BSA/AML Student Exercises Dec. 2022

• Identifying information about a customer (i.e., Name, for individuals-date of birth, Physical address, and Identification Number such as TIN-SSN.) • A description of the documentary methods that the Bank used to identify the customer. (i.e., copy of Driver's license, State issued Identification Card, Passport, or any other document that has the customer's picture). • A description of the non-documentary methods and results of any measures that the Bank took to verify the identity of the customer. One method to verify this information is through a third-party vendor or credit reports agencies. Reverse directories may be used as well to verify addresses and send thank-you letters to customers. If it is believed that the customer is providing false information, the incident must be reported to the BSA officer or immediate supervisor for further action. This may include filing a suspicious activity report (SAR). In addition, the USA PATRIOT Act amended the BSA to require special due diligence for private banking accounts for non-U.S. persons, including those held for politically exposed persons (PEPs) or senior foreign political figures. Note: Employees, including Bank Officers, may not make an exception to CIP procedures for a new customer because the person is personally known by any Bank employee, officer, director, or shareholder. Any request by an officer or employee to waive these procedures should be reported to the BSA officer. Please be sure to reference the Bank's CIP Policy or Procedure. Please see CEP Matrix as an additional reference. Definitions • Account: An "account' is defined as deposit account, loans account, safe deposit box, cash management, custodian, or trust account. • New Customer: Is an individual or legal entity that is opening a new account with the bank. It also means an individual who is opening a new account for another individual who lacks legal capacity (such as a minor or an incompetent) or for a group that has not formed a legal entity (such as a civic club). In the case of a joint account, each of the accountholders who does not already have an account here is considered new customer. o A new customer is an individual who obtains a loan with the Bank. In the case of a joint loan, it means each of the borrowers who do not already have an account here. The customer identification program (GIP) rules apply only to those individuals who actually close on a loan; they do not apply to people who apply but are subsequently denied or withdraw their application. • Existing Customers: o If a customer has an existing account with the Bank, the Bank employee must determine if the account was in place prior to October 1, 2003. If so, the Bank employee must determine if the information in the CIF is current and add any additional information, such as a driver's license number, state of issuance, expiration date or copy of ID. o If this customer opened an account after October 1, 2003, the Bank employee must determine if all of the identification information was obtained by the new accounts person. If a reasonable belief cannot be concluded, then the CIP process must be completed for that customer.

For Training Purposes Only

Page 15