Notice to financial institutions: Lifting of temporary suspension of debits due to lack of response to an ACH Reclamation notice

July 27, 2020

The Bureau of the Fiscal Service (Fiscal Service) will remove the suspension that was instituted on April 2, 2020 regarding the process of debiting a Receiving Depository Financial Institution’s (RDFI) Federal Reserve Bank (FRB) master account. Effective August 17, 2020, the suspension will be lifted, and reclamations that do not receive a response within 60 days will be debited according to the Green Book and 31 CFR 210.

Reclamation is a procedure used by the federal government to recover benefit payments made through the Automated Clearing House (ACH) Network to the account of a recipient who died or became legally incapacitated or a beneficiary who died before the date of the payment(s).

The government’s right to reclaim funds is established in Title 31 of the Code of Federal Regulations (CFR) part 210, subpart B. The government’s reclamation process is found in 31 CFR 210.9 through 210.14 and the Green Book. The reclamation provisions of 31 CFR part 210 completely preempt the reclamation provisions of the Nacha Operating Rules & Guidelines with respect to federal benefit payments.

By accepting a recurring benefit payment from the government, a RDFI agrees to the provisions of 31 CFR part 210, including the reclamation and debiting of the RDFI’s FRB account for any reclamation for which it is liable. An RDFI has up to 60 calendar days from the issue date of the reclamation to provide a full and accurate response to the proper government disbursing office. Failure to respond in a timely manner may result in a debit to the RDFI’s FRB account or the account of its correspondent for the total amount of the reclamation.

Financial institutions should continue to process and respond to reclamation notices. Please note that Fiscal Service will continue to process debits for reclamation of liability amounts, financial institution debit authorizations, ACH returns as a result of death, and checks received from financial institutions for amounts owed due to reclamations.

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