Method and system for screening financial transactions

• US 7,881,996 B1
• Filed: 08/03/2005
• Issued: 02/01/2011
• Est. Priority Date: 08/03/2004
• Status: Active Grant

• Current Assignee: Federal Reserve Bank of Atlanta (Federal Reserve System)
• Original Assignee: Federal Reserve Bank of Atlanta (Federal Reserve System)
• Inventors: Schulz, Larry
• Primary Examiner(s): Kyle; Charles R
• Assistant Examiner(s): Niquette; Robert R
• Application Number:
  US11/195,885
• Time in Patent Office: 2,008 Days
• Field of Search: 705/35, 705/30, 705/36, 705 38- 40, 705/42, 705/43, 705/50, 709/200, 713/168, 713/187
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/1085 involving automatic teller machines [ATMs]
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Efficiently screening ACH items and providing an indicator of the screening result. Electronic files, which can be in the NACHA file format, comprise ACH items. A gateway operator or an originating financial institution can screen each ACH item using a screening software module. For each ACH item, an indicator associated with the screening can be inserted into the ACH file before the ACH item is forwarded to a receiving financial institution. The indicator can identify whether the screening produced a match against an interdiction list and/or whether the screening produced a false positive. If the screening produced a match, processing of the ACH item can be suspended, and the ACH item can be returned to the originating financial institution. Notification of the match can be transmitted to the originating financial institution, the receiving financial institution, and/or law enforcement authorities.

Claims

1. A computer-implemented method for screening an automated clearinghouse (“

ACH”

) item between a sending customer and a receiving customer, comprising the steps of;

receiving a NACHA formatted ACH file comprising the ACH item from a first financial institution;

determining at a screening module whether at least one of the sending customer and the receiving customer is identified on an interdiction list, the interdiction list comprising information identifying at least one person or entity that is prohibited from conducting a financial transaction; and

in response to the foregoing determining step, the screening module inserting an indicator in the NACHA formatted ACH file, the indicator for use in further processing of the ACH file and being associated with the ACH item and indicating whether the at least one of the sending customer and the receiving customer is identified on the interdiction list,

wherein the screening module is implemented in a computer system that comprises instructions stored in a machine-readable medium and a processor that executes the instructions.

2. The computer-implemented method according to claim 1, wherein the indicator indicates that at least one of the sending customer and the receiving customer is identified on the interdiction list.

3. The computer-implemented method according to claim 1, wherein the indicator indicates that neither the sending customer nor the receiving customer is identified on the interdiction list.

4. The computer-implemented method according to claim 1, further comprising the step of submitting a notification to a law enforcement authority in response to a determination that at least one of the sending customer and the receiving customer is identified on the interdiction list.

5. The computer-implemented method according to claim 4, wherein the notification comprises a copy of the ACH item.

6. The computer-implemented method according to claim 1, wherein the step of determining whether at least one of the sending customer and the receiving customer is identified on an interdiction list comprises the step of determining whether at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list.

7. The computer-implemented method according to claim 1, wherein the first financial institution is a gateway operator.

8. The computer-implemented method according to claim 1, wherein the first financial institution is an originating depository financial institution.

9. The computer-implemented method according to claim 1, further comprising the step of transmitting the ACH item to a second financial institution in response to a determination that neither the sending customer nor the receiving customer is identified on the interdiction list.

10. The computer-implemented method according to claim 9, wherein the second financial institution is a gateway operator.

11. The computer-implemented method according to claim 9, wherein the second financial institution is a receiving depository financial institution.

12. The computer-implemented method according to claim 1, further comprising the step of determining whether the ACH item should be processed in response to a determination that at least one of the sending customer and the receiving customer is identified on the interdiction list.

13. The computer-implemented method according to claim 12, wherein the step of determining whether the ACH item should be processed comprises the steps of:

determining whether the at least one customer identified on the interdiction list is identified on a list of false positives; and

responsive to a determination that the at least one customer is identified on the list of false positives, determining that the ACH item should be processed.

14. The computer-implemented method according to claim 12, wherein the step of determining whether the ACH item should be processed comprises the step of transmitting a request to the first financial institution for instructions on whether the ACH item should be processed.

15. The computer-implemented method according to claim 1, wherein the step of determining whether at least one of the sending customer and the receiving customer is identified on the interdiction list comprises the steps of:

determining whether at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list;

responsive to a determination that at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list, determining whether the at least one customer named on the interdiction list is identified on a list of false positives; and

determining that the at least one customer named on the interdiction list is not identified on the interdiction list in response to a determination that the at least one customer named on the interdiction list is identified on the list of false positives.

16. The computer-implemented method according to claim 1, wherein the information in the interdiction list is generated independently of the ACH file and the ACH item.

