BSA/AML, CIP: Accounts; Loans; Deposit Account Closings
Printer-friendly VersionQuestion:
Does CIP require the bank to obtain all required documentary and non documentary verification for signers on a business account or non profit account? We do fulfill all CIP requirements for the business entity and also incorporate "best practice" procedures to attempt to receive information for the signers on business/ non profit accounts. However, some exceptions are made. If the bank is required to fulfill all CIP requirement for business/non profit signers, is the bank then required to maintain records of all "exceptions" made for business/non profit signers.
Answer:
Yes. This is not a "consumer" rule. It applies to all accounts (deposit, loan, trust, etc.) So, yes, you would need to document your "exceptions." (I assume this means that you used alternative media to confirm?!)
Question 2: If the bank declines to open an account because the customer (person or business entity) is unable to provide the bank with the required CIP data, does the bank have to provide the customer with a notice of decline (stating reason for decline)?
Answer 2: CIP does not have such a requirement. There is no Reg B adverse action notice for accounts. HOWEVER, do not forget to give your FCRA adverse action notice if you turn down due in whole or in part to a consumer report (e.g. Telecheck).
Question 3: If the bank declines to open an account because the (person or business entity) requests bank services that the bank feels may not be prudent with sound business practices, does the bank have to provide a notice of decline (stating reason for decline)? Please advise what type of notice would then be required. I have listed a few examples on accounts that we would decline:
* Depositing third party checks,
* Account is the depository account for Internet funds
* Customer claims to be social security beneficiary broker
* Corporation is not in good standing with the State Comptroller
* Type of Business (gentlemen's club or bar, etc.)
* Bank is unable to fulfill currency/ coin needs of business
Answer 3: You could turn them down, or close the account, for those or any other reason! You don't have to tell them why. Only exception you couldn't turn someone down because they were disabled and you didn't want to accommodate them (ADA issue).
Question 2: If the bank declines to open an account because the customer (person or business entity) is unable to provide the bank with the required CIP data, does the bank have to provide the customer with a notice of decline (stating reason for decline)?
Answer 2: CIP does not have such a requirement. There is no Reg B adverse action notice for accounts. HOWEVER, do not forget to give your FCRA adverse action notice if you turn down due in whole or in part to a consumer report (e.g. Telecheck).
Question 3: If the bank declines to open an account because the (person or business entity) requests bank services that the bank feels may not be prudent with sound business practices, does the bank have to provide a notice of decline (stating reason for decline)? Please advise what type of notice would then be required. I have listed a few examples on accounts that we would decline:
* Depositing third party checks,
* Account is the depository account for Internet funds
* Customer claims to be social security beneficiary broker
* Corporation is not in good standing with the State Comptroller
* Type of Business (gentlemen's club or bar, etc.)
* Bank is unable to fulfill currency/ coin needs of business
Answer 3: You could turn them down, or close the account, for those or any other reason! You don't have to tell them why. Only exception you couldn't turn someone down because they were disabled and you didn't want to accommodate them (ADA issue).