CIP FAQs – How should a bank provide notice to its customer when it engages in indirect lending through a third party such as a mortgage broker or car dealer?

Compliance > BSA > FinCEN FAQs - CIP
Q:  How should a bank provide notice to its customer when it engages in indirect lending through a third party such as a mortgage broker or car dealer?
 
A:  When a mortgage broker or car dealer is acting as the bank's agent in connection with a loan, the bank may delegate to its agent the obligation to perform the requirements of the bank’s CIP rule.  In contrast to the reliance provision in the CIP rule, the bank is ultimately responsible for its agent’s compliance with the rule.  Depending upon the manner in which the account is opened, the agent can provide notice to the bank’s customer, for example, by posting a sign, printing the notice on the loan application given to the customer, orally providing the notice, or by providing the notice in any manner that is reasonably designed to ensure that the customer is given notice before opening an account.  (January 2004)
 

ADDITIONAL INFORMATION
This FAQ was excerpted from the Interagency Interpretive Guidance on CIP Requirements that can be found at the following link:  https://www.fincen.gov/sites/default/files/guidance/faqsfinalciprule.pdf
 

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