Use of a Universal Signature Card

Issue/Inquiry

Is there a regulation that requires the Bank to have a “universal signature card” or a signature card for each product it offers?

Response Summary

While federal regulations require the use of a signature card for certain purposes, there is no regulatory requirement for a universal signature card or a signature card for each product offered. Federal Deposit Insurance Corporation (“FDIC”) guidance indicates that using a universal signature card is permissible.

Response Detail

Generally, a signature card is an acknowledgment of the contract between the Bank and a depositor that may grant signature authority over a deposit account and provide an example of an authorized signature. Except for certain purposes, federal laws and regulations do not require signature cards or a universal signature card covering more than one account, or prescribe the contents of such cards.

With respect to determining the amount of insurance for each depositor, the FDIC presumes that deposited funds are owned in the manner indicated on the deposit account records of the insured depository institution. The deposit account records include signature cards. 12 CFR §330.1(e),5(a).

In this regard, the signatures of each depositor on a deposit account signature card is a requisite for determining the amount of FDIC deposit insurance available for joint accounts. 12 CFR §330.9(c)(ii).

The Bank Secrecy Act also requires a depository institution to be able to reproduce any document granting signature authority over each deposit account for a period of five years. 31 CFR §103.34 (b).

The FDIC has long held that the use of master signature cards (i.e., those which pertain to more than one deposit account) as well as the subsequent adding of additional accounts are permitted so long as the master signature card clearly indicates how each account is owned and which individuals have the right to withdraw funds from each account.

The opening of an account and the signing of the signature card do not have to be contemporaneous.  Therefore, if a master signature card clearly indicates that several accounts are jointly owned by the same combination of individuals, and each of those individuals has personally signed the signature card, then the accounts will be treated as joint accounts and insured in accordance with the joint account regulation, as noted above. Such is true even if some of the joint accounts were subsequently opened by only one of the co-owners on an existing master signature card and the co-owners did not re-sign the signature card at the time the secondary accounts were opened. FDIC-91-51.

The Bank will need to make a business decision regarding whether it will utilize master signature cards, as there is no requirement to do so.

This response is for informational purposes only and is not intended for legal guidance.

This entry was posted on Tuesday, November 12th, 2019 at 6:00 am.