Practice Test Flashcards
The transaction set numeric code 835 that can be included in the Addenda Records of a CTX represents:
health care claim payment/advice
When an ODFI receives an Unauthorized Return Entry (R10) they will be subject to a fee of
4.50
How does the Federal Government collect funds erroneously disbursed after a recipient’s death?
Notice of Reclamation
According to the ACH Rules, an RDFI may, but is not obligated, to return an erroneous Entry at the request of the
ODFI
Which SEC Code is typically used to originate a Non-Consumer ACH Entry?
CCD
Which party is responsible for the warranties related to originating ACH Entries?
ODFI
True or False: The first eight digits of the trace number identify the ODFI.
True
The Originator and ODFI must ensure that ACH Entries are not delivered to the ACH Operator too early. The term used to describe what they must do with ACH Entries prepared early is:
Warehousing
Originators of debit WEB Entries are required to do an audit of data security practices and procedures:
at least once a year
True or False: Same-Day credit Entries received after 5:30 pm ET can be posted by the RDFI on the next business day.
True
An ACH credit Entry must be made available to the Receiver no later than the:
Settlement Date
Re-presented Check Entries (RCK) fall under Regulation E.
False
If a financial institution wishes to close an account, other than for reasons of fraud, to which a federal benefit payment is being sent, written notice must be provided to the recipient _____ before the account is closed.
30 days
The Trace Number is found in the _____ Record of an ACH File.
Entry Detail Record
In an IAT Entry, what is the maximum number of Addenda Records allowed for remittance information?
2
True or False: A Nested Third-Party Sender has an agreement with both their Third-Party Sender and the ODFI.
True
For a Reinitiated Entry, ______ is required in the Entry Description Field.
REINTIATE
According to the Nacha Rules, each Participating DFI agrees to comply with the Nacha Rules and:
Warrants that it is legally able to comply with all applicable requirements.
What is the timeframe for an RDFI to send a Corrected Return when the ODFI had dishonored the original Return because of incorrect information?
Two banking Days from settlement of the Dishonored Return.
A non-Federal Government Reclamation must be originated within _____ Banking Days after the Originator receives notice of the death of the Receiver.
5
Within how many Banking Days must the ODFI send the RDFI a copy of the check that has been converted to an ARC or BOC Entry when a written request is received from the RDFI?
10 Banking Days
True or False: An RDFI that accepts ACH credit Entries to a transaction account must also accept ACH debit Entries.
False
An Originator must retain the original or a copy of each written authorization of a Receiver:
For 2 years after the termination or revocation of the authorization.
The number of times that an Entry may be reinitiated when it is returned for insufficient or uncollected funds is:
2
True or False: ODFIs that have a suspected return rate for Unauthorized Entries greater than the allowable threshold may be required by Nacha to get the rate below that threshold and maintain that rate for at least 180 days.
True
Checks that are turned into Re-presented Checks (RCK) after they have been negotiated must clearly be marked:
insufficient NSF or uncollected funds
The filling fee for an Arbitration Claim under the Nacha Operating Rules is:
$250
What unique information must be included on a Consumer’s statement that relates to a POS or SHR Standard Entry Class Code?
Terminal ID, Location, city, and state.
True or False: Returning an ACH Entry payment stopped (R08) constitutes legal notice that an authorization has been revoked under Nacha Rules.
False
True or False: A P2P transfer request over the phone should be transmitted as a TEL Entry.
False
According to the Nacha Rules each Participating DFI must maintain, or have the use through a correspondent of, an account with:
The Federal Reserve Bank
Which entity is permitted by the Nacha Rules to originate a DNE (Death Notification Entry)?
An agency of the Federal Government
An ODFI’s risk of loss from originated ACH debits end upon settlement of funds.
False
Which event took place in 1972?
CACHA was formed
Each Participating DFI must retain records of all Entries transmitted to or from an ACH Operator for _____ years from the date the Entry was transmitted.
6
Which of the following Return Reason Codes should be used to return a fraudulent ACH Entry?
R10 - Customer Advises Originator is not known to receiver
True or False: It is the RDFI’s responsibility to be certain an authorization is in place before accepting an ACH Entry.
False
True or False: An ODFI may refuse to honor an RDFI’s written request for a copy of the Consumer’s debit authorization form.
False
Which of the following is an RDFI’s obligation when notified of the death of a recipient of federal government benefit payments?
Return all subsequent post-death benefit payments.
An ODFI may limit its credit risk by:
Requiring a prefunding of ACH payroll files.
