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Date:June 12, 2007
Bulletin Number: 730
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Subject

Submission Deadline for Direct Deposit Stop/Reversal Transactions

Purpose

To notify agencies of the National Automated Clearing House Association (NACHA) operating guidelines related to direct deposit stop/reversal transactions.

Affected Employees

Employees who are enrolled in direct deposit and have received an overpayment of salary that cannot be recouped through future paychecks or lump sum payments.

Effective Date(s)

Immediately.

Background

Per Section III, Chapter IV (B) of the NACHA Operating Guidelines, “reversing” entries must be transmitted to the Receiving Depository Financial Institution (RDFI) by midnight of the fifth (5th) banking day following settlement of the erroneous entry.

If reversals are processed after this period, money initially credited to the OSC direct deposit account may be debited later.  To ensure the financial integrity of the OSC direct deposit account, the 5 banking days rule must be implemented.

Agency Actions

To comply with the NACHA guidelines and to provide OSC staff with sufficient processing time, direct deposit stop/reversal transaction requests must be received by OSC by noon of the fifth (5th) banking day following the paycheck date.

Note:  Agencies must submit Form AC 3197 (Fax Request for Direct Deposit Stop/Reversal) as soon as an overpayment situation is identified.

OSC Actions

Any transactions received by OSC after the deadline of noon of the fifth (5th) banking day will not be processed and agencies must make other arrangements to recoup the overpayment.

Questions

Questions regarding this bulletin may be directed to the Payroll Deduction mailbox.