(As of July 2008)
31 CFR Part 210
Federal Government Participation
in the Automated Clearing House
31 CFR Ch. II (7–1–08 Edition)
PART 210—FEDERAL GOVERNMENT
PARTICIPATION IN THE AUTO-
MATED CLEARING HOUSE
Sec.
210.1 Scope; relation to other regulations.
210.2 Definitions.
210.3 Governing law.
Subpart A—General
210.4 Authorizations and revocations of au-
thorizations.
210.5 Account requirements for Federal pay-
ments.
210.6 Agencies.
210.7 Federal Reserve Banks.
210.8 Financial institutions.
Subpart B—Reclamation of Benefit
Payments
210.9 Parties to the reclamation.
210.10 RDFI liability.
210.11 Limited liability.
210.12 RDFI’s rights of recovery.
210.13 Notice to account owners.
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210.14 Erroneous death information.
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Fiscal Service, Treasury § 210.2
APPENDIX A TO PART 210—STANDARD DISCLO- had followed commercially reasonable
SURE FOR POINT-OF-PURCHASE CONVER- business practices.
SION—POSTED NOTICE
APPENDIX B TO PART 210—STANDARD DISCLO-
(c) Agency means any department,
SURE FOR POINT-OF-PURCHASE CONVER- agency, or instrumentality of the
SION—BROCHURE OR PAMPHLET United States Government, or a cor-
APPENDIX C TO PART 210—STANDARD DISCLO- poration owned or controlled by the
SURE FOR LOCKBOX CONVERSION—NOTICE Government of the United States. The
AUTHORITY: 5 U.S.C. 5525; 12 U.S.C. 391; 31 term agency does not include a Federal
U.S.C. 321, 3301, 3302, 3321, 3332, 3335, and 3720. Reserve Bank.
SOURCE: 64 FR 17487, Apr. 9, 1999, unless (d) Applicable ACH Rules means the
otherwise noted. ACH Rules with an effective date on or
before March 18, 2005, as published in
§ 210.1 Scope; relation to other regula- Parts II, III, and IV of the ‘‘2005 ACH
tions. Rules: A Complete Guide to Rules &
This part governs all entries and Regulations Governing the ACH Net-
entry data originated or received by an work’’:
agency through the Automated Clear- (1) ACH Rule 1.1 (limiting the appli-
ing House (ACH) network, except as cability of the ACH Rules to members
provided in paragraphs (a) and (b) of of an ACH association);
this section. This part also governs rec- (2) ACH Rule 1.2.2 (governing claims
lamations of benefit payments. for compensation);
(a) Federal tax payments received by (3) ACH Rule 1.2.4; 2.2.1.12; Appendix
the Federal Government through the Eight and Appendix Eleven (governing
ACH system that are governed by part the enforcement of the ACH Rules, in-
203 of this title shall not be subject to cluding self-audit requirements);
any provision of this part that is incon- (4) ACH Rules 2.2.1.10; 2.6; and 4.8
sistent with part 203. (governing the reclamation of benefit
(b) ACH credit or debit entries for the payments);
purchase of, or payment of principal
(5) ACH Rule 9.3 and Appendix Two
and interest on, United States securi-
(requiring that a credit entry be origi-
ties that are governed by part 370 of
nated no more than two banking days
this title shall not be subject to any
before the settlement date of the
provision of this part that is incon-
entry—see definition of ‘‘Effective
sistent with part 370.
Entry Date’’ in Appendix Two);
§ 210.2 Definitions. (6) ACH Rule 2.10.2.3 (requiring that
For purposes of this part, the fol- originating depository financial insti-
lowing definitions apply. Any term tutions (ODFIs) establish exposure lim-
that is not defined in this part shall its for Originators of Internet-initiated
have the meaning set forth in the ACH debit entries); and
Rules. (7) ACH Rule 2.11.3 (requiring report-
(a) ACH Rules means the Operating ing regarding unauthorized Telephone-
Rules and the Operating Guidelines initiated entries).
published by NACHA—The Electronic (e) Authorized payment agent means
Payments Association (NACHA), a na- any individual or entity that is ap-
tional association of regional member pointed or otherwise selected as a rep-
clearing house associations, ACH Oper- resentative payee or fiduciary, under
ators and participating financial insti- regulations of the Social Security Ad-
tutions located in the United States. ministration, the Department of Vet-
(b) Actual or constructive knowledge, erans Affairs, the Railroad Retirement
when used in reference to an RDFI’s Board, or other agency making Federal
knowledge of the death or legal inca- payments, to act on behalf of an indi-
pacity of a recipient or death of a bene- vidual entitled to a Federal payment.
ficiary, means that the RDFI received (f) Automated Clearing House or ACH
information, by whatever means, of the means a funds transfer system gov-
death or incapacity and has had a rea- erned by the ACH Rules which provides
sonable opportunity to act on such in- for the interbank clearing of electronic
formation or that the RDFI would have entries for participating financial in-
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learned of the death or incapacity if it stitutions.
