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A Banker's Guide to Virtual Currency
Andrew Beal

April 24
BSA/AML Compliance: Writing the SAR Narrative
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Required Training for Loan Originators
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Overdraft Practices in Today's Regulatory Environment
John Burnett

May 14
Reg E Claims - Allocating Liability Correctly
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#1797304 - 03/21/13 02:54 PM Charging a fee for ACH transactions
Compliance101 Offline
Gold Star

Registered: 10/20/04
Posts: 473
Loc: Tennessee
I have two questions in 1.
-If our bank sets up an ACH for a customer who has a checking account at our bank to pay their loan at another bank, can we charge a fee to do this? The same for a loan at our bank to pull the loan payment from a checking account at another bank? Or set up an ACH from deposit account at our bank to or from a deposit account at another bank?

-If so, what are the issues concerning Regulation E and Truth in Savings?
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Operations Compliance
#1797329 - 03/21/13 03:36 PM Re: Charging a fee for ACH transactions [Re: Compliance101]
John Burnett Online
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Registered: 10/27/00
Posts: 29431
Loc: Cape Cod
Charging a fee for ACH activity is just so counter-intuitive. ACH transactions are among the cheapest your bank handles.

But if you are to charge a fee, there are Reg E fee disclosure issues (which can be handled in either your EFT or your Savings disclosure).
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#1797485 - 03/22/13 05:34 AM Re: Charging a fee for ACH transactions [Re: Compliance101]
Ken_Pegasus Offline
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Registered: 08/30/01
Posts: 16673
Loc: Another trip around the sun
The law certainly doesn't consider prohibiting fees for ACH activity. Consider whether your customers will. Is your bank better off if its customers go back to using checks to avoid a fee? To be candid, I would not revert to checks if my bank started to impose ACH fees, but I would close my account straightaway.

The thirst for fee income is making banks consider some bizzare things...
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#1797580 - 03/22/13 11:20 AM Re: Charging a fee for ACH transactions [Re: Compliance101]
HappyGilmore Offline
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Registered: 06/11/04
Posts: 17220
Loc: Moron, Mongolia
for consumers it is as John said, counter-intuitive. For commercial customers, most banks charge a set fee for debit or credit transactions posted, either per item or a monthy minimum that becomes per item once the per-item exceeds the minimum threshold.

Now, in the scenario above, it sounds like you could be setting up an origination where your bank generates the ACH entry to debit your customer and provide the credit to the other bank - if you are talking origination, then all banks i'm aware of charge a fee for this. Assuming the customer uses some sort of cash management tool or product to create and send the payment.
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#1898475 - 02/20/14 11:07 AM Re: Charging a fee for ACH transactions [Re: Compliance101]
lvc Offline
Platinum Poster

Registered: 07/11/07
Posts: 889
We are also looking into implementing a one time setup fee for ACH origination to pay a consumer's loan with us and debit their checking account with another bank.

The fee would be disclosed on the ACH Authorization form.

Are we required to disclose this fee on our Fee schedule?

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#1898522 - 02/20/14 12:49 PM Re: Charging a fee for ACH transactions [Re: Compliance101]
lvc Offline
Platinum Poster

Registered: 07/11/07
Posts: 889
Bump

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#1898592 - 02/20/14 02:04 PM Re: Charging a fee for ACH transactions [Re: Compliance101]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 29431
Loc: Cape Cod
If that is the only scenario to which the fee will apply, there's no reason to include it on your schedule.
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#1898637 - 02/20/14 03:00 PM Re: Charging a fee for ACH transactions [Re: Compliance101]
ACHguru125 Offline
New Poster

Registered: 11/12/13
Posts: 11
We charge a $5.00 fee for one time ACH loan payments. We debit the customers account at another bank and credit their loan with us. It is considered a "tel" entry since the authorization is over the phone, and we disclose the $5.00 fee during the conversation with the customer. We do not charge a fee for Scheduled Recurring ACH transfers....

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