Compliance Blog

I spoke with a credit union that was thinking of getting into the student loan business.  But here was their dilemma: they were going to be making loans to some students that had not been into their offices.  The credit union was getting hung up on how they could comply with the BSA CIP rule.

The rule does require credit unions to gather and verify certain information when someone applies for membership or a loan.  But it does give great flexibility on how you go about it.  Credit unions can use a documentary method, by which they review documents that the member gives them.  Or they can use a nondocumentary method.  For example, credit unions going down that path might verify information via a credit report or other means.

The key thing is this: credit unions need to decide how they go about verifying the information and make sure it is in their policies. 

Here's a link to the online CIP chapter of the FFIEC BSA/AML Examiner's Manual.  You can look there for more details.

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The Compliance Guy is off to Nantucket for the 4th, where he hopes to avoid a 5-alarm sunburn.   Enjoy your weekend, enjoy the holiday, and stay safe!