Nacha Indemnification Agreement

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The bulletin stated that “Nacha has become aware that many financial institutions require an additional written compensation agreement that must be entered into as part of the requested ACH returns.” Therefore, Nacha has created an agreement “that serves as a standard written request and compensation agreement that can be used in cases where such additional compensation is requested by an RDFI.” It was available as a PDF to be completed by the ODFI and sent to the RDFI, from which it requested the return of funds in the event of incorrect entry or unauthorized credit through a compensation agreement (i.e., letter of intent). Nacha publishes the attached form entitled “Compensation Agreement – Request for Reimbursement of ACH Entry Funds” (“Clearing Agreement”) for use by financial institutions in certain situations where an ODFI requests the return of funds from an ACH transaction and the RDFI wishes to receive written compensation in addition to the compensation contained in Nacha`s Operating Rules (“Rules”). Nacha encourages financial institutions to familiarize themselves with this agreement and examine the situations in which they can be used, as their use will reduce the delays and costs associated with negotiating the terms of agreements between financial institutions. [1] In some cases, financial institutions may consider that the remuneration provided for in the rules does not apply or the RDFI may request additional assurances from the ODFI. These situations may include cases where the original ACH entry was not incorrect; the total amount of the original ACH entry is not available; or the funds are returned outside the ACH network. Financial institutions should be aware that paragraph 2.12.3 of the Rules contains compensation that the ODFI grants to an RDFI if it requests the return of an incorrect registration or credit entry that occurred without the consent of the originator. If we fail to complete a transaction to or from your account on time or in the correct amount in accordance with our agreement with you, we will be liable for your loss or damage. However, there are a few exceptions. For example, we are not responsible: Nacha has become aware that many financial institutions require the conclusion of an additional written indemnification agreement as part of the requested ACH declarations, especially if the return of funds cannot be supplemented by an ACH declaration entry (for example. B, a declaration base code R06) or if the funds are returned by the RDFI outside the ACH network (para. B.B by bank transfer or cheque).

This includes situations where the full amount of funds received from an ACH transaction is not available for return or the funds have been transferred to another account with rdFI. In such cases, an RDFI may request that it be compensated by the ODFI and that the ODFI complete and execute a compensation agreement provided by the RDFI or a form provided by the RDFI. This can lead to a delay in the return of requested funds, as financial institutions and their lawyers review the agreement and negotiate its terms, especially because some of the commonly used indemnification agreements are not designed for ACH transactions. In cases where a written request and compensation are requested, Nacha encourages financial institutions to use the following clearing agreement instead of negotiating the terms of each request for repayment of funds independently and individually. The ODFI requesting reimbursement of the funds must provide the RDFI with a duly completed compensation agreement inserting correct information in all fields displayed. The indemnification agreement should be signed by a person authorized to enter into the agreement on behalf of the ODFI. An RDFI is not required to take action in response to receiving a compensation agreement from an ODFI. Your use of the Services may also be affected by your deposit agreement and disclosures, including the applicable fee schedule (“Deposit Agreement”) or any other agreement with us for your linked Bank of America accounts and/or an agreement with our affiliates for your partner accounts associated with the Service, including your investment accounts with Merrill. If an account is linked to the Services, this does not change any agreements you have already entered into with us or our affiliates for that account, and you will continue to be subject to the terms we have given you in the agreement and disclosure for the linked account. The terms of these Account Agreements, including applicable fees, transaction restrictions, liability rules, and other restrictions that may affect your use of an account on the Services, form part of this Agreement.

In the event of any conflict between the terms of these Account Agreements and this Agreement, the terms of the applicable Account Agreement shall prevail, unless expressly stated otherwise in this Agreement. If you use the Services to transfer money between your investment accounts, which are subject to the Merrill Lynch Brokerage Website Terms and Conditions that you agreed to when you became a Merrill Online Client, this Agreement and not this Agreement applies to your transaction. .