CPP CPP Electronic Payments & ACH 2 — Questions and Answers
Question 1: What is an R02 return code in an ACH transaction?
- Insufficient Funds
- Account Closed (Correct answer)
- No Account / Unable to Locate Account
- Payment Stopped
Correct answer: Account Closed
R02 is the ACH return code indicating that the bank account has been closed by the account holder.
Question 2: What is the typical return timeframe for an unauthorized ACH consumer debit (R10)?
- 2 banking days
- 24 hours
- 60 calendar days (Correct answer)
- 5 banking days
Correct answer: 60 calendar days
Under Nacha rules, a consumer can return an unauthorized ACH debit (R10) up to 60 calendar days from the settlement date.
Question 3: Which Federal Reserve system provides real-time gross settlement for high-value transactions in the US?
- Fedwire Funds Service (Correct answer)
- FedACH
- FedNow
- CHIPS
Correct answer: Fedwire Funds Service
Fedwire Funds Service is the Federal Reserve's real-time gross settlement (RTGS) system used for large-value, time-critical payments.
Question 4: What does RDFI stand for in the ACH payment network?
- Regional Debit Financial Institution
- Receiving Depository Financial Institution (Correct answer)
- Registered Direct Funds Initiator
- Remote Deposit Financial Interface
Correct answer: Receiving Depository Financial Institution
RDFI stands for Receiving Depository Financial Institution — the bank that receives the ACH entry on behalf of the receiver.
Question 5: Under Nacha rules, how long does an ODFI have to honor a return entry from an RDFI?
- 24 hours
- 2 banking days
- 5 banking days (Correct answer)
- 30 calendar days
Correct answer: 5 banking days
The ODFI must accept return entries transmitted within the applicable return timeframe, which for most return reasons is 2 banking days, but the ODFI has 5 banking days to dishonor improper returns.
Question 6: What is the primary purpose of a prenote in an ACH transaction?
- To test the validity of an account before sending live transactions (Correct answer)
- To notify the receiver of an upcoming payment
- To reverse a previously settled ACH entry
- To flag a transaction for review
Correct answer: To test the validity of an account before sending live transactions
A prenote (zero-dollar test entry) is sent before live ACH transactions to verify the routing and account numbers are valid.
CPP CPP Electronic Payments & ACH 2
What is an R02 return code in an ACH transaction?