TN 7 (06-22)
A. PR 22-024 Ecker Center for Mental Health Collective Account
Title
1. SYLLABUS
A bank account titled "Ecker Center for Mental Health Rep Payee for Social Security"
does not meet SSA’s regulatory and statutory requirements for a representative payee
collective account. Specifically, it does not clearly show SSA beneficiaries’ ownership
of the funds. There is also nothing under Federal or Illinois law that specifically
requires the documents requested by the bank to change an account title. Rather, ECMH’s
indication that banks have requested such documents appears to be based on bank policy.
2. OPINION.
You requested a legal opinion on two issues related to the titling of a collective
bank account used by an organizational representative payee.
1. Does the bank account title being used by the payee, “Ecker Center for Mental Health
Rep Payee for Social Security,” satisfy SSA’s requirements to show beneficiary ownership
of the funds and the payee’s fiduciary role?
2. Are articles of incorporation or a certificate of assumed name required to change
a bank account title under Illinois or Federal law, and, if so, does SSA have any
legal obligation to assist the payee in providing those documents?
ECMH’s current collective account title, “Ecker Center for Mental Health Rep Payee
for Social Security,” does not satisfy SSA’s requirement to demonstrate beneficiaries’
ownership of the funds. As to the second question, nothing under Federal or Illinois
law specifically requires the identified documents for a bank to change an account
title. Rather, ECMH’s indication that banks have requested such documents appears
to be based on bank policy.
NOTE:
A collective account cannot be the payee’s operating account, business account, or
any other improperly titled account. POMS GN 00603.020B, POMS GN 00603.020C.3.b.
The payee’s name on the collective account title must match the payee’s name in the
Electronic Representative Payee System (eRPS). POMS GN 00603.020D.1.
DISCUSSION
A. Social Security Law and Policy
The Social Security Act, regulations, and agency policy require representative payees
to use the benefits they receive for the current needs of the beneficiary and in the
beneficiary's best interests. 42 U.S.C. §§ 405(j)(3), 1383(a)(2)(C); 20 C.F.R. §§
404.2035 – 404.2045, 416.635 – 416.645; POMS GN 00602.001A.1, GN 00605.001B.1. As relevant here, the payee must keep the benefit funds separate from their own funds
and show the beneficiary’s ownership of the benefits. 20 C.F.R. §§ 404.2035(b), 416.635(b) . Moreover, if a payee requests direct deposit, the title of the depository account
must show the payee as having a fiduciary interest, while reflecting the beneficiary
as the account’s owner. POMS GN 02402.055A, GN 00603.010A. These rules also apply when a payee conserves benefit funds in a bank account. 20
C.F.R. §§ 404.2045, 416.645; POMS GN 00603.010.
Agency policy permits representative payees to collect and manage Social Security
or Supplemental Security Income benefit payments for multiple beneficiaries in one
deposit account referred to as a “collective account.” POMS GN 00603.020A. As with individual beneficiary accounts, the collective account title must show that
the payee holds the account in a fiduciary capacity on behalf of multiple beneficiaries.
POMS GN 00603.020D.1. In other words, the payee manages the account but does not own the account, and the
beneficiaries own the account but do not have access to the account. POMS GN 00603.020A.1, D.1; see also POMS GN 02402.055C. Examples of such titles are: “ (Name of Payee) for Social Security/SSI Beneficiaries;”
and “ (Name of Payee) for SSA Beneficiaries.” POMS GN 00603.020D.1. Proper titling of a collective account established at a Federal Deposit Insurance
Corporation (FDIC) insured financial institution provides each beneficiary FDIC protection;
other financial institutions offer similar deposit protection. POMS GN 00603.020E.1.d. However, beneficiaries’ funds deposited into an improperly titled account often cannot
be easily returned back to SSA in cases of misuse. POMS GN 00603.020B.
B. Illinois Law
Illinois law provides that banks “may receive deposits of funds subject to withdrawals
or that are to be paid upon the checks of the depositor.” 205 Ill. Comp. Stat. 7002.
These deposit accounts may be held by an individual, by two or more individuals, by
a fiduciary where authorized by law, by a government, or by any corporation or other
person. 205 Ill. Comp. Stat. 7005. However, Illinois law requires all such deposit
accounts to be insured by the FDIC. See 205 Ill. Comp. Stat. 1005. Thus, a payee may use a collective fiduciary account to hold
beneficiary funds under Illinois law, and may assure individual FDIC coverage of each
beneficiary's funds by properly titling the account to clearly reflect the payee's
fiduciary interest and the beneficiaries’ ownership of the funds.
C. ECMH’s Collective Account Does Not Have a Correct Fiduciary Title
ECMH's collective account bears the title: “Ecker Center for Mental Health Rep Payee
for Social Security.” As noted above, the field office determined that the account
showed ECMH’s fiduciary role but did not clearly show SSA beneficiary ownership of
the funds. We concur with the field office’s assessment.
POMS GN 00603.020A.1 states, in relevant part:
A collective account must have a correct fiduciary title. The term “fiduciary” means
the payee may not seek personal benefit from managing the money of those they represent.
A fiduciary title shows the payee manages the account but does not own the account.
The beneficiaries own the account, but do not have access to the account.
Here, ECMH added the agency’s terminology of “Rep Payee” to the title to demonstrate
the fiduciary nature of the account. However, this title still does not indicate that
the funds within the account belong to any SSA beneficiaries. Therefore, it fails
to satisfy the agency’s requirement that the account title show the beneficiaries
own the account without having access to it. 20C.F.R.§§404.2035(b),416.635(b); POMS GN 02402.055C, GN 00603.020A.1, D.1.
In order to comply with agency policy, ECMH should change its collective account title
pursuant to POMS GN 00603.020D.1. As noted above, this provision gives examples of acceptable collective account titles.
D. No Federal or State Law Requires a Fiduciary to Provide the Documents
Requested by the Bank in Order to Change an Account Title
According to ECMH, the bank where they established the collective account informed
them that the account title could not be changed unless ECMH provided its articles
of incorporation or a certificate of assumed name. ECMH also alleges that other banks
where they have attempted to open a new collective account have requested the same
documents. You asked whether the documents requested by the bank are required to change
a bank account title under Illinois or Federal law, and, if so, whether SSA has any
legal obligation to assist ECMH in providing those documents.
We have not found anything in Federal or Illinois law that requires articles of incorporation
or a certificate of assumed name to change a bank account title. Any such requirement
appears to be bank policy. Notably, the materials provided to us indicate that the
title of ECMH’s collective account was changed from “Ecker Center for Mental Health
Client Account” to “Ecker Center for Mental Health Rep Payee for Social Security”
at some point after the March 2020 payee site review, suggesting the bank changed
the account title without ECMH providing such documents or the agency’s assistance.
CONCLUSION
ECMH's current collective account title does not comply with agency requirements because
it does not clearly show SSA beneficiaries’ ownership of the funds. Moreover, nothing
under Federal or Illinois law specifically requires the documents requested by the
bank to change an account title.