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#2116669 - 02/02/17 02:38 PM Reg CC Question - New Customer
Bankwoman1 Offline
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Midwest
If we have an account that has been opened since 2006 and the account holder adds a signer to the account who is a brand new customer to our bank - can a new account exception hold be used on a check made payable to the new customer and deposited into the existing account?

Thanks

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#2116875 - 02/03/17 02:31 AM Re: Reg CC Question - New Customer Bankwoman1
David Dickinson Offline
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David Dickinson
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Central City, NE
Refer to §229.13(a)(2):
An account is considered a new account during the first 30 calendar days after the account is established. An account is not considered a new account if each customer on the account has had, within 30 calendar days before the account is established, another account at the depositary bank for at least 30 calendar days.

However, you say the new person is a "signer"
§229.2(tt) defines a customer as "a person having an account with a bank." A signer doesn't own the account.

I don't believe a new signer makes the account "new" for the the New Account Exception.
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#2116881 - 02/03/17 01:04 PM Re: Reg CC Question - New Customer David Dickinson
Bankwoman1 Offline
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I'm sorry David....I should have clarified that. The customer is a joint owner/signer. So would this then make it considered a new account since one of the customers is brand new to the bank?

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#2116938 - 02/03/17 05:19 PM Re: Reg CC Question - New Customer Bankwoman1
LSmith Offline
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No this would not be considered a new account

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#2116942 - 02/03/17 05:40 PM Re: Reg CC Question - New Customer Bankwoman1
Doug Hendrickson Offline
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As David explained, if the person is just a 'signer' (i.e., they are not a joint owner and their name is not on the title of the account), then it is NOT considered a new account for Reg CC purposes. That signer is not considered a customer or owner of the account.

If the person is a joint owner, whose name should now be on the account, then it is considered a new account for Reg CC purposes.
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#2116952 - 02/03/17 06:03 PM Re: Reg CC Question - New Customer Bankwoman1
Bankwoman1 Offline
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Thank you Doug!

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#2116953 - 02/03/17 06:04 PM Re: Reg CC Question - New Customer Bankwoman1
Bankwoman1 Offline
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Might I just add.......I talked to a lady at the company that does our reviews and she told me the opposite. That it would not be a new account. You can understand my confusion........??

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#2116957 - 02/03/17 06:11 PM Re: Reg CC Question - New Customer Bankwoman1
Doug Hendrickson Offline
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I can understand your confusion. But I would trust David Dickinson's knowledge and expertise and his citation of the relevant language in the regulation. The gurus that are on this forum are incredibly versed in the regulations and have the unique ability to explain them in language we can all understand.
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#2116962 - 02/03/17 06:32 PM Re: Reg CC Question - New Customer Doug Hendrickson
Elwood P. Dowd Offline
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David quoted the only language anyone could quote. An account does not become "new" whenever a new owner is added.

If you have doubts about the new owners, don't add them.
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#2116978 - 02/03/17 07:23 PM Re: Reg CC Question - New Customer Bankwoman1
Bankwoman1 Offline
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When I read the language in the regulation, I interpret it to say that we could hold the funds using the new account hold. Because it states that "An account is not considered a new account if each customer on the account has had" Well....each customer has not had an established account/relationship - one customer is brand new. Now, Doug is saying that it would be considered "new" and Ken, you are saying it would not. Our reviewer says it would not. SO - I'm going with the majority!! I have asked the branch to remove the hold, as it should only have been a 2 day hold.....

Could someone please tell me why I ever wanted a job in compliance.........??

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#2116980 - 02/03/17 07:23 PM Re: Reg CC Question - New Customer Bankwoman1
Bankwoman1 Offline
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Oh....and Thank you ALL for your help!

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#2116995 - 02/03/17 07:59 PM Re: Reg CC Question - New Customer Bankwoman1
Elwood P. Dowd Offline
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If your reviewer can say this is a "new" account with a straight face, does she say you need to hand out all of the consumer disclosures required when a new account is actually opened?
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#2116997 - 02/03/17 08:01 PM Re: Reg CC Question - New Customer Bankwoman1
BrianC Online
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Just to clear up the confusion since there were some dissenting comments, the key phrase in the reg is this:

"An account is considered a new account during the first 30 calendar days after the account is established."

The account has been established for more than 30 days. Adding a joint owner at some arbitrary time in the future does not change the fact that this account has been open for more than 30 days. In this case "That which is old cannot be made new again."
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#2117001 - 02/03/17 08:19 PM Re: Reg CC Question - New Customer Bankwoman1
Bankwoman1 Offline
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Ken - our reviewer said it was not a new account. She agreed with you on this. smile

Brian - Thank you for clearing up the confusion!

Really - I appreciate everyone's help with this question. I'm sure I was making it harder than it needed to be, however, sometimes the language can be very confusing and interpreted different ways by different people!

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#2117006 - 02/03/17 08:43 PM Re: Reg CC Question - New Customer Bankwoman1
BrianC Online
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You're welcome Bankwoman1. The irony here is that if we leave the existing individual account alone and the existing customer and new joint owner establish a DIFFERENT account, then that account would meet the definition of "new account" under Reg CC. But...that may be more work operationally and from a customer service perspective would confuse and upset the customer.

As was also suggested above. If we have that significant of a concern about the new owner, refuse the request to add them. To paraphrase the quote one of the other Gurus has been using, "Just because you can do something, does not mean that you should."
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#2117011 - 02/03/17 08:59 PM Re: Reg CC Question - New Customer Bankwoman1
Bankwoman1 Offline
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Brian - I had to laugh out loud because we were just discussing the fact that the existing customer and new customer could come in and open a new account and then it would be considered "new". Before I ever saw this post from you. Our Sr Compliance Officer also made the comment "we better feel really good about what we are doing and make sure it benefits the customer and not just us"......

Apparently we were all thinking the same thing!!

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#2117046 - 02/03/17 10:29 PM Re: Reg CC Question - New Customer Bankwoman1
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Don't forget CIP! smile

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