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4000 - Advisory Opinions


Where a Depositor Intends to Establish an Individual Account, Signature Card Clearly Distinguishing Account holder Signature From Authorized-Signer Signature is Sufficient to Indicate Funds Owned by One Individual

FDIC-91-59

July 25, 1991

Valerie J. Best, Counsel

We were asked whether or not the requirements of 12 CFR 330.5(a) are satisfied in the following situation. The signature card used by a bank lists several types of accounts (individual, joint, testamentary, etc.). The depositor checks a box next to the type of account the depositor intends to establish. When a person wishes to open a single ownership account, that person's name is typed at the top of the signature card, and the box next to "Individual" is checked. In some instances, however, two people sign the signature card. Nothing on the card indicates the capacity in which the second person is signing. We were asked if the fact that the "Individual" box is checked is sufficient to clearly indicate that the funds are owned by one individual and that other signatories on the account are merely authorized to withdraw funds on behalf of the owner. 12 CFR 330.5.

Checking the "Individual" box is not sufficient to clearly indicate that the funds are owned by one individual and that other signatories on the account are merely authorized to withdraw funds on behalf of the owner. Consequently, funds deposited in the account shall be treated as jointly owned funds, rather than individually owned funds.

Individuals who want to establish a single ownership account, but who also want to designate a person who may withdraw funds on their behalf, may do so through a Power of Attorney. If a Power of Attorney is not used, then FDIC regulations require that the deposit account records clearly indicate that the funds are owned by one individual and that other signatories on the account are merely authorized to withdraw funds on behalf of the owner. 12 CFR 330.5.

We were asked if it would be sufficient to use a signature card similar to the one described above, but with one signature line designated "Account holder" and the other signature line designated "Authorized signer." We believe that would be sufficient to comply with the requirements of 12 CFR 330.5(a).


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