CIP on Pre- Patriot Act Customers

Question:

Because some of our customers checking accounts were opened Pre-Patriot Act, we do not have a copy of the primary ID, along with other things. Are we required to do the entire CIP (including primary and secondary ID's) for a customer that has had a checking account for years and wants to open a new savings account?

Answer:

Existing customers are exempt from CIP procedures "provided the financial institution has a reasonable belief they know the true identity of the customer." That last part is one of those "fuzzy" wordings regulators like to use. Some institutions have decided to apply CIP to all customers, including existing customers so they don't have to play the "we know them" game. Others have decided to use this exemption. Since CIP allows "contacting the customer" as a form of verification, if you have had correspondence with the customer (such as periodic statements, loan payments, etc.) you can easily argue that you have had multiple verifications with existing customers.

First published on BankersOnline.com 4/4/05