On March 29, 2024, FinCEN issued a notice and request for information and comment regarding the Customer Identification Program (CIP) Rule requirement for banks to collect a taxpayer identification number (TIN), among other information, from a customer who is a U.S. person, prior to opening an account. Specifically, FinCEN seeks information to understand the potential risks and benefits, as well as safeguards that could be established, if banks were permitted to collect partial SSN information directly from the customer for U.S. individuals and subsequently use reputable third-party sources to obtain the full SSN prior to account opening.
The CIP Rule under Section 326 of the USA PATRIOT Act requires a bank to implement a written CIP that contains identity verification procedures that enable the bank to form a reasonable belief that it knows the true identity of its customers. These procedures must specify the customer identifying information that a bank is to collect from each customer, including the identification number or TIN. The CIP Rule makes clear that the collection of certain identifying information must be collected directly from the customer prior to opening an account, except with respect to credit card accounts.
However, FinCEN said it recognizes that there has been significant innovation in the way that customers interact with financial institutions and receive financial services, including customer identifying information collection and verification tools. FinCEN noted that there has been expressed interest in permitting banks to collect a partial SSN while also permitting the use of reputable third-party sources to obtain the full SSN prior to account opening. Thus, the agency is interested in comments from the public on whether permitting partial SSN collection by a bank prior to account opening may promote, with appropriate safeguards, increased accessibility to financial services for a broader population of individuals.
In line with this, the FDIC has issued an advisory to reemphasize the required information to be collected from the customer prior to account opening under the CIP Rule, which includes, at a minimum, the customer’s name, date of birth (for an individual), address, and identification number.
The Federal Register Notice can be found here.
The FDIC’s Advisory can be found here.