SEcTIOn 1.1 application of rules
These Rules apply to all Entries Transmitted through one or more ACH Operators, except as provided in this Section 1.1.
SUBSECTION 1.1.1 Conflicting Association Rules Govern
These Rules may be superseded by any conflicting operating rules of an Association by which an ODFI and RDFI have agreed to be bound.
SUBSECTION 1.1.2 Express Agreement of Federal Government Required
These Rules apply to Entries originated by a United States Government entity or agency only if the United States Government has expressly agreed to be bound by these Rules under 31 C.F.R. Part 210.
SUBSECTION 1.1.3 General and Specific Rules If there is a conflict in these Rules between a general provision applicable to all Entry types and a specific provision applicable to a specific Entry type, the provision for the specific Entry type governs. Rules of general application are subject to exceptions stated within these Rules. Specific provisions, obligations, and exceptions for specific SEC Codes or other Entry types are described in the sections and subsections for those Entry types.
SEcTIOn 1.2 Participating DfIs must comply With rules
A Participating DFI must comply with these Rules and warrants that it is legally able to comply with all applicable requirements of these Rules. Only Participating DFIs may be ODFIs and RDFIs. A Participating DFI is responsible for its Third-Party Service Providers’ compliance with these Rules.
SUBSECTION 1.2.1 Effect of Illegality
Nothing in these Rules requires a Participating DFI to debit or credit an account or to transfer funds if such action is inconsistent with U.S. Legal
Requirements, including the obligations of the Participating DFI under programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN).
Nothing in these Rules requires a Participating DFI to debit or credit an account or to transfer funds or take other action required by the Rules if the Participating DFI reasonably believes that taking such action in connection with a specific Entry would violate applicable U.S. Legal Requirements, including the obligations of the Participating DFI under programs administered by the U.S.
Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN). A Participating DFI must comply with all other requirements of these Rules with respect to all other Entries or other aspects of the same Entry, including the timely transmission of Return Entries and the availability of funds from Entries.
SUBSECTION 1.2.2 Audits of Rules Compliance A Participating DFI must annually conduct, or have conducted, an audit of its compliance with these Rules in accordance with Appendix Eight (Rule Compliance Audit Requirements). A Third-Party Service Provider, including a Third Third-Party Sender, that has agreed with a Participating DFI to process Entries must annually conduct, or have conducted, an audit of its compliance with these Rules in accordance with Appendix Eight (Rule Compliance Audit Requirements).
SUBSECTION 1.2.3 Rules Enforcement
A Participating DFI is subject to, and must comply with, the Rules enforcement procedures of the National Association contained in Appendix Ten (Rules Enforcement).
SUBSECTION 1.2.4 Risk Assessments A Participating DFI must:
(a) conduct, or have conducted, an assessment of the risks of its ACH activities;
(b) implement, or have implemented, a risk management program on the basis of such an assessment; and,
u
uApproved September 8, 2011; Effective March 16, 2012
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members. Any such action taken by the Board of Directors will remain effective as provided by the Board of Directors until the earlier of (a) further action by the Board of Directors, or (b) action taken by the eligible voting members to amend the Rules in accordance with Subsection 1.3.1 (Procedures for Amending the Rules).
SUBSECTION 1.3.3 Official Interpretation of the Rules
The Board of Directors of the National Association may issue written interpretations of these Rules that are consistent with the express language of these Rules. Such written interpretations apply and are binding as if they were set forth in full in these Rules and were adopted in accordance with Subsection 1.3.1 (Procedures for Amending the Rules).
SUBSECTION 1.3.4 Construction Rules
Words in a singular number include the plural, and in the plural include the singular, unless the context otherwise requires. The term “section” to a subdivision of an Appendix (e.g., “Part 3.2”), and the term “subpart” refers to a subdivision of a part (e.g., “Subpart 3.2.1”). Terms that are defined in Article Eight (Definitions of Terms) and file format data elements contained in Appendix Three, Subpart 3.2.2 (Glossary of Data Elements) are capitalized (e.g., “Entry” and “Addenda Type Code”) throughout these Rules.
SUBSECTION 1.3.5 Headings and Captions Headings and captions in these Rules are intended only for convenience of reference and have no substantive effect.
SEcTIOn 1.4 records
SUBSECTION 1.4.1 Retention Requirement for Records of Entries
A Participating DFI must retain a Record of each Entry for six years from the date the Entry was Transmitted, except as otherwise expressly provided in these Rules.
(c) comply with the requirements of its regulator(s) with respect to such assessment and risk management program.
SUBSECTION 1.2.5 Compensation for Errors The settlement of claims for compensation between Participating DFIs may be governed by the procedures contained in Appendix Seven (Compensation Rules).
SUBSECTION 1.2.6 Arbitration
The settlement of disputes between Participating DFIs arising under these Rules may be governed by the procedures contained in Appendix Nine (Arbitration Procedures).
SEcTIOn 1.3 amending, Suspending and Interpreting the rules
SUBSECTION 1.3.1 Procedures for Amending the Rules
These Rules may be amended by action of the eligible voting members of the National Association in accordance with the procedures set forth in the bylaws of the National Association. These Rules may be amended by a vote of either (a) two-thirds of the total number of votes cast by eligible members, or (b) three-quarters of the number of members eligible to vote, unless, in either case, two-thirds of the eligible members of a membership class vote against the amendment. Amendments must be submitted to the eligible voting members by mail, fax, or e-mail. A member’s ballot must by received by the National Association no later than fifteen Business Days after the date of the ballot, or such later date as is specified in connection with the ballot. Each approved amendment will become effective on the date indicated in the ballot on the amendment.
