CIP in Emergencies

In the wake of the extensive damage brought by Hurricane Katrina, there are two problems. First, people need access to money - fast. This means access to existing accounts and opening accounts in new locations. Second, we may have difficulty determining their identities as documents may be missing or damaged.

Fortunately, FinCEN and the financial institution regulators have issued some guidance, taking into account the special problems that may exist. First, you must collect minimum information: the customer's name, address, date of birth, and TIN. It is not necessary to have documentation that verifies the identify of the customer before opening the account. The regulations allow both documentary and non-documentary methods. The basic required information can be compiled without documentation and verified later. Non-documentary verifications involve checking out the customer's information using sources such as credit reports and information available from federal agencies.

You have a "reasonable" period of time to verify the customer's identity. The agencies recognize that in the context of the hurricane damage, a reasonable period of time may be longer. Whatever your institution chooses to do with hurricane victim customers, the decision should be reflected officially in policies and procedures.

Another issue can be determining the customer's address. The house or apartment building may no longer exist, but the address still does - at least in theory. That address should be collected because that may be the address reflected on verification sources such as credit reports. But you will also need information on where the customer is currently located. There may or may not be an actual address. At a minimum, you should get a description of where the customer is living temporarily.

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 11, 10/05