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#186375 - 05/03/04 09:53 PM CD Presentment Required for Closing?
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
We issue paper CDs with the wording "Not Negotiable - Not Transferable" on them. As a matter of practice we require the presentment of the paper CD in order to make a withdrawal and/or close the CD. (I cannot find any reference to this "requirement" in our CD Terms and Disclosures.)

If an owner or authorized signer wishes to close the CD or make a withdrawal WITHOUT presenting the paper CD document, we have them sign an Affidavit of Loss. Is this necessary? Some of our managers are requiring ALL OWNERS or SIGNERS to sign the Affidavit of Loss. Is this necessary? Is it legal?

Thanks for any comments and thoughts.

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General Discussion
#186376 - 05/03/04 10:22 PM Re: CD Presentment Required for Closing?
RBanker Offline
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RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
We do not require the actual CD to be presented to us when cashing the certificate in. Since we do not open any '2 signature required accounts', we authenticate the presenters ID, cash the CD out, have the individual present sign the GL ticket indicating they did receive the funds and make the Official Check payable to them.

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#186377 - 05/03/04 10:24 PM Re: CD Presentment Required for Closing?
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
Brings up another question - Do you make the check payable to the individual or to all owners??

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#186378 - 05/03/04 10:33 PM Re: CD Presentment Required for Closing?
Tisa Offline
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Tisa
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Do you know the way to ...
If the account is JTWROS, any owner can request withdrawal of the funds. While it's more common for us to deposit the funds into the customer's savings or checking, we will cut a check if requested - payable to whichever owner requested the closure.

If it's "Tennants in Common" or some other vesting, or 2-signatures requried, or something else out of the ordinary, you might have reason to make the check to both, with an "and" conjunction between the names. Check your account agreement or consult with your legal department.
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#186379 - 05/04/04 10:24 AM Re: CD Presentment Required for Closing?
Elwood P. Dowd Offline
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Next to Harvey
Whenever you are closing an account with an oficial check, I suggest you make the check out exactly the way the account was titled. If it is "Jefferson or Varina Davis" and Varina is the one closing the account she can still negotiate the check, but so can he.
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#186380 - 05/04/04 01:18 PM Re: CD Presentment Required for Closing?
Banker Boy Offline
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Banker Boy
Joined: Oct 2003
Posts: 69
Florida
We do not require the actual certificate to be presented during withdrawal or closing of CD. In addition, we make the check payable as the person presenting the withdrawal requests (or withdrawn in cash or transferred to another account). It's really up to the account owner.

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#186381 - 05/04/04 02:38 PM Re: CD Presentment Required for Closing?
Ted Dreyer Offline
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Ted Dreyer
Joined: Apr 2001
Posts: 2,245
Both the requirements for closing the account and the rights of each party to withdraw should be covered in your account agreement. There is a tendency to think of the standard provisions of your account agreement as "boilerplate" language, but it represents part of your contract with your customer. Clear language in the agreement defining the rights of the parties limits your risk.

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#186382 - 05/04/04 07:04 PM Re: CD Presentment Required for Closing?
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
Ken, I have always been told to make the check out exactly as the account titling reads, too, but is there any legal reason for doing so?
Scenario: Betty Jones Living Trust, Betty Jones or Robert Jones, Trustees. Betty Jones dies and Robert Jones wishes to transfer funds to Billy Jones Living Trust. Is there any reason why Robert Jones could not have the funds directly transferred to new trust account OR must we cut a check payable to Betty Jones Living Trust, Robert Jones deposits into checking account with same title AND then writes a check payable to Billy Jones Living Trust?

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#186383 - 05/04/04 09:11 PM Re: CD Presentment Required for Closing?
BrendaC Offline
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BrendaC
Joined: Sep 2001
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Sweet Home AL
We have had to pay out to customers presenting CDs more than once when we could not find evidence that we had closed an account using an affidavit of lost instrument. That's why we now use paperless (book entry) CDs (except for CDs held as collateral on loans).
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#186384 - 05/04/04 09:32 PM Re: CD Presentment Required for Closing?
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
Conniew,
It's one of those "rules" that is intended to keep line employees from exercising personal judgment, avoid criticisms that one customer was treated in a preferred fashion over another with equal ownership rights, and keep auditors happy. However, no I would definitely not say that making the check payable only to "Varina" is wrong, it is just not what I would recommend.

In your example, I would make the check payable to the "Betty Jones Living Trust" and give it to Robert Jones. If its ultimate destination is the "Billy Jones Living Trust" I would suggest that Robert Jones endorse the check,

"Pay to the Order of the Billy Jones Living Trust,
Betty Jones Living Trust, Robert Jones, Trustee.",


Now, both the bank and Robert Jones have a clear paper trail regarding what he did with the money. (The trustee of the Billy Jones trust would still have to endorse the item.)
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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#186385 - 05/05/04 01:41 PM Re: CD Presentment Required for Closing?
conniew Offline
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conniew
Joined: Apr 2002
Posts: 155
St. Louis, MO
Thanks, Ken. That makes sense to me!

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