SEC Commissioner Urges Easing Duplicative Customer ID Checks

SEC Commissioner Hester Peirce urged regulators to make it easier for financial firms to rely on another regulated entity's verification of a customer's identity, rather than requiring each firm to repeat the same checks.

Speaking at SIFMA's Digital Assets Conference on September 23, 2026, during her penultimate week as a Commissioner, Ms. Peirce said the customer identification program (CIP) rules generally require each regulated entity to independently collect and verify a customer's name, birth date, address, and identification number, even when another registered entity has already vetted that person. She said regulators should make it easier for registered entities to rely on third-party identity verification for CIP purposes.

The proposal extended an argument Ms. Peirce has pressed in prior remarks (see prior coverage): that the government's steady accumulation of personal information, including through currency transaction reports and suspicious activity reports, carries costs that seem to dwarf its effectiveness at stopping bad actors. She said cryptographic tools such as zero-knowledge proofs and attribute-based credentials can now verify a specific fact, such as age, citizenship, or accredited-investor status, without disclosing the underlying personal data, and urged regulators to ask at every step whether a piece of information is truly necessary.

Ms. Peirce also revisited the SEC's "Innovation Exemption" (see prior coverage), a time- and size-limited exemption announced September 17, 2026 that facilitates trading of tokenized securities on crypto networks through automated market makers. Echoing Chairman Atkins, she described it as a bridge toward durable rulemaking and noted that the SEC is accepting public comment on it.