epayresources_aap_exam_flashcards_copy_copy_20250505133916 COPY
(287 cards)
1
Q
Column1
A
Column2
2
Q
Question
A
Answer
3
Q
The SEC Code field is found in which record?
A
5 record - Company / Batch Header Record
4
Q
Which SEC Codes have one or more mandatory Addenda Records?
A
COR, DNE, ENR, IAT (7), POS, SHR, MTE, and TRX
5
Q
Which SEC Codes have one or more optional Addenda Records?
A
ACK, ATX, CCD, PPD, CIE, CTX, IAT (5), and WEB
6
Q
What is the maximum number of batches permitted in a File?
A
999999
7
Q
How many characters are in a block?
A
940
8
Q
What are the three field inclusion requirements?
A
Mandatory, required, and optional
9
Q
Omission of this field inclusion will cause the ACH Operator to reject or pend a File, batch, or Entry.
A
A mandatory field
10
Q
Omission of this field inclusion MAY lead to this participant rejecting the Entry.
A
A required field
11
Q
Inclusion of information in this type of field does not impact acceptance of an Entry.
A
An optional field
12
Q
What are the three Payment Type Codes and what do they indicate?
A
S - Single Entry
R - Recurring Entry
ST - Entry initiated as part of a Standing Authorization
13
Q
List the sequence of Records for a File that has one batch with one Entry with one Addenda.
A
File Header Record
Company / Batch Header Record
Entry Detail Record
Addenda Record
Company / Batch Control Record
File Control Record
14
Q
Which Record contains the Entry / Addenda Record counts, total debit and credit Entry dollar amounts, and identification code for an Originator?
A
Company / Batch Control Record
15
Q
The ODFI’s routing number is contained in the first eight spaces of this 15-character field.
A
Trace Number
16
Q
What is the SEC Code for a Notification of Change?
A
COR
17
Q
What ten-character word MUST be in all caps in the Company Entry Description field of a Micro-Entry?
A
ACCTVERIFY
18
Q
What Record identifies the non-consumer Originator and the purpose of the Entry?
A
Company / Batch Header Record
19
Q
This three-character, numeric field is inserted by the ACH Operator and is based on a Julian calendar.
A
Settlement Date
20
Q
What are the two values that can be used as a segment terminator?
A
Backslash ( \ ) and tilde (~)
21
Q
What value is used as a data element separator?
A
Asterisk (*)
22
Q
What two-character field indicates the type of account and type of payment?
A
Transaction Code
23
Q
What MUST be in the Company Name field of a WEB credit?
A
The P2P service provider’s name
(ODFI or Third-Party Service Provider)
24
Q
What Record contains the Immediate Origin and Immediate Destination fields?
A
File Header Record
25
Which field does an Originator use to indicate the Banking Day on which a batch of Entries is intended to settle?
Effective Entry Date
26
What is the maximum amount an Entry can be?
99,999,999.99
(10 positions, $$$$$$$$¢¢)
27
What does the first digit of the two-digit transaction code identify? List the five possibilities.
The type of account. For example:
2 - DDA / checking
3 - Savings
4 - GL
5 - Loan
8 - Accounting records
28
Which Record contains the Receiver's routing and account number?
Entry Detail Record
29
What type of fields are left-justified and space filled?
Alphameric fields
30
This one-character field is alphameric, mandatory, and differentiates between multiple Files on the same day.
File ID Modifier
31
What type of fields are right-justified and zero filled?
Numeric fields
32
What does the second digit of the two-digit transaction code identify and list the nine possibilities?
The type of action to take. For example:
1 - Automated Return or NOC for original Entry Transaction Code of 22, 23, 24, 32, 33, 34, 42, 43, 44, 52, 53, or 54
2 - Automated deposit
3 - Prenote, DNE, or ENR
4 - Zero-Dollar Entry with remittance data for CCD, CTX, and IAT Entries only; ACK an ATX for checking or savings only
5 - Automated loan account debit (Reversals only)
6 - Automated Return or NOC for original Entry Transaction Code of 27, 28, 29, 37, 38, 39, 47, 48, 49, or 55
7 - Automated payment
8 - Prenotification
9 - Zero-Dollar Entry with remittance data for CCD, CTX, and IAT Entries only
33
34
Question
Answer
35
How many days does an ODFI have to register a TPS with Nacha?
Within 30 days of Transmitting the first Entry on behalf of the TPS, or within 10 days of becoming aware that an unregistered customer of the ODFI is actually a TPS.
36
What is the amount of time that an ODFI has to provide supplemental registration information about a Third-Party Sender to Nacha?
10 Banking Days from the receipt of the written request from Nacha
37
What is the amount of time an ODFI has to update registration information that was previously provided, including termination, about a TPS?
Within 45 days of the change
38
What is the amount of time that an ODFI must maintain an Originator's or TPS's Administrative Return Rate below the established level, if it has been exceeded?
180 days
39
What is the amount of time that an ODFI must maintain an Originator's or TPS's Overall Return Rate below the established level, if it has been exceeded?
180 days
40
What is the amount of time that an ODFI has to reduce an Originator's or TPS's Administrative Return Rate below the maximum level?
