Maybe I missed something when I read through the 106 pages, but I have a concern about the provision requiring us to obtain the information "from the customer". 121(b)(2)(i)(A) indicates that we have to obtain certain identifying information "from each customer". In the preamble to the rule, in footnote 13, on page 17, it says "each person named on a joint account is a 'customer' under this final rule unless otherwise provided."

Am I being too extreme to read this to mean we have to get the minimum identifying information directly from that particular customer, and cannot get it from a joint account holder? It seems to be consistent with the discussion on pages 33 & 34 about relying on 3rd parties for credit card banks to obtain some of the identifying information. If so, that's a huge change in our current procedures. Especially for loan applicants.

Any thoughts?

I haven't finished reading it all yet, but my understanding is that one person can provide info for another. For instance, one spouse could come in to open an account for both spouses. As long as the spouse that is present has the ID info on the other spouse, and you have a reasonable basis to believe that the info is accurate, you could open the account.

In the ABA telephone conference on this yesterday a similar question was posed. Pamela Johnson from the Fed stated that if it was a joint account being opened by only one of the owners, the bank could get the required information from the individual present and then use non-documentary means to verify that information.

I was somewhat dismayed in PJ's response yesterday. Sure, we can get the info from the spouse, and even verify it through ChexSystems. But that certainly doesn't affirm that the spouse wants to be on the account!

Perhaps I have a lack of faith in people, but I see a potential for abuse. Mr. Jones comes in to open a joint account for himself and the Missus. He has her drivers license number and all of her biographical info. Only problem - they are going through a divorce, he has a sizable check made payable for them jointly, and a certain "lady friend" of his can produce a darn good likeness of the Missus' signature!

I wish they had added a little disclaimer yesterday stating to be sure the joint owner either signs the signature card before a notary, or returns it in person. Otherwise, you just successfully identified a driver's license - not the person!

Am I in left field on this, or did anyone else have a concern about this, too?

You're not in left field at all, because the reality is the situation you described has happened on numerous occasions. But the risk based approach certainly allows us to take the notarized signature/return in person precautions that you mentioned. And both are very good suggestions.

That comment concerned me as well. I also was not pleased with the statement that it made sense not to worry if an SSN was off by one number! Excuse me...if I use some methods to validate SSNs and I receive indications that this is not your SSN number you are going to have to prove to me that it is. I won't turn you down without checking things out but that is not an element I am going to take casually.

Rebekah,
I heard the same thing you heard and thought the question could have been better put as, "Does the regulation prevent us from being ridiculously sloppy?" Then, PJ could have just said, "No" and gone on. This regulation only sets minimum standards and, as revised, some of them are well below current bank norms. Yours are the common sense requirements in the fact situation posed.

We took a chance and implemented our CIP in November based on the "proposed rules" so we have been able to address some of the issues you all are raising. We used the time to "refine" our process. We are a small community bank so it was most likely easier for us to do some of this than it would have been if we were a large regional. We could always relax our procedures if the new rules were less onerous. First, we take a copy of the ID on an 81/2x11 form we designed ourselves. If only one person is present and for some reason the other signer cannot come into the bank, we open the account in that person's name only. We give them the form and a signature card to take home. When the form and card comes back, we do a simple file maintenance and make the account joint. This puts the burden on the customer and we no longer have to follow-up. The form has gone through 3 revisions and now includes a section for the "non-present" joint holder's signature to be notarized. We have had total cooperation from the customers and it works great for us!

The key words are "risk based". While the problem Ken cited above can happen, it isn't often. With our military customers it is not unusual to respond to a request to add someone to an account from Germany or Korea, as examples.

You establish procedures, you request ID copies, Notary verifications, etc. and you hope for the best, i.e. risk-based procedures.

Sometimes the nature of the business requires it. We typically will not do this however, when the other party is in the area but doesn't want to come by. We are not that big into E&P accounts.

How does ChexSystems "verify". I am being told that "verify" is very different from "validate". Maybe this is another thread, but I understand that ChexSystems Validates the format of the SSN or DL, but does not have enough files to verify identity yet -- Help.

Working with the SSA, the IRS has published regulations which describe their plan to set up a system that will actually allow you to verify TINs (match an name and a TIN, not do a search on a name or on a TIN). At present, the best you can do, through mechanical resources or negative data bases, is a logical verification of the SSN; i.e. determine where and when it was made available and evaluate whether that is consistent with other information provide by the consumer.

Some positive ID systems will do a name/TIN match based on the information provided through consumer reports, in addition to the logical verification. Of course, this doesn't provide an official match, but does indicate whether the name and TIN have been used in conjunction elsewhere. We use such a service here, and while it hasn't uncovered any identy fraud, it has unearthed a few typos.

Has anyone heard anything further on SSA's verification system. I got a call this morning from a vendor who says they do have access to validate directly with SSA. I would be interested and they are going to send more info, but if SSA is close to providing this anyway, I'd rather wait.

I would like to know if anyone is using or intends to use CHOICEPOINT for id verification on account opening and if you have used their service, what is the fee structure, and how do you like the service?