[rcooper]

A question we received:

Is a bank required to have copies of social security cards in file in order to comply with the CIP rule. The pertinent regulatory citation is FinCEN’s 31 C.F.R. 1020.220.

[rcooper]

Answer by Don Blaine:
Section (a)(2)(i) requires banks to obtain customer information such as: name, DOB, physical street address and TIN for any customer that opens an account. The TIN, for a U.S. citizen, is normally a SSN. Section (a)(2)(ii) requires customer verification.

Banks normally verify customer information through documentary methods and the examples used in the regulation are a Drivers License and Passport. If your bank is using documentary methods, and every bank normally uses this methods for U.S. citizens, the bank must verify through an unexpired, government issued identification evidencing nationality or residence which bears a photograph or similar safeguard. Social Security cards do not have a photograph and do not have an expiration date so they would not serve as a verification of identity under the documentary method. While there is no prohibition on obtaining and maintaining a copy of a social security card on file there is no requirement to do so.

The Social Security Administration periodically sends out communications warning people to keep their card in a safe place. Most banks do not wish to inconvenience customers by informing them to go home or to their safe deposit box to obtain their social security card and bring it back to the bank. Most banks validate the social security number either through ChexSystems, a credit bureau or IRA E-Services.

A bank’s CIP written policy, that is incorporated within its BSA policy, must state whether the bank is using documentary or non-documentary verification processes so your actual practice for verifying customer identity must be spelled out in your written policy. Be careful of indicating in your policy that you will obtain a copy of the social security card when your bank’s process does not require such documentation and vice versa. You need to do what your policy states or risk a CIP violation during your exam. In essence – your written policy and actual practices, or processes, must agree. The regulation encourages, although does not require, more than one identifying document.

I have also gone through the BSA Examination manual and there is no instructions for examiners to review to determine whether the bank obtained a copy of a customer’s social security card.

I’ve attached the 14-page CIP FAQs from April 2005. These FAQs are far more expansive than the regulation itself and obtaining a copy of the social security card is never mentioned.

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