Feds issue guidance for CIP applicability to pre-paid cards

March 21, 2016 -- Joint guidance clarifying the applicability of the Customer Identification Program (CIP) rule to prepaid cards issued by banks, credit unions and other institutions was unveiled today by federal financial institution regulators, including NCUA, and FinCEN.

According to a joint release issued by the agencies (which also includes the FDIC, Federal Reserve and the OCC), the guidance applies to banks, savings associations, credit unions, and U.S. branches and agencies of foreign banks (collectively “banks”).

“The guidance clarifies that a bank’s CIP should apply to the holders of certain prepaid cards issued by the institution as well as holders of such prepaid cards purchased under arrangements with third-party program managers that sell, distribute, promote, or market the prepaid cards on the bank’s behalf,” the release states. “The guidance describes when, in accordance with the CIP rule, the bank should obtain information sufficient to reasonably verify the identity of the cardholder, including at a minimum, obtaining the name, date of birth, address, and identification number, such as the Taxpayer Identification Number of the cardholder. “

Interagency guidance on CIP rule for prepaid cards