SCENARIO 2: BUSINESS OWNER MAKES A MORTGAGE PAYMENT WITH CORPORATE FUNDS Jane Doe owns Jane’s Bridal Shop LLC (JBS). Jane’s personal mortgage is with your bank, and the JBS account is held with a competitor. Jane writes a check from the JBS account to your bank to pay her mortgage. While it appears that she is simply paying herself, writing a business check to cover a personal expense potentially invalidates the personal liability protections Jane is afforded through her LLC. If JBS is sued in the future and the opposing attorney is able to collect the canceled checks used to pay the personal mortgage, they may be able to convince a court Jane’s personal assets are no longer off limits from being seized. This legal battle could potentially place your bank in the middle of a lawsuit, and while there may be no financial loss to your bank, considerable manpower and resources could be exhausted by answering subpoenas. In addition to the scenarios above, making exceptions for customers to enable comingling of personal and business funds can create compliance monitoring challenges. For example, a well-defined BSA program has parameters in place to identify abnormal trends or behaviors that contradict customer due diligence data. If customers are not utilizing their accounts as intended and styled, it could create false alerts and confusion for BSA staff. Additionally, many business account fees are derived from transaction activity. Condoning the use of personal accounts for business purposes could have an impact on fee income. Often, exceptions to the previous scenarios are granted because a business owner is well known to the bank and, at the time of the transaction, it seems simpler to avoid a few extra steps, or the business owner simply is unaware of the implications that could arise from certain transactions. Take the time to educate business owners on proper management of their accounts and the personal liability that could result from comingling funds in order to foster trust and reduce challenges that could arise well after the transaction takes place. CONTACT US TODAY TO PLACE YOUR ANNOUNCEMENT AD Call 801-676-9722 or scan the QR code to fill out the form. Employees are motivated when they are recognized and feel valued. It’s about… ▷ Who to congratulate ▷ Who to acknowledge ▷ Who to thank for a job well done This magazine is a great platform to celebrate your team’s accomplishments! Place QR Code Here IT’S ABOUT THE CURRENCY | 13
RkJQdWJsaXNoZXIy MTg3NDExNQ==