FinCEN Clarifies Use Of Digital Credentials Under CIP

FinCEN and the staffs of the Fed, FDIC, OCC, and NCUA, have jointly issued two FAQs addressing the use of verifiable digital credentials (VDCs), including state-issued mobile driver’s licenses (mDLs), to verify customer identities under the Customer Identification Program (CIP) Rule.

The principal clarification is that an unexpired, government-issued VDC, such as an mDL, may qualify as “government-issued identification” for purposes of the CIP Rule, provided that the VDC evidences nationality or residence and bears a photograph, the institution has the technology or systems necessary to extract the appropriate information, and the institution’s CIP permits its use. As with physical identification cards, however, a VDC is not automatically sufficient if there are indications of fraud. The institution must still be able to form a reasonable belief that it knows the customer’s true identity.