ACH Operations Flashcards
Direct Access
When an Originator, Third-Party Service Provider, or Third-Party Sender transmits credit or debit entries directly to an ACH Operator using an ODFI’s routing number and settlement account.
Third-Party Service Provider
Bonus: Provide examples of functions performed by TPSPs
An organization that performs any function of ACH processing of entries on behalf of the Originator, the Third-Party Sender, the ODFI or the RDFI.
Bonus: Creating an ACH file on behalf of an Originator or ODFI, acting as a Sending Point or Receiving Point on behalf of ODFI or RDFI, respecively.
How are Third-Party Service Providers used by RDFIs?
RDFIs may receive their ACH entries through a Third-Party Service Provider (receiving point) that provides electronic receiving services.
Sending Point
An entity that transmits entries to an ACH Operator on behalf of the ODFI.
How are Third-Party Service Providers used by ODFIs?
ODFIs may designate a third-party as their sending point.
How are Third-Party Service Providers used by businesses?
Businesses may contract with a Third-Party Service Provider to create ACH files on their behalf (e.g. Payroll processor).
How can FIs limit their risk when dealing with Third-Party Service Providers?
A financial institution can limit its risk by:
- Entering into an agreement that addresses areas of potential risk
- Establishing dollar limits on files sent to ACH Operators
- Require TPSP to notify ODFI of dollar totals for each file deposited with the ACH Operator
Third-Party Sender
A Third-Party Sender acts as an intermediary on behalf of an Originator or another Third-Party Sender in transmitting entries between an Originator and the ODFI when there is not an origination agreement directly between the Originator and ODFI.
Nested Third-Party Sender
A Third-Party that has an origination agreement with another Third-Party Sender to act on behalf of an Originator but does not have an origination agreement with the ODFI itself.
What is ODFI warehousing vs. RDFI warehousing
- RDFI: Once a file has been received, RDFI must warehouse transaction until appropriate settlement date
- ODFI: Storing files received from Originators until appropriate release date in order to settle on the intended effective (settlement) date.
How long must a Participating DFI retain a record of each entry it transmits?
Six years, from the date the entry was transmitted (except as otherwise expressly provided in the NACHA Operating Rules.
What is the deadline for sending a dishonored return?
5 banking days
What is the deadline for sending a contested dishonored return?
2 banking days
Which date below is a suggested field that Nacha states may be used by Originating Financial Institutions to aid in controlling Same Day ACH files or to reduce the risk that a file will be processed incorrectly in a same day Operator window?
Company descriptive date
