We have a customer who would like the bank to pick up cash deposits from merchants. This is not our normal practice. Can anyone direct me to any sources that would help me understand risks involved and what we need to consider?

Thank you very much!

Check with your state department of banking...they may very well prohibit this practice.

While it most likely is not prohibited, the activity might be considered a mobile branch and require a charter.

Why don't you consider painting a red bullseye on all your employees and have them run around the firing range???

This is what armored car couriers are for.

Agree with rlcarey; this should definitely not be done, especially in light of the risk to the employee.

Not only are you putting your employees at risk, you would also be setting up your banking for a hugh liability.

Why in the world would you want to do this??

Have they not heard of armored car transport?

Could it be that the customer is trying to get something for nothing (or less than the going rate)? Customers often get free services related to their bank relationships that would have discrete costs if obtained elsewhere.

Armored carrier services isn't something I'd want to give away, and the mobile banking laws in various states can affect your ability to do so, even at a fee.

The customer is actually an attorney and is not located near the branch. The deposits would include checks and cash, but probably not large amounts of cash (<$1000?). The employee would pick up twice a week. Our state law does not prohibit but has a provision for what should be included in a contract (courier is agent of the customer, not the bank - and deposit is considered made when delivered to teller at bank premises.)

The bank's insurance policy covers the cash and checks, but there is a big deductible.

It sounds like the biggest issue is employee safety?

Why not set the attorney up with remote deposit and remove the liability portion of using a human courier.

Ponder, if the deposits are that small, is the account relationship worth the risk? Unless there are other deposits, or a significant fee for this service, you'll be losing money. Look for alternatives as RR joker mentions. People have been robbed and harmed for a lot less that $1K.

This is not a good idea, no matter the value of the client, or how many words are in a contract. It's a huge risk IMHO.

Maybe you should just build a branch next to the attorney's office, hate for him to have to drive to the bank to deposit items........

Customer is always right

So the courier is not an employee of the bank when they pick up the deposit and doesn't become one again until they get the deposit back to the bank? They become an agent of the customer.

Does the employee know that if they are in a car accident or heaven forbid hurt in a robbery that they would have no health insurance because they are no longer an employee.

I would sure hate to have to go to court on this one. The bank is putting an employee in a terriable position. So what if the customer claims the deposit is $1,000.00 short. While you say they are agent of the customer you have created a real problem.

Check with your regulators rulings on this service. IMO they would not accept this, as it is not an independent third party picking up the deposit.

They can't be an empoyee and an agent at the same time

Folks,

How about contacting your insurance company and see if it will pay for lost money from a robbery and death benefits for your employee? I suspect you'll stand both losses. It's much more appropriate to stick with industry-standard security practices -- and stop this proposal before all of your commercial customers ask for the same service . . .