WASHINGTON—A change to the Customer Identification Program (CIP) rule to allow the partial collection of a social security number (SSN) for identity verification purposes is being opposed by America’s Credit Unions.
The credit union “concerns” were outlined in a comment letter by ACU send in response the Financial Crimes Enforcement Network’s (FinCEN) request for comments related to the Taxpayer Identification Number (TIN) collection requirement under the CIP rule.
“At issue is the potential access to consumers’ full SSN by a third party,” ACU stated in its letter. “The existing rule requires financial institutions to implement a written CIP that includes identity verification procedures, and financial institutions must currently collect a full SSN from a customer to fulfill the TIN requirement. FinCEN seeks input on the rule’s SSN collection requirement, including potentially allowing financial institutions to collect a partial SSN from the customer and then using a third-party to collect the full SSN.
Additional Concerns
“[W]e are concerned that modifying the current process to allow for collection of the full SSN from a third-party may present certain risks, without clear benefits,” the letter continues. “While we typically encourage regulatory changes that increase flexibility, we are also mindful that some changes could bring about increased risk, including in the area of consumer fraud, such as identity theft, as noted by FinCEN.”
When it does not involve SSN collection, America’s Credit Unions said it recognizes the potential efficiencies in utilizing third parties under the CIP rule. The association is asking FinCEN to consider allowing greater use of third parties under the CIP Rule, which it argued “can decrease the amount of processing time required, while still complying with the regulatory requirements of the CIP Rule.”
Further Evaluation Requested
“Based on member feedback, [outside the TIN collection requirement,] we ask FinCEN to evaluate the appropriateness of expanding financial institutions’ ability to rely on third parties (e.g., fintechs) to collect and verify consumer data,” the letter reads. “Under such an approach, the financial institution would continue to be responsible for ensuring compliance with the customer verification requirements, as well as relevant data protection requirements.”
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