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CIP Policy

TOWN OF CHEEKTOWAGA FEDERAL CREDIT UNION

USA PATRIOT ACT – CUSTOMER IDENTIFICATION PROGRAM POLICY

A. PURPOSE OF THIS POLICY

The Board of Directors of Town of Cheektowaga Federal Credit Union (synonymous with the Credit Union) has adopted this Customer Identification Program (CIP) policy, as required by §326 of the USA Patriot Act.  The CIP is intended to enable the Credit Union to form a reasonable belief that it knows the true identity of each member.  This CIP policy is effective immediately and is incorporated into our overall Bank Secrecy Act policy.  This CIP policy will help our Credit Union detect and prevent money laundering and terrorist financing schemes.

The Credit Union understands that CIP requires us to follow these basic steps when a member and or an account owner (hereafter known as “member”) opens a new account or when a new member is added to an existing account:

  • Provide a CIP disclosure
  • Obtain basic information about the member
  • Verify the identity of the member
  • Verify the identity of beneficial owner(s) of legal entity members
  • Check if a member appears on a government terrorist list
  • Retain records for 5 years after the account has been closed.

B. POLICY GOALS 

  • Verify the identity of any member opening a new account at the Credit Union.
  • Verify beneficial owner(s) of legal entity members opening a new account at the Credit Union. 
  • Maintain records of information used to verify the identity of members opening new accounts for a period of 5 years after the account has been closed.
  • Cross-check names of members opening new accounts against lists of known or suspected terrorists/terrorist organizations provided by agencies of the US government.
  • Provide for internal procedures/controls to ensure ongoing CIP compliance by the Credit Union’s staff.

C. GENERAL PROVISIONS 

1. Applicability

This CIP policy applies to:

  1. Any new member opening an account at the Credit Union
  1. Beneficial owner(s) of a legal entity
  • A legal entity is defined as corporation, limited liability company, or other entity that is created by the filing of a public document with a Secretary of State or other similar office, a general partnership, and any similar entity formed under the laws of a foreign jurisdiction.
  • Beneficial ownership is determined under both a control prong and an ownership prong. Under the control prong a single individual with significant responsibility to control, manage or direct a legal entity. This includes, an executive officer or senior manager (Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, President), or any individual who regularly performs similar functions. One beneficial owner must be identified under the control prong for each legal entity.
  • A beneficial owner under the ownership prong is each individual, if any, who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, owns 25 percent or more of the equity interests of a legal entity member. If a trust owns directly or indirectly, through contract, arrangement, understanding, relationship or otherwise 25 percent or more of the equity interests of a legal entity, the beneficial owner is the trustee. Identification of a beneficial owner under the ownership prong is not required if no individual owns 25 percent or more of a legal entity member. Therefore, all legal entity members will have a total of between one and five beneficial owner(s).
  1. Any new member added to an existing member’s account
  1. EXCEPTION:  This CIP policy does not apply to existing members of the Credit Union opening new accounts as long as:
  1. Existing member identity was previously verified.
  2. Employee of the Credit Union has a reasonable belief he or she knows the identity of the member (prior history of statements and 1099 forms being sent to the member at the address of record) and the member is not a high risk individual.  A high risk individual is defined as one that does not conduct face to face business with the credit union or who does not live in the local area.

C. GENERAL PROVISIONS, CONTINUED 

2. Member Notice

Notice shall be given to new account owners in any of the following ways:

  • Oral notice given to new account owners, in person or on the phone
  • Lobby notice
  • Brochure/paper notice included in new member packets
  • Signs at Member Service Representative stations
  • Notice posted on the website

D. PROCEDURES

1.  Opening a New Account—Collecting Basic Information

  1. Any member who wishes to open a new account with the Credit Union must provide the following basic information BEFORE opening an account:

1) Name as it appears on the social security card

2) Date of Birth

  1. Address, which shall be:
  1. For an individual, a residential or business street address;
  2. For an individual who does not have a residential or business street address, an Army Post Office (AP0) or Fleet Post Office (FPO) box number, or residential or business street address of next of kin or of another contact individual; or
  3. For a person other than an individual (such as a corporation, partnership or trust), a principal place of business, local office or other physical location; and

4) Identification Number

a) US Persons:

  • Social Security Number
  • Employer Identification Number (for business accounts)

b) Non-US Persons (1 or more of these):

  • 9-Digit Individual Tax Identification Number
  • Passport Number & Country of Issuance
  • Alien Identification Card Number (Green Card)
  • Document Number & Country Issuing any “other” document” showing evidencing nationality or residence and bearing a photograph or similar safeguard.

D. PROCEDURES, CONTINUED

1.  Opening a New Account—Collecting Basic Information, Continued

  1. If the member is applying for a TIN/SSN or a card is not available, the Credit Union will accept a letter from the social security administration documenting that the card has been applied for or reissued.  We will require the member to produce the card within three months time.  In the case of an infant or adopted minor, identification numbers will be required from the parent(s) on the account.  Minors without an identification number will be monitored on a monthly basis with Member Service Representatives contacting the parents each month until the card is produced at the credit union.

c. When An individual opens an account at the Credit Union for a legal entity (after staff has determined membership eligibility), the Credit Union will ascertain the person’s authorization to open the account by establishing the true identity of the person and the beneficial owners of the legal entity using the following procedures:

●  Obtaining, examining, verifying, and recording evidence of the legal status,                     for example:

– Incorporation documents;

– Partnership agreements;

– Association documents;

– Business licenses; and

– Corporate resolutions.

