ACH LANGUAGE Flashcards
UNDERSTANDING ACH TERMS
A card, code or other means of access to a consumer’s account, or any combination of thereof, that may be used by the consumer to initiate electronic fund transfers. This does not include electronic devices, such as telephones, personal computers, or terminals, typically used in such transfers.
Access Device
A card or other means of access to a Consumer Account held by a Depository FI that is issued by an entity other than the Depository FI or a party that has contracted directly with the Depository FI to issue such cards or other means of access and can be used at the point of sale to initiate POS entries.
ACH Card
An electronic funds transfer system governed by the NACHA operating rules that provides for the interbank clearing of electronic entries for participating financial institutions.
ACH Network
An entity that acts as a central facility for the clearing, delivery, and settlement of entries between or among participating DFI’s. They may be a Federal Reserve Bank or an entity that executes an annual agreement with NACHA.
ACH Operator
The rate at which an Originator’s or Third-Party Sender’s debit entries are returned for administrative reasons (Return Reason Codes R02, R03, or R04), as calculated by the Rules requirement in Article Two (ODFI Return Rate Reporting Regarding and Originator’s or Third-Party Sender’s Administrative Return Rate or Overall Return Rate).
Administrative Return Rate
And ACH record that contains supplemental data related to an entry. This information may be needed to completely identify an account holder(s) or provide information concerning a payment to the RDFI and the Receiver.
Addenda Record
A contract between two entities (i.e., originating company and originating FI; originating company or Originating Depository FI and a TPSP/TPS; or Receiving Depository FI and a TPSP) that defines the operational and legal relationship between the two business entities when transferring funds electronically through the ACH network.
Agreement
The process of generating a message/data-specific code that can be used to positively identify the sender of the message/data, and to protect the message/data from insertion, modification, deletion or replay. The code is generated using a confidential set of keys and a complex mathematical algorithm (the Data Encryption Standard-DES). The code is appended to the message/data that is to protected. The message/data is in readable form.
Authentication
For most consumer debit entries, a written agreement with the originating company that is signed or similarly authenticated by an employee, customer, or member to allow payments processed through the ACH Network to be withdrawn from the Receiver’s account at a financial institution. It can also be a written agreement that defines the terms, conditions, and legal relationship between trading partners.
Authorization
An optional, variable format field of the MICR line of a check. It is positioned to the left of the routing number (or the external processing code, when such code is present). Data located within this field is bracketed by on-us symbols.
Auxiliary On-Us Field
Funds available for use on the current day
Available Balances
Funds that are available immediately to make payments, to invest, etc.
Available or Collected Funds
Schedule of deposited checks showing when the funds will be available.
Availability Schedule
Number of days required to collect items before the customer has available balances.
Availability
Any day on which a participating depository FI is open to the public during any part of the day for carrying on substantially all its banking functions. With reference to an ACH Operator, any day on which the applicable facility of such ACH Operator is being operated.
Banking Day
A group of records or documents considered as a single unit for the purpose of data processing.
Batch
The accounting entry that reflects the bank balance. It may or may not reflect funds available for immediate use.
Book or Ledger balance
The disbursement division for the US Dept of Treasury.
Bureau of the Fiscal Service
The FI or merchant that authorizes the issuance of a card to a consumer (or another organization) and is liable for the use of the card. The issuer retains full authority over the use of the card by the person to whom the card is issued. Any bank or organization that issues, or causes to be issued, bank cards to those who apply for them. Also referred to as the access device issuer.
Card Issuer
The transfer of funds from diverse accounts into a central account to effect more efficient cash management.
Cash Concentration
The transfer of funds from a central account to diverse accounts to effect more efficient cash management.
Cash Disbursement
Any item that is immediately convertible into cash such as a paper or electronic collection instrument.
Cash Item
A deposit of checks by a financial institution at another financial institution or the Federal Reserve Bank. The checks within the cash letter are drawn on various paying banks or may be drawn only on the financial institution receiving.
Cash Letter
A master file maintained by the ACH Operator to verify the file (CIF) routing numbers and other pertinent information or participating depository financial institutions.
Central Information File (CIF)