Life

Why Some Banks Ask for ID for a Cash Deposit

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The other day, I made a quick cash deposit via my bank’s drive-through lane and was immediately asked for my driver’s license.

The deposit I was making contained a personal check and $60 in cash. I didn’t want cash back: the entire amount was going into my checking account.

No big deal.

So since when does your bank need to see a driver’s license when you’re making a cash deposit?

Apparently, more and more banking customers are being asked to show ID when they’re just adding cash to their account.

It’d be one thing if they were trying to cash a check. Anytime you fill out the “less cash received” blank of a deposit slip and then sign the line indicating you want cash, it’s understandable you’d have to show your ID then. The bank needs to make sure you’re you so that if that check bounces and you don’t have enough money in your account to cover the cash-back total, they know who to contact.

But when you’re depositing cash — legal tender — in your own account, what’s the problem? You’ve already filled out the deposit slip with your account number. They key in the number and see that the deposit slip info matches what you’ve filled out.

So what’s with the ID? Are there random people going around putting suspicious amounts of cash in the accounts of complete strangers?

If so, I wish someone would do that for me!

Befuddled by this curious practice that seems to have come out of nowhere, I called my bank and asked about it.

The answer I got made zero sense.

I finally reached a customer service representative at my bank’s customer hotline. I was told that the bank’s policy changed in August 2018, and that it didn’t accept cash any longer. 

I asked whether there had been a string of counterfeit bills that might have prompted suspicion of printed money. But I also asked if the bank might have a legal team who was aware that it’s almost certainly illegal for a federally-licensed financial institution to refuse to accept federal tender.

She didn’t know.

I then asked how a bank could honestly expect to get away without accepting cash.

“If I have $50 in cash and your bank doesn’t accept it, how am I supposed to get that money in my account?” I asked.

“You can use the ATM,” she said.

I pointed out that I don’t use the ATM for cash deposits. To do so means you’re at the mercy of the person who opens the envelope; if they claim the cash amount was wrong, guess who the bank will believe. When I make a cash deposit, I deal with a teller who has seen me hand them the money and who I see as she counts it. If there’s a discrepancy, we both know it at the same time.

“Well, you could get a MoneyGram or money order,” she said.

What? This bank — potentially about to become my former bank — expects me to go buy a money order so I can make a deposit? 

I don’t suppose the rogue bank is going to reimburse me the cost of the money order, will it?

The fact that an employee of a bank honestly believes that it somehow makes sense that said bank would no longer accept U.S. currency is disturbing beyond words. The fact that she’d then suggest an acceptable solution would be the customer purchasing a money order to deposit into the bank is even worse.

I called the FDIC to try to get clarification on whether a bank actually can refuse all cash, but their agent couldn’t immediately answer. He suggested I fill out an online form asking that question and then submit it so FDIC staffers could research it and get back to me.

He then asked if I needed anything else or if I wanted to lodge a complaint.

I pointed out what should have been obvious: I can’t lodge a complaint until I know for sure whether the bank is breaking federal law. And I can’t know that, according to his own words, until I fill out their stupid online form and wait for their staff to get around to “researching” it, can I?

The FDIC, as you may have guessed, was of little immediate help. 

So I decided to call the individual branch and ask for the manager.

The real explanation does make some sense.

The policy did begin in August, she said. It was designed to prevent money laundering by requiring confirmation that any cash deposits are going into the accounts that belong specifically to the depositor. 

The bank obviously will accept cash as it always has. Tellers just have to verify that the money is going into the right person’s account. If you attempt to deposit cash into someone else’s account, you won’t be able to do that.

Granted, I don’t know a lot about money laundering.

But if I were to consider the advice of the crazy customer service rep, I’d have to wonder what would stop someone wanting to launder cash from buying their own money order and then just depositing that. And if Mr. Jones wanted to launder cash, couldn’t he give Mr. Smith $5,000 that Mr. Smith deposits in his own account, then have Smith write a check to Jones so Jones can deposit it? 

If the transactions were small enough, wouldn’t that accomplish what this policy that now requires me to show an ID for the deposit of a whopping $60 is designed to prevent?

They may have the best of intentions…but with a policy the bank itself can’t adequately explain, I’m not sure how effective it could be.

the authorPatrick
Patrick is a Christian with more than 30 years experience in professional writing, producing and marketing. His professional background also includes social media, reporting for broadcast television and the web, directing, videography and photography. He enjoys getting to know people over coffee and spending time with his dog.

6 Comments

  • I own a business where we do a portion of our transactions with cash. I periodically deposit that cash to our business checking account. We have owned the business for 5 years, I have made weekly cash deposits to that business account numerous times. Last week, like always, I completed the deposit slip with the business account name, account number and attempted to deposit the cash. They suddenly declared they would not accept my cash deposit until I provided my driver’s license so they could copy it. When I asked why, they said that was the rule. Only rarely in the past, usually only when dealing with a new teller, I had been asked to provide my birthdate. I would verbally provide the birthdate and they would process the deposit. Most times the tellers would recognize me and just process the deposit.

    It was an all currency deposit, no checks, coins or other kinds of funds. I cannot figure out what kind of fraud or deception this new procedure is designed to address. They would not provide any explanation other than it was the rule. I am now looking for a new bank but I expect the new bank will have their own ways to harass their customers. I think it used to be called Customer Service but it has apparently gone extinct.

  • While it’s not EXACTLY “money laundering,” I DO take the time to spread out any paper money I have just received and spray it with sanitizer. Both sides. Hmmm, isn’t everyone doing that the last few months?

  • I came to this link looking for answers as to why MY bank that holds MY accounts needs my ID to deposit cash, I cannot explain why but it makes me feel real uncomfortable, and I have a sense that something is wrong with this picture. When I withdraw cash, should I ask the teller for their ID? I will be checking out other banks.

    • I’ve had this same thing happen with a business account lately. It’s like – why? Cashier couldn’t tell me and the answer from the bank manager meant nothing. A long time ago it was predicted there would be no cash or other forms of monetary transactions unless it was a credit card so the ‘New World Government’ could keep track of everyone, all their money and their comings and goings. I got the answer that the computer doesn’t know me! I also find there is no one at this bank that I had previously had as a cashier. It’s all new people. I threatened to close that business account. It fell on deaf ears. He didn’t care. I believe not only with this virus going on, protesters, looting/burning, the world is a mess and it is affecting everyone. So, who is it they are picking on, but the small business owner that couldn’t even qualify for unemployment or their loans that the wealthy business owners got, that really didn’t need them. I had to self contribute my own money to my own business to survive. I’m glad I’m at the age where I won’t be in this god forsaken damned world that much longer. I pity those that have to stay here! My rant is over – for now!

  • I am in the process of firing SunTrust for this absurd policy. My first question to any bank I am thinking of using will be the “do you require ID to deposit cash?”. The mere fact that they think this will help stop money laundering is beyond laughable. Do they not know that crooks will always find a way to circumvent the system? This world is getting crazier beyond anything I could have imagined….

  • What if I have checks that are out and needed to make a cash deposit and I am disabled or just out of the hospital and my daughter, who is not on my account, is willing to make that deposit but can’t because of this absurdity. My bank SunTrust told me that under those circumstances I WAS S.O.L.

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