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Managing. The risk of Payment System - Turner P.

Turner P. Managing. The risk of Payment System - John Wiley & Sons, 2003. - 253 p.
ISBN 0-471-32848-0
Download (direct link): managingtherisksofpayment2003.pdf
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178
Endnotes
transaction. Insufficient funds, stop payment orders, and unauthorized debits are the most usual reasons for return items. The ACH Rules and the time deadlines are geared to the control of return items. A business using ACH payment systems should modify its internal procedures to synchronize with its financial institution’s deadlines under the ACH Rules.
ENDNOTES
1. Preface to Operating Guidelines.
2. Id.
3. ACH Rule 2.1.1.
4. Id. The agreement is not required in the case of a con-
sumer initiated entry (CIE), and the rule does not apply to destroyed check (XCK) entries.
5. ACH Rule 2.1.2.
6. Id.
7. ACH Rule 1.5.
8. Id.
9. ACH Rule 2.1.2.
10. Id.
11. ACH Rule 2.1.5.
12. ACH Rules 2.8.3.10, 2.9.3.2, and 3.5.
13. ACH Rule 4.1.1. The provision does not apply to CCD
credit, CTX entries, and XCK debit entries, or to MTE or SHR entries if the ODFI and RDFI are parties to a shared network agreement.
14. ACH Rule 2.1.5.
15. The notices required to be given by the ODFI to the
Originator are given pursuant to § 4A-405(c) and (d) of
Article 4A.
16. U.C.C. § 4A-405(d). Although U.C.C. § 4A-405(d) is not lit-
erally limited in its application to ACH transfers, Official Comment 3 to U.C.C. § 4A-405 makes clear that it was intended to apply only to ACH transfers:
179
Risks of Automated Clearing House Payments
A beneficiary’s bank will normally accept, at the same time and as part of a single batch, payment orders with respect to many different Originators’ banks. . . . The custom in ACH transactions is to release funds to the beneficiary early on the payment date even though settlement to the beneficiary’s bank does not occur until later in the day. The understanding is that payments to beneficiaries are provisional until the beneficiary’s bank receives settlement.
17. ACH Rule 2.2.1.1.
18. ACH Rule 2.2.1.2.
19. ACH Rule 2.2.1.3.
20. See ACH Rule 2.8 relating to the reinitiation of returned entries to originators.
21. ACH Rule 2.2.1.4.
22. ACH Rule 2.2.1.5. The warranty is not made, however, if the RDFI knows of the circumstances giving rise to the termination and the ODFI has no such knowledge.
23. ACH Rule 2.2.1.6. The warranty is not made, however, if the ODFI and the RDFI are parties to an agreement for the provision of services relating to the ACH entries or if a card issued by the ODFI to the Originator is used in connection with the authorization of these entries.
24. ACH Rule 2.2.1.7. See ACH Rule 4.5 with respect to the provision of periodic statements.
25. See ACH Rules 2.6 and 4.7.
26. ACH Rule 2.2.1.8. The warranties are also made in connection with written demands for payment transmitted to the RDFI outside the ACH system.
27. ACH Rule 2.2.1.9. Under ACH Rule 2.2.4, the ODFI warranties under the ACH Rules are also made to sending points.
28. ACH Rule 2.2.3 applies to the liability of the ODFI in the event that the ODFI is in breach of any of its warranties.
29. ACH Rule 2.2.2.
180
Endnotes
30. ACH Rule 2.3.1.
31. ACH Rule 2.3.2.
32. Id.
33. See ACH Rule 5.3.
34. ACH Rule 2.4.1.
35. ACH Rule 2.4.2. It should be noted that ACH Rule 1.3
(with respect to a participating depository financial institu-
tion) and ACH Rule 8.5 (with respect to an ACH Operator) allow participating depository financial institutions and ACH Operators to extend deadlines in circumstances beyond their control if diligence has been exercised.
36. ACH Rule 13.1.41.
37. ACH Rule 2.4.4.
38. ACH Rule 2.4.2.
39. ACH Rule 2.4.3.
40. ACH Rule 2.4.5.
41. See Geva, The Law of Electronic Funds Transfers, 85.05[4][d].
42. ACH Rule 2.5.1.
43. ACH Rule 13.1.41.
44. ACH Rule 2.4.2.
45. ACH Rule 2.4.5.
46. ACH Rule 2.7.1.
47. ACH Rule 2.7.2.
48. ACH Rule 2.2.
49. ACH Rule 2.7.3.
50. ACH Rule 5.1.
51. ACH Rule 2.7.6.
52. ACH Rule 2.11. Separate reinitiation rules apply to RCK entries.
53. ACH Rule 2.1.2.
54. The RDFI has the right to request the authorization under
ACH Rule 4.1.1. Under ACH Rule 3.5, the Originator’s record keeping obligation does not apply to shared network or machine terminal entries if the ODFI and RDFI are parties to an agreement for the provision of services relating to the entries.
181
Risks of Automated Clearing House Payments
55. ACH Rule 3.2. The rule does not apply to SHR or MTE entries if the ODFI and RDFI are parties to an agreement for the provision of services relating to such entries or if a card issued by the ODFFI or the Originator is used in connection with the authorization of the entries.
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