We have a client who wants to open accounts for her children who are two and four years old. No problem, right? Just open a TUTMA (we are in Tennessee) and go on... No, the parent wants a JOINT account so that the kids can get money anytime they want. Hello! They are two and four years old! My suggestion was to wait until the kids could sign their name and THEN make it joint, but she absolutely refuses to entertain that notion. The President wants us to make an exception and asked me how bad it would be from an examination standpoint if we did this. I have no idea what to tell him... Thoughts?

... and the kids are going to sign their names on the signature cards, right?

... and when the four year old reaches the ripe old age of ten and walks into your bank and asks to withdraw all her money so she can buy the latest [insert the 2013 "fad du jour"], you'll let her have her dough, right?

... and when Momma storms into the bank asking why you let Suzie squander her savings on that "piece of trash" you'll respond how?

You may end up doing this because the bank president wants you to, and I understand that motivation. But don't even think this won't be a dog that won't bite.

Welcome to the world of community banking. Don't you love it when we try to be all things for all people?

Wait til the kids learn how to initiate WEB and TEL entries for the latest "fads du jour". These should be interesting overdraft conversations we are ALL going to get to have with the parents that have assured us that THEIR kids will never do such things. I'll bet we won't be their favorite bank when they have to pony up for the overdrafts.

I actually had the same exact event happen that John described...except the son was a few years older. Momma came stomping into the bank with statements in hand demanding the $800+ back because she didn't sign the withdrawal ticket and never "authorized" her son to take the money.

Funny thing....son had signed the signature card...and when referred to bank counsel, the reply was quite simple....it was his money to begin with, he was authorized on the signature card, Momma should take it up with her son...not the bank.

Any chance you could stave off the customer and the bank president by reminding them that a signature card is a contract and minors are probably not going to be held accountable for any contracts they enter into?

Additionally, given that the signature card is a contract and the mother is wanting to give apparently full authority to at least one individual that can't even sign their name... uh, I'm no legal expert, but I don't think that's quite right.

We always try and look at it from the standpoint of how much monitoring are we going to have to do because we allowed for some "special circumstances." Sounds like, to me, your bank will be responsible for monitoring the activity on this account and could be held accountable/liable when/if it all goes wrong.

The "defects of minority" argument only holds up in states that haven't enacted laws permitting minors to have deposit accounts.

I do agree that you don't have a contract if you don't have a signed signature card. I'll add that the FDIC would not consider a joint account for insurance coverage purposes if "Junior" hasn't signed.