ABA Compliance Center Inbox, January/February 2018

QOne of our bank employees recently accepted a large cash deposit from a client while onsite at the customer’s place of business. Our employee brought the funds back to our branch and made the deposit. I have concerns about this, but the business line is telling me that “everybody does it.”

AYou are right to be concerned. When the bank employee accepted the deposit at the customer’s place of business, the employee was acting as an agent of the bank. The employee probably thought he was doing a nice thing to help the customer, but if anything had happened on the way back to the bank, the bank would have been fully responsible for making the customer whole. In addition, if the bank’s liability insurer found out about this, the bank’s insurance could be cancelled. Other questions you need to ask are: What would have happened if the cash was counterfeit? What if the customer asserted that he gave the employee $20,000 and $10,000 is missing? How would the employee defend himself? The business should be instructed to use a courier service or armored car service in the future. (Response provided Sept. 2017.)

QI just read that banks are exempt from the FTC’s telemarketing sales rule and Telephone Consumer Protection Act. Is that true?

ANo, it is not true. Banks are covered by the TCPA. Banks are not covered by the telemarketing sales rule because banks are outside the jurisdiction of the Federal Trade Commission. However, any individual or company that contracts with a bank to provide telemarketing services must comply with the TSR. Banks must also comply with requirements related to the Do Not Call list. The national Do Not Call list is maintained by the FTC, but applies to non-FTC-regulated entities, including banks, by virtue of an order issued by the Federal Communications Commission. In addition, companies—including banks—must maintain a company-specific Do Not Call list to permit consumers to request that a particular company not call them. (Response provided Sept. 2017.)

QMy question relates to garnishment of accounts containing federal benefits when there are insufficient funds to cover the amount of the garnishment. When we receive the garnishment order in these cases, my bank’s policy is to check the account daily. If more funds become available, we take those funds to satisfy the amount of the garnishment. Our software has the ability to continually monitor an account until the amount necessary to satisfy the garnishment is achieved. I’m trying to determine if this process is contrary to the rule and whether I need to turn off that feature.

AYou should turn this feature off. Financial institutions may perform an account review only one time for each garnishment order after service of the first order for accounts that receive federal benefits. If the same garnishment order is served again, the institution may not repeat the account review or take any other action related to the order, including garnishing amounts deposited or credited to the account. Institutions may not freeze funds deposited or credited to an account after the account review and may review an account holder’s account again only if they receive a new or different garnishment order against the same account holder. (Response provided Sept. 2017.)

Answers are provided by Leslie Callaway, CRCM, CAFP, director of compliance outreach and development; Mark Kruhm, CRCM, CAFP, senior compliance analyst; and Rhonda Castaneda, CRCM, compliance analyst, ABA Center for Regulatory Compliance. Answers do not provide, nor are they intended to substitute for, professional legal advice. Answers were current as of the response date shown at the end of each item.