[Federal Register Volume 68, Number 108 (Thursday, June 5, 2003)]
[Rules and Regulations]
[Pages 33826-33830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13833]



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Part VI





Department of the Treasury





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Fiscal Service



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31 CFR Part 210



Federal Government Participation in the Automated Clearing House; Final 
Rule

  Federal Register / Vol. 68, No. 108 / Thursday, June 5, 2003 / Rules 
and Regulations  

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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 210

RIN 1510-AA89


Federal Government Participation in the Automated Clearing House

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Interim rule with request for comment.

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SUMMARY: We're issuing an interim rule to amend our regulation at 31 
CFR part 210 (part 210), which governs the use of the Automated 
Clearing House (ACH) system by Federal agencies. Part 210 adopts, with 
some exceptions, the ACH rules (ACH Rules) developed by NACHA--The 
Electronic Payments Association (NACHA) as the rules governing the use 
of the ACH system by Federal agencies. We're amending part 210 to 
address changes that NACHA has made to the ACH Rules during the past 
year. We are requesting public comment on all aspects of the interim 
rule.

DATES: The interim rule is effective July 7, 2003. Comments on the 
interim rule must be received by August 4, 2003. The incorporation by 
reference of the publication listed in the interim rule is approved by 
the Director of the Federal Register as of July 7, 2003.

ADDRESSES: You can download the interim rule at the following World 
Wide Web address: http://www.fms.treas.gov/ach. You may also inspect 
and copy the interim rule at: Treasury Department Library, Freedom of 
Information Act (FOIA) Collection, Room 1428, Main Treasury Building, 
1500 Pennsylvania Ave., NW., Washington, DC 20220. Before visiting, you 
must call (202) 622-0990 for an appointment.
    You may send comments on the interim rule electronically to the 
following address: [email protected]. You may also mail your 
comments to Stephen M. Vajs, Director, Risk Management Division, 
Financial Management Service, U.S. Department of the Treasury, Room 
423, 401 14th Street, SW., Washington, DC 20227.

FOR FURTHER INFORMATION CONTACT: Donald J. Skiles, Senior Financial 
Program Specialist, at (202) 874-6994 or [email protected]; 
Natalie H. Diana, Senior Attorney, at (202) 874-6680 or 
[email protected]; or Stephen M. Vajs, Director, Risk 
Management Division, at (202) 874-1229 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Part 210 governs the use of the ACH system by Federal agencies. The 
ACH system is a nationwide electronic fund transfer (EFT) system that 
provides for the inter-bank clearing of credit and debit transactions 
and for the exchange of information among participating financial 
institutions. Part 210 incorporates the ACH Rules adopted by NACHA, 
with certain exceptions. From time to time we amend part 210 in order 
to address changes that NACHA periodically makes to the ACH Rules or to 
revise the regulation as otherwise appropriate.
    We're issuing an interim rule amending part 210 to reflect certain 
changes that NACHA has made to the ACH Rules since the publication of 
NACHA's 2002 rule book. The interim rule addresses the following seven 
NACHA rulemaking actions: (1) Voting on ACH Rule Amendments; (2) Rules 
Enforcement; (3) Accounts Receivable (ARC) Entry and Internet-Initiated 
(WEB) Entry Warranties; Re-presented Check (RCK) Entries Eligible 
Items; (4) Change Codes; ARC Stop Payments; ARC Individual Name Field; 
(5) Unauthorized Corporate Debits; Copies of Authorization; Definitions 
of Point-of-Purchase (POP) Entries and RCK Entries; Destroyed Check 
(XCK) Entry Check Serial Number Field; ACH Operator Edit Criteria; 
Elimination of Automated Return (RET) Entry Code; (6) Audit 
Requirements and (7) Telephone-Initiated (TEL) Reporting. We are 
requesting comment on all of these topics.
    As discussed above, part 210 incorporates the ACH Rules, with 
certain exceptions. Each year NACHA publishes a new rule book that 
reflects the changes to the ACH Rules that have been approved since the 
publication of the previous rule book. Part 210 currently provides that 
any amendment to the ACH Rules published in NACHA's 2002 rule book that 
takes effect after March 15, 2002 will not apply to Federal government 
ACH entries unless we publish a notice of acceptance of the amendment 
in the Federal Register. 31 CFR 210.3(b)(2). NACHA published its 2003 
rule book earlier this year. We're publishing this interim rule in 
order to incorporate in part 210 all of the amendments to the ACH Rules 
set forth in NACHA's 2003 rule book (including the supplement thereto 
approved February 27, 2003 and effective June 13, 2003), other than 
those relating to rules enforcement, ARC and WEB warranties, audit 
requirements, and TEL reporting.
    We have not previously sought comment on the issues addressed in 
this interim rule. We are requesting comment on all aspects of the 
interim rule discussed below.

