Agencies Issue Guidance on Customer Identification Program Requirements for Prepaid Cards

On Monday, March 21, 2016, the OCC, Federal Reserve, FDIC, National Credit Union Administration (NCUA), and the Financial Crimes Enforcement Network (FinCEN), published guidance to clarify the applicability of the customer identification program (CIP) regulations implementing Section 326 of the USA PATRIOT Act to prepaid cards.  The guidance specifically discusses the treatment under the CIP regulations of prepaid cards issued by banks, savings associations, credit unions, and branches of foreign banks, including cards sold and distributed by third parties that design, manage, and operate prepaid card programs.  The guidance also:


  • Clarifies that a bank’s CIP should apply to the holders of certain prepaid cards issued by a bank;
  • Provides an overview of the CIP rule requirements in 31 CFR 1020.220 with regard to the establishment of an account, identification of the customer, and verification of the customer’s identity;
  • States a general purpose prepaid card can be reloaded by the cardholder or by another party on behalf of a cardholder, or permits access to credit or overdraft features, creates an account for purposes of the CIP rule;
  • Clarifies when an account is created, a customer relationship is established between the issuing bank and the cardholder;
  • Discusses the application of these principles to other types of prepaid cards, such as payroll and government benefit cards; and
  • Discusses minimum contractual requirements for business relationships between issuing banks and third-party program managers.


Comptroller of the Current Thomas Curry noted that a white paper will be published soon, describing the OCC’s perspective on innovation in banking.  He also indicated the OCC will seek comments on the paper.