In recognition of the Independence Day holiday we thought we would share some information on the US Patriot Act. This act was created because of the terroristic events that occurred on 9/11 and went into effect on October 26, 2011. Most don’t realize that the USA Patriot Act is actually a 10 letter acronym that stands for Uniting (and) Strengthening America (by) Providing Appropriate Tools Required (to) Intercept (and) Obstruct Terrorism.
The main purpose of this Act is to prevent funding of terrorism and money laundering activities to fund terrorism. This law significantly weakened restrictions on law enforcement agencies that gathered intelligence within the United States. It also expanded the Secretary of the Treasury’sauthority to regulate financial transactions, especially those that involved foreign individuals or entities.
Title III of the Patriot Act is what affects the mortgage industry the most. This section requires lenders and banks to create and maintain CIP’s, Customer Identification Programs, to prevent money laundering and funding of terrorist activities. The institutions covered under this act are required to verify information on a customer prior to entering into a formal relationship like that of a loan, credit, or financial account.
There are four main pieces of information financial institutions are required to obtain on all customers before an account is opened or credit is offered. They are:
- Date of Birth
- Social Security or Tax ID Number
The SSN or TIN will be required for US citizens or legal entities. However, there are many permanent resident aliens or visa holders in the US. How do you verify their identify as they will not have a social security number and may not have a Tax ID number either? Alternative documentation is allowed under these circumstances and would require passport number and country that issued it, a Permanent Resident Alien card (aka Green Card), or number and country of issuance of other government issued document that shows evidence of nationality or residence and includes a photo. For a company that is online casino not a US entity and is attempting to open a financial account or acquire credit without a Tax ID number would require a government issued certificate of existence or good standing.
The information obtained is run through US intelligence agencies to determine if there is any connection with a terrorist or money laundering group. If a connection is determined an oral, wire, or electronic communication can be intercepted. The consequences to such an activity can be severe. There are also, criminal and civil penalties for any financial institution or agency who commits a violation of International counter money laundering measures.
The USA Patriot Act was ultimately created to prevent our country from funding horrific terroristic events that take the lives of Americans. This law is one of the most controversial and misunderstood laws in our country today. For now, let’s join forces and agree to protect our country and our people from acts of terrorism by doing our part to obey and enforce the laws in place.
Have a happy and safe Independence Day.