Skip to content
BOL Conferences
Thread Options Tools
#23376 - 07/10/02 08:14 PM ACH Origination
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
I am looking for a sample of an ACH Origination policy with regard to Commercial Customer. Also, I would appreciate any information on what other banks are doing for credit reviews of commercial ACH customers. Can anyone help?

Return to Top
General Discussion
#23377 - 07/10/02 08:57 PM Re: ACH Origination
prj Offline
100 Club
prj
Joined: Oct 2001
Posts: 100
Chaska, MN
You should check out your local ACH website (SWACHA, UMACHA, NACHA, etc)...you may find what you're looking for on-line. UMACHA has a PDF doc available in the members-section of their site.
_________________________
Pam The comments above are my own thoughts an opinions, not those of my employer.

Return to Top
#23378 - 07/10/02 09:22 PM Re: ACH Origination
Anonymous
Unregistered

I will fax or E-mail what I use as an ACH origination agreement. Just e-mail me your fax and E-mail address. My E-mail is dtimberlake@c-f-b.com

Return to Top
#23379 - 07/10/02 10:02 PM Re: ACH Origination
Rubaiyat Offline
Diamond Poster
Joined: Jun 2001
Posts: 1,373
Lido Deck
Amy, are you looking for an origination agreement? If so, the ACH rulebook has a good sample in it. Or are you looking for a board-approved policy regarding ACH originations?
_________________________
--A bad day at sea is better than a good day at work.

Return to Top
#23380 - 07/11/02 01:07 PM Re: ACH Origination
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
What I'm the most interested in is an internal policy for reviewing the credit risk associated with orginations for commercial customers. (i.e. how detailed credit review is necessary for what types of customers.)

Also is it uncommon to charge the customer's account on the day of origiantion instead of waiting for the settlement date?

Any help would be appreciated!

Return to Top
#23381 - 07/11/02 01:16 PM Re: ACH Origination
Rubaiyat Offline
Diamond Poster
Joined: Jun 2001
Posts: 1,373
Lido Deck
The ACH rules state that a debit should not be posted to an account before settlement, however, credits may be posted before settlement. This becomes an issue if a debit or credit comes in on a Saturday, for example, but the settlement does not occur until Monday. Some systems memo post the debit or credit when it occurs (before settlement), which in the case of a debit, is contrary to the ACH rules. As to how often this happens, I've heard it is not an uncommon practice. Apparently, this is often a result of processing systems limitations, rather than a conscious choice to post in this manner.
_________________________
--A bad day at sea is better than a good day at work.

Return to Top
#23382 - 07/11/02 01:45 PM Re: ACH Origination
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Amy,

Typically, we had the commercial loan department rate the credit risk of a compnay as if we were going to grant them a loan. Maybe not require quite as much detail, but still enough to perform a risk rating.

I think cwilliams misunderstood your question regarding charging the customer's account early. I believe that you were referring to the originating company on outgoing ACH entries. I have seen it happen either way and it is usually addressed in the contract for services.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#23383 - 07/11/02 01:51 PM Re: ACH Origination
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
While the loan department is determining the credit risk, is this based on set lending authority and would some decisions have to be approved by the loan committee?

Also would the same review be done for a small corporation and a municipality? I think they are two different animals.

Return to Top
#23384 - 07/11/02 02:09 PM Re: ACH Origination
Rubaiyat Offline
Diamond Poster
Joined: Jun 2001
Posts: 1,373
Lido Deck
Thanks rlcarey, for the clarification. That's what I get for thinking before I've had coffee!
_________________________
--A bad day at sea is better than a good day at work.

Return to Top
#23385 - 07/11/02 02:10 PM Re: ACH Origination
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Whether or not you require the review based on some level of lending authority is more of an internal decision. The important thing is to have a system in place to assess the exposure you may face (this would include size and number of transactions conducted) and weigh that against your ability to collect from the company. The thoroughness of your review may be based on volumes of transactions verses the size the company. It's sometimes possible to look at third party agency ratings when dealing with municipalities.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#23386 - 07/11/02 03:15 PM Re: ACH Origination
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
Does anyone have a policy on the credit review that they would be willing to share?

Return to Top
#23387 - 07/12/02 01:22 PM Re: ACH Origination
Anonymous
Unregistered

I have an excellent sample ach credit policy I can fax to you, either e-mail me at wletendre@web5.com or call me at 696-943-9401 ext 3442 and I'll fax it over to you.

Return to Top
#23388 - 07/12/02 05:11 PM Re: ACH Origination
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
Thank you so much that was an excellent sample!!

Return to Top