Customer Identification Program Rule Exemption from Collecting Taxpayer Identification Number Information from Customers

Summary:

The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (each an “agency” and collectively the “agencies”), with the concurrence of the Financial Crimes Enforcement Network (FinCEN), grant an exemption from the requirements of the Customer Identification Program (CIP) Rule for the collection of taxpayer identification numbers (TIN) from customers for all accounts in the circumstances specified below.

The Order Granting Exemption can be found on the FDIC’s website. 

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions.

Highlights:

• In 2003, the final CIP Rule was issued for banks, savings associations, credit unions, and certain non-federally regulated banks.
• The appropriate agency, with the concurrence of FinCEN, may by order or regulation, exempt any bank or type of account from the requirements of the CIP Rule after consideration of whether the proposed exemption is consistent with the purposes of the Bank Secrecy Act (BSA) and with safe and sound banking practices.
• This order permits banks subject to the jurisdiction of the agencies, including FDIC-supervised institutions, to use an alternative collection method to obtain TIN information from a third-party rather than from the customer, if the bank otherwise complies with the CIP Rule, which requires written procedures that: (1) enable the bank to obtain TIN information prior to opening an account; (2) are based on the bank’s assessment of the relevant risks; and (3) are risk-based for the purpose of verifying the identity of each customer to the extent reasonable and practicable, enabling the bank to form a reasonable belief that it knows the true identity of each customer.
• FinCEN, the Administrator of the BSA, considers using this alternative collection method to obtain TIN information about a customer, when used appropriately, to be consistent with the purposes of the BSA.
• The agencies find this exemption, when used appropriately, would be consistent with safe and sound banking practices.
• Based on these determinations, the agencies have issued an order granting an exemption from the requirement that banks subject to the jurisdiction of the agencies, including FDIC-supervised institutions, collect TIN information from the customer for all accounts in the circumstances discussed above.
• FinCEN and the FDIC emphasize there is no requirement to implement this exemptive relief, and banks may choose to continue collecting TIN information from the customer.
• This exemption does not change the overall purpose of the CIP Rule, and banks are required to implement a CIP Program that includes risk-based verification procedures that enable the bank to form a reasonable belief that it knows the true identity of its customers. These requirements exist regardless of whether the bank establishes this relationship directly with the customer or through an intermediary.