Sponsor Banks Can Now Collect TINs from Third Parties – Here’s What That Means for Fintechs
Blog post from Socure
FinCEN has allowed certain OCC-regulated banks, FDIC-insured banks, and NCUA-supervised credit unions to obtain customer Taxpayer Identification Numbers from third parties before account opening, provided they use documented, risk-based controls and maintain reasonable confidence in customer identity without increasing illicit-finance risk. The change does not directly apply to fintechs, money services businesses, or other non-bank financial institutions, which remain subject to their own Customer Identification Program and IRS reporting obligations. Fintechs using sponsor or FBO banks may nevertheless be affected if their banking partners adopt the alternative process, particularly where third-party-sourced TINs conflict with customer-reported information and create audit, 1099 reporting, or backup-withholding risks. Firms are advised to retain existing workflows unless directed otherwise by a regulated bank partner, clarify responsibility for tax compliance and authoritative TIN records, document data lineage, and plan for resolving mismatches.
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