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ACH Originator Obligations & Update(s)
Please review the following below:
Compliance with Rules and Instructions
The Customer, the Bank, and any other Originator for whom the Customer initiates ACH transactions shall comply and shall cause their respective officials, employees, Authorized Representative(s) and Administrator(s), to comply, with (i) the NACHA Rules as from time to time amended by NACHA (The NACHA Rules may be obtained at the NACHA's website at NACHA.org or by contacting NACHA directly at 703.561.1100.); and (ii) specifications, advisories, and instructions issued, from time to time, by the Bank, NACHA, and any federal or state regulatory authorities related to ACH transactions. ACH transactions are subject to all the Regulations governing electronic transactions, including but not limited to Article 4A of the Uniform Commercial Code. The bank reserves the right to audit the compliance of the Customer and any other Originator for whom the Customer originates ACH transactions, with this Agreement and the NACHA Rules.
The Customer and any other Originator for whom the Customer initiates ACH transactions shall obtain authorizations for all entries in accordance with NACHA Rules and all applicable state and federal law. The origination of ACH transactions by the Customer must comply with state and federal law. This includes, but is not limited to sanctions enforced by the Office of Foreign Assets Control ("OFAC"); and any laws, regulations and orders administered by FinCEN. The Bank may take recourse against any party involved in the process of transmission who fails to obtain proper authorization. In accordance with the NACHA rules the Customer shall retain the original authorization, and any change(s) to, for a period or no less than 2 years from termination or revocation of such authorization. The Customer shall be responsible for providing the Bank with a copy of such authorization upon request. Failure to provide such copy shall indicate that the authorization never existed, thus allowing the reversal of disputed transactions.
The Customer warrants to Bank all warranties the Customer is deemed by NACHA Rules to make with respect to ACH entries originated by the Customer for itself or on behalf of any other Originator for whom the Customer initiates ACH transactions. Without limiting the foregoing, the Customer, for itself or as an Originator for whom the Customer initiates ACH transactions warrants and agrees that:
- Each entry shall be accurate, timely, authorized by the party whose account will be affected, and that such entry complies with NACHA Rules
- The Customer will retain the original or copy of the customer authorization as required by NACHA Rules and any ACH Related Documents and will promptly provide to Bank any information necessary for Bank to comply with any NACHA reporting requirements
- The Customer will comply with all pre-notification requirements of NACHA Rules
- The Customer will comply with the terms of the Electronic Funds Transfer Act, Uniform Commercial Code Article 4A and other applicable law
- The Customer employs commercially reasonable security technology that at a minimum is equivalent to 128-bit encryption technology
- The Customer conducts annual audits as to its security practices and procedures
- Customer will provide timely and accurate notification to ACH Origination Customer Service; Phone Number 1-888-875-2265 of any Data Breaches when known or reasonably suspected by Customer, including but not limited to, Data Breaches to Consumer-Level ACH Data
Provisional Until Final
The Customer acknowledges that NACHA Rules make provisional any credit given for any entry until final settlement. If the RDFI does not receive final settlement, it is entitled to a refund from the Receiver and the Customer shall not be deemed to have paid the party
Third Party Service Providers
- Customer is a Third Party Service Provider if the Customer Is acting as a Third Party Service Provider between the Bank and the Originator (as defined in the NACHA Rules), the Third Party Service Provider must have a written contractual arrangement between themselves and the Originator, binding Originators to the NACHA rules and the provisions as outlined in the ACH Appendix of your CM Agreement. The Bank shall take directions from the Customer with the understanding that the Customer has obtained appropriate authorizations from the Originator and in no event shall Customer act on behalf of an Originator without proper authorizations. Third Party Service Provider must execute and deliver to Bank any agreements or documents required by Bank including but not limited to Bank's Third Party Service provider Agreement. Further, the Bank may take recourse against any party involved in the processing of the transaction, should it deem appropriate to do so.
- Customer retains Third Party Service Provider. Subject to Bank's approval, Customer may select a Third Party Service Provider to act as Customer's agent for purposes of the Services outlined in the ACH Appendix of your CM Agreement. Customer and Third Party Service Provider must execute all documents required by Bank, including but not limited to Bank's Third Party Service Provider Agreement before Bank provides this Service. Bank must receive written notices of termination ninety (90) Business Days before such termination is effective.
NACHA Rules Change Updates
Same Day ACH Notice
Effective September 23, 2016, the National Automated Clearing House Association (NACHA) will make Phase I of the Same Day ACH rule change effective.
Currently, most ACH payments are settled in one to two business days. The Same Day ACH rule change will enable ACH Originators that desire same-day settlement processing, the option to send Same Day ACH transactions to accounts at any receiving financial institution (RDFI). It will not affect existing schedules and capabilities for those ACH originators who wish to continue processing payments as they do today.
- Phase I (9/23/16)
- RDFIs are required to receive, process and make available Same Day ACH credits by the end of their processing day
- Debits are not eligible for Same Day ACH settlement until Phase II (9/15/17)
- Same Day ACH credits cannot exceed $25,000 per transaction
- The $25,000 per transaction maximum will apply to debits as well in Phase II
Republic Bank will comply with the new NACHA rule change and make funds available for any Same Day ACH transactions received within the approved processing timeframes.
If you have any questions about the Same Day ACH NACHA rule change or any other ACH origination topic, please contact your Cash Management Sales Officer at 888.875.2265.
- Phase I (9/23/16)
Republic Bank recommends that all ACH Originators obtain a copy of the ACH Rules. The annual update of ACH Rules for Corporate Originators may be ordered in print or electronic versions at NACHA.org.