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ACH > Questions > Flashcards

Questions Flashcards

1
Q

The maximum number of addenda records for TRX,CTX and ENR entries is?

A

9,999

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2
Q

What is the Amount of the non-refundable application fee to initiate an arbitration procedure ?

A

$250.00

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3
Q

If the transaction type code field for an IAT entry contains a second SEC code - in what record will you find the check serial number and terminal ID?

A

Remittance addenda record

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4
Q

What field contains the reason for payment as required by OFAC for IAT Entries?

A

Transaction type code field

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5
Q

For a destroyed check entry transaction,what needs to be in the company name field?

A

Check destroyed

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6
Q

Which of the following payment systems are referred to as real-time and gross settlement?

A

Fed wire funds transfer

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7
Q

When was NACHA formed

A

1974

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8
Q

Fed wire is subjected to what regulations?

A

Reg j and reg cc

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10
Q

What requires virtually all non-tax related payments by the federal government to be made via electronic funds transfer?

A

Eft mandate

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11
Q

What field contains the reason for payment as required by OFAC for IAT entries?

A

Transaction type code field

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12
Q

What is the minimum amount of a arbitration claim?

A

$250.00

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13
Q

Written and signed authorizations are required for which debit transactions?

A

Web,pop,ppd

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14
Q

What is the time frame to return an unauthorized ACH corporate entry?

A

Available to the ODFI no later then opening of business on the second banking day following settlement date of original entry

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15
Q

What is the maximum amount of days a bank has to respond to the reclamation entry before its federal reserve account is automatically debited for the full amount of the reclamation ?

A

60 calendar days

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16
Q

What relates to the EFT mandate?

A

The debt collection improvement act of 1996

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17
Q

What is the minimum amount of a commendation claim before in can be paid?

A

$200.00 per entry

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17
Q

Which provision of UCC article 4a can be varied by agreement (with disclosure to originator)?

A

Choice of law

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18
Q

As a prerequisite to origination,and to help control credit risk, an originating depository financial institution must have what in place for all the originators for which it transmits ACH entries ?

A

Exposure limits

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19
Q

An ACH operator acting as a gateway must not process what?

A

Any debit inbound IAT entry, except for reversing entries

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20
Q

What is the standard entry class code for an automated NOC?

A

“COR”

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20
Q

According to Reg E, how any days prior notice is required when there is a change to the initial disclosures which results in greater consumer liability ?

A

21 days

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21
Q

When a participant in the ACH NETWORK is unable to meet its financial obligation to another financial institution it is an example of what type of ACH risk?

A

Systemic risk

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22
Q

Individual name field is mandatory for ?

A

Tel and web payments

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23
Q

The two payment systems whose participations include the originator, originators depository institution,reserve banks, beneficiary a depository institution and beneficiary.

A

Fed wire funds and securities services

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24
Q

Special task force formed to develop a workable alternative to paper checks

A

Special committee on paperless entries (scope)

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25
Q

The year the location of the first ACH association

A

1972-California

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26
Q

Name the two ACH operators

A

Federal reserve bank and electronic payment network

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27
Q

Two basic types of checks in the collection cycle

A

On U.S. check and transit checks

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28
Q

Payment system governed by the electronic funds transfer act, reg z, card association rules and fair credit billing

A

Card payment system

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29
Q

Name the clearing and settlement methods for checks

A

Direct presentment, federal reserve bank, clearing house and correspondent bank

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30
Q

Payment system to which real-time, gross settlement applies

A

Wire transfer payment system

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31
Q

The year the routing number policy was adopted

A

1911

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32
Q

Payment system governed by the expedited funds availability act, UCC3,UCC4,OFAC,regulation cc and regulation j

A

Check payment system

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33
Q

Payment system to which net settlement applies

A

ACH network

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34
Q

An optional, variable format field of the MICR line of a check

A

Auxiliary on-us field

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35
Q

Payment system governed by the ACH rules, UCC4, UCC4A, Electronic funds transfer act, OFAC, REG E ,The right to financial privacy , reg D and reg CC

A

Ach network

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36
Q

A financial institution that received ACH entries from the ACH operator and posts the entries to the accounts of its depositors.

A

Receiving depository financial institution (RDFI)

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37
Q

Payment system governed by the ACH rules, UCC4, UCC4A, Electronic funds transfer act, OFAC, REG E ,The right to financial privacy , reg D and reg CC

A

Ach network

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37
Q

A financial institution that received ACH entries from the ACH operator and posts the entries to the accounts of its depositors.

