RDC is an automated deposit transaction delivery system. It enables electronic transmission of an electronic image (or captured digital data) to a credit union for posting and clearing.
RDC allows a credit union to collect on share drafts that have been deposited without physically transporting items, to receive digital information from deposit documents captured at a remote location, replaces microfilming, eliminates encoding costs, and speeds up collection.
RDC may provide benefits to both credit unions and their members by decreasing processing costs, supporting emerging technologies, and improving access to funds. This service may also introduce additional legal, compliance, and operational risks.
Remote Deposit Methods
A credit union may offer a variety of deposit capture methods depending on the type of member activity:
- Mobile capture (computer, tablet, phone, or other electronic device with scanning device)
- Merchant capture
- Remote lockbox deposit
- Teller capture (at each teller station or centralized on each teller line)
- Branch capture (at each branch location or centralized in back office location)
- ATM capture
- Kiosk capture
Qualifying Members for RDC
Qualifying members for RDC products and services is another way the management team can control risk. Members wanting to use RDC products and services should be subject to a risk-based qualifying suitability review. This is especially true for the business member due to the increased volume and type of activity the business member brings to the credit union.
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Duplicate Detection
With RDC, there is the potential for an item to be presented to a credit union more than one time through the use of multiple remote deposit methods. For example, a member may use a credit union’s mobile capture product to deposit a check, and then deposit the same check a second time at the credit union in person. To help control this risk, management should implement duplicate detection systems. The optimal solution provides real-time duplicate detection:
- On the item level,
- On the file level,
- Across multiple days,
- Across multiple points of presentment, and
- Across all applications (or deposit methods) within the enterprise.
Management Oversight
In order to ensure effective risk management, a credit union’s management team should establish operational performance metrics, create benchmarks and standards, and develop reports to support management oversight of RDC operations. Oversight of the following is warranted:
- Counterfeit checks and detection
- Check alteration and detection
- Forged or missing endorsements
- Double presentment
- Large item exceptions
- Volume velocity and breached dollar limit exceptions
- Gaps in training and rotation of duties
- User access authorities
- Workstation security standards
- Incident response expectations
Member Agreements
Part of effective risk management includes developing strong and well-constructed member agreements. This is especially true for business members due to the increased volume and type of activity they bring to a credit union. RDC agreements should clearly define:
- Roles and responsibilities of all parties, including those related to the sale or lease of equipment and software needed for RDC at the member location
- Handling and record retention procedures for information, including physical and logical security, transmission, storage, and disposal of deposit items containing nonpublic personal information
- Types of items that may be transmitted
- Processes and procedures that the member must follow, including those related to image quality
- Governing laws, regulations, and rules
- Authority to mandate specific internal controls at the member locations
- Right to audit member operations, or request additional customer information, and
- Authority to terminate the RDC relationship
See the RDC Review Procedures topic of this Examiner’s Guide chapter for more information.
Last updated September 25, 2017
