Collecting Financial Information

Question: We have just gone through a BSA audit and one of the exception items is asking us to implement a procedure within our new account area in asking customers for personal financial information. Our new account representatives have never been trained to ask for a financial statement or any kind of personal financial data such as "how much do you make at work", etc. The loan department is the only area that pulls financial data from credit bureaus and the like. I don't feel that this is necessary to properly identify our new customers when we have the basic procedures in place. Can you tell me if this is normal for operations personnel to start requiring new account customers to fill out financial questionnaires in order to open checking and savings accounts?

Answer: This is a great example of an examiner making up new rules. The CIP regulations do not specify the particular information that an institution should collect. The regulations leave most of the specifics up to the financial institution. The institution chooses these based on risk. The only basic standard is the minimum information such as name, address and government-issued identification documents. The idea of collecting financial information may be appropriate in some situations, such as a risk-based decision to collect that information from a new business customer. However, imposing that on all customers would clearly be a burden not just on the institution but, more importantly, on the customer. The burden simply isn't justified by normal risk.

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 6, 5/05