AAP Prep Program: Regulations, Laws, and Federal Government Payments

Practice flashcards covering ACH regulations, laws (Regulation E, UCC 4A, 31 CFR Part 210), and federal government payment procedures.

Regulation E Error Notification

The regulation that allows an RDFI to require a consumer to provide written confirmation of an oral error notice within $10$ business days.

Regulation E Service Fee Notice

A requirement for an Originator to provide notice if they wish to collect a service fee electronically for a payment returned as insufficient or uncollected funds.

Regulation E Consumer Protection

The provision that specifically governs consumer dispute rights for unauthorized ACH transactions.

UCC 4A Security Procedures

The law that addresses the need for commercially reasonable security procedures between an ODFI and an Originator.

31 CFR Part 210

The regulation that governs the processing of federal government ACH payments.

Garnishment Protected Amount

The amount established by an RDFI which is the lesser of the sum of federal benefit payments received during the lookback period or the account balance at the time of review (e.g., if balance is $\$1,000$ and benefits total $\$2,500$, the protected amount is $\$1,000$).

OFAC Policies and Procedures

The internal protocols of a financial institution that should reference the most current SDN List for screening ACH transactions.

OCC Bulletin 2021-49

A bulletin applying to nationally chartered banks regarding implementation of effective risk management systems for payment systems.

Commercially Reasonable Factors

A category used under UCC 4A to determine security procedures, which includes considerations like transaction type and commonly accepted commercial practices.

Return Reason Code R15

The designated return reason code defined as Beneficiary or Account Holder Deceased, used by an RDFI to notify a federal agency of a death.

UCC 4A Alterations

Provisions that can be modified via an Origination Agreement, such as reducing the timeframe for an Originator to inform an ODFI of errors in transmitted entries below the default of $90$ days.

Constructive Knowledge

Information an RDFI receives indicating a benefit recipient is deceased, which can come from a survivor, an estate, a DNE, or a Notice of Reclamation.

Suspicious Activity Report (SAR)

A report filed with FinCEN when activity, like a transaction significantly outside a Third-Party Sender's normal activity, is identified.

Currency Transaction Report (CTR)

A report required specifically for deposits of $\$10,000$ or more in coin or currency.

Federal Notice of Reclamation (Agency Timeframe)

The timeframe of $120$ calendar days within which a federal agency must initiate a reclamation after having actual or constructive knowledge of a death.

Notice of Reclamation (RDFI Response Time)

The maximum period of $60$ days from the issue date for an RDFI to provide a full and accurate response to a federal reclamation.

UCC 4A ODFI Liability

A provision that may NOT be altered by an ODFI in its Origination Agreement, specifically regarding the ODFI's liability for any errors it makes.

POP (SEC Code) Authorization

An SEC code for which the federal government does NOT require written authorization, utilizing a notice equals authorization approach.

IAT (International ACH Transaction) Travel Rule

The SEC code that adopted the Bank Secrecy Act's Travel Rule, requiring seven mandatory addenda records to accompany the payment throughout processing.

OFAC IAT Review

The requirement for an RDFI to screen all parties to an IAT entry, including remittance and foreign correspondent bank information found in Addenda Records.

Federal Non-receipt Claim Filing

The process where a benefit recipient must file a claim directly with the federal agency they receive payment from (e.g., Social Security Administration).

The Green Book

A procedures manual for financial institutions to follow when processing federal government payments.