Our bank has an exception list for CIP. In a previous BOL training the speaker suggested a bank not have an exeption list and if an examiner ask for one then it was a "trick question", because a bank shouldn't have one. However, what if our policy states that we will allow 10 days to collect information that was not collected upfront. Is a CIP policy allowed to have this or should we state we will not open the account if the person/business does not have ALL the required documents at account opening. Thanks.

We have a list of exceptions that can be received after account opening however these items have to do with our Policy and not with the Regulations. All items required by the regulation cannot be waived. Any account with an exception is monitored and if not cleared, the account is closed.
Whatever you state are your guidelines you have got to follow thru. If you state the account will be closed in 10 days, then you need to ensure the account is closed in 10 days.

At our last exam in April 06 we were asked for our exception list. We were told to keep the list up, report it to the BOD just like the loan side. An exception to policy or regulation is an exception the BOD should know about.

You may make exceptions so long as your CIP says exceptions may be made on a case by case basis, for example, with approval from a manager or officer. If your CIP allows for exceptions, then use an exception log for keeping track of them and for documenting how many you've had and for what reasons. I'd say the main exception we have here is not having a TIN for new businesses. But you could also have an exceptiopn for an expired license where you saw the renewal paperwork but not the new license itself. Each department has a CIP exception log and I request it be sent to me monthly so I can keep it with my BSA files.

"You may make exceptions so long as your CIP says exceptions may be made on a case by case basis, for example, with approval from a manager or officer. "

I disagree - you cannot vary your board approved CIP policies and procedures with a manager or officer approval. The exception list that the regulators are looking for are those that are created through clerical error or inadvertent oversight and that have been identified through your internal control processes.

Refer to page 54 of the examination manual:

Evaluate the level of CIP exceptions to determine whether the bank is effectively implementing its CIP. A bank’s policy may not allow staff to make or approve CIP exceptions. However, a bank may exclude isolated, non-systemic errors (such as an insignificant number of data entry errors) from CIP requirements without compromising the effectiveness of its CIP (31 CFR 103.121(b)(1)).

If your CIP policy allows exceptions through some sort of management approval process, I would suggest you revisit your policy because I know several banks that gotten whacked on that one.

If your CIP specifies which standard documentary evidence of identity will be accepted, but permits a different standard for those who don't carry those forms of ID (for example, elderly persons who don't have drivers' licenses), with or without supervisory approval, that's not an exception to your CIP. It's a backup standard within the CIP.

Your CIP should be designed with the flexibility the bank needs in order to operate efficiently, with the overriding aim of allowing the bank to become assured that it knows the true identity of its customer. If you find that you have problems adhering to the standards in your CIP, bring it to management's attention, so they may consider recommending policy changes. But don't make exceptions to the policy. You'll get gigged for them.

Randy - I recently used that section in the exam procedures in my CIP training.

Hmmm...OCC said our policy was fine, but maybe what I think of as an exception isn't the same type we are talking about here.

The exceptions I am talking about are the ones which can be cured. Liek the pending TIN for example--we will allow the account to be opened and maybe restrict certain activity on it until the TIN is furnished. If a TIN isn't provided within 60 days, we close the account. Same with the ID that's expired becuase the person just had a b-day and the DMV takes forever to send out a new ID...we open the account until the new ID is presented. If not, we close the account. The only permamnent "exception" we would allow without closing the account is the ID exception made for seniors.

The above must be allowed because it in part was created under the direction of the OCC.

I would not make an "in-curable" exception.