Q: Who is the “customer” for purposes of trust accounts? Does it make a difference whether the bank or a third party is trustee for the trust?
A: In the case of a trust account, the “customer” is the trust whether or not the bank is the trustee for the trust. “A bank will not be required to look through trust, escrow, or similar accounts to verify the identities of beneficiaries and instead will only be required to verify the identity of the named accountholder.” See 68 FR 25090, 25094 (May 9, 2003). However, the CIP rule also provides that, based on the bank’s risk assessment of a new account opened by a customer that is not an individual, the bank may need “to obtain information about” individuals with authority or control over such an account, including signatories, in order to verify the customer’s identity. See 31 C.F.R. § 103.121(b)(2)(ii)(C). For example, in certain circumstances involving revocable trusts, the bank may need to gather information about the settlor, grantor, trustee, or other persons with the authority to direct the trustee, and who thus have authority or control over the account, in order to establish the true identity of the customer. (April 2005)