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C

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.

Clearing House

A voluntary association of depository institutions that facilitates the clearing of checks or electronic items through the direct exchange of funds among members.

Collected Funds

Funds for which final payment has been received.

Company Batch/Header Record

The records(s) contained within an ACH file, which described the originators(s) of an ACH transaction(s) and the types of transactions within that batch.

Company Identification Number

The number in the company Batch/Header Record that identifies the originating company to the ODFI.

Compensating Balances

The balances a company must maintain at a bank to compensate for credit accommodations and credit services.

Consumer

Usually refers to a natural person not engaged in commercial transactions.

Consumer Account

A deposit held by a participating DFI and established by a natural person primarily for personal, family, or household use, and not for commercial use.

Controlled Disbursement

A disbursement arrangement where a company is notified early in the day of the dollar amount of items waiting to clear the account later in the day, so they can fund the account with the exact amount to clear the items.

Correspondent Bank

A bank that accepts deposits and performs banking services for other banks. Correspondent banking arrangements exist between local banks and banks located throughout the world.

Credit

An entry to the record of an account to represent the transfer or placement of funds into the account.

Credit Risk

The risk that a party to a transaction cannot provide the necessary funds, as contracted, in order for settlement to take place. Typically, credit-risk-related losses arise from the failure or bankruptcy of a company.

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