Banner Bank ACH Originator Guide

ACH Processing Limits ODFIs (Originating Depository Financial Institutions) are required to set processing limits for their Originators. Processing limits are risk exposure thresholds used by Banner Bank to determine whether the ACH entries submitted are within approved guidelines. ACH credit limits are typically tracked separately from ACH debit limits. If you are not originating ACH debit entries, your organization will not have an ACH debit origination processing limit. The ACH processing limits establish the cumulative maximum dollar amount of originated entries allowed. Banner Bank will assign you a daily origination limit. As part of the Rules, Banner Bank must monitor your ACH origination activity to the limits established for your account. Your ACH entries may be paused should limits be exceeded, so it is important to provide contacts, even off-hours contacts, should we need to reach you about an issue. If your company is anticipating an increase in the dollar amount of your ACH entries, you should proactively contact your relationship management consultant to discuss the situation and evaluate either a temporary or permanent limit adjustment based on the situation. Please note that additional scrutiny, including credit approval, may apply to a requested limit change. Lastly, be aware that your assigned Treasury Management Officer will periodically review your originated activity compared to established limit thresholds and will contact you to discuss any recommended changes. Prefunding for ACH Credits Originated versus Exposure Financial Institutions typically use one of two approaches to mitigate ACH risk to establish a processing limit: prefunding or credit-based exposure. If you are originating both ACH debit entries and ACH credit entries, your organization will require credit-based exposure for both types of activity. Descriptions of both approaches are listed below: • ACH Prefunding : When you originate ACH credit entries, prefunding allows Banner Bank to hold/debit the funds before releasing the entries into the ACH Network. For example, if you submit a payroll file on Wednesday for your employees to be paid on Friday, we will debit your funds on Wednesday. ACH prefunding is an ideal option for small businesses, start-ups, Originators with insufficient credit history, or those wishing to avoid a lengthy credit review. • Credit-Based Exposure : With credit-based exposure, Banner Bank performs a credit evaluation based on your company’s application for ACH origination services and collects financial information, such as credit reports, financial statements, etc., to make the approval decision. Credit-based exposure could apply to either credit or debit origination and is an ideal option for Originators wishing to fund ACH activity on the Settlement Date. For example, if your company sends an ACH file to Banner Bank on

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