Agencies Issue Guidance on CIP for Prepaid Cards
On March 21, 2016, the federal financial institution agencies (the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the U.S. Department of Treasury’s Financial Crimes Enforcement Network) issued guidance for applying Customer Identification Program (CIP) requirements to prepaid cards.
The guidance clarifies that certain prepaid cards issued by a financial institution should be subject to CIP. In order to determine which prepaid cards are covered by CIP, the financial institution first needs to determine whether the issuance of the prepaid card to a purchaser results in the creation of an account. If it does, then the financial institution needs to identify the customer/member per CIP. The guidance explains how financial institutions can go about identifying who the customer/member is for CIP purposes.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
Comments are closed.