Q: Is the CIP rule applicable to bank holding companies and their non-bank subsidiaries, or to savings and loan holding companies and their non-savings association subsidiaries?
A: No, the CIP rule in 31 C.F.R. § 103.121 applies only to a “bank.” A bank holding company is not subject to the rule solely because it owns a bank. However, a bank holding company may be subject to another CIP rule. For example, if the company is a broker-dealer in securities, it would be subject to 31 C.F.R. §103.122.
Similarly, a non-bank subsidiary of a bank holding company is not subject to the CIP rule for banks solely as a result of being affiliated with a bank in a holding company structure. However, a non-bank subsidiary may be subject to one of the other CIP rules.
Even if a bank holding company is not itself subject to the CIP rule under 31 C.F.R. § 103.121, it should, as a matter of safety and soundness, take appropriate measures throughout its organization to ensure that each entity is in compliance with any applicable CIP rule, to ensure that new accounts receive appropriate due diligence, and generally to protect the consolidated organization from risks associated with money laundering and financial crime.
The analysis set forth above is equally applicable to savings and loan holding companies and their non-savings association subsidiaries. (April 2005)