Dear Treasury Management Client:
We appreciate your Treasury Management business and want to keep you up-to-date on changes in our services and the rules that apply to them. To that end, we are alerting you that we have updated our Treasury Management Services Agreement (“Agreement”) to ensure it is aligned with our current service offerings and reflects changes in applicable law and network rules.
For your review, a summary of the material changes made to the Agreement is highlighted below and a copy of the updated Agreement (v6.25) may be requested from the Bank. All capitalized terms used but not defined herein have the meanings provided in Section 1 of the Agreement.
You are not required to execute or approve the updates at this time. We will deem your continued use of the Services after [, 2024] as evidence of your acceptance of and agreement to our updated Agreement. Furthermore, if you enroll in a new Treasury Management Service or change elections you previously made, your enrollment will be deemed acceptance of the Agreement.
SUMMARY OF MATERIAL CHANGES
Master Agreement:
Section 5 addresses digital signatures as a means of electronic contract acceptance. With technological advances and development of the law, we need the ability to execute contracts and Set-up Schedules and amend them with not only digital signatures but with online acceptance and other methods of authentication permitted by law. Thus, subsection b) now reads:
Bank may provide Client the option of entering into this Agreement or any Set-up Schedule, or an amendment thereto, with a digital signature or via other methods permitted by law. Client hereby agrees that Client’s use of such methods will represent the written signature(s) of Client’s Authorized Signer(s) and will bind Client to the terms and conditions of the applicable agreement, schedule, addendum or form.
Section 7 regarding your obligations with respect to Security Procedures and fraud prevention now includes a reminder to never share your credentials with otherwise unauthorized persons, even with someone purporting to be the Bank. To that end, we added the following to the end of subsection b:
DO NOT SHARE ONLINE CREDENTIALS. Bank will never contact Client by email or telephone in order to ask for or to verify Account numbers, Security Procedures or credentials, or any sensitive or Confidential Information. Do not share such information or otherwise provide access to Accounts. In the event Client receives an email, telephone call or other electronic communication that Client believes, or has reason to believe, is fraudulent, Client should not respond, provide any information to the sender/caller, click on any links in the email, or otherwise comply with any instructions.
IF CLIENT, ITS ADMINISTRATOR, A USER OR AGENT DISCLOSES USER IDENTIFICATION CODES AND/OR PASSWORDS TO ANYONE, AND/OR IF CLIENT ALLOWS SOMEONE TO USE SUCH IDs AND PASSWORDS TO GAIN ACCESS TO ACCOUNTS, CLIENT HAS AUTHORIZED THEM TO ACT ON ITS BEHALF AND WILL BE RESPONSIBLE FOR ANY USE OF THE SERVICE BY THEM, INCUDING EXTERNAL TRANSFERS.
Section 14 discusses Service Providers. Historically, payment processors and other Client Service Providers were primarily used for ACH Origination. Today, our customers permit third parties access to a variety of online Services. We have now added a subsection b) to address this development:
Client may grant authority to third-party Service Providers to legally bind Client with respect to its use of the Services. Client is liable for (i) Service Provider’s actual failure to comply with any of Client’s obligations under this Agreement; (ii) all fees, costs and expenses owed to each Service Provider for its services on Client’s behalf; and (iii) any claims, damages, costs, and expenses incurred by Client or Bank as a result of Service Provider’s failure to perform, delay or error in performing services on Client’s behalf. Notwithstanding the foregoing, Client understands and agrees that Bank may refuse to accept any instruction from such Service Provider for any reason, but in no event shall Client or Service Provider have a cause of action, legal or equitable, against Bank for such refusal. Client shall provide information, including financial information, which Bank may, in its sole discretion, require from time-to-time regarding any Service Provider that Client hires, employs, or retains in any manner, to initiate transactions or assume any of Client’s duties under this Agreement. Client understands and agrees that because of the risks involved in certain Services that Client may utilize, Bank may refuse, in its sole discretion, to provide such Services to Client if the Service Provider retained by Client does not meet Bank’s qualification criteria. Neither Client nor any other person or entity has the right to rely upon the determination made by Bank nor have a cause of action against Bank for or as a result of Bank’s determination.
Section 23 is a new section dealing with our right to establish limits on Services:
Bank reserves the right to limit the availability of certain Services or the amount and frequency of transactions based on such factors as credit worthiness, the length and extent of Client’s relationship with Bank and its affiliates, transaction history, and such other factors as Bank, in its sole discretion, deems relevant.
Service Terms &Conditions:
Each Treasury Management Service we offer is covered by a Service Terms & Conditions in the Agreement regardless of whether you use it. The Service Terms & Conditions of a particular Service become binding on you when you subscribe to the Service or use it.
We recommend Dual Control for ACH Origination and Wire Transfer Requests. This is an important protection for your Account especially in light of the sophistication of fraudsters and spammers. Section 4b) of the ACH Origination Service Terms & Conditions and Section 4a) of the Wire Transfer Service Terms & Conditions remind you of your obligations:
Client acknowledges and agrees that, in addition to the limitations on Bank’s liability and Client’s indemnification of Bank otherwise provided in this Agreement, Client assumes all additional risk and liability if it opts out of Dual Control and agrees to indemnify and hold Bank and its officers, directors, employees and agents free and harmless from and against any and all claims, demands, expenses (including, without limitation, attorneys’ fees, expenses and costs), losses or damages of any nature whatsoever that are incurred by Client as a result of Client’s decision to opt out of Dual Control.
We update the ACH Origination Service Terms & Conditions from time-to-time as the NACHA Rules change. However, users of ACH services are required to comply with the NACHA Rules whether or not they are reflected in the Agreement. You should always have access to the updated NACHA Rules. Material changes in the ACH Origination Service Terms & Conditions include:
Section 9a) clarifies that reversals may only be initiated to correct Erroneous Entries.
Reversals. Client or Bank may initiate Reversing Entries to correct Erroneous Entries. The initiation of Reversing Entries for any reason other than those explicitly permissible in the definition of Erroneous Entry is prohibited. In initiating a Reversing Entry, Client warrants that it has initiated Reversing Entries or files within five (5) Business Days of the original Entry or Entries and within twenty-four (24) hours of discovery of the error.. Client also warrants that the account holder of a Reversing Entry has been notified of the reversal, and the reason for the reversal, no later than the settlement day Settlement Date of the reversal. For both Reversing Entries and files, Client shall indemnify all parties to the transactions(s) from and against any claim, demand, loss, liability or expense.
Section 17a) is added to develop the requirements of ACH authorizations:
In addition to the representations and warranties of Client that are included herein, Client represents, warrants and agrees that with respect to each and every Entry transmitted by Client: (i) each person or company shown as the Receiver on an Entry received by Bank from Client has authorized the initiation of such Entry and the crediting or debiting of its account in the amount and on the Effective Settlement Date shown on such Entry; (ii) such authorization was obtained in the manner permitted by the NACHA Rules or under Applicable Law; and (iii) such authorization is operative at the time of transmittal or crediting or debiting by Bank as provided herein and has not been revoked.
Section 20 now includes a new NACHA requirement as to risk-management in situations of False Pretenses. “False Pretentions” is defined as the inducement of a payment by a person misrepresenting (a) its identity, (b) its association with or authority to act on behalf of another person or (c) the ownership of the Account to be credited. This is effective next year (2026).
Furthermore, Client agrees that by the appropriate date in 2026 (based on ACH volume) it will have established and implemented risk-based processes and procedures reasonably intended to identify Entries that are suspected of being unauthorized or authorized under False Pretenses (as defined in the NACHA Rules).
Thank you for your attention to these matters.