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X9 STANDARDS Flashcards

1
Q

Standards for Check Endorsements

Purpose: provides location for a physical check endorsements referenced by Reg CC

A

X9.100-111

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2
Q

X9 standard for specifications for an image Replacement Document (IRD)

Purpose: provide specification for standard machine-readable substitute documents. Referenced by reg. CC.

A

X9.100-140

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3
Q

X9 standard for Magnetic Ink Printing (MICR)

Purpose:

Part 1: Replacement and location of MICR fields

Part 2: EPC Field Use

A

X9.100-160

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4
Q

X9 standard for return reasons for Check Image Exchange and IRDs.

Purpose: Provides industry with return reason codes for both image exchange and IRD creation.

A

X9.100-188

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5
Q

X9 standard for electronic exchange of check and image data.

Purpose: provides industry with format to perform electronic check, exchange, forward and return . Referenced by Reg CC

A

X9.100-187

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6
Q

What is the Reg CC reference regarding MICR line definition and MICR location?

A

Printed near the bottom of the check in magnetic ink in accordance with ANS standards for:

X9.100-160 (aka x9.13) - For MICR line of original check
X9.100-140 for a substitute check
X9.100-187 for an electronic check/ electronic returned check For purpose of subpart Cand subpart D)

Location of MICR - information with reference to the electronic check.
Must conform with specifications of x9.100-187.

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7
Q

Indorsements

What are the requirements for banks (other than paying banks) that handle a check during forward collection or return?

A

Banks must indorse checks in accordance with the standards outlined in the following specifications:

X9.100-111:
Specifications for physical check endorsements and electronic endorsement overlays applied to check images.Applies to paper checks (other than substitute checks).

X9.100-140:
Specifications for Image Replacement Document (|RD).
Applies to substitute checks.

X9.100-187:
Standards for electronic exchange of check and image data (domestic).
Applies to electronic checks.

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8
Q

X9.100.111

A

Check endorsement standard

Provides location for a physical check endorsements and electronic endorsement. Overlays applied to check images. (Note that an overlay is an endorsement added by the depository bank. )

Does not apply to formats for electronic endorsement records as defined x9.100-187 check image exchange or x9.100-140 IRD standards.

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9
Q

X9.100-140

A

Image Replacement Document (IRD)
(Remember: 140 or 14D to remember IRD)

Provides the industry with a specifications For standard machine readable substitute documents.
- created from an image that derived from front and back of original check.

Rick, CC states the track image May at any point be reconverted to create substitute check (IRD)

IRDs May be used for returns, representment, inclusion and customer statements etc.

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10
Q

What is the purpose of a substitute check or Image Replacement Document (IRD)?

A

A substitute check or IRD is the legal equivalent of the original check.

It is created for various reasons, such as:
- Returned items
- Rejected items
- Paid items (e.g., for customer statements)

Substitute checks ensure that financial institutions can process checks even after truncation.

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11
Q

What does the X9.100-140 standard specify for substitute checks?

A

The X9.1 00-140 standard specifies:

The shrinkage of images (front and back) based on check size (e.g., consumer vs. business checks).

The inclusion of a “4” in the EPC position of the MICR line for IRDS.

Endorsement placement for reconverting banks and prior handlers.

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12
Q

Why is a “4” placed in the EPC position of the MICR line for an IRD?

A

The “4” in the EPC position serves two purposes:

  1. Identifies the document as an Image Replacement Document (IRD).
  2. Alerts software to stop shrinking the imageduring subsequent processing to preserve image clarity.
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13
Q

What responsibility does the reconverting bank have when creating a substitute check?

A

The reconverting bank must:

Include endorsements from all banks that previously handled the check. Identify the depository bank and truncating bank.

Follow placement and MICR line standards outlined in X9.100-140.

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14
Q

What happens if the paying bank creates a substitute check for a return item?

A

If a paying bank creates a substitute check for a return item:

The “4” is placed in the EPC position of the MICR line for the IRD.

