Regulatory Environment of ACH Systems

Rules established by the Federal Reserve for opening, maintaining, and closing accounts.

Regulations for the Automated Clearing House (ACH) network, outlining responsibilities of financial institutions and participants.

Rules for the Real-Time Payments (RTP) network, outlining responsibilities of network participants and The Clearing House.

Guidelines for transferring funds via the FedNow Service, aligning with Regulation J.

Regulations that specify the duties of the Federal Reserve as the ACH Operator.

Rules governing how institutions can access FedLine services through electronic connections.

A collection of laws passed by the government that defines rules of conduct.

A specific rule developed by the government that outlines what should or should not be done.

A federal law enacted by Congress to prevent money laundering and other financial crimes by making it harder for criminals to hide or transfer money through banks and other financial institutions.

A government agency that enforces economic sanctions against targeted countries, individuals, and entities by freezing their assets and transactions.

A list maintained by OFAC that includes individuals and entities subject to economic sanctions, such as terrorists, drug traffickers, and those involved in the proliferation of weapons of mass destruction.

A federal law passed in response to the 9/11 attacks to enhance national security and counter terrorism by strengthening law enforcement tools and requiring financial institutions to implement customer identification programs (CIPs).

A law designed to speed up the availability of deposited funds, typically making them available on the next business day.

A law that regulates electronic fund transfers, establishing consumer rights and responsibilities related to transactions like ATMs, debit cards, and ACH transfers.

A series of state laws that govern commercial transactions, including sales of goods, bank deposits, and secured transactions.

The process of verifying a customer's identity and documenting it as part of financial institution regulations, usually involving collecting and verifying information like name, address, and identification documents.

The Uniform Commercial Code (UCC) aims to standardize laws across states. It includes a section (Article 4A) that governs "corporate wholesale credit entries".

The Uniform Commercial Code (UCC) can be adopted by individual states, allowing them to modify or implement its provisions.

Regulation E governs electronic fund transfers (EFTs) for consumers, ensuring their rights and protection.

Under Dodd-Frank, Regulation E includes a rule for consumer-initiated international remittances, mandating certain protections.

Regulation J establishes rules for financial institutions to handle checks and settle balances via the Federal Reserve (FRB).

One part of Regulation J defines the FRB's role and responsibilities in check processing and clearing.

Regulation J outlines how the Federal Reserve handles wire transfers, including procedures and participant responsibilities.

Regulation J includes a section for the FedNow service, governing how the Federal Reserve processes funds transfers using this system.

An international agreement designed to strengthen bank regulation, supervision, and risk management in response to the 2007-2009 financial crisis.

A minimum capital requirement for banks, raised from 2% to 4.5% of common equity, expressed as a percentage of the bank's risk-weighted assets. It ensures banks have enough capital reserves to withstand financial shocks.

A non-risk-based leverage ratio that acts as a secondary safety net for banks, requiring them to hold leverage above 3%. It serves as a backstop when risk-based capital requirements are insufficient.

A liquidity ratio that requires banks to hold sufficient highly liquid assets that can withstand a 30-day stressed funding scenario. It ensures banks can meet their short-term funding needs even during tough economic times.

A liquidity ratio that requires banks to maintain stable funding above the required amount for a period of 1 year of extended stress. It ensures banks have a stable source of funding even during prolonged economic downturns.

The Expedited Funds Availability Act, implemented under Regulation CC, dictates how quickly deposited funds become available. It establishes specific funds availability schedules for financial institutions.

The Code of Federal Regulations (CFR) compiles all permanent and general U.S. federal agency regulations. It is divided into 50 titles, each covering a specific area of federal law.

31 CFR 205 outlines rules governing the transfer of federal funds to states for government assistance programs. It aims to ensure timely disbursement of funds and their availability for specific program uses.

31 CFR 210 provides the framework for the Automated Clearing House (ACH) Network usage by federal agencies. It defines rights and responsibilities for all parties involved, including banks and the public.

31 CFR 212 regulates restrictions on garnishing federal government benefit payments via ACH. It outlines procedures financial institutions must follow when handling such garnishment orders.

31 CFR 240 governs the payment and endorsement of checks drawn on the U.S. Treasury. It allocates responsibility for losses between the government and endorsers of checks. It also authorizes the Treasury to debit financial institution Master accounts for unpaid checks.

OCC Bulletin 2021-49 emphasizes the importance of effective risk management programs for banks, encompassing all payment systems. Banks are required to identify, measure, monitor, and control risks across their operations.