Skip to content
BOL Conferences Top Gun 23
Thread Options
#1796401 - 03/19/13 08:46 PM RDC and ACH Origination
Wen Offline
New Poster
Joined: Sep 2005
Posts: 12
We are going around and around where the responsibility for underwriting RDC and ACH Origination limits should be performed. Is it a credit decision or a deposit ops function.
Any insight would be appreciated.

Return to Top
Deposits and Payments
#1796402 - 03/19/13 08:48 PM Re: RDC and ACH Origination Wen
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,359
Galveston, TX
It is a credit underwriting function - where it reside within your institution is really your call. Typically the skilled credit underwriters are found on the credit side of the bank.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1796404 - 03/19/13 08:54 PM Re: RDC and ACH Origination Wen
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,868
Cape Cod
Let me guess. No one wants the responsibility, right? RDC carries the same risk factors as conventional over-the-counter paper deposits, plus the added fraud risk involved in the ability to double-dip if controls aren't in place. ACH origination if it only involves check conversions (ARC/POP/BOC) is about the same. ACH origination of other sorts presents greater credit risk in the sense that debits can come back for up to two months after the Settlement Date.

ACH is essentially an Ops function, and Ops ought to bear the responsibility for setting limits. But to the extent that the Originator is also a borrower from the bank, the folks setting the limits ought to be informed by the knowledge from the lending side of the house.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1796416 - 03/19/13 09:27 PM Re: RDC and ACH Origination Wen
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,608
Pulling people out of the ditc...
Both are credit functions - underwritten just like you would a loan. In our shop, the operations staff provide historical volume $$ data, but the limits come from Credit.
_________________________
Providing alternative truths since the invention of time

Return to Top
#1846672 - 08/28/13 03:56 PM Re: RDC and ACH Origination Wen
joeball Offline
100 Club
joeball
Joined: May 2004
Posts: 170
Bluegrass State
Would any ACH limit set by the bank be counted against the customers lending limit?
_________________________
I'm no supergenius, or are I? Homer Simpson.


Return to Top
#1846688 - 08/28/13 04:08 PM Re: RDC and ACH Origination Wen
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,359
Galveston, TX
Define lending limit - regulatory limit - no. Internal approved limits - yes.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1846699 - 08/28/13 04:19 PM Re: RDC and ACH Origination Wen
joeball Offline
100 Club
joeball
Joined: May 2004
Posts: 170
Bluegrass State
I was thinking about the regulatory limit when I asked. That helps. Thank you.
_________________________
I'm no supergenius, or are I? Homer Simpson.


Return to Top

Moderator:  John Burnett