Do All Signers Need to Sign Pledge Agreement?

Answered by:

Question:

When a savings account is pledged as collateral, do all signers need to sign the pledge agreement or is only one needed?

Answer:

That will depend on State law and how the account is titled. Typically, if the account is owned by two people in an "or" capacity, either can pledge the account. If the account is owned by two people in an "and" capacity, then both would be required to pledge the account. In Texas. even if one person on an "or" account pledges the account, the Bank must by certified mail notify all other account holders in order for the lien to be valid. So as I suggested, you need to consult with legal counsel to ensure you meet your State law requirements.

First published on BankersOnline.com 1/9/12