We have a customer who insists on putting large amounts of cash in his safe deposit box. Nevermind how we know this, it's a long story and does not pertain to my question.

Nowhere in our safe deposit lease does it say you cannot store cash. Only that you cannot store illegal items like drugs and bombs.

Does anyone else have an issue with cash being stored in a safe deposit box? Couldn't this constitute some sort of tax evasion or money laundering?

And furthermore, how would you approach the customer if this is indeed a serious problem?

Thanks.

Customers are allowed to have cash in a safe deposit box.

Whether the cash is from tax evasion or money laundering depends ....

I would not approach the customer, but you certainly could monitor his accounts.

Would you rat out this customer if they were keeping the money elsewhere?

What abeout the few hundred dollars many keep hidden at home in case of an emergency?

Its not bright, but unless you have firm information as to the source of the cash, I do not think it is worthy to report

Just consider your safe deposit as a really, really, safe mattress...what is the difference?

I agree bbsgrant, it is not worthy to report or confront, especially when you put it that way, it makes sense as to why any customer would be able to place cash in a safe deposit box. Thank you.

The particular customer has exhibited plenty of strange behavior however, and had an account with us but was afraid his ex wife was going to find his account and her lawyers were going to take his money, so he closed his account, and began using just the safe deposit box, however he is only a deputy and not the owner of the box. It's just a lot of strange things happening. He also insists on NOT using the private room we have, and opens the box in front of employees. I won't let any other employee help him now, and continue trying to persuade him to use the room or simply turn my back on him once we have the box out. There is also a severe language barrier involved, which makes it hard to communicate.

whew! some kinda soap opera huh?

The one other thing I'd suggest you consider is his source of funds and whether or not the apparent volume of cash is reflective of his anticipated activity. In other words, would you be suspicious if he were putting the same amount of cash into his checking account?

It's just one of those pesky "know your customer" things!

How you know this is very pertinent to the question. Regardless, the BSA/AML Handbook has a number of examples of suspicious activity that connect cash and safe deposit boxes. A couple are:

* Unusual traffic patterns in the safe deposit box area or unusual use of safe custody accounts. For example, more individuals may enter, enter more frequently, or carry bags or other containers that could conceal large amounts of currency, monetary instruments, or small valuable items.

*A customer rents multiple safe deposit boxes to park large amounts of currency, monetary instruments, or high-value assets awaiting conversion to currency, for placement into the banking system.

There is an "elastic clause" in the SAR filing requirements that makes it abundantly clear that financial behavior that is merely bizarre is reportable:

(iii) The transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the bank knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.

I don't know how you handle your boxes. At ours, we remove the box from the slot and hand it to the customer. They take it to the private room. If your procedure is the same, could you walk it directly to the private room and place it on the table instead of handing it to him.

I don't know the answer to this, but if he is a deputy on the box and not an owner, would you be allowed to contact the owner of the box and ask them if they were aware of the number of times the deputy is accessing the box and ask them if he is doing so at their request? Maybe you'll get lucky and they'll remove him as deputy.

Of course - regardless of the SAR question - why does the bank continue to even maintain this relationship?

Thanks for all of the input gang. Very helpful.

Our bank has recently been bought, and i have a feeling the powers that be are just going to let the new bank deal with issues like this one a month from now. You know how that goes...

Thanks again everyone!

This is not something I deal with often, but if I remember correctly, one issue about cash in safe deposit boxes is insurance coverage. Most homeowner's policies only cover a limited amount of cash, and the bank's insurance may not cover it either. If the cash turns up missing, the bank faces the problem of the customer filing a claim, but there is no proof of how much cash was in the box. Who wins? The customer's insurance is not going to pay, and the bank has deep pockets. You can decide for yourself who loses.

You mentioned a language barrier which may also be indicitive of a cultural issue. For example, my mother, who is in her 80's hides money in her safe deposit box (in case she needs it). She feels it is safer here than in her house and doesn't want it in her checking account.

We have quite a few customers in this type of situation; age related that is.

This is a question that is asked quite often nationwide. It comes up so frequently that I wrote a news article titled Safe Deposit Box Bulging with Cash - SAR Report? Please visit my web site at http://www.sdspec.com, click on the news article link, scroll down, look for this topic and your question should be answered.

I am bringing up an "old" thread because of the relevance of this article. How she'll prove she had the money will be a key. But if she can...

http://www.law.com/jsp/article.jsp?id=1189760565539

An elderly woman's claim that Wachovia Bank was liable for $75,000 allegedly lost when it authorized unsupervised locksmiths to break into her safety deposit box should proceed to trial, an acting Supreme Court justice in Manhattan has ruled.

The bank's failure to check one of its computer databases to see if the box had been rented raises a triable issue of fact as to whether the bank committed "gross negligence," Justice Michael Stallman ruled last week in Glassman v. Wachovia Bank, 115380/06.

I thought SDB were not FDIC insured? So it's in the customer's "best interest" not to keep cash in there.

The customer probably assumes his/her cash is covered.

SDBs are not FDIC insured. The Bank will take the loss if she wins.

That's the reason that some states require bold warnings in safe deposit contracts and (in some states) posters alerting customers that the bank and government do not insure box contents. And why some banks include in their contracts a prohibition on keeping cash (other than collectibles) in the box.