On August 5, the SOLO Network announced a FinCEN-observed bank reliance pilot developed in coordination with the U.S. Department of the Treasury, the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC). The pilot represents the first coordinated engagement across all four agencies to operationalize bank reliance at scale and could significantly reshape how financial institutions approach customer due diligence and identity verification.
Link to The Problem the Pilot Addresses The Problem the Pilot Addresses
Financial institutions have long been required to independently verify the identity and background of customers before onboarding them. That process has historically meant repeating the same verification work every time a customer opens a new financial relationship, regardless of whether another institution has already completed the same work to an acceptable standard. The redundancy stems not from any lack of verification, but from three structural problems: no common way to represent completed verification work across institutions, little economic incentive to share work already performed, and no operational framework for evidencing reliance in a consistent, auditable way.
Since 2003, the Customer Identification Program rule has permitted a bank to rely on verification performed by another federally regulated financial institution, provided the reliance is reasonable and backed by a contract and annual anti-money laundering certification. In practice, however, differences in bank policies have confined reliance largely to affiliate and sponsor-bank arrangements. The challenge has been implementing it consistently and at scale across different institutions with different processes and systems.
Link to How the Pilot Works How the Pilot Works
On June 8, the pilot was launched to address these structural barriers by standardizing not how institutions perform verification, but how completed verification is represented, evidenced, and independently evaluated by financial institution members of the network. Participating institutions generate standardized, auditable verification artifacts that document the work performed, methods used, timing, and personnel involved. Other institutions in the network can then independently evaluate those artifacts to determine whether they satisfy their own compliance and risk requirements without requiring the consumer or business to start over with the identity verification process whenever onboarding with a new financial institution. If any qualifying factors for a particular financial institution’s verification process are missing from the information shared among the network member, that financial institution can perform just the missing verification steps itself.
The model is being described as analogous to TSA PreCheck: trusted verification travels with the consumer rather than being restarted at every new financial institution, while each institution retains independent compliance responsibility and decision-making authority.
Link to Regulatory Significance Regulatory Significance
The involvement of the Treasury Department, FinCEN, OCC, and FDIC in observing and coordinating the pilot is significant for several reasons.
First, it signals regulatory openness to operationalizing bank reliance at scale under the Bank Secrecy Act (BSA) and Customer Due Diligence (CDD) rules. FinCEN’s CDD rules permit covered institutions to rely on another financial institution to perform elements of the customer identification and due diligence process, subject to certain conditions, but implementation has remained inconsistent.
Second, the multi-agency coordination suggests that regulators view standardized, auditable verification artifacts as a potential path toward satisfying BSA and CDD compliance obligations across institutions. The pilot’s outcome could inform future regulatory guidance or rulemaking on how bank reliance should be evidenced and documented.
Third, for fintechs operating within sponsor bank relationships, the pilot may offer a more durable and scalable alternative to the patchwork of bilateral reliance arrangements that currently characterize the market.
One important caveat bears noting: regulatory observation of the pilot does not constitute a no-action letter, safe harbor, or endorsement of the SOLO model. As of August 13, none of the four agencies had issued a companion announcement, and institutions considering participation should evaluate their own BSA and CDD obligations independently.