Sounds like this is headed for disaster. Mom can't cancel his card, doesn't want to close account, wants to stay on account, but thinks he is taking the money via ATM leaving items to bounce.
If the bank does not want to strongly suggest she get her own account and let him suffer the consequences of bounced items, and she doesn't see this herself, then she must be planning to keep him going.
Make sure the bank doesn't come up short.