[Code of Federal Regulations]

[Title 31, Volume 2]

[Revised as of July 1, 2005]

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



[[Page 56]]



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 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.

    (d) Notice of misdirected payment. If an RDFI becomes aware that an 

agency has originated an ACH credit entry to an account that is not 

owned by the payee whose name appears in the ACH payment information, 

the RDFI shall promptly notify the agency. An RDFI that originates a 

Notification of Change (NOC) entry with the correct account and/or 

Routing and Transit Number information, or returns the original ACH 

credit entry to the agency with an appropriate return reason code, shall 

be deemed to have satisfied this requirement.



[64 FR 17487, Apr. 9, 1999, as amended at 69 FR 13189, Mar. 19, 2004]