1. Voting on ACH Rule Amendments

    NACHA has amended its rules by eliminating a provision that allows 
certain depository financial institutions that are members of a 
Regional Payments Association to vote directly with NACHA on amendments 
to the rules. Amendments to the ACH Rules will continue to be voted on 
by NACHA's Payments Association members and Direct Financial 
Institution members. This rule amendment became effective January 1, 
2003.
    Federal agencies do not vote on ACH Rule amendments and this rule 
change does not affect Federal agencies' use of the ACH system. There 
is no need to provide an exception to this ACH Rule for Federal 
agencies and we therefore are accepting this ACH rule change.

2. Rules Enforcement

    NACHA has amended its rules regarding the enforcement process for 
violations of the ACH Rules, including the fines that may be imposed 
when a financial institution violates the ACH Rules. Specifically, this 
ACH Rule amendment:
    [sbull] Eliminates the second warning provided to an alleged 
offender before a recurrence is considered for a fine;
    [sbull] Increases the amounts of the fines assessed for violations 
of the ACH rules;
    [sbull] Enables recurrences to be tracked not only to the 
Originating Depository Financial Institution (ODFI) and its Originator, 
but also to any third-party service provider that is responsible for 
the violation;
    [sbull] Extends the time period for subsequent violations to be 
counted as recurrences of the initial violation;
    [sbull] Requires that ACH Operators provide statistical data on ACH 
returns to NACHA on a monthly basis to address potential fraud; and
    [sbull] Enables NACHA staff to present an alleged rules violation 
that significantly harms other financial institutions to the ACH Rules 
Enforcement Panel immediately for its review and consideration.

    These changes became effective on June 14, 2002.
    The national system of fines does not apply to ACH entries 
originated or received by Federal agencies. 31 CFR 210.2(d)(3). 
Accordingly, we are not incorporating in Part 210 these changes to the 
enforcement provisions of the ACH Rules.

[[Page 33827]]

