ACH Operating Rules Flashcards
ACH Network Administration Fee
Per-Entry Fee
$.000185
ACH Network Administration Fee
Annual Fee
$344.00
Is intended to minimize incidences of fraud schemes
Commercially Reasonable Fraud Detection
Establishes a baseline of normal activity
Monitoring forward and return volumes
Must hold records for a period of six years - providing Copies.
Participating DFI’s
Establishes, implements and periodically reviews exposure limits.
ODFI
Must have clear and readily understandable terms and readily identifiable as an authorization.
Originator
Debit Entries language must include:
- Single entry, Recurring or one or more subsequent Entries
- Amount or how amount is determined
- Timing, including start date, number and frequency
- Receiver’s name or identity
- Account to be debited
- Date of authorization
- Revocation language
May be met by the terms of the authorization and receiver’s affirmative action to initiate subsequent entries.
Standing Authorization
Standing authorization for debit entries to consumer accounts
- Specify action for subsequent entry
- Standing authorization that is oral comply with requirements of Oral Auth.
- Secure transmission of data via UEN
- Ensure proper use of SEC code based on Standing Auth. or Sub. Entry.
Amount of time a copy of Auth. must be sent to RDFI if written request is received
10 Banking Days
Amount of time the original or copy of Auth. must be kept from termination or revocation of authorization.
2 years
Amount of time a notice of change in amount to consumer accounts must be made.
10 Calendar Days
Amount of time a notice of change in scheduled debiting date must be made.
7 Calendar Days
General Warranties and Liabilities of ODFIs
- Entry is authorize by originator and receiver
- Entry complies with rules (includes proper SEC Code)
- Entry not transmitted on behalf of a suspended originator or
Third-party Sender. - Entry contains required information.
- Credit Entry is timely
- Debit entry satisfies an obligation, corrects an error or reclaims an
amount received after death or legal incapacity. - Secure transmission of banking information.
Does ODFI Warranties apply to goods or services?
No
General Indemnity by ODFI
- for breach of warranty
- for failure to comply with regulation E
How often do Debit WEB entries need to be audited?
Annually
Must use Fraud Detection Systems, Verification of receiver’s identity, Verification of routing numbers.
WEB Entries
General rights and responsibilities of RDFIs
- Must accept entries
- May rely solely on account numbers for posting entries
- May rely on Standard Entry Class Codes
- May request copy of receivers authorization of entry from ODFI
Number of days RDFI must return funds back to ODFI
By opening of business on second banking day following settlement date of original entry.
Restrictions on RDFI’s right to transmit return entries
May not return an entry due to the type of entry
May not return an entry based on MICR Data
Correcting and contesting dishonored returns must be transmitted within how many days?
2 banking days
Specific provisions for acknowledgment entries
Must be transmitted to be made available to ODFI no later than opening of business on second banking day following settlement date of CCD or CTX Entry.
RDFI may transmit extended return entries back to ODFI within how many days?
60 calendar days
General Responsibilities of ACH Operators
ACH Operator Must:
1. Agreement with National Association.
2. Compliance with the rules.
3. Enter agreements with participating DFI’s
4. Conduct Risk Management.
5. Comply with Federal reserve policy on settlement
6. Comply with national performance standards
7. Allow inter-operator Exchanges.
Gateways must obtain Authorization from ODFI or Gateway’s customer…
- To transmit outbound IAT to Foreign Gateway
- For settlement of entries with foreign gateway.
- Arrange for further transmission to “foreign RDFI” and settlement to or from
“foreign receiver’s” account.
Must notify intended RDFI of unlawful inbound payment transactions
Gateway
May not process Debit Inbound IAT Entries
ACH Operator
Standing oral debit authorization
must be recorded or provide receiver with written notice prior to the settlement of the first subsequent entry.
Recurring oral debit authorization
must include written notification to receiver and recording
Single oral debit entry
must be recorded or provided receiver with written notice.
Within how many days after receiving notice of the receiver’s death must the originator initiate a reclamation or written demand for payment?
30 days
When an ODFI utilizes a Third-Party Service Provider in the origination process, which party warrants the entries are authorized?
The Third-Party Service provider
