Monetary Instruments

Posted By: Linkpars

Monetary Instruments - 07/02/15 02:26 PM

Our bank only sells MI to customers. We have some customers who have "signers" on their accounts. My question is this, would you consider the "signer" a customer and sell them a MI, or are they not considered a customer because they are not the account owner?

I hope that makes sense.
Posted By: CFR31 Ch x

Re: Monetary Instruments - 07/02/15 02:33 PM

I think you just need to update your procedures addressing this particular scenario. There is no wrong or right answer here unless I am missing something. I would consider them a customer, but that is solely my opinion.
Posted By: Elwood P. Dowd

Re: Monetary Instruments - 07/02/15 02:39 PM

I would not consider a mere signatory to be a "customer" for any purpose, partially because the CIP regulation would not and partially because I would not want tellers believing the person was a "customer" if they presented a check for cash.

However, the difference of opinion only consolidates the advice you were offered: Your bank needs to make and document the decision.
Posted By: Linkpars

Re: Monetary Instruments - 07/02/15 03:12 PM

Ken, I totally agree with what you are saying. I don't want our tellers to think that a signer is a customer. This is the first time we have actually came across something like this, not to say it is the first, but we actually caught this one.

Thanks so much for your all's input.
Posted By: John Burnett

Re: Monetary Instruments - 07/02/15 07:30 PM

The signer is not a customer. But your policy could reflect authority to sell to a customer represented by an agent. The remitter would be your depositor (a business or individual). The purchaser for the MI recordkeeping requirement is the warm body that brought in the cash.
Posted By: rlcarey

Re: Monetary Instruments - 07/02/15 11:40 PM

For MI recordkeeping, they have to be a deposit account holder. Authorized signers, trustees, loan only customers are all treated as non-deposit holders for recordkeeping requirements. Customer or non-customer has nothing to do with it.
Posted By: Cape Codder

Re: Monetary Instruments - 07/03/15 01:39 PM

Originally Posted By John Burnett
The signer is not a customer. But your policy could reflect authority to sell to a customer represented by an agent. The remitter would be your depositor (a business or individual). The purchaser for the MI recordkeeping requirement is the warm body that brought in the cash.

And if you do sell MIs to these individuals and the sale falls into the MIL recordkeeping parameters, you need to make sure you're also including them in any 314(a) scrubs.