Question

Under which Act are banks required to implement a customer

identification program (CIP) to verify customers’ identities,
maintain records of their activities, and compare the identities of
new customer?

Answer 1

The USA PATRIOT Act requires banks to implement a Customer Identification Program (CIP) for verifying customer identities and maintaining records of their activities.

Step-by-step explanation:

The Act that requires banks to implement a Customer Identification Program (CIP) to verify customers' identities, maintain records of their activities, and compare the identities of new customers is the USA PATRIOT Act. This act was passed by the United States Congress in response to the 9/11 terrorist attacks and aims to prevent money laundering, terrorist financing, and other financial crimes.

The Customer Identification Program (CIP) under the USA PATRIOT Act requires banks to collect certain information from customers, such as their name, address, date of birth, and identification number. Banks must also verify this information using reliable documentation, such as a driver's license or passport.

By implementing the CIP, banks can help ensure the integrity of their financial services and prevent illicit activities. It promotes transparency and accountability in the banking sector, safeguarding both the institutions and their customers.