A qualified return strip with a “5” is added for sorting and routing back to the depository bank.

The qualified return strip can be removed after imaging for processing.

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15
Q

What is the difference between a “4” and a “5” in the MICR line for IRDS?

A

“4”: ldentifies the document as an IRD and signals software to stop shrinking the image.

“5”: Indicates a qualified return strip for routing a return item to the depository bank.

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16
Q

What is the difference between a “4” and a “5” in the MICR line for IRDS?

A

“4”: identifies the document as an IRD and signals software to stop shrinking the image. The 4 is an IRD no matter what direction.

“5”: Indicates a qualified return strip for routing a return item to the depository bank.

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17
Q

What does ANSI X9.100-111 cover regarding physical endorsements?

A

It governs physical endorsements, which are markings made directly on the original or substitute check (the physical piece of paper).

It also provides placement parameters for data content, background, and design elements on the back of the check.

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18
Q

What is the difference between a physical endorsement and an overlay endorsement?

A

A physical endorsement is directly on the piece of paper (original or substitute check), while an overlay endorsement is added electronically to an image of the check after it is captured. Physical endorsements always appear in the image, but not all endorsements seen in an image are physical.

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19
Q

Why is the reserved area for the depository bank’s endorsement important in ANSI X9.100-111?

A

The standard reserves a specific area for the depository bank’s endorsement to ensure it is clear, identifiable, and free from interference (e.g., payee endorsements or bold graphics). This allows for timely returns and proper identification of the depository bank.

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20
Q

What are the parts of the X9.100-160 MICR Line on Check ?

A

Part 1: establishes placement and location for printing E-13B MICR font and ink on checks, travis, and other documents for automated processing. An example of other documents: internal forms, deposit and batch tickets.
(Note: today fewer Banks will post encode dollar amount as the amount field is rarely used today)

Part 2: establishes assignment and management of a one-digit optional EPC field.
- EPC values convey special information for correct handling or routing of check/ check data to FI’s or other processors.
- used identification of irds or qualified returns (value 4 or 5
- Value 6 used to identify remotely created checks (RCC).

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21
Q

What fields are included in the MICR line?

A

The MICR line includes the
- amount field,
- “on us” field
- transit field
- auxiliary “on us” field.

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22
Q

Why is the amount field rarely used in 2025?

A

It was once used by depository banks to post and easily read the amount, but now it’s often not utilized as electronic systems have evolved.

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23
Q

What is the purpose of the “on us” field in the MICR line?

A

The “on us” field typically contains the account number and sometimes the check serial number, marked with symbols to distinguish them.

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24
Q

Where is the transit field located, and what does it contain?

A

The transit field is located between two transit symbols and contains the routing number of the paying bank.

