Safe Deposit 60 Steps to Properly Handle Delinquent Or Abandoned Boxes (How to Minimize Your UNLIMITED Liability)
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Safe Deposit 60 Steps to Properly Handle Delinquent or Abandoned Boxes (How to Minimize Your UNLIMITED Liability) Independent Community Bankers of America September 12, 2018 10:00 AM – 12:00 PM (Central) Presented by: Dave McGuinn President Safe Deposit Specialists Houston, Texas www.sdspec.com www.sdspec.com 1 Introduction Speaker David P. McGuinn, president of Safe Deposit Specialists, speaks nationwide for numerous financial associations. He is a former Senior Vice President and Cashier with over 45 years of financial experience and is often referred to nationwide as the safe deposit GURU. As a consultant he has trained over 350,000 safe deposit personnel since 1969 in programs offered in all 50 states. Dave is past president of the American Institute of Banking and the American, Texas and Houston Safe Deposit Associations. He has written numerous financial articles and has been interviewed by The New York Times, Wall Street Journal, Money Magazine, New York Magazine, Fortune Magazine, Washington Post, Associated Press, AARP, Bottom Line Financial, National Public Radio (NPR), British Broadcasting Corp. (BBC), Inside Edition, Crime Watch, Court TV, CUNA, FDIC, CNN, Fox, CBS, ABC, NBC Nightly News and many other financial publications regarding current safe deposit issues. He was also a featured speaker for the American Bankers Association, Independent Community Bankers of America and National Association of Federal Credit Unions and over 100 other nationwide financial associations. McGuinn has created numerous training videos, DVDs, policy and procedure manuals and many other unique safe deposit compliance products. His safe deposit resources are often considered the accepted standard for the financial industry. www.sdspec.com 2 Overview 1. Drilled and Abandoned Box ___________ 2. State & Federal Regulatory Requirements 3. 22 Box _________Procedures 4. 18 Abandoned Property Questions 5. 21 ____________Item Descriptions 6. Box Drilling Procedures Test 7. Unusual Items _________in Drilled Boxes 8. Question and Answer Session(s) www.sdspec.com 3 Past Due Box Claims Poor Procedures Create Significant Lawsuits Nationwide Very Poor Safekeeping Lawsuit History: Texas bank Lawsuit filed: Several years ago Jury trial (found guilty): $187,000.00 Incorrect Procedures: 1. Box rent past due and ___________mailed. 2. Box drilled and contents inventoried. 3. Contents secured in a __________envelope. 4. Envelope put into a file cabinet located in the lobby. 5. 18 ___________later renter comes in and pays charges. 6. Employee goes to file cabinet and removes envelope. 7. Renter opens _____________and screams: “These are not my box contents. I had a valuable coin collection in my box and someone has switched my coins and replaced them with junk!” 8. Lawsuit filed and jury awards $107,000 in damages. 9. Bank paid additional _________fees totaling $80,000.00. www.sdspec.com 5 More Poor Safekeeping Lawsuit History: Mississippi Credit Union Lawsuit filed: Several years ago Jury trial: Lawsuit Status Unknown Incorrect Procedures: 1. Box rent _______due and notices mailed. 2. Box drilled and contents inventoried. 3. Contents put into a file cabinet in the __________. 4. Hurricane floods credit union. 5. File cabinet _________out of credit union and is lost. 6. Box contents and original inventory forms are gone. 7. Renter comes back and wants her box ___________. 8. She claims jewelry and coin collection are missing. 9. Litigation or settlement offer is ____________. www.sdspec.com 6 Lawsuit History: Lawsuit filed: Several years ago Box Settled out of court: (Undisclosed amount) Incorrect Procedures: Drilling 1. Numerous branches were ____________. 2. Hundreds of boxes relocated. Lawsuit 3. All boxes merged into one ________location. 4. Poor recordkeeping and documentation. 5. Contracts and _________records misplaced. 6. Computer billing and history records lost. $5,500,000.00 7. Many box _____________were changed. 8. Safe deposit box audit performed. Bethesda, 9. 400 mystery boxes identified and __________. 10. Poor drilling and dual control procedures. Maryland 11. Very sloppy box content _____________. 12. Inventories identified box content owners . 13. Property owners were __________notified. 14. Incorrect safekeeping of property. 15. Very poor employee ___________. www.sdspec.com 7 Box Relocation Procedures Manual This valuable publication contains sample box renter notification letters with recommended mailing time schedules, security requirements, bid forms for box relocation vendors, insurance recommendations, chain of custody requirements and forms, sample box relocation horror stories and much more. These recommended procedures are now the accepted standard for the financial industry. www.sdspec.com 8 BOX RELOCATIONS RECOMMENDED PROCEDURE: 1. Place a hard __________egg inside a vacant box in each relocated section. 