PART 210—FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED CLEARING HOUSE Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 3302, 3321, 3332, 3335, and 3720. Source: 64 FR 17487, Apr. 9, 1999, unless otherwise noted. § 210.1 Scope; relation to other regulations. This part governs all entries and entry data originated or received by an agency through the Automated Clearing House (ACH) network, except as provided in paragraphs (a) and (b) of this section. This part also governs reclamations of benefit payments. (a) Federal tax payments received by the Federal Government through the ACH system that are governed by part 203 of this title shall not be subject to any provision of this part that is inconsistent with part 203. (b) ACH credit or debit entries for the purchase of, or payment of principal and interest on, United States securities that are governed by part 370 of this title shall not be subject to any provision of this part that is inconsistent with part 370. § 210.2 Definitions. For purposes of this part, the following definitions apply. Any term that is not defined in this part shall have the meaning set forth in the ACH Rules. (a) ACH Rules (b) Actual or constructive knowledge, (1) Does not re-initiate payments to the recipient; and (2) Subsequently initiates a reclamation for one or more payments made to the recipient. (c) Agency (d) Applicable ACH Rules (1) Subsections 1.2.2, 1.2.3, 1.2.4, 1.2.5 and 1.2.6; Appendix Seven; Appendix Eight; and Appendix Nine (governing the enforcement of the ACH Rules and claims for compensation); (2) Section 1.14 (governing the Participating DFI Contact registry); (3) Section 2.10 and section 3.6 (governing the reclamation of benefit payments); (4) The requirement in Appendix Three that the Effective Entry Date of a credit entry be no more than two Banking Days following the date of processing by the Originating ACH Operator (see definition of “Effective Entry Date” in Appendix Three); (5) Section 2.2 (setting forth ODFI obligations to enter into agreements with, and perform risk management relating to, Originators and Third-Party Senders) and section 1.6 (Security Requirements); (6) Section 2.17.2.2-2.17.2.6 (requiring reduction of high rates of entries returned as unauthorized); (7) The requirements of Section 2.5.8 (International ACH Transactions) shall not apply to entries representing the payment of a Federal tax obligation by a taxpayer; and (8) Until March 19, 2022, the requirement of section 2.5.17.4(a) that the Originator utilize a fraudulent transaction detection system that validates an account to be debited for the first use of such account number and for any subsequent change(s) to the account number. (e) Authorized payment agent (f) Automated Clearing House or ACH (g) Beneficiary (h) Benefit payment (i) Federal payment (1) Federal wage, salary, and retirement payments; (2) Vendor and expense reimbursement payments; (3) Benefit payments; and (4) Miscellaneous payments including, but not limited to, interagency payments; grants; loans; fees; principal, interest, and other payments related to United States marketable and nonmarketable securities; overpayment reimbursements; and payments under Federal insurance or guarantee programs for loans. (j)(1) Financial institution (i) Any insured bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to apply to become an insured bank under section 5 of such Act (12 U.S.C. 1815); (ii) Any mutual savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to apply to become an insured bank under section 5 of such Act (12 U.S.C. 1815); (iii) Any savings bank as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or any bank which is eligible to apply to become an insured bank under section 5 of such Act (12 U.S.C. 1815); (iv) Any insured credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752) or any credit union which is eligible to apply to become an insured credit union pursuant to section 201 of such Act (12 U.S.C. 1781); (v) Any savings association as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) which is an insured depository institution as defined in such Act (12 U.S.C. 1811 et seq. et seq. (vi) Any agency or branch of a foreign bank as defined in section 1(b) of