Termination Of Deposit Account Control Agreement

It is important for a deposit-taking institution to evaluate its DACA forms and DACA verification and implementation process from time to time to ensure that there are no unnecessary risks. Vorys has extensive experience in representing custodian banks in structuring, negotiating and implementing DACA and can assist you in your DACA assessment. Please contact us with any questions about how to better protect yourself from possible DACA liability. 1) Accept a DaCA form that has not been specifically created by this deposit-taking institution for use by that deposit-taking institution; Custodian banks should have an experienced in-house team responsible for implementing all AACs. Relationship officers should not implement CAAs, but they should be informed of the importance of sending DACA applications through the DACA Depositing Institute`s Preparation, Verification, and Execution Protocol. As long as DACA is carefully prepared and properly negotiated by the depository institution`s lawyer, the incorrect implementation of a DACA is the primary source of risk for a custodian institution. The deposit-taking institution must ensure that all necessary checks have been carried out on the corresponding current accounts and that the storage facility is ready and able to implement and implement all the instructions it receives within the deadlines set by DACA. In particular, small deposit banks should be alert to the absence of key personnel and have safeguard procedures in place so that daCA instructions are always implemented immediately. For example, if the deposit-issuing institution does not respond to a lender`s notification requiring exclusive control of current accounts within the time limits prescribed by DACA, the deposit-taking institution could be held liable by the borrower for any withdrawal from current accounts made by the borrower after the introduction of sole control. A deposit-taking institution that makes a DACA makes significant commitments, both to the insured party and to its depositing client. Failure by a depositary financial institution to comply with commitments may reduce the value of the lender`s deposit guarantees. If the rights and obligations of all parties to DACA are not clearly defined or if the changes to DACA change the standard implementation process of a depositary institution, a custodian institution may accidentally take action that could also reduce the value of the lender`s deposit guarantees. .

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