Document background
A Debit Authorization Agreement serves as the foundational document for establishing automated payment arrangements in the United States. This agreement becomes necessary when regular, recurring payments need to be automatically withdrawn from an account, such as for mortgage payments, insurance premiums, or subscription services. The document must comply with federal regulations including the Electronic Fund Transfer Act, Regulation E, and NACHA Operating Rules, while also adhering to state-specific banking laws. The agreement typically specifies the payment amount, frequency, duration, and provides protection for both the initiator and receiver of the funds.
