Is it necessary or required to do a CIP on an individuals DBA business/Sole Proprietor Account?

Absolutely. The info you obtain would be the individuals identifying information. SSN, DOB, Phys. address, and identification (generally a drivers license, State issued ID, or passport).

So you only do the individual or do you CIP both individual and the business?

You need to CIP the individual and obtain info on the business (many banks obtain business licenses, etc) so you understand the person you are doing business with and know what kind of activity to expect. So, CIP and Customer Due Diligence at least at a basic level. More may be needed based upon what you find out.

According to the regulation, there is only one "customer," the individual. On a good day, the "business" is nothing but a figment of somebody's imagination.

A banker in Arkansas explained it to me that the name of the sole proprietorship was of no more importance than the owner's nickname and she would have put that in the account title too if he asked her too.

However, as Kaybee says, its the banker in you that wants to verify that this is a bona fide account title. You want assumed name certificates, business licenses, tax certificates, or any other government issued document that indicates this is a legitimate business enterprise.

And, if you ever are tempted to exempt this business account from CTR filing requirements, you will need documentation that it is a commercial enterprise that "is registered as and eligible to do business within the United States or a State."