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#2252791 - 04/22/21 02:24 PM Real Time Payments - OFAC
BSA2019 Offline
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Joined: Mar 2019
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I am being told by vendor and TCH that OFAC does not apply to real-time payments. I am not finding a carve out for these type of payments. Any ideas on where to fund justification for that? The transactions occur in 15 seconds or less. I understand that OFAC is risk based-however want to make sure we are explicit about why the risk is justified.

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#2252792 - 04/22/21 02:27 PM Re: Real Time Payments - OFAC BSA2019
ACBbank Offline
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I could be mistaken but I've never heard of such an exemption being granted by OFAC.
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#2252801 - 04/22/21 03:50 PM Re: Real Time Payments - OFAC BSA2019
BrianC Offline
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How are the payments hitting the account? ACH, debit card? Also, I don't know what TCH is.

For domestic ACH payments I can tell you that each institution can rely on each other to screen their own customers. From the exam manual:

"With respect to domestic ACH transactions, the ODFI is responsible for verifying that the Originator is not a blocked party and making a good faith effort to ascertain that the Originator is not transmitting blocked funds. The RDFI similarly is responsible for verifying that the Receiver is not a blocked party. In this way, the ODFI and the RDFI are relying on each other for compliance with OFAC regulations."
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#2252808 - 04/22/21 05:44 PM Re: Real Time Payments - OFAC BSA2019
BSA2019 Offline
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TCH = The Clearing House.. I'd think it'd follow the same lines as ACH listed above.

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#2252819 - 04/22/21 07:48 PM Re: Real Time Payments - OFAC BSA2019
BrianC Offline
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That is likely the case. So it is wrong to say, "OFAC doesn't apply." It is right to say, "OFAC applies and each domestic participant is responsible for its own customers."
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#2253037 - 04/27/21 03:19 PM Re: Real Time Payments - OFAC BSA2019
John Burnett Offline
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TCH operates the RTPĀ® Network - a real time payments network that moves funds and settles for them in a matter of minutes. It's already offering the service that the Fed wants to offer starting in 2023, which would be a competitor of TCH.

And I second Brian's response just above.
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#2253056 - 04/27/21 04:38 PM Re: Real Time Payments - OFAC BSA2019
HappyGilmore Offline
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Pulling people out of the ditc...
and yet, if you allow a covered OFAC transaction to pass through to your customer and don't stop it, your bank is on the hook, regardless if you relied on another bank to screen their customer or not. so, make your risk based decision on how you will review prior to passing on.
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#2253163 - 04/28/21 08:41 PM Re: Real Time Payments - OFAC BSA2019
John Burnett Offline
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Cape Cod
Banks will need to decide at what level they will intercede in a real time payment (or same day ACH) to check OFAC lists. They won't have the luxury of a leisurely review with an overnight or longer delay before the transaction is supposed to hit the beneficiary's account.
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