Changing Required Payment Methods For Safe Deposit Box Rental

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Changing Required Payment Methods For Safe Deposit Box Rental
by Dave McGuinn, BOL Guru
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Question: Presently safe deposit renters can either pay by automatic payment from their checking account or send out a annual notice to pay. We are having problems collecting from the customers that we send out notices. Our bank would like to change its policy and REQUIRE renters to have automatic payment from their account or if they don't have an account with us, originate via ACH. Is there any compliance issue regarding the required method of payment? If we require auto payments, I plan to send out a letter to the renters that currently receive notices that they have until the next annual billing to change their payment method.

Answer: A written authorization must be obtained from all renters who have their annual rent debited from an account.

Trying to convert all existing renters to this new policy could be very difficult.

Starting a new bank policy that requires all new box renters to have their annual payments debited to their account might be easier to implement.

Let me also suggest. . . If you rent boxes to non-depositors, implement a new policy that all non-depositors must pay double the annual rental rate that a depositor pays. This will help you offset the drilling expense from some of the past due boxes that these non-customers don't pay and it usually creates many new deposit customers.

This new rate policy must be disclosed in your service fee brochure before it goes into effect.

If it is implemented properly (according to your existing contract)this new "double rate" structure could also effect your existing renters on their next annual rental due date.

First published on BankersOnline.com 10/7/02

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