We will be spinning off an office for a DeNovo enterprise in Michigan. One barrier that we are working with is switching our customers ACH transactions to the new accounts and routing number. Our current solution is to simply notify our customers to contact any ACH originators and to provide the new information. I have two concerns with this as I believe that the effectiveness will be low as many customers may put off making the change and it is a large request to make of the customer. I want this process to be as smooth as possible for them.

Has anyone gone through a similar process or have any advice for me?

Thanks!
Dean

One suggestion is for your institution to take steps to make it as easy as possible on your customers. If the customers have to write letters from scratch to the ACH originators, many will procrastinate. On the other hand, if you provide them with a form letter, with as much of the information filled out as possible, making it necessary for them to simply fill in a few fields, sign it, and mail it, the burden on the customer will be greatly reduced and that will increase compliance.

Thanks... I agree 100%. My best thought is to create a form with the new bank information, my customer can copy it, complete the originator information and send it on. Unfortunately, this still seems like a lot to ask, but I haven't been able to come up with anything better.

Dean

FYI...having been involved in opening a de novo bank, we found many ACH processors were not able to convert customer ACH transactions to our R&T if they were using ACH origination software that checked not only the validity but the existence of the R&T. Since our R&T was brand new, many ACH processors could not process to our new R&T until they got an update to their ACH origination software....6-12 months later.

WOW! Thank you...

One other tool to consider is the ACH Notification of Change (NOC) transaction. As soon as you have identified the new R&T and account numbers, you should consider creating the NOC transactions that go back through the ACH system to notify the originators. Don't rest on this alone, however. Although NACHA rules require the originator to act upon the NOC, many originators either don't understand the process or don't follow up. It's just another tool.

Another tool is to create a system whereby any transactions coming into your shop destined for divested accounts are stripped off and a new ACH tape created, which can be forwarded to the new entity. You should consider trying this for a couple of months in the interests of mutual customer relations. While these recipients will technically be customers of the new entity, you don't really want them to have a sour taste in their mouths over your failure to make the transition as smooth as possible.

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John Burnett
Cape Cod Bank and Trust