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FDIC Federal Register Citations

September 5, 2002

Office of the Comptroller of the Currency
250 E Street SW
Public Information Room, Maillots 1-5
Washington, DC 20219

Attention: Docket No. 02-11

Executive Secretary
Attention: Comments /OES
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429

RE: Request for comment: Customer Identification Programs for Banks, Savings Associations,
and Credit Unions; Federal Register 48290, July 23, 2002

Dear Sir or Madam:

Thank you for the opportunity to comment on the joint notice of proposed rulemaking on Customer Identification Programs for Banks, Savings Associations, and Credit Unions published pursuant to section 326 of the USA PATRIOT Act of 2001, signed into law on October 26, 2001. Section 326 of the Act adds a new subsection (1) to 31 U.S.C. 5318 that requires the Secretary to prescribe regulations setting forth minimum standards for financial institutions that relate to the identification and verification of any person who applies to open an account. This proposal is designed to implement those requirements.

The following comments to the proposal are listed in the order in which the provisions appear in the proposal.

1. Definition of Account [103.121(a)(1)

We request more guidance be provided regarding the definition of account. Specifically, how this will apply to indirect lending or other loans purchased. In these cases, the bank purchasing the loan would
generally not have any contact with the customer or an opportunity to obtain or verify identification documents.

2. Recordkeeping Requirements [103.121(b)(3)]

We would suggest requiring retention of the information contained on an identification document rather than retention of a photocopy of the document. Photocopies of documents are generally not of good quality and would provide very little additional assistance for identification purposes. In addition, the information and photograph contained on a document such as a driver's license will become obsolete over time.

Of additional concern would be the storage requirements. The requirement to retain photocopies of the identification documents for five years after an account is closed appears to be excessive and, as mentioned above, of little value as the information and photograph contained on the document will become obsolete over time.

3. Customer Notice [103.121(b)(5)]

We suggest more specific criteria be provided in the final regulation regarding the content and location of the required notice to customers, including model language deemed to be in compliance with the regulation.

There will be customer resistance to the identification requirements. The more consistently they are communicated to the public and the more obvious it is that they are required by law, the more readily they will be accepted as a routine part of opening a bank account.

4. Exemptions [103.121(c)]

We would suggest that exemptions granted by the regulator include correspondent bank accounts. Signatories on these types of accounts may change frequently. Requiring identification verification as signatories are changed would create a burden and be of little value as identification verification should have already been performed by the bank upon employment.

5. Implementation

We would suggest that there be a four to six month implementation period following publication of the final rule. The new customer identification requirements will have a large impact on banks including writing procedures, obtaining board approval, accommodating storage requirements, and training staff. We do not feel it will be possible to complete all of these projects by October 25, 2002.

We appreciate the opportunity to comment on this proposed rule.

Sincerely,
Old Second National Bank
Ruby Pleva,
Teller Services Manager, BSA Officer 37 S River St.
Aurora, IL 60506

Yorkville National Bank
Janice Towne,
AVP, BSA Officer
Shirlee Guddendorf,
Compliance Officer
102 E Van Emmon St
Yorkville, IL 6056

Kane County Bank
Peggy Nelson,
AVP, BSA Officer
749 N Main St
Elburn, IL 60119

Last Updated 09/11/2002 regs@fdic.gov

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