Topic: Minor Accounts
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What requirements would apply if we were to allow a high school foreign exchange student to open a checking account?
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Below are some of the issues we would consider before opening an account for a high school foreign exchange student. BSA/AML Requirements We recommend looking at your customer identification program (CIP) policies and considering what information you would like to collect from the student. The CIP regulations require you to collect the following information from…
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Are there rules in place regarding the types of accounts that cannot be charged a dormant account fee? For example, what about accounts held by minors or escrow accounts?
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We are not aware of any law that would prevent your organization from charging a dormant account fee on accounts held by minors or on escrow accounts. Generally, Illinois law permits a bank to determine an appropriate dormancy fee in accordance with the bank’s prudent business judgment and safe and sound operating standards. 205 ILCS…
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Do you know if there is an Illinois Law that prohibits charging a service or maintenance fee on a minor account?
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We believe that the general rule would apply, which is that a bank may charge any account fees agreed to by the customer, even if the customer is a minor. (Section 5e of the Banking Act states that “[n]otwithstanding the provisions of any other law in connection with extensions of credit” banks may charge any…
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Do you see any problems with reporting information on accounts held by minors to credit reporting agencies? Some parents have requested this as a way to build up a child’s credit score.
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We are not aware of any restrictions on reporting accurate credit information about a minor, but we note that there may be some reputational and other risks in reporting negative credit information about a minor. The Fair Credit Reporting Act (FCRA) and Regulation V do not contain any references to minors or to the ages…
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Should we allow a seventeen-year-old minor to take out a “credit builder” loan?
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In Illinois, the age of a majority is eighteen. The general rule is that a loan agreement with a minor is not enforceable, because the loan agreement is voidable by the minor party. Dixon National Bank v. Neal, 5 Ill.2d 328, 336 (1955). There are exceptions to this general rule, but from what you have told us,…
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I know that we can open up a checking account for a minor under the Illinois Banking Act. But can we also issue a debit card to a minor?
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The Illinois Banking Act states that banks may accept deposits from minors and that “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.” 205 ILCS 5/45.1. While that provision would protect…
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On a minor savings account (with minor as primary accountholder and parents as joint accountholders), can we charge a dormant account fee and report the account to the State Treasurer?
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We do not see any problems in charging a dormant account fee and remitting an account to the state, even though the primary owner of the account is a minor. Under the Uniform Disposition of Unclaimed Property Act [Repealed effective 1/1/18], deposit accounts are presumed abandoned after five years of no communication from the owner or…
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When a beneficiary of a UTMA account becomes an adult, can the beneficiary withdraw all the funds, or would the custodian’s signature still be required?
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The Illinois Uniform Transfers to Minors Act places the duty of closing out the account on the custodian, who “shall transfer in an appropriate manner the custodial property (to the extent that it has not been used pursuant to this Act) to the minor or to the minor’s estate.” 760 ILCS 20/21. The bank may…
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How should we respond to a Citation to Discover Assets that names an account that is not owned by the judgment debtor (but is owned by the judgment debtor’s children)?
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We believe that it would be a best practice to contact the attorney for the judgment creditor to advise the party that the accounts listed in the citation to discover assets do not appear to be the property of the judgment debtor. You may need to seek further determination from the court that the children's…