PEWAUKEE, Wis. – This is the week – Oct. 1 is the specific day – credit unions as well as other financial institutions must implement the Customer Identification Program (CIP) requirements of the USA Patriot Act to be in compliance with the law. But a random check of smaller credit unions across the Midwest found that that some procedures and policies were just going into place days before the deadline. All the CUs were ready -.or hoped they were. Many did, however, question the need for identification procedures for people they had known for years. In fact, one of the most frequent questions to arise in Wisconsin Credit Union League-sponsored information sessions about CIP, is: "If we already know someone, like our neighbor, do we still have to go through CIP?" The USA Patriot Act, signed in to law by President Bush in the wake of Sept. 11, 2001, the Patriot Act provides the government with new tools to protect the U.S. financial system from money laundering, terrorist financing, identity theft and other forms of fraud. According to Paul Guttormsson, counsel in the WCUL legal affairs department who has been a speaker at the WCUL sessions, "The rules are pretty clear, you can't make an exception." "With the Patriot Act we are trying to set up a customer identification program to verify that the person we are dealing with is actually who they tell us," says Scott Sauer, president and CEO of CONE Credit Union in Neenah, Wis. "What's confusing is the means for identification and when we need it. We are required to ask this of members who we have dealt with for many years. That is very frustrating." CONE Credit Union has about 1,715 members and assets of nearly $18 million. According to Sauer, "The biggest problem for these new laws or new regulations for presidents and CEOs of small credit unions is that we normally do not have the personnel to take a project like this and see it through its entirety. "Unfortunately, many of us in the small credit unions will learn these new regulations in bits and pieces which can make for a confusing process," he adds. "Some of the bigger credit unions and banks can direct specific employees to focus their attention directly on these projects and report back to the remaining staff to train them or answer any questions. This can make for a much smoother process. I felt the OFAC (Office of Foreign Asset Control) Policy was a little more straightforward. They provided a list of the terrorists, update it from time to time, and we match our membership against the list and if any name comes up, we report it." CONE Credit Union approved its CIP policy in July, posted it on its Web site, placed posters in its office and mentioned the policy several times in its newsletters. Staff also attended educational seminars to help bring them up to speed on the law. Sauer said complying with the procedures will be in direct proportion to the size of the credit union. More members would mean more IDs but also more employees to verify ID's. Fewer members would mean fewer IDs but fewer employees to verify IDs. "I think the most time will be spent explaining the process to our members. It's like the older person in the airport who gets picked to do the full security check. Unfortunately we are spinning the wheels a lot to find these terrorists and the consumer is inconvenienced by this." Sauer added that, "The biggest difficulty of satisfying the requirements is trying to find identification from certain individuals. Contrary to popular belief, not everyone carries around a valid driver's license. In these cases we must consult a third party provider like Trans Union. This takes time and becomes costly." In Moline, Ill., Ray Rogers, manager of Tri-Cities Bell Employees Credit Union, with $4 million in assets and 1,250 members, noted that the requirements were "things we've already been doing. We know most of the members except new hires and the service reps do that. We've been getting both forms of ID and tacking them to member applications. We wrote a policy and put the notice out in front. "We only will have to check present members if there are severe changes: if they get married or add people the staff doesn't know. Older members have asked if it applies to them. I jokingly tell them only if they are not a patriot." He said the credit union checks the terrorist lists – "long faxes from a nebulous government agency" – but that doesn't take too much time. "The names we get I can't even pronounce. We have good and loyal patriotic Americans that work for a phone company." He suggested that more concern would be about scams. At KONE Employees Credit Union, also in Moline, Ill., Katherine Hoeper, president/CEO, said that when regulations for the Patriot Act were finally completed, a staff person attended an Illinois Credit Union League-sponsored seminar. "They went through the policy almost verbatim. The staff member came back with a completed policy. We just had to make the decision on which ID form to ask for. We just passed the policy and we're ready to go." For its 3,500 members and its $15.5 million in assets, KONE Employees Credit Union is "not changing any forms. We're just adding the requirements on little canary yellow sheets with the verbiage you have to use. We ask for their IDs, take copies and attach it to the membership application. It's very easy for us." At Romeoville Community Credit Union in Romeoville, Ill., Joan Lansdowne, administrative assistant, said that for its approximately 1,000 members, the new requirements were basically the same as the credit union's standing policy. "We've always asked for two forms of ID, work ID and Social Security card, and we always check their driver's license so complying will be no problem." In Cook, Minn., Kris Squires, manager of Cook Area Credit Union with $13 million in assets and just under 2,400 members, sees the regulations as a waste of time and money for them. "We're a closed credit union and you can't join unless you are a member of our sponsoring organizations. The only thing we are doing is photocopying driver's licenses and checking them against the list. We've heard talk that next we may have to run comparisons. Mostly we do visuals and check to see if a name pops out as someone who has an account or recently opened one. So far that hasn't happened." It's also business as usual at Rimoda Credit Union in Davenport, Iowa which has 260 members. Office Manager Juanita Nordeen said the credit union gathers all the required information regularly. With a limited field-of-membership, Nordeen said the credit union is asking members for photo ID and has posted its policy. "We are very small, still do hand posting, and just do loans and shares. I can see where it might apply to larger open credit unions. but we don't have too much concern here." At the Des Moines Police Officers Credit Union, Des Moines, Iowa, Ted Neuser, CEO, calls the regulations burdensome and time-consuming but said the credit union is complying with everything, including using a documentation form from CUNA that allows for fingerprinting. "They are things we should have been doing in the first place. We make copies of company ID cards and one other form of ID and then attach it to the affidavit members complete." He said that since Des Moines Police Department, from which most of its membership is drawn, always did background checks on its recruits, the credit union had not. Now, he said, the credit union, with 1,560 members and assets of $22 million, will do that. He said the recordkeeping requirement did lead to the credit union setting up a new filing system. Lois Scott, CEO of Ralston & Community Credit Union, in Davenport, Iowa, with its $11 million in assets and 2,900 members, says while she has found that members are more comfortable after it is explained to them the need for extra information, some members have expressed concern about carrying extra identification. "Otherwise, it seems kind of burdensome. People used to be able to just go in and open accounts. Now they need to bring their driver's license and Social Security card and some times they don't carry that. People do mention that they don't like to carry the extra identification in case it is lost or stolen. I know I don't carry many forms of ID." In addition, she said, some people no longer even have their Social Security cards. WCUL's Guttormsson said credit unions have been hearing so much about CIP and all worked pretty hard to get policies in place. Most were fairly familiar with requirements but last-minute training sessions reinforced things. He called the requirements "just a number of common sense sort of steps that most credit unions already do. They just had to take those common sense ideas and put them into a formal policy with steps and procedures."