Topic: Account Opening
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One of our customers recently died. A family member has asked us to keep the customer’s deposit account open for about two months to accept refunds of insurance premiums and other credits. Would you recommend opening a new account using the executor’s social security number (SSN)?
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We believe that your customer would need to obtain an employer identification number, also known as a taxpayer identification number (EIN or TIN), for the estate, even if it qualifies as a small estate under Illinois law. The IRS requires that every estate obtain an EIN, no matter the size of the estate. Your institution…
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Can we create a separate account for checks made out to a subgroup of an organization? The organization and the subgroup both operate and report under one TIN.
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Based on the facts that you have provided, we do not see an issue with creating a separate account for the subgroup. We do recommend having an officer of the subgroup (if there is one) provide a signed statement conferring signing authority to the parent entity and specific individuals in the parent entity for the…
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Is it a best practice to accept a trust account certification in lieu of requiring the entire trust agreement when opening a trust account? One of our new employees noted that we could be held liable for a trustee’s wrongdoing if we obtain a copy of the entire trust agreement.
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There is no law that expressly requires you to obtain the entire trust instrument when opening a trust account. For example, the Customer Identification Program (CIP) rules require you to collect a name, address, and tax ID number for a trust, but they do not require that you obtain the trust instrument itself when a…
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Can you provide me with the exact verbiage that permits a financial institution to conduct on-site visits for its customers?
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The FFIEC's most recent BSA/AML Examination Manual states that customer due diligence information can be confirmed through banking references, correspondence, telephone conversations with the customer, and “visits to the customer's place of business.” Also, the manual specifically suggests conducting on-site visits for certain customers, such as third-party payment processors, cash-intensive businesses and money services businesses,…
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We would like to extend a business-purpose mortgage loan to an Illinois corporation that is solely owned by a German corporation. We understand the collection risks, but would there be any foreclosure issues, given the company’s foreign ownership? Also, we are opening a deposit account for the Illinois corporation and a related foreign company — are there any other compliance considerations?
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Mortgage Foreclosure Considerations We are not aware of any special considerations that would apply when foreclosing a loan made to a foreign-owned Illinois corporation. The borrowing entity will be treated as a domestic corporation (as defined in the Illinois Business Corporation Act of 1983), since it was incorporated in Illinois, irrespective of its foreign ownership.…
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We are considering implementing electronic signature pads for new deposit accounts and, eventually, loans. What are the state law implications that we should be considering during this process?
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Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021. Please note that this change may affect the continued accuracy of this guidance as it pertains to the ECSA. Illinois law provides that electronic signatures have the same validity as ink signatures, but additional…
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Do we need an individual’s social security number to open an account? An individual from Mexico wants to open an account with his taxpayer identification number.
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No, you are not required to obtain a social security number to open an account for a non-U.S. person. In lieu of a social security number for a non-U.S. person, the Customer Identification Program (CIP) rules require you to obtain one or more of the following: a taxpayer identification number, passport number and country of…
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We are thinking about providing a bonus credit of $10 for new student checking accounts. Can we condition the bonus on the customer’s enrollment in internet banking?
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With proper disclosures, you should be able to provide the account bonus on the condition that the customer enrolls in internet banking. Any advertising and account disclosures should clearly state that customers must sign up for internet banking to receive the bonus. If you will not be providing paper statements to the customers that enroll…
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We are providing a bonus credit of over $10 for new checking accounts. Do we need to disclose the bonus using any special wording, and do we need to disclose that the bonus will be reported as interest to the IRS?
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Regulation DD requires you to disclose the amount of any bonus and other related information in your account opening disclosures. No special wording is required, although the following is provided in the model clauses for account disclosures: You will [be paid/receive] [$_____ (description of item)] as a bonus [when you open the account/on (date) ____].s You must maintain a…