Q: We recently received a call from a someone who lives
in another state and who wanted us to accept a faxed signature to
open a new account. He had “urgent business” and wanted
us to immediately start to pay monies on this new account. When
we politely declined to comply with this arrangement, he started
citing new state and federal laws that say faxed signatures are
authorized for the first 72 hours until the original signatures
can be received by mail. I am unaware of any new laws that say we
must accept faxed signatures.
A: We also are unaware of any such faxed signature
requirement. Moreover, this would seem to be contrary to the USA
Patriot Act which requires more care when opening accounts. You
were wise to have refused the new account. Always trust your instincts.
Q: A very good customer is the personal representative
in charge of an account. Must he get a tax identification number
for the estate or can he use the deceased's social security number
on the account?
A: A decedent's social security number dies with
him. The IRS requires that an estate obtain its own taxpayer ID
number.
Suspicious Activity Reports
Under 12 C.F.R. § 21, national banks are required to report
known or suspected criminal offenses, including fraud, at specified
thresholds, or transactions over $5,000 that they suspect involve
money laundering or violate the Bank Secrecy Act. Similar regulations
by other regulators apply to other financial institutions.
Be aware that a new version of the SAR form has been implemented
beginning July 1, 2003. Previous versions of SAR form will not be
accepted after December 31, 2003. The new version may be downloaded
at http://www.fincen.gov/reg_bsaforms.php. For those who wish to
file electronically, the page located at http://www.occ.treas.gov/sar.htm
provides a link that allows banks and other filers to download software
for use in preparing and filing Suspicious Activity Reports.
And More on the USA Patriot Act
Notice To Customers:
Section 326 of the USA Patriot Act require a procedure for providing
customers with adequate notice that the financial institution is
requesting information to verify their identities. Financial institutions
may either give customers copies of the notice individually or in
a manner reasonably designed to ensure that the customer is able
to view it (such as a lobby sign). The notice must generally describe
the Section 326 identification requirements. Financial institutions
may use the following sample language as provided in the regulation,
31 C.F.R.103.121(b)(5):
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IMPORTANT
INFORMATION ABOUT
PROCEDURES FOR
OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain,
verify, and record information that identifies each person who opens
an account.
What this means for you: When you open an account, we will ask for
your name, address, date of birth, and other information that will
allow us to identify you. We may also ask to see your driver’s
license or other identifying documents.
Your Checklist for Compliance:
The Customer Identification Program (CIP) rules are in final format
and have a mandatory effective date of October 1, 2003. For those
institutions wondering if their CIP is sufficient, the following suggestions
may be helpful in reviewing it.
1. Audit Existing Policies and Procedures: Review your previously-existing
policies and procedures. You may find that some “new”
requirements have been in effect in your institution for years. Generally
your existing "Know Your Customer" policies most likely
include sensible business practices and BSA compliance programs. It
is the intent of section 326 to standardize the requirements for these
practices and programs and your existing "Know Your Customer"
policy may become the foundation for the section 326 Customer Identification
Program.
2. Blueprint and Blend: Write out your Customer Identification Program.
Integrate that written blueprint with your existing Bank Secrecy Act
and AML policies.
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