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#213961 - 07/26/04 02:05 PM Re: Forcing Employees to bank at your institution
Anonymous
Unregistered

I totally agree about this being a saftey issue as well. I'm also concerned regarding Privacy. I had to go to a teller this morning and take out my pay for two weeks. Now, she knows how much I make. It's very frustrating when people aren't flexible.

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#213962 - 07/30/04 08:47 PM Re: Forcing Employees to bank at your institution
Anonymous
Unregistered

If a bank wants its employees to bank with them then why not offer incentives. My bank gives its employees free checks and free checking as well as other incentives for doing business with the bank. Instead of forcing the employees hand and making for an unhappy environment reward them for doing business with their bank.

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#213963 - 07/30/04 09:00 PM Re: Forcing Employees to bank at your institution
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 20,015
Pulling people out of the ditc...
most employee accounts are tagged as "do not close" so what would stop an employee from writing a check for the amoutn of their check ech pay period and depositing it in a bank of their choice? Nothing says you must bank where you work, they are just saying here is how you get paid. Would a ZBA not work?
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#213964 - 07/30/04 09:16 PM Re: Forcing Employees to bank at your institution
Anonymous
Unregistered

We don't want employee accounts! We are located in a large metropolitan area and have arrangements with two major correspondent banks to offer free accounts. (The employee can choose to avail themselves of the free account offer or we will direct deposit to any other bank of their choice.) By doing so you eliminate: increased teller lines due to employee transactions, payroll information leakage, water cooler gossip about an employee's spending habits, political or charitable contributions, medical bills etc. You also eliminate the messy situation of handling employee overdrafts. Eliminating employee accounts also closes one avenue of fraud and reduces the internal audit/supervisory reviews that are necessary with such accounts.

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#213965 - 08/03/04 12:20 AM Re: Forcing Employees to bank at your institution
HRH Dawnie Offline
Power Poster
HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
I must have lost my mind some time today because I find this thread confusing as all get out

First of all, cash? Or are they paying in check form to those not being paid electronically. They're not really going to mail out or deliver large envelopes of cash are they? Someone has to be speaking tongue in cheek here.

And requiring direct deposit from the bank when it offers this payroll option to only be deposited into your own bank...well heck it makes sense. Encourage your employees to enjoy the convenience of direct deposit and have their accounts here....ummm that's a no brainer. What bank wants their employees writing checks out in the community from another bank? In my mind, if you won't bank with your employer you're a great advertisement for why no one should bank with them. If they're so bad you won't bank there why should a client?

As to the last post, again, you want senior staff writing checks on Wells Fargo stationary while working for you? I sure don't. I'm dang proud of where I work and I bank here because of this. We have procedures in place that protect us from our spending habits, etc. being gossiped about. Rules about overdrafts, rules about sharing payroll information, etc. Every bank I've worked at has. Most even white out (electronically) the deposit amount on employee deposits for this protection.

Perhaps some of the banks responding are full of crooks But we actually have some rather good clients who are also bank staff. We find the crook a rare commodity and assume we WANT our staff's accounts, both DDA and lending. Why not?

You're passing up on a huge amount of business by not wanting your staff to bank with you. You're also tellling the community through their check writing on OTHER bank's stationary, that they've found a "better" bank than yours to deal with. I'm glad we don't force our staff to issue this message in our community!
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#213966 - 08/03/04 01:26 PM Re: Forcing Employees to bank at your institution
Jokerman Offline
10K Club
Joined: Nov 2003
Posts: 12,846
Quote:

And requiring direct deposit from the bank when it offers this payroll option to only be deposited into your own bank...well heck it makes sense.




Dawnie, I agree with you about the message that it sends to encourage your employees to bank elsewhere, but I'm not sure you picked up on the fact that it is a Reg E violation to require them to accept direct deposit to any one institution (including your own).

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#213967 - 08/03/04 07:34 PM Re: Forcing Employees to bank at your institution
EdOils Offline
Platinum Poster
EdOils
Joined: Jan 2004
Posts: 555
Louisiana
Dawnie, I agree with you about the image and having the controls in place to protect against crooks, gossips, etc. However, there are many reasons to not bank where you work. As someone who banks elswhere, I have several.

