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Trust and Private Banking Accounts Listed as Potentially High Risk
The five federal financial institution regulators* issued joint examination procedures for evaluating domestic and foreign banking organizations' customer identification programs (CIP). A CIP must be adopted under section 326 of the USA PATRIOT Act, which amended the Bank secrecy Act (BSA) to require financial institutions to verify the identity of all customers who wish to open an account.
The customer identification and verification requirements, which went into effect on October 1, 2003, apply to all new deposit accounts, trust and private banking relationships and accounts, and other types of accounts.
A rule codified at 31 CFR 103.121 implements the section 326 requirements. The rule directs each covered institution (see box on page 6) to implement a written CIP as part of its BSA anti-money laundering program. The CIP must be risk-based, appropriate to the...