Plain English reading of S.2155’s ID retention provision

Since the passage of S.2155, the compliance team has received many questions regarding the use and retention of identification documents for accounts opened or financial services offered online. As background, this provision was first introduced as part of the MOBILE Act (which was never passed) and later tacked on to S.2155. Prior to the passage of this bill, many credit unions were having a hard time offering online account opening services as the copying or scanning of a member’s personal identification was prohibited. As a federal law, the bill now preempts any state law that directly contradicts this provision thus allowing credit unions the ability to serve their e-savvy members.

Unfortunately, the bill has caused quite the stir because of language indicating credit unions are required to delete the copy or image of the member’s personal identification after using it to for one of the following purposes: (1) verify the identity of the individual; (2) verify the authenticity of the driver’s license or personal ID; and (3) to comply with a legal requirement to record, retain or transmit the personal information in connection with opening an account or offering a financial product/service such as the BSA’s Customer Identification Program (CIP) requirements.

The plain reading of the deletion section of the bill seems to indicate that unless federal BSA laws require the credit union to keep a copy or image of a member’s ID, the credit union would have to permanently destroy this copy/image after using it for one of the three purposes. And as it is the case, current BSA laws do not require the retention of a copy/image of the member’s ID.


continue reading »