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#1641485 - 12/21/11 02:09 PM Paperless CDs
NewNana
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My bank is considering going paperless with regard to issuing CDs. The customer would receive a receipt instead of the actual certificate of deposit. They would also receive a separate TISA disclosure. Is anyone currently doing this? Can anyone think of a reason against implementing this process?

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#1641525 - 12/21/11 02:48 PM Re: Paperless CDs
rlcarey Offline
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Unless you are issuing negotiable CD's that is all you are doing now. The paper certificates that banks issue now are worthless pieces of paper.
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#1641537 - 12/21/11 02:44 PM Re: Paperless CDs
Kathleen O. Blanchard Offline

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Agreed! Banks have always seemed to think those "certificates" had some magic about them when they really were just receipts. These are savings accounts, not negotiable CDs.

Your collateral processes should not change because the bank still has control of the "collateral" and can place a hold.
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#1641667 - 12/21/11 04:01 PM Re: Paperless CDs Kathleen O. Blanchard
Bob The Banker Offline
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Originally Posted By: Kathleen B
Agreed! Banks have always seemed to think those "certificates" had some magic about them when they really were just receipts. These are savings accounts, not negotiable CDs.

Your collateral processes should not change because the bank still has control of the "collateral" and can place a hold.

Our magically certificates serve as our account contract and disclosures.

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#1641692 - 12/21/11 03:59 PM Re: Paperless CDs
Kathleen O. Blanchard Offline

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Yes, but it is still not a negotiable document, which is how many banks treat them. It is like any other account contract and disclosure, which doesn't have to be presented to close the account.
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#1641734 - 12/21/11 04:41 PM Re: Paperless CDs
1 Peter 5:7 Offline
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TX
As I said in another thread . . .

"If I can give a perspective from the customer's side . . . my father-in-law passed away recently and had small CDs scattered over several banks in his hometown. What was surprising to me when we went in to close out the CDs was the inconsistency between the banks in what documentation we had to present. Fortunately the CDs were all the "paperless" variety because the documentation we found in his SD box on all were clearly disclosure/contract/receipt type documents, not "original" CDs in the sense we used to see. But two of the banks still insisted that we present an ORIGINAL CD to close out the account. Not wanting to argue with idiots (sorry!) we simply handed over the disclosure/receipt and the CDs were cheerfully closed out.

I wonder how many front line folks still have a notion that the customer must turn over an "original" CD when the FI has in fact already gone to a book entry process and is merely issuing CD receipts. It creates an unnecessary hassle for customers, especially if indemnities are demanded. I advise any of you to review your CD documents and your frontline procedures to determine what type of CD you are actually issuing and what hoops you are requiring customers to jump through. Why put yourself at a competitive disadvantage?"

We like to rip the big banks for incompetence, but the two banks requiring "originals" were community banks. The biggees got it right.
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#1641746 - 12/21/11 04:37 PM Re: Paperless CDs
Doug Hendrickson Offline
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We switched to "paperless" CDs earlier this year and it's been a good thing. As others have noted, the customer just gets a receipt.

The ones who 'fought' it the most were the loan officers. First of all, it took a lot of convincing that we did not have to have the customer bring in their copy of the CD to close the account (just like they don't have to bring in anything to close a checking or savings account). Second, they like to have the customer copy of the CD to stick in the vault when the CD is securing a loan (I think this was so that if someone forgot to place a hold on the CD for the amount of the loan, they had some "back-up"). Hopefully, as CDs mature and new ones come one, they'll all disappear.
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#1972299 - 10/28/14 12:25 PM Re: Paperless CDs Doug Hendrickson
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Resurrection time.

Did anybody experience any push back from the customer when you introduced receipts in lieu of certificates? We are preparing to make the transition and just want to know what to expect.
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#1972301 - 10/28/14 12:39 PM Re: Paperless CDs low profile
Elwood P. Dowd Offline
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You're going to get pushback, guaranteed.

Banks have spent decades convincing people that the "Certificate of Deposit" was important and, if it was lost, put them through no end of trouble obtaining a "bond" or signing an indemnification agreement. If our customers are dull witted in thinking the piece of paper has value, we are fully responsible for that. (As Peter indicates, some bankers believe it too, not realizing that they are the ones who set up the ridiculous system.)