the International Banking Act, as amended (12 U.S.C. 3101). (2) In this part, a financial institution may be referred to as an Originating Depository Financial Institution (ODFI) if it transmits entries to its ACH Operator for transmittal to a Receiving Depository Financial Institution (RDFI), or it may be referred to as an RDFI if it receives entries from its ACH Operator for debit or credit to the accounts of its customers. (k) Government entry (l) Green Book (m) Notice of reclamation (n) Outstanding total (o) Recipient (p) Service (q) Treasury (r) Treasury Financial Manual [64 FR 17478, Apr. 9, 1999, as amended at 65 FR 18869, Apr. 7, 2000; 66 FR 10580, Feb. 16, 2001; 67 FR 17902, Apr. 11, 2002; 68 FR 33829, June 5, 2003; 70 FR 67366, Nov. 7, 2005; 73 FR 52584, Sept. 10, 2008; 76 FR 59030, Sept. 23, 2011; 79 FR 42980, July 24, 2014; 82 FR 42608, Sept. 11, 2017; 85 FR 15720, Mar. 19, 2020; 87 FR 46, Jan. 3, 2022] § 210.3 Governing law. (a) Federal law. (b) Incorporation by reference. Federal Register [email protected] www.archives.gov/federal-register/cfr/ibr-locations.html. (1) Nacha, 2550 Wasser Terrace, Suite 400, Herndon, Virginia 20171, tel. 703-561-1100, [email protected]. (i) 2021 Nacha Operating Rules & Guidelines: The Guide to the Rules Governing the ACH Network, copyright 2021; into § 210.2. (ii) Supplement #1-2021, Notice of Amendment to the 2021 Nacha Operating Rules, dated April 8, 2021; into § 210.2. (2) [Reserved] (c) Application of this part. http://www.fiscal.treasury.gov/ http://www.fiscal.treasury.gov/fmsnews.html [64 FR 17478, Apr. 9, 1999, as amended at 65 FR 18869, Apr. 7, 2000; 66 FR 10580, Feb. 16, 2001; 67 FR 17903, Apr. 11, 2002; 68 FR 33830, June 5, 2003; 69 FR 18803, Apr. 9, 2004; 70 FR 67367, Nov. 7, 2005; 73 FR 52584, Sept. 10, 2008; 76 FR 59030, Sept. 23, 2011; 79 FR 42980, July 24, 2014; 82 FR 42608, Sept. 11, 2017; 85 FR 15721, Mar. 19, 2020; 87 FR 46, Jan. 3, 2022] Subpart A—General § 210.4 Authorizations and revocations of authorizations. (a) Requirements for authorization. (1) The agency or the RDFI that accepts the recipient's authorization shall verify the identity of the recipient and, in the case of a written authorization requiring the recipient's signature, the validity of the recipient's signature. (2) Unless authorized in writing, or similarly authenticated, by an agency, no person or entity shall initiate or transmit a debit entry to that agency, other than a reversal of a credit entry previously sent to the agency. (b) Terms of authorizations. (1) To the provisions of this part; (2) To provide accurate information; (3) To verify the recipient's identity to the satisfaction of the RDFI or agency, whichever has accepted the authorization; (4) That any new authorization inconsistent with a previous authorization shall supersede the previous authorization; and (5) That the Federal Government may reverse any duplicate or erroneous entry or file as provided in § 210.6(f) of this part. (c) Termination and revocation of authorizations. (1) With respect to a recipient of benefit payments, a change in the recipient's ownership of the deposit account as reflected in the deposit account records, including the removal of the name of the recipient, the addition of a power of attorney, or any action which alters the interest of the recipient; (2) The death or legal incapacity of a recipient of benefit payments or the death of a beneficiary; (3) The closing of the recipient's account at the RDFI by the recipient or by the RDFI. With respect to a recipient of benefit payments, if an RDFI closes an account to which benefit payments currently are being sent, it shall provide 30 calendar days written notice to the recipient prior to closing the account, except in cases of fraud; or (4) The RDFI's insolvency, closure by any state or Federal regulatory authority or by corporate action, or the appointment of a receiver, conservator, or liquidator for the RDFI. In any such event, the authorization shall remain valid if a successor is named. The Federal Government may temporarily transfer authorizations to a consenting RDFI. The transfer is valid until either a new authorization is executed by the recipient, or 120 calendar days have elapsed since the