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#1408901 - 06/28/10 05:49 PM When does account owner become a "legal" customer?
wizard Offline
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If someone comes to our bank and opens a joint account BUT the second signer is not present, we allow account contracts and CIP worksheets to be sent to the non-present customer to be signed, notarized and returned. However, if the non-present signer does not return the signed/notarized signature contracts and CIP Worksheet within a reasonable time period, do we have a CIP violation? We obvioulsy would not allow the non-present person to EVER conduct transactions UNTIL we got the contract/CIP Worksheet back but we are now concerned about one that has not been returned in about 6 mos. So when does a "customer" actually become a "customer"? Is it when they are simply named on the account OR when the bank receives their SIGNATURE legally obligating them on the account. In some cases I am sure the non-present 2nd signer may not even know they have been NAMED as a joint signer. Thanks in advance for all responses on this one.

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#1408936 - 06/28/10 06:18 PM Re: When does account owner become a "legal" customer? wizard
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Banks have a number of ways they deal with this.

First, they won't send out documents!
Second option - don't actually activate the account for any owner until all documents are returned
Third - if the account is activated, do not add the additional party until all documents for that party are received - then add them to the account.

EDIT: To add on to this, it really depends upon what your process is and what your CIP says. If you open accounts with exceptions, then you should (actually must) have a set period of time after which the account will be closed if the exceptions are not cleared.
Last edited by MS Kaybee; 06/28/10 06:30 PM.
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#1408949 - 06/28/10 06:28 PM Re: When does account owner become a "legal" customer? Kathleen O. Blanchard
BrendaC Offline
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Sweet Home AL
I have always preferred option 3. Establish as single owner account, complete replacement docs to establish joint account and have party present sign the documents. If the second person doesn't come by within 10 days, destroy and leave as an individual account. Document all to initial person present, including final letter advising destruction of documents as previously agreed upon.
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#1409003 - 06/28/10 06:53 PM Re: When does account owner become a "legal" customer? BrendaC
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
Door #1: Sucks

Door #2: Preferred

Door #3: It will "save" the account opening, but is labor intensive.

If Kaybee & Brenda come to your bank and open an account and say Ken will bring in documents "later" so he will be a third party to the account, Ken is not a person opening an account with your institution; Ken is not a customer for the purposes of CIP. Doors 1 & 3 make that open to question.
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#1409018 - 06/28/10 07:01 PM Re: When does account owner become a "legal" customer? BrendaC
wizard Offline
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Joined: Dec 2005
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So IF we decided to go ahead open a joint account and one of the parties is NOT present, we should perform CIP on the non-present account holder at the time the account is OPENED and determine a specific time frame (in our CIP policy) to close out the account (or take further actions) if the contracts/CIP Worksheets have not been returned by the non-pressent account holder within said time frame?

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#1409031 - 06/28/10 07:08 PM Re: When does account owner become a "legal" customer? wizard
Georgia Plum
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How are you going to perform CIP on a non-present account holder?

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#1409115 - 06/28/10 07:49 PM Re: When does account owner become a "legal" customer?
wizard Offline
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Joined: Dec 2005
Posts: 73
Should clarify.....we would obtain name, DOB, address, and TIN. Then send a CIP Worksheet to be completed, signed and notarized by non-present acct. holder. The notarized CIP Worksheet and acct. contracts would be required to be returned along with copies of acceptable forms of ID as outlined by our CIP policy. BUT....if we did not receive the documents back within a defined resaonable time, we would add close the acct. per defined time frame written into the CIP policy.

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#1409193 - 06/28/10 09:36 PM Re: When does account owner become a "legal" customer? wizard
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Make sure this situation is considered in your CIP risk assessment with appropriate additional controls to validate the info on the non-present (absent?) party.
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Kathleen O. Blanchard, CRCM "Kaybee"
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