Train your personnel to stop using the terms "certificate of deposit" and "CD." Train them to explain that the reason for moving to "book entry" time deposits is to avoid inconvenience to customers if they lost the piece of paper. Use statement messages to note the change in advance.
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#1972337 - 10/28/14 02:19 PM Re: Paperless CDs Anonymous
Milby Offline
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I did this at two previous banks and had very little pushback. In truth, the second bank was already using the receipt but was requiring customers to bring it in to close. We had a few seniors say they liked the "old way" better, but none were really complaining. When we explained they didn't have to bring in the certificate/receipt and we just needed their ID they all (99%) thought it was a great idea and time saver.

I don't agree with Ken when he said you should stop using the the term Certificate of Deposit or CD; you'll definitely get push back there. I would love to see someone tell a 75 year retiree that you don't offer CDs anymore... only book entry time deposits. That money is walking out the door to the next bank on the opposite corner. Heck, I'm under 40 and would walk out of your bank for saying that.

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#1972354 - 10/28/14 02:51 PM Re: Paperless CDs Milby
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This issue is a concern because the "CD demographic" does not readily adapt to change.
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#1972361 - 10/28/14 03:01 PM Re: Paperless CDs Milby
Elwood P. Dowd Offline
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Quote:
I would love to see someone tell a 75 year retiree that you don't offer CDs anymore...


I missed the part where I suggested that...

What I did say is bank employees should be trained to use modern, descriptive terms; I cringe every time I hear a banker say "certificate of deposit" instead of "time deposit." As I get older I also shy away from assuming that my peers automatically suffer from diminished capacity.
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#1972436 - 10/28/14 04:42 PM Re: Paperless CDs Anonymous
Sunshine Lady Offline
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We have been providing our customers with receipts for CD's for years and it has all the information required and I have not had any pushback. Part of the acceptance is in how you explain it to the customers. As long as they have something for their records, they were okay. I am telling my age now, but I do remember when we would not close a CD without the original CD or the customer signing something saying that they lost it and the form had to be notarized (it was a pain).
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#1973781 - 11/03/14 08:13 PM Re: Paperless CDs Anonymous
toxfox13 Offline
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Springfield MO
We still require the original signed CD or an affidavit of a lost CD. I wish we would switch, we have customers complain all the time (even elderly customers) because their other banks have made the switch.

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#1973789 - 11/03/14 08:25 PM Re: Paperless CDs Anonymous
ahkcompliance Offline
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We started issuing receipts about 5 years ago. We had some push back at first but overall most people like not having to worry about bringing in the original certificate.

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#2161550 - 01/23/18 07:37 PM Re: Paperless CDs Anonymous
glick2424 Offline
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For those who have transitioned from a negotiable certificate to a receipt, what did your transition look like? ie. Did you simply phase out as CD's were renewing/issued or did you ask customers to bring in their negotiable CD and replace? If autorenewal, did you require the original at time of renewal or just let the customer keep?

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#2161606 - 01/24/18 12:06 PM Re: Paperless CDs Anonymous
rlcarey Offline
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There hasn't been a negotiable CD issued to a consumer by a bank in probably 40-50 years. I highly doubt what you are currently issuing are negotiable CD's. That would mean that I could buy a CD from you and sell it to Ken and Ken could come to the bank to redeem it solely based on the fact that he had physical possession of what you are currently calling the piece of paper that represents the CD. They have ben nothing but receipts for years, regardless of what they look like.
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#2162146 - 01/26/18 09:04 PM Re: Paperless CDs Anonymous
glick2424 Offline
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Agreed. I have asked for a copy of the document, however, with the institution I am working with it is highly possible that they are negotiable. Again, seeking thoughts on how to get them off of these if they do in fact exist.

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#2162150 - 01/26/18 09:10 PM Re: Paperless CDs Anonymous
rlcarey Offline
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Galveston, TX
Trust me - they don't exist.
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#2163519 - 02/07/18 07:11 PM Re: Paperless CDs Anonymous
glick2424 Offline
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I have actually reviewed the certificate and it is negotiable including the ability to transfer ownership. Any suggestions?

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#2163597 - 02/08/18 11:56 AM Re: Paperless CDs Anonymous
rlcarey Offline
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Galveston, TX
Then you need to sit down with legal counsel to review the CD contracts to see how you go about calling these CD's.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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