Questions and Answers
What does the File Header Record define?
What does the Company/Batch Header Record identify?
Identifies the Originator and briefly describes the purpose of the entry.
What is the maximum number of Addenda Records for TRX, CTX, and ENR entries?
9,999
What is the required retention period for Proof of TPS or TPSP Audit?
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A compensation claim shall be paid for an entry only if the loss suffered by the claimant is at least __________ per entry.
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An arbitration claim is processed only if the amount of damages claimed is _______ or more.
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What does Article 1 cover?
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What is the purpose of Article 4A (UCC)?
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Which act requires most non-tax-related federal government payments to be made electronically?
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The E-Sign Act gives electronic signatures and documents the same legal standing as those done with ink.
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Which regulation implements the Electronic Funds Transfer Act?
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The regulation that oversees national banks is the __________.
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Match the following terms with their definitions:
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What does TEL stand for?
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What is the definition of WEB?
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What does CCD stand for?
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What is the definition of CTX?
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What does ARC stand for?
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What is the definition of BOC?
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What does IAT stand for?
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What is the definition of POP?
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What does ACK/ATX represent?
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What does ADV stand for?
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What does COR stand for?
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What is the definition of DNE?
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What does ENR stand for?
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What does TRC/TRX refer to?
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What does XCK stand for?
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What are the consumer SEC codes?
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What are the corporate SEC codes?
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What SEC codes are used to convert checks?
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Which SEC codes can be used for both a Zero-Dollar Entry and payment-related info?
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What is Regulation Z designed for?
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What regulations govern Fedwire transactions?
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What is the name of the regulation governing Federal Government Payments outlined in the Green Book?
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What Addenda Type code is used for return entries?
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What Addenda Type code is used for COR entries?
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What is EDI?
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In what year was the Federal Reserve System created?
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Study Notes
ACH File Structure
- Comprised of five key record types: File Header Record, Company Batch Header Record, Entry Detail Record, Company Batch Control Record, and File Control Record.
- Each record serves a specific function in organizing ACH data.
File Header Record
- Defines physical characteristics of the ACH file and specifies the origin and destination of the file.
Company Batch Header Record
- Identifies the Originator and describes the entry’s purpose (e.g., payroll credit), including the ODFI's routing number.
Entry Detail Record
- Contains information linking entries to Receivers, including account and routing numbers, dollar amounts, and account types.
- Supports Addenda Records for additional details, with specific maximums based on entry type.
Company Batch Control Record
- This record holds details like entry counts, totals, and hash totals for entries in the batch.
File Control Record
- Summarizes totals from batch controls and includes counts of blocks and batches in the file.
SEC Code
- Found in the Company Batch Header Record, identifying the Standard Entry Class of the transactions.
Return Entries Timing Rules
- Must be available to RDFI's ACH Operator by the second banking day after settlement for processing to ODFI.
- Exceptions to timing rules include unauthorized consumer debit entries or improper documents for specific types of entries.
RCK Return Entry Guidelines
- RCK entries must be transmitted by RDFI by midnight of the second banking day following receipt.
- Exceptions for RCK entries include lack of notice, ineligible items, or insufficient signatures.
Record Retention and Compliance
- Proof of TPS or TPSP Audit must be retained for six years.
- Compensation claims for losses must reach at least $200 to be processed.
EFTA and Regulation E
- The Electronic Funds Transfer Act (EFTA), established in 1978, sets consumer rights regarding electronic funds transfers.
- Regulation E enforces the EFTA and focuses on disclosure, notifications, error resolution, and consumer protections.
UCC and Article 4A
- The Uniform Commercial Code (UCC) governs commercial electronic transfers and establishes clear responsibilities for handling transactions. Article 4A promotes quick processing and outlines security procedures.
Federal Reserve and OCC Regulations
- FRB Operating Circular 4 governs ACH processing by Federal Reserve Banks, while OCC Banking Circular 235 highlights risks in large payment systems.
Additional Acts and Guidelines
- The EFAA sets rules to reduce the unnecessary holding of funds, influencing funds availability schedules.
- The Debt Collection Improvement Act mandates electronic payments for non-tax-related federal payments.
Standard Entry Class Codes (SEC)
- CIE: Customer-Initiated Entries for consumer payments.
- MTE: Machine Transfer Entries for ATM transactions.
- PPD: Prearranged Payments and Deposits for consumer account transfers based on authorization.
- RCK: Re-presented Checks for ACH debits.
- TEL: Telephone-Initiated Entries for debits with oral authorization.
- WEB: Internet-Initiated/Mobile Entries for consumer transactions via online or mobile platforms.
General Practices in ACH Transactions
- Establishing secure, authorized transactions is critical to compliance.
- Each SEC code specifies rules for different types of entries, ensuring proper processing and accountability.
The Green Book
- A critical resource published by the U.S. Treasury, detailing responsibilities in federal ACH transactions and providing guidance on payments, non-receipts, and other related topics.### Corporate Credit and Debit
- CCD (Corporate Credit or Debit) allows funds transfer within a trading partner relationship, utilizing ANSI ASC X12 or UN/EDIFACT information.
- CTX (Corporate Trade Exchange) facilitates similar transactions with detailed message records.
Standard Entry Class Codes Overview
- ARC (Accounts Receivable Entry) enables Originators to convert checks received via mail, dropbox, or in-person for bill payments.
- BOC (Back Office Conversion Entry) allows Originators to process checks as ACH debits at purchase points.
- IAT (International ACH Transaction) includes transactions involving foreign financial agencies not in U.S. jurisdiction.
Additional Standard Entry Class Codes
- POP (Point-of-Purchase Entry) is used for in-person purchases, initiated by written authorization from Receivers.
- ACK/ATX (Acknowledgment Entries) serve as non-monetary confirmations of receipt for corporate payments.
- ADV (Automated Accounting Advice) provides automated accounting information in a machine-readable format.
Notifications and Corrections
- COR (Notification of Change) is used to correct entry information or refuse misrouted notifications, requiring an Addenda Record.
- DNE (Death Notification Entry) is utilized by U.S. government agencies to notify financial institutions of a Receiver's death.
- ENR (Automated Enrollment Entry) helps to transmit ACH enrollment info to government agencies at account holder’s request.
Truncated Entries and Check Processes
- TRC/TRX (Truncated Entries) designate individual or batches of truncated checks.
- XCK (Destroyed Check Entry) allows collection of checks that are no longer available, subject to NACHA rules.
Definitions of SEC Codes
- Consumer SEC Codes include CIE, MTE, PPD, POS/SHR, RCK, TEL, and WEB.
- Corporate SEC Codes are identified as CCD and CTX.
- SEC Codes that convert checks are ARC, BOC, and POP.
- CTX and CCD can be used for Zero-Dollar Entries and payment-related information.
Regulations and Compliance
- Regulation Z requires credit terms disclosures for consumers.
- Fedwire transactions are governed by Regulation J & CC.
- Federal Government Payments are outlined under 31 CFR 210.
- Regulation J pertains to the collection of checks by the Federal Reserve.
Addenda Type Codes
- The code for return entries is 99.
- The code for COR entries is 98.
Electronic Data Interchange
- EDI (Electronic Data Interchange) is the electronic transmission of standardized business documents.
Historical Context
- The Federal Reserve System was created in 1913, establishing the framework for modern banking operations.
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Description
Explore the intricacies of ACH file structure through this quiz. Learn about the five key record types including File Header, Entry Detail, and Company Batch Control Records, and their specific functions in organizing ACH data. Test your understanding of how these records work together to manage financial transactions.
