Important Tips as the ACH Originator for your Organization
ACH: Originator Education
The ACH Originator starts the flow for electronic payments in the ACH network. Without ACH Origination, both consumers and businesses would experience higher volume in delayed payments, payment processing costs, and security risk.
Table of Contents
Compliance
Comply with NACHA Rules, U.S. Treasury & Federal Reserve Regulations, and specific Bank Policies & Requirements.
Make sure you are compliant with the following:
- NACHA Operating Rules
- Regulation CC, D, E
- UCC4A (Uniform Commercial Code Article 4A)
- OFAC (Office of Foreign Assets Control) / BSA & AML (Bank Secrecy Act & Anti-Money Laundering)
- Title 31 CFR Part 210 (Code of Federal Regulations)
- FRB (Federal Reserve Bank) Operating Circular 4
- Hawaii National Bank ACH Assessment: Annual Audit Requirements and ACH Originator Agreement
Security & Safety
Use secure methods when transmitting banking information.
Please use these methods to ensure account safety:
- Check the level of encryption by using commercially reasonable security that complies with applicable regulatory requirements.
- Enable Multi-Factor Authentication on your account.
Timelines
Submit files & entries in a timely and accurate manner.
Submit ACH Files to Hawaii National Bank (through Online Banking or other methods) by 3:30 pm.
Sending a Credit File
When sending funds out of an HNB Account:
- Please send the file out at Two (2) business days prior to effective date.
*If the credit entry is scheduled to occur on a non‐processing day, then entry will be processed BEFORE the non‐processing day.
Sending a Debit File
When collecting funds from another financial institution
- Please send the file out One (1) business day prior to effective date
*If the debit entry is scheduled to occur on a non‐business day, then entry will be processed AFTER the non‐processing day.
NACHA Formatting
Format files & entries based on NACHA rules.
Use proper SEC code for ACH transaction type and method
- PPD (Prearranged Payment and Deposit): Commonly used for Consumer Entries
- CCD (Corporate Credit or Debit): Commonly used for Corporate Entries (Specifically for Business-to-Business transactions)
Submitting a reversal file/entry:
If an error occurs (duplicate or erroneous file/entry), initiate an ACH Reversal File within Five (5) business days properly using the correct SEC code and file type (Credit/Debit).
File/Entry formatting:
Invalid files or errors can delay processing or result in rejected batches. Make sure all information is inputted correctly to prevent delays.
Obtain Proper Authorizations
Make sure to receive written, verbal and/or electronic approval for any ACH transaction from both parties and keep proof of authorizations for a period of 2 years.
General Authorization Forms:
ACH Credit Authorization - Authorization to push funds into other account
ACH Debit Authorization - Authorization to pull funds out of other account
Monitor Return Activities and Update records accordingly (Notification of Change)
Excessive returns (especially unauthorized debits) may lead to penalties & delays
Make sure to obtain accurate bank routing and account number/type.
View some common return reasons in our ACH Return Reasons Codes Guide.
Additional Resources
Other helpful links to better understand ACH and your role as the Originator.
Every Local Entrepreneur
Needs a Local Bank
In Their Corner
Every Local Entrepreneur
Needs a Local Bank
In Their Corner
Every Local Entrepreneur
Needs a Local Bank
In Their Corner