Theft rise aids one business - nonbank deposit vaults

Need a large safe deposit box? Don't bank on getting one.

Go to almost any commercial bank in the nation to rent a large safe deposit box, say, the size of a filing cabinet drawer. Instead of a box, you'll be given a pen - to put your name on a waiting list that could stretch to five years.

But if you live near one of an estimated 15 to 20 newly minted private safe deposit box companies, you could find a box right now. These companies have opened in the last year and a half in such places as Atlanta; Miami; New Orleans; Detroit; Dallas; Houston; and Anchorage, Alaska.

''By next June, we project there will be 60 operating units,'' says Rick Drummond, president of the recently formed National Association of Private Security Vaults.

Why is this ''safekeeping'' business suddenly so profitable?

It is a classic case of supply and demand. Safe deposit boxes, especially large ones, are in short supply because, until recently, banks never had much demand for large boxes. Over half of the boxes were small ones traditionally rented or given to regular banking customers.

Then, three to four years ago, the demand for larger boxes took off. Rising gold and silver prices, appreciation of collectibles (antiques, stamps, artwork, etc.), and a corresponding increase in burglaries sent people scrambling for secure storage space.

''People today are looking for a safer place than the dining room to keep their eight-place silver service - which now can be worth anywhere from $4,000 to $8,000,'' says Robert Rosberg of the Mosler Safe Company.

Private vault operators are providing a safe place for these valuables, except they spell ''security'' with a dollar sign instead of an ''s.'' Private vault boxes cost from $150 to $2,000 a year to rent. This is two to 10 times higher than comprable bank space - if the banks have the space.

Private vault operators, however, make no apologies for their rates. Instead, they tick off the services they offer that banks don't: larger safe deposit boxes, privacy from the government, longer hours - some are open 24 hours a day, seven days a week - and, they claim, tighter security.

Emory Morseberger, owner of Fort Knox Safe Depository, in Atlanta, describes the general procedure for entering his vault area:

''You are met at the door by an armed Wells Fargo guard. He verifies your identity with a photo we would have on file. He takes your signature and matches it to one on file. Then he escorts you to your safe deposit box under the watchful eye of closed-circuit TV cameras. And you have to have your own renter's key. So you would be identified on those three things. There's a fourth method of identification that involves a code word system. Something like, what's the middle name of your wife's mother's father.''

''Total privacy'' is one of the advantages vault companies claim. Banking regulations do not extend to private vault operations. Assets stored in private vaults cannot be sealed off by the Internal Revenue Service when a person passes on, which is the case with banks. And unlike banks, some vault operations offer numbered accounts (John Doe accounts).

Convenience is another selling point touted by security vault operators. ''My youngest customer is a 15-year-old coin collecter,'' relates Frank Campbell, owner of One Safe Place, in Dallas. ''He told us when he opened his box with us that the banks are only open while he's in school and that doesn't do him any good.''

So what have banks been doing while private vaults have been siphoning off safe deposit customers?

''They (banks) have heard about us, but they figure we'll die off pretty soon , . . .'' says Drummon. ''Only a few aggressive and progressive banks are increasing the size of their operation, sizes of their boxes, and raising their rates. Traditionally, banks just haven't operated their safe deposit box department as a business entity.''

Many bankers would agree with private vault operators that the safe deposit operation of the past was a service, not a moneymaker. But that is changing.

The Monitor talked to several banks in five cities about safe deposit rates. All the banks had either recently raised or are planning to raise rates within the next few months. Some banks are replacing unused, smaller boxes with larger ones.

''Banks have stepped up their orders for safe deposit boxes,'' says Mr. Rosberg, of the Mosler Company. ''We've received considerably more orders than we had two years ago. And the orders are for larger boxes. The mix is changing toward the larger sizes.'' Industrywide, orders are up about 60 percent over the past two years, he says.

''And in light of this giant safe deposit expansion, new banks are building modular vaults. So when they fill up the vault with safe deposit boxes they can take out the rear modular panel and add another 10 or 15 feet,'' Rosberg explains.

As banks reorganize to meet the demand for large safe deposit boxes, the fledgling private vault industry is organizing itself. The National Association of Private Security Vaults was formed six months ago and now claims a membership of ''over 100,'' including equipment manufacturers.

One of the goals of the association, according to president Rick Drummond, is to set up standards for the industry. By setting up accreditation standards, it hopes to stave off restrictive legislation and prevent fly-by-night operations from getting into operation. The concern is that if a crooked operation were set up, the whole industry, still in its infancy, would be damaged.