I understand that ACH exposure is essentially unsecured credit. When considering loan limits to officers subject to REG O - the ACH exposure should be counted as well.

However, one of our credit officers stated they were told several years ago that ACH exposure was treated differently for REG O. Does anyone remember a ruling or a FIL that came out regarding ACH and REG O?

ACH exposure is not credit under either Regulation O or for other lending limit purposes. This is purely an internal risk assessment/internal control that is performed by the bank.

According to an FDIC examiner it is. So, if you can help me - that would be great. ACH exposure is and has been counted as unsecured credit and has been for years.

This is where we are:

215.3(7) Any other similar transaction as a result of which a person becomes obligated to pay money (or its equivalent) to a bank, whether the obligation arises directly or indirectly, or because of an endorsement on an obligation or otherwise, or by any means whatsoever.

Then IMHO your FDIC examiners have been terribly wrong. The establishment of ACH exposure limits is a function of risk management and does not result in an advance of money to a customer. While the ACH risk management process may take into consideration the bank's legal lending limits within the exposure that may be presented, it is not technically counted against the legal lending limit. It is a estimation of potential risk exposure and that is all.

Where is the note or legal obligation supporting this supposed credit? Where are these credits reported on your call report? Where in any of the regulations is it required that ACH risk exposure be treated as credit extended to the customer? Unless you are acting as an ODFI and sending credit transactions and not requiring that the insider to timely fund these transactions, there is no extension of credit. If you are acting as a RDFI and originating debt transactions, your telling me that the you have to count the estimated 60 day exposure of returned items in the credit limit. I would ask them to prove it.