ABA Banking Journal - November/December 2017 - 45

> ABA COMPLIANCE CENTER INBOX

Can I Keep a Copy of
a Customer's ID on File?
I am working for a new bank and am being told that Section 326 of the Patriot
Act (the Customer Identification Program rule) requires that banks keep a copy
of the ID that the customer provided. I have heard that many small banks such
as ours keep the copy in the loan file and cite the Patriot Act. According to my
peers, the examiners have not questioned this practice. Is this acceptable?
A: The CIP rule requires the bank to collect
certain pieces of information about a customer
and then verify the customer's identity. The rule
then requires that the bank keep the information,
name, physical address, date of birth and ID
number such as a social security number or
taxpayer identification number. It must also
retain information about how it verified the
identity. All of this will be set forth in the written
CIP policy approved by the bank's board
of directors.
See the CIP overview section in the FFIEC Bank Secrecy
Act Examination Manual:
A bank's CIP must include recordkeeping procedures. At a
minimum, the bank must retain the identifying information
(name, address, date of birth for an individual, TIN, and
any other information required by the CIP) obtained at
account opening for a period of five years after the account
is closed. For credit cards, the retention period is five years
after the account closes or becomes dormant. The bank
must also keep a description of the following for five years
after the record was made:
* Any document that was relied on to verify identity, noting
the type of document, the identification number, the
place of issuance, and, if any, the date of issuance and
expiration date.
* The method and the results of any measures undertaken
to verify identity.
* The results of any substantive discrepancy discovered
when verifying identity.
For many banks, the easiest way to demonstrate compliance
is to retain a copy of the customer's driver's license. And,
there are certain teller software packages that use the driver's
license to identify the customer. However, while that complies
with CIP, the question is what about Regulation B and the
Equal Credit Opportunity Act.

This is a situation where there is a conflict between
two regulations. Reg B generally prohibits collection of
information about a customer's race, ethnicity and gender
for non-mortgage loans. The problem is that if you have
a copy of driver's license in the file, you have a picture
which will indicate race and gender and the surname may
indicate ethnicity. Also-it is illegal in some states to make
a copy of driver's license and it is illegal under federal law
to make a copy of any government or military ID. 
One solution that some banks have used in states where
it's permissible to keep a copy of a driver's licenses is to
create a firewall or barrier so that the bank's lenders and
underwriters do not have access to the files where the
copy of a customer's driver's license is maintained. This is
important if the bank does keep copies of a driver's license
in customer files.
Importantly, nowhere in Section 326 does it state that
you must keep a copy of the identification provided.  In
fact, during the comment period for the final rule, the
agencies discussed whether to require financial institutions
to make a copy of the consumer's identification but
decided against it. The final regulation states that banks
must keep the information and a description-not the
documents themselves. The information on a driver's
license, for example, would be the name of the document
(driver's license), issuing party (state of X), issue date and
expiration date. For a passport, a bank would retain
the information relating to the country, issue date and
expiration date. (Response provided July 2017.)
Answers are provided by LESLIE CALLAWAY, CRCM, CAFP, director
of compliance outreach and development; MARK KRUHM, CRCM,
CAFP, senior compliance analyst; and RHONDA CASTANEDA, CRCM,
compliance analyst, ABA Center for Regulatory Compliance. Answers
do not provide, nor are they intended to substitute for, professional legal
advice. Answers were current as of the response date shown at the end
of each item.
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45


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Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2017

Chairman’s View
Upfront
Legal Briefs
Economic Outlook
Power Up Profile
Pitching In
Choices and Options Down on the Farm
Eager or Not, Every Board Needs an M&A Strategy
Adapting to Survive
More Than Just a Drink
Operations
Payments
Small Business Lending
Human Resources
ABA Compliance Center Inbox
From the States
Corporate Social Responsibility
Index of Advertisers
From the Vault
ABA Banking Journal - November/December 2017 - Intro
ABA Banking Journal - November/December 2017 - ebelly1
ABA Banking Journal - November/December 2017 - ebelly2
ABA Banking Journal - November/December 2017 - cover1
ABA Banking Journal - November/December 2017 - cover2
ABA Banking Journal - November/December 2017 - 3
ABA Banking Journal - November/December 2017 - 4
ABA Banking Journal - November/December 2017 - 5
ABA Banking Journal - November/December 2017 - 6
ABA Banking Journal - November/December 2017 - 7
ABA Banking Journal - November/December 2017 - Chairman’s View
ABA Banking Journal - November/December 2017 - 9
ABA Banking Journal - November/December 2017 - Upfront
ABA Banking Journal - November/December 2017 - 11
ABA Banking Journal - November/December 2017 - 12
ABA Banking Journal - November/December 2017 - 13
ABA Banking Journal - November/December 2017 - 14
ABA Banking Journal - November/December 2017 - 15
ABA Banking Journal - November/December 2017 - Legal Briefs
ABA Banking Journal - November/December 2017 - 17
ABA Banking Journal - November/December 2017 - Economic Outlook
ABA Banking Journal - November/December 2017 - Power Up Profile
ABA Banking Journal - November/December 2017 - Pitching In
ABA Banking Journal - November/December 2017 - 21
ABA Banking Journal - November/December 2017 - 22
ABA Banking Journal - November/December 2017 - 23
ABA Banking Journal - November/December 2017 - 24
ABA Banking Journal - November/December 2017 - 25
ABA Banking Journal - November/December 2017 - Choices and Options Down on the Farm
ABA Banking Journal - November/December 2017 - 27
ABA Banking Journal - November/December 2017 - Eager or Not, Every Board Needs an M&A Strategy
ABA Banking Journal - November/December 2017 - 29
ABA Banking Journal - November/December 2017 - Adapting to Survive
ABA Banking Journal - November/December 2017 - 31
ABA Banking Journal - November/December 2017 - 32
ABA Banking Journal - November/December 2017 - 33
ABA Banking Journal - November/December 2017 - More Than Just a Drink
ABA Banking Journal - November/December 2017 - 35
ABA Banking Journal - November/December 2017 - Operations
ABA Banking Journal - November/December 2017 - 37
ABA Banking Journal - November/December 2017 - Payments
ABA Banking Journal - November/December 2017 - 39
ABA Banking Journal - November/December 2017 - Small Business Lending
ABA Banking Journal - November/December 2017 - 41
ABA Banking Journal - November/December 2017 - Human Resources
ABA Banking Journal - November/December 2017 - 43
ABA Banking Journal - November/December 2017 - 44
ABA Banking Journal - November/December 2017 - ABA Compliance Center Inbox
ABA Banking Journal - November/December 2017 - From the States
ABA Banking Journal - November/December 2017 - 47
ABA Banking Journal - November/December 2017 - Corporate Social Responsibility
ABA Banking Journal - November/December 2017 - Index of Advertisers
ABA Banking Journal - November/December 2017 - From the Vault
ABA Banking Journal - November/December 2017 - cover3
ABA Banking Journal - November/December 2017 - cover4
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