Questions About Rep. Payee Account and CIP

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Question:

A customer came in and opened a savings account for his disabled son. He is the son's representative payee. Due to the USA Patriot Act (CIP) do we need to get ID from the son? How should the account be titled? Is the son the beneficiary? Can we offer a MAC card on this account?

Answer:

The account should be titled "Johnny Doe by Allen Doe, Representative Payee" and Johnny's Social Security number should be used for information reporting. For CIP purposes, the Representative Payee is the "customer" opening the account.

Whether you allow the Representative Payee to have an ATM or debit card is purely a matter of your bank's policy. Some banks do not, based on the theory that that purpose of the account is to provide a record of expenditures on behalf of the individual. Obviously, the Representative Payee could obtain receipts for payments made in cash.

First published on BankersOnline.com 3/21/05