The Federal Deposit Insurance Corporation, the Office of Comptroller of the Currency, and the National Credit Union Administration have issued an order exempting certain requirements of the Customer Identification Program (CIP) Rule. This action has been taken with the agreement of the Financial Crimes Enforcement Network.
The CIP Rule, part of Section 326 of the USA PATRIOT Act, mandates that banks and credit unions collect taxpayer identification number (TIN) information from customers before opening accounts. The new exemption allows these financial institutions to use alternative methods to gather TIN information from third parties instead of directly from customers.
This order is applicable to all entities supervised by these agencies. Since its initial issuance in 2003, there have been significant changes in how consumers access financial services. Additionally, there has been an increase in customer hesitancy to provide full TINs due to concerns over data breaches and identity theft. The exemption aims to offer flexibility while maintaining compliance with the CIP Rule.
Despite this change, banks and credit unions are still required to have risk-based procedures that enable them to reasonably verify each customer’s true identity.
