Mitigating automated clearing house risk through originator training

Timothy Mills, Jennifer Stanley and John Biloz

Journal of Payments Strategy & Systems, 2006, vol. 1, issue 1, 33-41

Abstract: This paper illustrates the importance of automated clearing house (ACH) originator education and its effectiveness in reducing a financial institution’s overall risk exposure. It summarises the types of risk, reviews changes to NACHA (The Electronic Payments Association) Operating Rules relative to originating depository financial institution (ODFI) warranties and highlights the risk that an ODFI is subject to under these warranties when an originator does not engage in good ACH business practices, thus causing the ODFI to breach the warranties. Also included are suggestions for a focused educational programme and identification of self-help resources for originators and institutions.

Keywords: ACH origination; ACH risk management; ACH training; originator; ODFI; payments; payments education; NACHA (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jpss00:y:2006:v:1:i:1:p:33-41

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