WASHINGTON–Banks that are under the supervision of the Federal Reserve can now obtain a customer’s tax identification number (TIN) from a third party under an exemption order approved by the Fed.
The new Fed rules is similar to one announced jointly in late June by NCUA, the FDIC, and the Office of the Comptroller of the Currency (OCC).
The order provides an exemption from the rule governing how a bank may obtain TIN information as part of the customer identification program (CIP) required by section 326 of the USA PATRIOT Act, which amended the Bank Secrecy Act.
Under that rule, as part of its AML program a Bank must directly obtain a customer’s TIN information before account opening.
About the Rule
Now, the Fed said, under the new rule “for all accounts at all banks (and their subsidiaries)” banks may instead use an alternative collection method to obtain TIN information from a third-party source rather than the customer as long as the institution otherwise complies with the CIP rule.
According to the new rule, banks must have written procedures that:
- Enable the bank to obtain TIN information prior to opening an account
- Are based on the bank’s assessment of the relevant risks
- Are risk-based for the purpose of verifying the identity of each customer to the extent reasonable and practicable, enabling the bank to form a reasonable belief that it knows the true identity of each customer.
The order stresses that obtaining TIN information through a third party is optional.Fed
