This is a BSA question, but I thought this may vary from state to state, so I'm posting here.

What docs do you request when opening an acct for a local or state government entity? I know they don't meet the definition of a customer per the BSA Exam Manual, but there has to be something we can request to establish who can open and operate an account for a local gov entity.

bump

I would at least get something on the entity's letterhead declaring their intention to open an account at your bank and listing the signers they want to put on the account. Depending on the entity, that might be the best you can hope for. Some agencies/entities are more helpful than others.

In the case of municipal accounts, they should be able to provide you with a resolution/ordinance that specifies who has the authority to open and conduct business on an account, and where the account may be opened. In my experience, such decisions must be made by vote of the governing body at their regularly scheduled meeting.

That said, this really isn't a CIP issue. You are seeking to verify the authority of the individual(s) acting on behalf of the municipality, where CIP (if it were to apply) would be concerned with the identity of the customer (municipality).

I agree CIP doesn't really apply to the entity, from an AML standpoint, if we don't request some type of documentation from the entity, does it increase our risk of being used to launder money? I think it would.

My dilemma was deciding what to include in my CIP procedures when opening accounts for these types of entities and now should I include it in my CIP procedures since CIP doesn't apply? Am I overthinking?

It would be in your Account Opening procedures, but not CIP since a government entity is not a "customer" according to the regulation.

As JacFSB pointed out, just from a general bank operations protocol, you want something to document that the account is authorized by the entity and the person who will be signing on the account have the authority to do so.

Account Opening procedures are going to be much more than just CIP since your procedures should outline your internal process for opening an account: i.e. forms to be used, screens and commands in your processing system, how checks are ordered (for transaction accounts), etc. CIP should be addressed in your Account Opening procedures, and the Account Opening procedures should reflect what your CIP requires - but the two are not one and the same.

but not CIP since a government entity is not a "customer" according to the regulation.

Of course that is assuming that the bank carved out this exception within their board approved CIP.

Just to emphasize Randy's point -- CIP is what your board says it is. It's not unusual for a bank's Customer Identification Program (CIP) to be more robust than the bare minimum requirements found in FinCEN's regulations at 31 CFR 1020.220 http://www.bankersonline.com/regs/31-1000/31-1020-000.html#220.