We are discussing a new product offering. We would like to establish an account for Person A. Person A would be subject to the normal customer onboarding process, including CIP.

Person A has a number of employees who work for him/her. We are thinking about opening sub accounts in name of Person A, but issuing MC Debit Cards in the name of the employees.

A couple of questions:

1. Is this permissible with MC?
2. Would we need to CIP the employees?
3. Are there any legal issues that can come because of this?

If person A has employees, this means that person A should have a business account. Person A's business is your customer for CIP purposes. Your CIP Policy will dictate if CIP is required for authorized signers on a business account. Having an employee debit card does not make an individual an account holder at your institution so BSA would not require CIP. (Again, look to your policy to see what it requires.)

MasterCard has a business debit card program that requires a separate BIN license. I do not recommend provide a consumer debit card for business purposes as a) your debit card agreement contains Reg E disclosures. Providing Reg E disclosures to a business contractually obligates you to provide coverage you are not required to.

For its business debit cards, MasterCard does permit them to be issued to authorized users. You should either work with a forms vendor or bank counsel to iron out what should be in your business account agreement. Generally any transactions performed by the employee are considered authorized even if they are not for approved business expenses. However, MasterCard does extend its Zero Liability provisions to small business debit cards so if an employee loses a card or has it compromised, you would be obligated to reimburse your customer.

Thank you for thoughts Brian. But this is absolutely a personal account. This is a very wealthy individual who has a cleaner, driver, a chef, etc. as his personal staff. Taxes are being paid and everything would appear to be legit.

That said, any thoughts on my original post?

Another anon here... very curious as to an answer for this question. I would almost suggest that these employees open their own accounts with your instituion and he funds them through his own account. He could be co-owner on all the accounts but his main one would remain his own. Gives him access to his $ and his employees limited access to only the funds they need and responsibility would fall on your customer and his employees and not you for possible embezzlement, theft, things you do not want to be part of.

I can't recommend creating one-off solutions for such rare requests. I won't argue against creativity, but it should be creativity with a larger user base in mind than one well-heeled self-indulgent customer (just can't keep that politically-correct hat on my head).

Why does this have to be a new product? Is there a limit on how many authorized individuals can have a card on a personal,account?

He can open a separate account for the household operations and they each can have a card. I don't even see it as self indulgent. Running a large home with staff is like running a business.

Or he could do it with an Amex card! :-)

John - I agree and if we are able to successfully roll this offering out, our plan is to offer it to other wealthy individuals so they don't have to withdraw $10,000-$15,000 in cash each week. Think hedge fund managers, investment bankers, etc. There is a big market for this in my area.

KB - We were going to limit it to 8-10 with a cap of $1,000 in each account. The sub accounts would be limited to transfers from the main account and debit card usage. No other forms of transactions would be permitted. As to why it has to be done this way, rich people want things their way

Regarding my original questions, would the proposed structure be in violation of MC Operating Rules and how would the CIP rule apply, if at all?

Thank you again for the feedback.

Oh, I think it makes perfect sense for the customer.

MasterCard has no prohibitions on such a practice. However, there are risks to consider. Since these are not customers, CIP is not required. It does mean that you will be engaging in financial transactions for individual(s) with whom you have no direct relationship. If it happens that one of these staff members is on the SDN list, you could have exposure so it is really up to you to decide what information you require from these individuals. I would recommend that you include a description of this process in your CIP Policy and Procedures and OFAC Risk Assessment and Policy.

The MasterCard product that is most appropriately geared to this kind of relationship is a reloadable prepaid product. The card would be issued in the name of the individual (and subject to CIP requirements) and person A could load money on the cards as the individuals have need of them.