FCU Account or Signature Card
Unlike the last five years’ worth of my birthday cards, account cards give members access to money. Also, unlike my birthday cards, it really matters what words are written on member account cards.
Unlike my family… hopefully, his family was kind enough to reward him just for being born. From time to time, credit unions reach out to the Compliance Team about account/signature card requirements. This blog tackles two of the most popular subjects: content requirements and record retention of account cards.
Content Requirements
Together with account agreements, signature cards represent binding contracts between the member and the financial institution. Account cards or signature cards are not heavily regulated by federal law for federal credit unions (FCUs). While there are very little federal content requirements found, NCUA has provided a sample form (Appendix B-4). This FAQ (member-only) explains what information should be included on the member account card, if the credit union chooses to use them:
“Question – My credit union is in the process of reviewing which information we would like included on a member’s signature card/application for membership. Has NCUA published any guidance regarding what should be included or what should not be included on a signature card?
Answer – NCUA has not published any formal guidance on signature cards but they have provided a sample signature card in Appendix B to NCUA’s Truth in Savings regulation. See, Appendix B of Part 707, B-4 Sample Form (Signature Card/Application for Membership). NCUA recommends that credit unions follow the sample forms and should use caution when adding account terms or conditions. The sample form includes name information, social security information, full address and phone contacts, date of birth, employer information, and mother’s maiden name. Commentary following the sample form permits credit unions to include additional information, such as driver’s license number, payable on death designations, life savings beneficiary designations, and other designations as long as it is in accordance with federal and state laws. However, NCUA recommends using standard account disclosures to indicate account terms rather than putting account terms on the signature card. NCUA disfavors placing account terms on the signature card because this requires a copy to be given to members and signature cards are very small with little room for account details. More importantly, NCUA warns against including account terms because a signature card will be valid for the life of the credit union membership and if credit union policies or laws change, the signature card and the new policies will conflict. Because of the longevity and static nature of a signature card, NCUA recommends a signature card requiring basic information similar to the sample form in Appendix B-4 of Part 707.”
Record Retention
Since signature cards are considered a part of the application, you should keep in mind that there is a record retention component to these cards. In Part 749, NCUA lists its recordkeeping expectations of its rules and regulations. The agency recommends that credit unions to retain “applications for membership and joint account agreements” permanently in Appendix A.
As for how to store these records, credit unions may hold original signature cards or may store them in any format which “accurately reflects the information in the record, remains accessible to all persons who are entitled to access by statute, regulation or rule of law, and is capable of being reproduced by transmission, printing or otherwise.” This means that machine copies, magnetic tape, micro-fiche, and electronic records are acceptable storage formats for account cards.
However, credit unions should consider there may be state law record keeping requirements, such as evidentiary requirements should the credit union find themselves in court and need to use the signature card as evidence.
