Introductory BSA/AML Examiner School, Atlanta, CA

procedures to monitor for completion of the verification process and may wish to consider restrictions on the customer’s use of the account (such as limiting access to the account or delaying issuance of access devices such as checks and debit cards until identity has been satisfactorily verified). Procedures must also be established to address situations where the identity of the customer cannot be satisfactorily determined. Verification through Documents The CIP procedures must provide specific directions for actions to be taken to verify identity through the inspection of documents obtained from persons seeking to open new accounts, including primary and secondary forms of ID which are acceptable and forms of ID that are considered unacceptable. In general, acceptable ID will include: • For an individual, an un-expired government-issued identification document evidencing nationality or residence and bearing a photograph or similar safeguard (such as a driver’s license or passport). • For a person other than an individual (such as a corporation, partnership, or trust), documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument. Verification through Non-Documentary Methods There may be new account opening scenarios, whether personal or business, in which verification of customer identity through the inspection of documents alone is not possible or sufficient. In situations that pose higher levels of risk, such as opening an account for persons who cannot present adequate identity documents or when the account is not opened in a face-to-face transaction, management will establish procedures for verification of the customer’s identity without, or in addition to, the use of identity documents. Heightened risk may call for the use of a combination of documentary and non-documentary verification methods. Examples of non-documentary verification methods the bank may utilize include: • Comparing customer-provided information against fraud and/or bad check databases. • Comparing information with a trusted third-party resource such as a credit reporting agency. • Comparing information to publicly available records and databases. • Contacting the customer after the account is opened. • Checking references. • Obtaining a financial statement and then checking the validity of the statement. • Checking prior financial institution account relationships. The CIP procedures must also address situations where, based on the bank’s risk assessment of a new account opened by a customer that is not an individual, the bank cannot adequately verify the identity of the entity that will be the owner of the account. In such situations, the bank will obtain information about the individual(s) with authority or control over such an account, including signatories, in order to verify In certain new account relationships or signature additions for an account, Anytown Community Bank staff may not be able to verify, with or without documentation, the identity of the customer and, therefore, will be unable to form a reasonable belief that the bank has established the true identity of the customer. Anytown Community Bank will have procedures to address when no account relationship should be opened. For those situations where questions arise about documentation, the Bank will have procedures to address how a customer may conduct transactions while the verification of identity process occurs. The procedures will also specify at which point, if the Bank cannot form a reasonable belief regarding the identity of the customer, the account shall be closed. In this latter situation, the procedures shall also prompt management to determine whether a Suspicious Activity Report (SAR) will be filed. Staff who observe transaction activity should be well informed of new account relationship information in order to the customer’s identity. Lack of Verification