Best bank for Home owners association banking

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calimero
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Joined: Mon Dec 29, 2014 8:04 pm

Best bank for Home owners association banking

Post by calimero » Sat May 07, 2016 11:08 am

Our HOA is currently using a local bank for both a checking and the savings/reserves. Obviously, interest rates are not great at the moment anyhow. However, we actually loose money with interest minus fees. They charge fees for a report on checks paid!!
Online bank Ally doesn't do HOA.
Has anyone come across an online place with better conditions for HOA?

stan1
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Re: Best bank for Home owners association banking

Post by stan1 » Sat May 07, 2016 11:18 am

I would check with other HOAs in your area. If you don't have these relationships you should build them for references to other professionals who specialize in work with cost-sensitive HOAs (auditors, attorneys, contractors).

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dm200
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Re: Best bank for Home owners association banking

Post by dm200 » Sat May 07, 2016 1:05 pm

calimero wrote:Our HOA is currently using a local bank for both a checking and the savings/reserves. Obviously, interest rates are not great at the moment anyhow. However, we actually loose money with interest minus fees. They charge fees for a report on checks paid!!
Online bank Ally doesn't do HOA.
Has anyone come across an online place with better conditions for HOA?
First, review (in detail) all bylaws, applicable regulations, etc. the requirements for use of a financial institution. While doing so, see if a federally insured credit union is allowable (probably is).

Second, "shop" the local market (banks and, if allowed, credit unions) to determine whether another financial institution would be better. Review/negotiate with current bank as well. I would also consider convenience in this evaluation.

Third, do your balances exceed the FDIC limit of $250,000? If so, "prudence" would indicate having more than one federally insured institution.

Fourth, as part of this review/analysis - to the degree possible and practical, consider internal control and audit/review of the funds handling to make sure internal fraud/embezzlement are as nearly impossible as can be done. Unfortunately, such organizations are subject to (sometimes massive) losses from such insider fraud/embezzlement.

As suggested in another post, compare notes with other, similar HOAs.

Leeraar
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Re: Best bank for Home owners association banking

Post by Leeraar » Sat May 07, 2016 1:44 pm

I am the President and Grand Poohbah of our HOA. We use the closest local credit union. No fees. 200 yards down the street.

It's just so much easier to deal with yearly changes in the treasurer and other officers if you can just go down the street, show your IDs, and be done. Our yearly cash flow is only about $8,000.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

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Kosmo
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Re: Best bank for Home owners association banking

Post by Kosmo » Sat May 07, 2016 7:02 pm

My HOA has a business checking account at Wells Fargo. No other bank accounts. There is a branch a mile up the road. The HOA where my rental property is (and I am on the board) uses Citadel credit union. Checking, savings, and CDs. Multiple local branches.

You may have trouble doing online banking only since an HOA is a business. You cannot simply open a free checking account and a high yield savings account like you would for yourself.

Topic Author
calimero
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Re: Best bank for Home owners association banking

Post by calimero » Sun May 08, 2016 7:38 am


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bertilak
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Re: Best bank for Home owners association banking

Post by bertilak » Sun May 08, 2016 8:56 am

Leeraar wrote:I am the President and Grand Poohbah of our HOA. We use the closest local credit union. No fees. 200 yards down the street.

It's just so much easier to deal with yearly changes in the treasurer and other officers if you can just go down the street, show your IDs, and be done. Our yearly cash flow is only about $8,000.

L.
I also am the Treasurer/President of our HOA and use a local credit union. It wasn't as easy for me!

When I took over the job I switched to the CU from an old-fashioned bank that charged a monthly fee to have a checking account. The CU would not open the account and give me signing authority unless I could prove I was the Treasurer.

I had to hunt down the information filed with the state that listed officers of the association. I had already filed the change with the state but it turned out there was an additional form to file that I had missed so when the CU looked us up on some state web page the old treasurer was still listed! Turns out there were several changes. I had to file the new form, show the CU the association bylaws that defined how officers were assigned or changed then show the properly signed meeting minutes where the board assigned me as Treasurer and btw President. The state-supplied info was not enough! (It's been a few years so I have probably missed something or confused some of that.)

Anyway that's how I learned a lot about how a homeowner's association needed to be run!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

Leeraar
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Re: Best bank for Home owners association banking

Post by Leeraar » Sun May 08, 2016 9:19 am

Yes, we file a yearly form with the State listing the HOA officers. The major purpose seems to be to pay the state $25.

At our current bank (CU), it seems sufficient for the person with the current authority to show up and vouch for the new person. In any event, the state forms are online and the bank could easily check.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

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bertilak
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Re: Best bank for Home owners association banking

Post by bertilak » Sun May 08, 2016 9:28 am

Leeraar wrote:Yes, we file a yearly form with the State listing the HOA officers. The major purpose seems to be to pay the state $25.

At our current bank (CU), it seems sufficient for the person with the current authority to show up and vouch for the new person. In any event, the state forms are online and the bank could easily check.

L.
When I walked into the credit union to open the account that's exactly what I expected. Perhaps it will be simpler from here on since all the proper paperwork has been (and will continue to be) filed. Much of this had been neglected before I took over.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

Seattlenative
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Re: Best bank for Home owners association banking

Post by Seattlenative » Mon May 09, 2016 5:36 pm

I no longer live in an HOA (condo in my case) but I served on our community association's board for a decade and was very familiar with our finances. Our community association management company handled our checking account, but not our association's maintenance reserve accounts. As you noted, some banks are easier to deal with in terms of handling ownership/signatures for association accounts - and we dealt with more than one banking institution. This is very critical when board members come onto, or off of, the board.

Up front, be absolutely consistent in using your association's true and correct legal name on ANY deposit accounts, tax filings, or service contracts. Sometimes your association's legal name as originally registered with the state and IRS is different than the "doing business as" name used by real estate agents and your residents. Example: over the years, previous board members and residents could have fallen into the habit of using a name like "Pine Ridge Condominium Association", yet your true legal name as registered with the Secretary of State might be "The Pines Association of Apartment Owners". Don't deviate from using the true legal name even if it sounds strange to do so.

This is not an endorsement, but I recall that Mutual of Omaha Bank (aka "Community Association Banc") tailored its business model for HOAs and condominium communities. http://www.mutualofomahabank.com/community-associations

I also recall that US Bank and Union Bank had divisions which could cater to the needs of community associations:
https://www.usbank.com/cgi_w/cfm/commer ... n_Division
https://www.unionbank.com/hoabankers/

NOVACPA
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Re: Best bank for Home owners association banking

Post by NOVACPA » Mon May 09, 2016 6:36 pm

Seattlenative wrote:
This is not an endorsement, but I recall that Mutual of Omaha Bank (aka "Community Association Banc") tailored its business model for HOAs and condominium communities. http://www.mutualofomahabank.com/community-associations
I am the treasurer of our HOA. We use Mutual of Omaha Bank.

I like because of the CDARS program. Through their special program, you’ll have access to full FDIC coverage on deposits up to $50 million.

I consolidated our other accounts there since we were chasing yield previously.

In addition, they offer loans, if you all should need them. I checked recently since we are doing some major renovations and didn't want to spend cash reserves and the rates were pretty good (3.73% for 5 years). We looked at doing it to lock in costs for five years rather than spacing out work over five years.

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