FinCEN Clarifies That Digital Credentials May Be Used for CIP
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On October 13, 2026, FinCEN and staff of the federal banking regulators issued two frequently asked questions, clarifying that banks and credit unions may use eligible government-issued digital credentials to verify customer identities under a Customer Identification Program (CIP), but financial institutions are not required to accept them. Such digital credentials must be digitally signed by the issuing agency, cryptographically bound to a device, protected by activation factors such as a PIN or biometric identification, and capable of being processed by the financial institution’s systems. Institutions must still identify signs of fraud, address anomalies, and retain sufficient records; existing obligations regarding customer due diligence, beneficial ownership, sanctions compliance, and suspicious activity monitoring remain unchanged.
AI-written from reports · updated 6 days ago
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- PYMNTSSelectedFinCEN clarifies that banks may use government-issued digital credentials to verify customer identities, subject to compliance requirements
FinCEN and staff from federal banking regulators issued two FAQs clarifying that banks and credit unions may use qualifying government-issued digital credentials to verify customer identities under the CIP, but institutions are not required to accept them. VDCs must be digitally signed by the issuing agency, cryptographically bound to a device, protected by activation factors such as a PIN or biometric authentication, and capable of being processed by the institution’s systems. Banks must still identify signs of fraud, handle anomalies, and retain sufficient records; existing customer due diligence, beneficial ownership, sanctions compliance, and suspicious activity monitoring obligations remain unchanged.
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