|
|
|
 |
Compliance Gurus
Lending Gurus
Security Gurus
Marketing Gurus
Technology Gurus
eBanking Gurus
|
Safe Deposit Box Liability
by: Ken Golliher, BOL Guru
BIO AND CONTACT INFO
Question: I have been hearing about bank's liability for boxes when there is no disclosure about boxes not being insured by the FDIC or the institution?
Answer: The only federally required disclosure relating to safe deposit boxes is under the GLB privacy provisions. If someone advises you to give a disclosure regarding the absence of deposit insurance, ask how he or she reached that conclusion. You either need a legal citation or a clear expression of personal opinion.
In a separate post, Andy correctly points out that some lawsuits following 9/11 are based on plaintiffs' claims that they did not know their contents were not insured. Your institution needs to evaluate the issue for what it is at this point: claims made in a lawsuit. Should the courts decide that such a disclosure is necessary, it will be under state law or the law of the contract, not federal law.
Personally, I think the courts will conclude that it should be obvious to anyone that "deposit" and "share" insurance does not apply to the unknown contents of a safe deposit box. Several points support that assertion, among them is the fact that the FDIC has shown some fastidiousness in requiring banks to label uninsured products, but "The Corporation" has never concluded that consumers might reasonably believe the contents of their safe deposit box are insured.
However, if your institution's risk assessment concludes otherwise, some modern contracts available from vendors do specifically point out that it is the renters' responsibility to maintain insurance on the contents. Many institutions conduct safe deposit box operations using a potpourri of contracts, some of which are hopelessly out of date. If this issue serves as their impetus for a wholesale update of their agreements, I am all for it.
First published on BankersOnline.com 5/20/02
Home | Compliance | Lending | Operations | Security | Marketing | Technology | eBanking
BOL Archives Privacy Policy Important Disclaimer Recommend This Site ! Contact Us
BankersOnline is a free service made possible by the generous support of our
advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all
banking professionals. Support our advertisers and sponsors by clicking
through to learn more about their products and services.
|
|
|
Print Friendly!
Email This Article!
Discuss NOW!