Verifying identities

A financial institution required to file a currency transaction report must verify certain information about the person conducting the transaction and the person (if any) on whose behalf a transaction is being conducted. [31 CFR 1010.312] The institution must do this before concluding a reportable transaction.

The institution must verify the name and address of the person conducting the transaction. If the person conducting the transaction did so on behalf of someone else, the institution must verify the identity, account number, and social security or taxpayer identification number, if any, of the person or entity on whose behalf the transaction is conducted.

The institution does this verification by examining a document, other than a signature card, that is normally acceptable within the banking community as a means of identification when cashing checks for nondepositors (e.g., a driver’s license or credit card). The institution may use a signature card only if it has previously examined such a document and described it on the signature card. When filling out the currency transaction report, the institution must record the specific identifying information (the account number of the credit card, the driver’s license number, etc.) on the report.

You may occasionally have a person who simply does not have the types of identifying documents you would normally want to see. For example, an elderly or disabled person might not have a driver’s license or credit card. The Treasury Department has issued an Administrative Ruling (No. 92-1) explaining what you should do. The Ruling says you may accept alternate identifying documents, such as a social security or Medicare/Medicaid card along with another document that contains both the person’s name and address. The Treasury Department suggests an organizational membership card, voter registration card, utility bill, or real estate tax bill. When completing the currency transaction report, you must record the word “elderly” or “disabled” along with the method used to identify the person, such as “Social security and (organization) membership card only ID.”

This Ruling also says institutions must have formal written policies concerning the types of identification acceptable from elderly or disabled persons who lack the usual forms of identification. Once the policy is implemented, the Ruling says, the financial institution should permit no exceptions.

One ambiguity about the Administrative Ruling is that it appears to apply only to elderly or disabled persons lacking usual identification documents. Neither “elderly” nor “disabled” is defined. The Ruling also gives no guidance on dealing with persons who are not elderly or disabled but lack the usual forms of identification.