A customer with a campaign account under his name and social security number would like to change the account type from “individual” to “non-profit, political organization,” as he now has a non-profit entity with an employer identification number (EIN). The customer currently holds a political office and has a handful of employees, each of whom he would like to be issued a debit card for the account. Are there any Illinois guidelines we must follow for this type of account, and what type of FDIC insurance is available for this type of account?

We recommend closing the campaign account under the customer’s name and social security number and opening a new account for the non-profit entity using its EIN. We also recommend following your Customer Identification Program (CIP) procedures for non-profit organizations, since your customer’s organization technically is a new customer for your bank.

The Illinois Election Code requires political committees (including candidate political committees) to segregate their funds from any personal funds of the officers, members, or associates of the committee. Relatedly, the Illinois State Board of Elections Guide to Campaign Disclosure recommends that political committees open separate segregated bank accounts to avoid the mixing of campaign funds with any personal funds of the committee’s officers, members, or associates. The Board’s Guide also indicates that financial institutions may require an EIN when opening a campaign account instead of using an individual’s social security number.

While we are not aware of any authority that would prohibit you from keeping the account open and changing the ownership and account type, we recommend that you instead close the account and open a new account in the non-profit’s name. A new signature card will provide your bank with a clear record of the amendment to the account ownership, type, and titling, and will ensure that your customer has agreed to any contractual terms that apply to the new account type.

Regarding deposit insurance, we believe that an account for a non-profit political organization would be entitled to the $250,000 standard maximum deposit insurance amount for corporations, partnerships, and unincorporated associations.

For resources related to our guidance, please see:

FinCEN CIP Regulations, 31 CFR 1020.220(a)(2)(i) (“The CIP must contain procedures for opening an account that specify the identifying information that will be obtained from each customer. Except as permitted by paragraphs (a)(2)(i)(B) and (C) of this section, the bank must obtain, at a minimum, the following information from the customer prior to opening an account: (1) Name; (2) Date of birth, for an individual; (3) Address . . .; and (4) Identification number, which shall be: For a U.S. person, a taxpayer identification number. . . .”)

FinCEN Regulations, 31 CFR 1010.100(mm) (“Person. An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, an Indian Tribe (as that term is defined in the Indian Gaming Regulatory Act), and all entities cognizable as legal personalities.”)

Illinois Election Code, 10 ILCs 5/9-6(c) (“All funds of a political committee shall be segregated from, and may not be commingled with, any personal funds of officers, members, or associates of such committee.”)

Election Code, 10 ILCS 5/9-1.8 (“(a) ‘Political committee’ includes a candidate political committee, a political party committee, a political action committee, a ballot initiative committee, and an independent expenditure committee. (b) ‘Candidate political committee’ means the candidate himself or herself or any natural person, trust, partnership, corporation, or other organization or group of persons designated by the candidate that accepts contributions or makes expenditures during any 12-month period in an aggregate amount exceeding $5,000 on behalf of the candidate.”)

Illinois State Board of Elections Guide to Campaign Disclosure (June 2019) (“Opening a separate segregated bank account is recommended when forming a political committee. The mixing of campaign funds with any personal funds of officers, members or associates of a political committee is prohibited. . . . When opening a campaign account, the financial institution chosen by the committee may require an employer identification number issued by the Internal Revenue Service. This procedure eliminates the use of an individual’s social security number attached to a campaign account that may result in a personal tax liability.”)

Deposit Insurance Coverage Regulations, 12 CFR 330.1(o) (“Standard maximum deposit insurance amount, referred to as the ‘SMDIA’ hereafter, means $250,000 adjusted pursuant to subparagraph (F) of section 11(a)(1) of the FDI Act (12 U.S.C. 1821(a)(1)(F)).”)

Deposit Insurance Coverage Regulations, 12 CFR 330.11(a)(1) (“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. . . .”)

FDIC, Your Insured Deposits, pages 18-19 (January 2020) (“Deposits owned by corporations, partnerships, and unincorporated associations, including for-profit and not-for-profit organizations, are insured under the same ownership category. Such deposits are insured separately from the personal deposits of the organization’s owners, stockholders, partners or members. . . . All deposits owned by a corporation, partnership, or unincorporated association at the same bank are combined and insured up to $250,000. . . . The number of partners, members, stockholders or account signatories established by a corporation, partnership or unincorporated association does not affect insurance coverage.”)