Academic journal article ABA Banking Journal

Can I Keep a Copy of a Customer's ID on File?

Academic journal article ABA Banking Journal

Can I Keep a Copy of a Customer's ID on File?

Article excerpt

Q: I am working for a new bank and am being told that Section 326 of the Patriot Act (the Customer Identification Program rule) requires that banks keep a copy of the ID that the customer provided. I have heard that many small banks such as ours keep the copy in the loan file and cite the Patriot Act. According to my peers, the examiners have not questioned this practice. Is this acceptable?

A: The CIP rule requires the bank to collect certain pieces of information about a customer and then verify the customer's identity. The rule then requires that the bank keep the information, name, physical address, date of birth and ID number such as a social security number or taxpayer identification number. It must also retain information about how it verified the identity. All of this will be set forth in the written CIP policy approved by the bank's board of directors.

See the CIP overview section in the FFIEC Bank Secrecy Act Examination Manual:

A bank's CIP must include recordkeeping procedures. At a minimum, the
bank must retain the identifying information (name, address, date of
birth for an individual, TIN, and any other information required by the
CIP) obtained at account opening for a period of five years after the
account is closed. For credit cards, the retention period is five years
after the account closes or becomes dormant. The bank must also keep a
description of the following for five years after the record was made:
* Any document that was relied on to verify identity, noting the type
of document, the identification number, the place of issuance, and, if
any, the date of issuance and expiration date.
* The method and the results of any measures undertaken to verify
identity.
* The results of any substantive discrepancy discovered when verifying
identity.

For many banks, the easiest way to demonstrate compliance is to retain a copy of the customer's driver's license. And, there are certain teller software packages that use the driver's license to identify the customer. However, while that complies with CIP, the question is what about Regulation B and the Equal Credit Opportunity Act. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.