NCP Exam Questions with Complete Solutions
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Terms in this set (119)
ECCHO Rules, Section XIX (C) outlines image
eligibility as follows:
According to the ECCHO Item is defined as a "check" under § 229.2(k) of
Rules, what items are Regulation CC;
eligible for image Item is a Fully Qualified Item; and
exchange? Sending Bank and the Receiving Bank have entered
into an agreement and the item is eligible for imaging
under that agreement.
, Federal Reserve OC3: Requirements associated with
bonds deposited electronically
• FRB makes no warranties with respect to savings
bonds processed
• Must have a completed agreement on file
o New agreement required for separately sorted ICL
deposits; No new agreement needed for savings
bonds included in a mixed ICL
• Files must conform to ANSI X9.37-2003 and UCD
requirements
• Savings bonds can be deposited in forward cash
letters only
o No Return cash letter types will be supported
• MICR line requirements:
o With preprinted MICR line: Must contain full MICR
line in Type 25 item detail record
o Without preprinted MICR line: Only routing number
for savings bonds and the redemption amount in Type
25 item detail record are required
• Physical endorsements are not required
o Electronic endorsements in Type 26 or Type 28
records required, consistent with check image deposit
What provisions are
guidelines
included in the
• Physical amount encoding is not required
predominant image
• Pricing Error Adjustment (PEA)
exchange rules to address
o FRB provides immediate credit, subject to payment
the exchange of images of
and adjustment
savings bonds?
o PEA adjustment result of BPD identification of
difference between redemption amount it calculates
and amount it was charged for the bond
ECCHO Rules:
• Provides agreement to transmit images of savings
bonds between Members with exclusions
o Bonds do not meet requirements for image
eligibility under Rules
• Rule establishes general standard of care applicable
,to handling Savings Bond similar to typical
correspondent bank arrangements
• Comingling of images of savings bonds and checks
allowed
• Industry Formats and Standards for Data File:
o Must follow specifications set forth in Fed Quick
Reference Guide
• Bank may reject and return image of Bond for any
reason prior to payment by Fed
• Payment subject to correction and adjustment from
Treasury or Federal Reserve Bank (as fiscal agent to
US Treasur
, It depends on the Standard Entry Class code (SEC
code), but will generally be the NACHA rules which
provide the legal framework for moving transactions
through the ACH system. The NACHA operating rules
and guidelines include provisions for:
Responsibilities, liabilities, and warranties of
participants
Availability of funds for converted check transactions
Return timeframes for converted check transactions
Regulation E (Reg E) - Provides protection for
What Rules and/or consumers whose accounts are debited or credited
Regulations provide via ACH:
oversight for checks Initiated through an electronic terminal or telephone
converted to ACH? For the purpose of ordering, instructing, or
authorizing a financial institution to debit or credit an
account
An example - each of the following check conversion
SEC codes, when initiated as paper checks then
converted to ACH entries for payment and clearing,
are no longer bound by the laws governing check
payments:
Accounts Receivable Entry (ARC)
Point-of-Purchase Entry (POP)
Back Office Conversion Entry (BOC)
Authorization Requirements:
When converting a check ARC: Notice must be provided to Receiver
to an ARC, POP, or BOC POP: Authorization must be on the receipt signed at
transaction, what are the time of purchase
authorization BOC: Signage & written notice at time of payment
requirements? • Example: At the check-out or where check is
presented as "source document" to the Originator
100% Correct (Grade A+)
Save
Terms in this set (119)
ECCHO Rules, Section XIX (C) outlines image
eligibility as follows:
According to the ECCHO Item is defined as a "check" under § 229.2(k) of
Rules, what items are Regulation CC;
eligible for image Item is a Fully Qualified Item; and
exchange? Sending Bank and the Receiving Bank have entered
into an agreement and the item is eligible for imaging
under that agreement.
, Federal Reserve OC3: Requirements associated with
bonds deposited electronically
• FRB makes no warranties with respect to savings
bonds processed
• Must have a completed agreement on file
o New agreement required for separately sorted ICL
deposits; No new agreement needed for savings
bonds included in a mixed ICL
• Files must conform to ANSI X9.37-2003 and UCD
requirements
• Savings bonds can be deposited in forward cash
letters only
o No Return cash letter types will be supported
• MICR line requirements:
o With preprinted MICR line: Must contain full MICR
line in Type 25 item detail record
o Without preprinted MICR line: Only routing number
for savings bonds and the redemption amount in Type
25 item detail record are required
• Physical endorsements are not required
o Electronic endorsements in Type 26 or Type 28
records required, consistent with check image deposit
What provisions are
guidelines
included in the
• Physical amount encoding is not required
predominant image
• Pricing Error Adjustment (PEA)
exchange rules to address
o FRB provides immediate credit, subject to payment
the exchange of images of
and adjustment
savings bonds?
o PEA adjustment result of BPD identification of
difference between redemption amount it calculates
and amount it was charged for the bond
ECCHO Rules:
• Provides agreement to transmit images of savings
bonds between Members with exclusions
o Bonds do not meet requirements for image
eligibility under Rules
• Rule establishes general standard of care applicable
,to handling Savings Bond similar to typical
correspondent bank arrangements
• Comingling of images of savings bonds and checks
allowed
• Industry Formats and Standards for Data File:
o Must follow specifications set forth in Fed Quick
Reference Guide
• Bank may reject and return image of Bond for any
reason prior to payment by Fed
• Payment subject to correction and adjustment from
Treasury or Federal Reserve Bank (as fiscal agent to
US Treasur
, It depends on the Standard Entry Class code (SEC
code), but will generally be the NACHA rules which
provide the legal framework for moving transactions
through the ACH system. The NACHA operating rules
and guidelines include provisions for:
Responsibilities, liabilities, and warranties of
participants
Availability of funds for converted check transactions
Return timeframes for converted check transactions
Regulation E (Reg E) - Provides protection for
What Rules and/or consumers whose accounts are debited or credited
Regulations provide via ACH:
oversight for checks Initiated through an electronic terminal or telephone
converted to ACH? For the purpose of ordering, instructing, or
authorizing a financial institution to debit or credit an
account
An example - each of the following check conversion
SEC codes, when initiated as paper checks then
converted to ACH entries for payment and clearing,
are no longer bound by the laws governing check
payments:
Accounts Receivable Entry (ARC)
Point-of-Purchase Entry (POP)
Back Office Conversion Entry (BOC)
Authorization Requirements:
When converting a check ARC: Notice must be provided to Receiver
to an ARC, POP, or BOC POP: Authorization must be on the receipt signed at
transaction, what are the time of purchase
authorization BOC: Signage & written notice at time of payment
requirements? • Example: At the check-out or where check is
presented as "source document" to the Originator