30 days from the receipt of the written request from Nacha
41
What is the amount of time that an ODFI has to reduce an Originator's or TPS's Overall Return Rate below the maximum level?
30 days from the receipt of the written request from Nacha
42
An ODFI must provide Nacha with information about Originators that exceed the Unauthorized Entry Return Rate Threshold within how many days?
10 Banking Days from the receipt of the written request from Nacha
43
What is the amount of time that an ODFI has to reduce an Originator's or TPS's Unauthorized Entry Return Rate below the maximum threshold?
30 days from the receipt of the written request from Nacha
44
What is the amount of time that an ODFI must maintain an Originator's or TPS's Unauthorized Return Rate below the established level, if it has been exceeded?
180 days
45
How long does a Participating DFI have submit a Report of Possible Rules Violation to Nacha from the date of the occurrence?
90 calendar days
46
An ACH Operator or a Participating DFI that acts as an entry point to or exit point from the United States for an ACH Entry.
Gateway
47
Which participant is responsible for obtaining an authorization from the Receiver?
Originator
48
What is the name of a TPSP that receives Entries from an ACH Operator for processing?
Receiving Point
49
What is the name of a TPSP that sends Entries to an ACH Operator for processing?
Sending Point
50
What are the responsibilities of an ACH Operator?
1. Provide clearing, delivery, and settlement services for ACH Entries
2. Process and edit Files based on the Nacha Operating Rules
3. Evaluate credit worthiness of, and apply risk control measures to Participating DFIs
51
What are the responsibilities of an RDFI in regard to receipt of Entries?
1. Timely receipt
2. Posting
3. Prenote validation
4. Return of Entries
5. Proper notification to ODFI regarding NOCs
6. Timely handling of remittance data
7. Providing Entry information to consumer Receivers
52
When is an RDFI required to provide funds availability for non-Same Day credits made available by the ACH Operator by 5:00 p.m. (RDFI's local time) on the Banking Day prior to the Settlement Date?
No later than 9:00 a.m. (RDFI's local time) on the Settlement Date of the Entry
53
When is an RDFI required to provide funds availability for non-Same Day credits made available by the ACH Operator after 5:00 p.m. (RDFI's local time) on the Banking Day prior to the Settlement Date?
No later than the end of the Settlement Date of the Entry
54
What is the deadline for an RDFI to provide funds availability for Same-Day credit Entries Transmitted in the first Same Day processing window?
By 1:30 p.m. (RDFI's local time)
55
What is the deadline for an RDFI to provide funds availability for Same-Day credit Entries Transmitted in the second Same Day processing window?
By 5:00 p.m. (RDFI's local time)
56
What is the deadline for an RDFI to make funds available in the Receiver's account for same-day credit Entries Transmitted in the third Same Day processing window?
No later than the end of the RDFI's processing day
57
What is the effective period for a consumer stop payment order?
The earlier of:
1. The withdrawal of the stop payment order by the Receiver;
2. The Return of the debit Entry; or
3. Where the stop payment order applies to more than one debit Entry relating to a specific authorization involving a specific Originator; the return of all such debit Entries
58
How must an RDFI honor a consumer stop payment order, either verbally or in writing, for a Single or Subsequent Entry?
In such time and in such manner as to allow the RDFI a reasonable opportunity to act on the order prior to acting on the Single or Subsequent Entry.
59
How long does an RDFI have to honor a consumer stop payment order, either verbally or in writing, for a Recurring Entry?
At least 3 Banking Days before the scheduled debit date
60
An RDFI may require written confirmation of a verbal stop payment order within how many days of the verbal stop payment order?
14 days
61
How long does an RDFI have to comply with a non-consumer's verbal stop payment order?
14 calendar days unless the order is confirmed in writing
62
What is the effective period for a non-consumer stop payment order?
The earlier of:
1. The withdrawal of the stop payment order by the Receiver;
2. The Return of the debit Entry; or
3. Six months from the date of the stop payment order, unless it is renewed in writing
63
How long does an ODFI have to request a copy of a WSUD?
1 year from the Settlement Date of the Extended Return Entry to which the WSUD relates
64
How long does an RDFI have to respond to an ODFI's written request for a copy of a WSUD?
10 Banking Days
65
What participant(s) may initiate a Reversing Entry?
Originator
ODFI
66
What participant(s) may initiate a Reversing File?
Originator
ODFI
ACH Operator
67
What is a valid reason for initiating Reversing Entry?
In response to Erroneous Entry
68
What is the time frame for sending a Reversing Entry?
Within 5 Banking Days following the Settlement Date of the Erroneous Entry
69
What are the circumstances in which Reversals are prohibited?
All instances where there is no Erroneous Entry
70
What is the amount of time an ODFI or Originator has to initiate a Reclamation Entry or written demand for payment?
Within 5 Banking Days after the Originator receives notice of death of Receiver
71
What is the amount of time an Originator can make a written demand for payment for a commercial reclamation?
Within 15 Banking Days after it receives the returned Reclamation Entry
72
What is the Record rentetion time frame for an ACH Operator?
