How many banking days does an ODFI have to report to NACHA about an originator with excessive unauthorized returns?

How many banking days does an ODFI have to report to NACHA about an originator with excessive unauthorized returns?

• A. 1 Banking Day
• B. 5 Banking Days
• C. 10 Banking Days
• D. 15 Banking Days

Answer: (C)

The correct duration for an ODFI to report to NACHA regarding an originator with excessive unauthorized returns is 10 banking days. This requirement is in place to ensure that any patterns of unauthorized returns are tracked adequately, which helps maintain the integrity of the ACH network. By reporting within this timeframe, ODFIs can assist NACHA in monitoring compliance with the rules and guidelines that protect both consumers and financial institutions. This reporting not only emphasizes the importance of risk management but also promotes accountability within the ACH payment system. The other timeframes listed do not align with NACHA's established guidelines, as the reporting period is specifically defined as 10 banking days by NACHA’s Operating Rules. This timeframe provides a balance between allowing for sufficient investigation of the returns while also ensuring timely reporting to address any compliance issues effectively.

The correct duration for an ODFI to report to NACHA regarding an originator with excessive unauthorized returns is 10 banking days. This requirement is in place to ensure that any patterns of unauthorized returns are tracked adequately, which helps maintain the integrity of the ACH network.

By reporting within this timeframe, ODFIs can assist NACHA in monitoring compliance with the rules and guidelines that protect both consumers and financial institutions. This reporting not only emphasizes the importance of risk management but also promotes accountability within the ACH payment system.

The other timeframes listed do not align with NACHA's established guidelines, as the reporting period is specifically defined as 10 banking days by NACHA’s Operating Rules. This timeframe provides a balance between allowing for sufficient investigation of the returns while also ensuring timely reporting to address any compliance issues effectively.