Bank Employee Manages Husband's Business Account

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Question:

An employee's husband has a business checking account at the bank (LLC). The employee is not an authorized signer on it. It is our policy that checks payable to a business be deposited to the business, and then a separate transaction be made for withdrawals, etc. The employee has been splitting the business deposit (checks payable to the business) between the business account and the their joint personal account. The employee has also been endorsing the checks with the business name. What action should be taken, if any, against the employee?

Answer:

First, be certain your bank has a publicized employee policy that forbids employees from handling transactions for themselves or their family members, and that accounts of employees and their family members are subject to the same policies that are in effect for other accounts. Also, determine whether the bank has clear policies against depositing checks payable to a business into a personal account. You cannot discipline an employee for violating non-existent policies.

Then, call the employee in and review the policy or policies with her, making sure that she understands that those policies require that employees not handle those deposits (they need to be accepted by another teller), and that checks payable to the business must be deposited to the business account. The employee should be free to help her husband manage the account, but she must stay within the bank's policies when doing so. Then make it clear that future infractions will subject her to disciplinary action, which could include termination.

I don't consider the endorsement issue to be a problem. It's the splitting of the checks into business and personal accounts on which you should focus, along with any evidence that she has handled any of the transactions herself.

First published on BankersOnline.com 6/14/10