When is it necessary for a credit union to verify an existing member's identity?

In the context of BSA Compliance, the necessity for a credit union to verify an existing member's identity typically arises when a member opens a new account or applies for certain services. This requirement is grounded in the principles of sound risk management and compliance with the Customer Identification Program (CIP) under the USA PATRIOT Act.

When a new account is opened or specific services are requested, it is crucial for the credit union to ensure that the identity of the member is verified to mitigate the risks of fraud, money laundering, and other illicit activities. This process helps maintain the integrity of the financial system and ensures that institutions know the identities of the individuals they are conducting business with.

While verification is important for new accounts and certain service applications, it is not necessarily required for every transaction that an existing member conducts. The verification process is focused on changes in the member's status, account types, or when new circumstances arise that warrant renewed identification. Thus, the correct answer centers on the requirement of verifying identity particularly during new account openings and service applications, which aligns with compliance guidelines and risk management practices.