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#2156890 - 12/12/17 03:39 PM Representative Payee Accounts-Consumer or Business
BuckDog Offline
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Posts: 123
Tennessee
I am interested in knowing whether you open a Representative Payee account as a consumer account or a business account? The account owner is an individual and the Rep. Payee is an individual. We would fully CIP both the owner and Rep. Payee. The question is whether it would be classified as a fiduciary account and be opened in a business checking account product or as a consumer and opened in a consumer account. I realize that a business account would not be given the Reg E protection. If the Rep. Payee were a business (ie nursing home, court appointed trust, attorney, etc) we would open as a business account. But with there being an individual being appointed by Social Security for a minor, we should open in a consumer account. Would you mind sharing which account type you would use for these accounts.

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#2156897 - 12/12/17 03:55 PM Re: Representative Payee Accounts-Consumer or Business BuckDog
Bankwoman1 Offline
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Midwest
We open Rep Payee accounts as consumer accounts as the owner of the account is not a business. As for Reg E, we do not allow overdraft privilege (protection) on Rep Payee accounts so no Reg E form is signed.

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#2156899 - 12/12/17 03:58 PM Re: Representative Payee Accounts-Consumer or Business BuckDog
rlcarey Offline
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rlcarey
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Galveston, TX
How you set them up is a business decision, but a Rep Payee account is not a "bona-fide trust agreement" so it would be covered under the consumer protections under Reg. E.
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#2156917 - 12/12/17 04:33 PM Re: Representative Payee Accounts-Consumer or Business BuckDog
John Burnett Offline
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John Burnett
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Cape Cod
Look to the purpose of the account in combination with the ownership.

For example, if an attorney maintains a trust account on behalf of her clients, the ownership may be individual if the attorney is a sole proprietor, but the purpose of the accounts is business. I would set it up as a business account.

On the other hand, with a rep payee account or its counterpart for VA funds, the ownership and purpose are both personal. I would set them up as personal (consumer) accounts.
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#2156929 - 12/12/17 04:58 PM Re: Representative Payee Accounts-Consumer or Business BuckDog
BuckDog Offline
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Posts: 123
Tennessee
Thank you.

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#2157051 - 12/12/17 11:02 PM Re: Representative Payee Accounts-Consumer or Business BuckDog
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
If your concern about Reg E's coverage is based on the issuance of a debit/ATM card, my suggestion would be that it's not a good idea to ever give out a debit/ATM card in connection with a fiduciary account. Debit cards can generate "unapproved" overdrafts. Fiduciary accounts should never be overdrawn. Fiduciaries are obligated to account for all expenditures. Using cash impairs their ability to do so.

The device just doesn't fit the stated purpose of the account..
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#2157105 - 12/13/17 04:22 PM Re: Representative Payee Accounts-Consumer or Business BuckDog
John Burnett Offline
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John Burnett
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Cape Cod
But the account will be subject to Regulation E anyhow (unless the bank is very small) because the SSA or SSI payments will be credited via direct deposit transactions.
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