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GENERAL COUNSEL’S CORNER

They asked what?

Unusual Bank Questions

KAREN M. NEELEY

O ver the years, I have heard a lot of interesting questions from bankers. Some start off with, “I’ll bet you

have haven’t heard this one before!” (Usually, they would lose that bet.) However, I believe you will find
the following FAQs unusual and entertaining and perhaps good teaching tools.

Can a person who murdered the contact with the customer. The individ- Next, investigate your customer’s
Q account owner still receive the pro- ual is deceased and no longer has privacy actions and make a determination as to
ceeds as the POD beneficiary? rights! In any event, consider getting a whether the bank must file a Suspicious
“hold harmless” from the POD beneficia- Activity Report.
Probably yes! The Texas Constitu-
A tion provides that no conviction ry (or representative). Finally, evaluate the impact of this
shall work “corruption of blood, or forfei- draw and usage of proceeds on the loan.
ture of estate…” In other words, a murder We just learned that a good cus- Remember that loan purpose is not
conviction does not prevent the murder- Q tomer made a large draw on a required to be obtained on a transaction
er’s heirs from receiving his property; but commercial line of credit secured by real that is secured by real property. Read
it also does not prevent a murderer from estate to make an investment in a Texas your loan agreement to see whether
inheriting from his victim! The Estates marijuana dispensary. What should the there is a breach. But remember that this
Code clarifies this point by preventing bank do about this? activity is legal in Texas! You probably do
the murderer from benefiting from the First, banks may provide banking not have any grounds to accelerate the
proceeds of a life insurance policy on the A services to businesses that are loan. However, document this analysis
victim. However, it stops there. legal under state law even though mar- carefully.
It is possible that other potential heirs ijuana is still a Schedule 1 Controlled
might bring a lawsuit and try to impose Substance. FinCEN issued guidance— We have had a number of bad expe-
a constructive trust on the proceeds. “BSA Expectations Regarding Marijuana- Q riences with powers of attorney.
However, that is out of the bank’s hands. Related Business” (FIN-2014-G001)—to Can we just say “no”?
provide some clarification on this point. No, the changes to the Durable
We just learned that one of our Around 30 states have legalized some A Power of Attorney Act mandate
Q certificate of deposit customers aspect of marijuana business, with many acceptance of a durable power of attor-
died. The CD was on auto renewal, and only permitting certain medical use. In ney as to an existing customer.
we hadn’t seen this customer in some 2015, the Texas Legislature passed a very For a new customer, you could decline
time. Our account documentation is in a narrow bill (Compassionate Use Act) that to open the new account.
“male” name. However, the death certif- permits the licensing and dispensing of
icate indicates a feminine version of the low-THC cannabis for certain treatment You also have several acceptable rea-
name and lists the gender as female. Help! of epilepsy. Three dispensaries have been sons for declining. But you need to pro-
permitted to obtain licensing through vide a notice of your rejection timely.
First, check all the identifying data, the Texas Department of Public Safety. You may request an opinion of counsel
A such as social security number, You can find their approval on the DPS and a certificate from the agent within
date of birth, and driver’s license number. website. ten days of receipt of the power of attor-
If these match, then it appears that your ney. Within seven days after you receive
customer was transgendered and went So, your first step is to determine these, you must make your decision and
through a sex change procedure. But whether this investment was in one of provide the notice.
to be sure, also consider asking family those legal, licensed entities. Document
members and bank employees who had your file with the results of this search.

8 The Texas Independent Banker