2. Carefully document all box numbers where these ________are located. 3. After the move, remove the eggs under _______control and document that they were examined and not cracked. 4. If a box renter claims that his property was __________during the relocation this procedure will provide a valuable defense for your institution. IMPORTANT: REMOVE ALL EGGS. IF YOU DON’T, THE ___________ WILL BE VERY ANNOYING A FEW MONTHS LATER. www.sdspec.com 9 Lawsuit History: Box Lawsuit filed: Several years ago Drilling Trial date: (Pending) Lawsuit Incorrect Procedures: 1. Box was _________by mistake in July. 2. Renter was never provided drill notification. 3. Property inventory identified box _________. $4,500,000.00 4. Renter was not notified immediately. 5. Renter finally ___________in November. Las Vegas, 6. Unknown locksmith’s name on inventory. 7. No bank employee signed inventory _______. Nevada 8. Very poor dual control procedures. 9. Box ___________inventory was very sloppy. 10. Incorrect safekeeping of property. 11. Bank told renter she must _______to recover. www.sdspec.com 10 Recent CBS Ann Werner Investigates, San Francisco, CA. Lawsuits filed: (Status unknown) TV Special Disappearance Claim #1: (Two disappearance claims) 1. Bank located in El Cerrito, California 2. Customer has rented box for over _____years. All Drilled Box 3. Box renter requested access to her box. 4. Box had been __________and all contents gone. Contents Missing 5. Valuable family jewelry missing. (over 8 carats) and 6. Bank’s response: “Sorry. your _________is gone”. Disappearance Claim #2: 27 Carat 1. Bank located in San Francisco, California 2. 27 _________sapphire pendant disappeared. Sapphire Stone 3. Sapphire brought to U.S. from Cambodia. Disappeared 4. Sapphire pendant worth over $______,000.00. 5. Bank’s response – “Not responsible for loss”. (Both California Mega Banks) www.sdspec.com 11 Other Recent Losses Missouri, California, Florida & Oklahoma “Recent" Disappearance Claims 1. St Louis, MO. - Box opened and all contents and the ______________were missing. Over $50,000 in jewelry and cash were stolen. Bank told renter that they take no responsibility for this loss. CBS featured loss on TV. 2. Palo Alto, CA. - Apple Computer former ___________box drilled. Contents and records disappear. CBS featured claim as a safe deposit TV special. 3. Miami FL. – Renter opens box and discovers all contents missing. A broken safe deposit box ______was found in the box. This also happened to another renter at a different branch of this same bank. 4. Purcell, OK. - Past due box drilled. $1,500,000.00 coins, jewelry and family heirloom documents given to unauthorized person. Bank ________with box renter for an undisclosed amount. www.sdspec.com 13 Wrong Past Due Box Drilled Now, What Do You Do? Please write your solution below: ___________________ ___________________ ___________________ ___________________ ___________________ ___________________ ___________________ ___________________ www.sdspec.com 14 State Regulations Most States Have Past Due and Unclaimed Property Regulations Every State is Different www.sdspec.com 16 Regulatory/Compliance Manual Safe Deposit Manuals Contain: ➢ ________State” Specific Regulations. ➢ Federal Safe Deposit Regulations: (Updated _______ ) ❑ Bank Secrecy Act ❑ USA Patriot Act ❑ Suspicious Activity Reports ❑ Bank Protection Act ❑ Americans With Disabilities Act ❑ SCRA Past Due Box Regulation ➢ Examination Requirements: ❑ Federal Deposit Insurance Corp. ❑ Comptroller of the Currency ❑ National Credit Union Admin. ➢ Recommended ________ Procedures. www.sdspec.com 17 Federal Regulation Servicemembers Civil Relief Act (SCRA) Servicemembers Civil Relief Act 1. The American Bankers Association and examiners and are now requiring past due safe deposit box ______compliance. 2. Service member’s past due box _________ be drilled without a court order. 3. Past due final drill letters should ask any service member or dependent (spouse or child) to contact your institution. 4. Must verify if renter is on active duty service on SCRA _________. https://scra.dmdc.osd.mil/ 5. Financial institutions are now postponing the past due box drilling if they are aware of a renter’s active duty. www.sdspec.com 19 2016 SCRA COURT RULING Loss History: 1. Wells Fargo Bank was fined $___ million for SCRA violations. 2. 413 service member ______ were seized from 2008 to 2015. 3. Cars were repossessed without a court order. 4. Bank must pay $__,000 per car, car equity, accrued interest and costs for consumer’s credit repair. www.sdspec.com 20 Delinquent Boxes Recommended Procedures For Drilling Past Due Boxes Drilling Delinquent Boxes ➢Restrict future box