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#807925 - 09/01/07 12:59 PM Frequency of updating ACH agreements
bls Offline
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Alabama
My question revolves around the ACH agreements that a bank enters into with a customer to originate ACH entries. How often should the ACH agreements be updated? I am leaning toward annual updates, but cannot find anything definitive on the subject. Any help anyone can provide will be greatly appreciated!

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#808132 - 09/04/07 01:14 PM Re: Frequency of updating ACH agreements bls
A_G Offline
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As far as I know ours are good forever (until either party terminates the contract that is). I would not think that the agreements would change that often, unless there is a change in the terms of the contract...
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#808798 - 09/04/07 09:06 PM Re: Frequency of updating ACH agreements A_G
hawksfan Offline
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Iowa/Illinois
I agree with AuditGuy. There would be no need to change/update unless the terms of the agreement needed to be changed or if NACHA came out with new guidance that certain new elements were required in the contract. We keep the exposure limit in an appendix and it is updated as needed, which is pretty infrequently.

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#808990 - 09/05/07 01:03 PM Re: Frequency of updating ACH agreements hawksfan
A_G Offline
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Originally Posted By: hawksfan
We keep the exposure limit in an appendix and it is updated as needed, which is pretty infrequently.


Ditto. Same with fees and things like that.
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#812008 - 09/10/07 01:23 PM Re: Frequency of updating ACH agreements A_G
MidMOAuditor Offline
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Missouri
Agreements are good indefinetely as far as I know. You do want to do an annual review and adjust exposure limits as necessary. During your review, if you find that things have changed in such a manner as to make the agreement questionable, then you might think about updating it.

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#818487 - 09/19/07 07:50 PM Re: Frequency of updating ACH agreements bls
osoalone Offline
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Texas
I attended an ACH Audit seminar just yesterday conducted by SWACHA. They recommended reviewing the contract annually because things do change periodically such as OFAC requirement, etc. They also suggested that the contract should state that if the ODFI is charged with any fines due to anything the Originator does, then the fines will be passed on to the Originator.

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#828389 - 10/03/07 07:56 PM Re: Frequency of updating ACH agreements hawksfan
SouthernComfort Offline
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Southern Illinois, USA
Would explain the exposure limits to me? I see this in the ACH exam questions and I am assumming it is referring to customers that we initiate payroll for but I am not certain. I have talked to operations regarding this issue, but it is hard to explain since I am not clear on the subject. I would appreciate your help.

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#828410 - 10/03/07 08:07 PM Re: Frequency of updating ACH agreements SouthernComfort
A_G Offline
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I think the NACHA book might explain them a little but look at the credit risk section from this OCC doc (page 3)...

OCC


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#828439 - 10/03/07 08:29 PM Re: Frequency of updating ACH agreements A_G
SouthernComfort Offline
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Southern Illinois, USA
Thank you. I believe that does clear things up.

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