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Time Frame for LLC Stop Payment (ACH Item)

Question: 
A stop payment on an LLC account has been requested. It's on an ACH item that is from the same company every month, usually the same amount every month but on occasion it will be a different amount. How long should this stop payment be good for? The account is a business account so it's not subject to Reg E.
Answer: 

by John Burnett:

NACHA rules on stop payments for non-consumer accounts say (Operating Rules subsection 3.7.2, 2016 edition):

An RDFI must honor a stop payment order regarding any debit Entry initiated or to be initiated to a Non-Consumer Account that is provided by a Receiver at such time and in such manner as to allow the RDFI a reasonable opportunity to act upon the stop payment order prior to acting on the debit Entry. The RDFI must comply with a verbal stop payment order only for a period of fourteen calendar days unless the order is confirmed in writing within that fourteen-day period.

Subsection 3.7.2.1 offers the following on the effective period for such stop orders:

A written stop payment order regarding any debit Entry initiated or to be initiated to a Non-Consumer Account will remain in effect until the earliest of:

(a) the withdrawal of the stop payment order by the Receiver;

(b) the return of the debit Entry; or,

(c) six months from the date of the stop payment order, unless it is renewed in writing.

Answer: 

by Ken Golliher:

Read whatever it is that you ask the customer to sign.

First published on 09/02/2018

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