5.1 Description of ACH Origination Service
The ACH Origination Service allows you to instruct us to create and/or send a NACHA formatted file on your behalf to execute the transfer of funds to/from another financial institution to disburse/concentrate funds or to make payments/collect funds to/from another party via the System. All transactions executed through the ACH Origination Service described above will be collectively known as (“ACH transactions”.) The ACH Origination Service is provided by Bank and is only accessible through the Online Services. Your use of and access to the ACH Origination Service is separate and apart from your ability to facilitate transfers via ACH to a linked bank account (see Section 3.6).
We will facilitate only Internet-Initiated/Mobile Entry (“WEB”) and Corporate Credit or Debit Entry (“CCD”) ACH transactions through the ACH Origination Service. We will select, at our sole discretion, whether to facilitate any given ACH transaction as a WEB transaction or CCD transaction.
Unless otherwise defined in this Agreement, capitalized terms that appear in this Section 5 shall have the meanings set forth in the Operating Rules (the “Rules”) of the National Automated Clearing House Association (“NACHA”).
5.2 Processing Deadlines
Except as provided in Security Procedures in Section 5.4 below, we shall (i) process entries received from you to conform with the file specifications set forth in the Rules, (ii) transmit such entries as an Originating Depository Financial Institution to the Federal Reserve Bank, and (iii) settle for such entries to the specified accounts as provided in the Rules.
We shall transmit such entries to the Federal Reserve Bank by the deadline of the ACH one business day prior to the Effective Entry Date shown in such entries, provided (i) such entries are received 3:00 PM ET on a business day, (ii) the Effective Entry Date is at least 2 days after such business day, and (iii) the Federal Reserve is open for business on such business day. A “business day” is a day in which the Federal Reserve Bank is opened to the public for carrying on substantially all of its business, other than a Saturday, Sunday, or legal holiday.
If any of the requirements of clause (i), (ii), or (iii) listed above are not met, we shall use reasonable efforts to transmit such entries to the Federal Reserve Bank by the next deposit deadline on which the Federal Reserve is open for business.
5.3 ACH Rules
When engaging in any transaction through the ACH Origination Service, you agree to comply with the Rules. You can obtain a copy of the Rules from NACHA at 13450 Sunrise Valley Drive, Suite 100 Herndon, VA 20171; instructions for obtaining a copy of the Rules are also available at www.nacha.org. You agree to comply with and be bound by the Rules. In the event you violate any of the applicable Rules and NACHA imposes a fine on us because of your violation, we may charge the fine to you. We agree to inform you of revisions to the Rules of which we have knowledge. Our current process does not support the origination of IAT’s (International ACH Transactions).
5.4 Security Procedures
Our security procedures or security requirements are integrated into the Online Services, and you acknowledge and agree that these security procedures are a commercially reasonable method of providing security against unauthorized payment orders. You agree to submit ACH origination requests solely through the Online Services.
5.5 Our ACH Origination Obligations
In a timely manner and in accordance with the Rules, we will process, transmit and settle for the entries received from you, which comply with the terms of this Agreement and/or any addendums or future addendums.
You warrant and agree that:
- Each entry is accurate, timely, and has been authorized by the party whose account will be credited or debited, and otherwise complies with the Rules.
- Each debit entry is for an amount, which on the settlement date with respect to it, will be owing to you from the party whose account will be debited, is for a sum specified by such party to be paid to you, or is a correction of a previously transmitted erroneous credit entry.
- You have complied with all pre-notification requirements of the Rules.
- You will comply with the terms of the Electronic Funds Transfer Act, if applicable, or Uniform Commercial Code Article 4A if applicable, and the laws of the United States. You shall otherwise perform your obligations under this Agreement in accordance with all applicable laws and regulations. You shall indemnify us against any loss, liability or expense (including attorney’s fees and expenses) resulting from or arising out of any breach of any of the foregoing warranties or agreements.
5.7 Authorized Daily Dollar Limits
There are limitations on the frequency and amount of ACH transactions you can originate from your Account using the ACH Origination Service. For limits that apply to transactions that credit or deposit funds into your Account, please refer to Section 3.1 concerning deposits. For limits that apply to transactions that debit or withdraw from your Account, please refer to Section 3.5 concerning withdrawals. These security- related limits may change from time to time.
Inherent to the implementation of any ACH Origination Service is a degree or risk assumed by us. It is possible for you to expose us to significant financial liability if you do not have sufficient funds on deposit in the Account to settle ACH transactions or returns. We reserve the right to periodically request and review your financial information and revoke your access to ACH Origination Service if we believe, in our sole discretion, that you cannot financially support your liability for ACH transactions originated from the Account.
The following types of ACH transactions may be originated using the Account and the Online Services: CCD and WEB.
