ACHPro Flashcards
1
Q
How will the Unauthorized Fee be collected?
A
The ACH Operator will collect and distribute the fees monthly.
2
Q
The ODFI must provide the Originator information to the RDFI within ___?___ of receiving a written request if received within __?__ of Settlement of the BOC entry.
A
2 Banking Days; 2 Years of Settlement
3
Q
Define SDNs
A
Specially Designated Nationals is the Blocked Persons List maintained by OFAC to access US funds.
4
Q
Who is responsible for verifying the accuracy of addenda information in a corporate payment?
A
RDFI
5
Q
Which Federal Reserve service consists of a safekeeping function and a transfer and settlement function?
A
Fedwire Securities Services
6
Q
Who are the corresponding banking customers of a Correspondent Bank?
A
Collecting Bank; Bank of First Deposit (BOFD)
7
Q
What types of transactions do The Clearing House’s Real-Time Payment (RTP) System support? Up to what amount?
A
Credit Push transactions only up to $1,000,000 or less
8
Q
Define Alternative Payment Method.
A
Any way to pay for goods or services that does not involve cash or a card that belong to a recognizable major card scheme (such as Visa/Mastercard/American Express).
9
Q
According to Regulation CC, when an original paper check is unavailable for inspection during a dispute, what can be assumed to resolve the dispute between F.I.’s?
A
Presumption of Alteration, unless there is a preponderance (outweighing amount) of evidence in the contrary.
10
Q
Principal objective of an ACH contingency plan?
A
Assure that the ACH operations remain viable, even under unusual conditionals, both natural and man-made.
11
Q
Allowing a Third-Party Processor to send files directly to the ACH processor is what type of risk for ODFI?
A
Fraud Risk
12
Q
Using a correspondent bank for ACH processing is what type of risk for ODFI?
A
Fraud Risk
13
Q
ACH processing employee setting aside exceptions & returns for another employee due back in a week is an example of what type of risk for the RDFI?
A
Operational Risk
14
Q
F.I. should use these 3 items regarding dates to aid in controlling ACH files and reducing risk that a file will be processed incorrectly:
A
File Creation Date
Effective Entry Date
Immediate Origin
15
Q
What types of risk do high volumes or rates of return post for ODFI?
A
Credit Risk & Reputational Risk
16
Q
Who Created the ACH Network?
A
SCOPE (Special Committee on Paperless Entries)
17
Q
Why is Multi-Factor Authentication considered more robust than single factor authentication? Examples?
A
Requires multiple methods of authentication for access, may be something the user:
Knows (password/PIN), Has (token/smart card), Receives (one-time passcode), Verified (biometric measurement).
18
Q
Ancillary Risk Examples?
A
Cross-Channel Risk, Counterparty Risk, Direct Access Risk
19
Q
Simple way to collect loan payments before customers are delinquent?
A
TEL (Telephone initiated payments)
20
Q
System used by IRS to collect corporate tax payments?
A
Electronic Federal Tax Payment Service (EFTPS)
21
Q
If requested, how long does an RDFI have to provide payment related information to a Receiver of a CCD, CTX, CIE, or IAT?
A
Opening of business on the RDFI’s second Banking day following SETTLEMENT date of the entry
22
Q
Commercial Loan Files
Competitors Customers
High volume check reconciliation customers
Local School Districts
This list is good prospects for marketing regarding?
A
Good ACH prospects
23
Q
What is a daylight overdraft?
A
An intraday negative balance
(When a bank overdraws more money than it has in its Federal Reserve account but is brought back into a credit by close of business)
24
Q
Who are Interchange fees charged to? Who pays interchange fees for each card payment?
A
Charged to - MERCHANTS
Pays - CARD ISSUER.
25
Will the ACH Operator Return Entries and RDFI Return Entries if they are in the same batch?
Yes
26
List a banking convention that made the automation of check processing possible.
