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Coatesville Savings Bank - USA Patriot Act “Customer Identification Program”

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INTRODUCTION

One of the most important, if not the most important, means by which Coatesville Savings Bank can hope to avoid criminal exposure to the institution by "customers" who use the resource of the institution for illicit purposes is to have a clear and concise understanding of the "customers" practices. The adoption of "Customer Identification Program" guidelines and procedures may prove extremely effective in detecting suspicious activity by "customers" of the institution in a timely matter.

As required by Regulation Rule Section 326:103.121, it is imperative that Coatesville Savings Bank adopt "Customer Identification Program" guidelines and procedures to ensure the immediate detection and identification of suspicious activity at the institution. An effective "Customer Identification Program" policy must, at a minimum contains a clear statement of management's overall expectations and establishes specific line responsibilities.

OBJECTIVES OF "CUSTOMER IDENTIFICATION PROGRAM" POLICY

A "Customer Identification Program" policy should increase the likelihood that Coatesville Savings Bank is in compliance with all statutes and regulations and adheres to sound and recognized banking practices.
A "Customer Identification Program" policy should decrease the possibility that Coatesville Savings Bank will become a victim of fraud or illegal activities.
A "Customer Identification Program" policy that is effective will protect the good name and reputation of the bank.<
A "Customer Identification Program" policy should not interfere with the relationship of Coatesville Savings Bank with its good customers.

POLICY ELEMENTS AND GOALS

Coatesville Savings Bank is committed to the concept of "identifying" customers who have deposits, loans or other banking services.

Coatesville Savings Bank "Customer Identification Program" policy minimizes the risk of deposit and loan fraud. Additionally, it discourages criminals from using Coatesville Savings Bank for other illicit purposes, such as money laundering.

ELEMENTS OF "CUSTOMER IDENTIFICATION PROGRAM" POLICY

The following elements make up the bank's "Customer Identification Program" policy.

The bank will make a prudent effort to determine the true identity of all its deposit and loan customers.
The bank will make a prudent effort to know who is using its other services such as wire transfers, money orders, etc.
The bank will refuse to conduct business with any individual who refuses to provide proper identification or with any business or organization that refuses to provide sufficient background information or credentials.

GOALS OF "CUSTOMER IDENTIFICATION PROGRAM" POLICY

By following each element of Coatesville Savings Bank's "Customer Identification Program" policy, the bank will achieve the following goals.

Assure that Coatesville Savings Bank is in compliance with the bank Secrecy Act, as well as with other laws and regulations. This reduces the bank's exposure to monetary penalties for noncompliance.
Decrease the likelihood of the bank becoming a victim of fraud or other illegal activity.
Reduce the risk of bank losses from government seizure and forfeiture of a customer's loan collateral when the customer is involved in illegal activity
Prevent the bank's public image from becoming associated with criminal activity.
Assure that the bank can readily identify suspicious activity.

EXAMINING CUSTOMER ID

Identifying a customer involves more than obtaining the right type of identification and recording the number.
When a customer presents ID, examine it thoroughly. Make sure the photograph and decription on the ID are consistent with the appearance of the presenter.

STEPS FOR EXAMINING ID

Take the following steps when you examine customer ID prior to opening the account.

Compare the photograph to the customer.
Compare the physical data to the customer's appearance. Physical data includes features such as height, weight; and eye color.
Compare the birth data to the customer's approximate age.
Check the ID issue date. Newly issued ID could signal potential roblems.
Check the ID expiration date.
Check the overall appearance of the ID.
Run your finger around the edge of any laminate to detect breaks. Examine official seals, holograms, and special features to ensure that they appear genuine.

PRIMARY IDENTIFICATION

Primary identification is the most reliable type of customer ID. Primary ID shows the customer's photograph and physical description.

Primary ID Documents.
Current Penna. Driver's license.
Current Non-Penna. Driver's license.
Official passport with current photograph.

