Agencies Issue Bank Secrecy Act Examination Procedures Relating to Section 326 of USA PATRIOT Act
July 29, 2004
Circular No. 11632

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

The federal financial institutions regulatory agencies issued Bank Secrecy Act (BSA) procedures for examining each domestic and foreign banking organization’s customer identification program (CIP). This program is required by section 326 of the USA PATRIOT Act (codified in the BSA at 31 U.S.C. 5318(1)). The procedures are designed to help financial institutions fully implement the new CIP requirements and facilitate a consistent supervisory approach among the federal financial institutions regulatory agencies.

The Federal Reserve Board has issued a supervisory letter (SR 04-13), dated July 28, 2004, to notify the supervisory staff and domestic and foreign banking organizations supervised by the Federal Reserve about the new BSA procedures.

The USA PATRIOT Act signed into law on October 26, 2001, established new and enhanced measures to prevent, detect, and prosecute money laundering and terrorism. The regulation implementing section 326 of the Act requires each financial institution to implement a written CIP that includes certain minimum requirements and is appropriate for its size and type of business. The CIP must be incorporated into the financial institution’s anti-money laundering compliance program, which is subject to approval by the financial institution organization’s board of directors.

Compliance with the regulation was required by October 1, 2003.

Press release OFFSITE
Interagency notice OFFSITE PDF
Supervisory letter (SR 04-13) OFFSITE

Nicholas Farco
Examining Officer
Legal and Compliance Risk Department