Laru Corporation, an industry leader in the development of ACH risk management and fraud detection software announced today the availability of software that gives ODFIs and TPPPs the tools required to be in compliance with FDIC’s new guidelines. The software also gives ODFIs and TPPPs the tools they need to meet all of the guidelines detailed in NACHA’s new Third Party Sender Risk Management Handbook.
Laru Corporation’s ACH Clarity program uses proprietary business intelligence methodology to organize ACH transactions originated by Third Party Payment Processors (TPPP) into meaningful and actionable reports. One of the objectives of Laru’s original product design was to meet and exceed the OCC 2006-39 TPPP guidelines provided by the Office of the Comptroller and Currency in 2006.
“We have seen regulatory directives on this subject from the OCC, NACHA and most recently the FDIC via their January 31, 2012 letter FIL-3-2012 (http://www.fdic.gov/news/news/financial/2012/fil12003.html). As a software company addressing payment governance, risk and compliance issues for DFIs, increasing regulation is certainly reason for alarm. We recognize the DFI’s need for non-interest income and want to arm them with risk measurement tools, so they can perform the cost-benefit analysis of conducting this business. To know your customer (KYC) and to know your customer’s customer (KYCC) are themes discussed at every payments related conference. Laru’s ACH Clarity reveals, for example, not only the aggregate unauthorized return rates for the TPPP but the individual return rates for the TPPP’s customers as well,” said Rajiv Donde, Laru CEO.
Bank Regulatory Agency examiners are increasing their focus on making sure that the ODFI has the proper risk management and reporting tools in place to handle the special risks created by TPPP. Examiners have forced banks to immediately terminate services to TPPPs for not having the proper reporting tools in place. According to Elliott McEntee, former CEO of NACHA, TPPPs should make sure their risk management and reporting tools also meet the FDIC and NACHA guidelines. TPPPS, said McEntee, need to demonstrate to their ODFI that originating transactions on their behalf will not create regulatory problems for the bank.
According to Laru CTO, Carl Daniel, “Some simple steps ODFIs can take through Laru’s ACH Clarity are to monitor TPPP activity (at aggregator and sub-aggregator level), by unauthorized return rates, SEC codes, SIC codes and transaction frequency and set alerts for anomalies. In addition, examining transaction trends over several years will establish transaction patterns.”
About Laru Corporation
Laru Corporation, headquartered in Folsom, CA, develops and provides ACH risk management and compliance applications to companies throughout the U.S. ACH originators and receivers use the company’s products to identify, resolve, and prevent ACH fraud and network violations. Laru’s flagship product, ACH ClarityTM, monitors and manages the risks of originating, receiving and processing ACH transactions, and provides an independent ACH audit platform to meet the requirements of OCC Bulletin 2006-39 and FDIC’s FIL-3-2012. ACH Vision ODFI prevents problem transactions from entering the ACH network. For more information, please call (888) 527-8007 or visit the company’s Website at www.larucorp.com.