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Oct. 1 Is Deadline for USA Patriot Act Compliance

Tuesday, July 1, 2003

Financial institutions have until Oct. 1 to come into full compliance with the final regulations that implement Section 326 of the USA Patriot Act. These regulations require certain institutions to establish procedures that:

  • verify the identity of a person opening a new account,
  • maintain records of the information used to verify the person's identity and
  • determine whether the person appears on any list of known or suspected terrorists or terrorist organizations.

The regulations apply to banks and trust companies, savings associations, credit unions, securities brokers and dealers, mutual funds, futures-commission merchants and futures-introducing brokers. Institutions affected by the rules are required to establish a program for obtaining standard identifying information--such as name, address, date of birth and Social Security number--from new customers.

Financial institutions affected by the new rules must also develop procedures to verify the identity of existing customers within a reasonable period of time. Many financial institutions may ask for standard identification such as a driver's license or passport, but the final rule gives institutions the flexibility to choose other methods based on their individual circumstances.

The USA Patriot Act regulations are part of a continuing national effort to fight crimes such as money laundering, terrorist financing, identity theft and other forms of fraud while also giving financial institutions flexibility in how they implement the new rules. The rules were developed jointly by the Treasury Department, Treasury's Financial Crimes Enforcement Network and seven federal regulators, including the Federal Reserve Board.

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