posted 06-21-2001 09:26 AM           

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I have always understood that holding cash in a safe deposit box is illegal, yet I haven't been able to find any references to this. Can anyone point me in the right direction? What is the financial institutions responsibility if it is aware a customer is depositing large sums of cash in a safe deposit box?

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posted 06-21-2001 11:52 AM            

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The first thought that comes to my mind would be to file an SAR. It's a tricky call, on the one hand you could have someone who is trying to store cash obtained from illegal sources. On the other hand, you could have someone who is using a safe deposit box instead of their mattress.

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posted 06-21-2001 12:02 PM            

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Your safe deposit contract may prohibit boxholders from placing cash in a box, but I've never heard of a law. As to your responsibility, this question should not arise because bank employees should have no idea what's in a customer's box. Finally, as to the filing of a SAR, you must have some crime in mind before filing. It's not illegal to have cash and lots of ordinary people squirrel it away for a rainy day. If you file recklessly, the customer will be able to sue you under the RFPA.

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posted 06-21-2001 01:16 PM            

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There may be rules issued by the Secret Service. That agency regulates currency in some interesting ways. If there is a safe deposit hoarding rule, that is probably where it would be.

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posted 06-22-2001 04:57 PM            

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First, there are no laws, per se, prohibiting the storage of currency in a safe deposit box. There are, however, the obvious rules against laundering money. If the box is used to facilitate laundering money, and you discern this, file a SAR. A frequent flyer in this area is the customer who visits the box frequently (several times a week) and proceeds directly to the teller line to deposit $5,000 - $9,900 in cash. If this pattern isn't appropriate for your customer (I can't think of a legitimate customer profile it would fit!), you've got suspected laundry and suspected structuring.

Second, many banks employ contract language forbidding the storage of cash in their safe deposit boxes, because of the insurance problems. Customers need to be reminded, of course, that the bank's coverage does not cover the contents of customers' boxes.

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posted 06-28-2001 12:24 PM         

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I remember being told (back in my branch days) that it was technically illegal to store cash in a safe deposit box. Maybe it was an insurance thing, or an IRS thing. I’m not sure, but I remember the branch manager telling me that.

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posted 06-28-2001 12:42 PM            

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I'm going to submit this inquiry to our BOL Guru Dave McGuinn. Since he's taught safe deposit issues all over the country, he's very familiar with the laws in each state. I'm with Richard, John, and the others who have posted above in believing there is no law (unless it's an obscure state law). Many standard safe deposit contracts, however, as noted, do prohibit storing cash.

The primary reason for such a prohibition is to limit the bank's liability in the event of a claim of mysterious disappearance or unauthorized access. If the customer alleges that a large amount of cash has been removed from his box in an unauthorized manner, the bank can point to the contract provision prohibiting the storage of cash in the box and can attempt to disclaim liability for the loss because the customer breached the contract.

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