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Wire Transfers/ACHs for Payroll Services

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Question: 
Our bank is going to be implementing business online banking within the next few months. Within this module we are going to allow the business customer to initiate wire transfers and ACHs, which will be mainly for payroll service purposes. What, if any, compliance comes along with this and are there sample disclosures and consent forms that we can customize for our bank?
Answer: 

Randy Carey

You probably need to hire a consultant and a skilled attorney. These are not products you pull out of a box and hope you have yourselves legally covered.

Answer: 

Brian Crow

From a compliance standpoint, I encourage you to read FFIEC Supplement to Authentication in an Internet Banking Environment. It addresses the risks associated with offering these products.

Institutions are expected to educate their customers about the risks of viruses and establish log-in processes that are reasonably designed to prevent unauthorized access. You may also want to consider how you will monitor activity to identify unusual behavior that is potentially fraudulent. As Randy states, any agreements should be reviewed by bank counsel.

From a BSA perspective, consider how you are going to monitor activity to determine if it is reasonable based on your customers' risk profiles. Although the product is primarily for payroll, will you permit customers to debit consumer accounts? If so, you should have a process in place to monitor returns to ensure that your originators are not originating fraudulent transactions. Also consider how you will manage OFAC risks for these transactions.

First published on 08/02/2015

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