Bank asks for photo ID for beneficiary: is this normal?

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dphilipps
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Bank asks for photo ID for beneficiary: is this normal?

Post by dphilipps » Tue Jul 30, 2019 8:13 am

I'm attempting to open a CD at a bank where I've been a customer for several years. I want to title it as POD (payable on death), but the bank won't let me nominate a beneficiary unless I provide a copy of their photo ID.

I don't have any ID documents for my beneficiary, and don't want to ask them. (I don't want to discuss my estate plans with my beneficiaries).

I've never encountered this issue with any other bank before. Is this the new normal, the Patriot Act gone wild?

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8foot7
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by 8foot7 » Tue Jul 30, 2019 8:29 am

I can't say whether it is normal, but I've set up a couple of accounts in the last year and I was not asked for a photo ID. I can see why an ID would be necessary at the time the account transfers after death, but just to set up a beneficiary seems overkill. What if it's a grandfather or grandmother setting up an account and the grandchildren who would be beneficiaries live a thousand miles away?

Cheyenne
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by Cheyenne » Tue Jul 30, 2019 8:39 am

...I've set up a couple of accounts in the last year and I was not asked for a photo ID
+1

jcar
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by jcar » Tue Jul 30, 2019 8:44 am

I believe I'd find somewhere else to do business. They may add your POD to some aggravating mailing lists.

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dm200
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by dm200 » Tue Jul 30, 2019 8:47 am

dphilipps wrote:
Tue Jul 30, 2019 8:13 am
I'm attempting to open a CD at a bank where I've been a customer for several years. I want to title it as POD (payable on death), but the bank won't let me nominate a beneficiary unless I provide a copy of their photo ID.
I don't have any ID documents for my beneficiary, and don't want to ask them. (I don't want to discuss my estate plans with my beneficiaries).
I've never encountered this issue with any other bank before. Is this the new normal, the Patriot Act gone wild?
Unfortunately, in my opinion, this has become more common. [I am in this exact business and have fought this battle.]

Banks and credit unions are under regulatory pressure to do this kind of thing (including SSNs or tax IDs for beneficiaries.) Banks and credit unions maintain that the POD beneficiary has no rights or status unless and until the death of the owner of the account. Regulators maintain otherwise.

Some banks and credit unions still do not require this, but many now do. Probably, when a bank or credit union becomes much more demanding about this - it is because a regulator found some sort of problem and is clamping down.

Since the POD can be changed at any time, as well as the fact that you may not want the POD beneficiary to know this information, it sure makes sense to me that such information need not be provided.

I think, however, that this is a losing battle and more and more banks and credit unions will be demanding such information.

Maybe some "creative" bank or credit union will come up with a way where this is not required?

TravelGeek
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by TravelGeek » Tue Jul 30, 2019 9:50 am

I set up PoD at several financial institutions (most recently Ally) and was never asked for ID.

In light of ever increasing data breaches (CapOne just yesterday) I would think banks would be interested in limiting the amount of data they have. Here they want data from people who likely aren’t even customers? No thanks... I would likely move my account elsewhere.

justlearnin
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by justlearnin » Tue Jul 30, 2019 10:15 am

A financial institution tried to get me to provide my adult children's social security #'s when I wanted to list them as beneficiaries. 1st they insinuated that they had to do this with all their customers. I said the beneficiaries would not be their customers until after I died. Then they said it was the law. I said no other similar institution required this information from me, so it clearly wasn't the law. I said I was going to move my money to their competitor and they quickly changed their tune! Amazing how that worked.

mptfan
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by mptfan » Tue Jul 30, 2019 10:16 am

Cheyenne wrote:
Tue Jul 30, 2019 8:39 am
...I've set up a couple of accounts in the last year and I was not asked for a photo ID
+1
+2 I have set up beneficiaries and have not been asked for photo ID, or ID of any kind.

Dottie57
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by Dottie57 » Tue Jul 30, 2019 10:28 am

mptfan wrote:
Tue Jul 30, 2019 10:16 am
Cheyenne wrote:
Tue Jul 30, 2019 8:39 am
...I've set up a couple of accounts in the last year and I was not asked for a photo ID
+1
+2 I have set up beneficiaries and have not been asked for photo ID, or ID of any kind.
+3

I set up beneficiaries on the banks online site.

