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My AAP Flashcards > Questions I missed > Flashcards

Questions I missed Flashcards

1
Q

What are the two reasons an ODFI can Dishonor a Return Entry?

A

Untimely, Incorrect information

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2
Q

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

A

Return the POP entry as R37 . No documents are required.

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3
Q

An RDFI has the right to Contest a Dishonored Return Entry

A

The RDFI used the wrong Return Reason code in first Return Entry

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4
Q

Which SEC Code can a RDFI reject at its sole discretion?

A

XCK

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5
Q

If an ODFI calls and asks an RDFI to return an entry, what should the RDFI do?

A

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

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6
Q

The R11 Return Reason Code is used for a

A

Incomplete Transaction

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7
Q

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?

A

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

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8
Q

A TEL entry can be returned for

A

Authorization Revoked by Customer R07, Customer Advises Not Authorized R10, Stop Payment R08

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9
Q

Notification of Change Entries can only be initiated by the RDFI?

A

True

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10
Q

When a Federal Reserve Bank is used for check collection process, which Regulation governs?

A

Regulation J

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11
Q

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

A

Allows American National Standards Institute to create specific EDI companies

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12
Q

Who develops format requirements and data specifications for the different EDI standards used by corporate Originators and their Financial Institutions?

A

Accredited Standards Committee ASC X12

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13
Q

Check processing laws are Federal based.

A

False

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14
Q

What does EBT stand for?

A

Electronic Benefits Transfer

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15
Q

What is the settlement process of a Fedwire and an ACH file?

A

Fedwire is a gross settlement system and ACH is a net settlement system

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16
Q

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?

A

Reg CC

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17
Q

According to UCC4A, a RDFI needs to provide a disclosure to its customers on?

A

Provisional Payment and Notice of Payment

18
Q

What is used to determine a commercially reasonable security procedure for the purposes of UCC 4A?

A

Institution size, transaction type, frequency of transactions

19
Q

Primary control of systemic risk is the responsibility of

A

the Federal Reserve

20
Q

What is the maximum fine for a 3rd recurrence of a Class 1 Rules Violation?

A

Up to $5,000

21
Q

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?

A

30 days

22
Q

The time frame for submitting a Report of Possible Rules Violation is

A

within 90 days of the occurrence

23
Q

If an ODFI receives a notice from NACHA requesting specific information on an Originator with high return rates, the ODFI must reply within

A

10 banking days of the receipt of the request

24
Q

The maximum penalty for a Class 2 violation of the ACH Rules under the National System of Fines is

A

Up to $100,000 per month until problem is resolved

25
Q

Can a CCD Entry be a nonmonetary Entry?

A

Yes

26
Q

To help mitigate risk, ODFIs must establish separate exposure limits for Originators who initiate WEB Entries.

A

False

27
Q

Each Originator of a BOC Entry is required to retain a copy of the source document for two years from the purchase date.

A

False

28
Q

The Originator of a WEB Credit is required to enter into an origination agreement with the ODFI.

A

False

29
Q

When delivering a TEL entry notice, the Originator must

A

Provide the receiver with written notice confirming the oral authorization prior to the settlement of the entry

30
Q

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

A

Financial Institutions must maintain sufficient balances in these accounts to cover net settlement amounts.

31
Q

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?

A

Fedwire Securities transfers

32
Q

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?

A

10 days

33
Q

What type of payment card is not a true payment instrument?

A

Credit Card

34
Q

Who controls Systemic Risk in the ACH Network?

A

The Federal Reserve Bank

35
Q

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

A

Settlement Date

36
Q

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

A

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.

37
Q

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.

A

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.

38
Q

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

A

Originator status code

39
Q

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?

A

Within 30 days on onboarding the TPS

40
Q

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

A

Reduced disbursement float

41
Q

What is the correct definition of a credit card?

A

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.

My AAP Flashcards (18 decks)

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