The American Fintech Council (AFC) has expressed its approval following the Financial Crimes Enforcement Network's (FinCEN) recent move to issue a Request for Information (RFI) concerning the Customer Identification Program (CIP) Rule. This initiative aims to address regulatory inconsistencies and adapt to technological advancements in digital banking, especially with regard to Buy Now Pay Later (BNPL) loans.
Phil Goldfeder, CEO of AFC, stated, "The decision by FinCEN is a step in the right direction towards regulatory modernization that will level the playing field for innovators who are creating critical access to safe and affordable credit options.” He thanked Director Andrea M. Gacki and her team for responding to their advocacy efforts.
Andrea M. Gacki of FinCEN highlighted the agency's recognition of changes in technology and financial services since the CIP Rule's inception. She welcomed input from interested parties on modernizing anti-money laundering regulations.
In April 2023, AFC reached out to then-acting FinCEN Director Himamauli Das, seeking clarity on whether collecting partial Tax ID Numbers directly from consumers was sufficient under the CIP Rule. The organization also engaged with FinCEN through multiple meetings over the past year advocating for necessary amendments.
According to a recent press release by FinCEN, “Since the adoption of the CIP Rule there has been significant innovation in customer identifying information collection and verification tools available." The RFI will help assess potential changes like allowing banks to collect partial Social Security Numbers from customers initially.
AFC's previous correspondence emphasized that exemptions within the CIP Rule already exist for credit card issuers regarding full TIN collection. These allow issuers to streamline processes using third-party sources instead of obtaining TINs directly from customers.
A report by the Consumer Financial Protection Bureau compared BNPL products favorably against traditional credit cards due to similar consumer experiences but lower costs than revolving credit options.
FinCEN acknowledged interest from banks and Congress regarding SSN collection requirements. They noted particular interest in permitting banks to use reputable third-party sources for obtaining full SSNs after collecting partial numbers during account opening procedures.
AFC plans to collaborate with its members in response to this RFI as they continue promoting an innovative and inclusive financial system.