We recommend having the current authorized signers and the new authorized signer sign a new signature card, rather than having the new signer sign a separate signature card and removing the old signer from the previous card. Your bank should also review its policies and procedures and the customer’s account agreement and comply with any requirements addressing the addition or removal of authorized signers, such as obtaining a corporate resolution from your business customer confirming the change in authorized signers.

We recommend obtaining signatures on a new signature card primarily due to operational concerns that may vary from bank to bank. Generally, signature cards are designed to assist tellers and back-office personnel in confirming the signature of an authorized signer on an account. They also can incorporate contractual terms that the customer agrees to by signing the card. Adding a separate signature card for a new signer may confuse your staff, who will have to look at two different signature cards to determine whether an individual is authorized to transact business on the account. Additionally, removing an authorized signer while retaining the old signature card, such as by crossing them out or altering the card in some other way, also may confuse your staff and increase the likelihood of fraudulent activity occurring on the account.