FDIC Federal Register Citations

Federal Deposit Insurance Corporation
Executive Secretary
550 17th Street, N.W.
Washington, DC 20429

Attention: Comments/OES

RE: Section 326 of the USA Patriot Act Proposed Rule

Rockland Trust appreciates the opportunity to comment on the proposed regulations referenced above. Rockland Trust is the sole banking subsidiary of Independent Bank Corp., which is the largest independent commercial bank headquartered in Massachusetts. Rockland Trust Company has 52 retail branches, eight commercial lending centers and three investment management offices located in Southeastern Massachusetts. The Company's primary business lines are commercial lending, retail banking and investment management.

The proposed rule implements section 326 of the USA Patriot Act, which requires the creation of reasonable procedures to (1) verify the identity of a client, (2) maintain records used to verify a person's identity, and (3) determine if a person appears on any government list of known or suspected terrorist organizations. As a large community bank, we agree with the intent of the proposed rules and believe that a reasonable and practical identification and verification procedure would protect the bank. We feel the key to implementing the program is that the institution may tailor its procedures to match their type of business and location.

We offer the following comments concerning the definitions:

Section 103.121(a)(1)

Account - The last statement should provide additional guidance to clarify "infrequent transactions such as occasional purchase of a money order or wire transfer" . This statement should be expanded to include periodic check cashing transactions. Any frequency of these types of transactions should be excluded because they do not meet the definition of account.

Section 103.121(a)(3)
Customer

As the definition of customer applied to business accounts it includes any signatory on the account. We believe that this requirement is too far reaching and should be clarified and limited to individuals that will be conducting transactions with the bank.

For many business accounts, the officers of the company may be located in a different state or region of the country. Obtaining identification for those individuals would be extremely difficult and problematic.

We offer the following comments concerning the remaining requirements of the proposal.

Section 103.121(b)(2)
Identity Verification Procedures

The section states that a bank need not verify the identifying information of an existing customer seeking to open an account if the bank previously identified the customer with procedures consistent with this regulation, and the bank continues to believe that it has a reasonable belief that it knows the true identity of the customer.

Regulators have required banks to have some form of controls in place to identify customer for a number of years as part of their Bank Secrecy Act compliance program. The identity verification requirements should be more flexible when opening an account for an existing bank customer. Requesting identification from well-known, existing customers places the bank in a negative customer service situation.

Section 103.121(b)(3)
Customer Identification Program - Recordkeeping

We do not agree that banks should maintain a copy of the document(s) used to verify customer identity. The footnote (#9) that further discusses this requirement needs to be clarified. If a bank notates the type of identification used and its corresponding number on account opening documents, this should be viewed as sufficient due diligence.

We do not see value in keeping copies of various forms of identification in files. Maintaining paper records of these forms will be costly. Most of the common forms of identification do not copy well which makes electronic recordkeeping impractical. We also have a concern that most forms of identification have expiration dates and banks cannot be expected to maintain files of current/valid identification.

A final concern about this requirement is the possible use of Regulation B prohibited information when reviewing account transactions.

Section 103.121(b)(4)
Customer Identification Program - Comparison with Government Lists

We agree that review of government lists should be performed. This requirement works efficiently with names included on the OFAC list due to various vendor screening options.

To accomplish the same task with the Control List, all screening activity by banks is manual. This list should be incorporated into database screening tools available to banks, or provided to vendors to include in OFAC-like screening tools.

We appreciate the opportunity to comment on this matter.

Christopher J. Burgess
Vice President, Director of Compliance
Rockland Trust Company
288 Union Street
Rockland, MA 02370
(781) 982-6633

cc: Massachusetts Bankers Association
     73 Tremont Street, Suite 306
     Boston, MA 02108-3906