"That's news to me. I thought places like St. Brendans Isl gave you a physical address you could use (different from "just" a PO box.) Did I misunderstand?"
I believe the government
supplies a list of, or can quickly identify, addresses that are "non-traditional" to financial institutions. Somehow banks know that our mail forwarding company's street address followed by our unique identifier:
XXX Childers St.
represents a mail collection and forwarding facility rather than an apartment complex with YYYY units.
I spent last December shopping
for a bank or credit union to place a CD with and every single
one that I talked with had an issue with the nature of our address within 24 hours of our application, sometimes much quicker.
Two years ago we tried to open an account in my wife's name at a credit union at which we already had had a joint account with for several years and she was refused due to our address.
Typically banks say our address is flagged to them as not being a physical family
residence. Some banks have accepted a utility bill (our Sirius satellite
bill) as "proof" of our residence as is. Some banks accept a next-of-kin address per the law in addition to our mailing address. Some banks outright refuse to do business with us, which is their right under the law.
The idea behind the "know your customer" law is to put the burden of vouching for the legitimacy of the banks customer base on the banks in an effort to fight money
laundering and terrorism. I've never heard what the penalty to the bank would be for allowing "leakers", but it must be uncomfortable for them.
The law supposes having a sticks-and-bricks address is a good way to separate the good from the bad and allows, but does not require, banks to accept a next of kin address to cover that requirement. Some banks are willing to stick their neck out and work
with non-traditional addresses, other banks apparently don't figure the risk/reward works out in their favor.