USA PATRIOT ACT Section 326

The final rules for Section 326 provide that banks, credit unions and financial services companies must collect certain information and verify the identity of customers who open new accounts. These firms must implement Customer Identification Programs (CIPs) that include procedures to verify customer identity, using certain required information, within a reasonable time after the account is opened.

To verify the identity of a customer, an institution’s CIP must include procedures to utilize documentary verification and non-documentary verification. That information must be documented and retained for five years after an account is closed, and the identity of customers who open a new account must be compared to a government list of known or suspected terrorists or terrorist organizations. The final rules also require banks to give customers adequate notice of the financial institution’s requirements to verify customer identity pursuant to its CIP.

Examples of Documentary Verification: For individuals, an unexpired government-issued identification that shows nationality or residence and a photo or similar safeguard such as a driver’s license or passport. If the customer is an entity other than an individual, documents such as certified articles of incorporation, a business license issued by a governmental entity, a partnership agreement, or trust instrument may be used.

Examples of Non-Documentary Verification: Direct customer contact, independent verification of the customer’s identity by comparing information given by the customer with information obtained from a consumer credit reporting agency, public database or other source, by checking references with other financial institutions, or obtaining the customer’s financial statement.

The institution’s CIP must include procedures to determine if the customer appears on any list of suspected or known terrorists or terrorist organizations issued by a Federal government agency known informally as the “Section 326 List”. Additionally, the institution must maintain a record of all the information received for five years from the date the account is closed.

Section 326 also requires firms to provide customers with adequate disclosure notice they are requesting information to verify their identity.

To help institutions manage the challenges associated with CIP, ATTUS has developed numerous solutions aimed at identity verification, including our most comprehensive solution, WatchDOG® CIP.

The official name of the USA PATRIOT Act is "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001." To view this law in its entirety, click on the link here: http://www.fincen.gov/statutes_regs/patriot/index.html.