We occasionally findfinancial institutions not consistently obtaining the occupation of customers/members at accountopening. Occupation is required information on Currency Transaction Reports(CTRs) and Suspicious Activity Reports (SARs). It helps indicate a person’s sourceof funds for determining suspicious activity. In addition, obtaining occupationshould be part of an effective customer/memberdue diligence process. The FederalFinancial Institution Examination Council (FFIEC) Bank Secrecy Act/ Anti MoneyLaundering (BSA/AML) Examination Manual states:
Management should have a thorough understanding of the money launderingor terrorist financing risks of the bank’s customer base. Under this approach,the bank should obtain information at account opening sufficient to develop anunderstanding of normal and expected activity for the customer’s occupation orbusiness operations. This understanding may be based on account type or customerclassification. For additional guidance, refer to Appendix K (“Customer Riskversus Due Diligence and Suspicious Activity Monitoring”).
And:
Enhanced Due Diligence for Higher-Risk Customers
The bank may determine that a customer poses a higherrisk because of the customer’s business activity, ownership structure,anticipated or actual volume and types of transactions, including thosetransactions involving higher-risk jurisdictions. If so, the bank shouldconsider obtaining, both at account opening and throughout the relationship,the following information on the customer:
- Purpose of theaccount.
- Source of funds andwealth.
- Individuals withownership or control over the account, such as beneficial owners, signatories,or guarantors.
- Occupation or type ofbusiness (of customer or other individuals with ownership or control over theaccount).
Consequently, consider verifying that yourinstitution is consistently obtaining occupation at account opening.
, Bank Secrecy Act, Deposits, Financial Services General, Regulatory Compliance | Comments Off on Obtaining Occupation at Account Opening
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
FAQs
Lenders may ask for an applicant's job title to verify employment and confirm a stated salary. It's also used to verify identity and, in some cases, is used as a factor to predict default risk. If a lender asks for your job title, it likely won't sway their decision as much as your credit history and credit score.
Why is my bank asking for my occupation? ›
Lenders may ask for an applicant's job title to verify employment and confirm a stated salary. It's also used to verify identity and, in some cases, is used as a factor to predict default risk. If a lender asks for your job title, it likely won't sway their decision as much as your credit history and credit score.
Is occupation required on a SAR? ›
While one section of the SAR calls for specific suspect information, the narrative should be used to further describe the suspect or suspects, including occupation, position or title within the suspect's business, the nature of the suspect's business (or businesses), and any other information and identification numbers ...
What is required for bank account opening? ›
Two latest passport size photographs. Address and identity proof documents. For a full list of address and identity proof documents, click here. Only a single copy of the document is required if it is listed under both address and identity proof, e.g. Passport / Aadhar Card.
What are the three requirements for a banks CIP? ›
Required Customer Information
The CIP must specify the identifying information that will be obtained from each customer opening an account. This must include the customer's name, date of birth (for an individual), address, and identification number (31 CFR § 1020.220(a)(2)(i)).
What does it mean when it asks for my occupation? ›
According to the most recent definition of the Merriam-Webster dictionary, an occupation is defined as "the principal business of one's life." Possible synonyms might include "employment" or "trade," terms that connote a general employment area rather than a specific job itself.
Why would a bank teller ask you your occupation when depositing cash? ›
They are doing it for very good reasons! An important part of the teller's job is to protect customers by watching for potential fraud. Some transactions may require verification of identification, which is a government regulation.
Which of the following is a red flag for suspicious transactions? ›
Frequent cross-border flow of transactions, especially with high-risk countries. A large amount of cash deposited in smaller portions. A large amount of cash deposited in an account at once. Payment received in account, not matched with goods shipped or trade-based money laundering.
What triggers a SAR investigation? ›
Suspicious Activity Reports (SARs) are crucial documents filed by financial institutions to report potentially illicit activities. Triggers for filing SARs include unusual transactions, patterns, or behaviors that raise suspicions of money laundering, fraud, or terrorist financing.
What is considered suspicious activity in banking? ›
Suspicious transactions are any event within a financial institution that could be possibly related to fraud, money laundering, terrorist financing, or other illegal activities. Suspicious transactions are flagged to be investigated, but many suspicious transactions are simply false positives.
What do I need to open a bank account? Here's what you'll need to open a bank account online or in person: a government-issued ID, personal details such as your Social Security number, and a way to fund your new account with an initial deposit.
What is required when opening a bank account? ›
Some bank accounts can be opened online, while others have to be opened in-branch. To open an account, all you need is your ID book and proof of residence. A bank account is a reliable way to keep your money safe while earning interest. Many jobs nowadays also require you to have a bank account to receive your salary.
Why would a bank refuse to open an account? ›
Why can't I open a bank account? A bank can deny your request to open an account because of past accounts that were closed due to negative balances, a history of overdrafts or problems verifying your identity. If you're unable to open a bank account, here are some tips on what to do next.
Who is exempt from CIP requirements? ›
The CIP rule provides for an exception for opening an account for a customer who has applied for a tax identification number (TIN) and an alternative process for obtaining CIP identifying information for credit card accounts.
Who typically determines when a SAR needs to be filed? ›
A bank should assess all of the information it knows about its customer, including the receipt of a law enforcement inquiry, in accordance with its risk-based BSA/AML compliance program. The bank should determine whether a SAR should be filed based on all customer information available.
What is a CIP checklist? ›
It covers establishing an anti-money laundering team, verifying a new client's identity, creating a profile for the client, notifying the AML team, reviewing information, completing KYC documentation, asking for required documentation, performing an AML specialist review, conducting screening for sanctions, assigning a ...
Why is my bank asking for my employment details? ›
Lenders typically ask for employer information on credit applications to help verify your identity but they're not obligated to report your job history to the credit bureaus.
Why does my bank want to know my job? ›
Banks need to verify your income. They should make sure that your income isn't derived from illegal activities such drug sales, human trafficking, Ponzi schemes, income from terrorist financings or money laundering.
What does occupation mean when applying for a credit card? ›
Occupation is a general term that refers to the field or industry you are a part of or the work you are interested in. It can also refer to your role within an organization.
Why would a bank call to verify employment? ›
Employment verification process. Usually, this is done to check if the person has a reliable source of income and has the financial means to pay their debts and rent. With open banking, financial information that is exchanged between banks and other financial organizations can be used to verify employment.
