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<p>ARLINGTON, Va.-Government officials explained the ins and outs of the information collection requirements under the U.S.A. PATRIOT Act during an audioconference hosted by NAFCU last week. Providing this critical information to listeners were NCUA Senior Trial Attorney John Ianno and Financial Crimes Enforcement Network (FinCEN) Executive Assistant for Regulatory Policy Peter Dijinis. Under section 326 of the act, financial institution regulators are required to issue a final rule regarding customer or member identification verification by October 26. While the proposed rule, expected to be released jointly by Treasury and the federal financial institution regulators, has not yet been issued, Ianno illustrated what he expects to be in the reg. He listed potential requirements for the rule as: creating reasonable procedures to verify identifications of those trying to open an account; maintaining a record of the information used to verify the identity; and determining if the person or group is on a list provided by the government of suspected terrorists. Additionally, consumers will be required to provide the identification information to obtain an account with reasonable notice from the institution. The procedures must be in writing and approved by the credit unions’ board of directors, Ianno said. He emphasized that the board will be “ultimately responsible” for compliance with the new regs when they come out. The information collection is intended only for consumers seeking a long-term relationship with the institution, Ianno said. It does not apply to someone wishing to purchase a money order, for example. “I don’t believe it will be very burdensome to credit unions,” Ianno said. He explained that most credit unions already collect this information for regulations implemented under the Bank Secrecy Act. He also said that the approach will probably be somewhat risk-based, based on the size and membership of the credit unions. For example, he said a large credit union, like Navy Federal Credit Union, with an international field of membership and a wide variety of services, would not have the same risk level as a 1,000-member credit union. Dijinis reviewed section 314 of the law that allows for information sharing between the government and financial institutions and permits financial institutions, on a voluntary basis to share information regarding suspicious terrorist activity or money laundering among themselves. Some listeners were concerned about the lines between the PATRIOT Act and the Right to Financial Privacy Act. Dijinis said, unfortunately, there are not clear-cut answers to that dilemma. He added that new issues are being raised continuously as the government and institutions gain experience with the interim regulations. An exact answer may not be available until there is a court challenge, he said. Financial institutions can help protect themselves from liability if they choose to share information with other institutions by getting certified. Dijinis stressed that this certification is only for information regarding credible suspicion of terrorist activity or money laundering. Dijinis told listeners to expect final regulations in the very near future. [email protected]</p>

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