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#1971258 - 10/22/14 08:23 PM Minor Deposit Accounts
dubble Offline
New Poster
Joined: Aug 2014
Posts: 14
What are your requirements for and restrictions on deposit accounts for minors?

1) Savings Accounts – Do you allow minors to open savings accounts, and do you require a joint owner? What are the age requirements? In what circumstances would your institution only open an UTMA for the customer?

2) Checking Accounts – Do you require there be a joint owner on the account? What are your requirements for the joint owner if required, e.g., parent/legal guardian, current customer, etc.?

Additionally, regardless of the type of account, do you require that the minor sign the account agreement or will you permit another individual to sign for them?

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#1971488 - 10/23/14 05:58 PM Re: Minor Deposit Accounts dubble
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,655
The Country
For minor savings accounts we do require a joint owner of legal age.

We do not offer minor checking accounts currently but are considering doing it for those 13 and over and calling it a teen checking account. We would require a joint owner of legal age.

If the minor wants to sign we let them sign but we do require an addition signer on the account who is of legal age.
A successful man is one who can lay a firm foundation with the bricks others have thrown at him.
-David Brinkley

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#1972012 - 10/24/14 09:37 PM Re: Minor Deposit Accounts dubble
dubble Offline
New Poster
Joined: Aug 2014
Posts: 14
Thank you for your response.

We are really intersted in seeing what types of policies other banks have in place when it comes to deposit account agreements with minors.

Will you require the joint owner be a parent or legal guardian or permit any adult to sign on the account with the minor?
Last edited by dubble; 10/24/14 10:00 PM.
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#2010675 - 04/28/15 02:45 PM Re: Minor Deposit Accounts dubble
GenerousLife Offline
Diamond Poster
Joined: Feb 2002
Posts: 1,466
I was doing some research on this specific topic and needed to go to the Oklahoma Statutes and found this section. I am completely gobsmacked. I read this to mean that Oklahoma has "removed the disability of minority" for the purpose of opening deposit accounts for minors.

Anyone up for comment?

Oklahoma Statutes Citationized
Title 6. Banks and Trust Companies
Chapter 1 - Oklahoma Banking Code
Article Article IX - Deposits and Collections - Notary Public - Protests
Section 903.1 - Minor Deposit Account
Cite as: O.S. §, __ __
A. Except as otherwise provided by this section, a bank or credit union lawfully doing business in this state may enter into a deposit account with a minor as the sole and absolute owner of the account and may pay checks and withdrawals and otherwise act with respect to the account on the order of the minor. A payment or delivery of rights to a minor who holds a deposit account evidenced by a receipt or other acquittance signed by the minor discharges the bank or credit union to the extent of the payment made or rights delivered.
B. If the minor is the sole and absolute owner of the deposit account, the disabilities of minority are removed for the limited purposes of enabling:
1. The minor to enter into a depository contract with a bank or credit union; and
2. The bank or credit union to enforce the contract against the minor, including collection of overdrafts and account fees and submission of account history to account reporting agencies and credit reporting bureaus.
C. A parent or legal guardian of a minor may deny the minor's authority to control, transfer, draft on, or make withdrawals from the minor's deposit account by notifying the bank or credit union in writing. On receipt of the notice by the bank or credit union, the minor may not control, transfer, draft on, or make withdrawals from the account during minority except with the joinder of a parent or legal guardian of the minor.
D. If a minor with a deposit account dies, the receipt or other acquittance of the minor's parent or legal guardian discharges the liability of the bank or credit union to the extent of the receipt or other acquittance, except that the aggregate discharges under this subsection may not exceed Three Thousand Dollars ($3,000.00).
E. Subsection A of this section does not authorize a loan to the minor by the bank or credit union, whether on pledge of the minor's savings account or otherwise, or bind the minor to repay a loan made except as provided by subsection B of this section or other law or unless the depository institution has obtained the express consent and joinder of a parent or legal guardian of the minor. This subsection does not apply to an inadvertent extension of credit because of an overdraft from insufficient funds, returned checks or deposits, or other shortages in a depository account resulting from normal banking or credit union operations.
"No problem can withstand the assault of sustained thinking." ~ Voltaire
"Sustained thinking gives me a headache." ~Me

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#2010797 - 04/28/15 08:01 PM Re: Minor Deposit Accounts dubble
CULady Offline
Gold Star
Joined: Sep 2007
Posts: 495
It appears that it is saying a minor can open an account, sign the contract for said account and basically be held responsible for the account.
Do they have any age limitation on that? I mean, can a three year old walk in and say I want a Savings account and we open it for them?!

