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Aug 12, 2008
Categories: BSA

Verifying CIP Information

The Compliance Guy has graciously offered me the opportunity to share a few thoughts.  Personally, I think he is just trying to get me hooked on blogging, like he obviously is, so that he can enjoy his upcoming two week honeymoon out West.  If you are a NAFCU-member you may have talked with me on the phone or seen me at Compliance School, I'm Steve Van Beek, Regulatory Compliance Counsel at NAFCU.   You may also remember me from this post, or this one or, unfortunately, this one.

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With identity theft continuing to rise, credit unions are wondering how they verify the accuracy of a member's SSN.  This naturally leads to the question of what level of verification credit unions need to perform on the Customer Identification Program (CIP) information they receive.  That answer is in the Frequently Asked Questions to the Final CIP Rule which was attached to a 2005 NCUA Regulatory Alert and can be found here.  The FAQ includes this information:

"31 C.F.R. § 103.121(b)(2)(ii) -- Customer verification

 1. Must a bank verify the accuracy of all of the identifying information it collects in connection with 31 C.F.R. § 103.121(b)(2)(i)?

The final rule provides that a bank’s CIP must contain procedures for verifying the identity of the customer, “using the information obtained in accordance with paragraph (b)(2)(i),” namely the identifying information obtained by the bank. 31 C.F.R. § 103.121(b)(2)(ii). A bank need not establish the accuracy of every element of identifying information obtained but must do so for enough information to form a reasonable belief it knows the true identity of the customer. See 68 FR 25090, 25099 (May 9, 2003). (January 2004)."

That is good news for credit unions as there is currently no way to verify that the Social Security Administration has issued a specific social security number to your potential member.  However, there are resources available to credit unions determine if a particular social security number is active.  The Social Security Administration maintains a "Death Master File" which includes a list of social security numbers issued to now-deceased persons.  There are free resources, such as this, which allow a search of the Death Master File.  

Note:  The Department of Commerce does have a product that allows direct searches of the Death Master File but it charges a pretty penny to do so. 

For verifying employee Social Security Numbers for wage reporting purposes, the SSA has that covered here. 

Anybody else have resources to share? 

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