IBA Compliance Connection

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We have a potential customer that is a property management company. At another institution, the company maintains separate operating accounts and reserve accounts for each different property that it manages. The company would like to move all of these accounts to our institution. Can we execute one master resolution and one signature card to cover all of the separate accounts that it would open at our bank? The property management company would be the sole signer on all of the accounts.

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We are not aware of any law or regulation that would prohibit you from executing one master resolution and one signature card to cover all of the customer’s separate accounts. For business customers, the FFIEC’s BSA/AML Examination Manual recommends that you obtain a corporate resolution authorizing the directors to open the account or appointing a person to act as a signatory on the account. Whether you want to accept one resolution and one signature card for all of the accounts is a business decision for your institution to make.

In addition, we emphasize the importance of maintaining records sufficient to establish separate insurance coverage for each account. Typically, multiple corporate accounts of the same business entity are added together for the purposes of establishing maximum FDIC insurance coverage. However, when a property management company is acting as an agent (or in some other fiduciary capacity) for the property owners with which it contracts — and that relationship is clearly established in the deposit account records — then each individual account is entitled to separate insurance coverage.

For resources related to our guidance, please see:

  • FFIEC BSA/AML Examination Manual, Business Entities (Domestic and Foreign) — Overview (For a business account, “required account opening information may include articles of incorporation, a corporate resolution by the directors authorizing the opening of the account, or the appointment of a person to act as a signatory for the entity on the account.”)
  • 12 CFR 330.11 (“The deposit accounts of a corporation engaged in any ‘independent activity’ (as defined in § 330.1(g)) shall be added together and insured up to the SMDIA in the aggregate.”)
  • 12 CFR 330.5(b) (“The FDIC will recognize a claim for insurance coverage based on a fiduciary relationship only if the relationship is expressly disclosed, by way of specific references, in the ‘deposit account records’ … of the insured depository institution. Such relationships include, but are not limited to, relationships involving a trustee, agent, nominee, guardian, executor or custodian pursuant to which funds are deposited.”)
  • FDIC-88-81 (Opining that if a bank “maintains records (in good faith and in the regular course of business) which show the name and ownership interest of each property owner in the account” then separate property management accounts would be insured up to the maximum amount for each property owner.)