Copy of ID in Loan File OK?

Answered by:

Question:

In the past we would not retain a copy of an ID for a commercial loan or mortgage in the loan documentation folder. We recently received the following advice from counsel: "This is the new FDIC guidance on retaining copies of the license pursuant to the USA PATRIOT Act. It would clearly be permissible to retain copies provided that they are not used for an impermissible purpose. This rule would seem to apply to both residential and commercial." Should we feel comfortable with this interpretation?

Answer:

Answer by David Dickinson: I think you will find some good information in these previous BOL strings:
#1
#2

Answer:

Answer by Lucy Griffin: No, you should not be comfortable with this opinion. When you collect pictures of IDs you may violate Regulation B. Regulation B allows you to rely on legal opinions, but only if they are well-reasoned and supported. The attorney who issued that opinion missed the fact that, when it comes to collecting race and gender information, such as that in a picture ID, Regulation B trumps CIP. The fact that CIP exists does not in any way lessen the Regulation B permissions and proscriptions on information gathering. Both FinCEN and the FRB have made this very clear.
That being said, there is no problem with collecting picture IDs for loans subject to HMDA reporting and/or Regulation B information gathering. Any other instance would be prohibited.

First published on BankersOnline.com 08/02/04