Transaction level ACH Screening - A Regulatory Imperative for US banks

This whitepaper explains why U.S. regulators require transaction-level OFAC screening of domestic ACH payments, not just customer-level checks. Drawing on guidance from the OCC, OFAC, the Federal Reserve, and FFIEC, it makes clear that both originating and receiving banks are responsible for compliance, and that strict-liability enforcement means failures can result in significant penalties. The recent $3.09B TD Bank case underscores the risks of excluding domestic ACH from sanctions screening.

** Relevance for U.S. Financial Institutions: ACH is one of the most widely used payment rails in the U.S., and regulators expect full sanctions compliance across every transaction.

This paper is highly relevant for banks and credit unions because it:

• Clarifies regulatory expectations for ACH compliance
• Highlights the risks of strict-liability enforcement
• Provides practical approaches for efficient, accurate screening.

*** There is lack of clarity about this very important subject among US banks and credit unions. We believe ABA website visitors will highly appreciate such important and relevant content.