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What is a ACH OPERATOR ?

ACH OPERATOR – The ACH operator processes entries between an originator and receiver. There are currently two ACH operators — the Federal Reserve Bank and EPN (Electronic Payments Network).

An ACH Operator processes all ACH transactions that flow between different depository financial institutions. An ACH Operator serves as a central clearing facility that receives entries from the ODFIs and distributes the entries to the appropriate Receiving Depository Financial Institution.

A Federal Reserve Bank that performs all of the following, or (2) an entity that executes an annual agreement with the National Association in which the entity agrees to comply with or perform all of the following:

  1. Adhere to these rules (except to the extent inconsistent with the policies or practices of the Federal Reserve Banks) and other applicable laws, regulations, and policies;
  2. Execute agreements with a mini-mum of twenty independent (i.e., not owned by the same holding company) Participating DFIs that bind such entities to the Cooperator’s rules and to these rules (except that a Federal Reserve Bank shall not be required to bind a Participating DFI to any provision of such rules of the National Association that is not incorporated by the Uniform Operating Circular of the Federal Reserve Banks); Provide clearing, delivery, and settlement services for ACH entries, as defined by these rules, between Participating DFIs that have selected that ACH Operators to perform ACH services (intra-ACH Operator services), and exchange transactions with other ACH Operators (inter-ACH Operators exchange);
  3. Process and edit files based on the requirements of these rules;
  4. Evaluate the credit worthiness of and apply risk control measures to their Participating DFIs;
  5. Adhere to the Federal Reserve’s Policy Statement on Privately Operated Multilateral Settlement Systems (as applicable); and
  6. Adhere to any National ACH Operator Performance Standards of the National Association.

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