Go to:

January 2019
< Dec Feb >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

NACHA: Sound Business Practices for Evaluating Customer Risks
Tuesday, June 17, 2014 6:25 AM

NACHA – The Electronic Payments Association has developed sound business practices to aid financial institutions in creating their own internal policies and procedures for appropriate due diligence when assessing and monitoring ACH Originators whose business activities may present a higher than normal risk profile under the institution’s enterprise risk management (ERM) program.

Customer risks identified within an ERM program typically include - at a minimum - credit risk, operational risk, regulatory risk and reputational risk. Its “Sound Business Practices for Evaluating Customer Risk” report also reviews key sound business practices for ACH origination in general.

Under an ERM program, certain industries, geographies or business activities may be identified as presenting higher than normal risk characteristics. As a result, customers that are deemed as potentially presenting a higher risk typically warrant additional due diligence before onboarding and on an ongoing basis to ensure that the financial institution has an appropriate understanding of a customer’s business.

This document details sound business practices that financial institutions may employ, or adapt, to diligently evaluate potential customer risks.

The document is divided into two sections: Enterprise-Level Policies and ACH Client Policies. Each section presents a number of practices that financial institutions may want to consider when evaluating customer risk profiles.

Specifically, the two sections address:

  • Enterprise-Level Policies, Procedures and Assessments ACH Client Policies, Procedures and Assessments
  • General Policies General Policies
  • Regulatory References Line of Business-Based Policies
  • Line of Business-Based Policies Activity Policies
  • Regulation-Related Policies
  • Additional Investigation and Recordkeeping

Click here to access the document.