We have a bank officer that regularly pickups cash deposits from a customer. Today she has taken several thousand dollars to them. She wrote up a debit to their checking account, had another officer sign it, and has left bank to take money to them. Customer has not signed anything. I question the entire transaction and safety of this for the bank and the officer. I can't say anything about it to her superior because he would totally support her. Any ideas or is this considered ok to do?

I'd say absolutely not. Would you let them take a cash withdrawal in person, at your office and not sign for it? If not, why would you allow it to occur here? And that's just the start of the issues here. What happens when customer takes the cash, calls later and says they were brought $10,000 but the withdrawal was done for $20,000? Can you definitively prove who is lying?

I'm guessing your insurance company wouldn't be thrilled about this either.

My thoughts also, but no one seems to think it is a problem.

Bad business. Wonder how much she and/or her family will get from the settlement after she gets followed out of the bank and harmed, or heaven forbid, killed?

You have multiple issues: personal risk, mobile branch license, insurance, failure to have reasonable internal controls...

Good luck. I know this can be a hot topic when it's perceived by management as low risk and "customer service".

You most likely are also operating a mobile branch and would need proper regulatory approval.

I agree with all of the above...you may also have what might be considered "private banking" by the examiners.

I agree with all of the above as well. I'd put a stop to it immediately.

I would worry more about the security and transaction risk more than the regulatory issues. What happens if there becomes discrepencies in the withdrawal amount and the amount given to the customer.

What if the Business customer runs into financial troubles? He could have someone outside his business waiting to rob the employee when she gets there. Then not only did he never receive the money, but he never signed for the withdrawal either!

What security precautions are currently being taken? Lockbox or locked briefcase at least?

I'm on board with everyone else. Not a good idea.

"yikes" is teh word that comes to mind...

The scary part of this IMO is the culture of the Bank that this is no problem and is defended. You have bigger problems than just this.

I would disagree

I think it is a bad idea - definitely, but in smaller towns, and smaller banks - i would imagine this had been common practice for a long time

But of course, the times they are a changin'

DoobyDoobyDoo - you're absolutely right. In my experience, going from a large bank in multiple states to a small community bank, the ideas and opinions of "security" on every level were totally different at these two banks. While the practice is extremely risky (as everyone has stated above), I imagine many institutions do business this way because "we've always done it for this customer."
It's hard when supervisors and upper management do not see the risk involved (or are just willing to take the risk).
When something bad happens, I'm sure the practice will change.

On rare occasions it may be necessary for cash to be transported by branch employees. Case in point....cash vault neglected to load casino's cash order onto the truck, which has already left for a more geographically remote location. (Can you tell I have done this?) Bank policy requires that two employees make the run, that they call administration when they leave the branch, when they arrive at client's destination, and when they leave and when they get back to the branch. This is a very rare occurrence and if it has become habitual to one client it needs to be addressed.

That's "fine" that small banks think they want to do this but they need to make sure their insurance and bonding covers the practice and that if they are a national bank they have a mobile branch charter approved (or a state that has a similar requirement).

If upper management thinks this is neccessary and low risk, they should be the one going around with the cash in their vehicles...

and what good does calling administration when you leave the bank? if you get robbed - or worse - on the way to the client, that phone call provided nothing. The call is doing nothing but providing a false sense of security to management.

Do you have any sort of whistleblower system in place? I'd be voicing my concerns there. If not, maybe with the head of IA or compliance.

This is a disaster waiting to happen. If you can't get the practice stopped, add it to the risk assessment and take it to your next Board of Directors meeting. Let the B of D sign off on the risk if they are willing. It's the ultimate CYA for something this big. If the B of D freaks out (as they should), the practice will be stopped immediately... problem solved.

However, even if the B of D does sign off on the risk, you still have that pesky insurance/bonding problem and that pesky issue that you are operating a mobile branch without a charter.

I was speaking with someone over the weekend and, in an unrelated conversation, they mentioned an experience at a small bank where an officer was doing just this for a customer. Well, perhaps an early request or two were legitimate but it turned out the officer was stealing from the customer's account.

If the bank insists on doing this, at a minimum have separation of duties. The employee who gets the request should not be the employee who delivers the cash.

Wow, excellent point, Kathleen!