Routing Number policy adoption by ABA in 1911
27
What regulations have direct bearing on the ACH Network?
Reg E, Reg D, Reg CC, UCC4A
28
Three Advantages to becoming an ODFI?
Reduction of ACH processing costs through increased volume. New opportunities for increased business through expanded services. Enhanced public relations through effective, efficient and innovative payment services.
29
Return time frame for Same Day ACH entry?
Return must be made available to the ODFI by the opening of business on the second banking day following Settlement Date. (same as usual return timeframe)
30
What is the definitive resource on MICR line printing?
ASC X9 TR 2-2005 Understanding, Designing and Producing Checks
31
What type of company would be the best prospect for Direct Payment?
Company with high-volume and recurring accounts receivables
32
Entry Detail Record contains?
Record Type Code & Discretionary data
-receiver acct & name, transaction amount & Tran code
33
ACH Operator minimal inclusion in the Acknowledgment Entry Batch Header?
Batch Number, Effective Entry Date, Total Credit Entry Dollar Amount
Batch Number, Effective Entry Date, Total Credit Entry Dollar Amount
34
Which item in the Entry Detail Record identifies the ODFI?
The Trace Number (first 8 digits is start of routing #)
35
For the purpose of calculating the Entry Hash totals for a batch, what two records are included?
Entry Detail Record & Company Batch Control Record
36
Standing recurring authorization amount change notification to consumer timeframe?
10 CALENDAR Days prior to the date of the next debit
37
Per UCC4A, if an ODFI transmits a duplicate entry, who is at risk of loss? What recourse is there? Who is entitled to be paid?
The ODFI bears risk of loss, only recourse is against the Receiver. The RDFI is entitled to be paid, but Originator has no obligation to pay the additional amount.
38
What does the The Supplemental Data Security Requirements (eff June 30, 2022) require large, non-FI Originators, Third-Party Service Providers and Third-Party Senders with an ACH volume of 2 million transactions or greater annually to do?
Protect deposit account information by rendering it unreadable when it is stored electronically.
39
ODFI is required by UCC4A upon acceptance of a credit entry:
Timely transmittal of the entry, Provisional Payment in the event the final settlement does not occur, Liability for late transmittal or failure to transmit.
40
ACH Network Advantages?
Reduced Costs, Reduced paper checks and deposit slips, Customer retention.
41
What document or regulatory guidance addresses the risks and mitigation practices for RDC?
FFIEC (Federal Financial Institutions Examination Council)
42
What regulations have direct bearing on checks and check collection?
Reg J, Reg CC, OC 3 (Fed Operating Circular), UCC 3 & 4 (Uniform Commercial Code)
43
Originators need to list __?__ in the Payment Related Information field.
Ultimate Beneficiary of the transaction (may not be the account holder name) -- IAT TRANSACTIONS
44
What is Layered Security?
The use of different controls at different points in the transaction process, so that a weakness in one control is generally compensated for by the strength of a different control.
45
If RDFI is unable to provide copy of Written Statement of Unauthorized Debit (WSUD) to an originating company after returning an ACH as unauthorized, what type of risk does this represent?
Operational Risk
46
If an ODFI is experiencing, or has potential to experience financial difficulties, the ACH Operator may require __?__
Advance notice of origination and prefunding.
47
Define ACH Data Passing
Passing of ACH debit information between two different companies, even if they are a subsidiary of the company. Data Passing is an ACH Rules violation.
48
Prefunding is a procedure where funds are placed in an account in the name of the ODFI in advance of what type of file? before settlement date
Credit File
49
__?__ may request that an __?__ provide a copy of the receiver's authorization for any entries.
RDFI may request that an ODFI
50
What constitutes proof of authorization for a WEB debit should an RDFI request a copy of the authorization? (ODFI would provide the proof to RDFI after requesting from their Originator).
Authorization via the internet or wireless network and the receivers instruction for the initiation of the individual debit.
