Most CMA chapters use a business checking account, not a personal one

If your chapter is registered as a nonprofit organization or a formal association, your bank will require a business account. Personal checking accounts have terms of service that prohibit commercial activity, and most banks will freeze the account if they discover it is being used to collect dues, pay vendors, or hold chapter funds. A business checking account is the legal and practical standard for any CMA chapter that collects money from members or spends money on chapter activities.

The specific account type depends on how your chapter is legally structured. A chapter that is incorporated as a nonprofit corporation will need to open the account under the chapter's legal name and provide articles of incorporation. A chapter that operates as an unincorporated association may be able to open a business account under the chapter name with bylaws and a resolution from the board instead. Either way, the bank will ask for documentation proving the chapter exists and is authorized to hold funds.

Key Takeaways

  • Personal checking accounts prohibit business use and banks can close them if they detect chapter activity like collecting dues or paying bills.
  • Business checking accounts require proof of legal structure — either articles of incorporation for a nonprofit or bylaws and a board resolution for an unincorporated association.
  • The account must be opened in the chapter's legal name, not in an individual officer's name, even if one person manages the money.
  • Most banks require two authorized signers on a CMA chapter account to prevent fraud and may support accountability for chapter funds.
  • Some banks offer accounts specifically for nonprofits or associations at lower fees than standard business accounts.

Why personal accounts do not work for chapter finances

Banks classify personal checking accounts as for individual use only. The account holder is expected to deposit their own income and pay their own bills. When a bank detects that money is flowing in from multiple people (member dues) or flowing out to vendors and organizations (chapter expenses), the account violates the terms of service. The bank may freeze the account without warning, hold the funds, and require the account holder to explain the activity.

This is not a gray area. Banks have automated systems that flag accounts receiving regular deposits from many sources or making regular payments to businesses. Even if the amounts are small, the pattern triggers review. A chapter that uses a personal account risks losing access to its own money at the moment it needs to pay for an event, reimburse a member, or cover an obligation.

What documentation banks ask for when opening a business account

The bank will ask for proof that your chapter is a real organization with the authority to hold money. For a chapter incorporated as a nonprofit, bring the articles of incorporation filed with your state and a copy of the IRS information letter (Form 1023 or 1023-EZ approval) if the chapter has applied for tax-exempt status. If the chapter is not yet incorporated, bring a copy of the chapter bylaws and a board resolution authorizing the account.

The bank will also ask for identification of the people authorized to sign checks and make withdrawals. Most banks require at least two authorized signers on a nonprofit or association account. Bring government-issued ID for each signer. Some banks ask for a list of board members or officers; others ask only for the signers. Call ahead to ask what your bank needs, because requirements vary.

The difference between opening an account in the chapter name versus a personal name

The account must be opened in the chapter's legal name. If your chapter is incorporated, use the exact legal name from the articles of incorporation. If your chapter is an unincorporated association, use the name under which the chapter operates and is known to members. The account should never be opened in the name of the treasurer, president, or any individual officer, even if that person is the only one who will use it.

An account in an individual's name creates legal and practical problems. If the officer leaves, the chapter may lose access to the account or have to prove it owns the money. If the officer faces a personal lawsuit or bankruptcy, the chapter's funds could be at risk. If the officer dies, the account may be frozen as part of their estate. A business account in the chapter's name protects the chapter's money and makes clear that the funds belong to the organization, not to any person.

Nonprofit and association accounts versus standard business accounts

Some banks offer accounts specifically designed for nonprofits or associations, with lower monthly fees or waived fees for certain services. These accounts often come with features like free check printing, no minimum balance requirement, or reduced fees for wire transfers. Standard business accounts may charge monthly maintenance fees of $10 to $30 or more, plus per-check fees if you write many checks.

Ask your bank whether it offers a nonprofit or association account tier. If your chapter is incorporated and has a tax-exempt information letter from the IRS, you may also be able to open an account at a credit union or a bank that specializes in nonprofit banking. These institutions often have lower fees and staff who understand the specific needs of organizations. Compare what a few banks offer before deciding; the difference in annual fees can be significant for a small chapter.

Who can sign checks and make withdrawals

The bank will ask you to name authorized signers when you open the account. Most banks require a minimum of two signers for nonprofit and association accounts. This means two people must sign every check, or the account must have a rule that any check over a certain amount requires two signatures. The purpose is to prevent one person from moving chapter money without oversight.

Typically, the president and treasurer are the two signers, though your chapter's bylaws may specify different officers. The bank will require government-issued ID from each signer and may run a background check. Once the account is open, you can change the authorized signers by submitting a new resolution from the board and updated ID. If a signer leaves the chapter, notify the bank when ready and remove them from the account.

What happens if your chapter currently uses a personal account

If your chapter has been using a personal account, you should open a business account as soon as possible and transfer the funds. Contact your bank and explain that you are moving the chapter's money to a proper business account. The bank may ask questions, but the move itself is straightforward — you can transfer the balance in a single transaction.

Once the business account is open and funded, notify all chapter members and vendors of the new account number. Update any automatic payments or recurring transfers. Close the personal account after you have confirmed that all chapter money has moved and no outstanding checks are pending. Keep records of the transfer for your chapter's files.

Frequently Asked Questions

Can a CMA chapter use a savings account instead of a checking account?

A savings account is not practical for chapter operations because you cannot write checks or set up automatic payments from a savings account. You would need a checking account to pay bills and reimburse members. Some chapters keep a small savings account for long-term reserves and a checking account for regular expenses, but the checking account is essential.

What if the chapter does not have a tax-exempt information letter yet?

You can still open a business account without the IRS letter. Bring the articles of incorporation (if incorporated) or bylaws and a board resolution (if unincorporated). The bank may ask when you plan to explore for tax-exempt status, but most will open the account without the letter. Once you receive the information letter, you can provide it to the bank to see if you may have access to for a nonprofit account tier with lower fees.

Can one person be the only authorized signer on a chapter account?

Most banks will not allow it. Their policy requires a minimum of two signers for nonprofit and association accounts to may support accountability. If your chapter is very small and has only one officer, you may need to add a board member or trusted volunteer as a second signer. Some banks may make exceptions for very small organizations, but this is rare.

What if the chapter's treasurer wants to use their personal account to pay chapter bills and get reimbursed later?

This creates legal and tax problems. The treasurer's personal account is not the chapter's account, and mixing personal and chapter money makes it hard to track finances and file accurate tax returns. It also exposes the treasurer personally if there is a dispute. A business account in the chapter's name is the only proper way to handle chapter money.

Do we need a separate account for each CMA chapter location or activity?

No. One business account in the chapter's name can hold all the chapter's money and pay all chapter expenses. You do not need separate accounts for different activities or locations. However, you should track income and expenses by category in your accounting records so you can see where money is coming from and going to.