Customer Identification Programs for Certain Banks That Do Not Have a Federal Functional Regulator

it opens or adds a signatory to the account and obtain the employer identification number within a reasonable period of time after it opens or adds a signatory to the account. (ii) Verification. The Program must contain risk-based procedures for verifying the information obtained pursuant to paragraph (b)(2)(i)(A) of this
section within a reasonable time after
the account is established or a signatory is added to the account. A bank need not verify the information about an existing customer seeking to open a new account or who becomes a signatory on an account, if the bank previously verified the customer’s identity in accordance with procedures consistent with this section, and continues to have a reasonable belief that it knows the true identity of the customer. (A) Verification through documents. The Customer Identification Program must contain procedures describing when the bank will verify identity through documents and setting forth the documents that the bank will use for this purpose. These documents may include:
(1) For individuals: unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard; and (2) For corporations, partnerships, trusts and persons other than individuals: documents showing the existence of the entity, such as registered articles of incorporation, a government-issued business license, partnership agreement, or trust instrument. (B) Non-documentary verification methods. The Program must contain procedures that describe non￾documentary methods the bank will use to verify identity and when these methods will be used in addition to, or instead of, relying on documents. These procedures must address situations where an individual is unable to present an unexpired government-issued identification document that bears a photograph or similar safeguard; the bank is not familiar with the documents presented; the account is opened without obtaining documents; the account is not opened in a face-to-face transaction; and the type of account increases the risk that the bank will not be able to verify the true identity of the customer through documents. Other verification methods may include contacting a customer; independently verifying documentary information through credit bureaus, public databases, or other sources; checking references with other financial institutions; and obtaining a financial statement. (iii) Lack of verification. The Program must include procedures for responding to circumstances in which the bank cannot form a reasonable belief that it knows the true identity of a customer. (3) Recordkeeping. (i) The Program must include procedures for maintaining a record of all information obtained under the procedures implementing paragraph (b)(1) of this
section. The record must include:
(A) All identifying information provided by a customer pursuant to paragraphs (b)(2)(i)(A) and (B) of this
section;
(B) A copy of any document that was relied on pursuant to paragraph (b)(2)(ii)(A) of this section that clearly evidences the type of document and any identification number it may contain; (C) The methods and result of any measures undertaken to verify the identity of the customer pursuant to paragraph (b)(2)(ii)(B) of this section; and (D) The resolution of any discrepancy in the identifying information obtained. (ii) The bank must retain all records for five years after the date the account is closed. (4) Comparison with government lists. The Program must include procedures for determining whether the customer appears on any list of known or suspected terrorists or terrorist organizations provided to the bank by any federal government agency. The procedures must also ensure that the bank follows all federal directives issued in connection with such lists. (5) Customer notice. The Program must include procedures for providing bank customers with adequate notice that the bank is requesting information to verify their identity. (c) Exemptions. The appropriate Federal functional regulator with the concurrence of the Secretary, may by order or regulation, exempt any bank or type of account from the requirements of this section. In issuing such exemptions, the Federal functional regulator and the Secretary shall consider whether the exemption is consistent with the purposes of the Bank Secrecy Act and with safe and sound banking, and is in the public interest. The Federal functional regulator and the Secretary also may consider other appropriate factors. (d) Other information requirements unaffected. Nothing in this section shall be construed to relieve a bank of its obligation to comply with any other provision in this part concerning information that must be obtained, verified, or maintained in connection with any account or transaction. Dated: July 15, 2002. James F. Sloan, Director, Financial Crimes Enforcement Network. Dated: July 2, 2002. John D. Hawke, Jr., Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System, July 10, 2002. Jennifer J. Johnson, Secretary of the Board. By order of the Board of Directors of the Federal Deposit Insurance Corporation this 3rd day of July, 2002. Valerie J. Best, Assistant Executive Secretary. Dated: July 5, 2002. In concurrence, by the Office of Thrift Supervision. James E. Gilleran, Director. Dated: July 3, 2002. Becky Baker, Secretary of the Board, National Credit Union Administration. [FR Doc. 02–18191 Filed 7–22–02; 8:45 am] BILLING CODE 4810–02–P DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506–AA31 Financial Crimes Enforcement Network; Customer Identification Programs for Certain Banks (Credit Unions, Private Banks and Trust Companies) That Do Not Have a Federal Functional Regulator AGENCIES: The Financial Crimes Enforcement Network, Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: FinCEN is issuing a proposed regulation to implement section 326 of the
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001(the Act) for credit unions and trust companies that do not have a federal functional regulator. The proposed rule provides the same rules for these financial institutions as are provided in a companion notice of proposed rulemaking being issued jointly by FinCEN and the Federal bank regulators published elsewhere in this separate
part of this issue of the Federal Register.
DATES: Written comments on the proposed rule may be submitted on or before September 6, 2002. ADDRESSES: Because paper mail in the Washington area may be subject to