FDIC Federal Register Citations

Executive Secretary
Attention: comments/OES
FDIC
550 17th Street NW
Washington, DC 20429

Re: Customer Identification Program

Dear Executive Secretary:

In response to the proposed Customer Identification Program I am writing with some questions and concerns.

Section 103.121(b)(2)(i) states that " the basic information that banks would be required to obtain under this proposed regulation reflects the type of information that financial institutions currently obtain in the account-opening process and is similar to the Identifying information currently required for each deposit or share account opened".

Response: It is to be assumed by this program that most financial institutions are presently doing most of what will be required. This is not true. We have a Know Your Customer Policy but we do not have procedures in place to cover all the area in the proposed CIP that would be required. We would not have sufficient time between 9/6/02 (commentary) and 10/26/02 (mandate date) to include all the necessary changes needed and training to be done. What flexibility exists where we cash on us checks for non-customers that are known to us because our branches are located primarily in small communities?

Section 103.121(b)(2)(ii)(A) states "CIP must contain procedures describing when the bank will verify identity through documents and setting forth the documents that the bank will use for this purpose. For individuals these docs may include: unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard".

Question: Where do we go to validate the authenticity of a driver's license or government issued ID?

Section 103.121(b)(2) states that "each bank must have risk-based procedures for verifying the identity of a customer that take into consideration the types of accounts that banks maintain, the different methods of opening accounts, and the types of identifying information available. These procedures must enable the bank to form a reasonable belief that it knows the true identity of the customer".

Question: The proposal does not give guidance for obtaining and verifying information for Internet/mail/phone. Also, what about indirect lending issues? Who is to collect this information? Who would verify information and who is responsible for storing information? The same questions would apply for participation loans, guarantors and/or cosigners. What about beneficiaries on Trust accounts, POD accounts where the owner sometimes doesn't want that person to know they will receive the funds, or minor accounts?

Very truly yours,
Donna E. Francis
Sr. Vice President/Retail Deposit Operations
The Bank of Castile
PO Box 129 50 Main St.
Castile, NY 14427