Board Member SSN Opening Accts

Jenna,

Did you do an online search for the facts?

Ask your silly management company whether the promised interest rate is backed by FDIC insurance. If not, terminate this management company. Directors and officers of a HOA (a nonprofit corporation) have a fiduciary duty not to take risks with reserve and operating funds like the risk that I think your silly management company is proposing.

I wouldn't give them my SSN#. It's not worth it in my opinion. The HOA doesn't need an owner's SSN #. The management company doesn't need any members SSN#. I'd look into different option for investment accounts. Although I don't really think a HOA needs one unless they are large and need to keep a large capital fund avaialable..

I would never ever volunteer to be a signatory for the HOA on anything. Only signing I did was for our checks and our bank did not require my SSN# to be a signatory. Just proof I was elected.

Being from Florida glad you did not eat me.... Saying Bite me to a Floridian gives new meaning.

Sorry but NOT from Alabama... I would NEVER EVER give my SSN# to ANYONE who has no right to it. A HOA is NOT one of those entities. Otherwise your a special kind of stupid and get what you deserve from doing it.

Alabama and Florida share a lot of DNA.

Not when transplanted!

There is no reasoning to give anyone my SSN#. This is why you get ripped off, have low credit scores, and identity stolen. All for what? So the HOA can use it to invest money? Nope.

I agree George... If we had a MC approach us with this idea, it's a hard pass. Makes no sense to have a member provide their SSN# for anything the HOA does.

I think you're proving your point.

EIN or Employer Identification Number is different than the SSN# or TIN (Taxpayer Identification Number). Banking institutions (unless you happen to be from Alabama) require that real people provide real ID, in this case SSN#. This Act came about from 9/11 and it's main purpose was to curb money laundering from terrorist organization, (which may or may not be an industry).

This is consistent with what I experienced when I opened a new business account to hold some of our reserves. They make you jump through an amazing number of hoops.

As for the more important question about an investment account:

One of the few things nearly everyone agrees about is the board's fiduciary duty when managing HOA money. Most interpret that to mean that the board should only choose investments when there will be no loss of principal and the funds will be available when needed. This means you're limited to things like money market accounts (not money market funds, those are different), CDs, Treasury bills, and bonds that are purchased as new issues and held to maturity. Unfortunately our low interest rate environment can tempt people to take greater risks with their money. Don't do it, you're asking to be sued.

Investment accounts can give you access to a wide range of financial products, most of which are NOT suitable for HOA funds. Stocks, mutual funds, ETFs and REITs can all lose principal. Brokerage firms may offer CDs, but these are brokered CDs that trade on the open market and that may lose principal. You also need to read the fine print if you buy CDs from a bank. In the past, any penalty for early redemption of a CD was limited to a reduction in the amount of interest. However, I've seen reports of some banks actually reducing principal as well. So you need to understand what you're buying.

Jenna

If you management company is handling your associations investments (Reserves) you have more potential problems than giving your SSN to them. When a MC goes bad, the first thing they do is steal any money from the association they can steal. Bye bye Reserves.

Your BOD should be controlling Reserves/excess money, not the MC.