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#538360 - 04/26/06 04:31 PM Medallion STAMP program..
Alien Offline
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Mexifornia
We are having some debate as to what support documents need to be maintained when providing this service. At present we keep copies of every bit of paper that the customer comes in with and also keep a log of the transactions. I think this is unnecessary and if at all, we should only keep a copy of the instrument that was stamped and guaranteed.

Does anyone have any comments in this regards, what you guys do or not do?

Thanks.
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General Discussion
#538361 - 04/26/06 04:46 PM Re: Medallion STAMP program..
SavannahOne Offline
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Georgia
Keymark, in particular, has really started pushing this.

My suggestions: You definately need the log. Also, keep a copy of the instrument and any documents used to verify the signer(s)' identity and authority/capacity to sign.

Statute of limitations: date of the discovery of the fraud + 6 years.

Potential Cost to bank: Replacement cost of instruments sold, as of the date of the replacement (significant market risk).

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#538362 - 04/26/06 06:01 PM Re: Medallion STAMP program..
P*Q Offline

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We keep everything and a log.It hasn't proved to be too burdensome yet and with the liability that is at stake for inproper guarantees, we'd rather play it safe.

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#538363 - 04/26/06 10:11 PM Re: Medallion STAMP program..
Alien Offline
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Mexifornia
One more question - do you guys get customers writing stuff on blank sheet of paper and asking for Stamp guarantee? For example I just had one where the customer wrote the following on an A4 paper he asked of me: "I so and so would like to withdraw all my shares and change my address from x to y" - no other documents to back it up.

What do you do?
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#538364 - 04/27/06 01:45 PM Re: Medallion STAMP program..
P*Q Offline

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Based on your description of the request, I would not guarantee this. You must have a dollar amount tied to the transaction and ensure that you don't guarantee over your banks' limit based on insurance coverage.

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#538365 - 04/27/06 06:32 PM Re: Medallion STAMP program..
Alien Offline
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Mexifornia
Thanks - so what I hear you saying is if you know the customer, and you know the dollar amount and also know that the person is the rightful owner - you can guarantee a document, even if the instructions are written on a plain piece of paper?
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#538366 - 04/27/06 06:51 PM Re: Medallion STAMP program..
Rocky P Offline
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Florida
Alien, be careful what you guarantee.

A lot of things can be written on a blank piece of paper after you stamp it. Another way of looking at it, would you stamp and guarantee the paper if YOU had to make good instead of the bank?
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#538367 - 04/27/06 07:29 PM Re: Medallion STAMP program..
P*Q Offline

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Alien, I would not guarantee a handwritten document. As SC says, be VERY careful what you guarantee, that's my only advice.

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#538368 - 04/27/06 10:50 PM Re: Medallion STAMP program..
Alien Offline
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Mexifornia
Thanks guys - It appears I have staved off such requests so far with valid doubt, although I have been under pressure to "approve" these.
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#538369 - 04/28/06 12:24 PM Re: Medallion STAMP program..
P*Q Offline

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Pressure by whom? If it's management, remind them of the penalties and liabilities for guaranteeing something that shouldn't have been.I feel for you.

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#538370 - 05/02/06 01:03 PM Re: Medallion STAMP program..
Laketime Offline
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I know we've beat this up a bit in the past, but here goes. I agree with everybody saying the supporting documents must be saved by the financial institution, but have you trained your officers to determine if they are the correct documents to begin with? In other words, do your officers that are guaranteeing know if the person in front of them has the capacity to sign? Or do they rely on the person requesting the guarantee to know the correct forms to send to the transfer agent and just assume they are the right person to be signing? I'm especially concerned when there has been a death that our officers are unsure how to determine what forms are needed and is the right person in front of them requesting the guarantee?
We are at a $100M limit and I recommend we do not increase to the next level ($250M) to minimize our exposure in this scary area.

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#538371 - 05/02/06 01:12 PM Re: Medallion STAMP program..
P*Q Offline

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One of the requirements to doing a guarantee is that you know if the person signing has the capacity to do so. There is a great handbook available that assists with these types of issues, it breaks down specific fiduciary issues that pop up. Plus, Kemark sent notification that all people authorized to conduct a guarantee are going to have to becone "certified", info to follow. It was stated on their last issue of Soundbytes. Click here for handbook.

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#538372 - 05/02/06 01:42 PM Re: Medallion STAMP program..
Kathleen O. Blanchard Offline

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I sent some folks to one of the training sessions and we rec'd a good video that goes over the requirements and several hypothetical scenarios. It was very helpful when amending the policy and procedures.
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#538373 - 05/02/06 01:50 PM Re: Medallion STAMP program..
RBanker Offline
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Austin Texas
Who presented the session your folks went to? We're going to one in Austin this month - presented by Kemark, I think - I'd have to look to double check. My fear is we have banking center presidents in rural markets who may not be fully cognizant of the liability of this product and I'm hoping to bring back some info that will help me drive that point home.
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#538374 - 05/02/06 03:27 PM Re: Medallion STAMP program..
P*Q Offline

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Kemark does sponsor the training. However, my earlier post indicated the Kemark was going to require everyone to be certified to address the very questions being posed in this thread (in the very near future). If you go on the Kemard site and look up the latest issue of Soundbytes, it gives more details.

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#538375 - 05/02/06 04:11 PM Re: Medallion STAMP program..
blue Offline
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PQ, Would you mind providing the web address for Kenmark? I could not locate it on the web. Thanks.

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#538376 - 05/02/06 04:20 PM Re: Medallion STAMP program..
blue Offline
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I found it. It's Kemark. I typed Kenmark.

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#538377 - 05/02/06 06:16 PM Re: Medallion STAMP program..
P*Q Offline

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#538378 - 05/02/06 06:21 PM Re: Medallion STAMP program..
blue Offline
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Thanks PQ. I appreciate the link.

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#538379 - 05/02/06 06:24 PM Re: Medallion STAMP program..
P*Q Offline

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Anytime.

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#538380 - 05/02/06 06:44 PM Re: Medallion STAMP program..
Kathleen O. Blanchard Offline

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Sorry I never got back to this thread. Yes, the training and video were by Kemark. We had the retail admin staff view the video..it was an eye opener for them.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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