ACH: Stay Informed and In Compliance

In the ever-changing world of ACH, it is difficult to stay abreast of the risks involved and the ever-changing rules. The presentation gives community banks ideas for reducing risk and improving compliance.

The ACH-Rule changes that are effective from 2018 - 2021 are also explained in a practical, easy-to-understand approach. NACHA’s upcoming changes are also covered during this one-day program.

Identify areas of ACH activity where a financial institution may be held liable if proper procedures are not in place, and learn what examiners are looking for relative to ACH. Fraud schemes occurring within ACH processing are outlined. Areas of risk/fraud addressed include:

  • Sending NOCs and returns
  • Accepting and returning government benefit payments
  • Transmitting ACH origination files from originators and third-party senders
  • Processing ACH pre-authorized transfers and loan payments
  • Originating person-to-person payments
  • Business email compromise

In response to each risk or fraud identified, there will be solutions provided to mitigate the risk to both the financial institution and its account holders. The class provides attendees with ideas for policies and procedures that help protect the financial institution from unnecessary losses.

Simplified procedures for maintaining compliance and tips for avoiding those commonly-made mistakes are provided.

ACH-Rule changes effective in 2018 through 2021, are also explained in an understandable manner. Such areas of change include: Same-day ACH, funds availability, return codes, audit requirements, WEB debits, data security, and a new NACHA form.

Sample written statements for unauthorized debits and stop-payment forms that comply with the rules and limit the bank's liability under Regulation E are provided.

Commonly made mistakes regarding ACH-Rules compliance will be identified, including the following areas:

  • Proper return codes and deadlines;
  • Stop payment versus written statement versus Regulation E;
  • Federal government benefit payment returns;
  • Originator due-diligence and exposure-limit requirements;
  • ODFI/originator compliance with the new waiting period for live entries after prenotifications;
  • Origination by the financial institution of pre-authorized transfers and loan payments; and
  • Performing the required ACH audit.

About the Presenter

Tim Tedrick, CRCM, CRP, and principal at Wipfli LLP in Sterling, Illinois, also leads this seminar. The firm has more than 650 financial institution clients and Tedrick specializes in compliance, consulting and assistance. He supervises internal audit and compliance exams for all sizes of financial institutions in eight states. He is a graduate of ABA’s National Graduate Compliance School in Norman, Oklahoma. Tedrick is also a Certified Regulatory Compliance Manager and a Certified Risk Professional. He teaches compliance at various statewide schools, and provides training to banks on a one-to-one basis.