Today, the Financial Crimes Enforcement Network (FinCEN), announced final rulemaking on anti-money laundering (AML) customer identification program (CIP) requirements for banks not subject to federal functional regulator supervision. This new rulemaking subjects those non-supervised banks to the same CIP requirements imposed on regulated banks. Non-bank organizations like loan and finance companies have not been subject to CIP requirements, and remain so.

This final rule only affects banks that are not regulated by the federal functional regulators, which include: the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Securities and Exchange Commission. Banks supervised by the preceding regulators have already been subject to CIP requirements as part of their anti-money laundering (AML) compliance programs, those not supervised are now subject to the same AML CIP requirements.

Under the USA Patriot Act, all covered financial institution must take reasonable steps to ascertain the identity of the nominal and beneficial owners of, and the source of funds deposited into, private banking accounts, as necessary to guard against money laundering and to report suspicious transactions. Enhanced scrutiny reasonably designed to detect and report transactions that may involve the proceeds of foreign corruption must be applied to private banking accounts requested or maintained for, or on behalf of, senior foreign political figures, including family members or close associates. These requirements have applied to most banks since 2002. This final rule will remove the exemption for banks not subject to regulation by a federal functional regulator.

This final rule is similar to the removal of exemption from loan and finance companies that subjected non-bank mortgage companies to AML program requirements. However, the rules for loan and finance companies do not include CIP requirements, these rules for non-supervised banks do include CIP requirements.

Banks must endeavor to obtain the following from prospective customers prior to opening an account: name, address, identification number, and date of birth for individuals. The identification number must be a U.S. taxpayer identification number for U.S. persons. Non-U.S. persons may provide identification numbers from U.S. taxpayer identification number, passport number and country of issuance, or other government-issued identification bearing a photograph or similarly safeguarded document evidencing nationality or residence.

Non-documentary methods of customer identification may also be included in the overall CIP. The CIP policy must address the bank's response to circumstances in which the bank cannot form a reasonable belief that it knows the true identity of a customer.

The general authority for this rulemaking comes from the USA Patriot Act and Bank Secrecy Act (BSA). FinCEN carries out BSA/AML rulemaking and adminisrative functions for the U.S. Department of Treasury.

Here is a copy of the final rule submitted for publication in the federal register.