51
Who establishes the ACH processing schedule?
ACH Operator
52
What 3 options are available to the ODFI if they receive a returned Entry?
1) Forward the Return entry to the Originator for action
2) Reinitiate an Entry for the Originator if it has been returned R01 (NSF) or R09 (Uncollected Funds)
3) Dishonor the return
53
List 3 requirements of Originators of Business to Business transactions (CCD/CTX)
1) Must provide proof of authorization or the contact information for the originator to RDFI within 10 days of request
2) Authorization for debits must bind the Receiver to the NACHA Operating Rules
3) Must have an Originator Agreement in place prior to sending CCDs
(payroll entries are NOT required to be prefunded)
54
What is defined as an individual payment initiated based on a standing authorization?
Subsequent Entries
55
Financial institutions participating in check truncation-
-what SEC codes are used?
-must abide by which 3 UCC articles & one other rule?
- Must abide by the National Association for Check Safekeeping (NACS) Rules
- Can originate TRC and TRX Entries
- Must abide by UCC Articles 3 & 4, in addition to the ACH Rules
56
Regarding provision of remittance information to receivers, who may request remittance information and when must it be provided by to receivers?
Corporate receivers can request remittance information and it must be provided by opening of business on the 2nd banking day following SETTLEMENT to all receivers.
57
What return code is used to Return an unauthorized debit entry to consumer account using a corporate SEC code?
R05 unauthorized consumer debit to consumer account
58
What return code should be used to return a corporate debit (CCD/CTX) to a corporate account past 2 day return window?
The RDFI can request permission from the ODFI to return the item R31
59
First 3-letter code used for payroll origination on IAT
Entry in the Transaction Type Code Addenda Record?
For outbound payroll SAL Transaction Type Code should be used
60
Definition of the File Header Record
Defines the file characteristics and the immediate origin and destination
61
List the order of an ACH file and their Record Type codes
1-Company/Batch Header
5-Batch Header
6-Entry Detail
7-Addenda (Optional)
8-Company/Batch Control
9-File Control
62
Company/Batch Control Record contains?
Detail and Addenda Record Counts, hash totals, and the dollar totals for the preceding detail entries within the batch
63
Company/Batch Header Record contains?
Identifies the Originator, and describes the purpose of the entry
64
Debit entries are not permitted for use with which SEC Code?
CIE (with the exception of reversals)
65
What is QUEST? What is the scope of the QUEST operating rules?
QUEST Operating Rules have been developed by Nacha’s Benefits and Services Council (formerly, the EBT Council) to establish a nationwide foundation for distributing government benefits through Electronic Benefits Transfer (EBT) programs.
66
Only employers with __?__ tax liabilities will be allowed to pay their federal tax deposits by check; all others are required to pay electronically (effective 1/1/11).
Minimal
67
Define Time Draft
An order in writing which is presented and then paid on agreed date.
68
Define RCC
Remotely Created Check, drawn on consumer account, is not created by the payor bank and does not include a drawer signature.
69
Check payment path: Payor, Payors DFI, Correspondent Bank, Receivers DFI, Receiver -- Who is the Collecting Bank?
Receivers DFI
70
What is EFTPS?
Electronic Federal Tax Payment Service, used by the IRS to collect corporate tax payments. Governed by title 31 code of federal regulations part 203
71
F.I. newly allowing WEB credit entries, what is required?
Do not have to comply with all WEB Debit requirements, but must know the Company Name Field in the Batch Header Record will have the ODFIs name or Third Party Service Provider listed.
72
What types of products may be issued via direct deposit?
Dividends, Interest, Payroll, Pension
73
True or False: Corporate to Corporate electronic payments improve corporate identity.
FALSE: Reduces internal processing, Improves Cash Flow & Vendor/Customer Relations
74
Which participants may file a Rules Violation Report?
Participating DFIs, the ACH Operator and NACHA
75
A Block consists of how many records?
