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Tuesday, July 22, 2014

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Circular Letters

Circular Letter 5570

July 25, 2002

To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Compliance Officer

Subject: PATRIOT ACT REGULATIONS ON CUSTOMER IDENTIFICATION

Summary:

On July 17, 2002, the Department of the Treasury, the Board of Governors of the Federal Reserve System, and six other federal financial regulators issued proposed rules that would require certain financial institutions to establish minimum procedures for identifying and verifying the identity of customers seeking to open new financial accounts. These proposed rules implement section 326 of the USA PATRIOT Act, which directs the issuance of regulations requiring financial institutions to implement reasonable procedures for (1) verifying the identity of any person seeking to open an account, to the extent reasonable and practicable; (2) maintaining records of the information used to verify the person's identity; and (3) determining whether the person appears on any list of known or suspected terrorists or terrorist organizations. The proposed rules seek to protect the U.S. financial system from money laundering and terrorist financing. Additionally, by requiring identity verification procedures for all new accounts opened after the effective date of the final rules, the rules could also protect consumers against various forms of fraud, including identity theft.

The proposed rules outline requirements for the following financial institutions: banks and trust companies, savings associations, credit unions, securities brokers and dealers, mutual funds, futures commission merchants, and futures introducing brokers.

Effective Date: Written comments must be submitted by September 6, 2002. Final rules implementing section 326 must be effective by October 25, 2002.

Comment Requested: Comments should refer to Docket No. R-1127 and be mailed to Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW, Washington, DC 20551; sent by FAX to (202) 452-3819 or (202) 452-3102; or mailed electronically to: regs.comments@federalreserve.gov.

Additional Information: A copy of the proposed rules is attached PDF Icon (488 KB, 41 pages). For additional information, contact the Regulations Assistance Unit at this Reserve Bank at (215) 574-6568 or the Enforcement and Special Investigations Sections at the Board of Governors at (202) 452-5235; (202) 728-5829; or (202) 452-2961.