Agencies issue exemption order for CIP program

Federal financial agencies—including the NCUA—issued an order granting an exemption from a Customer Identification Program (CIP) rule requirement. The CIP rule implements Section 326 of the PATRIOT Act and requires a credit union or bank to obtain a taxpayer identification number (TIN) from a customer prior to opening an account. 

The order permits credit unions to instead use an alternative collection method to obtain TIN information from a third-party source rather than the customer, provided that the credit union otherwise complies with the CIP Rule.  

"Today's Customer Identification Program rule exemption reflects the flexibility smaller credit unions need to verify the identity of members who wish to join using a Tax Identification Number—while not compromising national security,” said America’s Credit Unions Chief Advocacy Officer Carrie Hunt.  “We made sure that the Fed, NCUA, and the FDIC understood the unnecessary burdens their proposed rules would impose on credit unions. We will continue to engage the agencies to ensure credit unions can effectively serve their members." 

Previously, only a narrow exception allowed sourcing the TIN from a third-party for opening credit card accounts. The order will permit more flexible TIN acquisition in a wider array of account contexts. 

The order was issued by the NCUA, FDIC, Office of the Comptroller of the Currency, in coordination with the Financial Crimes Enforcement Network. 

In addition, the order acknowledges input provided by smaller credit unions and banks that expressed concern around the cost of utilizing third-party TIN verification services, as the order is optional and financial institutions are not required to use alternative collection methods to obtain TIN information.  

Read the full announcement.