Q: How can a bank demonstrate that it has “a reasonable belief that it knows the true identity of a person with an existing account” with respect to persons that had accounts with the bank as of October 1, 2003?
A: Among the ways a bank can demonstrate that it has “a reasonable belief” is by showing that prior to the issuance of the final CIP rule, it had comparable procedures in place to verify the identity of persons that had accounts with the bank as of October 1, 2003, though the bank may not have gathered the very same information about such persons as required by the final CIP rule.
Alternative means include showing that the bank has had an active and longstanding relationship with a particular person, evidenced by such things as a history of account statements sent to the person, information sent to the IRS about the person’s accounts without issue, loans made and repaid, or other services performed for the person over a period of time. This alternative, however, may not suffice for persons that the bank has deemed to be high risk. (January 2004)