Alert January 19, 2010

FinCEN Issues Guidance Regarding Address Confidentiality Programs under CIP Rules

The U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) provided guidance to financial institutions regarding application of customer identification programs (“CIPs”) to customers who have been issued a post office box through a state address confidentiality program (“ACP”).  Such programs are offered in 31 states to provide a victim of domestic violence, sexual assault or stalking who wishes to keep his/her physical address confidential with a substitute address.

Under the CIP rules for banks, broker-dealers, and other financial institutions, a financial institution must obtain a street address from each individual customer who opens an account.  If the individual customer does not have a residential or business street address, the financial institution may instead accept the street address of the customer’s next of kin or another contact individual

Recognizing the importance of ACPs in protecting individuals, FinCEN stated that it will allow a financial institution to treat a person who participates in a state-created ACP as an individual who does not have a street address.  In performing its CIP, the financial institution should obtain the street address of the ACP’s sponsoring agency, treating that agency as another contact individual for the customer opening the account.