Employee Financial Responsibility
pinnaclebank
1 Post
Can we terminate an employee for poor management of their checking accounts/financial obligations? We are having a difference of opinion within the bank about this, and some think that we can hold only Officers accountable. Is it unfair or illegal to expect more from our bank employees than we do from our customers? Shouldn't bank employees be held to a higher standard of financial responsibility than employees in other areas?
Our Policy Manual currently states that mismanagement of personal finances will be cause for disciplinary action, up to and including termination. Are we in compliance with the law?
Thanks!
Our Policy Manual currently states that mismanagement of personal finances will be cause for disciplinary action, up to and including termination. Are we in compliance with the law?
Thanks!
Comments
Chari
I've heard of banks checking credit histories before hiring ee's as well as other companies checking credit on candidates they hope to hire who will have P&L responsibility in their job. Of course, when this is done the ee has to sign on the dotted line before it is checked, and the company has to be in compliance with the FCRA. However, I have never heard of any company checking into their current ee's finances. This MAY be okay if the employee 1) knows about it 2) signs something that explains it and gives their express permission and 3) what their signing and what the company is doing is in compliance with the FCRA.
I've never worked at a bank, but it seems to me that if I did I would not sign up to be a customer of the bank as well...it would just be "too close to home" even though I manage my finances very conservatively.
Cinderella
That said, I would want financial mismanagement to have some reasonable parameters that would not lead to needless turnover and micromanagement. What is mismanagement? Is going 30 or 60 days late on a credit card to much? Is it mismanagement spending money on a 35 inch TV instead of putting money aside for your kids college?
If you define this well enough that both the company and the EEs know what you mean, then by all means, enforce the policy. It is not in the companies interests to train people to do the job and have them functioning very well, only to terminate over questionable areas.
I also remember from my days of auditing banks and savings and loans that there are plenty of controls over cash and plenty of controls associated with all of the exposure areas in banks. If the controls are working properly, and you do not have a significant level of collusion going on, your exposure is largely mitigated.
As has already been pointed out tons of reasons exist that could cause a financial problem. Perhaps the employee is just fine, but the spouse can't understand a "budget"
Additionally, I feel it important to mention that it is illegal to discriminate against an employee that has filed for protection under the bankruptcy laws. He/She may not be fired for doing so.
On the current employees, management was a little more lenient as to the reasons why, such as bankruptcy, medical bills, etc. The "rationale" here was if an employee was in charge of handling money and they had massive financial problems, it would be very "tempting" for them to "help themselves" or to borrow money and put it back. This was a common thing for a teller to cash out her drawer on Friday, pocket some money for the weekend and attempt to put it back in on Monday morning. What usually happened was the Internal Auditor showed up on the doorstep Monday morning before work and audited the cash drawers from Friday. The $25 that the teller borrowed over the weekend cost them their job....no if,ands or buts were accepted.
It was also common practice for bank employees handling money to target an account that was not used often and use it for their personal bank account, making deposits and withdrawals. This might go on for a while until the owner of the account happened to look at their statement (once every six months or a year maybe) and wonder what all these deposits and withdrawals were for since they hadn't made a transaction on the account in a year.
The point of this "novel" is that financial institutions do hold their employees to a higher financial standard than other institutions.
If it's a pattern of bounced checks, a warning might be enough. An irresponsible child with an ATM card can cause some of those, and a simple action can put it to a stop. Mom and Dad take away Jr's card.
I have heard of banks enforcing a policy just like you describe, though, but I think it's severe. The ironic thing is that some places waive overdraft fees as an employee perk, so in a way they're actually encouraging the practice. Then they get angry when an employee actually uses the perk. Just making the employee pay all the fees might instill a sudden sense of responsibility in cases like that.