We agreed with two classmates for them to oversee our savings and checking accounts. Both their signatures are on the accounts. One obtained a debit card under his name without the other's authorization and drained both the accounts and created overdrafts. We will pursue charges against him, but I need your help or suggestion on the role of the bank for allowing the issuance of the debit card. Please advise.
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Part of the answer here lies in the Deposit Agreement between the bank and the account owners. More and more we see banks not accepting liability for the requirement whereby two or more signatures are required on an account to make any withdrawal. Here is some sample language used to accomplish this.
"Multiple Signatures. We do not establish any accounts that require two (2) or more signatures on any items drawn on the Account. If, for example, you state "requires two signatures if greater than $1,000," you acknowledge that such provision is solely for your personal or internal control purposes. You shall indemnify and hold us harmless for losses due to paying any item bearing at least one authorized signature."
If your Agreement has something like this, then any one individual could access the funds and the use of a debit card doesn't interfere with the actual agreement. If your Agreement and signature card clearly reflect that more than one person's signature was necessary to withdraw funds, we suggest you speak with the bank and ask why they allowed the debit card to be issued. If you are not satisfied with their response or with any remuneration arrangements they propose, you may have to consult an attorney.
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Part of the answer here lies in the Deposit Agreement between the bank and the account owners. More and more we see banks not accepting liability for the requirement whereby two or more signatures are required on an account to make any withdrawal. Here is some sample language used to accomplish this.