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Recent ACH Rule Changes

Effective: March 20, 2015

When a Receiver obtains an unintended credit, it’s important that financial institutions have a clear method for rectifying such a situation. This Rule provides an Originator/Originating Depository Financial Institution (ODFI) with an additional means of resolving situations in which the reversal process has resulted in, or hasn’t resolved, an unintended credit to a Receiver.
To achieve that, the Rule establishes a new Return Reason code that ODFIs may use to dishonor the return of either a debit or credit entry. The Rule also establishes a Receiving Depository Financial Institution’s (RDFI) right to contest this type of dishonored return in certain situations.

Previously, RDFIs used Change Code C04 to request a correction to the Receiver’s name indicated in an ACH entry, obligating the Originator to make the requested change. Unfortunately, a problem sometimes arose if a Receiving Depository Financial Institution (RDFI) instructed an Originator to change the Receiver’s name on future Entries: in some cases, the billing company was unable to make that change, leading to the Originator then being unwilling or unable to adjust the name. That could lead to filing a Rules violation report, creating challenges and conflict for both the RDFI and Originating Depository Financial Institution (ODFI).
To address the risk created by C04– essentially, that an RDFI warrants an accurate name change, while the Originator’s copy of the Receiver’s authorization reflects a different name– this Rule will eliminate C04 from the Rules.

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