FDIC Federal Register Citations

When reviewing the proposed regulation to implement section 326 of the USA PATRIOT Act the bank is concerned about the following sections of the regulation:

1."Reasonable procedures to verify" opens the door to wide scope of interpretation. In the competitive world in which we operate strict interpretation of the reg's identification requirements by an institution in relation to their competition may result in putting them at a competitive disadvantage. If the reg is specific in defining acceptable forms of identification and the accounts and transactions to be covered, rather than leaving it open to each financial's interpretation "what is reasonable" then the risk of competitive disadvantage will be minimized.

2. Positive identification of authorized signors beyond the individual opening an account in person will be extremely difficult. Alternative delivery systems such as Internet account opening procedures will be eliminated. Obtaining positive ID's on accounts who change signors via corporate management changes (which happen regularly) will be very very difficult. Obtaining positive ID's on corporate accounts at the account opening will be nearly as difficult. Loans originated by car dealers and sold to the bank will be another time positive ID steps by bank personnel will be nearly impossible. These are just a few of the situations when positive identification will range from difficult to nearly impossible especially on corporate signature verifications.

3. Blanket elimination of a Post Office Box as a mailing address will impact customers who travel on a regularly with no permanent residence. Perhaps these type of customers should file for an exemption and have their identity established prior to receiving an exempt status certificate from people trained to verify their identity.

4. Accounts opened for long time existing customers who are well known by bank personnel should not need to undergo the same ID procedures as a new customer with no established track record. These customers files should be noted internally as "identity established" and not be required to go through the entire identity review process.

5. The time frame from the comment period ending on September 6 to having a board approved "Customer Identifcation Program" fully operational by the end of October will offer an extreme challenge to all financial which may result in quick solutions which lack the forethought to achieve the results intended by the reg.

Dan Augustine, Senior Vice President
Bank Operations
Phone 712-277-6581