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§ 210.2 31 CFR Ch. II (7–1–08 Edition)
(g) Beneficiary means a natural per- (v) Any savings association as de-
son other than a recipient who is enti- fined in section 3 of the Federal De-
tled to receive the benefit of all or part posit Insurance Act (12 U.S.C. 1813)
of a benefit payment. which is an insured depository institu-
(h) Benefit payment is a payment for a tion as defined in such Act (12 U.S.C.
Federal entitlement program or for an 1811 et seq.) or is eligible to apply to be-
annuity, including, but not limited to, come an insured depository institution
payments for Social Security, Supple- under the Federal Deposit Insurance
mental Security Income, Black Lung, Act (12 U.S.C. 1811 et seq.); and
Civil Service Retirement, Railroad Re- (vi) Any agency or branch of a for-
tirement annuity and Railroad Unem- eign bank as defined in section 1(b) of
ployment and Sickness benefits, De- the International Banking Act, as
partment of Veterans Affairs Com- amended (12 U.S.C. 3101).
pensation and Pension, and Worker’s (2) In this part, a financial institu-
Compensation. tion may be referred to as an Origi-
(i) Federal payment means any pay- nating Depository Financial Institu-
ment made by an agency. The term in- tion (ODFI) if it transmits entries to
cludes, but is not limited to: its ACH Operator for transmittal to a
(1) Federal wage, salary, and retire- Receiving Depository Financial Insti-
ment payments; tution (RDFI), or it may be referred to
(2) Vendor and expense reimburse- as an RDFI if it receives entries from
ment payments; its ACH Operator for debit or credit to
the accounts of its customers.
(3) Benefit payments; and
(k) Government entry means an ACH
(4) Miscellaneous payments includ-
credit or debit entry or entry data
ing, but not limited to, interagency
originated or received by an agency.
payments; grants; loans; fees; prin-
(l) Green Book means the manual
cipal, interest, and other payments re-
issued by the Service which provides fi-
lated to United States marketable and
nancial institutions with procedures
nonmarketable securities; overpay-
and guidelines for processing Govern-
ment reimbursements; and payments
ment entries.
under Federal insurance or guarantee
(m) Notice of reclamation means notice
programs for loans.
sent by electronic, paper, or other
(j)(1) Financial institution means: means by the Federal Government to
(i) Any insured bank as defined in an RDFI which identifies the benefit
section 3 of the Federal Deposit Insur- payments that should have been re-
ance Act (12 U.S.C. 1813) or any bank turned by the RDFI because of the
which is eligible to apply to become an death or legal incapacity of a recipient
insured bank under section 5 of such or death of a beneficiary.
Act (12 U.S.C. 1815); (n) Outstanding total means the sum
(ii) Any mutual savings bank as de- of all benefit payments received by an
fined in section 3 of the Federal De- RDFI from an agency after the death
posit Insurance Act (12 U.S.C. 1813) or or legal incapacity of a recipient or the
any bank which is eligible to apply to death of a beneficiary, minus any
become an insured bank under section amount returned to, or recovered by,
5 of such Act (12 U.S.C. 1815); the Federal Government.
(iii) Any savings bank as defined in (o) Recipient means a natural person,
section 3 of the Federal Deposit Insur- corporation, or other public or private
ance Act (12 U.S.C. 1813) or any bank entity that is authorized to receive a
which is eligible to apply to become an Federal payment from an agency.
insured bank under section 5 of such (p) Service means the Financial Man-
Act (12 U.S.C. 1815); agement Service, Department of the
(iv) Any insured credit union as de- Treasury.
fined in section 101 of the Federal Cred- (q) Treasury means the United States
it Union Act (12 U.S.C. 1752) or any Department of the Treasury.
credit union which is eligible to apply (r) Treasury Financial Manual means
to become an insured credit union pur- the manual issued by the Service con-
suant to section 201 of such Act (12 taining procedures to be observed by
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U.S.C. 1781); all agencies and Federal Reserve Banks
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Fiscal Service, Treasury § 210.4
with respect to central accounting, fi- (c) Application of this part. Any person
nancial reporting, and other Federal or entity that originates or receives a
Government-wide fiscal responsibilities Government entry agrees to be bound
of the Treasury. by this part and to comply with all in-
structions and procedures issued by the
[64 FR 17478, Apr. 9, 1999, as amended at 65
Service under this part, including the
FR 18869, Apr. 7, 2000; 66 FR 10580, Feb. 16,
2001; 67 FR 17902, Apr. 11, 2002; 68 FR 33829, Treasury Financial Manual and the
June 5, 2003; 70 FR 67366, Nov. 7, 2005] Green Book. The Treasury Financial
Manual is available for downloading at
§ 210.3 Governing law. the Service’s web site at http://
www.fms.treas.gov/ or by calling (202)
(a) Federal law. The rights and obliga- 874–9940 or writing the Directives Man-
tions of the United States and the Fed- agement Branch, Financial Manage-
eral Reserve Banks with respect to all ment Service, Department of the
Government entries, and the rights of Treasury, 3700 East West Highway,
any person or recipient against the Room 500C, Hyattsville, MD 20782. The
United States and the Federal Reserve Green Book is available for
Banks in connection with any Govern- downloading at the Service’s web site
ment entry, are governed by this part, at http://www.fms.treas.gov/fmsnews.html
which has the force and effect of Fed- or by calling (202) 874–6540 or writing
eral law. the Product Promotion Division, Fi-
(b) Incorporation by reference—applica- nancial Management Service, Depart-
ble ACH Rules. (1) This part incor- ment of the Treasury, 401 14th Street,
porates by reference the applicable SW., Room 309, Washington, DC 20227.
