We are developing procedures/policies that will allow our customers to move money to/from their accounts at our FI to their accounts at another FI using ACH. One of our concerns is how to handle risk. Does anyone have any experiences on how to handle large $ transactions? We would like to have some method to verify funds (outgoing debits), but seems like it would be alot of manual work. What about putting a limit on the dollar amount? Any suggestions or ideas would be appreciated.

first, you would need to have an agreement on file for every customer you will be originating for. Second, the software you choose for this venture should have the capability to interface with your account balances to ensure that funds are available prior to creating the file fopr you. There are several software packages I'm aware of that do this. Third, you ned to perform due diligence on all originators, whihc will determine the amount you would allow them to originate (credit reports, etc.). Know Your Customer (KYC) plays heaviliy ion ACH origination

Not an answer - a related question. We are looking at the services of a Third Party Service Provider to accomplish our Internet Banking inter-bank transactions. We will, of course, require our customers (originators) to sign an agreement. The TPSP will perform customer due diligence on our behalf. Any caveats?

Be aware that you will be responsible for any payments that are made to OFAC-barred persons or entities. The TPSP may be able to do the OFAC checking for you, but your bank is on the hook for any violations.

I'd suggest that your agreement include language that holds the bank harmless if it blocks or delays and transfer if there is a reasonable question that an OFAC-listed party is involved, or that the transfer might be illegal or improper for any other reason. Such language might include a provision that the bank will contact the originating customer in such an event.