Topic: Authorized Signers
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If an adult is an authorized signer on a minor’s demand deposit account, can the adult’s creditors attach the assets in the minor’s account? The account is titled in the minor’s name, and the adult is only an authorized signer.
No, we do not believe that an adult authorized signer’s creditors would be able to attach the funds in an account solely owned by a minor — provided that your account records clearly and unambiguously reflect that the minor is the sole owner. The Illinois Code of Civil Procedure permits a creditor to serve a…
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Does Illinois place any limits on the number of authorized signers that can be added to individually-held accounts? We are aware that some states have “convenience account” statutes that limit the number of convenience depositors or authorized signers that may be designated for an account. Before converting to our current core processor, our system allowed for only one authorized signer or convenience depositor to be named on an individually held account. Our new core processor does not have the same restriction. Must we continue to restrict the number of authorized signers on an individually held account, or can this restriction be lifted?
We are not aware of any Illinois laws that restrict the number of authorized signers that may be added to an individually-held account. Consequently, we believe your bank may choose the total number of authorized signers that you allow account holders to designate. Also, we note that an Illinois law permitting the use of convenience…
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We have several large corporate customers with officers who have full rights on the customers’ accounts and other employees with signing authority only. For example, one customer has two officers with full rights and approximately 32 authorized signers. We would like to streamline the process of adding (or subtracting) multiple signers to a corporate account by using a “signing authority form” as an addendum to a corporate authorization resolution. The signing authority form would provide that (1) the customer understands the document is an addendum to the corporate authorization resolution and account agreement, (2) the “undersigned” (including the corporate officer and any listed authorized signers) authorizes the bank to verify the credit and employment history of the authorized signer(s), which may include obtaining a credit report for the authorized signer(s), and (3) the undersigned acknowledges the receipt of copies of agreements and disclosures related to terms & conditions, truth in savings, funds availability, electronic funds transfers, privacy, and substitute checks. Is there any other language we should include in the signing authority form?
While we cannot provide you with legal advice, and consequently we cannot opine on the provisions in your account documents regarding their appropriateness or omissions, we do have some general comments in response to your question. First, we recommend reviewing any proposed language in your signing authority form to ensure that it is consistent with…
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Can an individual deposit a check made out to them personally into an LLC’s account? For example, can Jane Doe deposit a check made out to her into the account of Doe’s Donuts, LLC without first indorsing it over to Doe’s Donuts, LLC? Or must Jane Doe indorse the check as “Jane Doe, payable to Doe’s Donuts, LLC” then indorse the check on behalf of Doe’s Donuts?
In our view, the best practice would be to require Jane Doe to indorse the check over to Doe’s Donuts, LLC, then to deposit the check into Doe’s account with an indorsement “on behalf of Doe’s Donuts, LLC” — assuming that Jane Doe is an authorized signer on the LLC’s account. As the payee of…
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We have a deposit account application from an LLC that has listed a trust as its sole manager and member. The account will be titled in the name of the LLC, and the authorized signer is the trustee of the trust. How would the trustee endorse the LLC’s deposits and sign the LLC’s checks?
In our view, you should set up the account with the signature card identifying the signatory party as “[Name of LLC], [Name of Trust], Managing Member, [Signature of Trustee], Trustee.” As the authorized signer, the trustee should endorse checks deposited into the LLC’s account in the same manner. With respect to checks drawn from the…
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For an account owner or an authorized signer to be removed from a joint account, does Illinois law require that all account owners and authorized signers execute a change request form approving the removal? If so, does the account owner or authorized signer who is being removed from the account also need to approve their own removal?
Removing an Account Owner While Illinois case law on this issue remains unsettled, we recommend obtaining the written consent of all joint account owners for the removal of an account owner. There is conflicting case law in Illinois as to whether joint account owners may unilaterally remove other joint owners from an account without their consent or…
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We are opening business checking accounts for five different entities. We have a resolution and operating agreement from each entity showing authorization for an individual, John Smith, to serve as authorized signer for each entity. We aren’t sure how to label the authorized signer in our signature cards. Should our signature cards simply name the individual signer (“John Smith”)? Or “John Smith, Managing Member?” Or “John Smith, by Entity 1, Managing Member” (although it would be difficult to fit in that much text in our signature card authorized signer box)?
Signature cards are designed principally to assist tellers and back office personnel in confirming the signature of an authorized signer on an account. We believe it would be best to identify John Smith as an authorized signer, followed by his title and his signature. We do not believe it is necessary to write, “John Smith,…
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What is a Letter of Delegation? We have a customer who is the independent executor for an estate account. He is legally blind and provided us with a Letter of Delegation that was executed in 2017, authorizing his attorney to be added as an agent on the estate account. The Letter of Delegation directs our bank to provide all account information requested by the agent and indicates that the agent will be able to handle all transactions related to the account, including the right to modify or close the account. Does this letter mean that the attorney can transact on the account, including writing checks and closing the account without the customer’s approval?
It appears that your customer is using the Letter of Delegation to convey his intent that his attorney be added as an authorized signer for the estate account, which appears to be permissible in this case. Illinois recognizes two types of estate executors — independent and supervised. It appears that your customer is an independent…
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We have a customer that is updating the authorized signer on several accounts. The customer is a municipal government hospital (a nonprofit corporation), and we believe that the authorized signer is the hospital’s new CEO. Do we need the customer to complete a beneficial ownership form for these accounts?
Yes, we believe that your bank should collect beneficial ownership information from the hospital, as there has been some indication that the hospital’s beneficial ownership is changing due to the departure of the current CEO. Under FinCEN’s new customer due diligence (CDD) final rule, banks generally are required to obtain and verify beneficial information for…
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We are going through our list of inactive accounts under the new Illinois unclaimed property law. If a customer with inactive accounts is either the authorized signer on an active checking account or a beneficiary on an active payable on death account, can we treat the customer’s “inactive” accounts as active? Also, if we have a POD account with one mailing address for the owner and a different mailing address for the beneficiary, can we treat this POD account as linked to the beneficiary’s other accounts (which use the beneficiary’s mailing address) for purposes of the unclaimed property law?
We believe that a beneficiary should be treated as an apparent owner of the active account, but not an authorized signer. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that activity directed by “an apparent owner” for an account “shall be an indication of interest in all such accounts” — provided that such…