We allow our customers to register an external account via our OLB system (similar to PayPal). Once that is complete, the customer can move funds between the two organizations. However, our OLB provider does not provide a "reversing file" for NSF entries. Ex: customer wants to debit their account with us and credit another FI. The funds are not in their account here, so the item bounces but the credit is at the other FI.
Is it possible for us to create a single ACH entry to debit the external account? I cannot find a reference in the NACHA Rule Book.
Thank you!!

Only the RDFI can return an item NSF. By giving your customers this ability, you are acting as the ODFI and assume the risk of allowing a customer to originate items for money they do not have. Generally these products allow you to put limits in place to minimize your exposure to this situation. Also check with your vendor to see if you can prohbit the customers from scheduling a debit in the future to avoid this situation altogether.

Regardless, you cannot attempt to debit their account at the other institution.

Thank you for the quick response. We have limits in place and can deny access. Just wanted to confirm that we didn't have any other recourse.

Odd that your system does not have a requirement to verify good funds before initiating the transfer from your FI to the other. Very, very odd.

That is definitely very odd, and not a good position to be in, as it is not proactively helping you prevent this. Our OLB does something similar and is not connected to immediatley communicate with our core. So, we have until a certain time the next morning to cancel the transaction before it goes out if the branch (responsible for daily NSF working) determines they do not want it paid.

Ours operates like Sallaia's.

Out of curiosity, who are you using that doesn't do a balance check?