Fiduciary Accounts - Ownership & Disclosures

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Question:

I am updating the bank's signature card sample and I am starting to question myself about ownership and disclosures for fiduciary accounts. For example, we open an escrow account for a realtor with the account titled "John Doe, Escrow Account" and the realtor is the authorized signer. Is this a personal purpose or business purpose and what disclosures do you give them? Are fiduciary accounts personal or business if the funds are held for a individual?

Answer:

If the fiduciary is acting in a professional capacity, as would be the case for a real estate agent, a property manager or an attorney, the account is not considered a consumer account for Reg DD purposes. I'd suggest reviewing the examples provided in the Official Staff Interpretations to Reg DD, in the comments on sections 230.2(a) and (h) (Account and Consumer). You can find them in Supplement I to the regulation.

First published on BankersOnline.com 5/14/07