We are looking at installing a new online bill payment system. In your agreement and disclosure do you disclose a min. and max. amount for individual bill payments? For example, "you may make individual payments ranging from $1.00 to $5,000." Secondly, is there a Reg that requires this disclosure?
Thanks.

I would definately include a minimum and maximum, but it is not a reauirement that I am aware of.

The minimum prevents you from having to pay 34¢ postage to mail a 33¢ check. Considering a maximum of $2,999.99 means you do not have to maintain the records required under §31 CFR 103.39.

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.

Would you please elaborate on the part about the $2,999.99 max. limit? How would this relate to the recordkeeping requirements?

I would definitely set min and max standards as you may want to keep the max at $9999.99 as you may need to file CTRs if over that amount. Many of your items are combination of REGs as REG E & REG D.

We actually developed our agreement and had it reviewed by the bank's lawyer.We actually set a bill payment NSF fee in combination with our normal NSF fee as $30.00 and $15.00 for a total of $45.00. Your bill payment processor may charge the bank if NSFs occur in the bill payment process. Look at all angles as we had to set times for bill payment and how long it takes to process etc.

We set our payment range at $.01 to $9,999.00. It was basically a risk decision and was not associated with any particular reg, as far as I know. We do have certain restrictions, such as you must be paying a person or business in the U.S. and you should not make court-ordered payments, such as child support, via our bill pay service.

We outsource this product support to a vendor specializing in internet bill pay.

I personally use the service and highly recommend it from a consumer point of view. It is very convenient.

There are a number of data protection issues relevant to this service. Since we are on the internet, we have to perform intrusion testing and third-party vendor due diligence. The system was impacted a few months ago (not our bank) and immediate intervention actions were taken by the processor. The system was inoperable for several days and some payments were lost when the system was shut down. We personally contacted each customer impacted and sent cashier's checks out for their bills that were lost. All bill pay customers were issued new PINs when the system was brought back up.

I thought it was interesting that our procedures for handling the situation were reviewed by our regulator a few weeks later
when they came in to perform our safety and soundness exam. They knew about it immediately after it happened.

Lela, I cannot concieve how cash could be involved in a bill payment service. The payment "always" originates from a transaction account, so no CTR is necessary if over $10,000.

BJ, the bill payment is a payment order, subject to not only recordkeeping requirements of §103.33(e)(1), but also retrievability requirements of §103.33(e)(4) [as we have all painfully been reminded of recently].

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.

[This message has been edited by Al Miller (edited 10-17-2001).]

Al, thanks for keeping me straight on the this issue. We had a customer placing cash into the transaction account then using bill payment function to transfer it to another bank.

Al

Following up on the recordkeeping proceds., how is this info. captured? Does your vendor capture it and provide it in some kind of spreadsheet format or how does that work? Thanks.

Of course, you must disclose minimum and maximum transaction amounts. Reg E requires that any transaction limitations be disclosed. Minimums and/or maximums are limitations aren't they?

BJ, let's just say that the information is captured in such a way that there is significant opportunity to improve on the process. We are spending many more hours than we should retrieving the information.

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.

If the bill pay service cuts a check, then Reg E doesn't apply.

But the bill pay starts with the person's computer, not the paper check.

205.3(c) states in the exceptions, "(6) Telephone-initiated transfers. Any transfer of funds that --

(i) is initiated by a telephone communication between a consumer and a financial institution making the transfer, and

(ii) does not take place under a telephone bill-payment or other written plan in which periodic or recurring transfers are contemplated."

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Andy Zavoina
Opinions stated are not necessarily that of my employer.