We have a church that wants to set up direct deposit to pay their minister whose account is at another bank. Our system can accomodate this; however, I am stuck on who would sign the agreement. In the origintor world, we would have the person whose account is being credited (ministers account at another bank), sign an authorization for the ACH credit. But, we would also need our customer (the church)to sign an authorization form of some sort as well. I am looking for some guidance on how this should be handled?

The church (via proper representative) should sign an ACH originator agreement with the bank and the church would be subjected to the standard ACH originator due diligence process. You don't need anything from the minister. Most likely hardly worth it for one or two ACH originations a month.

Let me make sure I am understanding. We have several ACH Originators and we act as the ODFI. These customers are originating the ACH through our On-line banking cash management. This would be a situation where we are setting up a recurring ACH transaction to occur every 2 weeks, where the churchs account is debited and an ACH credit is originated and sent out with numerous other ACH tranasactions that we originate (for example we debit customers accounts at other banks and credit their loan here) and the bank would debit our customers account. I can't get my arms wrapped around this for some reason.

"These customers are originating the ACH through our On-line banking cash management."

Then I would hope that your cash management agreement includes the proper ACH agreements.

The ACH Originators though online banking, is compliant. We have been doing that for years and have all of the necessary agreements, etc. This situation is basically 1 customer want us to debit their account and credit their employee. It would not be feasible to set them up as an originator.

But they want to be an originator and without an agreement, I don't think you are going to comply with NACA rules. I don't think there is a deminimus rule - but maybe I am wrong.

Diana - if I read this correctly, you are looking for the churcj to have the bank act as the originating point for their minister's pay. Is the church going to be providing a payroll file for you to send, or will they just provide you an amount that needs to be sent every pay period? Either way, you need to treat this the same as you would any of your customers coming in through your online banking. The church is an originator, but you are the originating point and ODFI for them - in short, you are acting as their processor. You have no choice but to set them ujp as an originator.

If you don't think it is feasible to do so, then you should tell the church you can't perform this service. The agreements are as much for your protection as your customers. The last thing you need is 10 years from now the church says they never authorized it, they sue, it makes the press, and the bank loses...big. Even if you win that one, you lose.

Thank to all for your help.