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RDFI & ACH Transaction Notices

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I am trying to research if an RDFI is required to mail to clients the ACH transaction notices that are generated from the FRB where we process ACH files?

You are required under Reg E to provide consumer Receivers of preauthorized transfers to their accounts either positive notice, negative notice or a readily available phone line to inform them whether a scheduled transfer has been received or has not been received, as applicable. If, like most banks, you comply by providing a phone line that the consumer can use to check on expected transfers, you don't need those notices that the Fed provides, apparently as a helpful feature for banks that want them.

On the other hand, if you informed customers you will send a notice for ACH transfers, those provided by the Fed may help you accomplish that. But from a regulatory perspective, it's an added expense that you don't have to incur.

For non-consumer ACH transactions, UCC Article 4A has notice requirements unless you inform your business accounts that you don't provide them [see UCC 4A-4-4(b)], or pay interest on the amount of the amount of the payment order from the day notice should have been given until the beneficiary learned of receipt of the payment order by the bank. Under subsection 4A-404(c), the right of a beneficiary to be notified under subsection 4A-404(b) may be varied by agreement of the beneficiary or by a funds transfer system rule if the beneficiary is notified of the rule in advance.

First published on 07/28/2019

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