insolvency, closure, or appointment, whichever occurs first. § 210.5 Account requirements for Federal payments. (a) Notwithstanding ACH Rules 2.1.2, 4.1.3, and Appendix Two, section 2.2 (listing general ledger and loan accounts as permissible transaction codes), an ACH credit entry representing a Federal payment other than a vendor payment shall be deposited into a deposit account at a financial institution. For all payments other than vendor payments, the account at the financial institution shall be in the name of the recipient, except as provided in paragraph (b) of this section. (b)(1) Where an authorized payment agent has been selected, the Federal payment shall be deposited into an account titled in accordance with the regulations governing the authorized payment agent. (2) Where a Federal payment is to be deposited into an investment account established through a securities broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, or an investment account established through an investment company registered under the Investment Company Act of 1940 or its transfer agent, such payment may be deposited into an account designated by such broker or dealer, investment company, or transfer agent. (3) Where an agency is issuing part or all of an employee's travel reimbursement payment to the official travel card issuing bank, as authorized or required by Office of Management and Budget guidance or the Federal Travel Regulation, the ACH credit entry representing the payment may be deposited to the account of the travel card issuing bank for credit to the employee's travel card account at the bank. (4) Where a Federal payment is to be disbursed through a debit card, stored value card, prepaid card or similar payment card program established by the Service, the Federal payment may be deposited to an account at a financial institution designated by the Service as a financial or fiscal agent. The account title, access terms and other account provisions may be specified by the Service. (5)(i) Where a Federal payment is to be deposited to a prepaid account that meets the following requirements: (A) The account is held at an insured financial institution; (B) The account is set up to meet the requirements for pass-through deposit or share insurance such that the funds accessible through the card are insured for the benefit of the recipient by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund in accordance with applicable law (12 CFR part 330 or 12 CFR part 745); (C) The account is not attached to a line of credit or loan agreement under which repayment from the account is triggered upon delivery of the Federal payments; and (D) The issuer of the account complies with all of the requirements, and provides the holder of the account with all of the consumer protections, that apply to a prepaid account under the rules implementing the Electronic Fund Transfer Act and the Truth in Lending Act. (ii) No person or entity may issue a prepaid account that receives Federal payments in violation of this paragraph (b)(5), and no financial institution may maintain a prepaid account that receives Federal payments if the issuer violates this paragraph (b)(5). (iii) For the purposes of this paragraph (b)(5), the term— (A) “Prepaid account” means a prepaid account as defined for purposes of regulations implementing the Electronic Fund Transfer Act, as amended; and (B) “Issuer” means a person or entity that issues a prepaid account. (6) Where a Federal payment is disbursed to a resident of a nursing facility, as defined in 42 U.S.C. 1396r, the payment may be deposited into a resident trust or patient fund account established by the nursing facility pursuant to requirements under Federal law relating to the protection of such funds. (7) Where a Federal payment is disbursed to a member of a religious order who has taken a vow of poverty, the payment may be deposited to an account established by the religious order. As used in this paragraph, the phrase “member of a religious order who has taken a vow of poverty” is defined as it would be by the Internal Revenue Service for Federal tax purposes. (8) The Secretary of the Treasury may waive the requirements of paragraph (a) of this section in any case or