3. ARC and WEB Warranties; RCK Eligible Items

    NACHA has amended the ACH Rules to (1) clarify the warranty 
provisions associated with the ARC and WEB applications, and (2) 
clarify that items eligible to be re-presented as RCK entries must 
contain a pre-printed check serial number.
    When NACHA replaced the PPD Accounts Receivable Truncated Check 
Debit Entry pilot program with the ARC entry application, the legal 
foundation for the application was modified from a legal framework 
based on check law to one based on Regulation E. During development of 
the ACH Rules governing ARC entries, however, a key component of an 
ODFI's liability was omitted with regard to an ODFI's breach of 
warranty that causes a Receiving Depository Financial Institution 
(RDFI) to be out of compliance with Regulation E. NACHA therefore has 
amended the ACH Rule 2.9.3.5 (Liability for Breach of Warranty) to 
expand the subsection governing the ODFI's liability for breach of 
warranty for ARC entries to specifically include claims, demands, loss, 
liability, or expenses incurred by the RDFI resulting from its 
inability to comply with Regulation E because of a violation of the 
Rules by the ODFI.
    Similarly, as a result of an oversight during the development of 
the ACH Rules governing WEB entries, no specific provision was included 
to explicitly address an ODFI's breach of liability associated with WEB 
entries. NACHA has amended ACH Rule 2.10.2 to specifically address ODFI 
liabilities for breaches of warranty associated with WEB entries.
    NACHA also has amended the ACH Rules to clarify that an item that 
is truncated and transmitted as an RCK entry must contain a pre-printed 
check serial number. The ACH Rules related to electronic check 
applications (i.e., ARC and POP entries) require that an eligible 
source document used for the application contain a pre-printed check 
serial number. However, no similar requirement was explicitly stated in 
the electronic check rules for RCK entries. To avoid operational 
problems and to provide consistency among electronic check 
applications, NACHA has added an explicit requirement that to be 
eligible for truncation and transmission as an RCK entry, an item must 
contain a pre-printed check serial number. These ACH Rules changes 
became effective on September 13, 2002.
    Under part 210, the ACH Rules addressing warranties for ARC and WEB 
entries are not applicable to ACH entries originated or received by 
Federal agencies. See 31 CFR 210.2(d)(6), (7) (excluding ACH Rule 2.9 
and 2.10 from the definition of Applicable ACH Rules). The liability of 
Federal agencies to RDFIs in connection with the origination of 
unauthorized debit entries is set forth at 31 CFR 210.6(d). Pursuant to 
31 CFR 210.6(d), an agency's liability in connection with the 
origination of an ACH debit entry is limited to the amount of the 
entry. Accordingly, we are not incorporating in part 210 NACHA's rule 
changes related to breach of warranties for ARC and WEB entries. We 
are, however, incorporating in part 210 the ACH Rule amendment 
requiring that an item that is truncated and transmitted as an RCK 
entry contain a pre-printed check serial number.

4. Change Codes; ARC Stop Payments; ARC Individual Name Field

    NACHA has amended the ACH rules to remove certain codes, create a 
new return reason code for ARC entries and remove a requirement for ARC 
entries. Specifically, the amendment removed Notification of Change 
Codes C10 (Incorrect Company Name), C11 (Incorrect Company 
Identification), and C12 (Incorrect Company Name and Company 
identification), because these codes were seldom used by RDFIs.
    The amendment also created new Return Reason Code R38 for a stop 
payment on the source document related to an ARC entry to separate it 
from Return Reason Code R08. Prior to the amendment, Return Reason Code 
R08 had two timeframes associated with its use: two days for a stop 
payment order placed on an ACH debit entry and sixty days for a stop 
payment order placed on a source document (check) related to an ARC 
entry. The use of two return time frames associated with one return 
reason code was confusing to many ACH participants and was inconsistent 
with other Return Reason Codes. Return Reason Code R08 (Stop Payment) 
will retain the standard two-day return time frame for stop payments 
placed on ACH entries.
    The amendment also modified the Individual Name Field of the ARC 
Entry to make it optional to include the individual's name in this 
field. Prior to the amendment, the Individual Name Field was a required 
field for ARC entries. In an automated processing environment, where 
electronic capture of source document information is required, capture 
of the consumer's name is not possible without manual intervention. The 
purpose of the rule amendment was to decrease the manual processing 
required to originate ARC entries and to improve the efficiency with 
which ARC entries may be originated by making the Individual Name Field 
in the ARC Entry an optional field, as is the case with POP entries.
    These rule amendments became effective on March 14, 2003. We 
believe that these rule changes improve the operational efficiency of 
the ACH system and improve the consistency of the rules that govern the 
system. Therefore, we are incorporating all of these ACH Rule changes 
in part 210.