1 year from the date the Entry was received or Transmitted
73
An ODFI must respond to an RDFI's written request for a copy of the Receiver's authorization related to a consumer transaction within how many days?
10 Banking Days
74
How long must an Originator retain the original or copy of a consumer authorization after termination or revocation of the authorization?
2 years
75
An ODFI must respond within how many days to an RDFI's written request for proof of authorization?
10 Banking Days
76
What is the Originator's retention time for proof of authorization for an ARC or BOC Entry?
2 years
77
An ODFI must provide an RDFI a copy of the face of the Eligible Source Document relating to an ARC or BOC Entry within how many days?
10 Banking Days
78
How long does an RDFI have to request a copy of a Check for which an XCK Entry relates?
6 years after Settlement Date
79
An ODFI must provide an RDFI a copy of an item relating to an XCK Entry within how many days?
30 calendar days
80
An ODFI must provide an RDFI a copy of the item related to an RCK Entry within how many days?
10 Banking Days
81
An Originator must retain a copy of the front and back of an item related to an RCK Entry for how many days?
7 years
82
How long does an RDFI have to provide payment-related information from CCD, CTX, CIE, and IAT Entries, upon request?
Opening of business on the second Banking Day following the Settlement Date of the Entry
83
What is the time frame in which the Originator must notify the Receiver in advance of a change in the amount of a recurring debit?
10 calendar days
84
What is the time frame in which the Originator must notify the Receiver in advance of a change in the date of the debit?
7 calendar days
85
What is the time frame to return a standard Return Entry?
Transmitted to its ACH Operator by the ACH Operator's deadline for the Return Entry to be made available to the ODFI no later than the opening of business on the second Banking Day following the Settlement Date of the original Entry.
86
What is the deadline to return an Extended Return Entry?
Transmitted to its ACH Operator by its deposit deadline for the Extended Return Entry to be made available to the ODFI no later than the opening of business on the Banking Day following the sixtieth calendar day following the Settlement Date of the original Entry.
87
What is the time frame for an RDFI to Transmit an Extended Return Entry once the Written Statement Unauthorized Debit has been received?
Within 6 Banking Days
88
What is the time frame for an RDFI to return a credit Entry?
Transmitted to its ACH Operator by the ACH Operator's deadline for the Return Entry to be made available to the ODFI no later than the opening of business on the second Banking Day following the RDFI's receipt of notification from the Receiver
89
What is the time frame for an RDFI to return unauthorized debits to a Non-Consumer Account that bear the CCD or CTX SEC Code?
Transmitted to its ACH Operator by the ACH Operator's deadline for the Return Entry to be made available to the ODFI no later than the opening of business on the second Banking Day following the Settlement Date of the original Entry.
90
What is the return time frame for an XCK Entry beyond two Banking Days?
Transmitted to its ACH Operator by the ACH Operator's deposit deadline for the Return Entry to be made available to the ODFI no later than the opening of business on the Banking Day following the sixtieth calendar day following the Settlement Date of the XCK Entry.
91
What is the time frame when an ODFI must Transmit a dishonored Return Entry?
Transmitted within 5 Banking Days after the Settlement Date of the Return Entry
92
What is the time frame for an RDFI to Transmit a contested or corrected dishonored Return Entry?
Transmitted to the ACH Operator within 2 Banking Days after the Settlement Date of the dishonored Return Entry
93
What is the time frame for an RDFI to Transmit a NOC?
Transmitted within 2 Banking Days of the Settlement Date of the Entry to which the NOC relates
94
What is the time frame an ODFI must provide NOC or corrected NOC information to the Originator?
Within 2 Banking Days of the Settlement Date of the NOC or corrected NOC
95
What is the time frame for an ODFI to Transmit a Refused NOC?
Transmitted to its ACH Operator within 15 days of receipt of the NOC or corrected NOC
96
When must an RDFI respond to a Refused NOC?
Within 5 Banking Days after the Settlement Date of the refused COR Entry
97
What is the minimum information that an RDFI must verify in regard to a Prenotification Entry?
Account number is valid
98
What is the time frame ab Originator must wait to send a live Entry following the Settlement Date of a Prenote?
3 Banking Days
99
An Originator must make corrections provided in a NOC for a Single Entry within this time period.
The Originator is not required to make corrections per the Nacha Operating Rules, but may do so at its discretion.
100
When must an Originator make corrections provided in a NOC for a Recurring Entry?
6 Banking Days or prior to the next live Entry, whichever is later
101
What is the three-digit number that identifies the Settlement Date?
Julian date
102
What is the date on which exchange of funds with respect to an Entry is reflected on the books of the Federal Reserve Bank?
Settlement Date
103
What is the time frame an Originator must Reinitiate a Returned Entry?
Within 180 calendar days following the Settlement Date of the original Entry
104
What is the time frame an Originator must initiate a Return Fee Entry authorized by notice?
Within 45 calendar days following the Settlement Date of the Return Entry
105
When must a Gateway notify an RDFI of an inbound IAT transaction that has been blocked or rejected?
5 Banking Days
106
What SEC Code(s) may be used for both a Non-Monetary Entry and the provision of payment-related information to the Receiver?