class of cases. [64 FR 17478, Apr. 9, 1999, as amended at 65 FR 18869, Apr. 7, 2000; 73 FR 52584, Sept. 10, 2008; 75 FR 80339, Dec. 22, 2010; 76 FR 59031, Sept. 23, 2011; 82 FR 42609, Sept. 11, 2017] § 210.6 Agencies. Notwithstanding any provision of the ACH Rules, including Subsections 2.4.5, 2.8.4, 4.3.5, 2.9.2, 3.2.2, and 3.13.3, agencies shall be subject to the obligations and liabilities set forth in this section in connection with Government entries. (a) Receiving entries. (b) Liability to a recipient. (c) Liability to an originator. (d) Liability to an RDFI or ACH association. (e) Acquittance of the agency. (f) Reversals. (g) Point-of-purchase debit entries. (h) Return Fee Entry. [82 FR 42609, Sept. 11, 2017, as amended at 85 FR 15721, Mar. 19, 2020; 87 FR 47, Jan. 3, 2022] § 210.7 Federal Reserve Banks. (a) Fiscal Agents. (b) Routing numbers. § 210.8 Financial institutions. (a) Status as a Treasury depositary. (b) Liability. et seq. (c) Acquittance of the financial institution. (d) Notice of misdirected payment. [64 FR 17487, Apr. 9, 1999, as amended at 69 FR 13189, Mar. 19, 2004; 70 FR 67367, Nov. 7, 2005; 79 FR 42981, July 24, 2014; 79 FR 73841, Dec. 12, 2014; 82 FR 42609, Sept. 11, 2017] Subpart B—Reclamation of Benefit Payments § 210.9 Parties to the reclamation. (a) Agreement of RDFI. (b) The Federal Government. § 210.10 RDFI liability. (a) Full liability. (b) Actual or Constructive Knowledge of Death. (1) Does not re-initiate payments to the recipient; and (2) Subsequently initiates a reclamation for one or more payments made to the recipient. (c) Exception to liability rule. (d) Time limits. (e) Debit of RDFI's account. [64 FR 17487, Apr. 9, 1999, as amended at 69 FR 13189, Mar. 19, 2004; 85 FR 15721, Mar. 19, 2020] § 210.11 Limited liability. (a) Right to limit its liability. (1) An amount equal to: (i) The amount in the account at the time the RDFI receives the notice of reclamation and has had a reasonable opportunity (not to exceed one business day) to act on the notice, plus any additional benefit payments made to the account by the agency before the RDFI responds in full to the notice of reclamation, or (ii) The outstanding total, whichever is less; plus (2) If the agency is unable to collect the entire outstanding total, an additional amount equal to: (i) The benefit payments received by the RDFI from the agency within 45 days after the death or legal incapacity of the recipient or death of the beneficiary, or (ii) The balance of the outstanding total, whichever is less. (b) Qualification for limited liability. (1) Certify that at the time the benefit payments were credited to or withdrawn from the account, the RDFI had no actual or constructive knowledge of the death or legal incapacity of the recipient or death of the beneficiary; (2) Certify the date the RDFI first had actual or constructive knowledge of the death or legal incapacity of the recipient or death of the beneficiary, regardless of how and where such information was obtained; (3)(i) Provide the name, last known address and phone number, as shown on the RDFI's records, of the following person(s): (A) The recipient and any co-owner(s) of the recipient's account; (B) All other person(s) authorized to withdraw funds from the recipient's account; and (C) All person(s) who withdrew funds from the recipient's account after the death or legal incapacity of the recipient or death of the beneficiary. (ii) If persons are not identified for any of these subcategories, the RDFI must certify that no such information is available and why no such information is available; and (4) Fully and accurately complete all certifications on the notice of reclamation and comply with the requirements of this part. (c) Payment of limited liability amount. (d) Violation of subpart B. [64 FR 17487, Apr. 9, 1999, as amended at 69 FR 13189, Mar. 19, 2004; 76 FR 59031, Sept. 23, 2011] § 210.12 RDFI's rights of recovery. (a) Matters between the RDFI and its customer. (b) Liability unaffected. § 210.13 Notice to account owners. Provision of notice by RDFI. § 210.14 Erroneous death information. (a) Notification of error to the agency. (b) Resolution of dispute. [64 FR 17487, Apr. 9, 1999, as amended at 69 FR 13189, Mar. 19, 2004]