CUNA Comment Letter
Section 326 Notice of Inquiry: Identification
July 23, 2003
326 Recordkeeping Comments
U.S. Department of the Treasury
Office of the General Counsel
1500 Pennsylvania Avenue, NW
Washington, DC 20220-0002
To Whom It May Concern:
On behalf of the Credit Union National Association, we are pleased to file comments following the request of the U.S. Department of Treasury for additional input on its final rules under Section 326 of the USA Patriot Act regarding identification requirements and the use of particular documents, such as Matricula Consular issued by the Government of Mexico, at account opening. By way of background, CUNA is the largest domestic credit union trade association and represents more than more than 90% of our nations 10,000 state and federal credit unions.
Our comments were developed under the auspices of the CUNA Examination and Supervision Subcommittee chaired by Mr. John Franklin, President and CEO of the South Carolina Credit Union League. They also are based on communications we have had with our state leagues, individual credit unions and officials at NCUA as well as the Treasurys Financial Crimes Enforcement Network, FinCEN.
Summary of CUNAs Comments in Support of Credit Unions Deciding for Themselves Whether to Accept Matricula
- CUNA continues to support the approach taken in the final rule which permits financial institutions to accept consular identification cards.
- CUNAs view is that institutions should be able to decide for themselves whether to accept such forms of identification, rather than the federal government making the determination.
- The treatment of consular identification cards under the final rule is fully consistent with the USA Patriot Acts language and intent.
- CUNA is aware that a number of concerns have been raised about the use of consular identification cards. While these issues should not be dismissed lightly, we do not believe they justify a prohibition against institutions using consular identification cards.
- Rather than prohibiting the acceptance of such documents, Treasury should work with the other regulators to develop voluntary guidelines to help insure institutions are in compliance with Section 326 when they rely on consular identification cards.
- Such guidelines should clarify that institutions may require an individual seeking to open an account to provide a U.S. passport or other official U.S. document to show identity, in addition to a consular identification card.
- In any event, CUNA opposes changes to the final rule so close to the compliance date of October 1 or for a reasonable time thereafter. Credit unions and other institutions are working hard to meet their responsibilities under Section 326 and changing the rules at this late date would thwart compliance with the Act, not further it.
Provisions of the Final Rule Regarding Documents Used in Account Opening
Under the final rule, financial institutions must have a customer/member identification program, which includes risk-based procedures for verifying the identification information provided by an individual seeking to open an account. Financial institutions may use documents or non-documentary methods to verify the identity at account opening. The final rule provides that for non-U.S. persons, a financial institution using documents to verify identity may rely on a document issued by a foreign government that evidences nationality or residence and bears a photograph or similar safeguard.
The final rule also permits financial institutions to verify identification for non-U.S. persons with a variety of documents and does not require an institution to obtain a taxpayer identification number from a non-U.S. person, as long as the institution has obtained one or more of the following: a passport number and country of issuance; alien identification card number; or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard.
CUNAs General Comments
CUNA continues to support this approach, which permits the use of documents, such as the Matricula Consular issued by offices in this country of the Mexican government, as identification for foreign citizens in the United States. By the same token, the rule does not require any institution to use Matricula, and those that are uncomfortable with this form of identification may choose to rely on other documents or non-documentary information. It is our view that financial institutions should be able to decide for themselves whether they want to rely upon such documents, rather than the federal government dictating which documents can and cannot be accepted. We believe the treatment of Matricula under the final rule is fully consistent with the language and intent of the USA Patriot Act.
CUNA is aware that concerns have been raised about the use of consular identification cards in general and Matricula specifically. One issue that opponents of Matricula have raised is that it is impossible for an institution to ascertain whether such a card has been obtained or produced fraudulently. The same concern could be raised regarding state-issued drivers licenses and other forms of identification issued in this country.
CUNA does not believe concerns about consular identification cards should be lightly dismissed. However, we also do not believe that the final rule should be changed to eliminate or prohibit the use of Matricula or other consular identification cards. Rather than changing the rule, we would encourage Treasury and the other regulators to work together to develop guidelines to assist institutions that choose to rely on such documents. Such guidelines should not be mandatory for those institutions accepting consular identification cards, but rather, should be a resource to help institutions comply with the rules requirements concerning the use of documents to verify identity.
In its request for additional comments, Treasury posed several questions to commentors for their consideration. CUNAs response to those questions as follows:
Specific Questions Regarding Matricula and Other Forms of Identification
- Should the regulations preclude financial institutions' reliance on certain forms of identification issued by certain foreign governments?
It is CUNAs view that the final rules should not prevent institutions from accepting certain forms of identification, such as Matricula. Rather, as stated above, we believe guidance from the regulators would be useful to help institutions that choose to rely on such documents.
- Should the regulations require financial institutions to obtain a passport number from all customers who are non-U.S. citizens?
We do not believe the final rules should be changed to include this requirement. However, it might be useful if the guidelines mentioned above clarify that institutions are certainly free to accept Matricula in conjunction with other documents, such as a passport or Green Card.
- What are the anticipated effects on non-U.S. citizens in the United States who are not required to have a passport?
- What are the anticipated effects on non-U.S. citizens who open accounts from broad, and thus are not required to have a passport?
These questions are difficult to address with certainty. However, there is a concern that if such individuals are required to produce documents other than those issued by their government, they would be discouraged from using traditional, U.S. financial institutions, even when their purposes are legitimate. We believe such a requirement is not necessitated by the Act or by security concerns and should not be added to the final rule.
Treasury Should Not Make Any Rule Changes At This Time
Undoubtedly, given the concerns raised by the Department of Justice and on Capital Hill, Treasury officials felt they had no choice but to seek additional comments on the issues of Matricula and photocopying (our separate letter on that matter is also being filed today.) However, this is an unusual action and a number of institutions are concerned that Treasury might make changes to the final rule prior to the compliance date of October 1. Even if such changes took effect at some later date, we believe it would be too disruptive to the compliance process to entertain amendments now or for the next several months. Because institutions are working hard now to insure they will be in compliance and ready to meet all requirements of the rule come October 1, we urge Treasury not to reopen the rule. Instead, we recommend Treasury develop guidelines to assist financial institutions in the use of consular identification documents.
Thank you for the opportunity to comment on this issue. Please do not hesitate to contact me if you have questions about our views.
Mary Mitchell Dunn
Associate General Counsel and Senior Vice President