I'm perfoming an audit and the program is asking me to determine what the daily limit for bill payment activity is for customers. The program continues to state that if ALCO or liquidity consequences were considered in setting this limit.

Now we have established dollar threshholds for investigating activity, but I can't imagine a daily limit limiting customers to what bills they can pay. What's the difference if they write a check for $100,000 or pay a bill using bill payment for $100,000. Why would we want to limit bill pay amounts if the customer has the money available. I'm confused...help please.

Liquidity concerns? I agree with you - what is the difference as far as liquidity is concerned whether the customer uses bill pay or check? Both will be Fed clearing items (or other correspondent clearing items) whether check or ACH. You can't control a customer's ability to write a check over a certain $ amount, and if you try doing that with billpay they lose the convenience factor of using billpay.

As far as risk is concerned, again someone not authorized to sign on the account could write checks as well as gain access to billpay. As long as you have a review process for large items and can monitor for fraud, money laundering, etc., I don't know what more banks can do.

We don't set limits, and review daily the billpay items over $xxxx . We have very few.

Maybe people at larger banks will have a different view on this matter and will chime in.