CCD, CTX, CIE, and IAT
107
If the scheduled Settlement Date for a credit Entry is not a Banking Day for the ODFI but is a day on which the applicable office of the Federal Reserve Bank is open, when will the ACH Operator effect settlement?
The scheduled Settlement Date
108
According to the Nacha Operating Rules, which ACH participant must calculate the settlement amounts for each Banking Day for all Entries processed under these Rules?
ACH Operator
109
What is the term used for the process of holding either credit or debit Entries until such a processing day when the ACH Operator will accept them?
Warehousing
110
What is the process used by the Bureau of the Fiscal Service to research non-receipt of SSA, SSI, or VA benefit payments?
Trace Request
111
What is the type of Entry an Originator initiates to both validate the account number of a Receiver and verify the Receiver obtains the payment-related information?
Zero-Dollar Entry
112
Exception item an ODFI would receive if mandatory information in a record is either invalid or missing.
Reject Entries
113
What is an authorization that requires specific action be taken by the Receiver to initiate a Subsequent Entry called?
Standing Authorization
114
What is the Company Entry Description value for all Reinitiated Entries?
RETRY PYMT
115
The ODFI of a Person-to-Person credit WEB Entry must input the name of the consumer Originator in which field?
Individual Identification Number
116
An ODFI may use this tool to become aware of an Originator's or TPS's past relationships with other ODFIs.
Terminated Originator Database (TOD)
117
What is the time frame in which unauthorized Entries to a Consumer Account are covered under the breach of warranty claim?
2 years from the Settlement Date of the debit plus Entries that occurred within 95 calendar days of the first unauthorized debit Entry
118
What is the time frame in which unauthorized Entries to a Non-Consumer Account are covered under the breach of warranty claim?
1 year from the Settlement date of the debit Entry
119
What is the Return time frame for an Entry bearing a consumer SEC Code that has posted to a Non-Consumer Account?
Transmitted to its ACH Operator by its deposit deadline for the Extended Return Entry to be made available to the ODFI no later than the opening of business on the Banking Day following the sixtieth calendar day following the Settlement Date of the original Entry.
120
What Return reason code may an RDFI use to Return a debit WEB Entry that posts to a Non-Consumer Account that has an ach filter/positive positive pay feature?
R29 - Corporate Customer Advises Not Authorized
121
What Return reason code may an RDFI use to Return a BOC Entry when the Check has also cleared the account?
R37 - Source Document Presented for Payment
122
What Return reason code may an RDFI use to Return an Entry when the account number does not correspond to the individual identified in the Entry?
R03 - No Account / Unable to Locate Account
123
What Return reason code may an RDFI use to Return any Entry they believe is suspicious?
R17 - File Record Edit Criteria / Entry Initiated Under Questionable Circumstances / Return of Improperly Initiated Reversal
124
What is an Erroneous Entry?
1. Duplicate
2. Unintended Receiver
3. Wrong amount
4. Wrong date
5. Credit PPD that satisfies each criteria:
a. Related to Receiver's employment
b. Value paid by Check to Receiver
c. Credit PPD Transmitted prior to delivery of
Check
125
What is the time frame for sending a Reversing Entry or Reversing File?
Within 5 Banking days following the Settlement Date of the Erroneous Entry and within 24 hours of the discovery of the Erroneous File.
126
127
Question
Answer
128
What are the five main participants in the Check system?
Payor, Paying Bank, Correspondent Bank, Bank of First Deposit, and Payee
129
What are the five main participants in the Card system?
Cardholder, Issuer, ATM/Payment Network, Acquirer, and Merchant
130
What is the year the American Bankers Association (ABA) adopted a routing number policy?
1911
131
What is the string of characters on the bottom of a check that includes the routing number and account number?
MICR (Magnetic ink character recognition) line
132
What is Check clearing?
The path a check follows
133
What is the process of debiting and crediting funds represented by a check?
Check collection
134
Fedwire® Funds Service uses what type of system to settle interbank funds transactions such as federal funds purchases, corporate payments, and other large-value payments?
Real-time gross settlement
135
What is a multi-party network with intermediaries connecting and managing the flow of funds between Cardholders and Merchants?
Open loop network
136
Payment services are provided directly to Merchants and Cardholders by the owner of the network without involving third-party financial institutions as intermediaries is called what?
Closed loop network
137
Online debit card transaction are also known as what?
PIN-based or single message transaction
138
Offline debit card transaction are also known as what?
Signature-based or dual message transaction
139
What is the instant payments platform operated by The Clearing House?
RTP®
140
What are the three RTP® status messages?
Accepted
Rejected
Accepted and not posted
141
What is the Federal Reserve's payment service that allows transactions to be sent 24/7 called?
FedNow® Service or FedNow®
142
What are the types of FedNow® participation?
Customer Credit Transfer
Liquidity Management Transfer
Settlement Only
143
What is a transit check?
A check that must be sent to another depository institution for collection
144
What is settlement is done individually for each transfer, rather than processing by batch called?
Gross settlement
145
Which card transactions are eligible for fraud or unauthorized chargeback?
Signature-based card transactions
146
What type of check MUST be sent to another depository institution for collection?
