AAP Baseline Exam - Incorrect Answers

Question 1

How long is an RDFI required to retain a copy of a WSUD related to a returned entry?

Answer 1

One year

Question 2

The Nacha Operating Rules require that each ACH Operator must retain a record of all entries for at least:

Answer 2

One year from transmittal of entry.

Question 3

Which of the following is true relating to addenda records for an IAT (International ACH Transaction) entry?

Answer 3

7 mandatory, 2 optional remittance, 5 optional foreign correspondent (only a combined maximum of 12 addenda records)

Question 4

If an Originator changes the scheduled debit date of an ACH entry, how many days in advance of the new date must the Originator provide notice to the consumer Receiver?

Answer 4

Seven calendar days

Question 5

When is settlement considered final for ACH credit entries?

Answer 5

The day following the settlement date.

Question 6

The Overall Return Rate Level is:

Answer 6

15%

Question 7

An ACH Operator receives an ACH Credit item with a stale effective entry date. When will settlement occur?

Answer 7

The next available settlement opportunity.

Question 8

How many CHARACTERS are in a block in a Nacha-formatted file?

Answer 8

940

Question 9

Anthony opened his checking account with Northern Bank in February. In the initial disclosures provided by Northern Bank upon account opening, the ATM fee was clearly stated as being $3.00 per transaction. Effective October 1, the fee for using an ATM will increase to $3.50. According to Regulation E, how many days prior notice is required when there is a change to the initial disclosures which results in greater consumer liability?

Answer 9

21 Days

Question 10

A transaction that posts to an account in real time may affect the balance available in the account immediately, however the posting may be temporary until the institution has completed all of the verification, balancing and reconciliation activities for:

Answer 10

Memo posting

Question 11

An RDFI is required to make funds available in the Receiver’s account for credit Same Day Entries received in the third same-day processing window by:

Answer 11

The end of RDFI’s processing day.

Question 12

The RDFI, upon receipt of the federal government’s Notice of Reclamation, has up to how many days to react to a Notice of Reclamation and prevent further withdrawals?

Answer 12

One business day

Question 13

Community Financial Institution developed an ACH origination agreement for its business customers to sign. The Nacha Operating Rules require which of the following to be included in the agreement:

Answer 13

The financial institution’s restriction on the type of entries that may be originated.

Question 14

Which arbitration procedure could be used in a dispute arising where a complaint asserts damages of $10,000 or more but less than $50,000?

Answer 14

Arbitration Procedure B

Question 15

In an ACH file, which record contains the Company Name, the Standard Entry Class Code, and the Effective Entry Date?

Answer 15

Batch Header Record

Question 16

True or False: ODFIs are required to originate Same Day ACH, but RDFIs can choose to receive Same Day ACH

Answer 16

False: ODFIs can choose to originate Same Day entries, but RDFIs are required to receive Same Day ACH.

Question 17

A Financial Institution terminated a relationship with a Payments Processor, who they previously registered in Nacha’s Third-Party Sender Registry. The Financial Institution must update the registry within what timeframe following the termination of this relationship?

Answer 17

45 Days

Question 18

The Company Name (all batches except IAT) is:

Answer 18

Mandatory

Question 19

First Bank (the ODFI) is creating XCK entries due to a lost cash letter. According to the Nacha Operating Rules, First Bank needs to keep a copy of the item(s) to which each XCK entry pertains for:

Answer 19

6 years

Question 20

Within what time frame must An ODFI reduce the Unauthorized Entry Return Rate of an Originator or Third-Party Sender below the Unauthorized Entry Return Rate Threshold after being instructed to do so by Nacha?

Answer 20

30 Days

Question 21

As a prerequisite to origination, and to help control credit risk, an ODFI must have this in place for all the Originators for which it transmits ACH entries:

Answer 21

Exposure Limits

Question 22

Great State Bank receives a notice from Nacha regarding reporting requirements for unauthorized returns for one or more Originators or Third-Party Senders (TPS) that Nacha suspects exceeded the threshold of 0.5 percent. Great State Bank must:

Answer 22

respond within 10 banking days via a traceable delivery method explaining the reason(s) causing the Originator or TPS to have exceeded the unauthorized entry return rate threshold.

Question 23

A data element/segment requirement designator that indicates the presence of a specified data element is necessary to ensure processing.

Answer 23

Mandatory

Question 24

An RDFI may choose to transmit a Notification of Change to an ODFI no later than what timeframe?

Answer 24

Within two Banking Days of the Effective Entry Date of the Entry to which the Notification of Change relates, except for Notifications of Change due to merger, acquisition, or other similar events.

Question 25

If the effective entry date of a batch of entries is left blank by the
ODFI, the ACH Operator will insert the settlement date as:

Answer 25

the next available settlement opportunity

Question 26

Which of the following statements is true about BOTH Same Day ACH and RTP?

Answer 26

Both have a $1,000,000 per transaction limit

Question 26

Upon request of a Receiver, an RDFI must provide all payment-related information for CCD, CIE, CTX, and IAT entries to non-consumer accounts by:

Answer 26

The opening of business on the second banking day following the settlement date of the entry.

Question 27

Fedwire Funds are final and irrevocable upon completion of processing by the:

Answer 27

Federal Reserve Banks

Question 28

Per UCC 4A, a contract between a financial institution and a customer may limit liability to the bank unless:

Answer 28

The financial institution demonstrated “lack of good faith or failure to exercise ordinary care”

Question 29

An Originating Depository Financial Institution (ODFI) may use which of the following tools to become aware of an Originator’s or Third-Party Sender’s past relationships with other ODFIs?

Answer 29

Terminated Originator Database

Question 30

Which of the following is a characteristic of an eligible item for which an Originator could create an RCK Entry?

Answer 30

Amount less than $2,500

Question 31

A data element/segment requirement designator that indicates the omission of this field may cause an entry to reject at the RDFI:

Answer 31

Required

Question 32

A network that provides payment services directly to merchants and cardholders by the owner of the network without involving a third party as an intermediary is:

Answer 32

Closed Loop Payment System