Customer or Member Identification Program

The USA PATRIOT Act requires credit unions to verify the identity of their members by implementing a CIP or MIP that, at a minimum, meets the requirements of FinCEN regulation § 1020.220, Customer identification program requirements for banks, including:

  • Member identification information

  • Identity verification procedures

  • Recordkeeping

  • Comparison with government lists

  • Member notice

The CIP must consist of policies and procedures for verifying the identity of the member. The procedures must describe when the credit union will use documents, non-documentary methods, or a combination of both methods in accordance with FinCEN regulation § 1020.220(a)(2)(ii), Customer verification. Procedures must also address the various methods to open an account. For example, an online account opening process will likely have different documentation and validation requirements than those opened in a branch.

To review compliance with the USA PATRIOT Act, an examiner first requests a list of new member accounts and account opening procedures. This may require obtaining account opening procedures from multiple departments, depending on where and how the credit union opens new accounts.

If transaction testing or other analytical reviews are completed for CIP, the examiner selects a sample from the list of new accounts. Ideally, the sample will include the full range of accounts (for example, minor, consumer, opened online, and legal entity accounts) and will cover a variety of methods members use to open accounts (for example, in person, online, or by a third party on behalf of the credit union). A valid sample will also include accounts identified by the credit union as higher risk along with accounts opened:

  • For a member awaiting a TIN

  • With incomplete documentation

  • Using non-documentary methods

  • With exceptions

  • By a third party (for example, indirect loans)

Per FinCEN regulation § 1020.220(a)(2)(i), Customer information required, a credit union must obtain all of the following information from the member prior to opening the account.

  • Name

  • Date of birth

  • Physical address

    • For an individual: a residential or business street address, or if necessary, an Army Post Office or Fleet Post Office box number, the residential or business street address of next of kin or of another contact individual, or a description of the member’s physical location

    • For a “person” other than an individual (such as a corporation, partnership, or trust): a principal place of business, local office, or other physical location

  • Identification number

    • For a U.S. person, a taxpayer identification number

    • For a non-U.S. person, one or more of the following: a taxpayer identification number; passport number and country of issuance; alien identification card number; or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard

For more information, see the Customer Identification Program section of the FFIEC BSA/AML Examination Manual and the Frequently Asked Questions from FinCEN.

Last updated on February 02, 2023