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ACH Network Participants and Roles Flashcards

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  1. Which entity establishes the rules and operating standards governing the ACH network?

    Answer: NACHA – The Electronic Payments Association

    NACHA – The Electronic Payments Association is the self-regulatory organization that writes and enforces the NACHA Operating Rules for the ACH network.

  2. What distinguishes a Third-Party Processor from a Third-Party Sender under NACHA rules?

    Answer: A TPS transmits entries directly to an ODFI; a Third-Party Processor provides processing services but does not transmit entries as a sending point

    A Third-Party Sender transmits entries to an ODFI and is in the direct chain of transmission, while a Third-Party Processor provides back-office services without being the sending point to the ODFI.

  3. NACHA membership is required for which entities?

    Answer: ODFIs and RDFIs (depository financial institutions participating in the ACH network)

    NACHA membership is required for depository financial institutions that participate directly in the ACH network as ODFIs or RDFIs.

  4. The Gateway Operator role in international ACH is performed by:

    Answer: An ODFI or RDFI that transmits or receives entries across national borders

    A Gateway Operator is an ODFI or RDFI that transmits ACH entries to or receives them from a financial agency outside the United States.

  5. An Originator's agreement with its ODFI must include:

    Answer: The Originator's agreement to comply with the NACHA Operating Rules

    NACHA rules require that ODFIs include a provision in their Originator agreements binding the Originator to comply with the NACHA Operating Rules.

  6. Government agencies that originate ACH entries are classified as:

    Answer: Federal or state government Originators

    Federal and state government agencies that initiate ACH entries (such as payroll or benefit payments) are classified as government Originators under NACHA rules.