5. Unauthorized Corporate Debits; Copies of Authorization; Definitions 
of POP and RCK Entries, XCK Check Serial Number Field; ACH Operator 
Edit Criteria; Elimination of RET Code

    NACHA has amended the ACH Rules to (1) revise Return Reason Code 
R29 (Corporate Customer Advises Not Authorized); (2) clarify the right 
of an RDFI to request a copy of a Receiver's authorization both before 
and after receiving an entry; (3) establish a 10-banking day timeframe 
for an ODFI to provide an RDFI with a copy of an authorization when 
requested by the RDFI; (4) clarify that an ODFI must provide a copy of 
an authorization to the RDFI without charge; (5) clarify the 
definitions of POP and RCK entries to define them as Single-Entry 
transactions; (6) modify the Check Serial Number Field within the XCK 
format to make it a mandatory field; (7) update the ACH Operators' 
batch rejection edit criteria regarding valid transaction codes to 
incorporate loan and general ledger transactions; and (8) eliminate the 
RET Standard Entry Class Code.
Return Reason Code R29
    This rule amendment clarified Return Reason Code R29, Corporate 
Customer Advises Not Authorized. The prior description of Return Reason 
Code R29 stated, ``the RDFI has been notified by the Receiver (non-
consumer) that the Originator of a given transaction has not been 
authorized to debit the Receiver's account.'' Some ACH participants 
were misinterpreting the intended use of this return reason code 
because of its wording. Return Reason Code R29 is used to return a 
specific ACH debit entry that was not authorized by the corporate 
Receiver. NACHA did not intend that this return reason code be used to 
revoke a corporation's authorization for all future ACH debit entries. 
This amendment clarified Return Reason Code R29 by removing the 
reference in the description to the Originator of the entry, stating, 
``the RDFI has been notified by the Receiver (non-consumer) that a 
specific transaction has not been authorized by the Receiver.''

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Right to Request a Copy of Authorization
    This rule amendment clarified that an RDFI may request a copy of an 
authorization both before AND after receiving an ACH entry, by removing 
the phrase ``Prior to acting as an RDFI for a Receiver'' from Article 
Four, Subsection 4.1.1 (Right to Information Regarding Entries). Prior 
to the amendment, Article Four, Subsection 4.1.1 stated that ``Prior to 
acting as an RDFI for a Receiver, the RDFI may request, in writing, 
that an ODFI provide a copy of the Receiver's authorization * * *'' 
NACHA's intent was that under this section, in addition to requesting a 
copy of an authorization after an RDFI has received an ACH entry, an 
RDFI may also request a copy of an authorization prior to receiving the 
first ACH entry. NACHA has reworded the section because some ODFIs 
misinterpreted it, believing that an RDFI is only permitted to request 
a copy of an authorization prior to receiving an ACH entry.
Time Frame to Produce Copy of Authorization
    NACHA has amended the ACH rules to require that the ODFI provide a 
copy of an authorization within 10 banking days of receiving a written 
request for the copy from the RDFI. Prior to the amendment, the ACH 
Rules did not define a specific time frame for an ODFI to provide a 
copy of an authorization to the RDFI.
Copy of Authorization to RDFI Without Charge
    NACHA has amended the ACH Rules to clarify that an ODFI may not 
charge the RDFI for providing either the original or a copy of an 
authorization. Prior to this amendment, the ACH Rules did not 
explicitly state that the ODFI must provide either the original or a 
copy of an authorization to the RDFI without charge.
Single-Entry Transactions
    This rule amendment modified the ACH Rules to define POP and RCK 
entries as Single-Entry transactions. Prior to the amendment, the ACH 
Rules defined specific one-time debits (i.e., ARC entries, TEL entries, 
and certain WEB entries) as Single-Entry debits. Other one-time debit 
transactions (i.e., RCK and POP), which were developed prior to use of 
the defined term ``Single Entry,'' were described as non-recurring 
debits. This amendment provides consistency among the definitions of 
similar one-time debit entries.
Check Serial Number Field
    This rule amendment modified the Check Serial Number Field of the 
XCK format to make this a mandatory field, making it consistent with 
other electronic check applications. The amendment also requires that 
the information in this field for an XCK entry be included by the RDFI 
on a consumer's periodic statement. Prior to this amendment, the Check 
Serial Number Field for XCK was optional, not edited by the ACH 
Operators, and not required to be included on the consumer's periodic 
statement.
Automatic Batch Rejection Edit
    This rule amendment updated the description of the ACH Operator 
edit concerning transaction codes for Notifications of Change to 
reflect all applicable transaction codes. Specifically, the transaction 
codes 41, 46,51, and 56 were added for Standard Entry Class Code COR. 
Prior to the amendment, in Appendix Three, Section 3.5 (Automatic Batch 
Rejection) of the ACH Rules, the description of the ACH Operator edit 
for valid transaction codes for Notifications of Change did not list 
the transaction codes for general ledger or loan entries (series 40 and 
50).
RET Standard Entry Class Code
    This rule amendment eliminated the RET Standard Entry Class Code 
because of the low volume of paper return conversion currently 
performed by the ACH Operators and the low volume of entries processed 
using this SEC Code. The RET Standard Entry Class Code was used by ACH 
Operators to convert paper returns into electronic format on behalf of 
an ACH participant when the original SEC Code was unavailable. The ACH 
Operators currently require that the original Standard Entry Class Code 
be provided. As a result, use of the RET Standard Entry Class Code for 
converted returns became unnecessary.
    The foregoing eight amendments to the ACH Rules became effective on 
March 14, 2003. We believe that these rule changes improve the 
operational efficiency of the ACH system and improve the clarity and 
consistency of the rules that govern the system. Therefore, we are 
incorporating all of these ACH Rule changes into part 210.

