We were recommended to have a Due from Banks Policy, however I do not see templates for this. Would this be part of our ALM Policy, or separate?

Why would you need a Due from Bank Policy? If anything it might be covered in an Accounting Department Policy.

Who recommended you have one?

external auditor, to document officers responsible for correspondent account transfers, responsible persons for monitoring balances, levels of check signing authority. The more I read this finding it sounds like they want procedures but they called it a policy. I suppose a Reg F Policy?

Here is what I would say, I have no idea how large your bank is or how many "due from bank accounts" your bank uses. Just because your auditors and/or examiners make a recommendation does not mean you have to implement. I would think management would make a business decision. Our Accounting Department has 6 people in it and when you have turnover, it gets to be a challenge updating signature cards and processes in a timely manner.