Authorized Signer Rights on Checking Account
Answers by John Burnett and Ken Golliher, BOL Guru Guru Bio
Question: What rights does an authorized signer have on a checking account? I was told at my previous bank position that a signer could do anything on a checking account except that they could not close the account.
Answer by John Burnett: An authorized signer can only transact business on behalf of the account owner. So, for example, he or she could not deposit a check payable to the authorized signer, unless it's endorsed over to the owner, and the funds become the owner's. And I'd be reluctant to allow an authorized signer to obtain back statements or wire funds or have a debit card on the account without specific authorization from the owner.
As for closing the account, unless your deposit agreement or authorized signature documents say to the contrary, the UCC in most states (section 4-403) allows any signer to close an account, even if multiple signatures are normally required for withdrawals.
Answer by Ken Golliher: The term can be "authorized signer," it can also be "agent" or "convenience signer."
If there is a state statute that uses one of these terms, then the person can do whatever the statute says they can do. If there is no such statute, then the person's authorities are largely established by any contractual terms you may impose or (worst case scenario) bank policies, written or otherwise.
As John notes, the model version of the UCC addresses the account closure issue.
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