17. A computer program product having stored therein a set of instructions that, when executed, cause a computer to implement a process of screening an automated clearinghouse (“

ACH”

) item between a sending customer and a receiving customer, the process comprising the steps of;

determining whether at least one of the sending customer and the receiving customer is identified on an interdiction list, the interdiction list comprising information identifying at least one person or entity that is prohibited from conducting a financial transaction, and

in response to determining that at least one of the sending customer and the receiving customer is identified on the interdiction list, inserting a first indicator into an ACH file that comprises the ACH item, the first indicator for use in further processing of the ACH file and indicating that at least one of the sending customer and the receiving customer is identified on the interdiction list.

18. The computer product of claim 17, wherein the process further comprises the step of, in response to determining that neither the sending customer nor the receiving customer is identified on the interdiction list, inserting into the ACH file a second indicator for use in further processing of the ACH file, the second indicator indicating that neither the sending customer nor the receiving customer is identified on the interdiction list.

19. The computer product of claim 17, wherein the ACH file is a NACHA formatted file.

20. The computer product of claim 17, wherein the process further comprises the step of, responsive to determining that at least one of the sending customer and the receiving customer is identified on the interdiction list, transmitting a notification of the identification to a law enforcement authority.

21. The computer product of claim 20, wherein the law enforcement authority is the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC).

22. The computer product of claim 20, wherein the notification comprises a copy of the ACH item.

23. The computer product of claim 17, wherein the process further comprises the steps of:

determining whether at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list;

responsive to determining that at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list, determining whether the at least one customer identified on the interdiction list is identified on a list of false positives, and

responsive to determining that the at least one customer is identified on the list of false positives, determining that the at least one customer is not identified on the interdiction list.

24. The computer product of claim 17, wherein the information in the interdiction list is generated independently of the ACH file and the ACH item.

25. A computer-implemented method for screening an automated clearinghouse (“

ACH”

) item between a sending customer and a receiving customer, comprising the steps of;

creating a NACHA formatted ACH file comprising the ACH item at a first financial institution;

determining at a screening module whether at least one of the sending customer and the receiving customer is identified on an interdiction list, the interdiction list comprising information identifying at least one person or entity that is prohibited from conducting a financial transaction; and

in response to the foregoing determining step, the screening module inserting an indicator in the NACHA formatted ACH file, the indicator for use in further processing of the ACH file and being associated with the ACH item and indicating whether the at least one of the sending customer and the receiving customer is identified on the interdiction list,

wherein the screening module is implemented in a computer system that comprises instructions stored in a machine-readable medium and a processor that executes the instructions.

26. The computer-implemented method according to claim 25, wherein the indicator indicates that at least one of the sending customer and the receiving customer is identified on the interdiction list.

27. The computer-implemented method according to claim 25, wherein the indicator indicates that neither the sending customer nor the receiving customer is identified on the interdiction list.

28. The computer-implemented method according to claim 25, further comprising the step of, responsive to a determination that at least one of the sending customer and the receiving customer is identified on the interdiction list, submitting a notification of the identification to a law enforcement authority.

29. The computer-implemented method according to claim 28, wherein the notification comprises a copy of the ACH item.

30. The computer-implemented method according to claim 25, wherein the step of determining whether at least one of the sending customer and the receiving customer is identified on an interdiction list comprises the step of determining whether at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list.

31. The computer-implemented method according to claim 25, wherein the first financial institution is a gateway operator.

32. The computer-implemented method according to claim 25, wherein the first financial institution is an originating depository financial institution.

33. The computer-implemented method according to claim 25, further comprising the step of transmitting the ACH item to a second financial institution.

34. The computer-implemented method according to claim 33, wherein the second financial institution is a gateway operator.

35. The computer-implemented method according to claim 33, wherein the second financial institution is a receiving depository financial institution.

36. The computer-implemented method according to claim 25, further comprising the step of determining whether the ACH item should be processed in response to a determination that at least one of the sending customer and the receiving customer is identified on the interdiction list.

37. The computer-implemented method according to claim 36, wherein the step of determining whether the ACH item should be processed comprises the steps of:

determining whether the at least one customer identified on the interdiction list is identified on a list of false positives; and

responsive to a determination that the at least one customer is identified on the list of false positives, determining that the ACH item should be processed.

38. The computer-implemented method according to claim 25, wherein the step of determining whether at least one of the sending customer and the receiving customer is identified on the interdiction list comprises the steps of:

determining whether at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list;

responsive to a determination that at least one of the name of the sending customer and the name of the receiving customer is on the interdiction list, determining whether the at least one customer identified on the interdiction list is identified on a list of false positives; and

responsive to a determination that the at least one customer is identified on the list of false positives, determining that the at least one customer is not identified on the interdiction list.

39. The computer-implemented method according to claim 25, wherein the information in the interdiction list is generated independently of the ACH file and the ACH item.