Since the bank may serve elderly or disabled individuals who do not drive, branch managers may approve exceptions for customers who have satisfactory/ acceptable ID. Exceptions are made on a case-by-case basis.

SECONDARY IDENTIFICATION

The following documents are secondary identification. May be utilized in Conjunction with Primary Identification.

Known employer ID cards.
School ID with photograph.

UNACCEPTABLE IDENTIFICATION

The following documents are unacceptable ID.

Food stamp card
Social Security card, except to verify a number
Driver's license that is temporary or expired
Club or association card
Marriage license
Library card
Business card
Fishing or hunting license
Insurance policy

INVESTIGATING NEW ACCOUNTS

A thorough screening of customers that wish to open new accounts is the first and perhaps the most important step the bank can take to avoid losses from fraudulent activity, such as money laundering.

Although screening new account customers has been a common practice for years; the scope and depth of the investigation must be expanded.

Frequently, a thorough investigation of a prospective new customer immediately discourages a criminal from attempting to use the bank for illicit purposes.

Prior to opening a new account, all authorized owners of said account will be verified through ChexSystems. After opening a new account, a `Welcome Letter" will be sent to the customer to verify the address given at the time the account was opened.

INVESTIGATING PERSONAL ACCOUNTS

When you open a personal account, begin by obtaining the required information from the customer. Then take steps to verify the identity of the customer and the validity of the identification. Prior to opening a new account, all authorized owners of said account will be verified through ChexSystems. After opening a new account, a "Welcome Letter" will be sent to the customer to verify the address given at the time the account was opened.

Compare the ID to other information and credentials. Although most fake ID bears the photograph of the presenter.

Obtaining Customer Information The following information is required.

Name and address.
Social Security number.
Home and/ or work telephone number.
Home and/ or work telephone number.

INVESTIGATING ORGANIZATION ACCOUNT

With few exceptions, the investigation techniques used to open accounts for organizational customers are similar to those for individuals.

The branch should obtain and verify background information and credentials that identify the prospective organizational account signer or signers.

Organization name and address. Include the street address. A post office box or mail drop service should not be the only address on record.
Federal tax ID number.
Organization resolution. To establish authorized account signers.

MONITORING DEPOSIT ACCOUNTS

The bank may not actually "know" a deposit customer until a new account has been opened for a few months. Therefore, part of Coatesville Savings Bank's "Customer Identification Program" policy is to review or monitor transactions for at least a 60 day period.

Basically, deposit account monitoring consists of reviewing the account activity to determine any unusual transactions.

Monitor Daily Activity Report for large currency transaction or cash-in / cash-out used for BSA compliance monitoring.

COLLATERAL FOR CASH LOANS

Exercise caution when granting "cash loans" if they are fully covered by collateral such as deposit account or other cash equivalent that are normally viewed as risk free. (Our collateral loans made on certificates only).

CUSTOMER IDENTIFICATION PROGRAM RECORD RETENTION Coatesville Savings Bank will maintain a record of all information obtained during the customer identification process. This recorded retention is in addition to existing BSA recordkeeping.

RECORDS TO BE RETAINED:

All identifying information about a customer (name, date of birth, address and Social Security Number or Tax ID Number.
A description of any document that was used to determine identification noting the type of document, and identification number contained in the document, the place of the issuance and if any the date of issuance and expiration date.
A description of the methods and the results of any measures taken to verify the identify of the customer through non-documentary methods.
A description of the resolution of any discrepancy discovered when verifying the identifying information obtained.

RETENTION OF RECORDS:

Coatesville Savings Bank will retain the required identifying information for (5) five years after the date of the account is closed. Coatesville Savings Bank will retain for (5) five years after the record is made, descriptions of any documents used to verify the customer's identity, descriptions of any other measures used to verify the identify of the customer and descriptions of the documentation used to resolve any discrepancy discovered when verifying any identifying information obtained. Coatesville Savings Bank will retain the identifying information, not just copies of the document used to verify customer identify.