Outside of your CIP issue, unless you have a product that actually allows a single customer to hold a master account relationship and then set up their own sub-accounts - which they can name in any manner that they want too - I think I would be taking a pass on this arrangement. If all you are going to be doing is hold home improvement funds for a short period in each of these short-term sub-accounts, of what benefit is to the bank without a substantial fees being involved. Sounds like a maintenance nightmare.
From a CIP standpoint, these appear to be nothing more than a escrow account relationship.
10. Who is the “customer” for purposes of escrow accounts?
An escrow account is an account generally established for the deposit of funds that are to be paid to a specified party on the fulfillment of escrow conditions or returned. If a bank establishes an account in the name of a third party, such as a real estate agent, who is acting as escrow agent, then the bank’s customer will be the escrow agent.
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