Questions I missed Flashcards
What are the two reasons an ODFI can Dishonor a Return Entry?
Untimely, Incorrect information
Megabank received a POP Entry for Mrs. Smith. The next day the check was presented for payment. The banks system captured the check as a duplicate check
Return the POP entry as R37 . No documents are required.
An RDFI has the right to Contest a Dishonored Return Entry
The RDFI used the wrong Return Reason code in first Return Entry
Which SEC Code can a RDFI reject at its sole discretion?
XCK
If an ODFI calls and asks an RDFI to return an entry, what should the RDFI do?
If the RDFI decides to comply with the ODFI’s request, return the entry using Return Reason Code R06 after receiving a Letter of Indemnification from the ODFI
The R11 Return Reason Code is used for a
Incomplete Transaction
An unauthorized CCD debit was discovered on a business statement. How long does the RDFI have to return this debit entry through the ACH Network?
The return must be made available to the ODFI by opening of business on the 2nd banking day after Settlement Date of the original entry
A TEL entry can be returned for
Authorization Revoked by Customer R07, Customer Advises Not Authorized R10, Stop Payment R08
Notification of Change Entries can only be initiated by the RDFI?
True
When a Federal Reserve Bank is used for check collection process, which Regulation governs?
Regulation J
ACH Network supports Financial EDI in all of the following except Creating SEC Codes which support EDI information, Allowing payment related data to be included in addenda records, Supporting the Federal Governments Vendor Express program, Allows American National Standards Institute to create specific EDI companies
Allows American National Standards Institute to create specific EDI companies
Who develops format requirements and data specifications for the different EDI standards used by corporate Originators and their Financial Institutions?
Accredited Standards Committee ASC X12
Check processing laws are Federal based.
False
What does EBT stand for?
Electronic Benefits Transfer
What is the settlement process of a Fedwire and an ACH file?
Fedwire is a gross settlement system and ACH is a net settlement system
Which regulation states that funds deposited by means of electronic payment must be made available to the consumer no later than the business day following the banking day on which the bank received the electronic payment?
Reg CC
According to UCC4A, a RDFI needs to provide a disclosure to its customers on?
Provisional Payment and Notice of Payment
What is used to determine a commercially reasonable security procedure for the purposes of UCC 4A?
Institution size, transaction type, frequency of transactions
Primary control of systemic risk is the responsibility of
the Federal Reserve
What is the maximum fine for a 3rd recurrence of a Class 1 Rules Violation?
Up to $5,000
If contacted by Nacha under the ODFI Return Reporting Provision, how may days does an ODFI have to work with its Originator Third Party Sender to reduce the return rate for Administrative Return Rate and or Overall Return Rate entries below the applicable Return Rate level before being subject to a rules enforcement proceeding?
30 days
The time frame for submitting a Report of Possible Rules Violation is
within 90 days of the occurrence
If an ODFI receives a notice from NACHA requesting specific information on an Originator with high return rates, the ODFI must reply within
10 banking days of the receipt of the request
The maximum penalty for a Class 2 violation of the ACH Rules under the National System of Fines is
Up to $100,000 per month until problem is resolved
Can a CCD Entry be a nonmonetary Entry?
Yes
To help mitigate risk, ODFIs must establish separate exposure limits for Originators who initiate WEB Entries.
False
Each Originator of a BOC Entry is required to retain a copy of the source document for two years from the purchase date.
False
The Originator of a WEB Credit is required to enter into an origination agreement with the ODFI.
False
When delivering a TEL entry notice, the Originator must
Provide the receiver with written notice confirming the oral authorization prior to the settlement of the entry
Which of the following statements are true regarding Federal Reserve accounts?
A. Only those Financial Institutions which use a Federal Reserve Bank as their ACH Operator are required to maintain or have access to, through a correspondent, an account at the Federal Reserve Bank.
B. Financial Institutions must maintain sufficient balances in these accounts to cover net settlement amounts.
C. Settlement through the Federal Reserve account precludes a Financial Institutions from pursuing legal recourse for any return or adjustment Entry.
D. None of the above
Financial Institutions must maintain sufficient balances in these accounts to cover net settlement amounts.
Which payment system is a debit pull system with regard to payments, where the sender initiates the transfer and then payments are automatically debited from the Beneficiary Bank’s Federal Reserve Bank account?
Fedwire Securities transfers
If an ODFI requests a copy of a Written Statement of Unauthorized Debit (WSUD) within 1 year of the date of the initiation of the adjustment Entry; how long does the RDFI have to send a copy of that WSUD to the ODFI?
10 days
What type of payment card is not a true payment instrument?
Credit Card
Who controls Systemic Risk in the ACH Network?
The Federal Reserve Bank
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
Settlement Date
The return code R37 may be used to return items with which two SEC codes?
A. PPD, POP
B. ARC, POP
C. ARC, RCK
D. POP, RCK
ARC, POP
The return code R37 Source Document Presented for Payment can be used for items with the SEC code ARC and POP as well as BOC. Source Documents Presented for Payment to which an RCK relates must use return code R53.
Authorization for a recurring Telephone-Initiated Entry include all but one of the following.
A. Oral authorization
B. Copy of Authorization must be sent to the Receiver
C. Authorization must be signed or similarly authenticated by the Receiver
D. Receiver must initiate the call if there is no existing relationship.
Authorization must be signed or similarly authenticated by the Receiver
Authorization from the Receiver must be recorded and/or written notice must be provided to Receiver prior to Settlement. The authorization does not have to be signed by the Receiver.
Which of the following codes allows a Financial Institution to determine whether an item has been originated by the federal government or by a private sector Originator?
A. Service Class Code (SCC)
B. Standard Entry Class Code (SEC)
C. Originator status code
D. Record type code
Originator status code
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. When should ABC Bank notify Nacha of their new TPS?
Within 30 days on onboarding the TPS
Which of the following is not a benefit of Direct Deposit?
A. Increased productivity
B. Reduced disbursement float
C. Additional employee benefit
D. Reduced risk of fraud
Reduced disbursement float
What is the correct definition of a credit card?
Access devices to a lending product, cleared through the Visa MasterCard, American Express, or Discover networks.
Transactions are authorized realtime.
Settlement for merchants is guaranteed and typically next-day.
Not considered a true payment instrument.
