Hi - I'm looking for any information regarding these types of accounts. We recently had a funeral home contact one of our branches because they were being audited. Seems the home needed some verification of the agreements the bank had on file for their/our customers. No confidential or prohibited information was released - it was more of a verification of: this is what we have, how does it compare to what you have? My question is this: are there any risks or exposure to loss associated with these types of accounts? Currently we set up an automatically renewable CD in the name of the customer as primary owner (and certifier of the TIN) with the Funeral Home as authorized signer. The home completes an agreement with the customer that authorizes them to use the $$ in the CD for funeral expenses and provides a copy to us. Is there anything else we should be considering? Thanks.

Holder in due course is one thing to review, depending on your contracts. What happens if the funeral home goes under, what requirements for funerals or perpetual care would be on you?

I'm not a expert on Michigan State Law, but I would refer you to the following cite. It would appear that you may be acting as an "escrow agent" under the law. This is a Q & A page, but it has a link to the statute. You may want to look at the requirements imposed on "escrow agents".

http://www.cis.state.mi.us/bcs/ppf/faqs.htm

Thanks - this was a great resource!