Ever wondered why board members need to provide personal information to be a signer on the association’s bank accounts?
In the wake of the September 11 terrorist attacks, the USA PATRIOT Act was enacted to help combat future threats to the United States. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 gave government agencies expanded powers and authority to combat corruption in the use of financial institutions for money-laundering purposes.
New rules were imposed on banks, securities brokers and institutions in other industries to assist the government in identifying suspicious individuals and entities. For example, banks must file a suspicious activity report (“SAR”) every time there is activity of over $10,000 on an account. Another set of rules imposed on institutions is referred to as “Know Your Customer.” This means there are minimum customer identification and record keeping requirements that must be complied with to ensure that accounts are opened for legitimate purposes.
When a board member is to have signing authority over the association/corporation accounts, the bank/broker needs to be able to confirm that the individual being given such authority is not a “suspicious” person or entity and that the association/corporation itself is a legitimate entity and not a “shell” corporation. Banks have several ways of identifying individuals with the most precise method resulting from having copies of ID and Social Security Numbers of the individual signers.
Individuals signing up for their association’s board should be made aware of these requirements. FirstService Financial understands that board members are volunteers, and has arranged with its partner banks to allow the board directors/officers to contact the bank/broker directly to provide personal information should the board member feel reluctance to provide such information through FirstService Residential.
Feel free to contact your FirstService Financial representative with any questions.