Financial institutions may use state-issued mobile driver’s licenses (mDLs) and other government-issued digital credentials for ID verification under the Bank Secrecy Act (BSA)/anti-money laundering (AML) customer ID program (CIP) rule, federal regulators said Tuesday.
Treasury’s Financial Crimes Enforcement Network (FinCEN) and staffs of the prudential federal financial institution regulators on Tuesday jointly issued two new frequently asked questions on the use of mDLs, a form of verifiable digital credential (VDC), for customer ID verification. They also amended a previous one to reflect updated terminology for VDCs.
In a Financial Institution Letter (FIL), the Federal Deposit Insurance Corp. (FDIC) explains that:
- An mDL is a driver’s license or identity card that is issued by a state government and contains all of the same information as a physical driver’s license. An mDL is a type of VDC.
- The CIP rule neither requires nor prohibits reliance on government-issued VDCs such as mDLs as a means of verifying a customer’s identity.
- An unexpired, government-issued VDC, such as an mDL, would qualify as a “government-issued identification” for purposes of the CIP Rule, though it must also “evidence nationality or residence and bear a photograph or similar safeguard.”
- A bank may use a VDC, such as an mDL, to verify a customer’s identity, to the extent permitted by the bank’s CIP and so long as the bank or credit union maintains the appropriate technology or systems to extract the relevant information from the VDC.
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