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aspirit
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by aspirit » Tue Jul 30, 2019 10:44 am

Dottie57 wrote:
Tue Jul 30, 2019 10:28 am
mptfan wrote:
Tue Jul 30, 2019 10:16 am
Cheyenne wrote:
Tue Jul 30, 2019 8:39 am
...I've set up a couple of accounts in the last year and I was not asked for a photo ID
+1
+2 I have set up beneficiaries and have not been asked for photo ID, or ID of any kind.
+3

I set up beneficiaries on the banks online site.
+4 :happy I said I was going to move my money eleswhere and they quickly changed their tune! Amazing how that worked. :happy

It's ridiculous, the more whoops you jump through the more they will institute. :P
Time & tides wait for no one. A man has to know his limitations. | "Give me control of a nation's money and I care not who makes it's laws" | — Mayer Amschel Bauer Rothschild ~

crre
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by crre » Tue Jul 30, 2019 11:06 am

in the past two weeks i've updated my tod/pod designations at three different financial institutions (one bank and two brokerages) in three different states. none of them required me to provide photo id for my beneficiaries.

Gill
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by Gill » Tue Jul 30, 2019 11:12 am

If this is a trend, it's unfortunate and very scary. A POD designation or any beneficiary designation is much like a will, i.e., confidential and can be changed or revoked at any time. It should be the same with POD designations. In many cases I don't want my beneficiary to know they have been named as such and I want to feel free to make changes at any time. Requiring this is a complete invasion of privacy.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

whomever
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by whomever » Tue Jul 30, 2019 12:38 pm

I've set up a couple of accounts in the last year and I was not asked for a photo ID
another +1

We have some POD beneficiaries who are e.g. friends ... asking for their photo ID would be kinda awkward.

mptfan
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by mptfan » Tue Jul 30, 2019 1:57 pm

aspirit wrote:
Tue Jul 30, 2019 10:44 am
I said I was going to move my money eleswhere and they quickly changed their tune! Amazing how that worked. :happy

It's ridiculous, the more whoops you jump through the more they will institute. :P
Just because certain information is requested on standardized forms does not mean it is required, and yet often people assume that just because a form contains a section for certain information to be provided that the information *must* be provided. This is often false. Of course some information is required, if you are opening a financial account it is reasonable to require your name and address and social security number, but much of the categories of information "requested" on standard forms are just that, requests, and can be left blank or ignored. I do it all the time.

Most people are like sheep, they just do as they are told to do or requested to do and fill out whatever information is requested on standard forms and companies take advantage of that inclination. It's even worse when front line employees assume that if it is on the form then the information must be required because "that's our policy." The worst of all is when an employee claims that the law requires you to provide the information!

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dm200
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by dm200 » Tue Jul 30, 2019 4:51 pm

whomever wrote:
Tue Jul 30, 2019 12:38 pm
I've set up a couple of accounts in the last year and I was not asked for a photo ID
another +1

We have some POD beneficiaries who are e.g. friends ... asking for their photo ID would be kinda awkward.
One reason why I believe such information should not be required unless and until the beneficiary is about to get the money.

However, I believe that the regulators will win that battle. I believe, sooner or later, all banks and credit unions will have to require this, or similar, documents.

student
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by student » Tue Jul 30, 2019 4:52 pm

Cheyenne wrote:
Tue Jul 30, 2019 8:39 am
...I've set up a couple of accounts in the last year and I was not asked for a photo ID
+1
+2. Usually they asked for Name, address, birthday and SSN.

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dm200
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by dm200 » Tue Jul 30, 2019 4:53 pm

Gill wrote:
Tue Jul 30, 2019 11:12 am
If this is a trend, it's unfortunate and very scary. A POD designation or any beneficiary designation is much like a will, i.e., confidential and can be changed or revoked at any time. It should be the same with POD designations. In many cases I don't want my beneficiary to know they have been named as such and I want to feel free to make changes at any time. Requiring this is a complete invasion of privacy.
Gill
While I agree, the federal regulators do not.

Write your Congressman and Senators in Washington DC.

student
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by student » Tue Jul 30, 2019 4:55 pm

What I do is, if allowed, I use my living trust as the beneficiary. Unfortunately, many banks do not allow this.

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celia
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by celia » Tue Jul 30, 2019 5:18 pm

We had a similar problem with DH's employer who had an incompetent payroll department and had just instituted a new payroll system. Of course, besides many payroll deductions being wrong during this change, all beneficiary statements had to be re-done. They required name, SSN, address, etc. I refused for my data being given to these folks who couldn't fix their own errors. I told DH to use our trust instead, but they initially refused. After many objected and filed complaints, they had the software system "corrected".

Not only can a trust be a beneficiary, but so can a charity, business, organization, school, or government entity. How do you get photos for these? It makes no sense! Take your business elsewhere.

As an alternate, call up and ask the same question on the phone, possibly while calling another branch. It is possible the person helping you is new and not well-informed. Also ask to speak to their supervisor.

