I've usually seen most FI's gather the 4 pieces of information at or before account opening. Verification usually occurs at some point down the road.

However, a LOB is requesting to open accounts by obtaining a copy of the application for the Tax Id. Has any one used this process? Any feedback from the regulators?

We, too, require the TIN to be provided when the relationship is established. Before making a decision on the LOB's request, you may want to first check your BSA/AML policy - if it says you don't open accounts without a TIN, the exception shouldn't be allowable.

Each LOB maintains a separate CIP Policy. They would like to update theirs to allow for the practice of obtaining the copy of the application for the Tax Id.

They wouldn't change their account opening procedures without first updating their CIP Policy. I'm not so much concerned about policy, as I am this turning into a criticism down the road.

I agree with my fellow Cape Codder. I also have a pragmatic objection to allowing accounts to be opened "pending TIN application." It complicates matters because now you have to have a policy or procedure concerning how long you'll allow the account to go without the new TIN, and imposes a follow-up procedure ("tickler" process) that will drive your new accounts people mad. The best time to ensure you have all the required information is when you still have the account opening under your control -- before it opens.

Just because the regulation permits it doesn't make it a good idea.

Putting a provision into its CIP that would allow a bank to open an account with only an application for a TIN seemed like a good idea in 2003. Based on experience in the interim, it has proven to be a time waster.

The CIP regulation requires the bank to get an identifying number, not a TIN.

As most U.S. born persons get an SSN shortly after birth and relatively few of them need to open a bank account before they are weaned, it does not make much sense to create an exception for them. As a U.S. business can obtain an EIN via the IRS web site on demand, there is no reason to make an exception for them either.

If the new "customer" is a non U.S. born individual, a variety of identifying numbers from their country of origin, including a passport number, satisfy CIP requirements. If they later obtain a U.S. SSN or ITIN and want to bring it in, that's dandy. If they don't, they don't.

Adding such a provision that requires follow-up where none would be required if the non U.S. number was accepted. Again, it's a waste of time. I would not do it even if the policy did provide for it.

What's a LOB?

Line of business. They are having some difficultly getting the necessary information immediately and wanted to know if this change would cause an issue.

I'm not a big fan of it, but I said I would look into it.

If your bank has a line of business that is having particular difficulty obtaining TINs (assuming it's dealing with U.S. persons) at account opening, I suggest reviewing the account opening process or try to determine what is special about the line of business that causes it such aggravation.

I just don't think it's credible. However, the CSR's will like it and they will let other "follow-up required" customers in through the same door.

However, a LOB is requesting to open accounts by obtaining a copy of the application for the Tax Id.

That really is a line that doesn't work for me anymore.

TINs are instant issue on-line now - there really is no application process anymore. Opening an account with a "pending" TIN application is like saying the check is in the mail when you have a credit card and a swipe machine in front of you.