NACHA unveils resource for assessing ACH risks
June 3, 2014 – NACHA – The Electronic Payments Association last week announced the launch of a new resource that financial institutions can use to better assess and monitor companies that may present a higher than average risk profile when initiating automated clearinghouse transactions.
For those ACH originators that may present a high-risk profile under a financial institution’s enterprise risk management program, NACHA’s new document, Sound Business Practices for Evaluating Customer Risk, reviews sound business practices for ACH origination at both the enterprise and ACH-specific level.
“Appropriate due diligence when onboarding a new ACH Originator or when evaluating existing relationships is a key component of effective risk management for financial institutions,” Janet Estep, president and CEO of NACHA, said in a statement. “Employing proper due diligence and other risk management strategies helps financial institutions mitigate their risk and helps ensure the continued safety, security and integrity of ACH payments and the ACH Network.”
NACHA is also expanding use of its Originator Watch List tool “to further support financial institutions and the payments industry with managing risks,” the association said. NACHA also encouraged financial institutions to use the Nationwide Multistate Licensing System to support risk efforts as well as the association’s Terminated Originator Database to support risk management activities.
NACHA will be providing additional details on its document, along with use of the Originator Watch List and Terminated Originator Database and the NMLS during a webinar, “Making Due Diligence Easier with High-Risk Originators,” at 1:30 p.m. Eastern on June 19.