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What does ODFI Mean ?

ODFI (ORIGINATING DEPOSITORY FINANCIAL INSTITUTION) – A participating DFI which is responsible for the origination of ACH transactions. This institution may deposit items directly with an ACH operator or may work through a third-party processor which is the actual Sending Point.

Originator
– Must execute an agreement or contract with ORIGINATING DEPOSITORY FINANCIAL INSTITUTIONthat binds Originator to NACHA Operating Rules
– The agreement defines parameters of the relationship between the two parties,
identifies processing requirements for specific applications, and establishes liability and accountability for certain procedures related to the applications

– Originators are subject to applicable U.S. law when initiating ACH transactions

• ORIGINATING DEPOSITORY FINANCIAL INSTITUTION

  1.   ORIGINATING DEPOSITORY FINANCIAL INSTITUTION bears full responsibility for Entries it originates
  2.  ORIGINATING DEPOSITORY FINANCIAL INSTITUTION is required to execute written agreement with its companies that will bind each company to NACHA Operating Rules.
  3. ORIGINATING DEPOSITORY FINANCIAL INSTITUTION/Originator agreement should address the responsibilities and liabilities of the
  4. Originator on whose behalf  ORIGINATING DEPOSITORY FINANCIAL INSTITUTIONis providing ACH services
  5. Extremely important in today’s environment to ensure that ODFIs know their customers, and they are credit-worthy

Return Entry
RDFI can return Entry for any valid reason
• Normal Return Time frame: The RDFI must make the return entry available to the ODFI no later than the opening of business on the 2nd Banking Day following the Settlement Date of the Entry
• Special return time-frames for RCK and Adjustment Entries – RCK: Made available to ODFI by midnight of 2nd Banking Day following receipt of Entry
– Adjustment Entry (unauthorized, revoked, source document presented for ARC/POP.BOC, etc.): available to ODFI by opening of business on the Banking Day following the 60th calendar day after Settlement Date of Entry

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