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#2166310 - 03/01/18 03:03 PM Pay on Death
Tessie Offline
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Joined: Jan 2006
Posts: 155
If we have a non customer added to a Pay on Death CD, do we need their CIP info and social security number at the time they are added or do they get it later when the CD is paid?

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#2166313 - 03/01/18 03:12 PM Re: Pay on Death Tessie
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,617
Galveston, TX
If they are never an account holder, why would you need CIP information. You would need information for IRS reporting and anything else required by State law after the death of the account holder.
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#2166740 - 03/05/18 09:10 PM Re: Pay on Death Tessie
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 162
Tennessee
We go ahead and get basic information on the customer to be able to have some if the customer does pass away so that we can contact them if need be. This includes their name, social security number, address, & phone number and we create an information profile. We have found that it helps when trying to contact them, however we do not OFAC since they are not an actual customer at this time.

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#2169655 - 03/22/18 06:27 PM Re: Pay on Death Tessie
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 341
TX
We run OFAC on POD beneficiaries at account opening. I would like to discontinue the practice since it is time consuming as beneficiaries are not listed on our core. We end up having to save the OFAC scan to another system. I was recommending that we discontinue OFAC on beneficiaries until I read this in the OFAC Q&A:

95. Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?

"Property," as defined in OFAC regulations, includes most products that financial institutions offer to their clients. "Property interest," as defined by OFAC, includes any interest whatsoever, direct or indirect, present, future or contingent. Given these definitions and as a matter of sound banking practice, it is prudent for financial institutions to screen account beneficiaries upon account opening, while updating account information, when performing periodic screening and, most definitely, upon disbursing funds. Where there is a property interest of a sanctions target under a blocking program, the property must be blocked. Beneficiaries include, but are not limited to, trustees, children, spouses, non-spouses, entities and powers of attorney. [12-04-06]

So now I am rethinking stopping the process.

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#2169656 - 03/22/18 06:32 PM Re: Pay on Death Tessie
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,617
Galveston, TX
most definitely, upon disbursing funds.

Go with that and support it in your risk assessment.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2169661 - 03/22/18 06:45 PM Re: Pay on Death Tessie
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 341
TX
Thank you! I will see if I can get the powers that be convinced of this too.

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#2169664 - 03/22/18 06:48 PM Re: Pay on Death Valley girl
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Quote:
We run OFAC on POD beneficiaries at account opening


In that conversation, point out that it was ridiculous to start this practice. What would you have done if you got a hit?
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#2169669 - 03/22/18 06:51 PM Re: Pay on Death Tessie
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 341
TX
That has been exactly my point.

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#2169942 - 03/23/18 06:52 PM Re: Pay on Death Tessie
Just Jean Offline
Platinum Poster
Joined: Feb 2002
Posts: 582
USA
We had an older customer who routinely changed his POD beneficiaries between family and charities, depending on who he was angry with that particular day. If we had done full tilt verification we would have wasted even more time. He eventually left us so we don't know who was the ultimate beneficiary "winner".

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#2169952 - 03/23/18 07:14 PM Re: Pay on Death Tessie
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
At one point a few years back, the chief bureaucrat at the agency in charge of banks for a certain southern state that separates the Gulf of Mexico from the Atlantic Ocean reportedly insisted that banks run OFAC on POD beneficiaries. It didn't make sense then, and it doesn't make sense now.
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