We believe that you may treat an account that is jointly owned by a minor and an adult as you would any other account — including by enforcing your right of setoff, overdraft privileges, and other items addressed in the account agreement.

The Illinois Joint Tenancy Act does not prevent a minor from jointly owning an account with another party and no federal laws prohibit minors from opening deposit accounts. Additionally, the OCC has stated that there are no federal prohibitions on minors opening accounts at banks and notes that they are governed by state contract law. (The Illinois Banking Act specifically authorizes state banks to open bank accounts for minors, but because your bank is a national bank, that provision is not directly relevant here.)

In Illinois, courts have held that contracts with minors are voidable by the minor on attaining the age of majority (which is eighteen in Illinois), although such contracts are not void outright. A minor’s ability to void agreements may make your account agreement’s offset, overdraft, and other provisions unenforceable.

However, if the minor has opened a joint account with a legal guardian or parent over the age of majority, we believe that your bank’s risk will be lessened because you can enforce the account agreement against the adult joint owner. At least one Illinois court has held that a joint account owner is liable for overdrafts caused by another joint account owner. Another court has held that banks may set off the debts of either joint owner against a joint account as specified in the joint account agreement. Consequently, we believe your bank may enforce its rights of setoff, overdraft, and other provisions of your account agreement with respect to a joint account, provided that at least one joint owner is an adult.

For resources related to our guidance, please see:

• Joint Tenancy Act, 765 ILCS 1005/2(a) (“When a deposit in any bank . . . transacting business in this State has been made or shall hereafter be made in the names of 2 or more persons payable to them when the account is opened or thereafter, the deposit or any part thereof or any interest or dividend thereon may be paid to any one of those persons whether the other or others be living or not, and when an agreement permitting such payment is signed by all those persons at the time the account is opened or thereafter the receipt or acquittance of the person so paid shall be valid and sufficient discharge from all parties to the bank for any payments so made.”)

• OCC, Guidance to Encourage Financial Institutions’ Youth Savings Programs and Address Related Frequently Asked Questions (February 24, 2015, updated November 9, 2017) (“1. Are there restrictions on minors opening savings accounts?  How old must a person be to open a savings account without a parent or guardian serving as the custodian or co-owner on the account?

  No federal law prohibits minors from opening savings accounts. Rather, a deposit account relationship is based on a contract governed by state law.In general, minors are deemed to not have the legal capacity to enter into a contract, including opening an account at a financial institution, meaning that a contract with a minor is potentially ‘voidable.’ However, some states specifically allow a minor to open a savings account.For example, the State of Washington permits a minor to enter into a valid and enforceable contract for a deposit account with a financial institution. States also have different legal definitions of ‘minor.’

  Whether it is legally permissible for an institution to open an account for a minor without requiring a responsible adult to be the custodian or co-owner is a determination that a financial institution should make in consultation with legal counsel.”)

• Interagency, Guidance to Encourage Financial Institutions’ Youth Savings Programs and Address Related Frequently Asked Questions (February 24, 2015) (“No federal law prohibits minors from opening savings accounts. . . . In general, minors are deemed to not have the legal capacity to enter into a contract, including opening an account at a financial institution, meaning that a contract with a minor is potentially ‘voidable.’”)

• Illinois Banking Act, 205 ILCS 5/45.1 (“A state bank may accept deposits made by a minor and may open an account in the name of such minor and the rules and regulations of such bank with respect to each such deposit and account shall be as binding upon such minor as if such minor were of full age and legal capacity.”)

• Fletcher v. Marshall, 260 Ill. App. 3d 673, 675 (1994) (“A contract of a minor is not void ab initio, but merely voidable at the election of the minor upon his attaining majority.”)

• Thornhill v. Midwest Physician Ctr., 337 Ill. App. 3d 1034, 1052 (2003) (“In Illinois the age of majority is 18 years old.”)

• Joint Tenancy Act, 765 ILCS 1005/3 (“Except as otherwise provided in this Act, all joint obligations and covenants shall be taken and held to be joint and several obligations and covenants.”)

• Pacenta v. Am. Sav. Bank, 195 Ill. App. 3d, 808, 809, 814–15 (4th Dist. 1990) (“The trial court held that the defendant bank had the lawful right to charge back against plaintiff’s individual account the amount of an overdraft created in a joint checking account to which her husband and the plaintiff were cosignatories. We affirm. . . . [P]ublic policy requires that one who has established a joint account be held liable, to the extent of his funds held in other accounts in that bank, for the amount of credit the bank gives the joint account, and for any overdrafts which result from this credit, regardless of who personally presents the check on that account. Such a bank has the right, under the Code, to unilaterally charge this debt against any account the plaintiff customer may have with the bank, including plaintiff’s individual account or CD, regardless of whether the account card has a specific indemnification clause for the bank.”)

• Selby v. DuQuoin State Bank, 223 Ill. App. 3d 104, 109 (5th Dist. 1991) (“[A] plain reading of the set-off provision of the signature-card agreement indicates to this court that the Bank asserted a right to set off each depositor’s debts or obligations owing to the Bank against the deposit account and that each depositor recognized this right of the Bank to set off either depositor’s debts against the joint account. . . . because the joint depositors, Smith and plaintiff, agreed that the Bank’s right of setoff applied to the joint account for a debt or obligation owing by either of them, the Bank’s setoff of these funds was proper.”)