Block consists of 10 records, each being 94 characters, totaling 940 characters (94x10 records). If a block contains less than 940 characters, the remainder of the block must be filled with 9s.
76
A Block consists of how many characters?
940 Characters
Block consists of 10 records, each being 94 characters, totaling 940 characters (94x10 records). If a block contains less than 940 characters, the remainder of the block must be filled with 9s.
77
Fixed costs of providing ACH services include all the following except:
A. Staffing
B. Hardware
C. System Maintenance
D. Return item processing
Return item processing is not a fixed cost; but rather, a variable cost.
78
The Limitation on Warranty Claim Rule states that for Entries to non-consumer accounts, the ODFI liability is:
For an entry to a non-consumer account, an RDFI may make a claim for one year from the Settlement Date of the entry.
79
Which of the following are unique selling points for CCD?
A. Creates a fully electronic payment between trading partners
B. Supports broader use of payment-related data to accompany the payment
C. Offers another payment option for the consumer
D. Offers an ability for consumers to initiate the payment
A- creating a fully electronic payment between trading partners, creating efficiencies, enabling intra-organization movement of funds, and limited fields for payment-related data to accompany the payment.
80
What is the Addenda Type Code used for an IAT COR Entries?
Addenda Type Code 98 is the code used for all Notification of Change Entries.
81
For an IAT Entry, the Receiving Financial Institution Number Qualifier field would be located in which IAT Addenda Record?
The fifth IAT Addenda Record contains information about the Financial Institution receiving the Entry.
82
Define Credit Card
Access devices to a lending product, cleared through the Visa®/MasterCard®, American Express, or Discover networks. Transactions are authorized real-time. Settlement for merchants is guaranteed and typically next-day. Not considered a true payment instrument.
83
Which is not a primary function of an ACH Operator?
A. Accept ACH files from ODFIs and other ACH Operators
B. Monitor compliance with exchange schedules
C. Sort and distribute files to RDFIs and other ACH Operators
D. Effect settlement of arbitration and compensation cases
An ACH Operator does not settle any disputes between participants. Nacha will settle any disputes that stem from non-compliance with Nacha Operating Rules.
84
If the ODFI fails to supply Nacha with required information within 10 banking days of the written request, Nacha may initiate a ___
If the ODFI fails to supply Nacha with required information within 10 banking days of the written request, Nacha may initiate a Class 2 Rules Violation.
85
A party that is not the Originator of the transaction but has authorized an ODFI to transmit Entries on behalf of the Originator into the ACH Network by signing an ACH Origination Agreement is called?
Third-Party Sender
86
Which of the following is NOT a field minimally included in the Acknowledgment Entry File Header Record from the ACH Operator for each file that was not rejected by the ACH Operator?
A. Immediate Origin
B. File ID Modifier
C. Settlement Date
D. Total Debit Entry Dollar Amount in File
Of the fields presented, Settlement Date is the only field that is NOT in the Acknowledgment Entry File Header Record from the ACH Operator for each file not rejected by the ACH Operator.
87
Susan Smith is talking to a CSR at Lucas Credit Union; she is stating that she mailed a check to ABC Electric Company on 3/14 and on her statement the check cleared as an ACH with the SEC Code of BOC on 3/17. However, her electricity has been shut off due to non-payment. What should the CSR do?
This is an incomplete transaction and can be returned with a Written Statement of Unauthorized Debit form that is signed and dated on or after settlement date of the incomplete transaction as R11.
88
ABC Bank on-boarded a new Originator. During the on-boarding process, ABC Bank determined that the Originator; Sandy Property Management Co., is a Third-Party Sender (TPS). When should ABC Bank notify Nacha of their new TPS?
All Third-Party Senders must be registered with Nacha. The ODFI is responsible for providing Nacha with the initial, basic registration information within 30 days of originating the first ACH Entry.
