QUESTION
The company that generates my loan documents includes a form
which requires the closing agent to obtain two forms of ID from the
borrower. Does the Patriot Act require us to obtain and verify a borrower’s
identity at closing with at least two forms of identification?
ANSWER
No. There is no set number of forms of ID required by
the USA Patriot Act. Section 326 of the USA Patriot Act requires financial
institutions to implement a Customer Identification Program (“CIP”) that is
appropriate for the size and location of the financial institution. This
regulation requires the CIP to be in writing, incorporated into the
institution’s Identity Theft Prevention and Red Flags program, and approved by the Board
of Directors, a committee of the Board of Directors, or Senior Management.
A financial institution must implement reasonable procedures
for verifying the identity of any person who applies for a residential or
commercial mortgage loan. These procedures may vary based upon the
circumstances of each situation and whether any “Red Flags” are present based
on the information obtained by the financial institution regarding the
consumer.
It should be noted that the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and the United States Department of the Treasury have recommended that “given
the availability of counterfeit and fraudulently obtained documents, a bank is
encouraged to obtain more than a single document to ensure that it has a
reasonable belief that it knows the customer’s true identity”. [Interagency
Interpretive Guidance on Customer Identification Program Requirements, April
28, 2005.]
This Guidance can be located by clicking on the link below.
Joyce Wilkins Pollison
Director/Legal & Regulatory Compliance
Lenders Compliance Group