5.8 Provisional Credit
You acknowledge that the Rules make provisional any credit given for an entry until the financial institution crediting the account specified in the entry receives final settlement. If the financial institution does not receive final settlement, it is entitled to a refund from the credited party and the originator of the entry shall not be deemed to have paid the party.
You will maintain the Account during the term of this Agreement. You will maintain in the Account as of the applicable settlement date immediately available funds sufficient to cover all credit and debit entries initiated by you. You authorize us to debit the Account on the applicable settlement date in the amount of each entry. In the event there are not sufficient available funds in the Account to cover your obligations under this Agreement, you agree that we may debit any account maintained by you with us or that we may set off against any amount we owe to you, to obtain payment of your obligations under this Agreement.
5.10 Cancellation or Amendment
You shall have no right to cancel or amend any entry/file after its receipt by us. However, we shall use reasonable efforts to act on a request, in writing, by an Authorized User to cancel an entry/file before transmitting it to the Federal Reserve Bank. Any such request shall comply with the security procedures described in Section 5.4 above. You may be required to submit a new transfer request in writing or electronically through the Online Services. We shall have no liability if the cancellation or change is not affected.
You may request the reversal of an entry for erroneous or duplicate transactions that have been transmitted to the Federal Reserve by contacting us through the Online Services.
5.12 Rejection of Entries
We shall reject any entry, including an on-us entry, which does not comply with the requirements of this Agreement and may reject any entry if you are not otherwise in compliance with the terms of the Agreement. We shall notify you by email or via the Online Services of such rejection no later than the business day such entry would otherwise have been transmitted by us to the ACH or, in the case of an on-us entry, its effective entry date.
5.13 Returned Entries
We shall notify you by email or via the Online Services of the receipt of a returned entry from the Federal Reserve no later than one business day after the business day of such receipt. We shall have no obligation to re-transmit a returned entry if we complied with the terms of this Agreement with respect to the original entry.
You agree not to exceed ninety-five percent (95%) of any thresholds set forth in the NACHA Rules for returns on the basis that the Transaction was unauthorized, returns for administrative reasons, or all returns regardless of the cause in any thirty (30) day period. You further agree not to exceed one-half percent (0.5%) returns on the basis that the Transaction was unauthorized in any thirty (30) day period irrespective of whether any NACHA thresholds have been exceeded. Returns on the basis that the transaction was unauthorized will be assigned a NACHA return status of R07 (“authorization revoked by customer”), R10 (“customer advises not authorized”), or R29 (“corporate customer advises not authorized”).
We reserve the right to limit, suspend, or terminate your ACH Origination Service privileges for any violation of this Section 5.13.
5.14 Notifications of Change
We shall notify you of all notifications of changes that we receive related to entries that you transmit by email or via the Online Services no later than five (5) business days after receipt thereof.
You agree to pay us for ACH Origination Service provided under the Agreement in accordance with the current schedule of fees in Section 3.14 above. We may change our fees from time to time upon written notice.
We shall have the right to audit any records for compliance with the agreements and Rules relating to ACH Transactions originated by you.
5.17 ACH Origination Service Liability, Limitations on Liability & Indemnity
WE SHALL BE RESPONSIBLE ONLY FOR PERFORMING THE ACH ORIGINATION SERVICE EXPRESSLY PROVIDED FOR IN THIS AGREEMENT AND SHALL BE LIABLE ONLY FOR OUR GROSS NEGLIGENCE IN PERFORMING THIS SERVICE. WE SHALL NOT BE RESPONSIBLE FOR YOUR ACTS OR OMISSIONS (INCLUDING WITHOUT LIMITATION THE AMOUNT, ACCURACY, TIMELINESS OF TRANSMITTAL OR AUTHORIZATION OF ANY FILE RECEIVED FROM YOU) OR THOSE OF ANY OTHER PERSON. WE ARE AUTHORIZED BY YOU TO PROCESS TRANSACTIONS IN ACCORDANCE WITH THE INFORMATION THAT WE RECEIVE IN THE ISSUED FILE TRANSMISSION FROM YOU. YOU SHALL BE SOLELY RESPONSIBLE FOR THE INFORMATION CONTAINED IN THE FILE, AND WE SHALL HAVE NO RESPONSIBILITY FOR ERRONEOUS DATA PROVIDED BY YOU. YOU WILL INDEMNIFY AND HOLD US HARMLESS FROM AND AGAINST ANY LOSS, CHARGE, LIABILITY, COST, FEE OR EXPENSE (INCLUDING ATTORNEYS’ FEES AND EXPENSES) WE SUFFER OR INCUR RESULTING FROM ANY THIRD-PARTY LAWSUIT, CLAIM, ARBITRATION OR OTHER ACTION, ACTUAL OR THREATENED, ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
IN NO EVENT SHALL WE BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE OR INDIRECT LOSS OR DAMAGE THAT YOU MAY INCUR OR SUFFER IN CONNECTION WITH THIS AGREEMENT, INCLUDING LOSSES OR DAMAGES FROM SUBSEQUENT WRONGFUL DISHONOR RESULTING FROM OUR ACTS OR OMISSIONS PURSUANT TO THIS AGREEMENT.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING PROVISIONS, WE SHALL BE EXCUSED FROM FAILING TO ACT OR DELAY IN ACTING IF SUCH FAILURE OR DELAY IS CAUSED BY LEGAL CONSTRAINT, INTERRUPTION OF TRANSMISSION OR COMMUNICATION FACILITIES, EQUIPMENT FAILURE, WAR, NATURAL DISASTER, EMERGENCY CONDITIONS, OR OTHER CIRCUMSTANCES BEYOND OUR CONTROL. NOTWITHSTANDING THE ABOVE, WE WILL REIMBURSE YOU FOR EXPENSES INCURRED (E.G. WIRE FEES) IN THE EVENT OF OUR FAILURE OR DELAY IN TRANSFERRING FUNDS SOLELY CAUSED US.
