Are there any standard approval procedures for originating ACH items for a corporate customer; whether it be debit or credit entries? We have a basic application for the customer to complete, as well as agreements for them to sign, but are uncertain as to whether there is a required approval process we should be following before we begin originating entries on their behalf. We are getting an increasing number of requests for this service and any help or suggestions would be greatly appreciated!

These should be underwritten as if granting credit, i.e., full financial analysis, etc. For example, if they are originating debits, they can come back for 60 days. If they originate $500,000 in debits a month, you may have a total exposure of $1mm. You would want to be sure you would loan them that money if they approached you and asked for a $1mm loan. That's a simplistic explanation. Make sure you get appropriate corporate resolutions also. Some standard corporate resolutions may not authorize ACH activities.

I concur. Please remember you are warranting to everyone that your originators' transactions are authorized, timely etc. and this includes OFAC. Please see Article III, "Obligations of Orginators" page OR 10. The OFAC info is also titled Obligations of Originators in OG 104. You are warranting that all this stuff has been done.

Does anyone have a sample policy on ACH origination that you would be willing to share?