ACH Rules, including rule changes
with an effective date on or before [64 FR 17478, Apr. 9, 1999, as amended at 65
March 18, 2005, as published in Parts II, FR 18869, Apr. 7, 2000; 66 FR 10580, Feb. 16,
2001; 67 FR 17903, Apr. 11, 2002; 68 FR 33830,
III, and IV of the ‘‘2005 ACH Rules: A June 5, 2003; 69 FR 18803, Apr. 9, 2004; 70 FR
Complete Guide to Rules & Regulations 67367, Nov. 7, 2005]
Governing the ACH Network.’’ The Di-
rector of the Federal Register approves
this incorporation by reference in ac-
Subpart A—General
cordance with 5 U.S.C. 552(a) and 1 CFR § 210.4 Authorizations and revocations
part 51. Copies of the ‘‘2005 ACH Rules’’ of authorizations.
are available from NACHA—The Elec-
tronic Payments Association, 13665 (a) Requirements for authorization.
Dulles Technology Drive, Suite 300, Each debit and credit entry subject to
Herndon, Virginia 20171. Copies also are this part shall be authorized in accord-
available for public inspection at the ance with the applicable ACH Rules
Office of the Federal Register, 800 and the following additional require-
North Capitol Street, NW., Suite 700, ments:
Washington, DC 20002; and the Finan- (1) The agency or the RDFI that ac-
cial Management Service, 401 14th cepts the recipient’s authorization
Street, SW., Room 401, Washington, DC shall verify the identity of the recipi-
20227. ent and, in the case of a written au-
(2) Any amendment to the applicable thorization requiring the recipient’s
ACH Rules that takes effect after signature, the validity of the recipi-
March 18, 2005, shall not apply to Gov- ent’s signature.
ernment entries unless the Service ex- (2) Unless authorized in writing, or
pressly accepts such amendment by similarly authenticated, by an agency,
publishing notice of acceptance of the no person or entity shall initiate or
amendment to this part in the FED- transmit a debit entry to that agency,
ERAL REGISTER. An amendment to the other than a reversal of a credit entry
ACH Rules that is accepted by the previously sent to the agency.
Service shall apply to Government en- (b) Terms of authorizations. By exe-
tries on the effective date of the rule- cuting an authorization for an agency
making specified by the Service in the to initiate entries, a recipient agrees:
FEDERAL REGISTER notice expressly ac- (1) To the provisions of this part;
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cepting such amendment. (2) To provide accurate information;
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§ 210.5 31 CFR Ch. II (7–1–08 Edition)
(3) To verify the recipient’s identity than a vendor payment shall be depos-
to the satisfaction of the RDFI or ited into a deposit account at a finan-
agency, whichever has accepted the au- cial institution. For all payments
thorization; other than vendor payments, the ac-
(4) That any new authorization in- count at the financial institution shall
consistent with a previous authoriza- be in the name of the recipient, except
tion shall supersede the previous au- as provided in paragraph (b) of this sec-
thorization; and tion.
(5) That the Federal Government (b)(1) Where an authorized payment
may reverse any duplicate or erroneous agent has been selected, the Federal
entry or file as provided in § 210.6(f) of payment shall be deposited into an ac-
this part. count titled in accordance with the
(c) Termination and revocation of au- regulations governing the authorized
thorizations. An authorization shall re- payment agent.
main valid until it is terminated or re- (2) Where a Federal payment is to be
voked by: deposited into an investment account
(1) With respect to a recipient of ben- established through a securities broker
efit payments, a change in the recipi- or dealer registered with the Securities
ent’s ownership of the deposit account and Exchange Commission under the
as reflected in the deposit account Securities Exchange Act of 1934, or an
records, including the removal of the investment account established
name of the recipient, the addition of a through an investment company reg-
power of attorney, or any action which istered under the Investment Company
alters the interest of the recipient; Act of 1940 or its transfer agent, such
(2) The death or legal incapacity of a payment may be deposited into an ac-
recipient of benefit payments or the count designated by such broker or
death of a beneficiary; dealer, investment company, or trans-
(3) The closing of the recipient’s ac- fer agent.
count at the RDFI by the recipient or (3) The Secretary of the Treasury
by the RDFI. With respect to a recipi- may waive the requirements of para-
ent of benefit payments, if an RDFI graph (a) of this section in any case or
closes an account to which benefit pay- class of cases.
ments currently are being sent, it shall [64 FR 17478, Apr. 9, 1999, as amended at 65
provide 30 calendar days written notice FR 18869, Apr. 7, 2000]
to the recipient prior to closing the ac-
count, except in cases of fraud; or § 210.6 Agencies.