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FIREchief
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by FIREchief » Tue Jul 30, 2019 5:46 pm

student wrote:
Tue Jul 30, 2019 4:55 pm
What I do is, if allowed, I use my living trust as the beneficiary. Unfortunately, many banks do not allow this.
Great suggestion. I've actually tried this with an elderly relative who was asking for personal information in conjunction with a beneficiary designation. I called the relative's rural small town bank directly and they said a revocable trust is "no problem." I further confirmed that they would only need a properly drafted certification of trust, and not the entire trust document. I then drafted a cover letter addressed to this bank employee, from the intended beneficiary, and sent it and the certification of trust to the account owner so that they could submit it to the bank.

That being complete, I have less than 50% confidence that it "worked." :oops:
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

ChicagoBear7
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by ChicagoBear7 » Wed Jul 31, 2019 10:33 am

This situation most likely occurred due to confusion over the new "Beneficial Ownership Rule" that was implemented about a year ago - part of the Bank Secrecy Act / Anti-money Laundering rules for banks and brokers. The U.S. finally codified its expectations about ascertaining the beneficial owners and control persons of legal entities (S Corps, C Corps, LLCs, LLPs etc.) and trusts - both revocable and irrevocable. (The U.S. was actually behind most other westernized countries in developing such standards.) The rules can be complex, but essentially you need to keep drilling down until you hit "blood" - even if that means going through dozens of entities and holding companies. However, there is no requirement to CIP beneficiaries on POD accounts - at least until the owner dies and the beneficiary inherits the account.

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dm200
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by dm200 » Wed Jul 31, 2019 1:20 pm

FIREchief wrote:
Tue Jul 30, 2019 5:46 pm
student wrote:
Tue Jul 30, 2019 4:55 pm
What I do is, if allowed, I use my living trust as the beneficiary. Unfortunately, many banks do not allow this.
Great suggestion. I've actually tried this with an elderly relative who was asking for personal information in conjunction with a beneficiary designation. I called the relative's rural small town bank directly and they said a revocable trust is "no problem." I further confirmed that they would only need a properly drafted certification of trust, and not the entire trust document. I then drafted a cover letter addressed to this bank employee, from the intended beneficiary, and sent it and the certification of trust to the account owner so that they could submit it to the bank.
That being complete, I have less than 50% confidence that it "worked." :oops:
I am in various aspects of this type of business. It is my understanding that a Living trust can be made a POD beneficiary (although, I suppose, a bank or credit union could have a more restrictive policy).

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FIREchief
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by FIREchief » Wed Jul 31, 2019 2:19 pm

dm200 wrote:
Wed Jul 31, 2019 1:20 pm
FIREchief wrote:
Tue Jul 30, 2019 5:46 pm
student wrote:
Tue Jul 30, 2019 4:55 pm
What I do is, if allowed, I use my living trust as the beneficiary. Unfortunately, many banks do not allow this.
Great suggestion. I've actually tried this with an elderly relative who was asking for personal information in conjunction with a beneficiary designation. I called the relative's rural small town bank directly and they said a revocable trust is "no problem." I further confirmed that they would only need a properly drafted certification of trust, and not the entire trust document. I then drafted a cover letter addressed to this bank employee, from the intended beneficiary, and sent it and the certification of trust to the account owner so that they could submit it to the bank.
That being complete, I have less than 50% confidence that it "worked." :oops:
I am in various aspects of this type of business. It is my understanding that a Living trust can be made a POD beneficiary (although, I suppose, a bank or credit union could have a more restrictive policy).
Thanks. The bank wasn't the problem. Even though it is a small town rural bank, the person who answered the phone was very familiar with living trusts and indicated it would be no problem for them to name a trust (instead of an individual) as a beneficiary.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

TravelGeek
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Re: Bank asks for photo ID for beneficiary: is this normal?

Post by TravelGeek » Wed Jul 31, 2019 3:06 pm

dm200 wrote:
Tue Jul 30, 2019 4:53 pm
Gill wrote:
Tue Jul 30, 2019 11:12 am
If this is a trend, it's unfortunate and very scary. A POD designation or any beneficiary designation is much like a will, i.e., confidential and can be changed or revoked at any time. It should be the same with POD designations. In many cases I don't want my beneficiary to know they have been named as such and I want to feel free to make changes at any time. Requiring this is a complete invasion of privacy.
Gill
While I agree, the federal regulators do not.

Write your Congressman and Senators in Washington DC.
I’d also make “the other regulators” (CFPB) aware of this. There are plenty of people who don’t have ID, and there are plenty of reasons why I wouldn’t be able to provide a copy of their ID if they had one.

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