Customer Identification Programs

14-0801 / November 2014
Customer Identification Programs

SENT BY ELECTRONIC MAIL 
AND FIRST CLASS MAIL

Cathleen A. Mahon, President & CEO 
Deyanira Del Rio, Board Chair 
National Federation of Community Development Credit Unions 
39 Broadway A venue 
Suite 2140 
New York, New York 10006 

Re: Customer Identification Programs

Dear Mses. Mahon and Del Rio:

Your correspondence dated August l , 2014 and October 20, 2014 requested NCUA guidance clarifying whether an identification card issued under New York City's Municipal ID Program (a "Municipal ID") will suffice for credit unions' customer identification programs ("CIP") governing opening new member accounts. Your more recent correspondence specifically requested clarification of my initial response letter dated August 22, 2014 with respect to whether "credit unions may, for non-U.S. citizens, accept the identification number from [Municipal IDs] for the purpose of opening accounts."

The "CIP Rule" found in the regulations of the Financial Crimes Enforcement Network at 31 C.F.R. § 1020.220, describes procedures for the establishment of accounts for both "U.S. Persons," which for natural persons refers to U.S. citizens, and for "non-U.S. persons," which for natural persons means non-U.S. citizens.1 As I have previously indicated, under the CIP Rule a credit union "must include risk based procedures for verifying the identity of each customer to the extent reasonable and practical," such that the credit union has a reasonable belief that it knows the true identity of each member.2 Language in the CIP Rule indicates that a credit union's verification of identity through documentation may include the review of an "unexpired, government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard ..."3 Previously published guidance states that even non-government-issued identification may be used, as long as it can enable the financial institution to "form a reasonable belief that it knows the true identity of the customer."4

As indicated in my previous response, for "U.S. persons," identity verification is initially tied to a taxpayer identification number ("TIN") rather than a particular form of identification.5 A TIN would have to be confirmed by the credit union before opening a new account for a U.S. person using a Municipal ID.6 For non-U.S. persons, the CIP Rule allows a new account to be opened where the applicant can establish name, date of birth, address, and also provide an identification number, the last of which may be provided using any one (or more) of the following: a passport number with country of issuance; an alien identification card number; or the number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photo or similar safeguard.7

Accordingly, an unexpired Municipal ID, which you described to include data found in other forms of government-issued identification such as name, photo, date of birth, address, and signature, would contain the elements required by the CIP Rule for a primary source of identification in opening a new account for either U.S. or non-U.S. persons.8

In the process of implementing the CIP Rule, Treasury indicated it will "ensure that [information relating to the security and reliability of identification cards] is collected and shared with the financial community to assist them in verifying the identity of their customers."9 You should also seek the input of Treasury regarding the use of Municipal ID, as that agency would be in the best position to clarify its interpretation of the use of government issued identification by any U.S. financial institution for CIP purposes.

Sincerely,

/s/
­
Michael J. McKenna
General Counsel

OGC/DPF:bhs
SSIC 3247
GC#14-0801

cc:     
Director, Office of Examination and Insurance
Director, Office of Small Credit Union Initiatives 


1 31C.F.R.§ 1010. lOO(ii i).

2 31 C.F. R. § 1020.220(a)(2).

3 31 C.F. R. § 1020.220(a)(2)(ii)(A)(l).

4 Financial Crimes Enforcement Network, Guidance on Customer Identification Regulations FAQs: Final CJP Rule, 31 C.F.R. § 103.121(b)(2)(ii) - Customer verification (April 28, 2005), at #2, available at https://www.fincen.gov/statutes_regs/guidance/pdf/finalciprule.pdf

5 31 C.F.R. § 1020.220(a)(2)(i)(A)(4)(i).

6 Alternative procedures can be put in place for account applicants that have applied but not yet received a TIN at the time of account opening. 31 C.F.R. § 1020.220(a)(2)(i)(B).

7 31 C.F.R. § 1020.220(a)(2)(i)(A)(4)(ii).

8 Using the documentary approach described in 31 C.F.R. § I 020.220(a)(2)(ii).

9 Customer Identification Programs for Financial Institutions, 68 Fed. Reg. 55336 at III (Comments received Sep. 25, 2003), available at http://www.gpo.gov/fdsys/pkg/FR-2003-09-25/html/03-24226.htm.

Last modified on
07/10/20