Transit check
147
Which wire system participant receives the funds?
Beneficiary
148
What is a debit card payment requiring a PIN and traveling over one of the ATM/POS networks is also known as?
Online debit
149
What is debit card payment requiring a customer signature and traveling over a credit card network is also known as?
Offline debit
150
Which payments are final and irrevocable?
Wire, RTP®, and FedNow®
151
Which participant authorizes, clears, and settles a debit transaction between an Acquirer and Issuer?
An ATM/POS Network
152
List the three main type of cards and what they access.
1. Credit cards access a lending product
2. Debit cards access a DDA / checking account
3. Prepaid/stored value cards access a stored balance that is not associated with the Cardholder's account
153
154
Question
Answer
155
What is compliance risk?
Risk that occurs when a party to a transaction fails to comply, either knowingly or inadvertently, with payment system rules, policies, regulations, and applicable U.S. and state law.
156
What is credit risk?
Risk that a party to a transaction will not be able to provide the necessary funds, as contracted for settlement to take place.
157
What is cross-channel risk?
Risk that occurs when the movement of fraudulent or illegal payment transactions from one payments channel to another is met with inconsistent risk management practices and lack of information sharing across payment channels about fraud.
158
What is Direct Access risk?
Risk specific to the ACH Network that occurs when an Originator or third party transmits Files (transactions) directly to an ACH Operator using a financial institution’s routing and transit number and settlement account.
159
What is fraud risk?
Risk that occurs when a payment transaction is initiated or altered by any party to the transaction in an attempt to misdirect or misappropriate funds with fraudulent intent.
160
What is operational risk?
Risk that occurs when a transaction is altered or delayed due to an unintentional error.
161
What is reputation risk?
Risk that occurs when negative publicity regarding an organization’s business practices leads to a loss of revenue or results in litigation.
162
What is systemic risk?
Risk that occurs when one funds transfer system participant is unable to settle its commitments causing other participants to be unable to settle their commitments.
163
What is third-party risk?
Risk that occurs when Organizations rely on outside parties to perform services on their behalf and experience inferior performance by the third party or manage the relationship poorly.
164
All financial institutions participating in the ACH Network must provide information to reach their ACH operations department and ACH risk/fraud department where?
ACH Contact Registry in the Nacha Risk Management Portal
165
ODFIs must complete this database registration if they any of their Originators, Third-Party Service Providers, or Third-Party Senders Transmit Files directly to an ACH Operator.
Direct Access Registration Database
166
ODFIs must complete this database registration if have an agreement with a type of Third-Party Service Provider but do not have an Origination Agreement with the TPSP's Originators.
Third-Party Sender Registration Database
167
What are administrative controls?
Procedures and practices used to manage risk, ensure compliance, and safeguard sensitive data.
168
What is excused delay?
Permissible delay by a Participating DFI or ACH Operator in the performance of its obligations under the Rules beyond the required time limits provided the delay was:
1. Caused by the interruption of communication or computer facilities; and
2. Beyond the reasonable control of the Participating DFI or ACH Operator
169
What is a contingency plan?
Steps taken to prepare for, respond to, and recover from disruptions to operations.
170
What is the deadline to report a possible ACH Rules violation?
Within 90 days of the occurrence
171
What is the length of time a financial institution has to respond to a written request from Nacha regarding an Originator's or TPS's Unauthorized Entry Return Rate?
10 Banking Days
172
Who must conduct an ACH risk assessment?
Participating DFIs and TPSs
173
What are four components of multifactor authentication?
1. Something the Receiver knows (ie: password)
2. Something the Receiver has (ie: computer)
3. Something the Receiver is (ie: voice or fingerprint)
4. Some place the Receiver is (ie: geolocation)
174
What is multifactor authentication?
Use of 2 or more factors to determine a Receiver's identity
175
Who must protect the confidentiality and integrity of Protected Information until its destruction?
1. Non-Consumer Originators
2. Participating DFIs
3. Third-Party Service Providers
4. Third-Party Senders
176
What criteria must non-consumer Originators (who are not Participating DFIs), TPSPs, or TPSs meet to be required to render DFI account numbers unreadable when stored electronically?
Their volume exceeds 2 million Entries annually
177
Banking information related to an Entry that is Transmitted via an Unsecured Electronic Network must be protected how?
Either encrypted or via a secure session
178
What types of transmissions are not subject to the rule regarding Entries Transmitted via an Unsecured Electronic Network?
Transmissions by means of voice or keypad inputs from a wireline or wireless telephone to a live operator or voice response unit (VRU).
179
What is considered banking information that must be protected as related to Entries Transmitted via an Unsecured Electronic Network?
Routing numbers, account numbers, PINs, or other identification symbols in an Entry
180
Originators of debit WEB transactions MUST establish and implement what type of detection system?
Fraudulent transaction detection system
181
At a minimum, what does an Originator of debit WEB Entries need to validate?
The account number to be debited MUST be validated for the first use and when any subsequent changes are made to the account being debited.
182
An ODFI MUST enter into what with each Originator or Third-Party Sender?
Origination Agreement
183
An ODFI MUST establish, implement, and periodically review this for each Originator or Third-Party Sender.