(4) The RDFI’s insolvency, closure by Notwithstanding ACH Rules 2.2.3,
any state or Federal regulatory au- 2.4.5, 2.5.2, 4.2, and 8.7.2, agencies shall
thority or by corporate action, or the be subject to the obligations and liabil-
appointment of a receiver, conservator, ities set forth in this section in connec-
or liquidator for the RDFI. In any such tion with Government entries.
event, the authorization shall remain (a) Receiving entries. An agency may
valid if a successor is named. The Fed- receive ACH debit or credit entries
eral Government may temporarily only with the prior written authoriza-
transfer authorizations to a consenting tion of the Service.
RDFI. The transfer is valid until either (b) Liability to a recipient. An agency
a new authorization is executed by the will be liable to the recipient for any
recipient, or 120 calendar days have loss sustained by the recipient as a re-
elapsed since the insolvency, closure, sult of the agency’s failure to originate
or appointment, whichever occurs first. a credit or debit entry in accordance
with this part. The agency’s liability
§ 210.5 Account requirements for Fed- shall be limited to the amount of the
eral payments. entry(ies).
(a) Notwithstanding ACH Rules 2.1.2, (c) Liability to an originator. An agen-
4.1.3, and Appendix Two, section 2.2 cy will be liable to an originator or an
(listing general ledger and loan ac- ODFI for any loss sustained by the
counts as permissible transaction originator or ODFI as a result of the
codes), an ACH credit entry rep- agency’s failure to credit an ACH entry
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resenting a Federal payment other to the agency’s account in accordance
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Fiscal Service, Treasury § 210.6
with this part. The agency’s liability centration or Disbursement (CCD) SEC
shall be limited to the amount of the code for entries to business accounts.
entry(ies). The requirements of ACH Rules 2.1.2
(d) Liability to an RDFI or ACH asso- and 3.5 shall be met for such an entry
ciation. Except as otherwise provided in if the Receiver presents the check at a
this part, an agency will be liable to an location where the agency has posted a
RDFI for losses sustained in processing conspicuous notice at the point-of-pur-
duplicate or erroneous credit and debit chase containing the disclosure set
entries originated by the agency. An forth at appendix A to this part and
agency’s liability shall be limited to makes available to the Receiver, in a
the amount of the entry(ies), and shall form that the Receiver can retain, the
be reduced by the amount of the loss disclosure set forth at appendix B to
resulting from the failure of the RDFI this part. For purposes of ACH Rules
to exercise due diligence and follow 3.12 and 4.1.1, authorization shall con-
standard commercial practices in proc- sist of a copy of the notice and a copy
essing the entry(ies). This section does of the Receiver’s source document.
not apply to credits received by an (h) Accounts receivable check conver-
RDFI after the death or legal inca- sion—(1) Conversion of consumer
pacity of a recipient of benefit pay- checks.—An agency may originate an
ments or the death of a beneficiary as Accounts Receivable (ARC) entry using
governed by Subpart B of this part. An a check drawn on a consumer account
agency shall not be liable to any ACH that is received via the mail or at a
association. dropbox, or that is delivered in person
(e) Acquittance of the agency. The in circumstances in which the agency
final crediting of the amount of an cannot contemporaneously image and
entry to a recipient’s account shall return the check. The notice and au-
constitute full acquittance of the Fed- thorization requirements of ACH Rules
eral Government. 2.1.4 and 3.7.1 shall be met for an ARC
(f) Reversals. An agency may reverse entry only if an agency has provided
any duplicate or erroneous entry, and the Receiver with the disclosure set
the Federal Government may reverse forth at appendix C to this part.
any duplicate or erroneous file. In ini- (2) Conversion of business checks. An
tiating a reversal, an agency shall cer- agency may originate an ACH debit
tify to the Service that the reversal using a business check that is received
complies with applicable law related to via the mail or at a dropbox, or that is
the recovery of the underlying pay- delivered in person in circumstances in
ment. An agency that reverses an entry which the agency cannot contempora-
shall indemnify the RDFI as provided neously image and return the check.