First, as the auditor, I review employee accounts. I would have to have someone else review mine, if it was here.
Second, we have only 2 branches and one ATM in town (not near my house). The other bank has ATMs on nearly every street corner. They also have free checking, online banking, and bill pay. We don't have bill pay.
Third, I have known a few people who were fired for excessive ODs. I haven't bounced a check since college, but I'd hate to take that chance if I was running close.
I could continue, but I think I've made my point.

Don't get me wrong, I love where I work and I would not work at the bank who holds my money for me. Sure, I'm embarrassed when I'm wearing my bank logo shirt and I whip out the other bank's check card, but it is short lived.
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You gain education by reading the fine print. You gain experience by not.

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#213968 - 08/03/04 08:16 PM Re: Forcing Employees to bank at your institution
Anonymous
Unregistered

As the anti-employee account person, thanks for more clearly outlining the reasons for this stance. Being a smaller bank in one of the largest cities in the U.S., we are not trying to compete with the Chase/Bank One's and Citibank's of the world in the number of ATM's, bill pay etc. If an employee wants a free account we've made arrangments for them to get everything free plus 1000's of free ATM's. If someone really wants to bank with us they can - but the account is not free and they must keep the required minimum balance.

In a city our size, the image issue raised by Dawn is a not a problem - maybe it is in a smaller town. Of course all banks have controls and policies concerning employee accounts and confidentiality - but there will also be lapses and violations. In my 20 years of bank auditing and examining I've seen several frauds where using an employee account aided in committing fraud. (And in each case the bank had a clean audit/control opinion from a major accounting firm.)

In encouraging employees to bank elsewere, we viewed the positives to the employee and the elimination of potential headaches as a win-win situation.

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#213969 - 08/05/04 11:49 AM Re: Forcing Employees to bank at your institution
Anonymous
Unregistered

A U.K. perspective, for what it’s worth. When I joined my bank in 1977 (sic) staff were obliged to have their current (= ‘checking’ I imagine) account with the bank so as to enable it to track their financial affairs, in case a staff member was ‘up to no good’. Also overdrafts were strictly forbidden. In the eighties this was relaxed and by the nineties we were allowed to conduct our financial affairs as any other member of the public. Recently, my bank set up a special department whose aim is to encourage staff to put as much of their personal business through the bank as possible, offering special terms on certain ‘products’ -that are not available to ‘ordinary’ customers- to do so.

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#213970 - 08/06/04 10:40 PM Re: Forcing Employees to bank at your institution
ChicagoGuy Offline
Diamond Poster
ChicagoGuy
Joined: Nov 2003
Posts: 1,577
Chicago, IL
Story from a former life many, many sunsets ago.........the bank paid all the employees in cash. This was rumored to be done because the President didn't want a certain-someone knowing what he took home. This was fine until the payroll was stolen one fine day! From a locked cabinet nonetheless....guess what? Inside job......Guess what again? After that no more cash and the Pres probably had to start fessing up about the take-home pay!!!

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#213971 - 08/07/04 10:29 AM Re: Forcing Employees to bank at your institution
Anonymous
Unregistered

We are required to have an employee account for our pay to be deposited however, we can bank at any institution we want. I know at our bank we as employees get everything free so why would I want to bank anywhere that I wont get everything free.

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#213972 - 08/07/04 12:38 PM Re: Forcing Employees to bank at your institution
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Let's wrap this up with a bow by restating the Reg. E rule:

As an employer, the bank may not condition employment upon the employee's agreement to receive pay by EFT deposit to an employer-designated financial institution.

That means:

  1. The bank may not require the employee to receive pay via EFT deposit to an account at the employer.

  2. The bank may not require the employee to receive pay via EFT deposit at any other employer-designated financial institution.

  3. The bank may require EFT deposit if it permits the employee to select the receiving financial institution.

  4. The bank may require that any EFT deposit be to an employer-selected institution (including itself) if the bank permits the employee to receive pay by some means other than EFT deposit (such as check or cash).


There is nothing in the Reg. E rule that prevents an employer from requiring its employees to bank with it. But I cannot imagine how such a policy would be enforceable.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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