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ARC Rules
by John Burnett, BOL Guru
Guru Bio
Question: Where do I find the rules on representing a returned ARC and secondary collections regarding ARC?
Answer: Those are NEACH rules. A good source of information is the NACHA ACH rules book, particularly the operating guidelines, starting with page OG 204 (2007 edition). Item 6 in that discussion indicates that an ARC bounced for insufficient or uncollected funds may be reinitiated (as an ARC) no more than two times following the return of the first ARC entry. Those reinitiations must be made within 180 days of the settlement date of the original ARC entry.
If those attempts are unsuccessful and if the originator still has the original check (retaining the original check in secure storage has been permitted since March 16,2007), the original check could be sent for collection. In fact, the original check can be presented for payment in lieu of resubmitting the ARC transactions, if that is the originator's preference. The rules only require that the original not be used to "double dip" by getting paid both via the ACH and via conventional check collection.
First published on BankersOnline.com 9/17/07
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