in the applicable ACH Rules, but the The agency shall use the CCD SEC code
agency’s liability shall be limited to for such entries, which shall be deemed
the amount of the entry. If the Federal to meet the requirements of ACH Rule
Government reverses a file, the Federal 2.1.2 if the agency has provided the dis-
Government shall indemnify the RDFI closure set forth at appendix C to this
as provided in the applicable ACH part. For purposes of ACH Rules 3.12
Rules, but the extent of such liability and 4.1.1, authorization shall
shall be limited to the amount of the (i) Returned item service fee. An agen-
entries comprising the duplicate or er- cy may originate an ACH debit entry
roneous file. Reversals under this sec- to collect a one-time service fee in con-
tion shall comply with the time limita- nection with an ACH debit entry origi-
tions set forth in the applicable ACH nated pursuant to paragraph (g) or (h)
Rules. of this section that is returned due to
(g) Point-of-purchase debit entries. An insufficient funds. An entry originated
agency may convert to an ACH debit pursuant to this paragraph shall meet
entry a check drawn on a consumer or the requirements of ACH Rules 2.1.2
business account and presented at a and 3.5 if the agency has complied with
point-of-purchase. Agencies shall use the disclosure requirements of para-
the Point-of-Purchase (POP) Standard graph (g) or (h), as appropriate. For
Entry Class (SEC) code for entries to purposes of ACH Rule 3.12 and 4.1.1, au-
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consumer accounts and the Cash Con- thorization shall consist of a copy of
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§ 210.7 31 CFR Ch. II (7–1–08 Edition)
the notice provided under paragraph (g) thorization of the agency, shall be lia-
or (h), as applicable, and a copy of the ble to the Federal Government for the
Receiver’s source document. amount of the transaction, plus inter-
[64 FR 17487, Apr. 9, 1999, as amended at 67
est. The Service may collect such funds
FR 17903, Apr. 11, 2002; 69 FR 13189, Mar. 19, using procedures established in the ap-
2004; 70 FR 67367, Nov. 7, 2005] plicable ACH Rules or by instructing a
Federal Reserve Bank to debit the
§ 210.7 Federal Reserve Banks. ODFI’s account at the Federal Reserve
(a) Fiscal Agents. Each Federal Re- Bank or the account of its designated
serve Bank serves as Fiscal Agent of correspondent. The interest charge
the Treasury in carrying out its duties shall be at a rate equal to the Federal
as the Federal Government’s ACH Op- funds rate plus two percent, and shall
erator under this part. As Fiscal Agent, be assessed for each calendar day, from
each Federal Reserve Bank shall be re- the day the Treasury General Account
sponsible only to the Treasury and not (TGA) was debited to the day the TGA
to any other party for any loss result- is recredited with the full amount due.
ing from the Federal Reserve Bank’s (2) An RDFI that accepts an author-
action, notwithstanding Section 11.5 ization in violation of § 210.4(a) shall be
and Article 8 of the ACH Rules. Each liable to the Federal Government for
Federal Reserve Bank may issue oper- all credits or debits made in reliance
ating circulars not inconsistent with on the authorization. An RDFI that
this part which shall be binding on fi- transmits to an agency an authoriza-
nancial institutions. tion containing an incorrect account
(b) Routing numbers. All routing num- number shall be liable to the Federal
bers issued by a Federal Reserve Bank Government for any resulting loss, up
to an agency require the prior approval to the amount of the payment(s) made
of the Service. on the basis of the incorrect number. If
an agency determines, after appro-
§ 210.8 Financial institutions. priate investigation, that a loss has oc-
(a) Status as a Treasury depositary. curred because an RDFI transmitted an
The origination or receipt of an entry authorization or notification of change
subject to this part does not render a containing an incorrect account num-
financial institution a Treasury deposi- ber, the agency may instruct the Serv-
tary. A financial institution shall not ice to direct a Federal Reserve Bank to
advertise itself as a Treasury deposi- debit the RDFI’s account for the
tary on such basis. amount of the payment(s) made on the
(b) Liability. Notwithstanding ACH basis of the incorrect number. The
Rules 2.2.3, 2.4.5, 2.5.2, 4.2, and 8.7.2, if agency shall notify the RDFI of the re-
the Federal Government sustains a loss sults of its investigation and provide
as a result of a financial institution’s the RDFI with a reasonable oppor-
failure to handle an entry in accord- tunity to respond before initiating
ance with this part, the financial insti- such a debit.
tution shall be liable to the Federal (c) Acquittance of the financial institu-
Government for the loss, up to the tion. The final crediting of the correct
amount of the entry, except as other- amount of an entry received and proc-
wise provided in this section. A finan- essed by the Federal Reserve Bank and
cial institution shall not be liable to posted to the TGA shall constitute full
any third party for any loss or damage acquittance of the ODFI and the origi-
resulting directly or indirectly from an nator for the amount of the entry. Full
agency’s error or omission in origi- acquittance shall not occur if the en-
nating an entry. Nothing in this sec- tries do not balance, are incomplete,
tion shall affect any obligation or li- are incorrect, or are incapable of being
ability of a financial institution under processed. In the case of funds col-
Regulation E, 12 CFR part 205, or the lected by an agency through origina-
Electronic Funds Transfer Act, 12 tion of a debit entry, full acquittance
U.S.C. 1693 et seq. shall not occur until the underlying
(1) An ODFI that transmits a debit payment becomes final.
