VIDEO: Minimum CIP Requirements
In this Compliance Clip (video), Adam talks about the minimum requirements for a financial institution’s Customer Identification Program. This is a BSA topic.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about the minimum Customer Identification Program requirements in your organization. This, of course, is a BSA topic.
As a high-level overview, let's talk about what a Customer Identification Program is. Of course, what this is, is this is required for each financial institution. You must have your own Customer Identification Program written as part of your BSA/AML policy. It must be designed to help your financial institution form a reasonable belief that you know the true identity of each customer who is opening a new account. So this applies both on the deposit side as well as on the lending side.
Within your Customer Identification Program, you have to verify through both documents and non-documentary verification, but what you require is going to be based upon your risk assessment and what is defined in your BSA/AML policy. Your policy is really dictating this. However, there are some minimum requirements, essentially four things, that need to be in your Customer Identification Program.
These include, first of all, the customer's name. We have to have the name of the customer, whether it's an individual or an entity. For an individual, we have to have their birth date. We also have to have a physical address of where the customer is located. And then we have to have an identification number, which typically for US persons is going to be a Social Security Number. Those are the four things that we have to have.
Again, what else is going to be required in your CIP programs is going to be based on your policy and you have to have some pieces that are documentary verification, like a driver's license and other things like articles of incorporation for an organization. Then some things are non-documentary verification, like a credit report or some other type of verification. So that's what's required. Those are the bare minimum requirements of a CIP program. But of course, what you need to follow is what's in your defined BSA/AML program in your financial institution because you're going to base that on a risk assessment and it's going to be designed based on the size, complexity and risk at your specific institution.
That's all I have for you for this Compliance Clip.