Signature Cards

It’s winter holiday time! And for me this time of year stirs up memories of simpler times. As the holiday season breezes in, I wonder how many of us still reach for pen and paper to send holiday greetings? Or has that gone out the window like the penny? I don’t think anyone would disagree that it is definitely easier – and cheaper- to send a holiday email or share a digital card with a click. However, in my opinion there is still something charming about an envelope arriving in the mail carrying handwritten holiday wishes. 

Anyway, let’s talk about signature cards-- you know, the card/document/form a member signs when opening their account. If you’re not aware, NCUA has an example in Appendix B of its Truth in Savings Regulation (Part 707). I realize many credit unions use electronic signature cards or digital account set-up systems, so while the format has evolved, the purpose of a signature card remains the same: it captures information specific to the member, such as their signature and other identifying information.

While it might seem convenient to include account terms on the signature card, NCUA cautions against it and advises credit unions to use standard disclosures instead as evidenced by the following notation included under the sample form in the appendix:

“However, no account terms may be included on a signature card unless a copy of the signature card is provided to the member at the time of account opening. The Board recommends that credit unions refrain from this practice, and instead use standard account disclosures. One reason for this is that if laws, regulations or credit union policies change, discrepancies may result between them and the earlier signature card terms. Given the longevity of credit union membership, signature cards may well be in use for up to or over a century. In addition, as signature cards are relatively small, they probably will not contain enough space to make all desired and required disclosures. Fragmentation of terms, some on signature cards, some on separate disclosures, could easily lead to member confusion.”

You may be wondering if signature cards are necessary for share insurance coverage. For single owner accounts, what matters is that the account is clearly documented in the credit union’s records as belonging to the member. For joint accounts, prior to 2021, signature cards were historically required to prove joint ownership. But, after the 2021 rule change, other documentation can be used to establish joint ownership for insurance purposes, such as debit card issuance or transaction history by the joint owner - but a signature card is considered a best practice in that it offers clarity in account ownership and as documentation in case of legal disputes.

According to NCUA’s record retention guidelines, signature cards should be retained for the life of the account as they are considered part of the permanent account record. For more information on content and record retention requirements of account cards see this Compliance Team blog post.

Key takeaways on the role of signature cards:

•Signature cards document the member’s agreement to the account terms and conditions as it shows that the signer intended to open the account and accept the account terms. 
•Signature cards document who owns or co-owns an account.
•Signature cards confirm who has legal right to access, withdraw or manage funds.
•Signature cards are not mandatory for share insurance coverage.
•Signature cards serve as a security control/safeguard (compare/verifying signatures on checks and other documents).

Even though digital formats are everywhere now, the signature card still matters—even if the old paper version is a thing of the past. It serves as a reliable record of account ownership and the specific terms acknowledged by the member. It also keeps the signatures of those allowed to access and use the account, helping confirm identities and prevent fraud.

Season’s Greetings Compliance Friends!