American Bar Association’s Business Law Today - April 2024

On March 29, 2024, the Financial Crimes and Enforcement Network (FinCEN) in collaboration with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Board of Governors of the Federal Reserve System (collectively, the Agencies), published a Notice for Information and Request for Comment (RFI). Specifically, the RFI seeks information from interested parties regarding the Customer Identification Program (CIP) Rule requirement for banks to collect, among other things, a taxpayer identification number (TIN) or Social Security number (SSN) for U.S. persons prior to opening an account (TIN Collection Requirement). Currently, the CIP Rule requires that for U.S. individuals, banks must collect a full SSN from the customer prior to opening an account.

Recognizing the significant changes in technology and financial services that have occurred since the CIP Rule’s promulgation, FinCEN is exploring ways to modernize the U.S. anti-money laundering/counterterrorism financing regime. To do so, FinCEN seeks information in order to assess and understand risk, benefits, and safeguards that could be established if banks were permitted to collect partial SSN information directly from the customer for U.S. individuals, and then use reputable third-party sources to obtain the full SSN prior to account opening. Additionally, FinCEN intends to use the information obtained to evaluate and enhance its understanding of current industry practices and perspectives related to the CIP Rule’s TIN collection requirement. Further, it will use that information to assess potential risks and benefits associated with the change to the TIN Collection Requirement.

Comments are welcome and must be received on or before May 28, 2024.

Reprinted with permission from the American Bar Association’s Business Law Today April Month-In-Brief: Business & Regulated Industries.