We have a new customer who is wanting to set up automatic drafts for his tenants' rent payments. He has a clause in his lease that allows for this. I was given the task of rewriting our ACH Transfer Agreement for his tenants to sign and have notarized to allow us to debit their account each month. However, the more I think about this the less comfortable I am with it. In my opinion, the agreement to debit the account needs to come from the landlord, otherwise he has no liability at all. I've done these kinds of things before at a previous bank, but they were handled through cash management through our internet banking product (we don't have this capability at my current bank). Can anyone give me some guidance on how to proceed with this? I'm thinking we tell the customer he needs to have his own agreement and let him take on the liability that goes with it.

Or just say no. He is trying to get a service that usually costs money.

customer should have the agreement with his tenants and also be originating the ach debits...bank is simply the conduit for those entries to get into the ach system. if your bank doesn't have a cash management tool for him to use, then he needs to find another bank to do this.