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25
What is the function of the auxiliary "on us" field in the MICR Iline?
The auxiliary "on us" field, located on the far left, may contain the check serial number if it's not placed in the "on us" field.
26
What is the main purpose for the x9.100-187 Electronic Exchange of Check and image data?
Provides the industry with format to perform electronic check exchange Format supports exchange for both for both forward presentment and returns. And also for IRD creation and customer deposits. Allows check images to be linked to and transmit it along with financial posting data utilizing a cash letter structure Supports multiple check clearing alternatives such as bank-to-bank, bank-to- switch, etc.
27
What does the X9.100-187 standard define?
The X9.100-187 standard defines the format for the electronic check image data, specifically for the Image Cash Letter (ICL).
28
What records are included in the lmage Cash Letter (ICL)?
The ICL includes: File header record File control record Cash letter record Cash letter control record Bundle header record Bundle control record Item-level records for each check
29
What does the x9.100-188 Return Reasons standards address?
Return reasons for check, image exchange and IRDs - includes return reasons used by x9.100-14 0 image replacement document IRD (substitute checks) - X9.100-187 electronic exchange of check and image data. Standard includes return codes for both customer and administrative returns for image exchange and IRD creation. Does NOT address operational, implementation, Or settlement considerations.
30
What is technical report 47?
It is a universal companion document to the x9.100-187 electronic exchange of check and image data.
31
What is the purpose of the 188 standard?
The 188 standard creates a unified repository for return reasons and their abbreviations, ensuring consistency when creating substitute checks (IRDs). It provides standardized abbreviations and a maximum of four to five sentences for each return reason.
32
How does the Universal Companion Document in Technical Report 47 help with data interpretation?
The Universal Companion Document ensures that different entities use and interpret values consistently, even if their local systems use different formats or variations (e.g., "blue" might mean midnight blue or navy in different systems). It helps provide clarity across the industry.
33
What is a Cash Letter?
Group of negotiable instruments, usually checks Includes instructions for handling - Who it's from? (Presenting Bank) - Where it's going? (Receiving Bank) Describes what kind of items are included - Forward collection items - Return checks Includes control totals - Total number of items - Total dollar value
34
What is a cash letter historically based on?
Paper cash letters used to be sub.grouped into bundles. Typically about 300 items in each bundle. Each bundle would have supper instructions such as from/to, what's included, Number of items, and dollar value. To a cash letter file mimics the same process but the only thing that was added was the file had a record.
35
What is the significance of a file containing multiple cash letters or bundles?
The file can contain multiple cash letters, and each cash letter can have one or multiple bundles. This structure helps in sorting and routing to the correct destination.
36
What provides industry standards to ensure segregation of forward collections and returns?
The TR 47 UCD (Technical Report 47. Universal Companion Document) prevents intermingling forward collections and returns by requiring separate cash letters for each type.
37
How are records for forward collection and returns differentiated?
Forward collection records are in the 20-series, while return records are in the 30-series. This distinction helps in sorting and handling files accurately.
38
What should you know if you see a 30-series record in a file?
A 30-series record indicates that the item is a return, processed by the paying bank.
39
What does it mean if a file has both 20-series and 30-series records?
If a file contains both 20-series and 30-series records, it indicates a second representment, as all data should be retained in the electronic records for future reference.
40
What should you know if you see a 20-series record in a file?
A 20-series record indicates that the item is a forward image exchange.
41
What is the structure of a file in the analogy using envelopes?
A file is like a large envelope containing: A file header record and file control record. Inside the file envelope are: Cash letter envelopes, each with a cash letter header record and control record. Inside each cash letter envelope are: Bundle envelopes, each with a bundle header record and control record. Inside each bundle are the items or checks.
42
What steps are required to present a single check for processing?
To present one check, the depository bank must create: 1. A file containing a file header and control record. 2. A cash letter within the file. 3. A bundle within the cash letter. 4. The specific check within the bundle.
43
What does the file header record describe?
The file header record within the image cash flow letter file shows where it came from through the origin routing number field and it shows where it's going through the destination routing number field.
44
What record type is a file header record?
Type 1 associated With the File Control record type 99.
45
What are some of the critical description fields of the file header record??
