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#79128 - 05/09/03 02:29 PM OFAC Bill Pay

Are banks required to screen online banking bill payment payees? Some payments are made by check and we're not sure these payeess bank with a financial institution, thus they may not be screened by anyone?

Should the bill pay vendor screen payees?

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eBanking / Technology
#79129 - 05/09/03 02:45 PM Re: OFAC Bill Pay
IUalum Offline
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Joined: Mar 2002
Posts: 938
I would say the bill-pay vendor would be responsible for OFAC screening in this case. In most instances, we don't even know when a customer has made a bill-pay transaction unless we're constantly monitoring their account.
Opinions expressed are mine and not necessarily that of my employer.

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#79130 - 05/09/03 02:58 PM Re: OFAC Bill Pay
Pale Rider Offline
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If banks begin to check payees on bill pay, isn't the next logical step that we have to check payees on paper checks ? I will be very interested to see how this question is addressed. What a nightmare !
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.

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#79131 - 05/12/03 08:10 PM Re: OFAC Bill Pay

We recently went through an FDIC Safety and Soundness Audit and they did ask. We were pleasantly surprised to find that our online banking provider (ORCC) already does this for us. I'm not sure if there is any official ruling on this, but individual auditors may have different opinions.

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#79132 - 05/14/03 02:12 AM Re: OFAC Bill Pay
Mark McClanahan Offline
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Mark McClanahan
Joined: Jan 2003
Posts: 35
Charlotte, NC USA
I could not find any official ruling on this either. However, my OFAC contact at Treasury said that it depends on whether the payee is domestic or foreign and whether it's practical to implement the screening.
Mark McClanahan

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#79133 - 05/15/03 03:16 PM Re: OFAC Bill Pay

I agree that the next logical step would be to check the payee on all check that our customers write. After that we could begin asking customer's who withdraw cash who they are giving it to and screen them. And after that we could.... Give me a break, let common sense prevail. A bill payment should be considered the same as a check written by the customer. It is not an official check.

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#79134 - 05/16/03 09:39 PM Re: OFAC Bill Pay
Dollar Bill Offline
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Dollar Bill
Joined: Nov 2002
Posts: 107
I think it would depend on if you outsource your bill payment functions or process transactions in-house.

We have an Internet Service Provider that outsources the bill payment function to another vendor. The ISP has the responsibility of performing vendor assessments.

Since the processing agent initiates the ACH credits, and the credits may be sent via check, electronic transmissions, or ACH to the vendor payees, I would think it is the vendor's responsibility to perform the check.

In some outsourcing instances, the FI might not even know who the payee is.

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