The Financial Crimes Enforcement Network and federal banking agencies today issued an order allowing banks a new exemption to customer identification program rule requirements. As of today, banks are permitted, but not required, the option to collect taxpayer identification number information from third parties rather than directly from bank customers when opening accounts.
Under the CIP rule, banks must collect a TIN from U.S. customers who open accounts, which is usually their Social Security number. FinCEN last year asked for public input on the potential risks and benefits if banks were permitted to collect partial SSN information and use reputable third-party sources to obtain the full SSN prior to account opening, an exemption that was previously extended to credit card accounts. Last May, in response to this request, the American Bankers Association did not take a position, but informed FinCEN about relevant risks and benefits, noting that any change must carefully balance efficiency and effectiveness, including minimizing compliance costs.
The new order permits banks to obtain TIN information from a third party rather than the customer as long as the bank otherwise complies with the CIP rule.
“We recognize that the way customers interact with banks and receive financial services has changed significantly since 2001, when the initial requirement was enacted into law under the USA Patriot Act,” FinCEN Director Andrea Gacki said. “This order reduces burden by providing banks with greater flexibility in determining how to fulfill their existing regulatory obligations without presenting a heightened risk of money laundering, terrorist financing or other illicit finance activity.”
