Topic: Account Opening
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We have a customer who wants to establish an account for an unincorporated joint venture operated by two businesses and two individuals. What account documentation should we obtain when opening the account?
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Based on these facts, the joint venture should be treated as a partnership and treated accordingly. Under Illinois law, any two or more persons who operate an unincorporated business together (that is, who “carry on as co-owners a business for profit”) are automatically considered to be a partnership, even without a written agreement or a…
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Can we set up a joint checking account owned by two businesses? Should we get Employer Identification Numbers (EIN) from both businesses?
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We are not aware of any laws or regulations that would prevent you from opening a joint checking account owned by two businesses. The Illinois Joint Tenancy Act provides that two or more persons may enter into a joint deposit account. 765 ILCS 1005/2(a). The Illinois Statute on Statutes defines the term “person” to include…
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Does Illinois law authorize the use of “for the benefit of” (“FBO”) accounts?
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We are not aware of any Illinois law that expressly refers to an FBO account. However, Illinois does have a statute — enacted in 2009 — that expressly authorizes banks to offer “convenience accounts,” which appear to be comparable to FBO accounts. Our description of this law, presented at our annual IBA Bank Counsel Conference…
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We’d like to give our reward checking account customers a book written by a prominent financial advisor. Would this be seen as promoting the author’s financial advice?
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We believe that providing a book on financial advice as an account bonus would be a business decision and would pose a very low risk for your institution. However, if you are concerned that providing the book might imply an endorsement of its entire content, you may wish to consider including a disclaimer along with…
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When a customer opens a deposit account for a trust, should we obtain a copy of the entire trust agreement? Some trustees wish to provide only a letter of opinion, in lieu of the trust agreement.
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Whether you require an entire trust agreement before opening a deposit account for the trust is up to your institution (given that your institution is not acting as trustee for the trust). We are not aware of any laws or regulations that would require you to obtain the entire trust agreement before opening a deposit…
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Our mortgage loan software recently changed the font size it uses on initial privacy notices, so that the font size differs from the font size on our annual privacy notices. Is that a problem?
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We are not aware of any rule that requires the font size in the initial privacy notice to be the same as the annual privacy notice. The privacy rules require that initial and annual privacy notices be “clear and conspicuous.” 12 CFR 1016.4(a)