Why the Board decided against using Auto-Debit Payments
After discussing the subject with Walter Clur at Aloha Property Management, and then with Ben Locquiao, the Bank of Hawaii Cash Management Officer for Maui, the Board has decided NOT to use ACH (Automated Clearing House) auto-debits after all. Following are the facts we learned about ACH payments:
- The Association would have to go through an "approval" process.
- There is a one-time startup fee of $150.
- There is a monthly fee of $25 per month whether it is used or not. With annual payments, we would be paying $275 per year for eleven months in which it was not used at all. Walter says that ACH is more suitable for AOAOs who are on monthly payments. For annual payments it is not necessary or cost effective.
- There is a batch fee of $5.00 per batch.
- There is a transaction fee of $.15 per payment.
- Not all owners would choose to this payment method so we would have to maintain two entirely different procedures for collecting fees.
- Preparing the batches involves a separate online login and data entry, actually taking more time than processing checks.
- The owners who become delinquent and cost the Association time and money would never go on ACH anyway, so it really would serve no purpose.
- Use of ACH has some liability by opening the Association to "settlement exposure" and possible charge-backs.
- Our goal in considering ACH was to simplify the collection of payments while saving time and money, but in reality it would complicate the process, take more time, and add to our operating overhead -- exactly the opposite of what we had in mind.
- Everyone is already familiar and comfortable with checks.
- Checks are tangible, scan-able, easy to deposit, and FREE.
We thank the owners who showed support by signing up for ACH and sincerely apologize for any inconvenience this conclusion may have caused anyone. We are as disappointed as you are in discovering that this method is not the panacea we had envisioned. Mahalo for your understanding and patience while we strive to devise the best possible system for running this Association.