If your bank has stated in the policy that monetary instruments are not sold to non-customers, if you sell a monetary instrument to a loan-only customer, have you violated your own policy? Say you allow a loan-only customer to purchase a cashier's check for $4,000...is that ok because they are technically an established customer, but you would have to collect the additional items of identification as if they were a non-customer because they do not have a deposit account? In other words, we haven't technically broken our policy, but we do need to collect the additional information pieces?

All depends how you define a customer.

If they have a loan with the bank, I'm not sure how they are not a customer?

If it was a sold loan only, or a series of sold loans, I could see how this could be a good discussion to have though.

Look at what “extra” identifying pieces you need for a non-depositor vs. a depositor. “Address, social security number, birthdate.” These should look very familiar to you. CIP! If the loan was closed after 2003, you should have all the required record keeping information somewhere in the bank already. Where I often cite banks for violating their own policy is when they sell a monetary instrument to a business account signer incorrectly thinking that they sold the instrument to the business. Only natural persons can buy monetary instruments regardless of the name in a remimiter field. Unless there is a carve out in the policy for this, a business account signer is a non-customer and not eligible to make the purchase. A loan customer is still a customer and this would not violate policy provided that it says customer and not depositor.

Agreed that we should have all of the information for the "enhanced" reporting requirements for non-deposit account customers already on file and accessible. I am thinking that those loan-only customers that have to be reported on the Monetary Instrument Log will have to have the additional reporting items that are required for non-customers. I see that what you are saying it is not technically a violation of our policy to not sell the instruments to noncustomers because we do define these loan only folks as customers.

Thank you for explaining your stance on the authorized signer. I think we have a little work to do with our policy.

One of the thoughts was that we indicate that we will not sell a monetary instrument to any person that does not have a Customer Information File (CIF) built in our core system. We are currently building CIFs for authorized signers on businesses. So if we have a CIF built for the Authorized Signer and they come in to purchase the cashiers check, technically we would not be in violation of our policy and we would just have to make sure we collect the additional information required for non-customers, right?

Thanks!

So straight from the exam manual...these are the requirements that are on the "non-depositor" list that are not on the "depositor" list.

Address of the purchaser.
Social Security or alien identification number of the purchaser.
Date of birth of the purchaser.
Specific identifying information for verifying the purchaser’s identity (e.g., state of issuance and number on driver’s license).

Restricting sales to individuals for which you already have this information on file (such as in a CIF record) is one way to go provided that we have all of this for loan online customers and business signers.

That makes perfect sense to me. Thank you for your time in tackling this subject with me