Exposure limits
184
An ODFI MUST monitor what across multiple Settlement Dates?
An Originator's or Third-Party Sender's origination and Return activity
185
Who must approve an ODFI's Direct Access Debit Participants?
The ODFI's board of directors or board designees
186
An ODFI may terminate or suspend an Origination Agreement within how many days notice if an Originator or Third-Party Sender breaches or causes the ODFI to breach the Rules?
10 Banking Days
(or less if stipulated in the Origination Agreement)
187
Between the ODFI and Gateway, who bears the risk that the laws of the receiving country prohibit the processing, settlement, or transfer of the proceeds of an IAT Entry?
ODFI
188
The lack of an Origination Agreement between an Originator and ODFI increases what type of risk for the ODFI if the Originator is unable to provide funds for settlement?
Credit
189
What are five things an ODFI MUST do as part of their Originator or TPS risk management due diligence?
1. Assess the nature of the Originator's or TPS's activity and the risk it presents
2. Establish, implement, and periodically review exposure limits
3. Establish and implement procedures to monitor origination and Return activity across multiple days
4. Enforce restrictions on types of Entries that can be originated
5. Enforce exposure limits
190
List three controls to help mitigate Direct Access risk.
1. Underwriting
2. Management
3. Monitoring
191
Who is subject to the same risk assessment criteria as its ODFI?
A Third-Party Sender
192
List six requirements that should be part of a Third-Party Sender's risk management practice.
1. Perform customer due diligence
2. Set and enforce customer limits
3. Audit and test Originator authorization processes
4. Monitor forward and Return transaction volumes, dollars, and rates
5. Establish data security policies, procedures, and systems with access controls
6. Establish SEC Code specific risk management requirements
193
Reviewing an Originator's business licenses, financial statements, and ACH processing experience during the on-boarding process are examples of what?
Customer due diligence
194
For high-risk Originators, requiring additional documentation, setting transaction limits, and implementing more frequent monitoring are examples of what type of strategy?
Risk mitigation strategy
195
How does the concept of risk management apply to ODFIs for ongoing due diligence of Originators?
Nacha Rules require Originating Depository Financial Institutions (ODFIs) to have a risk management program that should encompass ongoing monitoring of ACH participants, including Originators. This monitoring helps identify and mitigate potential risks associated with an Originator's activities.
196
What risk is associated with early posting of credits?
Credit risk
197
Who assumes the risk associated with the early posting of credits?
Credit risk is assumed by the ODFI
198
Segregation of duties, transaction monitoring, and account reconciliation are examples of what types of control?
Internal controls
199
Policies, procedures, and risk assessments assist in controlling what type of risk?
Compliance risk
200
What is the level and degree of risk an Organization is willing to assume to meet its strategic goals called?
Risk appetite
201
What is the acceptable level of variance relative to achieving a specific objective called?
Risk tolerance
202
This should be conducted periodically and be designed to review risks associated with an Organization's ACH program.
ACH risk assessment
203
The Rules allow an ODFI to suspend or terminte an Origination Agreement with an Originator or Third-Party Sender if they breaches the rules or causes the ODFI to breach the rules within how many days notice?
10 Banking Days notice
(or shorter if stipulated in the Origination Agreement)
204
This is a group of employees who are assigned the responsibility of monitoring ACH operations and related maintenance tasks.
ACH operational control group
205
What is the goal of a disaster recovery or contingency plan?
To resume business as quickly and fully as possible
206
207
Question
Answer
208
What is the Administrative Return Rate Level?
0.03
209
What SEC Code adopts the BSA's "Travel Rule?"
IAT
210
An Originator of this SEC Code is required to conduct an annual IT audit.
WEB debit
211
How long must an Originator retain the authorization for a PPD Entry?
2 years from the termination or revocation of the authorization
212
What is the maximum timeframe in which a report of possible Rules violation must be submitted?
Within 90 days of the alleged Rules violation
213
What is included in an authorization for a commercial POP Entry?
Notice provided to Receiver by the Originator at the point of purchase and written authorization signed by the Receiver.
214
What is the number of days a financial institution has to complete its investigation of an alleged error before it is required to provide provisional credit to the consumer, according to Regulation E?
10 business days
215
WEB Entries are subject to the requirements of this Regulation.
Regulation E
216
Which ACH applications require the Originator to use a MICR reading device to capture the Receiver's banking information from the MICR line of the Eligible Source Document?
ARC, BOC, and POP
217
What is the Unauthorized Entry Return Rate?
0.005
218
What is the amount of time a Participating Depository Financial Institution must retain all Records?
6 years from the date the Entry was Transmitted unless specified otherwise
219
What transactions are governed by UCC4A?
Commercial wholesale credits, including CCD / CTX credits, wire transfers, FedNow, and RTP transactions
220
What governs the clearing and settlement of ACH items by the FRB, ODFIs, and RDFIs?
FRB OC4
221
What governs the use of EFTs for processing federal tax payments through EFTPS?
Title 31 of the Code of Federal Regulations (CFR) Part 203
222
What governs the handling of payments for the Bureau of Public Debt made through the ACH Network?
