We are re-evaluating our safe deposit box procedures and would like to know if other banks will rent boxes to non-customers. Why or why not?

Also, if you do rent to non-customers is the rental amount the same as a customer pays? Could there be any UDAAP issues if a customer pays $20/year but a non-customer has to pay $50/year?

Why not:

* If you are short on boxes in any facility, then it makes sense to reserve them for your customers.

* The fact that a customer banks somewhere else, but wants to open a box with you borders on being a "red flag;" i.e. it simply doesn't make sense unless he's trying to hide from someone. (People usually hide from the IRS, creditors, or their spouse.)

* With no other connections, it's more likely that you will lose contact with this customer and he will simply abandon the box, causing you significant expense. (You could test this theory by reviewing boxes abandoned in recent years; i.e. did they have other relationships?)

* Safe deposit boxes are a "loss leader" for most banks; renting them to non customers doesn't change that equation.

* The most cost saving technique in safe deposit administration is to require the customer to have a checking account and require that the rent be debited to the account; i.e. there are no billing and collection expenses.

* Any BSA related "due diligence" information is based entirely on what the customer told you - you don't know anything else.

You are not required to treat customers and non customers alike.

We "inherited" a bunch of safe deposit boxes (from years and decades ago) with no other connected accounts. A lot of them never pay and must be drilled and eventually escheated. Lots of time and cost involved.

We now only allow a new SDB rental by a customer with another account here, and we strongly encourage auto debit from the account. They get a significant cost savings (about 40% off) if they do auto-debit. We will still mail them a bill if they pay the higher fee, but most people choose auto debit now. Occasionally we still get non-customers asking to rent boxes and we encourage them to open up a connected DDA account and do the auto debit. We offer an everyday savings or everyday checking with a minimum $100 deposit, and we've gotten a lot of new DDA customers this way. In my area, the majority of banks don't offer SDB anymore. We have a huge vault with lots of empty boxes.

Can we require auto debit for the safe deposit rental fee or do we have to provide the customer with payment options?

Unless your state has a prohibition, you can indeed require payment for safe deposit leases via auto-debit. Policing the requirement may be a hassle, but it does help you discover who's closed out an account (and therefore a potential candidate for an order to vacate the box if rent isn't paid).

OK, Thanks.