Identification

• Most banks require new account holders to provide two forms of ID. Banks accept only passports and state-issued driver's licenses or ID cards as primary IDs. The secondary ID required will vary from bank to bank, but many require customers to provide a Social Security card, student ID or credit card. Expired IDs are not accepted, and to minimize identity theft, most banks do not accept IDs issued within the prior month.
  
  

Significance

• Banks base ID requirements on the 2001 USA Patriot Act. This law requires new customers to provide banks with a government-issued ID featuring an identification number, date of birth, name and physical address. Banks cannot open accounts with P.O. box addresses, although they can direct bank statements to them. Banks and bank employees face fines for failing to properly identify new account holders, and banks must regularly update customer information to ensure accuracy.
  
  

Types

• People wishing to open a personal account under a trust must provide the bank with a full copy of the trust before opening it. Bank compliance officers review trust documents and can reject them if sections of the document are viewed as ambiguous.
  
  People who add pay-on-death (POD) beneficiaries to their accounts must provide the names of the individuals, and most banks require their date of birth. Social Security numbers are not needed for POD accounts but are required for custodial accounts, because the custodian has account access and the funds belong to the beneficiary.
  
  

Benefits

• The U.S. government uses information gathered from banks to help combat terrorism and money-laundering activities. The requirement to present a valid ID makes it more difficult for thieves to open fraudulent accounts. Most banks require tellers to compare IDs presented by people making withdrawals with ID numbers recorded at the account opening. This measure reduces the likelihood of identity theft or family members with the same name illegally accessing each other's accounts.
  
  

Difficulties

• Temporary residents such as students often have trouble opening accounts because they do not have Social Security numbers or U.S. IDs. People who move to a new state also run into problems, because most banks do not accept out-of-state IDs at the account opening and are also reluctant to accept newly issued in-state IDs. Banks set their own policies on new account documentation, and this often leads to confusion for consumers trying to switch accounts.