entry to an agency without the prior (d) Notice of misdirected payment. If an
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written or similarly authenticated au- RDFI becomes aware that an agency
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Fiscal Service, Treasury § 210.10
has originated an ACH credit entry to The proper use of the R15 or R14 return
an account that is not owned by the reason code shall be deemed to con-
payee whose name appears in the ACH stitute such notice.
payment information, the RDFI shall (b) Notice of reclamation. Upon receipt
promptly notify the agency. An RDFI of a notice of reclamation, an RDFI
that originates a Notification of shall provide the information required
Change (NOC) entry with the correct by the notice of reclamation and re-
account and/or Routing and Transit turn the amount specified in the notice
Number information, or returns the of reclamation in a timely manner.
original ACH credit entry to the agen- (c) Exception to liability rule. An RDFI
cy with an appropriate return reason shall not be liable for post-death ben-
code, shall be deemed to have satisfied efit payments sent to a recipient act-
this requirement. ing as a representative payee or fidu-
[64 FR 17487, Apr. 9, 1999, as amended at 69 ciary on behalf of a beneficiary, if the
FR 13189, Mar. 19, 2004; 70 FR 67367, Nov. 7, beneficiary was deceased at the time
2005] the authorization was executed and the
RDFI did not have actual or construc-
Subpart B—Reclamation of Benefit tive knowledge of the death of the ben-
Payments eficiary.
(d) Time limits. An agency that initi-
§ 210.9 Parties to the reclamation. ates a request for a reclamation must
(a) Agreement of RDFI. An RDFI’s ac- do so within 120 calendar days after the
ceptance of a benefit payment pursuant date that the agency first has actual or
to this part shall constitute its agree- constructive knowledge of the death or
ment to this subpart. By accepting a legal incapacity of a recipient or the
benefit payment subject to this part, death of a beneficiary. An agency may
the RDFI authorizes the debiting of the not reclaim any post-death or post-in-
Federal Reserve Bank account utilized capacity payment made more than six
by the RDFI in accordance with the years prior to the date of the notice of
provisions of § 210.10(e). reclamation; provided, however, that if
(b) The Federal Government. In proc- the account balance at the time the
essing reclamations pursuant to this RDFI receives the notice of reclama-
subpart, the Service shall act pursuant tion exceeds the total amount of post-
to the direction of the agency that cer- death or post-incapacity payments
tified the benefit payment(s) being re- made by the agency during such six-
claimed. year period, this limitation shall not
apply and the RDFI shall be liable for
§ 210.10 RDFI liability. the total amount of all post-death or
post-incapacity payments made, up to
(a) Full liability. An RDFI shall be lia-
the amount in the account at the time
ble to the Federal Government for the
the RDFI receives the notice of rec-
total amount of all benefit payments
lamation and has had a reasonable op-
received after the death or legal inca-
portunity to act on the notice (not to
pacity of a recipient or the death of a
exceed one business day).
beneficiary unless the RDFI has the
right to limit its liability under § 210.11 (e) Debit of RDFI’s account. If an
of this part. An RDFI shall return any RDFI does not return the full amount
benefit payments received after the of the outstanding total or any other
RDFI becomes aware of the death or amount for which the RDFI is liable
legal incapacity of a recipient or the under this subpart in a timely manner,
death of a beneficiary, regardless of the the Federal Government will collect
manner in which the RDFI discovers the amount outstanding by instructing
such information. If the RDFI learns of the appropriate Federal Reserve Bank
the death or legal incapacity of a re- to debit the account utilized by the
cipient or death of a beneficiary from a RDFI. The Federal Reserve Bank will
source other than notice from the provide advice of the debit to the
agency issuing payments to the recipi- RDFI.
ent, the RDFI shall immediately notify [64 FR 17487, Apr. 9, 1999, as amended at 69
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the agency of the death or incapacity. FR 13189, Mar. 19, 2004]
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§ 210.11 31 CFR Ch. II (7–1–08 Edition)
§ 210.11 Limited liability. (B) All other person(s) authorized to
withdraw funds from the recipient’s ac-
(a) Right to limit its liability. If an
count; and
RDFI does not have actual or construc-
(C) All person(s) who withdrew funds
tive knowledge of the death or legal in- from the recipient’s account after the
capacity of a recipient or the death of death or legal incapacity of the recipi-
a beneficiary at the time it receives ent or death of the beneficiary.
one or more benefit payments on behalf (ii) If persons are not identified for
of the recipient, the RDFI’s liability to any of these subcategories, the RDFI
the agency for those payments shall be must certify that no such information
limited to: is available and why no such informa-
(1) An amount equal to: (i) The tion is available; and
amount in the account at the time the (4) Fully and accurately complete all
RDFI receives the notice of reclama- certifications on the notice of reclama-
tion and has had a reasonable oppor- tion and comply with the requirements
tunity (not to exceed one business day) of this part.
