BSA/AML Student Exercises Dec. 2022

• Missing Documents — If the customer does not have all of the required identification and information, the account cannot be opened until the customer can supply the required information. • On accounts that we open where we are not familiar with the documents —When the employee is unfamiliar with the documents produced, the customer must be directed to apply for a valid identification card issued by the state or other valid government issued document. Loan Customers and CIF • The lender should obtain identification documentation before loan closing. The lender must obtain the required identification documents from all borrowers. 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. • In the case of a purchase money mortgage loan, the current address is considered the address of the person at the time of the loan application, not the address of the property being purchased. • As a general rule, the Bank will not keep copies of identifying documents in loan credit files. The Bank will, include the ID type, number, issuing date and state, expiration dates and a copy of the Identifying documents on our CIF files (image under CIF). The Bank is obtaining the copy of the Identification (i.e., DL, passport, etc.) as evidence that the Bank properly identified the new customer, starting a banking relationship with the AJ & R Bank. This information must be kept for five years after the loan is granted. • Lenders must also verify the information provided by the customer on the loan application against information from Bank references, employment references and credit bureau information. If you cannot verify information provided by the customer, you cannot close the loan. The account information will be referred to the BSA officer for investigation. The BSA officer will determine if a SAR must be filed. Foreign Customers and CIP • USA PATRIOT Act specifically authorizes banks to distinguish between U.S. citizens and non-U.S. citizens for the purpose of determining acceptable forms of identifying information. Therefore, banks are allowed to ask if a new customer is a U.S. citizen. You must obtain a taxpayer identification number (TIN) and TIN certification (VV-9 form) from all U.S. citizens on deposit accounts. Non-U.S. citizens must complete a W-8 form. If your customer does not have a TIN, then the customer must show you an application for it or you cannot open the account. • Non-Resident Alien (NRA) customers may request W-8 status for U.S. tax withholding. In such cases, the NRA customer completes a W-8 form, which attests to the customer's foreign and U.S. tax-exempt status. While it is an Internal Revenue Service (IRS) form, a W-8 is not sent to the IRS but is maintained on file at the bank to support the lack of any tax withholding from earnings. Note: Refer to the CIP Matrix requirements by type of customer and account for documentation on Non U.S. citizens. Lack of Verification When the Bank cannot form a reasonable belief that we know the true identity of a customer, the Bank will apply the following: • Decline to open the account. Opening Accounts When the Customer Is Not Present at the Bank (Accounts Opened by Mail, Telephone, or via the Internet)

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