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Lost Passbook/CD Affidavit Question

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Question: 
We are one of those hold-out banks that issue passbooks for CD's. Beginning May 1st we are ceasing that practice and just printing a signature card similar to checking and savings accounts. The Mass Banker's Handbook states that: "If individuals lose their passbooks or certificates of deposit a Lost Passbook/CD affidavit must be completed and signed by all parties named on the account.....". My specific question is, does the use of the term CD certificate mean the signature card, or does it refer to institutions that issue actual "certificates", much, like stock certificates used to be issued?
Answer: 

I have some familiarity with the Mass Banker's Handbook. A customer can't lose a statement savings account or a time deposit that's not evidenced by a certificate. Decide what you're going to do with certificates issued before May 1. Will those be converted to uncertificated accounts and the certificates canceled? If not, you'll need to be able to process affidavits of lost certificates until all have been turned in as they mature.

If you plan to convert those outstanding certificates before they mature, be very certain to notify the owners, and set up (and retain) a cross reference index listing every one of those certificates and the newly-assigned account number. You want to be able to account for every nickel so that 20 years from now, when someone is cleaning out a deceased customer's attic, and find one of the old certificates and try to claim it as an heir, you can document that the certificate became account 123456789 on May 1, 2019, and was paid out at maturity with cashier's check CC54321, payable to the then alive, now deceased customer, bringing the account balance to $0.

And if you are easing into the new way of handling time deposits, so that outstanding passbooks will be converted only (1) at maturity if rolled over, or (2) when brought in and the depositor requests to be changed to a statemented account, I'd advocate marketing the change-over to those passbook customers, touting the convenience of not having to remember where that little book is, the ease of automatically rolling accounts over when desired, and the ability to see the account grow via online banking.

First published on 05/12/2019

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