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Non-profit Loses its Bank Connection
I am the new president of a 501(c)(4) organization that has been in existence for at least fourteen years. However, my involvement has been limited to the last two years. Last year I was elected president and this year the long-term treasurer resigned.
When I took the approved minutes to the bank that holds our account to notify them of the change in officers and to remove the ex-treasurer, there was a problem. The bank had never been updated of the new officers since the account was established fourteen years ago, and since the ex-treasurer was the only remaining signatory, the bank insisted that the ex-treasurer certify the minutes memorializing the change of officers before we could assume control of the account. Now the ex-treasurer is refusing to cooperate with the certification of the minutes, and the bank refuses to move onto other options to allow the new board to assume control of the account. One suggestion from the bank was to have the ex-treasurer endorse a check for the entire amount of the account to us so we could open another account. I cannot imagine a bank suggesting that an ex-officer be allowed to access the account in this manner and am frustrated that we cannot gain control of the account. Our vendors need to be paid and other financial obligations are not being met. What can we do?
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 Assuming that the organization has kept current its annual filings with the state and/or the IRS, ask the bank if it will accept a copy of the most recent filing as evidence of the current officers and board members. If it will, then the certification of the minutes meant to bring the bank current should also be acceptable.
There is a lesson here, and you already have learned it: it's awfully easy for small businesses and non-profits to skip some of the details as they just try to keep their heads above water. That can, as you've seen, cause problems. The bank should receive notice whenever any signatory on the account is to be changed, and each notice should provide the complete current list.
Published on BankingQuestions.com 12/01/10
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