to act on the notice, plus any addi- (c) Payment of limited liability amount.
tional benefit payments made to the If the RDFI qualifies for limited liabil-
account by the agency before the RDFI ity under this subpart, it shall imme-
responds in full to the notice of rec- diately return to the Federal Govern-
lamation, or ment the amount specified in
(ii) The outstanding total, whichever § 210.11(a)(1). The agency will then at-
is less; plus tempt to collect the amount of the out-
(2) If the agency is unable to collect standing total not returned by the
the entire outstanding total, an addi- RDFI. If the agency is unable to collect
tional amount equal to: that amount, the Federal Government
(i) The benefit payments received by will instruct the appropriate Federal
the RDFI from the agency within 45 Reserve Bank to debit the account uti-
days after the death or legal incapacity lized by the RDFI at that Federal Re-
of the recipient or death of the bene- serve Bank for the amount specified in
ficiary, or § 210.11(a)(2).
(ii) The balance of the outstanding (d) Violation of subpart B. An RDFI
total, whichever is less. that fails to comply with any provision
(b) Qualification for limited liability. In of this subpart in a timely and accu-
order to limit its liability as provided rate manner, including but not limited
in this section, an RDFI shall: to the certification requirements at
(1) Certify that at the time the ben- § 210.11(b) and the notice requirements
efit payments were credited to or with- at § 210.13, shall be liable to the Federal
drawn from the account, the RDFI had Government for any loss resulting from
no actual or constructive knowledge of its act or omission. Any such liability
the death or legal incapacity of the re- shall be in addition to the amount(s)
cipient or death of the beneficiary; for which the RDFI is liable under
(2) Certify the date the RDFI first § 210.10 or § 210.11, as applicable.
had actual or constructive knowledge [64 FR 17487, Apr. 9, 1999, as amended at 69
of the death or legal incapacity of the FR 13189, Mar. 19, 2004]
recipient or death of the beneficiary,
regardless of how and where such infor- § 210.12 RDFI’s rights of recovery.
mation was obtained; (a) Matters between the RDFI and its
(3)(i) In cases involving the reclama- customer. This subpart does not author-
tion of Social Security Federal Old- ize or direct an RDFI to debit or other-
Age, Survivors, and Disability Insur- wise affect the account of a recipient.
ance benefit payments, or benefit pay- Nothing in this subpart shall be con-
ments certified by the Railroad Retire- strued to affect the right an RDFI has
ment Board or the Department of Vet- under state law or the RDFI’s contract
erans’ Affairs, provide the name and with a recipient to recover any amount
last known address of the following from the recipient’s account.
person(s): (b) Liability unaffected. The liability
(A) The recipient and any co-owner(s) of the RDFI under this subpart is not
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of the recipient’s account; affected by actions taken by the RDFI
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Fiscal Service, Treasury Pt. 210, App. B
to recover any portion of the out- fund transfer from your account in the
standing total from any party. amount of the check. The cashier will void
the check and return it to you.
§ 210.13 Notice to account owners. Insufficient Funds—The electronic fund
transfer from your account will usually
Provision of notice by RDFI. Upon re- occur within 24 hours, which is faster than a
ceipt by an RDFI of a notice of rec- check is normally processed. Do not present
lamation, the RDFI immediately shall a check to the cashier unless there are suffi-
mail to the last known address of the cient funds available in your checking ac-
account owner(s) or otherwise provide count. If the electronic fund transfer cannot
to the account owner(s) a copy of any be completed because of insufficient funds,
we may try to make the transfer up to two
notice required by the Service to be more times [and we will charge you a one-
provided to account owners as specified time fee of $lllll, which we will also
in the Green Book. Proof that this no- collect by electronic fund transfer].
tice was sent may be required by the Authorization—By reading this notice and
Service. handing your check to the cashier, you au-
thorize the conversion of your check into an
§ 210.14 Erroneous death information. electronic fund transfer. If the electronic
fund transfer cannot be processed for tech-
(a) Notification of error to the agency. nical reasons, you authorize us to process
If, after the RDFI responds fully to the the copy of your original check.
notice of reclamation, the RDFI learns More Information—A pamphlet with more
that the recipient or beneficiary is not information about this process, including in-
dead or legally incapacitated or that formation about your rights under Federal
the date of death is incorrect, the law, is available from the cashier. [You may
RDFI shall inform the agency that cer- also call lll or visit our Internet site at
tified the underlying payment(s) and lll for detailed information.]
directed the Service to reclaim the NOTE: This notice must be conspicuous.
funds in dispute. This means that the notice should be printed
(b) Resolution of dispute. The agency on a sign that is prominently posted at the
that certified the underlying pay- location where checks are presented to a
cashier, in such a way that it is clearly visi-
ment(s) and directed the Service to re- ble from several feet away to customers
claim the funds will attempt to resolve waiting to present checks.