A

Receiving depository financial institution (RDFI)

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38
Q

A person or entity that is issued a card or debit account that is accessed though the use of the card

A

Cardholder

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40
Q

A person or entity that is issued a card or debit account that is accessed though the use of the card

A

Cardholder

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41
Q

Financial institution identified by the routing number encoded on the MICR line of a check

A

Paying bank (payouts depository financial institution)

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42
Q

A third-party that sends ACH files on behalf of the ODFI. Examples include correspondent banks, corporate credit unions and processors.

A

Third-party sending point

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43
Q

The year the federal reserve system was created

A

1913

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44
Q

The party to whom a check is made payable

A

Payee

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45
Q

The first bank to which a check is deposited or transferred

A

Bank of first deposit(payees depository financial institution)

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46
Q

The party obligated to pay on a check

A

Payor(check writer, maker of drawer)

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47
Q

A voluntary association of depository institution that facilitate the clearing of checks or electronic items through the direct exchange of funds between members

A

Clearing house

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48
Q

Financial institution that creates an image of the original check

A

Truncating bank

49
Q

ACH payment transactions are accumulated throughout the day , sent to the ACH operator, sorted by destination and transmitted in groups at specified times

A

Batch process, store-and-forward systems

50
Q

The national trade association for electronic payment, which establishes the rule, industry standards and procedures governing the exchange of commercial ACH payment by depository financial institution

A

NACH-the electronic payment association

51
Q

A financial institution the receives ACH entries from the ACH operator and posts the entries to the accounts or its depositors

A

Recording depository financial institution (RDFI)

52
Q

The financial institution that contracts with a merchant to initiate payment requests to a card associated or company in the context of credit and debit card payment.

A

Acquirer/processor (merchant bank or merchant processor)

53
Q

The central clearing facility for ACH transactions

A

ACH operator

54
Q

An entity that issues a credit or debit card to the cardholder

A

Card issuer

55
Q

The financial institution that contracts with a merchant to initiate payment requests to a card association or company in the context of credit and debit card payment

A

Acquirer/processor(merchant bank or merchant processor)

56
Q

Risk that occurs when fraudulent or illegal payment transactions move from one payment channel to another( check payments to ACH )

A

Cross-channel risk

57
Q

According to NACHA operating rules, the ODFI needs to keep a copy of the items to which each XXK entry pertains for?

A

6 year

58
Q

Tolls to combat fraud risk

A

Personnel practices, physical security, data security, change controls and operational controls

59
Q

Exposure limits criteria, at a minimum, should be based on

A

overall customer relationship, individual subsidiaries/divisions of company, historical or predicted dollar value of files processed and specific ACH application

60
Q

The ACH security framework addresses these three areas

A

Protection of sensitive data and access controls, self-assessment and verification of originators and third-party senders

61
Q

The central clearing facility for ACH transactions

A

ACH operator

62
Q

Financial institution identified by the routing number encoded on the MICR line of a check

A

Paying bank (payouts depository financial institution)

63
Q

Transaction set for tax return information

A

ANSI ASC X12.813

64
Q

Name the originator benefits of direct payment via ACH

A

Improved cash flow/collections, time/labor reduction, lower administration and operating expense

65
Q

Name the receiver benefits of direct deposit via ACH

A

No lost/ stolen checks, immediate funds availability, convenience

66
Q

The year ANSI formed the accredited standards committee (ASC) X12

A

1979

67
Q

Examples of financial EDI

A

Vendor express, state tax payment, child support payments and health care claim payments

68
Q

A telecommunication intermediary used by corporations and financial institutions to transmit data

A

Value added network(VAN)

69
Q

A debit entry initiated by an originator in accordance with the receivers oral authorization via the telephone. May be a single entry or recurring

A

Telephone-initiated(TEL)

70
Q

A third-party that sends ACH files on behalf of the ODFI. Examples include correspondent banks, corporate credit unions and processors.

A

Third-party sending point

72
Q

The party to whom a check is made payable

A

Payee

73
Q

The first bank to which a check is deposited or transferred

A

Bank of first deposit(payees depository financial institution)

74
Q

The party obligated to pay on a check

A

Payor(check writer, maker of drawer)

75
Q

A voluntary association of depository institution that facilitate the clearing of checks or electronic items through the direct exchange of funds between members

A

Clearing house

76
Q

Financial institution that creates an image of the original check

A

Truncating bank

77
Q

An entity that issues a credit or debit card or debit card to the cardholder.

A

Card issuer

78
Q

Financial institution that produces the substitute checks

A

Reconverting bank

79
Q

ACH payment transactions are accumulated throughout the day , sent to the ACH operator, sorted by destination and transmitted in groups at specified times

A

Batch process, store-and-forward systems

80
Q

The national trade association for electronic payment, which establishes the rule, industry standards and procedures governing the exchange of commercial ACH payment by depository financial institution

A

NACH-the electronic payment association

81
Q

A financial institution the receives ACH entries from the ACH operator and posts the entries to the accounts or its depositors

A

Recording depository financial institution (RDFI)

82
Q

The financial institution that contracts with a merchant to initiate payment requests to a card associated or company in the context of credit and debit card payment.

