FDIC Federal Register Citations

This appears to be a documentation nightmare, even for a bank our size at 20 million in assets. I have been reading everything I can get my hands on and it still boggles my mind as to how we would implement this let alone keep it up to date and gather the needed information.

I keep getting this picture of the excited 10 year old that comes into the bank to open his first savings account only to find out that we need a copy of his social security card, a picture ID and a certified copy of his birth certificate before we can accept his $50 deposit. Do you think they will be back, I doubt it? I understand that all financial institutions will have to abide by these rules, but a piggy bank at home does not and savings account rates are not very attractive at this time. First impressions can kill hopes of any future banking relationship.

I know that the regulation provides for getting the documentation after opening the account, the equivalent of closing the barn door after the cow escapes. I work with loan documentation and I can tell you that once a customer has their proceeds you will play heck getting additional documentation. I spend my days on the phone to insurance companies trying to keep proof of coverage on vehicles current, writing letters to customers to get current financial information annually, following up on secured titles to vehicles, to only mention a few of the pieces of paper documentation required by federal/state examiners for loan customers.

I simply cannot imagine a paper documentation file for each owner on demand deposit, savings, certificate of deposit, savings bond, IRA's, travelers checks, bank drafts that a "customer" opens or buys. Also I believe in some states it is not legal to photocopy a driver's license, the preferred form of identification. I can imagine however that banks will have to hire additional people to keep track of this CIP paperwork and federal/state agencies will hire new examiners to examine the documentation.

We are blessed with the ability to know our customers because we have been our community for 100 years. We are an integral part of our community and know all of our customers on a first name basis; we can name their immediate families and extended family relationships. Trust me if you walk into our bank and we don't recognize you, we will find out who you are and where you are from.

After reading all of this CIP information I keep coming back to a quote I saved many months ago, see attached. Thank you for your time and consideration.

Yours truly,

Merrill A Powers, AVP 
Ford County State Bank
Spearville, KS 67876 
FAX 620-385-2615

Notable Quotes
Community banks don't deal with such companies as Enron, helping them in their nefarious activities. They don't help dictators and their friends and relatives in foreign lands launder their ill-gotten money. They don't see their customers as mere numbers to be fleeced. The nation's smaller banks are integral parts of their communities. They know their customers, and their customers know them. They always have been the financial bulwark of their communities, helping them in good times and bad."

"Point of View: Smaller Banks, a National Treasure" Robert A. Bennett, editor-in-chief, U.S. Banker, May 2002