for time deposits, chex systems is not contacted. subsequently, should the time deposit account holder open a savings or checking account, chex systems is not contacted because of the existing relationship (the time deposit). chex systems is contacted for regular savings and checking account openings absent an existing relationship.

should chex systems be contacted for time deposit openings? should chex systems be contacted for all savings/checking account openings regardless of existing relationships?

on a unrelated matter, should account openings be permitted with a "po box" address. our bank does. thanks.

I woudl recommend contacting Chexsystems on all new customers regardless of accoutn type for exactly the reason you stated. This is especially critical if Chexsystems is doing your OFAC searches for you. Check your CIF system to see if there's some means of noting on the customer profile whether or not this step has been completed. This will keep you from spending money on redundant inquiries.

Regarding the PO Box issue- CIP requires a physical address, so having only a PO Box on a customer is simply not compliant. Again, go back to your CIF system- see if there is a way for you to differentiate between a physical address and a mailing address so you can still deliver the customer correspondence to the PO Box.

thanks, i am checking the patriot act now (cip).

chex system may not only be used for previous negative banking relationships, but it also provides a negative response for identifying information that may erroneously supplied by the customer or input improperly by the employee. It also, if you subscribe, performs an OFAC verification. Since time deposits may be considered high risk, this type of verification may enhance your AML procedures and CIP. Therefore, IMHO, I would run chex system verification for time deposits.

Regarding existing accounts, this may depend, if they are currently in good standing and verification previously performed there may not be a benefit, simply cost. However, if your bank reports deposit accounts to chex systems, I have, believe it or not, had customers who had previous c/o accounts try to open another account at the same bank. If your system does not reflect c/o deposit accounts, chex system review of customers with previous relationships may assist with recovery.

Allowing PO box only for an address will create non-compliance with the Patriot Act and BSA. Customer may supply PO Box as mailing, however, I would always obtain and verify a physical address.

Have you run into any CIP problems when someone wishes to open an account, but her ID shows a PO box instead of a residence address? Are you refusing those until they change id to residence address or are you requiring other documentation and opening?

CIP meaning customer identification process.

Do we have to comply with Patriot Act NOW? We placed full compliance of Patriot Act on back burner (due to end of year; exams; audits, etc) until final word is received on effective date. How wrong are we? Thanks, (I think)

Not required YET, but was wondering how others plan to handle that.

We call Chexsystems for each new relationsip, particularly transaction acccounts, as well as for services where our possibility of loss or fraud are high. So, we call when they first walk in the door, regardless of the type of account they open. If they open a checking account 6 months later, we would call again. If the order their first ATM or debit card 2 years later, we would probably call again. Some of our greatest losses have come from "known members" who suddenly open checking accounts. Sometimes they do that because they have been closed out elsewhere.

I have heard of some money-laundering schemes involving time deposits. A customer opens a time deposit account with cash (under $10,000 to avoid CTR filing), then later obtains a loan secured by the CD (clean money). Customer defaults on loan, bank takes CD, and thinks they're okay. Then the scheme is uncovered and the CD funds have to be turned over. Now the bank is out 100%. These are small scams individually, but can be perpetuated against a large number of institutions using multiple front people with phoney IDs. It's worth the money to run the scan.

I too have a problem with only getting a P.O. Box for address, and am looking forward to the USA PATRIOT Act to help me get this changed.