The Department of Financial Institutions has become aware that some financial institutions are taking excessive risk regarding ACH transactions.
If your institution processes ACH transactions for telemarketers or internet based sites, you should very carefully review your contract with both the processing company and the originators. You should further have CURRENT financial information on BOTH the originators and processors.
Appropriate reserves should be maintained, under your control, and the contract should specify daily transaction limits. Board of Directors approved policies regarding all aspects of ACH transactions should be in place and available for examiners. Proper controls and regular monitoring of these transactions is essential.
We urge you to proceed with caution and insure that your level of risk is appropriate for your institution and your Board of Directors as well. Be certain that you comply with established NACHA rules.
If you have any questions or comments, please contact Assistant Commissioner Derek Carrier at 615-741-2236.