and advances in identity verification led to this exemption. The exemption is optional, and banks must continue to comply with all other regulatory requirements under the Bank Secrecy Act.
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