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#1796401 - 03/19/13 08:46 PM RDC and ACH Origination
Wen Offline
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Joined: Sep 2005
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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.

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#1796402 - 03/19/13 08:48 PM Re: RDC and ACH Origination Wen
rlcarey Online
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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.
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#1796404 - 03/19/13 08:54 PM Re: RDC and ACH Origination Wen
John Burnett Offline
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John Burnett
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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.
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#1796416 - 03/19/13 09:27 PM Re: RDC and ACH Origination Wen
HappyGilmore Offline
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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.
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#1846672 - 08/28/13 03:56 PM Re: RDC and ACH Origination Wen
joeball Offline
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joeball
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Would any ACH limit set by the bank be counted against the customers lending limit?
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#1846688 - 08/28/13 04:08 PM Re: RDC and ACH Origination Wen
rlcarey Online
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rlcarey
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Galveston, TX
Define lending limit - regulatory limit - no. Internal approved limits - yes.
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#1846699 - 08/28/13 04:19 PM Re: RDC and ACH Origination Wen
joeball Offline
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joeball
Joined: May 2004
Posts: 177
Bluegrass State
I was thinking about the regulatory limit when I asked. That helps. Thank you.
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