05/09/2024

Payments Hot Tip: How to Comply in Third-Party Relationships

Working with third parties enables FIs to compete and respond in an ever-changing financial ecosystem and expand your customer base. However, working with third parties can introduce new compliance requirements. For instance, Article Two, Section 2.18.3 of the Nacha Operating Rules states, “An ODFI must register with the National Association each Third-Party Sender for which it originates Entries. An ODFI with no Third-Party Senders must affirmatively state to Nacha that it has none.” All originating institutions must comply with that requirement or risk fines.

Join us for SFE's upcoming training, Third-Party Risk Management Requirements for Financial Institutions and Third-Party Payment Processors, taking place May 14, from 1-2:30 pm CT. The session will review recent enforcement actions related to third parties and discuss third-party risk management guidance and compliance considerations to help financial institutions better understand the expectations regulators have regarding third-party relationships.

In addition, check out our ACH Origination Third-Party Sender Agreement. This sample agreement, in a Word document format, includes critical terms and conditions that should be addressed in a legal agreement between a financial institution and a Third-Party Sender—to ensure you’re supporting their compliance and mitigating your risks.

For more information on third-party senders, how to identify them, and rules around them, please feel free to reach out to us. We’re happy to answer individual questions on a case-by-case basis.   

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