[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: 31CFR210.8]

[Page 55-56]
 
                  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. 210.8  Financial institutions.

    (a) Status as a Treasury depositary. The origination or receipt of 
an entry subject to this part does not render a financial institution a 
Treasury depositary. A financial institution shall not advertise itself 
as a Treasury depositary on such basis.
    (b) Liability. Notwithstanding ACH Rules 2.2.3, 2.4.5, 2.5.2, 4.2, 
and 7.7.2, if the Federal Government sustains a loss as a result of a 
financial institution's failure to handle an entry in accordance with 
this part, the financial institution shall be liable to the Federal 
Government for the loss, up to the amount of the entry, except as 
otherwise provided in this section. A financial institution shall not be 
liable to any third party for any loss or damage resulting directly or 
indirectly from an agency's error or omission in originating an entry. 
Nothing in this section shall affect any obligation or liability of a 
financial institution under Regulation E, 12 CFR part 205, or the 
Electronic Funds Transfer Act, 12 U.S.C. 1693 et seq.
    (1) An ODFI that transmits a debit entry to an agency without the 
prior written or similarly authenticated authorization of the agency, 
shall be liable to the Federal Government for the amount of the 
transaction, plus interest. The Service may collect such funds using 
procedures established in the applicable ACH Rules or by instructing a 
Federal Reserve Bank to debit the ODFI's account at the Federal Reserve 
Bank or the account of its designated correspondent. The interest charge 
shall be at a rate equal to the Federal funds rate plus two percent, and 
shall be assessed for each calendar day, from the day the Treasury 
General Account (TGA) was debited to the day the TGA is recredited with 
the full amount due.
    (2) An RDFI that accepts an authorization in violation of 
Sec. 210.4(a) shall be liable to the Federal Government for all credits 
or debits made in reliance on the authorization. An RDFI that transmits 
to an agency an authorization containing an incorrect account number 
shall be liable to the Federal Government for any resulting loss, up to 
the amount of the payment(s) made on the basis of the incorrect number. 
If an agency determines, after appropriate investigation, that a loss 
has occurred because an RDFI transmitted an authorization or 
notification of change

[[Page 56]]

containing an incorrect account number, the agency may instruct the 
Service to direct a Federal Reserve Bank to debit the RDFI's account for 
the amount of the payment(s) made on the basis of the incorrect number. 
The agency shall notify the RDFI of the results of its investigation and 
provide the RDFI with a reasonable opportunity to respond before 
initiating such a debit.
    (c) Acquittance of the financial institution. The final crediting of 
the correct amount of an entry received and processed by the Federal 
Reserve Bank and posted to the TGA shall constitute full acquittance of 
the ODFI and the originator for the amount of the entry. Full 
acquittance shall not occur if the entries do not balance, are 
incomplete, are incorrect, or are incapable of being processed. In the 
case of funds collected by an agency through origination of a debit 
entry, full acquittance shall not occur until the underlying payment 
becomes final.