FI Dictating Business Signer Changes?

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Question:

Can a financial institution dictate when a business can change signers on an account (i.e. mid-term on a CD) or is that solely at the discretion of the business?

Answer:

There is no logical reason to restrict a business's ability to change authorized signers. The deposit customer is the business, not the individual signers. If the business discharged its treasurer and hired a new one, the bank would be in the wrong to require that the former treasurer be carried as signer until the CD happens to mature.

First published on BankersOnline.com 6/29/09