Increasingly, customers note that they are unable to obtain Medallion signature guarantees (MSGs) from financial institutions such as Bank of America.  Common reasons customers need MSGs include transferring account ownership, redeeming shares to a new address or third party, changing authorized signers, or changing 529 plan beneficiaries.  Financial institutions may decline to issue an MSG for the following reasons:

• The institution no longer participates in the Medallion program.
• A free-form letter was submitted versus a form that outlines the intention of the customer and provides a place for an MSG.
• The issuer does not deem the transaction appropriate (i.e., it is non-financial) for providing an MSG.

Recognizing the impact of this development on the ease of doing business for many customers, NQR clients have taken, or are considering taking, steps to address the issue including:

• Conducting an internal review of existing MSG requirements and associated risk to screen situations where an MSG may not really be needed.
• Coaching call center representatives to uncover the reason the bank will not provide the MSG by asking whether the issue is due to the lack of documentation required by the bank, if a form is required, or whether the transaction is non-financial in nature. Sometimes representatives will conference call the bank to determine the underlying issue, if appropriate.
• Making processing exceptions if supporting documentation is provided, such as a certified copy of a death certificate or trust document.
• Escalating the issue to the compliance department or senior leaders to determine whether an exception can be made if no other solution can be derived.
• Suggesting that the customer try another bank or broker/dealer firm to obtain the MSG.
• Sending the customer the appropriate form to use in lieu of a free-form letter.

NQR will continue to monitor industry developments and document our clients’ responses to challenges with regard to MSG requirements.