6. Audit Requirements

    NACHA has updated the rules compliance audit requirements of 
Appendix Eight of the ACH Rules to include (1) provisions related to 
new ACH products and applications, and (2) additional provisions 
designed to strengthen the audit requirements. This rule amendment 
became effective on March 14, 2003.
    Federal agencies are not subject to the audit requirements of 
Appendix Eight. 31 CFR 210.2(d)(3). Accordingly, we are not 
incorporating these changes to the audit requirements into part 210.

7. TEL Reporting

    NACHA has amended the ACH Rules to allow NACHA, in cases where the 
return rate for unauthorized TEL transactions appears to exceed 2.5%, 
the right to request an ODFI to provide NACHA with specific information 
relating to Originators of those TEL entries. Under the new rule, ODFIs 
are obligated to provide the requested information within 10 banking 
days of receipt of NACHA's written request to the Chief Operating 
Officer of the financial institution. Failure to provide the requested 
information in a timely manner will constitute willful disregard of the 
ACH Rules and will subject ODFIs to applicable fines. This amendment 
becomes effective on June 13, 2003.
    We are not incorporating this ACH Rule change into part 210. We do 
not believe that Federal agencies are experiencing excessive return 
rates for unauthorized TEL transactions. Moreover, Federal agencies are 
subject to various requirements regarding the privacy of information 
they maintain, including the Privacy Act, which restrict the disclosure 
of information regarding individuals who enter into TEL transactions.

II. Section-by-Section Analysis

Section 210.2(d)

    We are amending the definition of ``applicable ACH rules'' at Sec.  
210.2(d). Current Sec.  210.2(d) defines applicable ACH rules to mean 
the ACH Rules with an effective date on or before March 15, 2002, as 
published in Parts II, III, and IV of the ``2002 ACH Rules: A Complete 
Guide to Rules & Regulations Governing the ACH Network,'' with certain 
exceptions. We are amending Sec.  210.2(d) to refer to the ACH Rules 
with an effective date on or before June 13, 2003.
    The effect of this amendment to Sec.  210.2(d) is to incorporate in 
Part 210 the following changes to the ACH Rules:
    [sbull] Voting on ACH Rule Amendments;
    [sbull] RCK Eligible Items;
    [sbull] Change Codes; ARC Stop Payments; ARC Individual Name Field; 
and
    [sbull] Unauthorized Corporate Debits; Copies of Authorization; 
Definitions of POP and RCK Entries, SCK Check Serial Number Field; ACH 
Operator Edit Criteria; Elimination of RET Code.
    We are also adding a new subsection (7) to Sec.  210.2(d), which 
excludes ACH