89
What are the benefits of automated enrollments for Electronic Vendor Payments?
Automated enrollment can be used for both consumer and corporate enrollments in federal government programs. Automated enrollment improves accuracy and simplifies the enrollment process by enabling enrollment with multiple agencies.
90
An internet initiated subsequent Entry that has a Standing Authorization signed on paper and permits the subsequent Entry to be initiated via the company's website, would be sent out to the Network as what SEC Code?
PPD
91
Which of the following SEC Codes has a maximum number of Addenda Records of zero (0)?
A. POS
B. IAT
C. BOC
D. ENR
Of the SEC Codes presented, BOC is the only code that has a maximum number of Addenda Records of zero.
92
A correct source for assistance regarding questions/problems with Public Debt Securities is:
The answer is the Bureau of Fiscal Service. The Bureau of Public Debt and Financial Management Services have been combined.
93
Of the following, which return code does not apply to ARC Entries and may not be used to return an ARC Entry?
R03 is used for Unable to locate account due to name and number not matching their records. A Receivers name is not on the MICR line, so the RDFI cannot return the Entry for that reason.
94
T/F: The Check Clearing for the 21st Century Act did not require banks to accept checks in electronic form.
True
95
What is the appropriate ANSI standard for a substitute check in an Image Cash Letter (ICL)? (ICL) is X9.100-140
(ICL) is X9.100-140
96
According to the Federal Reserve Operating Circular 4, Settlement becomes final for Next Day ACH Credits as of what time?
According to the Federal Reserve Operating Circular 4, Settlement becomes final for ACH Credits as of 8:30 a.m. ET on Settlement Date
97
Which of the following are true for International ACH Transactions (IATs)?
A. Not eligible for Same Day
B. Has 12 maximum Addenda Records
C. Inbound to or outbound from the United States
D. All of the above.
All of the above apply to IATs.
98
When an RDFI receives an improper Reversing Entry to a Consumer account they can return the Entry using which extended return code once they receive a WSUD?
An RDFI may return an improper Reversing Entry to a Consumer account by using Return Reason Code R11
99
When will an ODFI receive returns with an R18 code from the ACH Operator?
An ODFI will receive returns with an R18 when debits have been released to the operator two or more days prior to their Effective Date.
100
“The non-public personal information, including financial information, of a natural person used to create, or contained within, an Entry and any related Addenda Record” is the Nacha Operating Rules definition of
Protected Information
101
What is a MAC (message authentication code)?
A MAC is used to validate the authenticity of files. It is a unique result of the application, 8-byte code, algorithm which verifies that a file has been received with the same values it had at the point of origin.
102
Which of the following will be a reason for the ACH Operator to reject a batch or the entire File?
A. Originated Entries and Return Entries are in the same batch
B. ACH Operator Return Entries and RDFI Return Entries are in the same batch
C. The BSA Originator Currency Code is all spaces or all zeros (IAT Entries)
D. The Standard Entry Class Code is invalid in the File Header Record
Nacha Operating Rules added “ACH Operator Return Entries and RDFI Return Entries are in the same batch” as a reason for the ACH Operator to reject a batch or the entire File.
103
Which of the following is true regarding the Transfer Remittance Rule?
A. Under Reg E, it is intended to protect consumers who send money electronically to foreign countries.
B. Consumers must be given at least 30 minutes to cancel an order and get their money back if they cancel an order.
C. The types of covered transfers include wire transfers and ACH transactions.
D. All of the above are true regarding the Transfer Remittance Rule.
All of the above
104
ABC Company erroneously sent an ACH debit file to their employees. They sent out a correcting Reversal File, the day after the Settlement Date of the erroneous file. Later that day, the ODFI sent them a notice that all original erroneous debits were returned as NSF. What can the ODFI do to assist ABC Company to reclaim their funds?
Dishonor the original erroneous debit that the ODFI received as R62
105
Which is not an example of an Electronic Benefits Transfer (EBT) benefit?