What conditions would cause a Batch in an ACH File to reject?
The trace numbers are in descending sequence within the batch
Which of the following fields in the MICR line of a business check will cause that check to be ineligible for conversion to an ARC, BOC, or POP Entry?
Auxiliary On-Us
Notification of Change Code C01 changes what information?
Account Number
Which of the following field types, if missing from the ACH Record, will cause the Entry, Batch, or File to be rejected by the ACH Operator?
Mandatory
Which Federal regulation is the basis for the Green Book?
31 CFR 210
The process of protecting ACH data before it is transmitted from sending to receiving points is called:
Encryption
A requirement of an ODFI of a WEB credit Entry includes:
Verification of receiver’s identity
The proper flow of an original ACH transaction is:
Originator, ODFI, ACH Operator, RDFI, Receiver.
As of March 18, 2022, the dollar limit for Same Day ACH Entries is?
1,000,000
Which of the following is true concerning the timeframe for the receipt of a stop payment order on a Subsequent Entry to a Consumer account?
Placed at least three banking Days before the scheduled transfer date
An ACH debit to a Consumer’s Account that has insufficient funds must be returned by the RDFI:
so, it is back to the ODFI by opening of business on the second banking day from the settlement date of the entry.
The Unauthorized Return Rate Threshold that Nacha will use in determining if an Originator or Third-Party Sender has an excessively high unauthorized return rate is ____ percent of debit Entries originated.
0.5%
The WEB Standard Entry Class Code:
applies to recurring, standing and single-entry internet/wireless network initiated debits or P2P credits.
The Nacha Rules use the words “source document” instead of “check” in reference to which of the following Entry types?
Back office conversion entry
What is the main difference between a direct payment and a direct deposit?
One is a debit, the other a credit.
True or False: TEL transactions are used only for Single-Entry debits.
True
According to the Nacha Rules, if the Originator plans to change the date on which it agreed to debit the Consumer (for recurring debits), what is the minimum amount of time that an Originator must send notification to the Receiver about the change?
Not less than 7 calendar days before the first entry affected by the change.
If both the Originator and Receiver are natural persons, no authorization by the Receiver is required for _____ Entries.
True
ODFIs must ensure that agreements have been made with all Originators or Third-Party Senders that bind the Originator or Third-Party Sender to the:
Nacha Rules
The ninth number in a financial institution’s routing number is called the:
Check Digit
Placing dollar caps on an ACH origination File is designed to limit which types of risk?
Systemic and Operational
The 820 EDI Transaction Set can be used with the CTX payment formats.
true
Regulation E defines a Consumer as:
A natural Person
When there is no contractual relationship for ACH services between the Originator and the ODFI, what name is given to the party that works with both participants in originating ACH Entries?
Third-Party Sender
Commercially reasonable security should be included in the agreement between the Originator and the ODFI are covered in:
Origination Agreement
Return Reason Codes R61-R70 are utilized by the ODFI to:
dishonor Returns it has received from the RDFI
UCC4A primarily applies to:
Consumer ACH Credits
The timeframe that the ODFI has to reduce the rate of Unauthorized Returns for an Originator or Third-Party Sender to below the established threshold as a result of ODFI Return Rate Reporting rules is _____ days.
30 Days
Notice of any changes made in terms or conditions of a Regulation E disclosure that result in greater liability for the Consumer must be provided at least 21 days before the changes are to take effect.
21
Per Regulation E, if an error cannot be resolved within ten business days, provisional credit is made to the customer and the institution may take up to _____ to resolve the error.
45 calendar
Any Entry that requires special attention or processing is referred to as:
an exception entry
Under Nacha Rules an ODFI is at risk of a Consumer debit transaction being returned for up to ______ from the Settlement Date of the Entry.
60 days
The Addenda Record that may accompany a CCD Entry can contain up to 85 characters of payment-related information.
False
Except for mergers, acquisitions, or other similar events, an RDFI must initiate a Notification of Change within _____ of the Settlement Date of the Entry to which the NOC relates.
2 banking days
An RDFI may submit a Limited Warranty Claim against an ODFI for an unauthorized PPD Debit to a Non-Consumer account:
up to two year from the settlement date of entry.
Based on their birth date, a new social security recipient may get the payment by direct deposit on:
the fourth Wednesday of the month
Which Federal regulation is the basis for the Green Book?
31 CFR 210
True or False: TEL transactions are used only for Single-Entry debits.
True
