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#2199541 - 11/30/18 05:30 PM Grade School Accounts
t0dd Offline
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We have recently developed a program in order to get young elementary students involved in savings. We provide applications to the elementary schools to provide to the students and if they are interested they complete the information with parent/guardian information as well in order to open an account. Students can open the account with as little as $1. We complete an ID check of the minor as well as the parent/guarding listed on the application. Our BSA Officer has concerns with the fact that we are not physically seeing the customers even thought we are verifying all the application prior to opening the account through our third party verification system. We have also noted this risk within our Risk Assessment.

Curious if there are other banks that have a program like this, and if so is there anything we are missing to please examiners.

Thank you in advance for your responses!

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#2199542 - 11/30/18 05:49 PM Re: Grade School Accounts t0dd
rlcarey Online
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rlcarey
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Galveston, TX
What do on-line banks do?? They never physically see a customer.
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#2199574 - 11/30/18 08:18 PM Re: Grade School Accounts t0dd
Richard Insley Offline
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Richard Insley
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Toano, VA
How does the cash to open an account get to the bank? What if the student presented $10,001 cash to open an account?
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#2199602 - 11/30/18 09:50 PM Re: Grade School Accounts Richard Insley
t0dd Offline
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that is a possibility, but if it happened we would file a CTR in that situation.

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#2199604 - 11/30/18 10:11 PM Re: Grade School Accounts t0dd
ColoradoAML Online
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For BSA concerns, if your policy and procedures allow it, it's not illegal or a regulatory violation, but if the procedures are counting bankers on meeting the customer and comparing their ID to their face, for instance, you're probably violating your procedures. If bankers are allowed to open accounts without ever meeting a customer, the appropriate process should be documented in CIP procedures. Since the BSA Officer is the one with concerns, and they're presumably the one who is conducting any related risk assessments and writing any related procedures, I would expect BSA examiners to have concerns also.

I think there may be a number of other concerns with having bankers accepting cash off-site and bringing them to the bank that aren't BSA related that should probably be explored. I'm sure there are contributors here who may be able to speak to whether, at some point, those deposit accepting bankers are considered a mobile bank branch and must be treated as such. Or maybe I'm wrong. I would still be concerned about the inevitable situation where a customer says they gave you $1,000 and the banker only comes back to the branch with $100.

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#2199619 - 12/01/18 04:17 AM Re: Grade School Accounts t0dd
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
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Toano, VA
Originally Posted By t0dd
that is a possibility, but if it happened we would file a CTR in that situation.
The CTR possibility was merely an afterthought. My main concern is that you could have an illegal branch. Long, long ago, my bank ran into that kind of problem when we sent a branch employee to a nearby nursing home for a few hours every week or two. We thought it was a nice service (which never broke even, as I recall). The state banking commissioner did NOT agree and ordered us to shut it down.
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