Check Products

Question 1

What is ARP?

Answer 1

Account Reconciliation Products

Question 2

What ARP product does the following describe?
* Customer provides the bank data of the checks issued
* Bank matches data against cleared checks
* Customer receives reconciliation reports that includes checks paid, outstanding items and exceptions.

Answer 2

FULL Reconciliation

Question 3

What ARP product does the following describe?
* Customer recieves a report of paid items, usually sorted by the customer’s instructions

Answer 3

PARTIAL Reconciliation

Question 4

What ARP product allows the customer to maintain one account but have deposits from mulitple business locations?

Answer 4

DEPOSIT Reconciliation

Question 5

Which SEC code describes an entry where the source document is received via point-of-purchase or a manned bill payment location?

Answer 5

BOC (Back-Office Conversion)

Question 6

What are considered Non-cash items and not generally eligible for exchange?

Answer 6

An item:
1. that would be check, except a passbook, certificate or other document is attached;
2. is accompanied by special instructions;
3. that consists of more than a single thickness of paper;
4. has not been preprinted or post-encoded in magnetic ink w/ routing # of paying bank;
5. is a foreign item.

Question 7

What is required to convert a check to ACH?

Answer 7

1. Must contain a pre-printed serial number.
2. Must not have been previously negotiated or voided.
3. Must have routing, account, & check serial number encoded in magnetic ink.

Question 8

What the dollar limits for ACH conversion?

Answer 8

• $25,000 - ARC, BOC, & POP
• $2,500 - RCK

Question 9

What checks are not eligible for ACH conversion?

Answer 9

• Contains Aux/on-us field in MICR line
• Check payable to someone other than the originator (Third-party)
• Draft that does not contain the receiver’s signature (RCC)
• Obligations of financial institution (Cashiers/Official ck, money order)
• Check provided by lender to access loan account
• Checks drawn on an investment company
• Government checks
• Checks drawn on US Treasury, FRB or FHLB
• Checks in foreign currency

Question 10

What rules and regulations govern ACH converted checks?

Answer 10

• Nacha Rules, Reg E, & EFTA - ARC, BOC, & POP
• Nacha Rules, UCC, & Reg CC - RCK & XCK

Question 11

How long must a check be retained after being converted to ACH?

Answer 11

• ARC & BOC - 2 years
• POP - determined by receiver (signed authorization receipt must be retained by originator for 2 years)
• RCK - 7 years

Question 12

Under what circumstances can a POP entry be disputed by a receiver?

Answer 12

• No notice was provided to the receiver that the check was going to be converted.
• The source document used for entry was not an eligible source document.
• The source document was presented for payment as a check through the check collection system.

Question 13

What are some benefits of utilizing image cash letter?

Answer 13

• Reduced transaction costs
• More efficient back office processing
• Faster return processing