Compliance Alliance Question of the Week
For the beneficial ownership verification portion, does the bank need a copy of the drivers licenses for each identified beneficial owner?
No, the bank does not specifically need a DL for verification purposes. This is not saying that the bank does not have to verify using CIP procedures, but there is just not a specific requirement for the bank to get a DL. The bank can, for instance, verify through non-documentary methods.
(b) Identification and verification. With respect to legal entity customers, the covered financial institution's customer due diligence procedures shall enable the institution to:
(2) Verify the identity of each beneficial owner identified to the covered financial institution, according to risk-based procedures to the extent reasonable and practicable. At a minimum, these procedures must contain the elements required for verifying the identity of customers that are individuals under § 1020.220(a)(2) of this chapter (for banks); § 1023.220(a)(2) of this chapter (for brokers or dealers in securities); § 1024.220(a)(2) of this chapter (for mutual funds); or § 1026.220(a)(2) of this chapter (for futures commission merchants or introducing brokers in commodities); provided, that in the case of documentary verification, the financial institution may use photocopies or other reproductions of the documents listed in paragraph (a)(2)(ii)(A)(1) of § 1020.220 of this chapter (for banks); § 1023.220 of this chapter (for brokers or dealers in securities); § 1024.220 of this chapter (for mutual funds); or § 1026.220 of this chapter (for futures commission merchants or introducing brokers in commodities). A covered financial institution may rely on the information supplied by the legal entity customer regarding the identity of its beneficial owner or owners, provided that it has no knowledge of facts that would reasonably call into question the reliability of such information.
12 CFR § 1010.230(b)(2): https://www.fdic.gov/regulations/laws/rules/8000-1400.html#fdic8000fra1010.230
The CIP must contain risk-based procedures for verifying the identity of the customer within a reasonable period of time after the account is opened. The verification procedures must use "the information obtained in accordance with [31 CFR 1020.220] paragraph (a)(2)(i)," namely the identifying information obtained by the bank. A bank need not establish the accuracy of every element of identifying information obtained, but it must verify enough information to form a reasonable belief that it knows the true identity of the customer. The bank’s procedures must describe when it will use documents, nondocumentary methods, or a combination of both.
FFIEC, CIP-Overview: https://www.ffiec.gov/bsa_aml_infobase/pages_manual/olm_011.htm
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