ACH Report of Possible Rules Violation

Posted By: Irishguy

ACH Report of Possible Rules Violation - 10/27/21 09:00 PM

What responsibility does a Bank have to report originators that do not act upon NOC files? A cite would be wonderful. Thanks in advance.
Posted By: osucpa

Re: ACH Report of Possible Rules Violation - 10/28/21 12:13 PM

Try Article Two, Subsection 2.11.1, ODFI and and Originator Action on Notification of Change
and Article Two, Subsection 2.11.2, ODFI Right to Refuse Notification of Change Entries

This information came straight out of our audit program.
Posted By: Irishguy

Re: ACH Report of Possible Rules Violation - 10/28/21 03:21 PM

I want to make sure I'm explaining and understanding correctly.

Our customer, John Doe, gets a direct deposit from ABC Co. via ACH. When we receive the file, we notice that ABC Co does not have John's correct account number so we submit a NOC and process the transaction because we can determine the account number.

After we submit the NOC, do we have a responsibility to ensure that ABC Co makes the correction within the prescribed time frames? If they don't make the change, do we have to file a Report of Possible Rules Violation?

If Banks do have this responsibility, how do most banks track this kind of information?

Any help would be appreciated.
Posted By: osucpa

Re: ACH Report of Possible Rules Violation - 10/28/21 04:19 PM

I would tell you if ABC Co. is not your customer you have no responsibility. You hope the information gets changed accordingly. Depending on the size of your bank will depend on how you handle this with your customer. I have seen for small community banks they will reach out to their customer and explain the issue to see if the customer can get it corrected. For larger banks they just process the NOCs.
Posted By: HappyGilmore

Re: ACH Report of Possible Rules Violation - 06/16/22 05:07 PM

Nothing in the Nacha rules mandates a financial institution must file a rules violation report...now, if an originator not acting on NOCs is causing your bank grief, in that you are having to manual process transactions because of the incorrect account numbers, you certainly can choose to file one. You could also do as suggested above and contact your client. and also contact the ODFI. if both of those attempts fail, certainly within your rights to file a rules violation.

of course, returning the transaction as "no account found" is also an option. But one that severely impacts your customer, and is a pretty drastic measure.