[[Page 33829]]

Rule 2.11.3 from the definition of applicable ACH rules. The effect of 
this amendment is to provide an exception to NACHA's TEL reporting 
requirements for Federal agencies. Because the ACH Rules relating to 
rules enforcement, ARC and WEB warranties, and audit requirements are 
already excluded from the definition of applicable ACH Rules, no change 
to part 210 is necessary in order to exclude from Part 210 NACHA's 
amendments to those ACH Rules.

Section 210.3(b)

    We are amending subsection 210.3(b), ``Incorporation by reference--
applicable ACH Rules,'' by replacing the references to the ACH Rules as 
published in the 2002 rule book with references to the ACH Rules as 
published in the 2003 rule book.

III. Procedural Requirements

Request for Comment

    We invite public comment on all aspects of this interim rule.

Request for Comment on Plain Language

    Executive Order 12866 requires each agency in the Executive branch 
to write regulations that are simple and easy to understand. We invite 
comment on how to make the interim rule clearer. For example, you may 
wish to discuss: (1) Whether we have organized the material to suit 
your needs; (2) whether the requirements of the rule are clear; or (3) 
whether there is something else we could do to make the rule easier to 
understand.

Notice and Comment and Effective Date

    We find that good cause exists for issuing the interim rule without 
prior notice and comment. Under the Administrative Procedure Act, an 
agency is permitted to issue a rule without prior notice and comment 
when the agency for good cause finds that notice and public procedure 
thereon are impracticable, unnecessary or contrary to the public 
interest. 5 U.S.C. 553(b)(B). We believe that it is important to 
address the publication of new ACH Rules as quickly as possible in 
order to mitigate the uncertainty and inconvenience to financial 
institutions and agencies that would result from a time lag in 
responding to NACHA's rule changes. When we proposed to address changes 
to the ACH Rules by reviewing and responding to rule changes on an 
annual basis, we received many comments expressing concern over the 
potential consequences of such a time lag. Those consequences include 
uncertainty as to the rules governing government ACH transactions, as 
well as the inability of financial institutions to segregate the 
processing of those transactions.

Executive Order 12866

    The interim rule does not meet the criteria for a ``significant 
regulatory action'' as defined in Executive Order 12866. Therefore, the 
regulatory review procedures contained therein do not apply.

Regulatory Flexibility Act Analysis

    Because no notice of proposed rulemaking is required for the 
interim rule, it is not subject to the provisions of the Regulatory 
Flexibility Act.

Unfunded Mandates Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1532 (Unfunded Mandates Act), requires that the agency prepare a 
budgetary impact statement before promulgating any rule likely to 
result in a Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate or by the 
private sector, of $100 million or more in any one year. If a budgetary 
impact statement is required, section 205 of the Unfunded Mandates Act 
also requires the agency to identify and consider a reasonable number 
of regulatory alternatives before promulgating the rule. Although the 
Unfunded Mandates Reform Act of 1995 does not apply to the interim 
rule, we have determined that it will not result in expenditures by 
State, local, and tribal governments, or by the private sector, of $100 
million or more in any one year.

Executive Order 13132--Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies, including FMS, to 
certify their compliance with that Order when they transmit to the 
Office of Management and Budget (OMB) any draft final regulation that 
has federalism implications. Under the Order, a regulation has 
federalism implications if it has ``substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.'' In the case of a regulation that has 
federalism implications and that preempts State law, the Order imposes 
certain specific requirements that the agency must satisfy, to the 
extent practicable and permitted by law, prior to the formal 
promulgation of the regulation.
    In general, the Executive Order requires the agency to adhere 
strictly to Federal constitutional principles in developing rules that 
have federalism implications; provides guidance about an agency's 
interpretation of statutes that authorize regulations that preempt 
State law; and requires consultation with State officials before the 
agency issues a final rule that has federalism implications or that 
preempts State law.
    The interim rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.

