The return must be received by the RDFI's ACH operator in time for it to be received by the ODFI by the opening of business on the second business day following the settlement day for the original transaction.
Plain English: Settlement date is the date the transaction was supposed to post to the reciever's account. The next day, you'd know the item overdrew the account, and you have to bounce the item to make sure it gets back to the originating financial institution by the next day after that.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8