Guidance on Customer Identification Program Rules Issued Pursuant to the USA PATRIOT Act
January 15, 2004
Circular No. 11571

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a supervisory letter (SR 04-02) dated January 14, 2004, the federal bank and thrift regulatory bodies and the U.S. Department of the Treasury's Financial Crime Enforcement Network (collectively the agencies) released a frequently asked questions document (FAQs) to provide additional guidance on the customer identification program rules issued under section 326 of the USA PATRIOT Act.

Section 326 of the USA PATRIOT Act, which is codified at 31 U.S.C. 5318(l), requires financial institutions such as banks, savings associations, and credit unions to have customer identification programs that:

  • Verify the identity of new accountholders.
  • Ensure that the institution has a reasonable belief that it knows each customer's identity.
  • Compare the names of new customers against government lists of known or suspected terrorists or terrorist organizations.

A customer identification program is an important component of a financial institution's overall anti-money laundering and Bank Secrecy Act compliance program. The FAQs, and related responses, provide helpful interpretive guidance for an institution to establish an effective program given its size and business activities.

SR letter (04-02) OFFSITE
New regulations pursuant to Section 326 OFFSITE PDF

Nicholas Farco
Examining Officer
Legal and Compliance Risk Department

Robert Otero
Examining Officer
Legal and Compliance Risk Department