The Federal Reserve Board on Thursday joined other federal financial institution regulatory agencies, as well as the Financial Crimes Enforcement Network, in providing banks the flexibility to use an alternative method for collecting certain customer identification information. Specifically, the agencies now permit banks and credit unions to obtain a tax identification number from a third party, rather than directly from the customer.
By law, banks and credit unions are required to verify the identity of a potential customer by obtaining certain identifying information before opening an account. Since this requirement's implementation in 2003, there have been considerable changes in the way that customers interact with banks and receive financial services. Today's action will grant banks flexibility in how they obtain this information, while ensuring that risk-based procedures continue to underpin verification of a customer's identity.
The flexibility from this action is optional, and banks are not required to use alternative collection methods. The Board coordinated its action with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the U.S. Treasury Department's Financial Crimes Enforcement Network.
