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#113571 - 09/10/03 02:07 PM Identifying Business Account Signers
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
I know this has been discussed before, but how many of you are requiring identification on signers for business accounts - deposits as well as loans.

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#113572 - 09/10/03 02:27 PM Re: Identifying Business Account Signers
Pale Rider Offline
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under the Lone Star
Our bank went back and forth, because it is risk-based, it will depend on factors increasing the potential for money laundering or terrrorism. If none of the factors are present, we will not ID the signers.
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#113573 - 09/11/03 12:42 AM Re: Identifying Business Account Signers
Princess Romeo Offline

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Unfortunately for us, we're in a HIFCA! So the risk of money laundering is inherently greater. We've opted to ID signers on deposit accounts. Signers (who are usually guarantors) on loans to business entities will be CIP'd through non-documentary verification - i.e. credit report, copy of tax return, financial statements, etc.
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#113574 - 09/11/03 08:23 PM Re: Identifying Business Account Signers
AMXSteve Offline
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Joined: Jun 2001
Posts: 75
Wilmington, OH, USA
We're pretty much in the same boat as BonnieM. We're identifying signers on deposit accounts but relying more heavily on non-documentary methods for signers on loans.
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#113575 - 09/12/03 08:20 PM Re: Identifying Business Account Signers
Anonymous
Unregistered

I'm really confused now. In another tread "Business Application - Watch Out, verifying the identity of Business account signers using ChexSystems would be an FCRA violation.
When we open business accounts such as a corporation, we obtain the name and tax ID number for all signers on the account. We do a Chexsystem inquiry on all signers. We use this noa as a "credit" inquiry to determine credit worthiness, but as a method to determine whether previous banking relationships have been handled unsatisfactorily.

Are we in violation to FCRA?

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#113576 - 09/12/03 08:34 PM Re: Identifying Business Account Signers
Dolly Nugent Offline
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Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
We use a New Account Information Sheet. Any person wanting to open an account must complete it. We have this language built into the form:

"I authorize [enter your bank name] to obtain information regarding my identity, credit history, and other banking history from a consumer-reporting agency. I understand that this information will be used in conjunction with the request to open or modify a deposit account being submitted by the persons listed above. I further understand that information in the credit report results in a decision to either disallow my signing authority on the account or disallow opening the account. [Enter your bank name]will communicate this fact to owners and/or authorized signers of the (proposed) account. I further authorize [enter your bank name]to obtain such information at any time from one or more consumer reporting agencies that it may choose as long as I am an authorized signer on the account."

The customer signs the form - hence we have informed them and also have their consent.

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#113577 - 09/12/03 08:36 PM Re: Identifying Business Account Signers
Inquisitor / Sommelier Omega Offline
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From what I can gather, the ChexSystem report is being used as and is considered a credit report. The more I read the more I am convinced that there is more than one way to interpret the FCRA. I am standing by the fact that this is not a consumer transaction. I am not going to offend customers (lets get real-it will happen) when it is not required by 326. Consider all the risk factors when making the decision, but I am opting to do things the easy way - for a change.
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#113578 - 09/12/03 11:37 PM Re: Identifying Business Account Signers
Princess Romeo Offline

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Joined: Jun 2001
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OMEGA,
If you get examined on FCRA, you can expect that this will be considered a violation. There are no if, ands or buts, a ChexSystems report IS a credit report.

Just because you say you are not using for credit report purposes does not change the fact that you have obtained a credit report.

Also, the FCRA does not care if the transaction is consumer or business. The rules still apply.
Last edited by Bonnie M; 09/12/03 11:39 PM.
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Regulations are a poor substitute for ethics.
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