A. Reduced need for expensive wire transfer
B. Enhanced security through the use of PINs
C. Minimized risk of benefit theft
D. Reduced errors in benefit administration
Electronic Benefits Transfer (EBT) is a means of disbursing government benefits electronically. EBT allows recipients to access their benefits through automated teller machines (ATMs) and retail point- of-sales (POS) terminals; nearly 100% of food stamps and cash assistance programs are delivered via EBT. Sending wire is not benefit
106
The Written Statement of Unauthorized Debit ________________________.
A. must be signed and dated prior to the Settlement Date of the Entry.
B. must contain the account holder's assertion that the Receiver is an authorized signer or has authority to act on the account.
C. cannot contain more than one unauthorized debit Entry from a specific Originator.
D. must be retained for a period of 6 months following the Settlement Date.
The Written Statement of Unauthorized Debit (WSUD) must contain the account holder's assertion that the Receiver is an authorized signer or has the authority to act on the account. WSUD statements may not be accepted prior to Settlement Date, can contain information on more than one Entry by an Originator and must be retained for 1 year.
107
What does Nacha state 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?
The company descriptive date may be used by Originators to denote the intent of a same day ACH file.
108
What is the transaction set number for Electronic Filing of Tax Return Data?
ASC X 12 813
109
A bill payment service provider initiates CIE debits. What is unique about these transactions?
CIE debits are not allowed, and the ACH Operator will return these Entries R35 (improper debit Entries) when they are originated.
110
What is the maximum dollar amount of an ACH Entry?
A. $99,999,999.99
B. $100,000,000.00
C. $999,999,999.99
D. There is no maximum dollar amount.
The Nacha Entry Detail Record has a field size of 10 digits for the dollar amount, thus limiting the dollar amount to $99,999,999.99.
111
Your DFI is considering starting a mortgage origination service for IAT Entries and you are conducting testing with your Originator. In reviewing an IAT file, you find the 3-letter code of 'MOR' in the Transaction Type Code of the first IAT Addenda Record. Is this an Addenda Record error?
There are a series of Transaction Type Codes for outbound IAT transactions. These can be found in Appendix Three of the Nacha Operating Rules Book. MOR is the abbreviation for Mortgage.
112
Which of the following is a return code that is initiated by the ACH Operator to return an Entry?
A. R99
B. R19
C. R33
D. R24
R19, Amount Field Error, is the only return code presented that is initiated by the ACH Operator.
113
If a Receiver notifies an RDFI that a credit entry has posted to his account that he does not recognize, and wishes the RDFI to return it, the RDFI may return the Entry using which Return Reason Code?
If a Received notifies an RDFI that he is refusing a credit Entry that posted to his account, the RDFI may return it using Return Reason Code R23, Credit Entry Refused by Receiver.
114
What is NOT considered a way to reduce fraud risk?
A. Encryption
B. Prefunding
C. Dual Control
D. Authentication
Fraud risk can be mitigated by having controls in place such as; encryption, authentication, tokenization, dual control, separation of duties, strong data security etc. (prefunding would be to help reduce credit risk)
115
Required of Originators who process a recurring TEL Entry?
They must BOTH record the audio record of the Receiver’s oral authorization and provide written confirmation of the authorization to the Receiver.
116
Which of the choices below do not apply to WEB Credits?
A. Fraud detection
B. P2P transaction
C. The Receiver is a consumer
D. Authorization is communicated via the Internet or Wireless Network
An Originator of a WEB debit, not a WEB credit, has to establish and implement commercially reasonable systems to detect fraudulent transactions.
117
What is OCR?
OCR stands for Optical Character Recognition.
118
From the following list, which choice includes only regulations that have a direct bearing on Fedwire funds transfer?