Title 31 of the Code of Federal Regulations (CFR) Part 370
223
Who establishes federal government ACH policy?
Bureau of Fiscal Service
224
Which regulation requires consumers be able to "comparison shop" for credit by requiring disclosures about terms and cost?
Regulation Z
225
What is the fee paid by an ODFI to the corresponding RDFI for a Same Day Entry?
Same Day Entry fee
226
What are the SEC Codes that require information on the terminal location, terminal city, and the terminal state to be disclosed on the consumer Receiver's periodic statement?
MTE, POS, and SHR
227
What regulation governs wire transfers through the FRB?
Regulation J
228
What SEC Code applies to Entries initiated by a consumer Originator to a Consumer Account of the Receiver based on any form of authorization that is communicated from the Receiver to the Originator via the Internet or a Wireless Network?
Credit WEB Entry
229
Which ANSI transaction set is used for Transmitting a healthcare claim payment / advice?
ASC X12 835
230
What is designated as UCC 4A choice of law unless otherwise stated in an agreement?
State of New York
231
What entity that may provide a written interpretation of the ACH Rules?
Nacha Board of Directors
232
What is the name of the digital representation of the front and back of a Check that provides the same obligations and protections of the original Check?
Image Replacement Document (IRD) or substitute check
233
What is the name of the master list maintained by the Department of the Treasury that contains the routing numbers (RTNs) and addresses of financial institutions receiving federal government ACH payments?
Financial Organization Master File (FOMF)
234
What is the procedural manual used for ACH transactions originated on behalf of the federal government?
Green Book
235
What regulation implements the Electronic Fund Transfer Act (EFTA)?
Regulation E
236
If an RDFI requires written confirmation of a verbal stop payment order, what is the time frame after which the verbal stop payment order ceases to be binding?
14 calendar days
237
What governs federal government ACH payments?
Title 31 of the Code of Federal Regulations (CFR) Part 210
238
According to the Green Book, what is the 45-day amount for a Reclamation?
The dollar amount of all post-death benefit payments received within 45 calendar days following the death of a beneficiary.
239
An RDFI may determine which sections of the Nacha Operating Rule apply to the processing of an Entry based on what?
SEC Code
240
Per Regulation E, what is a transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account?
Electronic fund transfer
241
Which participants are responsible for accepting all Entries that comply with the Nacha Operating Rules?
RDFI
242
Which ACH payment applications may not be returned as (R07) authorization revoked?
ARC, BOC, and POP
243
What is the length of time a consumer stop payment order remains in effect?
The earlier of:
1. The withdrawal of the stop payment order by the Receiver;
2. The Return of the debit Entry; or
3. Where the stop payment order applies to more than one debit Entry relating to a specific authorization involving a specific Originator; the return of all such debit Entries
244
What are the three methods by which a Receiver may provide an Eligible Source Document for an ARC Entry to an Originator?
1. Via the U.S. mail or delivery service
2. At a drop box location, or
3. In person for payment of a bill at a manned location
245
What is the time frame for providing a stop payment order for an Entry initiated to a Non-Consumer Account?
Either verbally or in writing at such time and in such manner as to allow the RDFI a reasonable opportunity to act upon the stop payment order prior to acting on the debit Entry; remains in effect for six months unless the RDFI determines to honor the stop payment order for a longer period of time.
246
How long must an Originator retain the authorization for a PPD Entry?
2 years from the termination or revocation of the authorization
247
What Regulation governs payroll card accounts?
Regulation E
248
What is the time frame that an RDFI must retain a copy of a WSUD?
At least 1 year from the Settlement Date of the Extended Return Entry(ies) to which the WSUD relates
249
How long must an ACH Operator retain a record of all Entries, Return Entries, and Extended Returned Entries they received or Transmitted?
For 1 year from the date the Entry was received or Transmitted
250
What is the minimum contact information that must be provided by an ODFI for proof of authorization for a CCD, CTX, or inbound IAT Entry to a Non-Consumer Account for inquiries regarding authorization?
The Originator's name, and phone number or email address for inquiries regarding authorization of Entries
251
Who provides indemnification from and against any and all claims, demands, losses, liabilities, and expenses, including attorney's fees and costs, related to initiated Entries, that result directly or indirectly from a breach of the Nacha Operating Rules?
ODFI indemnification
252
How does an RDFI agree to comply with the provisions of 31 CFR Part 210 and the Green Book?
By accepting a recurring benefit payment from the government
253
What is the name of the inquiry process, which is separate and distinct from a Rules enforcement proceeding, used as a starting point to evaluate the origination activity of Originators and Third-Party Senders who breach the Administrative Return Rate Level or Overall Return Rate Level?
Nacha origination inquiry and review process
254
What is fee called that is paid by a respective ODFI to the RDFI for a debit Entry returned as unauthorized?
Unauthorized Entry Fee
255
Which party is liable under UCC 4A for unauthorized Entries when an Originator and an ODFI do not agree on a commercially reasonable security procedure and, therefore, no security procedure is in effect?
ODFI
256
What is the overall Return rate level for all debit Entries, except RCK?
