Subject to Backup Withholding: Open Account?

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Question:

Are we required to open an account if a customer discloses that he is subject to backup withholding?

Answer:

You aren't obliged to open a deposit account, regardless of the person's backup withholding status (or any other attribute). My only caveat is to avoid making such decisions based on any of the bases that you can't consider when making a credit decision, not because the law prevents you from doing so, but because it makes sense from a public image perspective.

First published on BankersOnline.com 11/15/10