Questions and Answers
The BSA/AML Examination Manual provides more in-depth guidance on the types of accounts and customers/members subject to the customer identification program (CIP) regulation. According to the Customer Identification Program—Overview section:
An "account" is a formal banking relationship to provide or engage in services, dealings, or other financial transactions, and includes a deposit account, a transaction or asset account, a credit account, or another extension of credit. An account also includes a relationship established to provide a safe deposit box or other safekeeping services or to provide cash management, custodian, or trust services.
An account does not include:
- Products or services for which a formal banking relationship is not established with a person, such as check cashing, funds transfer, or the sale of a check or money order.
- Any account that the bank acquires. This may include single or multiple accounts as a result of a purchase of assets, acquisition, merger, or assumption of liabilities.
- Accounts opened to participate in an employee benefit plan established under the Employee Retirement Income Security Act of 1974.
The exam manual goes on to state that the CIP rule applies to a "customer." A customer is:
A "person" (an individual, a corporation, partnership, a trust, an estate, or any other entity recognized as a legal person) who opens a new account, an individual who opens a new account for another individual who lacks legal capacity, and an individual who opens a new account for an entity that is not a legal person (e.g., a civic club). A customer does not include a person who does not receive banking services, such as a person whose loan application is denied.
With the above regulatory guidance in mind, it is clear that a safe deposit box lease is an account and signers on that lease would be considered customers subject to the identification verification requirements. A loan co-signer and account beneficiaries may be associated with an account that is subject to the CIP regulation but these parties are not considered a “customer” that would be subject to the identification/verification requirements. Neither a co-signer nor a beneficiary is a person opening a new account. That being said, some institutions have chosen to expand their CIP and include co-signers and account beneficiaries in the identification/verification process.
(Posted: 04/03/2008)