A

Acquirer/processor (merchant bank or merchant processor)

83
Q

The central clearing facility for ACH transactions

A

ACH operator

84
Q

An entity that issues a credit or debit card to the cardholder

A

Card issuer

85
Q

The financial institution that contracts with a merchant to initiate payment requests to a card association or company in the context of credit and debit card payment

A

Acquirer/processor(merchant bank or merchant processor)

86
Q

Risk that occurs when fraudulent or illegal payment transactions move from one payment channel to another( check payments to ACH )

A

Cross-channel risk

88
Q

Tolls to combat fraud risk

A

Personnel practices, physical security, data security, change controls and operational controls

89
Q

Exposure limits criteria, at a minimum, should be based on

A

overall customer relationship, individual subsidiaries/divisions of company, historical or predicted dollar value of files processed and specific ACH application

90
Q

The ACH security framework addresses these three areas

A

Protection of sensitive data and access controls, self-assessment and verification of originators and third-party senders

91
Q

The central clearing facility for ACH transactions

A

ACH operator

92
Q

Two service provided by fed wire

A

Funds service and securities service

93
Q

The Ach network is Not governed by what regulation?

A

Reg j

94
Q

Transaction set for tax return information

A

ANSI ASC X12.813

95
Q

Name the originator benefits of direct payment via ACH

A

Improved cash flow/collections, time/labor reduction, lower administration and operating expense

96
Q

Name the receiver benefits of direct deposit via ACH

A

No lost/ stolen checks, immediate funds availability, convenience

97
Q

The year ANSI formed the accredited standards committee (ASC) X12

A

1979

98
Q

Examples of financial EDI

A

Vendor express, state tax payment, child support payments and health care claim payments

99
Q

A telecommunication intermediary used by corporations and financial institutions to transmit data

A

Value added network(VAN)

100
Q

A debit entry initiated by an originator in accordance with the receivers oral authorization via the telephone. May be a single entry or recurring

A

Telephone-initiated(TEL)

108
Q

An entity that issues a credit or debit card or debit card to the cardholder.

A

Card issuer

109
Q

Financial institution that produces the substitute checks

A

Reconverting bank

110
Q

Method using one type of authentication factor

A

Single-factor authentication

111
Q

Risk that a party to a transaction cannot provide the necessary funds as contracted for settlement to take place on the scheduled date

A

Credit risk

112
Q

Controls systemic risk in the ach network

A

Ach operator

113
Q

Risk presented when processors, sending or relieving points, or other parties performing a function of ach processing on behalf of a participant

A

Third party risk

114
Q

A strategy used by an ODFI to establish one total exposure limit for multiple originators

A

Risk pooling

115
Q

Method using two types of authentication factors

A

Two factor authentication

116
Q

A method used by an ODFI requiring an originator to ensure funds are available prior to settlement of an ach transaction

A

Prefunding

117
Q

Parties responsible for controlling operational risk in the ach network

A

ODFI and RDFI

118
Q

A method used to mitigate credit risk, also required by the ach rules

A

Exposure limits

119
Q

Method using more than two types of authentication factors

A

Multi factor authentication

120
Q

A means of disbursing government benefits electronically

A

Electronic benefits transfer (ebt)

121
Q

Transactions set for health care payments

A

ANSI ASC x12.835

122
Q

Transaction set for payment order/remittance advice

A

ANSI ASC x12.820

123
Q

Transaction set for lockbox

A

ANSI ASC x12.823

124
Q

Transaction set for income or asset offset

A

ANSI ASC x12.521

125
Q

Single entry debut initiated by an originator to an account of the recorder pursuant to a source document provided by the receiver at the point of purchase or at a manned bill payment location

A

BOC

126
Q

Name the RDFI responsible for receipt of entries

A
  1. timely receipt
  2. posting
  3. prenote validation
  4. return of entries
  5. proper notification to originator regarding NOCs
  6. timely handling of remittance data
  7. provide entry information to consumer receivers (periodic statements)
127
Q

Deadline for the RDFI to transmit contested dis honored or corrected returns

A

2 banking days

128
Q

A site where entries are received from an ach operator for processing

A

Receiving point

129
Q

Originator of debit WEB entries are required to implement these risk management procedures

A
  1. verification of receivers identity
  2. fraudulent detection system
  3. verification of routing numbers
  4. annual audit of website security

ACH (2 decks)

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