Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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1/9/04 USA PATRIOT Act Monitor News Release: FAQs on Customer ID Programs

Customer Identification Program FAQs Provided by Agencies
Frequently asked questions regarding Customer Identification Programs required under 31 CFR 103.121 are the subject of a joint release of the banking supervisory agencies. FAQs: Final CIP Rule has been posted on the FinCEN website, Although many of the answers to the questions in the FAQs release seem obvious from a careful reading of the rule and the preamble to its release in the Federal Register (68 Fed. Reg. 25090, May 9, 2003), some areas of confusion are resolved. Thus, the exclusion from the definition of "account" regarding loans acquired through acquisition, merger, etc., is determined to apply to loan participations purchased from third parties and loans purchased from a car dealer or mortgage broker. "If, however, the bank is extending credit to the borrower using a car dealer or mortgage broker as its agent, then it must ensure that the dealer or broker is performing the bank's CIP." Other observations concerning the FAQs release will be discussed in a forthcoming issue of the Monitor.

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