Maryland Legal Alert for Financial Services

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FinCEN Proposes Changes to Customer Identification Requirements

On March 29, 2024, the Federal Crimes Enforcement Network (FinCEN), along with other federal agencies, issued a Notice and Request concerning a proposed amendment to the Customer Identification Program (CIP) Rule requiring banks to collect taxpayers’ identification number (TIN) information before opening any account – typically a Social Security number for U.S. citizens.  The proposed changes would adjust requirements of Section 326 of the USA PATRIOT Act (CIP Rule), which requires that each bank implement a written CIP containing identity verification procedures that enable the bank to reasonably identify its customers.  FinCEN and other agencies found the CIP Rule necessary to protect against money laundering and other illegal activities. The proposed change would allow banks to collect partial Social Security number information and then subsequently obtain the full Social Security number from a reputable third-party source.

FinCEN is inviting comments on the proposed change to evaluate and assess the potential risks and benefits associated with changing the CIP Rule, specifically for providers of buy-now, pay-later products that rely on bank partners.

FinCEN is accepting comments related to the Notice and Request until May 28, 2024. 

For more information, contact Christopher R. Rahl or Tamia J. Morris.

Contact Christopher R. Rahl | 410-576-4222

Contact Tamia J. Morris | 410-576-4021