IN ADDITION, WE SHALL BE EXCUSED FROM FAILING TO TRANSMIT OR DELAY IN TRANSMITTING AN ENTRY IF SUCH TRANSMITTAL WOULD RESULT IN OUR HAVING EXCEEDED ANY LIMITATION UPON ITS INTRA-DAY NET FUNDS POSITION ESTABLISHED PURSUANT TO PRESENT OR FUTURE FEDERAL RESERVE GUIDELINES OR IN OUR REASONABLE JUDGMENT OTHERWISE VIOLATE ANY PROVISION OF ANY PRESENT OR FUTURE RISK CONTROL PROGRAM OF THE FEDERAL RESERVE, OR ANY RULE OR REGULATION OF ANY OTHER U.S. GOVERNMENTAL REGULATORY AUTHORITY. SUBJECT TO THE FOREGOING LIMITATIONS, OUR LIABILITY FOR LOSS OF INTEREST RESULTING FROM ITS ERROR OR DELAY SHALL BE CALCULATED BY USING A RATE EQUAL TO THE AVERAGE FEDERAL FUNDS RATE SET BY THE FEDERAL RESERVE BANK FOR THE PERIOD INVOLVED. AT OUR OPTION, PAYMENT OF SUCH INTEREST MAY BE MADE BY CREDITING THE ACCOUNT RESULTING FROM OR ARISING OUT OF ANY CLAIM OF ANY PERSON WE ARE RESPONSIBLE FOR, ANY ACT OR OMISSION OF YOU OR ANY OTHER PERSON.
PERFORMANCE INTERRUPTION OF THE ACH ORIGINATION SERVICE FOR ANY REASON SHALL NOT RELIEVE YOU OF YOUR OBLIGATION TO MAKE ANY TAX DEPOSIT, AND WE WILL INCUR NO LIABILITY TO YOU FOR YOUR FAILURE TO MAKE ANY REQUIRED TAX PAYMENT BY OTHER MEANS IN THE EVENT OF SUCH INTERRUPTIONS.
5.18 Inconsistency of Name and Account Number
You acknowledge that, if an entry describes the Receiver inconsistently by name and/or account number, payment of the entry may be made based on the account number even if it identifies a person different from the named Receiver. You are solely responsible for providing correct information for all ACH Origination Service requests through the Online Services.
You may cancel your ACH Origination Service at any time by providing us with written notice. Your access to the ACH Service through Online Services will be suspended within three (3) business days of our receipt of instructions to cancel your ACH Origination Service from any Authorized User. We shall be entitled to rely on any written notice believed by us, in good faith, to be signed by any Authorized User. We shall have no obligation to transmit entries if you are in default of any of its obligations under this Agreement, including the obligation to pay any related fees for each credit and debit entry.
You will remain responsible for all transactions that occur prior to termination, whether termination by you or by us, and for any fees and charges incurred prior to the date of cancellation. Any unprocessed transactions including future dated and recurring transactions, will be cancelled as a result of termination of your ACH Origination Service. You agree that we can terminate or limit your access to the ACH Origination Service for any of the following reason without prior notice:
- If you have insufficient funds in your Account. The ACH Origination Service may be reinstated, at our sole discretion, once sufficient funds are available to cover any fees, pending transfers, and debits.
- Your breach of any term of this Agreement and/or the Rules.
- Upon reasonable notice (including immediate), for cause (including the foregoing) or without cause, in our sole discretion. Any unprocessed transactions including future dated and recurring transactions will be cancelled as a result of termination of your ACH Origination Service.
5.20 Notice Disclosure
Under the operating rules of NACHA, which are applicable to ACH transactions involving your Account, we are not required to give next day notice to you of receipt of an ACH item, and we will not do so. However, we will continue to notify you of the receipt of payments in the periodic statements we provide you.