Topic: Account Opening
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A customer would like to open an account for a bible study group, but he does not have any information pertaining to the church. This account does not appear to qualify for unincorporated organization or club accounts. Can we open the account using the customer’s name with the title of the bible study group?
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We believe that a bible study group could qualify as an unincorporated association for deposit insurance purposes. An unincorporated association must consist of two or more persons formed for some religious, educational, charitable, social or other noncommercial purpose, and we believe that a bible study group would fit that definition. Consequently, you may title the…
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How should we title a class reunion account? Should it be: “Class Reunion 19XX,” with a second line listing the name of the individual opening the account? Do we need an employer identification number (EIN) for the account?
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We believe that your customer’s class reunion account can be titled either in the name of the individual(s) who own the funds or in the name of an unincorporated association (that is, an organization formed for a noncommercial purpose with deposits separate from those of the members comprising the association). While deposit insurance may…
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When acquiring customers who have decided to move their account from another bank, what documentation should we require to open a sole proprietorship account for a customer “doing business as” an assumed name who started the business before assumed name certificates were required? Is using the business’s employer identification number (EIN) sufficient? What should we do if the customer wants to use their social security number for the account?
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When opening a new sole proprietorship account, we recommend following the guidance in FinCEN’s CIP Rule FAQs, which describe how to verify a sole proprietorship’s identity. Using a fictitious or assumed name certificate is one documentary method for verifying a sole proprietorship’s identity, but you may use non-documentary methods described in the CIP rules as…
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We’re looking for a new due diligence form for new and existing customers that our frontline staff can use. Can you recommend a template?
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We have two customer information forms in our forms library that are linked in our resources. We also have made a request to our Compliance Division Advisory Committee for a sample customer due diligence form and will send you any submissions we receive. Also, included in our resources are a bank’s customer due diligence form…
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Our farmer customers who operate as sole proprietors open accounts using their social security numbers. If a farmer would like their spouse to be a co-owner on a farm account (e.g. John Doe or Jane Doe Farm Account), can the account still be classified as a sole proprietorship? In the past, we have allowed only one owner on a sole proprietorship account, with a spouse listed as an authorized signer. What is the proper way to title this type of account?
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We are not aware of any prohibition against a sole proprietor account being titled in the name of two spouses. Under the Internal Revenue Code, two spouses who run a business together may file a tax return as a sole proprietorship if they fulfill all the requirements for being considered a “qualified joint venture.” The…
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Our current account disclosures for consumer and business accounts provide that new accounts must be funded within 32 days of opening or the accounts will be closed. Can we change this language in our business account disclosures to provide that the accounts “may be closed” after 32 days, with additional time provided as needed? We would like to have the discretion to provide more time for business accounts to fund, as we are finding that it often takes longer than 32 days to set up these accounts.
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Yes, we believe that your bank may revise its business account agreements to provide your bank with the discretion to give customers additional time to fund accounts after the first 32 days have passed. We are not aware of any law or regulation that would prohibit this change, provided that your account agreements and disclosures…
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Our BSA Officer does not want to open new trust accounts until we have tax ID numbers for every beneficiary of the trust, as well as other information — such as the legal fees and our own trust fees that we will charge to the trust. Delaying these account openings until we have collected this information is causing operational difficulties, for example when we urgently need to pay bills using trust funds, and it can be difficult to track down beneficiaries’ tax IDs, particularly for minors. Our preferred practice would be to open the trust accounts with the trust’s tax ID, in addition to other identifying information, and to obtain the beneficiaries’ lDs as soon as possible thereafter (while ensuring that we do not make any distributions to the beneficiaries in the meantime without obtaining their taxpayer IDs and running OFAC checks).
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We believe that FinCEN’s customer identification program (CIP) rules permit your bank to establish a procedure in which trust accounts are opened with the trust’s taxpayer ID, and you collect the beneficiaries’ taxpayer IDs “within a reasonable time” after the account has been opened — particularly given the safeguards your institution is taking before making…
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Our bank is preparing to allow customers to use electronic signatures to open accounts and make changes to accounts in all areas of our bank, including deposits, loans, and trusts. Is there any reason to continue to obtain a customer’s wet ink signature on a signature card? Are wet ink signatures required for mortgage documents or for certification of beneficial ownership forms? Also, is there a method of identification authentication for customers opening accounts using electronic signatures that is better than other methods when it comes to catching synthetic identity fraud?
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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. As a general rule, we believe your bank may accept a customer’s electronic signature on…
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A community college has been a customer of our bank for several years and now is opening a new account. Do we need to obtain a Certification of Beneficial Ownership Form?
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Whether a community college is exempt from FinCEN’s customer due diligence requirements, including the requirement to collect a certification form, depends on the specific community college. If the community college is a public institution that has the power to tax (for example, some community colleges in Illinois have the power to levy property taxes), we…