Due to the rise of many fraudulent activities, banks are in the process of
tightening down requirements and documentation for accounts they are currently
maintaining and are opening.
Because not all banking institutions govern their accounts in the same manner, it
is impossible to predict how one bank’s revised guidelines will impact your guild
banking operations.
I do not know about the smaller banks and credit unions, but the larger banks as
Wells Fargo & Bank of America have been in the process of auditing their
accounts, like our guild accounts and non-profit accounts.
Banks have been implementing internal audits, checking to verify they the
necessary documentation, legitimizing the account. For instance, with a 501 C (3)
non-profit account that they have a copy of the Articles of Incorporation, Bylaws,
A copy of the organization’s meeting minutes, reflecting board approval of
parties on the bank account; and, that the officers listed on the bank account
match the filed Statement of Information with the Secretary of State’s Office, and
that the corporation is in “Good Standing”. Meaning the guild has paid their
annual registration fee. *Lastly, that the TIN listed on the bank account matches
the name of its registered owner.
For instance, because of this change in banking regulations, some banks are
noticing that the CNCH Inc. TIN being used by our unincorporated guilds is not a
match, nor the same entity (name) on the bank account. Some banks are
beginning to pull these accounts, stating … only ONE entity has use of a TIN. For
whatever reason, what has been approved and accepted in the past is not any
longer. Banks are gradually deciding that member guilds do not have the use of
the flagship CNCH, Inc TIN to open and maintain an account.
Consequently, when a random internal audit happens on your guild bank account,
or, when your guild officers visit your bank to change officers/signers, your
account may be targeted.
If your account is targeted for any of the above reasons, your bank will send a
letter that tells you what’s missing and that you have X many days to cure any
deficiencies, to their satisfaction. If not cleared by X many days, they will closeout
the account!
At this point, your guild (members and board) must decide what actions are
necessary, if you want to keep a guild bank account.
1. If you are already a 501 C (3) Non-Profit guild, perhaps is just a matter of
re-supplying documentation that has been misplaced within the banking
system. Or updating your Statement of Information with the Secretary of
State so that your officers match your account signers?
2. If you are NOT a 501 C (3) guild, and if you are good sized guild…You may
want discuss beginning the process of acquiring non-profit status so that
your guild can obtain your own TIN from IRS.
3. If you are a small guild, and do not want to go through the process and
expense of becoming a 501 C (3), your next option is a DBA account.
Example: XXXX doing business as XYZ Guild. ONE person from your guild
would be XXXX. X would use his or her Tax ID number on the account. And
X would have to file a Fictitious Business Statement. At this point, X could
authorize additional signers on the bank account.
4. If none of the above work for your guild, your next option is for ONE person
in the guild to open a separate bank account for the sole purpose of
managing guild funds.
5. Lastly, NO bank account. Members pay as you go.
To help those guilds who do not already have their own TIN (Tax Identification
Number) and/or who are NOT a legitimized NON Profit Organization with the
State of California, CNCH will be posting several website links on the CNCH
Resource Page so that your officers and members can research and review the
necessary steps prescribed by the State of California to acquire non-profit status.
This is a head’s up for your guild to be aware of what may be coming down the
pipeline on your bank account. NOW may be the time to prepare, in the event
you get that 30- or 60-day letter.
Notice: Acquiring non-profit status and a TIN will take longer than 60 days!
Perhaps you have a member amongst you who can lend a helping hand such as
an accountant, CPA, or attorney. I am told that most accounts would be
qualified for the process. Talk to your neighbor guilds who are 501 C (3)
organizations about their Bylaws and Standing Rules to give you a start.
Additionally, guilds in good standing with CNCH, with or without non-profit
status are still considered member guilds of CNCH, Inc. and therefore enjoy the
benefits as member guilds such as liability insurance.