   ●  Obtaining and verifying information about the business, for example:

– Financial statements of the business;

– A description of the business; and

– A description of the trade area.

   ●   Obtaining, verifying and recording identification of each beneficial owner:

  • Name
  • Date of Birth
  • Address
  • Identification number 

   ● Verifying as much of the information as possible. 

D. PROCEDURES, CONTINUED

2.  Verifying Required Information—Methods Used

When a new member opens an account, the Credit Union’s staff shall use both “documentary and “non-documentary” methods to verify the identity of all new account owners.  If an account is requested through the mail or Internet, it will not be opened until documentary information and a signed account card are received.

  1. Documentary identification includes requiring any of the following (listed in order of preference:
  1. Unexpired Government Issued Drivers License
  2. Unexpired Government Issued Identification Card
  3. Passport
  4. Employer Identification Card
  5. Student Identification Card
  6. Other National Identification Document
  7. For person other than an individual (such as a corporation, partnership or trust), documents showing the existence of the legal entity such as:
    1. Certified articles of incorporation
    2. Government-issued business license
    3. Partnership agreement, or
    4. Trust instrument.
  1. Non-Documentary identification includes any of the following:
  1. Contact new member’s employer
  2. Check references at other financial institutions
  3. Check consumer reporting agencies
  4. Compare member information against credit report, public database or other source
  5. Obtain a financial statement
  6. Obtain a utility, phone or credit card bill showing correct name and address
  7. Obtain certificate of marriage registration showing correct name
  8. Obtain property title, deed, or search and survey
  1. Additional verification for certain customers:  Based on the credit union’s risk assessment of a new account opened by a customer that is not an individual, the credit union will obtain information about individuals with authority or control over such account, including signatories, in order to verify the customer’s identity.  This verification method applies only when the credit union cannot verify the customer’s true identity using the verification methods described above.  

D. PROCEDURES, CONTINUED

3.  Special Circumstances—Lack of Verification

In situations where the Credit Union cannot form a reasonable belief regarding the identity of a new account owner (either due to lack of documentary identification or non-documentary verification) the staff at the Credit Union will: 

  1. Not open the account

4.  Comparison with Government Lists

The Credit Union will crosscheck the name(s) of any new member against any list of known or suspected terrorists or terrorist organizations issued by any Federal government agency and designated as such by Treasury in consultation with the Federal functional regulators.  This determination will be made at the time the account is opened.  The Credit Union will follow all Federal directives issued in connection with such lists.  Any member whose name appears on any of the above-mentioned lists may not be permitted to open an account at the Credit Union.  

The Credit Union will crosscheck all vendors and requested 3rd party checks against the known or suspected terrorist organizations issued by any federal government agency and designated as such by the Treasury in consultation with the Federal regulations. The Credit Union will follow all Federal directives issued in connection with such lists.  Any requested payee whose name appears on any of the above-mentioned lists will not be paid at the Credit Union.  

5.  Record Retention—Five Years

CIP requires the Credit Union to “make and maintain” a record of all identifying information received from new account owners for a period of five years AFTER an account is closed.

Record retention shall consist of a description of any document used to establish identity, to include:

  • Type of document (e.g., drivers license, passport)
  • Any identification number on the document
  • Place document was issued, expiration date of document

D. PROCEDURES, CONTINUED

5.  Record Retention—Five Years, Continued

When using non-documentary methods to verify identity (e.g., credit report, calling employer), and requesting additional verification for certain customers, the Credit Union shall:

  • Identify the non-documentary method used (e.g., called employer)
  • Document results of this verification method (e.g., employment at School District confirmed by payroll office)

When any substantive discrepancy is discovered when verifying the identifying information, a description of the resolution will also be maintained.  

E. RELIANCE ON ANOTHER FINANCIAL INSTITUTION OR THIRD PARTY

The Credit Union is permitted to rely on another financial institution (including an affiliate) to perform some or all of the elements of the CIP, if reliance is addressed in the CIP and certain criteria are met.

The CIP rule does not alter the Credit Union’s authority to use a third party, such as an agent or service provider, to perform services on its behalf.  Therefore, the Credit Union is permitted to arrange for a third party, such as a car dealer or mortgage broker, acting as an agent in connection with a loan, to verify the identity of it customer. The Credit Union can also arrange for a third party to maintain its records. However, as with any other responsibility performed by a third party, the Credit Union is ultimately responsible for that third party’s compliance with the requirements of the Credit Union’s CIP.  As a result, the Credit Union should establish adequate controls and review procedures for such relationships.

The Credit Union does not rely on another financial institution or third party to perform CIP procedures.

F. RESPONSIBILITY

The Credit Union’s Manager will be responsible for implementing the CIP and will assume responsibility for ongoing compliance with the CIP. 

G. TRAINING

All credit union personnel who might, in the daily course of business, open new accounts are to be given intensive training in the requirements of the CIP.  Additionally, all Credit Union employees and officials will be given an overview of the CIP on an annual basis.

H. ANNUAL REVIEW

This policy will be reviewed by the board of directors on an annual basis.

Board Meeting/Approval Date: January 27th, 2026