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<div><b>To:</b> Oregon State Agency ACH Customers: </div>
<div><b>From:</b> Oregon State Treasury, Finance Division</div>
<div><b>Date:</b> March 31, 2010</div>
<div><b>Re: NACHA RULES REVISION– EFFECTIVE MARCH 19, 2010</b></div>
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<div style="text-align: justify; ">This notice is intended to make you aware of a recent NACHA rule revision that went into effect on March 19, 2010. The rule revisions pertain to ACH Authorizations and Returns and to ACH Stop Payments. The attached document
drafted by US Bank provides an overview of the rule revisions and related considerations for ACH Originators. </div>
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<div style="text-align: justify; ">The Oregon State Treasury recommends that agencies take this opportunity to review all ACH Authorization forms used by the agency and to review procedures around proper handling of authorization revocations to ensure they
are in compliance with the NACHA rule revisions. Sample ACH Authorizations that comply with ACH Authorization Rules can be found on the OST Website:</div>
<div style="text-align: justify; "> </div>
<div style="text-align: justify; "><a href="http://www.ost.state.or.us/Services/CashMgmt/Forms/C-22a-DirectDeposits-Credits-AgencySending.doc"><font color="#0000FF"><u>ACH Credit Form C22a</u></font></a></div>
<div style="text-align: justify; "><a href="http://www.ost.state.or.us/Services/CashMgmt/Forms/C-22b-DirectPayments-Debits-AgencySending.doc"><font color="#0000FF"><u>ACH Debit Form C22b</u></font></a> </div>
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<div>For agencies choosing to edit their own existing ACH Authorization forms, please note that in order for an ACH Authorization to be considered valid it must: </div>
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<li style="margin-bottom: 10pt; ">Be clearly and readily understandable as an ACH Authorization. </li></font>
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<li style="margin-bottom: 10pt; ">If the authorization is not clear and readily understandable as to its terms, or is invalid under applicable law, it will not be considered a valid authorization. Any entry based on an authorization that does not conform to
these specifications can be returned by the customer as unauthorized. This revision in the rules clarifies the intent of the rules that ‘clear and readily understandable’ terms are a fundamental component of a proper and valid ACH authorization. </li></font>
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<li style="margin-bottom: 10pt; ">State that it complies with Oregon and U.S. Law </li><li style="margin-bottom: 10pt; ">Determine if the transaction will be moved outside the U.S. in its entirety</li><li style="margin-bottom: 10pt; ">Determine type of bank account ~ business or personal/ checking or savings</li><li style="margin-bottom: 10pt; ">Provide the customer with a method to revoke the authorization.</li></font>
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<li style="margin-bottom: 10pt; ">State agencies should also be prepared to respond to customers that may contact them to revoke their original authorization when a customer is choosing to file a ‘statement of unauthorized debit’ with their bank that includes
an ACH Stop Payment request for future transactions.</li></font>
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<li style="margin-bottom: 10pt; ">Please note that ACH Originators are also required to maintain a copy of the ACH Authorization for a period of 2 years beyond termination of the agreement. </li></ul>
<div>If you have concerns or questions about the NACHA rule change or other ACH requirements, please contact Rhonda Bachmann at 503-378-8256 or via email at: <a href="mailto:Rhonda.bachmann@ost.state.or.us"><font color="#0000FF"><u>Rhonda.bachmann@ost.state.or.us</u></font></a></div>
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