Risk Management and Assessment Proposal

Transcription

1 Survey Deadline Risk Management and Assessment Proposal ACH Participant Survey January 4, 2008 Survey responses are due to NACHA by February 19, NACHA Staff Contacts Return completed surveys to: Questions: Maribel Bondoc, Manager, Network Rules Fax (703) Debbie Barr, AAP, CTP, Senior Director, Network Rules Phone (703) Section I - Respondent Information Name: Title: Organization: Phone: Please indicate your organization s role(s) in the ACH Network: ODFI RDFI ACH Operator Originator Receiver Other Regional Payments Association Government Third-Party Service Provider Software Vendor Industry Association Would your organization be willing to be contacted in order to provide more information on the topics included within this survey?

2 ACH Participant Survey, 1/4/08, Page 2 Financial Institution Respondents Please Complete Asset Size less than $250 million $250 million - $1 billion $1 - $100 billion greater than $100 billion Annual ACH origination volume Annual ACH received volume What areas of your organization provided input for the responses to this survey? Operations Wholesale/Corporate Banking/Treasury Management Customer Service Sales/Retail Other: Corporate Originators and Receivers Please Complete Annual ACH origination volume: Annual ACH received volume Third Party Service Providers and Software Vendors Please Complete Which parties to ACH payments do you serve? Originators ODFIs RDFIs Section II - General Concept 1. Does your organization support the proposal to require all Participating DFIs to annually conduct an assessment of the risks of their ACH activities? 2. Does your organization support the concept that risk assessments should be scaled to the nature and complexity of a Participating DFI s ACH activity?

3 ACH Participant Survey, 1/4/08, Page 3 3. Does your organization support the proposal to include Risk Assessment Requirements as a separate appendix in the Rules? 4. Does your organization support the proposed expansion of the ODFI exposure limit requirements to incorporate more detailed ODFI risk management practices prior to origination? 5. Does your organization support the proposed requirement that additional risk-related topics be addressed in ODFIs agreements with Originators and Third-Party Senders? Section III Participant Issues RDFI Risk Assessments 6. Does your organization support the Level 1 Risk Assessment requirements for RDFIs, as defined in Appendix Nine, Section 9.1? 7. As an RDFI, does your organization currently conduct an assessment similar to the Level 1 Risk Assessment being proposed?

4 ACH Participant Survey, 1/4/08, Page 4 ODFI Risk Management Practices 8. As an ODFI, does your organization currently (check all that apply): Perform financial and operational due diligence of Originators and Third- Party Senders? Identify the line(s) of business of Originators and Originators of Third- Party Senders? Assess the nature of Originators or Third-Party Senders ACH activity and the risks it presents? Establish exposure limits for Originators/Third-Party Senders related to the nature of its ACH activity and related risks? Establish procedures and controls to monitor and enforce limits on origination activity, return activity, and exposure limits across multiple settlement dates? Address within your agreements the following (check all that apply): any restrictions on Originators or Third-Party Senders acceptable lines of business? specific Originator or Third-Party Sender requirements relevant to their lines of business? your right to terminate or suspend the agreement, or any Originator of a Third-Party Sender, for breach of the Rules? your right to audit the Originator s compliance with the agreement and the Rules? the Originator s or Third-Party Sender s reporting and recordkeeping requirements? Have procedures to periodically review the practices outlined above? 9. Would your organization need to modify your agreements with Originators and Third- Party Senders if this proposal is implemented?

5 ACH Participant Survey, 1/4/08, Page 5 ODFI Risk Assessments 10. Does your organization support the proposed differentiations between Level 2 and Level 3 Risk Assessments? 11. A.) Does your organization support the proposed requirements for a Level 2 Risk Assessment? B.) Does your organization support the proposed requirements for a Level 3 Risk Assessment? 12. Does your organization support any of the seven conditions that would require a Level 3 Risk Assessment (check all that you support)? the ODFI has an agreement with a Third-Party Sender; the ODFI permits an Originator or Third-Party Sender to transmit ACH files directly to an ACH Operator using its routing number(s); the ODFI originates ACH debit transactions for an Originator whose return transactions for unauthorized entries exceeds one percent of its forward debit transactions; the value of debit entries originated by the ODFI on any business day exceeds a percentage or multiple (i.e., 10 percent, 25 percent, 100 percent, 2 times, etc.) of its risk-based capital, as determined by NACHA; the ODFI originates ACH transactions for an Originator whose business lines include, but are not limited to, money services, money transmission, or online payments processing; Are there other lines of business that should be included?

6 ACH Participant Survey, 1/4/08, Page 6 the ODFI originates ACH transactions for an Originator whose business lines include those published from time to time by the National Association as having high rates of return; the ODFI has been subject to a Class 2 or Class 3 rules enforcement action by NACHA? 13. A. If your organization supports the comparison of ACH debit dollars originated to riskbased capital, what factors should NACHA consider in setting the percentage or multiple (i.e., 10 percent, 25 percent, 100 percent, 2 times, etc.) of risk-based capital (check all that apply)? the number of ACH debits originated by an ODFI; the type of ACH debits originated by an ODFI; a specific time period based on the number of days a debit can be returned; the percentage of debits originated to corporate accounts vs. consumer accounts; the ODFI s return rates; the ODFI s relationship(s) to an industry average(s); Other B. What should the percentage or multiple be? 3.5 percent of risk-based capital (NACHA s estimate of the industry average) 10 percent 25 percent 100 percent 2 times Other Don t know 14. As an ODFI, does your organization currently conduct an assessment similar to either the Level 2 or Level 3 Risk Assessment being proposed? - Level 2 Level 3

7 ACH Participant Survey, 1/4/08, Page 7 Section IV - Impacts 15. Does your organization have any concerns about or foresee any negative effects/risks related to this proposal? 16. What benefits does your organization believe would be derived from this proposal? 17. Would there be a substantial operational impact to your organization associated with this proposal? If yes, please specify: 18. Would there be a financial impact to your organization associated with this proposal? If yes, please specify how costly the financial impact would be: High Moderate Minimal Provide an estimate of the costs involved:

8 ACH Participant Survey, 1/4/08, Page Would your organization require changes to your ACH software with this proposal? If yes, please explain: Section V - Proposed Implementation Date Amendments to the NACHA Operating Rules may be implemented up to four times each year in March, June, September, and December. Amendments with software changes may be implemented in March and September. 20. Does your organization support the proposed implementation date for this proposal of December 19, 2008, with the first assessment under these requirements to be completed by December 1, 2009? If no, what implementation date do you believe would be more appropriate? June 2008 (first assessment to be completed by 12/1/08) September 2008 (first assessment to be completed by 12/1/08) September 2008 (first assessment to be completed by 12/1/09) March 2009 (first assessment to be completed by 12/1/09) Other (please specify) Section VI - General Questions 21. Are there any sections of the proposal that your organization believes should be balloted separately? If yes, please specify what section(s) and explain why:

9 ACH Participant Survey, 1/4/08, Page Please identify any other specific issues that have not been addressed elsewhere in this ACH Participant Survey? (feel free to attach additional pages):