A. Reg E, Reg D, Reg J
B. The Green Book, Reg CC, OC 3
C. Reg D, Reg J, Reg CC
D. OC 6, Reg CC, Reg J
Of the list provided only OC 6, Reg CC, and Reg J have a direct bearing on Fedwire funds transfers.
119
OCC Bulletin 2006-39 addresses:
A. Risk Management
B. Marketing
C. Education
D. Holidays
OCC Bulletin 2006-39 provides guidance for examiners for Risk Management of ACH transactions.
120
What is the timeframe from the original Settlement Date of the return that the Originator has to initiate the RETURN ENTRY FEE?
no later than 45 days after the Settlement Date of the ACH Return.
121
Which of the following ACH processing alternatives are available to Financial Institutions?
A. Personal Computer
B. Mini/ Mainframe Computer
C. Third Party Processor
D. All of the above
All of the above are alternatives Financial Institutions can use to process ACH
122
For which of the following return codes is a Written Statement of Unauthorized Debit not required?
A. R-10
B. R-07
C. R-38
D. R-51
R-38 (Stop Payment placed on item to which an ARC relates) does not require the RDFI to obtain a Written Statement of Unauthorized Debit from the consumer prior to sending the return.
123
Which of the following should ODFIs NOT consider when assigning credit limits for ACH Origination?
A. The location of the Originator.
B. The Originator’s transaction volume.
C. The Originator’s financial reports.
D. Prefunding
ODFI’s should be evaluate the credit worthiness of their originator’s by reviewing financial reports and always consider the originator’s transaction volumes. For originator’s without internal or public credit reporting service ratings, the ODFI could require them to prefund.
124
The Nacha Operating Rules state that items returned for R01 and R09 can only be reinitiated two times for all of the following SEC codes except:
A. POP
B. ARC
C. RCK
D. PPD
RCK items have their own distinct limit of three total presentments in combination of paper and electronic.
125
A "DES" algorithm is used for
A. Loans
B. Authentication
C. Encryption
D. Rocket science
A "DES" algorithm is used for encryption.
126
Which of the following do not provide legal framework for the check payment process?
A. Regulation D
B. Uniform Commercial Code Article 4
C. ECCHO Rules
D. Regulation CC
Regulation D does not provide legal framework for check processing. Regulation D governs reserve requirements for financial institutions.
127
Structuring cash deposits in order to evade reporting requirements occurs during what stage of money laundering?
A. Integration
B. Placement
C. Assimilation
D. Layering
Occurs during the Placement Stage
placement (dirty money introduced)
layering (illicit funds moved around) integration (money re-enters 'clean')
128
Upon written request, the ODFI of BOC Entries is required to provide the RDFI information identifying the Originator within which time frame, provided that the RDFI sends the request within two years of Settlement Date?
A. 10 calendar days
B. 10 banking days
C. 2 banking days
D. 14 calendar days
The ODFI of BOC Entries must provide information identifying the Originator within 2 banking days of receipt of the RDFIs written request.
129
Variable costs of providing ACH services include all the following except:
A. ACH Operator fees
B. Hardware
C. Testing
D. Postage expense
Hardware is not a variable cost; but rather, a fixed cost.
130
Which of the following statements is incorrect regarding the establishment of Exposure Limits?
A. ODFIs must establish exposure limits for each of its Originators and/or Third-Party Senders.
B. ODFIs must review exposure limits periodically.
C. ODFIs must establish exposure limits for each of its Originators and/or Third-Party Senders of Debit applications only.
D. ODFIs must monitor exposure limits across multiple Settlement Dates.
C. ODFIs must establish exposure limits for each of its Originators and/or Third-Party Senders of Debit applications only.
131
Which of the following data fields can be found in the Entry Detail Record?
A. Addenda type code
B. List code
C. Discretionary data
D. Service Class Code
Discretionary data is a field included in the Entry Detail Record.
132
An RDFI receives a payment into a consumer account which has remittance information included in an addenda record. Is the RDFI required to provide this to their consumer?
