Our customer had previously given his online banking login & password (access device) to his spouse, but they are now parting ways. Today he told us that his spouse used online banking to transfer $6,500.00 from his account to her account last week. Both accounts affected are owned individually, and both accounts are with our institution. Our disclosure says that online banking transfers are authorized if conducted by "you or someone you have authorized by giving them your log-in information even if that person exceeds your authority". My understanding is that this language is consistent with Reg. E Staff Interpretations 2(m)2.

-Do you agree that this would not be an unauthorized transaction because the login info had been given to the spouse, and the transaction happened before our customer gave us notification that the spouse was no longer authorized?

-I’m thinking the transfer would not be SAR reportable because our customer had given his login info to the spouse. Any thoughts?

This has become an issue between them and does not impact the bank.

He needs to discuss it with the lawyer who is representing him in the divorce, but I don't think he will be able to do anything about it either. From experience, sometimes there just isn't any way to get someone else to pick up the tab for a mistake that you made.

I also don't see this as a SAR issue, he provided her the information to enact the transfer, he admits he did it. The "S" is SAR stands for "suspicious", not "stupid".

The "S" is SAR stands for "suspicious", not "stupid".
That's awesome!

From an operational stand point, I'm curious if they both were single accounts, how the transfer was able o be done.

Our online banking platform only allows transfers between accounts with a common ownership role.

For example, I could transfer money between my joint account and my single account, but I could not transfer money to an account that is in my son's name only.