the dispute with the RDFI in a timely
manner. If the agency determines that [67 FR 17903, Apr. 11, 2002]
the reclamation was improper, in APPENDIX B TO PART 210—STANDARD
whole or in part, the agency shall no- DISCLOSURE FOR POINT-OF-PUR-
tify the RDFI and shall return the CHASE CONVERSION—BROCHURE OR
amount of the improperly reclaimed PAMPHLET
funds to the RDFI. Upon certification
by the agency of an improper reclama- What is point-of-purchase check conversion?
tion, the Service may instruct the ap- Point-of-purchase check conversion is the
propriate Federal Reserve Bank to process of converting checks that customers
present to cashiers into electronic fund
credit the account utilized by the RDFI
transfers. ‘‘Electronic fund transfer’’ is the
at the Federal Reserve Bank in the term used to refer to the process in which we
amount of the improperly reclaimed electronically instruct your financial insti-
funds. tution to transfer funds from your account
to our account, rather than processing your
[64 FR 17487, Apr. 9, 1999, as amended at 69
check. When you hand a check to the cash-
FR 13189, Mar. 19, 2004]
ier, your check is copied and the account in-
formation from your check is used to make
APPENDIX A TO PART 210—STANDARD an electronic fund transfer from your ac-
DISCLOSURE FOR POINT-OF-PUR- count. The cashier voids your check and re-
CHASE CONVERSION—POSTED NOTICE turns it to you. By presenting your check at
a location where a sign notifies you that
NOTICE TO CUSTOMERS PRESENTING CHECKS
your check will be converted, you authorize
Conversion of Checks—If you are presenting the conversion of your check into an elec-
a check to the cashier, your check will be tronic fund transfer in this manner.
converted into an electronic fund transfer. How quickly will funds be transferred from
When you hand your completed, signed my account? The electronic fund transfer
check to the cashier, your check will be cop- from your account will usually occur within
ied. The account information from your 24 hours, which is faster than a check is nor-
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check will be used to make an electronic mally processed. Therefore, you should be
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Pt. 210, App. C 31 CFR Ch. II (7–1–08 Edition)
sure that there are sufficient funds available ally occur within 24 hours, and will be shown
in your checking account when you present on your regular account statement.
your check. If the electronic fund transfer You will not receive your original check
cannot be completed because there are insuf- back. We will destroy your original check,
ficient funds in your account, we may try to but we will keep the copy of it. If the EFT
make the transfer up to two more times [and cannot be processed for technical reasons,
we will impose a one-time fee of $lll you authorize us to process the copy in place
against your account, which we will also col- of your original check. If the EFT cannot be
lect by electronic fund transfer]. completed because of insufficient funds, we
Will the electronic fund transfer appear on my may try to make the transfer up to 2 times
account statement? The electronic fund trans- [and we will charge you a one-time fee of $l,
fer from your account will be on the account which we will also collect by EFT].
statement that you receive from your finan- NOTE: This disclosure must be conspicuous.
cial institution. However, the transfer may This means that it should be printed in rea-
be in a different place on your statement sonably large typeface. If this disclosure is
than the place where your checks normally combined with other information, it should
appear. For example, it may appear under be set off by contrasting color, by sur-
‘‘other withdrawals’’ or ‘‘other trans- rounding it with a box, or by using other
actions.’’ The electronic fund transfer should means to ensure that it is prominently fea-
be identified on your statement as ‘‘[in- tured.
sert].’’ [69 FR 13189, Mar. 19, 2004]
What if there is a problem with the electronic
fund transfer? You should contact your finan-
cial institution immediately if you believe
that the electronic fund transfer reported on
your account statement was not properly au-
thorized or is otherwise incorrect. Con-
sumers have protections under a Federal law
called the Electronic Fund Transfer Act for
an unauthorized or incorrect electronic fund
transfer.
What if the electronic fund transfer cannot be
processed? In rare instances, an electronic
fund transfer cannot be processed for reasons
other than insufficient funds. In these cases,
we will process the copy of your original
check. Different rights apply to the proc-
essing of the copy of the check than apply to
an electronic fund transfer.
[More detailed information about this
process is available on our Internet site at
lll or by calling lll.]
NOTE: This disclosure must be conspicuous.
This means that it should be printed in rea-
sonably large typeface. If this disclosure is
combined with other information, it should
be set off by contrasting color, by sur-
rounding it with a box, or by using other
means to ensure that it is prominently fea-
tured.
[67 FR 17903, Apr. 11, 2002]
APPENDIX C TO PART 210—STANDARD
DISCLOSURE FOR ACCOUNTS RECEIV-
ABLE CONVERSION—NOTICE
NOTICE TO CUSTOMERS MAKING PAYMENT BY
CHECK
If you send us a check, it will be converted
into an electronic funds transfer (EFT). This
means we will copy your check and use the
account information on it to electronically
debit your account for the amount of the
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check. The debit from your account will usu-
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