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Financial Services Marketplace

Ensuring Compliance for Reserve Investments

It's a familiar story: a board member opens a bank account for an introductory rate, and fast forward, the new board can't access the funds. The consumer account creates chaos, and worst of all, the community learns they are out of compliance. No one is happy.

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Our platform delivers automatic compliance and happiness for all. Compliance is not just a box to check—it’s the foundation for a well-governed, financially secure, and trustworthy association that protects its owners, its leaders, and its future. By proactively investing reserves in accordance with board-approved policies and reserve studies, you are able to fulfill fiduciary responsibilities while creating clear, measurable value for your community. 

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What’s Required for Reserve Investment Compliance

1. The Right Account Type

• Must be a commercial account, not consumer or personal.

• Tied to the community association’s legal entity, not an individual.

• Must align with association banking regulations and reserve policies.

Many banks offer consumer CDs to associations without realizing it’s the wrong structure. All bank accounts must be opened under the association’s legal entity name and EIN—never an individual’s name. This protects association funds from being treated as personal assets and enables transparency and accountability.

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2. The Right Account Setup

• Fully titled in the association’s legal name.

• Includes federal tax ID (EIN).

• Complies with management agreement and board authority requirements.

The program eliminates setup and account opening errors that can trigger compliance issues.

3. The Right Capabilities

• Allows for digital multi-signature approval flows.

• Includes full visibility and reporting for boards and managers.

• Built specifically for association reserve investing, not generic consumer tools.

With our Reserve Cash Management Program, all accounts are FDIC- and NCUA-insured, fully auditable, and purpose-built for community associations.

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Why Proper Bank Account Management Matters for Your Association

• Compliance with State Laws & Governing Documents: Most state condo and HOA statutes (e.g., Davis-Stirling, Condo Acts) require dedicated bank accounts for association funds. This ensures compliance with legal and fiduciary responsibilities and follows requirements in the association’s CC&Rs, bylaws, and policies.

• Proper FDIC Protection: Commercial accounts can utilize tools like ICS (Insured Cash Sweep) or CDARS to protect balances above the $250,000 FDIC limit. This safeguards reserve and operating funds and provides peace of mind for owners and Board members.

• Robust Internal Controls: Commercial bank accounts enable multiple authorized signers, dual-authorization and segregation of duties, and detailed transaction and audit trails. This reduces the risk of fraud and errors and helps maintain D&O insurance protection.

• Clear Record-Keeping for Audits and Reviews: Commercial accounts provide robust statements, online access, and integrations with accounting platforms. This supports annual audits and review requirements and enables accountability and long-term financial planning.

• Compliance with Fiduciary Duty and Regulations: Board members have a fiduciary responsibility to protect association assets. Improper use of consumer accounts can jeopardize insurance coverage, trigger regulatory scrutiny, and expose boards to legal or personal financial liabilities.

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Risks of using Consumer Bank Accounts for Association Funds

1. Breach of Fiduciary Duty - Using personal accounts can be viewed as negligence or misconduct. Board members may face personal liability for financial mismanagement or loss

2. Improper Ownership and Control - Funds in a personal account could be treated as an individual’s property. If a board member resigns or becomes incapacitated, the association may lose access or face frozen funds.

3. Non-Compliance with Laws and Bylaws - Violates many state laws and governing documents requiring transparency and proper fund management. Could result in legal penalties or audits

4. Inadequate FDIC Protection - Funds may not be covered by FDIC insurance if the account isn’t titled under the association’s name and EIN. This can lead to uninsured losses over $250,000.

5. Lack of Transparency and Accounting Tools - Consumer accounts don’t support the reporting or sub-accounting needed for community associations, leading to audit issues, poor record keeping, and owner distrust.

6. Legal and Insurance Exposure - Improper fund management can invalidate insurance protections (e.g., D&O or fidelity bonds), and expose board members to personal lawsuits.

Always open association bank accounts under the association’s legal name and EIN, using a commercial banking platform designed for community management. These accounts offer the safeguards, permissions, insurance, and oversight mechanisms necessary to ensure sound financial governance. Our company’s internal financial services program offers nationally competitive rates at banks that focus primarily on the unique needs to community associations.

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The Financial Services Marketplace ensures compliance

• Managing a marketplace of financial institutions that cater to community requirements.

• Only offering insured products and commercial reserve accounts.

• Ensuring proper master signatures, titling, and EIN association.

• Requiring no manual setup by managers or boards, avoiding human error potential.

You shouldn’t have to wonder if you’re out of compliance. With our platform, compliance is automatic, so you are not left wondering if you have access to your reserve funds and instead can focus on securing your financial health.