We are trying to determine if we can rely on a mortgage company ID verification. We are a bank which is an affiliate of a mortgage company and we purchase mortgages from the mortgage company. Would this mortgage company (that ownes a bank) be a financial institution under CIP?

I think they probably are considered a financial institution under the citation given in the regulation. It includes "loan and finance company", however, unless they are also subject to a CIP rule, which I don't think they are yet, and are regulated by a federal functional regulator (FRB, OCC, FDIC, OTS, NCUA, SCC, or CFTC) then you can't officially "rely" on them under the rule.

My recommedation would be to rely on them as your agent. You still retain all the responsibility, but at least you can let them do the work.

Another consideration is that an "account" covered by the rule does not include an account the bank acquires through purchase of assets, which from everything I've read includes the purchase of loans. I don't think the affiliate relationship would affect that.