Sheesh this has been around since 2000... Kinda glad this hasn't been seen by anyone at my CU. I really don't want to get into this!
Last edited by CULady; 04/28/15 08:04 PM.
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#2010828 - 04/28/15 08:46 PM Re: Minor Deposit Accounts dubble
Pauli Loeffler Offline
Pauli Loeffler
Joined: Jan 2011
Posts: 76
Sec. 903.1 authorizes minor deposit accounts and removes the minor’s legal incapacity to contract making him liable for overdrafts, account fees, etc. but still allows the parent or legal guardian the ability to deny the minor’s authority to control, transfer, draft on or make withdrawals through written notification to the bank. After the bank receives such notice the minor can only control, transfer, etc. with joinder of the parent or guardian. Having the parent or guardian sign the a guaranty/indemnity is recommended.

This statute is ONLY applicable to those accounts where the minor is the sole owner of the account. Section 901(A) of the Banking Code permits joint ownership of an account by a minor: "(When a deposit has been made or shall hereafter be made in any bank in the names of two or more persons, payable to any of them or payable to any of them or the survivor, such deposit, or any part thereof, or any interest thereon, may be paid to either of the persons, whether one of such persons shall be a minor or not, and whether the other be living or not; and the receipt or acquittance of the person so paid shall be valid and sufficient release and discharge to the bank for any payment so made." While these joint accounts are permitted, there are several problems that may arise in their use. First, a minor acting alone can draw all of the money out of a joint account at any time, even if it belongs to the parent. The minor is never the sole owner of a joint account, so the language in 903.1 that permits a parent to deny the minor the right to control an account doesn’t apply. A parent who has a dispute with a child cannot limit the child’s ability to draw out all of the money in a joint account. The only remedy is for the parent to go to the bank to close the account before the minor does. If the funds in the account are the minor’s rather than the parent’s such as where the minor has a job and deposits his paycheck into the account, the joint account would be subject to garnishments, levies and attachments issued against the parent. Due to these issues with joint ownership of an account with a minor, I recommend setting up minor accounts as sole ownership under the Banking Code’s 903.1 combined with guaranty by the parent or guardian or other responsible person.
While the provisions in the Oklahoma Banking Code emancipate the minor for purposes of contracting for sole ownership of a bank account, they do not emancipate for all purposes connected with the account: he cannot name a POD nor may he add an authorized signer. He cannot “opt-in” to ODP. If he wishes to have an ATM or Debit Card, I would have the parent sign the debit card request in order to issue the card and definitely have the parent (or other responsible person) as a guarantor on the account. You will also want to look at your VISA or MC agreement for debit cards to see if there is an age restriction for issuance. Further, some providers of online and mobile banking require the person requesting the service to be 18, so you will want to look at that agreement as well.

The question how old a minor must be for a sole ownership account comes up a lot. There is no restriction under the statute, so it is left to bank policy which needs to be consistently applied. I know some 12-14 year olds that babysit or have paper routes, and my kids worked as baggers at a local supermarket starting at age 14. I know some banks require the minor to be 16 for a checking account, but then you have to be careful if you make an exception. I don’t think I would want a 14 year old to have a debit card even with parental authority and a guaranty, but an ATM card would be fine if you offer those. With a debit card, there is nothing magical about age since my daughter even though she is 20 can’t seem to remember that available balance is only “real” money if all debit items are posted or pending and the checks she has written have been presented (she bounced her rent check last month since she didn’t think about this when she looked at her balance at the ATM), but none of my other kids ever had this problem, and they have had debit cards since they were 15.

As far as CIP, the Q & As provide.:

6. Does the CIP rule prohibit a minor from opening an account?
No, the CIP rule does not bar a minor from opening an account. It merely states that the bank’s “customer” is the individual who opens the account for an individual who lacks legal capacity, such as a minor. In other words, if a parent opens an account for a minor, the bank’s customer is the parent. If, however, a minor opens the account, then the minor is the bank’s customer. For example, where a bank sends its employees to elementary schools so that students may open savings accounts as part of a program to promote financial literacy, a student opening an account is the bank’s customer. In this situation, as for all customers, the bank should get the name, address, date of birth, and taxpayer identification number of the student. Since verification procedures are risk-based, banks can use any reasonable documentary or non-documentary method to verify a student’s identity. In this case, the bank might verify a student’s identity using a student identification card or by having the student’s teacher confirm the student’s identity. (April 2005)

The bank could also the same documentation used by Oklahoma DPS to issue a DL which is a birth certificate and social security card plus school, doctor or clinic records.

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#2020997 - 06/17/15 04:51 PM Re: Minor Deposit Accounts dubble
Midwest BSA Offline
Joined: Sep 2014
Posts: 54
Do you all typically run an OFAC check on a minor (in a custodial account situation)?

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#2021299 - 06/18/15 06:52 PM Re: Minor Deposit Accounts dubble
rlcarey Online
10K Club
Joined: Jul 2001
Posts: 79,627
Galveston, TX
OFAC is a risk based decision. Any idea how many minors are on the OFAC list?

Try "0". You be the judge of the risk.
The opinions expressed here should not be construed to be those of my employer:

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