Immediate destination routing number Immediate origin routing number File creation date - example: 20160801 File creation time - example 1158 Immediate destination name - example FRB Atlanta Immediate origin name - example. XYZ bank
46
File Control Record Type
Type 99, associated with the file how to record Type 1.
47
What does the File Control Record describe?
The file control record is the last record of the Image Cash Letter (ICL) file. Shows total items in the file Shows total amount of the file
48
What are some of the critical description fields in a File Control Record?
Cash letter count Total record count Total item count File total amount
49
Why are there substantially more records than items in a cash letter file?
Each check has multiple records, including images of the front and back (50 and 52 records) and records describing the image, compression values, return location (record 26), and intermediary information. For example if the Fed handles the file there are additional records.
50
What type is the Cash Letter Header record?
Type 10; associated with type 90.
51
What type is the Cash Letter Control record?
Type 90; associated with type 10.
52
What does the Type 10 record in a cash letter indicate?
A Type 10 record in a cash letter indicates various details such as whether the bundles are for forward collection or return.
53
What information does the Type 90 record in a cash letter provide?
A Type 90 record is the cash letter control record that summarizes details like the number of bundles, total items, and total amount in the cash letter.
54
What does the Cash Letter Header record contain?
Destination and ECE institution routing numbers Various dates and time Codes to indicate - Forward (01) cash letter - Return (03) cash letter - Type of returns
55
What does the cash letter control record contain??
Provides totals for the cash letter, including bundle account, item count and total amount.
56
Why is it important not to intermingle administrative and customer returns in a cash letter?
Administrative and customer returns serve different purposes and must be kept separate to ensure proper processing and compliance.
57
Describe the bundle hierarchy of a forward presentment record.
The Bundle of a forward presentment would include : Forward presentment bundle: Bundle header (20), item (s), Bundle control (70) -> Item(s): Check details 25 record, check detail 26 record, check detail 28 record, and image view which has two records 50 and 52
58
What is 25 record in forward presentment?
In forward resentment, 25 record is an item detail which contains check MICR data.
59
What is Check Detail Addendum A record Type 26?
26 record dentifies the return location. Note that the path forward for collection may not be the same for return As a return may take a different path. If record 26 identifies a different return location, it is still recognized as the bank of first deposit.
60
What is Check Detail Addendum C record type 28?
28 record identifies each subsequent endorser.
61
What are records 50 and 52?
These are the image records. They are paired together for both the ront image and back image. Pair of 5052 records for the front view Pair of 5052 records back view.
62
What type is the Bundle Header Record?
Type 20 Associated with Type 70 Bundle Control
63
What Type is the Bundle Control record
Type 70 associated with the bundle header record type 20.
64
What does the bundle header record contain??
Destination institution routing number Various dates Bundle ID sequence number Cycle number Code indicating forward return items Not mixed in same cash letter
65
What does a Bundle Control Record contain?
Provides TOTALS in a bundle for: Item count Total amount Images within bundle count ( typically 300 items)
66
Check detail record Type 25
One record for each check containing: - MICR information from original check - Item sequence number assigned by truncating FI - for business checks would include aux-on-us field Information scanned from MICR line. MICR line of a check: The payer Bank routing number is split in 2 with routing number without the check ID and the check ID of the routing number. (Note that In prior records the routing is 9 digits but in this field it is 8 digits.
67
Check detail addendum a record Type 26
Electronic endorsement of Depository bank. Multiple type 26 records if check is represented. Identifies return location for customer returns. Confirms to Reg CC BOFD or alternate return location. Codes indicate whether FI truncated the ORIGINAL check. - EPC field: 4 in type 25 or type 31 record (for return) indicates image of substitute check. The truncation indicator field determines if the FI truncated the original check. Example. Y If I did not truncate original check N, if return location is not the same as depository bank, they would create a type 28 record for themselves and in that record would populate Truncation Indicator field with Y saying we're the true depository bank who truncated check..
68
Check detail addendum c record type 28
