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In Response To:
Thread Starter: Anonymous
Title: Re: Employee Banking

I'm the anon who posted the "ATM several times a week" example. Some have opined it's a waste of BSA's time and/or "just being nosy."

I can't disagree, and yet, it happens that you are illustrating my point. The activity doesn't have to be suspicious to you, or be criminal in nature, to end up being discussed by BSA staff or by an entire group of management that, with BSA, makes the decisions for SARs. So while I personally wouldn't care a bit if a branch employee got $20 out every day for lunch, here is a real-life scenario that crossed my desk in recent history:

Employee A uses our ATMs for the max allowable withdrawal limit ($400 a pop) multiple times per week, at multiple other branches other than where she works. Timing indicates leaving work as often as twice a day (mid-morning and mid-afternoon) to make a run to another branch for a withdrawal. This was referred to BSA on a suspicious activity notice sent to BSA.

Our process is that whenever something potentially suspicious is referred, it goes to a group for deciding on a SAR. That group happens to include Employee A's boss. So, all imaginary "nosiness" aside, that employee's transactional choices are now getting talked about internally, and could end up on a SAR. Easiest thing that she could have done is choose to bank somewhere other than where she works. She doesn't like getting cash where she works anyway (at her branch) but drives to other areas of the city to do it. Is there anything criminal there? Probably not. Is it weird? That's subjective. Weird enough for a SAR? Subjective also. If an examiner finds this activity and asks us whether we filed a SAR, would we want to say yes or no? Is this employee creating risk for the bank, merely by banking here? I'd say, Yes.

Now throw in what happened with another employee a few months before that, at a different branch: in addition to arguably "excessive" ATM use for large amounts withdrawn, that one was also making frequent cash deposits of $500 to $1,000. So you check to see if the branch is in balance, and it does seem to be. This leads to the "Are they a frequent gambler?" discussion. It's not nosiness, but looking for information that may make a SAR avoidable. We don't want to see a lot of cash taken out plus a lot of cash deposited, for any customer, unless we know why.

As far as whether gambling and banking are compatible pursuits: my opinion is that bankers should certainly not be habitual gamblers. For one thing, serious gamblers may get into debt situations in which, on the low end of risk, they may end up in dire financial straights or end up at risk of losing their homes and life savings, all because of a gambling addiction. For initial and continued employment, we expect our bankers to be in a sound financial situation personally, and capable of managing their own finances without high-risk financial behavior being a factor. A financially desperate person is not someone who you want to be in a position to have to resist bribes or other financial incentives to make bad decisions on behalf of the bank. On the high end of risk, a gambler may end up feeling driven to "borrow" cash from their branch hoping to earn it back through gambling and pay it back without anyone noticing. I've known two bankers over the years who were fired for exactly that issue. A "first thing in the morning" cash audit revealed a different cash count than what was done at end-of-day, and their blubbering defense was "I was going to pay it back..." Turns out they were habitual gamblers who were desperate to finally transform themselves from losers into winners. In my experience the vast majority of gamblers are losers (financially); the house always wins.

It's also a reputational risk issue. If your customers are at the casino every weekend, do you really want them seeing your Senior Loan Officer at the same craps tables, every weekend? One adage is that the appearance of impropriety is almost as bad as the impropriety itself. If a customer decides (wrongly) that the banker is probably gambling with money from the bank vault, that dangerous rumor can spread quickly. And as we all learned in 2020, people these days will believe literally anything.