NCUA Issues BSA FAQ for CU Processing of Katrina Victims

ALEXANDRIA, Va.-NCUA, in conjunction with the other federal banking regulators, sent out a Regulatory Alert (05-RA-06) for credit unions dealing with Hurricane Katrina-impacted members and non-members regarding Bank Secrecy Act requirements. An enclosure with the alert, in the form of Frequently Asked Questions, informs credit unions that under the interagency Customer Identification Program (CIP) regs they must obtain the person’s name, address, date of birth, and taxpayer identification number. For those who do not have a permanent address because it was wiped out in the storm, credit unions should get the person’s last permanent address and the address of where they are staying currently, even if it is temporary. If an address for the temporary housing is unavailable, a description of the physical location of temporary housing will do. The credit union is allowed “a reasonable period of time” to verify the member’s identity. Given the extreme circumstances, the credit union should determine what is reasonable and how to verify member identifications through documentary and/or non-documentary methods. Therefore credit unions are not required to obtain a drivers’ license or any other identification at account opening, which will be helpful in many cases for Hurricane Katrina victims. NCUA said that Social Security, the Office of Personnel Management, and Railroad Retirement benefit payments already have identification processes in place to identify recipients over the phone. Treasury’s recent guidance on government benefit checks and the use of third party drafts is available at: http://www.fms.treas.gov/flexibility_thirdparty.html. The use of non-documentary methods may require some credit unions to amend their CIPs and obtain board approval “as soon as practicable.” If receiving wire transfers for non-member victims, a credit union does not have to obtain information from the beneficiary or verify their identity under $3,000, though “prudent practice would normally lead a credit union to do both.” For transfers of $3,000 or more that the credit union accepts for a non-member, the institution should obtain and retain their name, address, type of identification document reviewed and the number of it, and a taxpayer identification number or lack thereof. The receiving credit union is responsible for this information, as well as a copy of the payment order.