Although RDFIs must provide remittance information to corporate customers upon request, they do not need to do this for consumers.
133
Upon written request from the RDFI the ODFI has how many days to supply a copy of the item to which the XCK Entry relates, provided that request is within 6 years of the date the ODFI initiated the XCK?
A. 10 banking day
B. 10 business days
C. 30 days
D. 45 days
Upon written request from the RDFI the ODFI has 30 days to supply a copy of the item to which the XCK Entry relates, provided that request is within 6 years of the date the ODFI initiated the XCK.
134
Under Rules Enforcement, National Systems of Fines, in regard to the ODFI reporting requirements, which of the following pieces of information is the ODFI not required to provide to Nacha?
A. The complete legal name of the business (Originator)
B. Statement as to whether the Originator acts as a sending point
C. Actual Rate of Return for items returned Account Closed
D. Originators volume for a specific time
The Administrative Return threshold is an overall number of administrative returns, and it is not identified as to return reason code. Actual Rate of Return for items returned Account Closed
135
What must an RDFI do upon receipt of a domestic ACH credit to a Blocked Person?
The RDFI must immediately freeze and prevent access to proceeds of ACH transactions involving interests of Blocked Persons. Proceeds should be held in an interest-bearing account and reported to OFAC within ten days.
136
Corey would like to have an authorization with his Oil Company that states they will charge him for oil when he requests a delivery. When Corey calls the Oil Company for a delivery and initiates the charge, what type of authorization would this be called?
The Rule defines Subsequent Entries as individual payments initiated based on a Standing Authorization.
137
What security issues are particular to DFI relationships with Third-Party Service Providers?
A. Data breaches
B. Transaction volume and the type of ACH transactions that will be initiated
C. Account takeover
D. Network intrusion
Transaction volumes and the types of ACH transactions that will be initiated are security issues particular to DFI relationships with Third-Party Service Providers.
138
Who is the delegated administrator of the BSA?
A. OFAC
B. Treasury Department
C. FinCEN
D. OCC
FinCEN, a bureau of the U.S. Treasury, is the delegated administrator of the BSA. FinCEN issues regulations, provides outreach to regulated industries, and supports the examination functions performed by federal banking agencies.
139
When evaluating a prospect for a corporate trade exchange service, which of these is not important information?
A. Existing trade discounts
B. Timeliness of balance information
C. Timeliness of payments
D. Type of billing
Timeliness of balance information is not necessary when evaluating an EDI or corporate trade payments prospect. It is important when evaluating a cash concentration prospect, but not an EDI or corporate trade payments prospect.
140
For CIE Entries, the Company Name and Company Identification fields in the Company/Batch Header Record identify:
A. The Originator (consumer paying the bill)
B. The Bill Payment Service Provider transmitting the Entry
C. The Receiver
D. None of the abov
For CIE Entries, the Company Name and Company Identification fields in the Company/Batch Header Record identify the Bill Payment Service Provider transmitting the Entry.
141
What is the appropriate ANSI standard for a substitute check in an Image Cash Letter (ICL)?
A. X9.100-140
B. X9
C. X9.100-187
D. X9.100-165
The appropriate ANSI standard for a substitute check in an Image Cash Letter (ICL) is X9.100-140
142
Records of each return Entry must be retained by the Financial Institution for:
A. One year
B. Two years
C. Six years
D. Seven years
Per the Nacha Operating Rules, records of each return Entry must be retained for six years.
143
Which of the following definitions are valid for the term "card issuer"?
A. Any third-party processor which processes merchant credit card payments
B. The Financial Institution or merchant liable for the use of the card
C. Any organization that issues or uses a personal identification number (PIN) to effect electronic funds transfers
D. B and C
A card issuer is any Financial Institution or merchant liable for use of the card, AND any organization that issues or uses a personal identification number (PIN) to effect electronic funds transfers.
