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DACA are tripartite agreements between a lender (often referred to as an insured party), a borrower, and a deposit-take institution. The purpose of a DACA is to allow a lender to take control of its borrower`s deposit accounts held with a deposit institution other than the lender, allowing the lender to fine-lending its security interests on deposit accounts. Some CADs are structured in such a way that the lender has exclusive control of the deposit accounts immediately after the execution of the DACA. Other DACA allow the borrower to access, withdraw and transfer funds from deposit accounts until the lender tells the custodian that the lender takes sole control and that the borrower no longer has the right to access, withdraw or transfer funds from deposit accounts. The first step a custodian bank needs to take to protect itself is to start with a good DACA form. DACA forms made available to a deposit-taking institution by a lender are not prepared taking into account the unique operational, business and legal needs of the deposit-taking institution. And it is very likely that they will contain provisions that are more favorable to lenders than the market in the sector. By creating and emphasizing the use of its own DACA form, a deposit-taking institution can be confident that its unique operational needs will be taken into account, including notification information and the time required to implement other parties` instructions. In addition, individuals who implement CADs with the deposit-taking institution are better acquainted with the deposit-taking institution`s obligations under DACA by consistently using their own form, which reduces the likelihood of there being an error or oversight in the implementation. Often, those responsible for implementing AACs are not familiar with the verification and interpretation of agreements. Therefore, an unknown DACA form will be difficult to interpret to understand all of the custodian bank`s obligations. If the deposit bank form is used consistently, any lawyer who negotiates a DACA for the deposit-take-off institution can point out changes to the DACA that may affect the deposit-take-off institution`s obligations. .

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