[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR210.6]

[Page 54-55]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 210--FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED CLEARING HOUSE--Table of Contents
 
                           Subpart A--General
 
Sec. 210.6  Agencies.

    Notwithstanding ACH Rules 2.2.3, 2.4.5, 2.5.2, 4.2, and 7.7.2, 
agencies shall be subject to the obligations and liabilities set forth 
in this section in connection with Government entries.
    (a) Receiving entries. An agency may receive ACH debit or credit 
entries only with the prior written authorization of the Service.
    (b) Liability to a recipient. An agency will be liable to the 
recipient for any loss sustained by the recipient as a result of the 
agency's failure to originate a credit or debit entry in accordance with 
this part. The agency's liability shall be limited to the amount of the 
entry(ies).
    (c) Liability to an originator. An agency will be liable to an 
originator or an ODFI for any loss sustained by the originator or ODFI 
as a result of the agency's failure to credit an ACH entry to the 
agency's account in accordance with this part. The agency's liability 
shall be limited to the amount of the entry(ies).
    (d) Liability to an RDFI or ACH association. Except as otherwise 
provided in this part, an agency will be liable to an RDFI for losses 
sustained in processing duplicate or erroneous credit and debit entries 
originated by the agency. An agency's liability shall be limited to the 
amount of the entry(ies), and shall be reduced by the amount of the loss 
resulting from the failure of the RDFI to exercise due diligence and 
follow standard commercial practices in processing the entry(ies). This 
section does not apply to credits received by an RDFI after the death or 
legal incapacity of a recipient of benefit payments or the death of a 
beneficiary as governed by Subpart B of this part. An agency shall not 
be liable to any ACH association.
    (e) Acquittance of the agency. The final crediting of the amount of 
an entry to a recipient's account shall constitute full acquittance of 
the Federal Government.
    (f) Reversals. An agency may reverse any duplicate or erroneous 
entry, and the Federal Government may reverse any duplicate or erroneous 
file. In initiating a reversal, an agency shall certify to the Service 
that the reversal complies with applicable law related to the recovery 
of the underlying payment. An agency that reverses an entry shall 
indemnify the RDFI as provided in the applicable ACH Rules, but the 
agency's liability shall be limited to the amount of the entry. If the 
Federal Government reverses a file, the Federal Government shall 
indemnify the RDFI as provided in the applicable ACH Rules, but the 
extent of such liability shall be limited to the amount of the entries 
comprising the duplicate or erroneous file. Reversals under this section 
shall comply with the time limitations set forth in the applicable ACH 
Rules.
    (g) Point-of-purchase debit entries. An agency may convert to an ACH 
debit entry a check drawn on a consumer or business account and 
presented at a point-of-purchase. Agencies shall use the Point-of-
Purchase (POP) Standard Entry Class (SEC) code for entries to consumer 
accounts and the Cash Concentration or Disbursement (CCD) SEC code for 
entries to business accounts. The requirements of ACH Rules 2.1.2 and 
3.4 shall be met for such an entry if the Receiver presents the check at 
a location where the agency has posted a conspicuous notice at the 
point-of-purchase containing the disclosure set forth at appendix A to 
this part and makes available to the Receiver, in a form that the 
Receiver can retain, the disclosure set forth at appendix B to this 
part. For purposes of ACH Rules 3.10 and 4.1.1, authorization shall 
consist of a copy of the notice and a copy of the Receiver's source 
document.
    (h) Accounts receivable check conversion. (1) Conversion of consumer 
checks. The notice and authorization requirements of ACH Rules 2.1.4 and 
3.6.1 shall be met for an accounts receivable entry only if an agency 
has provided the Receiver with the disclosure set forth at appendix C to 
this part.
    (2) Conversion of business checks. An agency may convert to an ACH 
debit a check drawn on a business account

[[Page 55]]

that is received via mail or at a dropbox location if the agency has 
provided the Receiver with the disclosure set forth at appendix C. The 
agency shall use the CCD SEC code for such entries, which shall be 
deemed to meet the requirements of ACH Rule 2.1.2 if the agency has 
provided the disclosure set forth at appendix C. For purposes of ACH 
Rules 3.10 and 4.1.1, authorization shall consist of a copy of the 
notice and a copy of the Receiver's source document.
    (i) Returned item service fee. An agency may originate an ACH debit 
entry to collect a one-time service fee in connection with an ACH debit 
entry originated pursuant to paragraph (g) or (h) of this section that 
is returned due to insufficient funds. An entry originated pursuant to 
this paragraph shall meet the requirements of ACH Rules 2.1.2 and 3.4 if 
the agency has complied with the disclosure requirements of paragraph 
(g) or (h), as appropriate. For purposes of ACH Rule 3.10 and 4.1.1, 
authorization shall consist of a copy of the notice provided under 
paragraph (g) or (h), as applicable, and a copy of the Receiver's source 
document.

[64 FR 17487, Apr. 9, 1999, as amended at 67 FR 17903, Apr. 11, 2002]