Customer Identification Requirements for New Accounts

Several initiatives mentioned in this issue of Community Developments Investments seek to bring recent immigrants into the traditional banking system. Immigrants are frequently unbanked and disproportionately use alternative financial service providers. Questions have come up concerning what documentation these consumers need to participate in these initiatives and open savings or checking accounts. Congress addressed this question when it enacted the USA Patriot Act in 2001. Section 326 of this law and the implementing regulations (known as the Customer Identification Program, or CIP rule) outline procedures for banks to follow in order to verify the identity of customers who open accounts.

The CIP rule requires that, at a minimum, a bank must obtain the name, address, date of birth, and U.S. taxpayer number before an individual can open an account. If the individual is not a U.S. citizen, the bank may obtain the identification number and country of issuance of any other government-issued document that shows nationality or residence and bears a photograph or similar safeguard. Within a reasonable time after the account is opened, the CIP rule requires the bank to verify the customer's identity by asking to see some form of identification, such as a driver's license or passport or by using a non-documentary method of verification.

The CIP rule neither endorses nor prohibits bank acceptance of information from particular types of identification documents issued by foreign governments, such as the "Matrícula Consular," or consular registration, an identification card that Mexico issues through its consulate offices. Instead, a bank must decide for itself, based on appropriate risk factors, the types of documents it will accept to verify the identity of its customers. Banks can review a fact sheet on the CIP rule.