[16472]
August 26, 2003
TO: COMPLIANCE ADVISORY COMMITTEE No. 64-03
MONEY LAUNDERING RULES WORKING GROUP No. 53-03
SEC RULES COMMITTEE No. 69-03
TRANSFER AGENT ADVISORY COMMITTEE No. 80-03
RE: CUSTOMER VERIFICATION AND THE FAIR CREDIT REPORTING ACT
As you know, the customer identification program (CIP) rule for mutual funds, among
other things, requires all mutual funds to take steps to verify the identity of their customers.1
On a number of occasions, we have been asked whether the verification process pursuant to the
CIP rule would implicate the Fair Credit Reporting Act (FCRA).
We have received a memorandum from counsel that addresses this issue. The
memorandum expresses the view that there is a reasonable basis to conclude that reports
typically used by mutual funds and fund service providers only to verify a customer’s identity
should not be considered consumer reports subject to regulation under the FCRA. A copy of
the memorandum is attached.
Robert C. Grohowski
Associate Counsel
Attachment (in .pdf format)
1 See 68 Fed. Reg. 25131 (May 9, 2003).