A copy of the source document for an ARC Entry must be kept for how many years from the Settlement Date?

A copy of the source document for an ARC Entry must be kept for how many years from the Settlement Date?

• A. One year
• B. Two years
• C. Five years
• D. Seven years

Answer: (B)

The correct duration for retaining a copy of the source document for an ARC Entry is two years from the Settlement Date. This requirement is established by the NACHA Operating Rules, which govern Automated Clearing House (ACH) transactions. The purpose of keeping this documentation is to ensure that there is adequate evidence of customer authorization for the transaction, which is essential for compliance with regulatory standards and for addressing any disputes that may arise. In this context, retaining the documentation for two years allows financial institutions and businesses to manage and respond to any potential inquiries or challenges related to the transaction, thus providing a safeguard for both the originator and the consumer involved in the ACH process.

The correct duration for retaining a copy of the source document for an ARC Entry is two years from the Settlement Date. This requirement is established by the NACHA Operating Rules, which govern Automated Clearing House (ACH) transactions. The purpose of keeping this documentation is to ensure that there is adequate evidence of customer authorization for the transaction, which is essential for compliance with regulatory standards and for addressing any disputes that may arise.

In this context, retaining the documentation for two years allows financial institutions and businesses to manage and respond to any potential inquiries or challenges related to the transaction, thus providing a safeguard for both the originator and the consumer involved in the ACH process.