With the help of banking insiders across the country, we tried to get inside the heads of the employees making these decisions, using a true story as a case study. At each turn, bankers face a number of choices. Below, we’ll provide you with five of them and let you decide what you would do in the bank’s position.
A Bartender’s Tale
Shortly after finishing her bartending shift in Chicago late one night, Daniela Gallegos walked to a Chase A.T.M. across the street to deposit a paycheck of about $100 plus $290 in cash tips. She had deposited cash in the middle of the night on other evenings, to avoid being robbed on the way home and to avoid overdrawing her account — which she had done a few times.
Cash deposits during the wee hours can sometimes seem fishy to a bank, particularly if an account holder has exhibited other troubling behavior.
QUIZ MODULE ONE:
QUESTION: How should an A.T.M. work at that hour?
1) Accept both the check and cash deposits. If she were a drug dealer, she would probably deposit more money — and do so without a paycheck in the same transaction.
2) Reject both deposits, spit her card out, and ping a branch banker to call her in for questioning about her late-night deposit.
3) Confiscate her card and keep the money.
ANSWER: On the night in question, Ms. Gallegos said the machine swallowed everything. “It just took my card, and told me there was an error,” said Ms. Gallegos, 33, “leaving me with nothing and no explanation.” Stranded, she called a friend who sent a car for her.
There was an explanation, however — one that Chase never conveyed to Ms. Gallegos but did tell us. It could find no record of her having made any transaction in the middle of the night and the bank believed that the A.T.M. was operating normally. Did the machine spit her card and money back out after Ms. Gallegos waited near the machine in the hopes that it would work? Those are all possibilities, but it’s still unclear. Chase’s record of its subsequent investigation of the incident does not indicate whether bank staff looked at surveillance tape of the A.T.M.
Ms. Gallegos was upset enough to have her father, a longtime Chase customer, call the bank on her behalf (with little success). Her text messages from that week show her lamenting the situation to a friend. She even shared the whole ordeal with her therapist.
Later that day, she called Chase for an explanation and went to a branch. By then or soon after, things were happening in the background that call center employees or branch bankers would probably not be privy to.
QUIZ MODULE TWO
QUESTION: You’ve trained the security analysts who monitor accounts. What would you want them to do when they review Ms. Gallegos’s situation with the A.T.M.?
1) Cancel her account.
2) Call Ms. Gallegos to get her account of what happened at the A.T.M.
3) Everything in choice 2, plus explain to her exactly what set off alarms.
4) Everything in Choices 2 and 3, plus bar her from making A.T.M. deposits, just to make sure tellers can keep an eye on her when she deposits cash with them.
ANSWER: Chase chose to cancel her account. When Ms. Gallegos went into the Chase branch that afternoon, the representative told her they couldn’t answer her questions and that they reserved the right to close customer accounts for any reason. When she called the bank’s customer service number later that afternoon to beg for further clarification, she heard a similar script — Chase was ending its relationship with her and they would mail her remaining balance.
The banks are constantly monitoring for criminals perpetrating fraud or money laundering. In this case, the bank had concerns about fraud. But if someone else had made a series of questionable late night deposits — in combination with other suspicious behavior, for example — the activity may have been flagged as money laundering.
The banks have to follow a variety of laws. Regulations emerge from the laws, and many of the regulations are open to interpretation. That means lawyers for the bank — both in-house and outside counsel — are regularly handing out instructions to even the most junior bankers. Regulators then follow up, constantly, often questioning specific decisions and transactions.
Bankers must know who their customers are and what they’re doing with their money. Staff have to track the daily drumbeat of communications from regulators and law enforcement agencies, and keep track of who has landed on government lists of criminals and suspects.