The regulations on business accounts

first_imgOr rather, the lack thereof. The NAFCU Regulatory Compliance Team regularly gets asked whether federal regulations apply to business deposit accounts.Most consumer protection rules do not apply to deposit accounts held by a business. It is important to understand that a business-purpose account can be held by a legal entity, such as an LLC or a corporation, or by individuals operating a business themselves as a sole proprietorship. Understanding whether the individuals or a legal entity own the account can be important to determining the applicability of a rule, as well as the credit union’s ability to open the account under field of membership considerations and its share insurance coverage.Further, it is important to understand that even if an account is not covered by the scope of a rule, a credit union may contractually obligate itself to treat the account as if it were covered due to the language in its agreements. Some credit unions make a risk-based business decision to use the same documentation for all accounts, rather than establishing parallel processes and paperwork for business accounts. Each credit union needs to make its own decision on the topic, but educated decisions are best. So let’s talk about what rules do and do not apply to accounts held by businesses. continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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