April 22, 2015

New Report: Federally Required Customer Identification Program (CIP) for Banks

OLR Report 2015-R-0120 summarizes the major components of the customer identification program, which federal law requires banks to develop and implement.

The 2001 USA Patriot Act (P. L. 107-56) requires  banks to verify, through a CIP, the identity of people wishing to open accounts with them. The CIP requirement was implemented by federal regulations in 2003. Under the regulations, banks must develop and implement a written CIP appropriate for its size and type of business that, at a minimum, includes procedures for:
  1. performing risk-based identity verification using specified customer information,
  2. keeping records and notifying customers, and
  3. conducting comparisons with certain terrorist lists kept by the federal government.
The CIP must be a part of a bank’s anti-money laundering compliance program (31 CFR §§ 1020.220, et. seq.). 

To learn more about CIPs, click here to read the full report.