In the first quarter of this year, I participated in the Chicago Feds BSA/AML conference call. During the call, a banker asked whether a financial institution is required to "un-batch" an ACH file, scrub the beneficiaries against OFAC, "re-batch" the file and send the ACH. Has anyone else had to deal with this or was on this call.

I believe the FDIC stated that it was the responsibility of the FI to conduct this process, but according to my ACH group, the "ACH Rule Book" and NACHA state this is not required. The liability is on the originator (the company sending the "batch") and not the FI.

I need any help possible.

Technically, the liability does fall on every party that touches the transaction, the originator, the ODFI, and the sending point. As an ODFI/SP, I do not scan ACH against OFAC, I have done an assessment and am willing to take that risk.

I believe the Treasury Dept and NACHA came to an agreement in the late 1990's to lay this scrubbing responsibility on the ODFI. However, the Treasury agreed that the ODFI, by including a requirement in the Origination Agreement that the Originator will only originate lawful items, will not hold the ODFI responsible for scanning the contents of the file against an OFAC list. It doesn't absolve the ODFI from all BSA responsibility, but it helps to prevent the ACH network from coming to a standstill by placing the primary burden at the point where the transaction enters the network -- on the Originator.