Is a new borrower who is substituted for an existing borrower through an assumption of a loan a customer to whom the CIP rule applies?
Yes, a new borrower who is substituted for an existing borrower through an assumption of a loan is a customer because the new borrower is establishing a new account relationship with the bank. (January 2004) 4. The CIP rule requires a bank to verify the identity of each customer. Under the CIP rule, a customer generally is defined as a person that opens a new account. If a pension plan administrator chooses to remove a former employee from the plan pursuant to section 657(c) of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), it is required by law to transfer these funds to a financial institution. In addition, an administrator of a terminated plan may remove former employees that it is unable to locate, by transferring their benefits to a financial institution. Would a plan administrator or the former employee be a bank customer where funds are transferred to a bank and an account established in the name of the former employee, in either of these situations? In
Related Questions
- A loan and a time deposit are each an account for purposes of the CIP rule. How do the requirements of the CIP rule apply to a loan that is renewed, or a certificate of deposit that is rolled over?
- Is a new borrower who is substituted for an existing borrower through an assumption of a loan a customer to whom the CIP rule applies?
- Is a person who becomes co-owner of an existing deposit account a customer to whom the CIP rule applies?
