FTA Calls for Immediate Exceptive Relief from Requirement to Collect Full Nine-Digit SSNs
WASHINGTON, D.C. – The Financial Technology Association (FTA), a trade association representing leading fintech companies, today submitted a comment letter in response to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) request for information on the Customer Identification Program (CIP) rule requirement. FTA urged FinCEN and the federal banking agencies to provide covered financial institutions with immediate exceptive relief from the requirement to directly collect a consumers’ full nine-digit Social Security Numbers (SSNs) and called on them to modernize the CIP to better reflect identity verification needs in the digital age.
“As financial services become increasingly more digital, identification verification capabilities must keep pace in a way that protects consumer privacy. This includes recognizing the well-established practice of collecting the last four SSN numbers and working with a trusted third party for verification,” said Penny Lee, President and CEO of the Financial Technology Association. “Requiring consumers to provide their full nine-digit Social Security Number when transacting online does not make them safer and will lead to distrust in applying for financial products. We urge regulators to modernize identity verification requirements and explore technology-driven options to meet the needs of consumers in the digital age.”
Banking regulators have historically allowed financial providers to collect only the last four digits of an SSN directly from the customer and obtain the remainder from trusted third-party sources, a practice known as the Combined Collection Method. This practice is safe and reflects the reality that many people no longer go into a physical bank to open an account or take out a loan and may not want to provide their full Social Security Numbers to access financial services online.
Rather than reverse this previously accepted practice, FinCEN and federal banking regulators should grant immediate relief from the requirement to collect the full nine-digit SSN and accept the Combined Collection Method. Doing so aligns with consumer expectations for financial services in the digital age and adopts best practices for data minimization and data security. If regulators do not provide this relief, they should immediately carve out certain consumer products and Buy Now Pay Later (BNPL) services, reflecting their lower risk profile and unique operational characteristics. In addition, regulators should modernize the CIP Rule through joint-agency rulemaking that enhances clarity and adopts a principles-based approach encouraging innovation and collaboration.
Click here to read FTA’s full response to the proposed Customer Identification Program requirement.
ABOUT US
The Financial Technology Association (FTA) is a Washington, DC-based trade association representing industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
FTA Calls for Immediate Exceptive Relief from Requirement to Collect Full Nine-Digit SSNs
WASHINGTON, D.C. – The Financial Technology Association (FTA), a trade association representing leading fintech companies, today submitted a comment letter in response to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) request for information on the Customer Identification Program (CIP) rule requirement. FTA urged FinCEN and the federal banking agencies to provide covered financial institutions with immediate exceptive relief from the requirement to directly collect a consumers’ full nine-digit Social Security Numbers (SSNs) and called on them to modernize the CIP to better reflect identity verification needs in the digital age.
“As financial services become increasingly more digital, identification verification capabilities must keep pace in a way that protects consumer privacy. This includes recognizing the well-established practice of collecting the last four SSN numbers and working with a trusted third party for verification,” said Penny Lee, President and CEO of the Financial Technology Association. “Requiring consumers to provide their full nine-digit Social Security Number when transacting online does not make them safer and will lead to distrust in applying for financial products. We urge regulators to modernize identity verification requirements and explore technology-driven options to meet the needs of consumers in the digital age.”
Banking regulators have historically allowed financial providers to collect only the last four digits of an SSN directly from the customer and obtain the remainder from trusted third-party sources, a practice known as the Combined Collection Method. This practice is safe and reflects the reality that many people no longer go into a physical bank to open an account or take out a loan and may not want to provide their full Social Security Numbers to access financial services online.
Rather than reverse this previously accepted practice, FinCEN and federal banking regulators should grant immediate relief from the requirement to collect the full nine-digit SSN and accept the Combined Collection Method. Doing so aligns with consumer expectations for financial services in the digital age and adopts best practices for data minimization and data security. If regulators do not provide this relief, they should immediately carve out certain consumer products and Buy Now Pay Later (BNPL) services, reflecting their lower risk profile and unique operational characteristics. In addition, regulators should modernize the CIP Rule through joint-agency rulemaking that enhances clarity and adopts a principles-based approach encouraging innovation and collaboration.
Click here to read FTA’s full response to the proposed Customer Identification Program requirement.
ABOUT US
The Financial Technology Association (FTA) is a Washington, DC-based trade association representing industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.