Wire help!

Posted By: Dodge

Wire help! - 01/13/15 11:22 PM

I wasn't sure which forum to post my questions, so I apologize in advance if this is the incorrect forum.

My disclaimer: I have never worked with wires, but I have been asked to help fix and research the correct procedures. We are having a meeting tomorrow over these issues below, and I need help.

Q1: If loan proceeds are to be wired is the originator the Bank or customer? What if the funds are to payoff another Bank or going to a title company? Our current practice is the Bank is the originator. However, previous threads that I have read indicate that the customer is the originator.

Q2: Do wire transfer authorization form need to be sign by the customer when the loan proceeds are wired? We have a disbursement authorization form that shows where the money is being wired and the account number that the customer signs.

Q3: We have a couple of customers who live out of state primarily, but have a account with the bank and will wire funds from their account at our bank. Since the customer cannot come in the bank to sign, and fax signatures are not valid under UCC code; how would you handle this type of situation? Our president wants a written authorization that includes all the necessary information to submit the wire. If the customer submits the wire instructions by fax, could we call the customer and ask for their pin and security answers to their security questions; even though, the wire would not be for commercial purposes?

Thanks in advance for any help I receive.
Posted By: rlcarey

Re: Wire help! - 01/14/15 02:24 AM

#1. The customer is the originator. It is their funds once the loan is made. They have instructed the bank that they wish to wire the funds to pay off their other loan with the funds being advanced. Otherwise, you would just cut them a check.

#2. Sounds like a signed authorization to me.

#3. You need a wire transfer agreement that sets forth the conditions for wiring funds when the customer is not present and also set forth the commercially reasonable security procedures that the bank and the customer agree to be performed before the wire is considered authorized. You need to be working with legal counsel on the development of your agreement.
Posted By: Dodge

Re: Wire help! - 01/14/15 01:17 PM

Thank you for your help!
Posted By: Buddy the Elf

Re: Wire help! - 01/14/15 02:53 PM

Randy nailed it.
Posted By: HappyGilmore

Re: Wire help! - 01/14/15 03:49 PM

agree with Randy, only difference is that in scenario #1 if the bank is buying into a loan participation, they would be the originator of the wire, not a customer.