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Bank Account Opening Process

I am in the process of developing an "Idiot's Guide to Opening Bank Accounts - Domestic (U.S.) and Foreign" and would appreciate any assistance.  I know in this universe of learned colleagues on ProFormative there are a number of people with best practices to share and land mines to avoid.

I am very aware of the need for appropriate resolutions, signature authorities,service level agreements etc.  What I am interested in learning more about is the need to provide proper ID for signatories, what legislation/regulations must be complied with and how the process is completed from beginning to end from a number of different viewpoints.

A list of regs/legal considerations I think must be included would be the Patriot Act, OFAC, Bank Secrecy Act, possible FDIC requirements, the bank's own requirements and the company's policies.  Any insights that can be shared (or war stories to avoid repeating) would be most appreciated.

Once completed, I would be glad to provide the final product to all who were involved  in providing assistance in this matter.  I hope to be able to develop a guide that has applicability on a generic level to ANY bank account to be opened (or closed) for that matter. 

Answers

Ernie Humphrey CTP
Title: CEO & COO
Company: Treasury Careers
LinkedIn Profile
(CEO & COO, Treasury Careers) |

Mark,

Fantastic idea and you have the full support of Proformative. In addition to our support, I offer you my personal support as a long time treasury professional to assist you in any way possible with the content. I would think that Electronic Bank Account Management (EBAM) could be an integral part of this document which would encompass what SWIFT is doing in addition to other Cloud and SaaS based solutions. Another compenent could be the shift from SAS70 to SSAE 16 (SOC1-3) in assessing those that want to sell EBAM related services.

Just let us know how we can help you out Mark.

Ernie Humphrey
VP, Educational Programs
Proformative

Kevin Kelso
Title: Controller
Company: The Arc of Delaware
(Controller, The Arc of Delaware) |

Just a couple of comments from my perspective as a Bank Controller:

1) Depending on the type of institution you are creating this document for, there is a need to be able to segregate Intercompany Bank Accounts and also link them numerically or within a numbering scheme that makes sense for your company.
2) Another potential indicator is whether the foreign account is held within an OECD or Non-OECD country (i.e. those countries that signed the convention on the Organization for Economic Co-Operation & Development.)
3) Make it a general habit to have multiple signatories (where possible) in case a signatory leaves the company and there is a need to change an aspect of the bank account. It's a good idea to have a database of the bank accounts, date opened, signatories, etc. for audit and SOX404 purposes. Cash is particulary a point of focus for SOX404 compliance. For year-end audit confirms, it also makes it easier to track ownership.

4) Consider a centralized mailing address for all bank statements, especially in a larger corporate environment where these are often lost or never reach their intended owner. They can always be scanned to a shared drive for distribution to the end owner and having them centralized in 1 place is an added internal control.

Simon Westbrook
Title: CFO
Company: Aargo Inc.
( CFO, Aargo Inc.) |

A couple of things to consider when opening your bank account.
If location and convenience is important, and you need a bank as near as possible to your location, then this may determine your selection.

If you have international operations you may wish to selct your bank from a list that is actually present in all or most of the countries in which you intend to operate. When money is teransferred internationally involving a handover from one banking corporation to another, there is loss of accountability for the transition and total time taken between leaving one account and value being credited in the receiving account. Within a single bank transfer system it is tough for the bank to argue that the delay, if any, was caused by the other bank! Finally, make sure you understand the basis and amount of charges that will be applied to your account and see if you can negotitae a pricing deal that works for you. I have recently opened accounts for clients with one of the big banks and they are offering free of chargen accounts provided you open a savings account as well as a checking account, and sign an auto transfer of at least $100 per month to the savings account. There is nothing to prevent you transferring the money back to your checking account, and no minimum balances.

Topic Expert
Bob Stenz
Title: Controller
Company: Silicon Valley start-up
(Controller, Silicon Valley start-up) |

It may help to note that once opened...foreign bank accounts (including US signers and the highest account balance during the year) must be reported to the Treasury Department (via IRS Form TD F 90-22.1).

Stephen Glenn
Title: Controller
Company: Pierre Frey, Inc.
(Controller, Pierre Frey, Inc.) |

To expand on Bob's coment, foreign bank accounts held by US corporations must file a seperate IRS form TD F 90-22.1 for each signer on the account (as an individual filer), and one for the company that controls the account (as a corporate filer). The individual filers must report their SS#, date of birth and address. The address of the bank, company address and the highest account balance during the prior year must be reported on the corporate filing.

Stephen Glenn
Title: Controller
Company: Pierre Frey, Inc.
(Controller, Pierre Frey, Inc.) |

When researching banks, not only look at fees and services, but also take into consideration the ease of opening or maintaining accounts. Our North American operations are based in the US, with the CFO in France. To open an account in Canada, TD Canada requires all signatories to visit the local branch to sign the documents in person. That is not going to happen, so we are moving our accounts.

Julie Lam
Title: Controller
Company: Port of Oakland
(Controller, Port of Oakland) |

Wonderful idea. I would love to take a peek at your finished product. Lately I feel like 50% of my job is opening bank accounts in various foreign countries. Some notes I always take when entering new markets are: 1) Process for transfering funds between countries (some countries are stricter than others) 2) standard payments methods (we avoid checks at all cost) and always look at bulk payment methods, 3) location and number of branches, 4) typical investment options, 5) residency requirement for signers, and 6) usefulness of tapping into the local website

We always have minimum of two signers. If someone outside of Finance needs to be signer, then that signer is a co-signer with some in Finance. And I realize this is very simple, but I always print the account opening documents on single sided paper so that I can exchange single pages if I need to make a correction without having to potentially redo a signature.

Almost forgot. We also document the purpose of the account and the approval for the account opening. I've found on occasion that sometimes the purpose isn't a real need and more of a want.

Kevin Kurtis
Title: Personal Banker
Company: Fifth Third Bank
(Personal Banker, Fifth Third Bank) |

If you have any questions regarding the actual process of establishing accounts and relevant regulations. I am a current banker and also hold the CTPA Designation. So I may have many of the answers you are looking for and I would also be interested in seeing the results of what you are doing. You can reach me at kkurtis24atgmail [dot] com for any questions regarding banking.

(Agent, JKS Solutions, Inc.) |

I'd love to know where to get a copy when its published. If you can include a chapter about credit card administration with respect to foreign operations that want to use US Based credit card relationships.

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