List of Subjects in 31 CFR Part 210

    Automated Clearing House, Electronic funds transfer, Financial 
institutions, Fraud, and Incorporation by reference.

Authority and Issuance

0
For the reasons set forth in the preamble, part 210 of title 31 of the 
Code of Federal Regulations is amended as follows:

PART 210--FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED 
CLEARING HOUSE

0
1. The authority citation for part 210 continues to read as follows:

    Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 
3302, 3321, 3332, 3335, and 3720.

0
2. Revise Sec.  210.2(d) to read as follows:


Sec.  210.2  Definitions.

* * * * *
    (d) Applicable ACH Rules means the ACH Rules with an effective date 
on or before June 13, 2003, as published in Parts II, III, and IV of 
the ``2003 ACH Rules: A Complete Guide to Rules & Regulations Governing 
the ACH Network,'' including the supplement thereto approved February 
27, 2003 and effective June 13, 2003, except:
    (1) ACH Rule 1.1 (limiting the applicability of the ACH Rules to 
members of an ACH association);
    (2) ACH Rule 1.2.2 (governing claims for compensation);
    (3) ACH Rule 1.2.4; 2.2.1.10; Appendix Eight and Appendix Eleven 
(governing the enforcement of the ACH Rules, including self-audit 
requirements);
    (4) ACH Rules 2.2.1.8; 2.6; and 4.7 (governing the reclamation of 
benefit payments);
    (5) ACH Rule 8.3 and Appendix Two (requiring that a credit entry be 
originated no more than two banking days before the settlement date of 
the entry--see definition of ``Effective Entry Date'' in Appendix Two);
    (6) ACH Rule 2.10.2.2 (requiring that originating depository 
financial

[[Page 33830]]

institutions (ODFIs) establish exposure limits for Originators of 
Internet-initiated debit entries); and
    (7) ACH Rule 2.11.3 (requiring reporting regarding unauthorized 
Telephone-initiated entries).
* * * * *

0
3. Revise Sec.  210.3(b) to read as follows:
* * * * *
    (a) Incorporation by reference--applicable ACH Rules.
    (1) This part incorporates by reference the applicable ACH Rules, 
including rule changes with an effective date on or before June 13, 
2003, as published in Parts II, III, and IV of the ``2003 ACH Rules: A 
Complete Guide to Rules & Regulations Governing the ACH Network,'' 
including the supplement thereto approved February 27, 2003 and 
effective June 13, 2003. The Director of the Federal Register approves 
this incorporation by reference in accordance with 5 U.S.C. 552(a) and 
1 CFR Part 51. Copies of the ``2003 ACH Rules'' are available from 
NACHA--The Electronic Payments Association, 13665 Dulles Technology 
Drive, Suite 300, Herndon, Virginia 20171. Copies also are available 
for public inspection at the Office of the Federal Register, 800 North 
Capitol Street, NW., Suite 700, Washington, DC 20002; and the Financial 
Management Service, 401 14th Street, SW., Room 420, Washington, DC 
20227.
    (2) Any amendment to the applicable ACH Rules that takes effect 
after June 13, 2003, shall not apply to Government entries unless the 
Service expressly accepts such amendment by publishing notice of 
acceptance of the amendment to this part in the Federal Register. An 
amendment to the ACH Rules that is accepted by the Service shall apply 
to Government entries on the effective date of the rulemaking specified 
by the Service in the Federal Register notice expressly accepting such 
amendment.

    Dated: May 29, 2003.
Richard L. Gregg,
Commissioner.
[FR Doc. 03-13833 Filed 6-4-03; 8:45 am]
BILLING CODE 4810-35-P