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Temporary suspension of debits due to lack of response to an ACH Reclamation notice after 60 days

The Bureau of the Fiscal Service (Fiscal Service) continues to monitor guidance from the Centers for Disease Control and Prevention, the Office of Personnel Management, the World Health Organization and other authorities relating to the coronavirus disease (COVID-19), which has unfortunately resulted in some staffing challenges for financial institutions and at Fiscal Service. These challenges may result in the delay of the financial institution to respond and Fiscal Service’s ability to process Automated Clearing House (ACH) Reclamations in a timely manner.

As of result of the current events, until further notice, Fiscal Service will suspend the process of debiting a receiving depository financial institution’s (RDFI) Federal Reserve Bank (FRB) master account in cases where the RDFI does not respond to an ACH Reclamation notice within 60 days. Financial institutions should continue to process and respond to reclamation notices during this period in order to avoid unnecessary backlogs. Please note that Fiscal Service will continue to process requests for debits (i.e., 45 day amounts), financial institution debit authorizations, ACH returns as a result of death and checks received from financial institutions for amounts owed due to reclamations.

Reclamation is a procedure used by the federal government to recover benefit payments made through the 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) (Off-site) part 210, subpart B. The government’s reclamation process is found in 31 CFR 210.9 through 210.14 and the Green Book (Off-site). The reclamation provisions of 31 CFR part 210 completely preempt the reclamation provisions of the Nacha Operating Rules & Guidelines (Off-site) with respect to federal benefit payments.

By accepting a recurring benefit payment from the government, an 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.