| August 20, 2002
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 |
