The other day I was asked "Is it illegal for a customer to keep cash in their safe deposit box?"

I said No, it is not, and truthfully, we are not supposed to know the contents of a customer's box. However, some did not believe me.... so I told them I would post a question. We are a Texas bank, and I have looked at Chapter 59 of the Texas Finance Code.

It is not illegal unless you have reason to believe or knowledge of a crime having been or is being committed. Example: money laundering; money from ill gotten means Bank robbery from another place, ect.

Many elderly people from the "Depression Era" don't trust deposit's in the financials, but do trust Cash and safe deposit boxes. Generally, Federal & State Law protects the honest Safe Deposit Box users rights to privacy as long as its on the up & up. You should have a policy of "Don't ask Don't tell" unless the activity is reasonable suspicious from the facts know. Then file a SAR or call the local Law.

LOL... so much for being anonymous!!!!

Well, since you're not supposed to know what's in your customer's box, how would anyone know? (Ask them that, just for kicks....)

What if a customer comes in with $20,000 in cash, deposits it into a savings account and later (few days or even weeks) comes back withdrawls the $20K and puts in his/her safe deposit Box.

Would you file SAR on the deposit? And if you know they withdrew the $20K just to pretend or actually put into a safe deposit box, wouldn't that be suspicious too?

There would have to be more to the story before I would reach the SAR level.

Suspicious Activity Report - the key is a reasonable suspicion that the activity is a reportable event. As long as made in good faith without any malice toward the suspect. It doen't mean you should become a detective or nosey about what you observe. Let the professionals (Feds) find out what's going on if they ever get around to it?