To assist in the effort to stop money laundering and financial transactions related to funding terrorism, federal law mandates that financial institutions adapt and adhere to a Customer Identification Program (CIP).   Using the CIP approach, each financial institution must be able to “form a reasonable belief that it knows the true identity of each customer” making an account application.  To that end, financial institutions must have a CIP that includes both practical and reasonable procedures to verify each customer’s identity.

Any entity (corporation, individual, partnership, trust, or estate) that opens a new account is considered a customer and, as such, the Customer Identification Program rule applies.  Customer Identification Program procedures are detailed in the Bank Secrecy Act Anti-Money Laundering Examination Manual, the CIP rule implements section 326 of the USA PATRIOT Act, ( and dictate that all banks and financial institutions must ask for the name, address, date of birth, and other information (e.g. state driver’s license) to identify each new customer.


Customer Verification and Verification through Documents

Reasonable verification does not require establishing the accuracy of every element of identifying information obtained, but it must be sufficient to support “a reasonable belief that it knows the true identity of the customer”.  Procedures must detail the scenarios for ID verification via documents, non-documentary methods, or a combination of the two.

Customer ID Bank Fraud

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Identity Theft by Don Hankins, on Flickr.  This work is licensed under a Creative Commons Attribution 3.0 Unported License.

In the case of verification by documentation, the bank in question must have procedures that establish what constitutes the minimum acceptable documentation.  Institutions can effectively check driver’s licenses used as primary or secondary ID by referring to the I.D. Checking Guides, ( Dana Lander (Google+), an IT security specialist, recommends any driver’s license check for ID verification centers upon the Guides’ document images, supportive text, and details on security features, such as UV images.  State and federal agencies recommend use of these guidelines for driver license checks, thereby fulfilling the federal banking agency’s expectation for proper review of customer identification.

It can be difficult to identify the different security measures in ID cards for each state but it is not impossible.  Driver’s License Guide Company offers yearly updates of United States and Canada ID details in a booklet available to the public.  Since the state ID card is different in each state, it would be beneficial to learn the security measures for IDs in as many states as possible.  People can never stop learning so learn how to identity these special features in ID cards and it will help increase the prevention of identity theft or fraud.

In addition, it is important to stay alert and improve our security system.  With the recent news about Target’s data breach, it left millions of people vulnerable to identify theft or more.  The advancement of technology has helped us increase efficiency but has also harmed us.  People or companies need to stay up to date with technology and find new ways to protect customers and themselves from data fraud.  Thefts will continue to find ways to hack a server and we must continue to find ways to prevent that from happening.


Arnel Ariate is the webmaster of Money Soldiers.

Click Here to Leave a Comment Below 1 comments
david bergman - February 24, 2014

In this case customers are really disappointed bank should be the more secure against the hackers or fraud financial institutions must have that includes both practical and reasonable procedures to verify each customers identity opens a new account is considered a customer the Customer Identification Program reliable.


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