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#73454 - 04/13/03 06:20 AM ACH transfer reversal
markber Offline
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markber
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Does a bank/CU have right to reverse an ACH transfer initiated by OTHER institution due to insufficient funds? If so, how much time after an ACH transfer does a bank have to reverse it?

Thanks,

Mark
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#73455 - 04/14/03 03:04 PM Re: ACH transfer reversal
1111 Offline
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1111
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Yes, it can be "returned" just like a check, only through the ACH network. I'm not sure on the timing, but I'll guess that it's the same as a check if the reason is NSF.

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#73456 - 04/14/03 04:09 PM Re: ACH transfer reversal
John Burnett Offline
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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.
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#73457 - 04/14/03 04:16 PM Re: ACH transfer reversal
Rubaiyat Offline
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According to the NACHA rules, an ACH item being returned for NSF must be returned to the ODFI no later than the opening of business on the second banking day following the settlement date of the item.
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#73458 - 04/14/03 04:17 PM Re: ACH transfer reversal
Rubaiyat Offline
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Sorry John, for the duplication. Serves me right for sneaking a snack before I hit "enter".
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#73459 - 04/14/03 05:21 PM Re: ACH transfer reversal
John Burnett Offline
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Yeah, but your answer was right and mine, while more wordy, was wrong. I fixed mine to hide the evidence of my slip-up.
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#73460 - 04/15/03 12:06 AM Re: ACH transfer reversal
1111 Offline
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1111
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By the way, just make sure that it's not an ACH-POS entry that is NSF as they cannot be returned.

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#73461 - 04/15/03 04:02 PM Re: ACH transfer reversal
John Burnett Offline
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Quote:

By the way, just make sure that it's not an ACH-POS entry that is NSF as they cannot be returned.




Let's distinguish between true ACH items, which have come through the Automated Clearinghouse to us, and POS items that may be formatted as ACH when they hit your system, but usually do not go through the Automated Clearinghouse. The former are usually able to be returned. The latter are not.

There may be a POS network that relies on the automated clearinghouse to route transactions (I'm not familiar with this scenario). In that case, if there are contractual issues that guarantee the item when presented, I'd then take Ipso's comment verbatim.
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#73462 - 04/19/03 05:21 AM Re: ACH transfer reversal
markber Offline
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markber
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Thanks very much for everybody's answers!! They help to understand why it takes so long (4 days) for PCBanker to do incoming ACH transfers (2 days) and make funds available to customers (2 days). I wonder if it is a common practice to make ACH-transferred funds unavailable for two additional days after an incoming ACH transfer (initiated by the FI) came through.
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#73463 - 04/21/03 01:54 PM Re: ACH transfer reversal
John Burnett Offline
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Quote:

I wonder if it is a common practice to make ACH-transferred funds unavailable for two additional days after an incoming ACH transfer (initiated by the FI) came through.



I sincerely hope not! In all cases, funds deposited electronically must be available no later than the day after deposited. In most cases, they must be available on settlement day at the opening of business. (Regulation CC, 229.10(b))
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#73464 - 04/28/03 12:31 AM Re: ACH transfer reversal
Anonymous
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Quote:

Quote:

I wonder if it is a common practice to make ACH-transferred funds unavailable for two additional days after an incoming ACH transfer (initiated by the FI) came through.



I sincerely hope not! In all cases, funds deposited electronically must be available no later than the day after deposited. In most cases, they must be available on settlement day at the opening of business. (Regulation CC, 229.10(b))




John, thank you for your reply. So... if a bank makes funds deposited electronically (via ACH transfer) unavailable for withdrawal for 2 days after the settlement day, does this mean that the bank does NOT comply with regulation CC, 229.10(b)? Or can a bank do whatever it wants with respect to the fund availability?

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