safekeeping

Our bank still issues paper certificate of deposits. When our retired customers go south for the winter and they have a COD that will mature while they are gone they endorse the COD and leave it with our branches where they are locked in the vault until maturity. They are then redeemed and a new COD issued. The new one then is kept in the vault until the customer returns to pick it up. This is being done at several of our branches. I can see potential problems and liability in this process. Should we have them sign something that reduces the liablity and tells us that we are authorized to do this? Should we keep them centralized in one office? We do this when we are holding a COD as collateral on a loan. This is somewhat the same issue.

I don't feel comfortable with doing this but management wants to do this as a service to our customers.

We have the same issue for a few customers. We were not having them sign safekeeping agreements but we are now requiring that. I suggest you keep them in a safe deposit box under dual control. The keeper of the "customer" key should not have access to the attendant key.
It is both a risk and a service. I can see why we do it. I just don't like the risk that goes with it.

We do not allow (or try not to allow) signed CDs to be kept in safekeeping.

We have had a few people request that the bank hold their cd for them while they go south. Retail management decided to leave it up to the individual branch managers as to whether or not to do this. We're establishing procedures for a signed receipt that includes specific instructions for the cd at maturity as well as dual control.

I'd prefer if they just don't keep them...but I got over ruled.

Why do these customer not have auto-renewal CD's? Besides - the paper CD is meaningless and establishing all these controls are not worth the trouble. Just don't allow them to sign the redemption order and deliver it to the bank ahead of time.

Some of our CODs have promotional rates and roll over into a shorter term with a lower rate. The customers are wanting to keep them from automatically rolling over into the shorter term. They want to keep the same higher rate and longer term. Therefore the COD must be redeemed and a new certificate issued. Thus the issue with leaving them with the branch personnel. And I believe some are signing them before they leave them