0.15
257
Which ACH participant must register any Third-Party Senders under the Third-Party Sender registration rule?
ODFI
258
Stop payment Returns fall into which category of Return rate reporting?
Overall Return Rate
259
What date must a Rule compliance audit be completed by?
31-Dec
260
What Return reason codes are included in the Administrative Return Rate Level?
R02, R03, and R04
261
What Return reason codes are included in the Unauthorized Entry Return Rate?
R05, R07, R10, R11, R29, and R51
262
At minimum, a written stop payment order for a Non-Consumer Account will remain in effect for how long?
The earlier of:
1. The withdrawal of the stop payment order by the receiver;
2. The return of the debit Entry; or
3. Six months from the date of the stop payment order
263
According to UCC 4A, if the RDFI fails to make funds available to the Receiver, it may be liable for what types of damages?
Consequential damages
264
What party has to disclose notice of receipt of the Entry to the Receiver according to UCC 4A, but only when there is an agreement in place to do so?
RDFI
265
According to the E-Sign Act, what characteristics must a valid electronic signature contain?
Consumer's identity and assent
266
Who administers and enforces economic and trade sanctions in support of U.S. national security and foreign policy objectives?
Office of Foreign Assets Control (OFAC)
267
What are the number of years Treasury policy states post-death payments may be reclaimed?
6 years from the date on the Notice of Reclamation (NOR)
268
What is the time frame associated with the Reinitiation of Entries returned as insufficient or uncollected funds?
Within 180 days of the Settlement Date of the original Entry
269
Which ACH participant is required to disclose information to the consumer regarding Check conversion?
Originator
270
Which Regulation states that a financial institution may not impose a fee related to any aspect of the error resolution process for unauthorized EFTs?
Regulation E
271
According to UCC 4A, the RDFI must pay which participant upon acceptance of an Entry?
Beneficiary
272
What states an RDFI should respond to a DNE by flagging the deceased Receiver's account to prevent future benefit payments from posting?
Green Book
273
According to the Nacha Operating Rules, Originators of debit WEB Entries are required to do what?
* Perform account validation
* Perform an annual IT audit
* Use a commercially reasonable fraudulent transaction detection system
274
What is a Non-Monetary Entry Transmitted by an Originator for conveying payment-related information in a CCD or CTX Entry to a Non-Consumer Receiver, or an IAT Entry to any Receiver called?
Zero-Dollar Entry
275
What requires that virtually all non-tax related payments made by the federal government be made via electronic funds transfer?
Electronic Funds Transfer (EFT) mandate
276
Regulation E states this this constitutes authorization for an Check conversion.
Notice plus Receiver going forward with transaction
277
What is a Point-of Sale (POS) Entry?
A debit Entry initiated at an "electronic terminal," defined in Regulation E, to a Consumer Account of the Receiver to pay an obligation incurred in a point-of-sale transaction, or to effect a point-of-sale terminal cash withdrawal. A POS Entry may also be an adjusting or other credit Entry related to such debit Entry, transfer of funds, or obligation.
278
Under the terms of this act, any agreement, authorization, Written Statement of Unauthorized Debit, or other record that necessitates a signature or similarly authenticated method can utilize an Electronic Signature.
Electronic Signatures in Global and National Commerce (E-Sign) Act
279
What is a comprehensive legal framework governing wholesale electronic funds transfers, which outlines the rights and responsibilities of Originators?
Uniform Commercial Code (UCC) Article 4A
280
Payments to a Receiver by an RDFI related to an Entry governed by UCC 4A can be made on what basis until the RDFI receives final settlement?
Provisional
281
Under the provisions of the UCC 4A, which party is not held liable if the ODFI makes an error, such as a duplicate Entry, incorrect amount, or wrong receiver?
Originator
282
What is a transaction called in which an Originator, ODFI, or Third-Party Sender debits a consumer’s account to collect funds but fails to complete the corresponding payment (credit) to the party owed the payment?
Incomplete Transaction
283
Upon a written request from the RDFI, proof of authorization related to a CCD or CTX Entry an ODFI must provide what?
1. An accurate record evidencing the Receiver's authorization, or
2. Contact information for the Originator that at a minimum, includes
(a) the Originator's name, and
(b) the Originator's phone number or email address for inquiries
regarding the authorization
284
An RDFI may rely solely on what information contained in an Entry for the purpose of posting the Entry to a Receiver's account?
Account number, regardless of whether the name of the Receiver in the Entry matches the name associated with the account number in the Entry.
285
When an ODFI agrees to pay a fee to the respective RDFI for a debit Entry (except for a debit IAT Entry) that is returned with a Return reason code of R05, R07, R10, R11, R29, or R51 is called what?
Unauthorized Entry Fee
286
When the registering participant has one or more Third-Party Sender relationships, what information must be provided in the initial registration process?
1. ODFI’s name and contact information
2. Name and principal business location of the Third-Party Sender
3. The routing number used in ACH transactions originated for the Third-Party Sender
4. The Company Identification number(s) of the Third-Party Sender
287
What is an ACH Operator or a Participating DFI that acts as an entry point to or exit point from the U.S. for ACH payment transactions called?
Gateway
