Exemption order allows banks, credit unions to get TIN info from third parties

An exemption order allowing banks and credit unions to satisfy a federal customer identification program (CIP) rule by getting taxpayer identification number (TIN) information from third parties – not just directly from the customer or member – was issued Friday by the federal bank and credit union regulatory agencies.

“Since the CIP Rule was issued initially in 2003, there has been a significant evolution in the ways consumers access financial services, along with a rise in reported customer reluctance to provide their full TIN due, in part, to data breaches and identity theft concerns,” the agencies said in a release Friday. “Accordingly, this exemption provides flexibility to those entities supervised by the agencies that must comply with the CIP Rule. The exemption does not change the underlying requirement for banks and credit unions to have risk-based CIP procedures that enable them to form a reasonable belief they know the true identity of each customer.”

The order was issued by the Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC), with concurrence from Treasury’s Financial Crimes Enforcement Network (FinCEN). It takes into account comments received on a March 2024 interagency request for information (RFI) and applies to all entities supervised by the agencies.

The order doesn’t remove an institution’s option to get TIN information directly from a customer. However, the order notes that if using information from a third party, the institution is expected to otherwise comply with the USA PATRIOT Act-based CIP rule, which requires written procedures that:

(1) enable the institution to obtain TIN information prior to opening an account;

(2) are based on the institution’s assessment of the relevant risks; and

(3) are risk-based for the purpose of verifying the identity of each customer to the extent reasonable and practicable, enabling the institution to form a reasonable belief that it knows the true identity of each customer.

Agencies Issue Exemption Order to Customer Identification Program Requirements

FinCEN Permits Banks to Use Alternative Collection Method for Obtaining TIN Information