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ACH Association

An organization formed by financial institutions to regulate and support the exchange of electronic transactions among member institutions.

ACH Credit

A transaction through the ACH network originated to pay a receiver (deposit funds into an account).

ACH Debit

A transaction through the ACH network originated to remove funds from the receiver (withdrawal from account).

ACH Network

The funds transfer system governed by the rules of the National ACH Association which provides for the inter-financial institution clearing of electronic entries for participating financial institutions.

Addenda Record

An ACH record type that carries the supplemental data needed to completely identify an account holder(s) or provide information concerning a payment to the RDFI and the Receiver.

Affidavit

A sworn statement by a consumer declaring that a particular ACH transaction was authorized or that the authorization for that transaction has been revoked.

Agreement

A contract between an originating company and an ODFI that defines the operational and legal relationship between the two entities when transferring funds electronically through the ACH.

ASCII

American Standard Code Information Interchange. ASCII is a standard seven-bit code created to achieve compatibility among various types of data processing equipment. The standard ASCII character set consists of 128 decimal numbers ranging from 0 through 127, assigned to letters, numbers, punctuation marks, and the most common special characters.

Authentication

To establish the authenticity of; prove that the authorizer is genuine.

Authorization

An agreement by a receiver to allow for the posting of debit or credit items to their account. Authorizations for credit transaction may be orally given, but debit transactions must be authorized in writing or similarly authenticated if by other means (for example; by telephone, by digital signature or PIN if by computer.)

Automated Clearing House

A central clearing facility, operated by a Federal Reserve Bank or a private sector organization on behalf of depository financial institutions in which participating DFIs transmit or receive ACH entries.

Automated Deposit

A deposit made directly to an account at a depository institution through the ACH network (i.e., payroll deposits, social security payments, and retirement benefits).

Availability

The number of days required to collect items before the customer has use of the funds.

Available Funds

Funds currently available for immediate use

Banking Day

Any calendar day except Saturday, Sunday and legally defined holidays (as defined in Regulations D and CC)

Batch

A group of records or documents considered as a single unit for the purpose of data processing.

Business Day

Any day on which a participating Depository Financial Institution (or ACH Operator) is open for carrying on substantially all of its business functions (as defined in Regulation E).

Cash Concentration

The transfer of funds from diverse accounts into a central account to effect more efficient cash management.

Cash Disbursement

The transfer of funds from a central account to diverse accounts to effect more efficient cash management.

Central Information File (CIF)

A master file maintained by the ACH containing information on each depository financial institution. This file includes the depository financial institution's name; transit routing number, address, settlement and delivery information and output medium requested.

Check Conversion

Using payment information from a check tendered for payment to initiate an electronic debit to the check writer's account. The electronic debit becomes an electronic transaction subject to the requirements of Regulation E.

Check Digit

The final digit of a routing/transit number, which may be used to test the validity of a specific routing/transit number.

Check Truncation

1. Traditional definition: Deposited checks are held at the financial institution or Federal Reserve Bank of first deposit instead of being sent to the drawee financial institution. Information from the checks is transmitted electronically from the truncation financial institution to the drawee financial institution. 2. Additional definition: Checks tendered in payment at non-financial institution locations are held by the payee or by the maker (check writer), and the payment initiated by the check is made electronically.

CIE (Customer Initiated Entry)

An automated consumer transaction that allows consumers to originate an ACH bill payment through their financial institution or a third party bill payment service.

Clearing

Process of collecting the paper or electronic items from the drawee banks after being deposited by a customer.

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