What does ODFI Mean ?
ODFI (ORIGINATING DEPOSITORY FINANCIAL INSTITUTION) – A participating DFI which is responsible for the origination of ACH transactions. This institution may deposit items directly with an ACH operator or may work through a third-party processor which is the actual Sending Point.
Originator
– Must execute an agreement or contract with ORIGINATING DEPOSITORY FINANCIAL INSTITUTION that binds Originator to NACHA Operating Rules
– The agreement defines parameters of the relationship between the two parties,
identifies processing requirements for specific applications, and establishes liability and accountability for certain procedures related to the applications
– Originators are subject to applicable U.S. law when initiating ACH transactions
• ORIGINATING DEPOSITORY FINANCIAL INSTITUTION
- ORIGINATING DEPOSITORY FINANCIAL INSTITUTION bears full responsibility for Entries it originates
- ORIGINATING DEPOSITORY FINANCIAL INSTITUTION is required to execute written agreement with its companies that will bind each company to NACHA Operating Rules.
- ORIGINATING DEPOSITORY FINANCIAL INSTITUTION/Originator agreement should address the responsibilities and liabilities of the
- Originator on whose behalf ORIGINATING DEPOSITORY FINANCIAL INSTITUTIONis providing ACH services
- Extremely important in today’s environment to ensure that ODFIs know their customers, and they are credit-worthy
Return Entry
• RDFI can return Entry for any valid reason
• Normal Return Time frame: The RDFI must make the return entry available to the ODFI no later than the opening of business on the 2nd Banking Day following the Settlement Date of the Entry
• Special return time-frames for RCK and Adjustment Entries – RCK: Made available to ODFI by midnight of 2nd Banking Day following receipt of Entry
– Adjustment Entry (unauthorized, revoked, source document presented for ARC/POP.BOC, etc.): available to ODFI by opening of business on the Banking Day following the 60th calendar day after Settlement Date of Entry
