Can President be a bank signer?

[Guest Abigail DeSesa]

Hello,

I wanted to find out if it is acceptable to have the president of a 501c3 be able to sign checks when there is a full board of officers available?

[jstackpo]

RONR has nothing to say about check signatures, so it will be up to your association.

 

If the tax law dealing with 501c3 business has anything to say, do that, of course.

[Rev Ed]

It is up the organization to decide, although I would personally strongly recommend that two Board members sign all cheques.

[Edgar Guest]

I would personally strongly recommend that two Board members sign all cheques.

 

So, not the president and treasurer if they're not board members?

[Rev Ed]

So, not the president and treasurer if they're not board members?

 

Well, two directors/officers.  Sorry, normally the President and Treasurer are also members of the Board in my experience, even though they do not have to be.

[g40]

It is up the organization to decide, although I would personally strongly recommend that two Board members sign all cheques.

 

While it is very common that organizations require two signatures on checks (or on checks above a certain amount), today it is very unlikely that the bank or credit union will or can enforce such a requirement of two signatures. Therefore, if your organization has such a "two signature" requirement, it would be wise and prudent to have a process to review paid check images for two signatures.

[Richard Brown]

While it is very common that organizations require two signatures on checks (or on checks above a certain amount), today it is very unlikely that the bank or credit union will or can enforce such a requirement of two signatures. Therefore, if your organization has such a "two signature" requirement, it would be wise and prudent to have a process to review paid check images for two signatures.

I agreeg40.  It has been my experience that most banks these days just do not enforce a two signature requirement on an account.  The fine print on the paperwork you sign when you open an account nowadays usually tells you that, too. 

 

But, if the organization check has two distinct signature lines and the notation "Two signatures require", there is perhaps at least a chance that merchants won't accept the check with only one signature or that the bank will catch it and not pay it.  But, I sure wouldn't bet on it.  Someone in your organization needs to inspect the checks to make sure they were all properly signed.

[g40]

I agreeg40.  It has been my experience that most banks these days just do not enforce a two signature requirement on an account.  The fine print on the paperwork you sign when you open an account nowadays usually tells you that, too. 

 

But, if the organization check has two distinct signature lines and the notation "Two signatures require", there is perhaps at least a chance that merchants won't accept the check with only one signature or that the bank will catch it and not pay it.  But, I sure wouldn't bet on it.  Someone in your organization needs to inspect the checks to make sure they were all properly signed.

 

"Once upon a time ..." it was common for banks to have the "two signature" requirement in the account agreements/signature cards. Now - the general industry practice/recommendation is that banks and credit unions not have such "two signature" requirements in the account agreements.

 

I am involved with several organizations that have either a full "two signature" requirement for all checks or "two signatures" for checks over a certain amount. It then becomes the responsibility of "internal control" or auditing to review that the "two signature" requirement is being complied with by the check signer(s). When physical checks were actually returned, sometimes that could be "fudged" by having the second signer sign the returned check -- but today with only check images  - that cannot be "fudged".

 

Personally it has been (and still is) my opinion (and experience seeing what some other organizations commonly do) that a very restrictive "two signature" requirement often leads to one signer signing blank checks [VERY BAD IDEA] or even both signers signing blank checks.

 

I don't have any personal experience with this - but you may be correct that merchants may not accept one signature when the check states "Two signatures required".

 

IMO, this issue/discussion illustrates the importance of having bylaws, policies, etc. stay up to date with current technology, industry practices, etc.

 

I am old enough to remember that the checking account I had when I graduated from college and was employed at my first full time job actually did not have an "account number" but just my name on the checks. Back then, I suppose the bank must have actually looked at the check when the bank cleared it.

[Rev Ed]

I agreeg40.  It has been my experience that most banks these days just do not enforce a two signature requirement on an account.  The fine print on the paperwork you sign when you open an account nowadays usually tells you that, too. 

 

 

Well, fortunately, RONR does not care what the bank says - if you want two signatures then that's what you can do according to RONR.  Of course, as to legality, and the bank's responsibilities with regards to a decision made by the Board (i.e. that two signatures are required), that would be up to a lawyer as it is beyond the scope of this forum

[Richard Brown]

Well, fortunately, RONR does not care what the bank says - if you want two signatures then that's what you can do according to RONR.  Of course, as to legality, and the bank's responsibilities with regards to a decision made by the Board (i.e. that two signatures are required), that would be up to a lawyer as it is beyond the scope of this forum

Rev Ed, I don't think anybody on here disagrees with you.  But, if you check back, it was you, in post # 3, who first brought up the suggestion of having two signatures required on checks.  Then, g40 pointed out that it's his experience that banks will not enforce such a requirement and I agreed with him....and with you as to the suggestion of requiring two signatures.

[jstackpo]

Consider yourself lucky if the bank catches a "no signature" check.