Does covering up multiple bad loans by continually debiting a negative DDA account to apply a payment warrant a SAR?

The DDA never has a positive balance.

Can you provide a little more detail about how these transactions flow? If I'm understanding you correctly, it sounds like someone is drawing on their bounce protection to make their loan payments?

Does the DDA ever get above $0- even if just for a portion of a day (for example, when a direct deposit posts)?

If the DDA has been negative for more than 60 days, do you know why it has been allowed to remain open?

Or, based on my sniff test on your facts, is this about someone in the bank making these payments occur?

SAR - probably not. It is more a sign of improper internal controls. This is something that needs to go to the board of directors through the audit process channel. The board should take action to fire the involved individuals or the regulators will take that action for them and most likely issue prohibition orders for operating in an unsafe and unsound manner.

The DDA account does not have bounce protection. It is generally always in the negative.

The president of the bank is the loan officer and the one making these transactions. I'm just not sure what I can do about it.

Do you have a whistleblower policy or can you talk to your auditors "on the side". If not, an anonymous call to your regulator might be in order. The fact that the President of the bank is involved does not bode well for the outcome once the regulators get involved.

-how long of a period does it stay negative and never a zero balance or positive?
-what activity is happening on account? what is the avg (neg) balance? Just this payment? what deposits?

Just curious to the situation

Is this individual authorized to conduct the transaction on the account/

It tends to be negative for weeks at a time. There might be one day that the account has a positive balance if we return items, but not more than a day every few weeks.

There is a direct deposit into the account that doesn't bring the account into the positive. It is after that direct deposit that the payments will be withdrawn and applied to the loans.

You need to follow Richard's advice soon.

I agree.