Wondered if anyone could tell us if there is any prohibition against a bank employee picking up and delivering deposits to the bank from merchant and individual customers? Some of our banks are considering offering this as a "service" to their customers, but something about this doesn't seem right. Thank you.

I don't know that there is any law against offering this service, but there is great liability and exposure to say the least. I think the first place you should check would be your bonding and insurance company. I know there are runners who pick up bags for banks from retail stores, which falls into the same category. And, as in the case of ATM servicing, any such service such as you described would probably be best done by dual control.

You should check out the definition of what a bank is first. 12 USC 360 and 12 USC 36 (national) tells us that a branch is where deposits are received or where checks are paid or money is lent.

Interpretations that I recall indicate that if your employee or a bank paid courier goes to pick up deposits, you could be operating an unlicensed branch.

Similar problems have been seen when banks tried to go to schools to provide basic services and education about saving. Often they do not fly, at least officially.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

[This message has been edited by Andy Z (edited 01-28-2001).]

Thank you Andy and Barbara. I did go ahead and check with the state banking department and it appears under our state law, a financial institution is permitted to have a "courier service", but that it must be a third party and the third party must conform to certain requirements. I believe this answered my question.

Angela - just curious - what state?

Many years ago, my bank ran into this problem with a twice-a-week visit to a local nursing home. We had sent branch employees to this location for years - until a competitor ratted us out. The Maryland Banking Commissioner squashed us like a bug.

Barbara --
Angela appears to be located in Columbus, GA

Yes Barbara, I am in Georgia. I am sorry I didn't mean to ignore you, I just didn't get back to reading the posts on this discussion. Our state banking department told us that in Georgia financial institutions can also own a courier service.