Customer (member) Identification Program (CIP/MIP) 2023/2024 already passed

Customer (member) Identification Program (CIP/MIP) The identification and verification rules do NOT apply to which of the following? a. Joint owners b. Beneficiaries c. Co-borrowers d. Non-resident aliens e. Applies to A, B, C & D. - correct answer THE CORRECT ANSWER IS B The CIP/MIP regulations apply to anyone applying to open an account, which includes any accountholder on the account (members and non-members). This will include joint owners and trustees, as well as both resident and non-resident aliens. However, beneficiaries are not signers on an account and may not even know they are beneficiaries; therefore, they are not included on this list. Additionally, the definition of "account" means any "formal banking or business relationship established to provide an ongoing service, dealing, or other financial transaction." This definition is broad enough to include loans, and therefore co-borrowers would also fall under the requirements. Yes or No: Does the CIP/MIP rule prohibit a minor from opening an account? - correct answer NO The CIP/MIP rule states that the credit union's "member" includes an individual who opens the account for an individual who lacks legal capacity, such as a minor. In other words, if a parent opens an account for a child, the member for purposes of the CIP/MIP rule is the parent. If, however, a minor opens the account, then the minor is the member. According to NCUA, when a minor opens the account, he/she can be verified through documentary methods such as a driver's license or work permit. If these are not available, the minor could be identified through nondocumentary methods such as verification by an existing member, using public databases, or verification of identity by parent/teacher. A credit union's CIP/MIP policy must specify what types of documentary and/or non-documentary evidence it will accept for a minor's account and the circumstances under which such documentation will be acceptable. Treasury explains that when a credit union sends its' employees to elementary schools to allow students to open savings accounts as part of a program to promote financial literacy, a student opening the account is the member and the credit union must get the name, address, date of birth, and taxpayer identification number of the student. Since verification procedures are risked-based, credit unions can use any reasonable documentary or non-documentary method to verify a student's identification. Yes or No: Must a credit union verify the accuracy of all of the identifying information it collects during the CIP/MIP process? - correct answer NO The regulation provides that a credit union's CIP/MIP must contain procedures for verifying the identity of the member using the information obtained during the credit union's CIP/MIP process. A credit union need not establish the accuracy of every element of identifying information obtained, but must verify enough information to form a reasonable belief that it knows the true identity of the member. Yes or No: To satisfy the CIP/MIP recordkeeping requirements, the credit union must retain the original information collected at account opening, in addition to updated information about the member (such as the member's current address). - correct answer YES The CIP/MIP regulation requires credit unions to retain the original information collected at the time of account opening for five years after the date the account is closed. Obtaining and maintaining updated member information serves a valuable, but different purpose. A non-profit organization wants to open an account at the credit union. However, since non-profits do not have any "owners", it cannot provide "beneficial" owner information. How can the credit union open this account? a. This account cannot be opened because the credit union cannot verify identifying information from at least one person who owns 25% or more of the legal entity. b. The credit union can open the account by collecting the identifying information from at least one board member to satisfy the "owner criteria" c. The credit union can open the account by collecting identifying information from at one person who meets the "control" criteria d. The credit union can open the account because non-profits are not legal entities. - correct answer THE CORRECT ANSWER IS C