SUBSECTION 1.3.2 Temporary Adoption,
Suspension, or Change of Effective Date of Rules The Board of Directors of the National Association may approve an amendment to these Rules, suspend an amendment to these Rules, or change the effective date of an amendment to these Rules if it determines that such action is in the best interests of the National Association and its
2012 OPERATING RULES OR3 excused to the extent the delay was caused by the interruption or the suspension of payment by, or unavailability of funds from, a Participating DFI or another ACH Operator.
SEcTIOn 1.6 Secure Transmission of acH Information via Unsecured Electronic networks
Banking information related to an Entry that is Transmitted via an Unsecured Electronic Network must, at all times from the point of data entry and through the Transmission of such banking information, be either encrypted or Transmitted via a secure session, in either case using a commercially reasonable technology that provides a level of security that, at a minimum, is equivalent to 128-bit RC4 encryption technology. Banking information includes any Entry, routing number, account number, PIN or other identification symbol. This Section applies to Transmissions between:
(a) a Receiver and an Originator;
(b) an Originator and an ODFI;
(c) an ODFI and an ACH Operator;
(d) an ACH Operator and an RDFI; and (e) an Originator, ODFI, RDFI, or ACH Operator
and a Third-Party Service Provider.
Transmissions of banking information over an Unsecured Electronic Network by means of voice or keypad inputs from a wireline or wireless telephone to a live operator or voice response unit are not subject to this section.
SEcTIOn 1.7 choice of law
These Rules and the rights and obligations of a party with regard to a credit Entry subject to Article 4A of the Uniform Commercial Code are construed in accordance with and governed by the laws of the State of New York, unless otherwise provided in an agreement by which the relevant parties are bound.
SEcTIOn 1.8 Beneficiaries of the rules
Each Participating DFI, ACH Operator, Association, and the National Association (including its Board, committees, and panels) are intended third-party SUBSECTION 1.4.2 Provision Requirement forRecords of Entries
A Participating DFI must, if requested by its customer or any other Participating DFI or ACH Operator that originated, Transmitted, or received the Entry, provide the requester with a printout or reproduction of the information relating to the Entry. A Participating DFI may impose a reasonable charge for providing such information.
SUBSECTION 1.4.3 Electronic Record Creation and Retention
A Record required by these Rules to be in writing may be created or retained in an Electronic form that (a) accurately reflects the information in the Record, and (b) is capable of being accurately reproduced for later reference, whether by Transmission, printing, or otherwise. and National Commerce Act (15 U.S.C. § 7001, et seq.), including the provisions that reference state versions of the Uniform Electronic Transactions Act, and in a manner that evidences the identity of the Person who signed and that Person’s assent to the terms of the Record.
SEcTIOn 1.5 Excused Delay
Delay by a Participating DFI or ACH Operator beyond the time limits prescribed or permitted by these Rules is excused to the extent the delay was caused by the interruption of communication or computer facilities, provided that the delay is beyond the reasonable control of the Participating DFI or ACH Operator. This may include delays caused by war or act of God, provided that the Participating DFI or ACH Operator exercises such diligence as the circumstances require. Delay caused by the general failure of a Participating DFI’s, or its Third-Party Service Provider’s, computer facilities or other equipment does not constitute an excused delay and should be addressed within the Participating DFI’s contingency planning policies.
Delay by an ACH Operator beyond the time limits prescribed or permitted by these Rules also is
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SEcTIOn 2.1 general rule – ODfI is responsible for Entries and rules compliance
An ODFI is responsible for all Entries originated through the ODFI, whether by an Originator or through a Third-Party Sender, including Entries Transmitted through Direct Access. An ODFI is responsible for its Originators’ and Third-Party Senders’ compliance with these Rules.
SEcTIOn 2.2 Prerequisites to Origination
An ODFI must perform, or ensure that an Originator or Third-Party Sender performs, each of the following before permitting the Originator or Third-Party Sender to originate any Entry:
SUBSECTION 2.2.1 ODFI Agreement with Originator, Third Party Sender or Sending Point SUBSECTION 2.2.1.1 ODFI Must Enter Origination Agreement with Originator
An ODFI must enter into an Origination Agreement with each Originator for which the ODFI will originate Entries. The Origination Agreement must include, at a minimum, each of the following:
(a) The Originator must authorize the ODFI to originate Entries on behalf of the Originator to Receivers’ accounts;
(b) The Originator must agree to be bound by these Rules;
(c) The Originator must agree not to originate Entries that violate the laws of the United States;
beneficiaries of the representations, warranties, and covenants of each other Participating DFI and ACH Operator under these Rules. Nothing in these Rules is intended to, and nothing in these Rules is implied to, give any legal or equitable right, remedy, or claim to any other entity, including to any Originator, Receiver, Third-Party Service Provider, or Third-Party Sender.
SEcTIOn 1.9 Protection for the national association from
frivolous lawsuits
A Participating DFI that commences a legal proceeding against the National Association must pay, on demand, the attorneys’ fees and costs incurred by the National Association in connection with the proceeding if judgment is rendered in the National Association’s favor or if the National Association is otherwise dismissed from the proceeding.
SEcTIOn 1.10 network administration fees
A Participating DFI agrees to pay the National Association (a) an annual fee, and (b) a per-Entry fee for each Entry that is Transmitted or received by the Participating DFI, including those Entries that are not processed through an ACH Operator but are exchanged with another non-affiliated Participating DFI. The annual and per-Entry fees are established from time-to-time by the Board of Directors of the National Association and are published within the Schedule of Fees part of the Rules.