Created by intermediary banks, and they add their electronic endorsements here. - Associated with previous Check Detail Record - Multiple Type 28 records if subsequent endorsers Fields conform to Reg CC/other endorsement requirements (e.g.; ECCHO Rules) - Record carries codes to indicate: - Institution that truncated original check (if type 26 record is not the truncating bank the real shrunken bank would identify themselves here) - Defines bank's role in collection process - Carries Return Reason (on re-presented item) - Two purposes for Type 28 records: - Carry Return Reason from prior 35. return record (re-presented items); and - For subsequent indorsements: - Identifies and provides information for each endorsing institution - Required for IRD creation If cash letter is missing routing number for return location and type 26, don't turn location could be acquired from the type 28.
69
Describe the bundle for a return record heirchy.
Return Bundle: Bundle header (20), Return item(s), Bundle control (70) Return Items: Return detail 31 record, Return detail 32 record, Return detail 33 record, return detail 35 record, Image view Image View: Image view detail 50 and 52 Pair 5052 for front and back.
70
What happens to return records when an item is returned?
When returning an item forward records convert to return records. (30 series are return records)
71
What does Type 25 from a forward collection item convert to for a return item?
Type 31. Plus type 33 if Aux on-us present.
72
What does Type 26 from a forward collection item convert to for a return item?
Type 32
73
What does Type 28 from a forward collection item convert to for a return item?
Type 35
74
Return type 31
Created by paying bank or returning institution. And provides the return reason. Contains information from check detail record Type 25 or from The original check. Includes: Forward bundle date ECE institution item Sequence Number
75
Return type 33
Used in conjunction with return record type 31. Auxiliary On-Us May contain: Auxiliary on us field for business checks The Aux on us field Is in check detail record Type 25 and Forward presentment.
76
What is Return Addendum A record type 32?
Mirrors check detail addendum A record type 26 from forward presentment. A s type 26 identifies return location.
77
What is Return Addendum D record type 35?
Mirrors type 28. Additional type 35 record created to identify paying bank Carries paying bank identification and return reason code. Same Return reason noted also in type 31. In representment items: Mirrors Type 28 record. Identifies and provides information for each endorsing institution and forward collection process.
78
What information does view detail record type 50 and type 52 provide?
Type 50 contains codes that describes the image: Format Compression View side (whether it's front or back of check) View descriptor (full of partial) Digital signal signature and security information) Type 52:contains the image and: Reference key information Security information Clipping information Digital signature
79
Record type 50?
Paired with record type 52. Contains code that describes the image to ask whether it's the front of the image or the back of the image.
80
Record type 52
Contains the image of the check.
81
Example scenario: In an original Presentment of an item, which X9 records are required?
Type 25 for the check detail record Type 26 BOFD indorsement
82
Example scenario: In a return (ICL) image cash letter, what information is required to carry check detail, prior endorsements, and return information?
Type 31 and 33 if business check for Aux on-us (check details from 25 - MICR info) Type 32 - flipped from 26 Type 35 - NEW record with return code.
83
In a re-presentment, what X9 records are required to carry check detail and all endorsement information for a 2nd presentment?
Type 25 - check details Type 26 - flipped from 32 in first return Type 28 - Flipped from 35 on first return New Type 26 - for the second presentment.
84
If the second presentment is returned, what X9 records are required to carry check detail, prior endorsements, and return information?
Type 31/33 - check data Type 32 - flipped from FIRST 26 Type 32 - flipped from SECOND 26 Type 35 - flipped from FIRST 28 Type 35 - NEW record to include current return.
85
If the second presentment is returned, what X9 records are required to carry check detail, prior endorsements, and return information?
Type 31/33 - check data Type 32 - flipped from FIRST 26 Type 32 - flipped from SECOND 26 Type 35 - flipped from FIRST 28 Type 35 - NEW record to include current return.
86
Which X9 records are required to carry check detail and endorsement information for presentment of an IRD item?
Note that all prior information should be included on the image of the IRD. Type 25 - check details Type 26 - for return location BOFD indorsement When BOFD A creates an IRD, it must contain all prior endorsements.
87
Type 31/33 information is taken from which record?
Type 25, check detail record in forward presentment.
88
Type 32 record is flipped from what record during the return process?
Type 26
89
Type 28 in forward presentment of a re-presentment?
Flipped from 35
90
X9.100-10
Paper for MICR Documents
91
X9.100-20
Print and Test Specifications for Magnetic Ink Printing (MICR)
92
X9.100-111:
Physical Check Endorsements
93
X9 TR 2
Understanding, Designing and Producing Checks
94
X9 TR 6
Guide to Quality MICR Printing and Evaluation
95
X9 TR
Check Security
96
X9 TR-33
Check Image Quality Assurance and Processes
97
X9 TR 47
Universal Companion Document of X9.100-187
98
X9 TR 100
Organization of Check-related Payments Standards
99
What is the purpose of the TR 2 technical report?
to promote uniformity in design and production of checks
100
What is the purpose of the TR 47 technical report?
to clarify how institutions should apply the standard for populating data files

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