A man walks into his credit union…

While searching for inspiration for an article to write I walked into my multi-branch, multi-billion-dollar credit union to open an estate account. I’ve recently lost a sibling, and I’m a fiduciary, serving as a trustee of a trust and the executor of an estate. Because of poor documentation, I had to take on the added role of executor for assets not included in the trust. Hello probate court.

So, I walked into my credit union to open an estate account to hold a soon-to-come distribution of five hundred-thousand dollars. I had an appointment.

Simple task, right? I knew what to bring with me to confirm the facts and the legal authority to proceed. I had the court’s certification showing the legal existence of the estate. I had a death certificate. I had an IRS provided tax identification number for the estate. And I had a paid invoice showing that I held a court-ordered fiduciary bond.

Trust and estate accounts at credit unions are growing but, unsurprisingly, the member service representative was unfamiliar with the requirements to open such an account; but not a problem because the task for opening trusts and estate accounts at this credit union is done centrally at the administrative office. I’ve seen the same set-up elsewhere. Makes sense.

The branch staffer faxed over copies of all I had brought. The documents covered all the bases. I expected to walk out in short order with my new estate account. Until I didn’t.

The manager for the staff responsible for handling this type of account opening informed me, through the branch staffer, that the credit union could not open the account because the annual renewal on the bond was due in ten days. I was told that they wouldn’t open the account today, and if they did open it, they would be forced to close it when the renewal date arrived—assuming I had not provided a waiver to the bond or evidence of renewal payment. I couldn’t help but think “this makes no sense” but they were firm—I had to have an active bond in place. Still, I couldn’t imagine a scenario where the credit union would close an estate account the day the bond expired. Yet, they said they would.

Everyone was polite and friendly. The branch manager joined the conversation and left for a moment to “research something.” He concurred with the admin staff’s decision and asked me to return when I corrected the situation.

The credit union staff helping me that day believed the fiduciary bond had an expiration date, and they thought that mattered. But . . . everything they told me was wrong. And if you are opening and hosting trust and estate accounts you should know the facts. More importantly, you should cling to the goal of meeting your member’s need and make sure you know what you are doing before you deny service.

I returned home, emailed my attorney, and learned that a court ordered fiduciary bond is “continuous,” meaning it doesn’t expire on its own but remains active until the court releases the fiduciary from their duties and the bond obligation is discharged. 

That annual renewal payment on the fiduciary bond (trustees and executors open this type of bond) that the manager was focused on is meaningless. Payment is irrelevant to the credit union’s interest, or any party other than the court. And the court will not release the bond and complete the estate process without all business being done legally.

The first reason is because they don’t understand the differences in types of surety bonds, which includes fiduciary bonds. Other types of surety bonds have terms and expiration dates; or can be cancelled by one or more of the involved parties. But it’s not true for fiduciary bonds (bonds issued for trust and estate business) and my credit union should know that.

I didn’t know it—but I don’t provide trust and estate accounts. They do!

The second reason they got it so wrong (and this is the teachable moment) is because they lost sight of the goal—to complete the task to deliver the member service. And that’s why I want to share this experience.

When the credit union’s branch staff was explaining to me why “they could not help me, could not open the account” I couldn’t help but think “this makes no sense.” I couldn’t imagine a world where the credit union would close an estate account because a fiduciary bond had expired. I shared my disbelief. The branch staff thought it odd as well, but they put their trust in the manager on the other end of the line AND they gave up on serving me.

At one point the branch manager left the room to “research it”, so he said. I don’t know what he looked at, but I do know it took me one minute online at home to learn the facts that would have changed everything in the moment.

So why isn’t the credit union staff asking the same question? Why are they simply defaulting toward service failure? Why didn’t somebody put more weight on “service” and “look it up?” Why did they fail to question in pursuit of the goal? Why did they simply choose to “fail in the moment” and send me out the door unfulfilled?

As I see it—“they are too comfortable in their processes, and too unwilling to question.” They’re not alone in this. Too often, we “accept the answer” without question. Now I admit my willingness to question “accepted knowledge” has gotten me in trouble, more than once (actually, a lot). But if we are to succeed at member service, we must be willing to question process, and to question co-workers, managers, executives when process gets in the way of success.

It shouldn’t be to satisfy each other. It should be to satisfy the member; and to pursue that goal until it is met by capturing more or better information; or fixing a broken process. And the goal to serve should never be pushed aside when questions remain unanswered.

I love credit unions, even when they make it hard to do so. Sometimes smiles and cordial behavior just aren’t enough. You need to do the work and stay true to the goal.

BTW, my credit union isn’t alone. My lawyer tells me banks and credit unions often get confused on this subject, so here’s some information on the topic of fiduciary bonds. I hope you share it in your credit union. I’m going to share it with my credit union and, hopefully, they’ll open the account.

In the USA, a court-ordered fiduciary bond guarantees a fiduciary's faithful performance, protecting beneficiaries and creditors from financial harm if the fiduciary breaches their duty, with the surety company covering any losses. 

Court order: A court may order a fiduciary bond to be posted, requiring the fiduciary to obtain one from a surety company. 

Fiduciary obligation: The fiduciary is legally obligated to obtain and maintain the bond, and to act in the best interests of the beneficiaries. 

Surety company role: The surety company guarantees that the fiduciary will act faithfully and responsibly and will cover any financial losses resulting from the fiduciary's actions or omissions. 

Protection for beneficiaries: If the fiduciary breaches their duty (e.g., embezzlement, fraud, or mismanagement of assets), the surety company is obligated to cover the damages up to the bond amount. 

Claim process: If a beneficiary or creditor suffers a financial loss due to the fiduciary's actions, they can file a claim against the bond, and the surety company will investigate and potentially pay out the claim.