The Services. On completion of the Implementation Form by the Company and acceptance and approval by the Bank of the Company’s election for ACH origination services, the following services will be provided pursuant to the terms herein: a pre-authorized payments program, whereby, for and on behalf of the Company, the Bank will make and/or accept payments (individually, a “Payment” and collectively, the “Payments”) to, respectively, employees of the Company, customers of the Company, the Company’s subsidiaries and/or the Company’s affiliates, by means of the Automated Clearing House (the ACH)
Entries. In order to make and accept such Payments, the Company wishes to initiate Credit Entries or Debit Entries pursuant to the terms of this Agreement and the rules and guidelines of the National Automated Clearing House Association (“NACHA”), as the same may be amended, modified, updated, or otherwise changed from time to time (collectively, the “Rules”) and further acknowledges that entries may not be initiated that violate the laws of the United States. The Company agrees to only originate Corporate Credit or Debit (CCD) and Prearranged Payment and Deposit Entry (PPD) as all other Entry codes are restricted. The Company hereby confirms that the Bank has furnished to it a copy of the Rules as currently in effect. To effectuate the foregoing, the Bank is willing to act as an Originating Depository Financial Institution (an “ODFI”) to initiate such Credit Entries or Debit Entries and as a Receiving Depository Financial Institution (an “RDFI”) to receive such Credit Entries or Debit Entries destined for accounts held by the Bank. The Company agrees that the ODFI has the right to audit periodically the Company’s compliance with the Agreement and the NACHA rules.
Rules. Unless otherwise defined herein, all capitalized terms shall have the meanings set forth in the Rules. The term “Entries” shall have the meaning provided in the Rules and shall also mean all data received from the Company hereunder which the Bank uses to prepare Entries.
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the Company and the Bank agree as follows:
Incorporation of Recitals. The recitals set forth herein above are true and correct in all respects and are hereby incorporated within.
Transmittal of Entries by Company.
(a) Company shall transmit PPD (Prearranged Payments & Deposits) or CCD (Corporate Credit or Debit) Entries to the Bank via the Internet Banking System at www.congressionalbank.com in compliance with the Rules. The total dollar amount of Entries transmitted by Company to the Bank on any day shall not exceed the amount specified in the attached Commercial ACH Origination Application (Schedule A).
(b) Company shall retain data on file adequate to permit remaking of Entries for seven (7) days following the date of their transmittal by the Bank as provided herein, and shall provide such Data to the Bank upon its request.
(a) The Company and the Bank shall comply with the security requirements described in the Master Treasury Services Agreement or any procedures requested by the Bank in the future (the “Security Procedures”) with respect to Entries transmitted by Company to the Bank. Company acknowledges that the purpose of such Security Procedures is for verification of authenticity and not to detect an error in the transmission or content of an Entry. No procedure for the detection of any such error has been agreed upon between the Bank and Company. The Company agrees to establish prudent security standards and policies that include proper safeguards to protect the confidentiality of all login IDs and passwords for initiating transactions using this system.
(b) Company agrees to notify Bank immediately if any tokens are lost/stolen or placed in the custody of an unauthorized Person. Customer agrees to educate its Administrators and Users on appropriate security procedures including, but not limited to, signing off the System when they are not using it; the risks associated with opening e-mail and/or attachments, especially those from unknown sources; and the risks associated with clicking on or opening pop-ups and web links. Any transaction initiated or authorized using a valid combination of a login ID and password will be considered authentic, valid and binding by the Company and the Bank. If the Company suspects or believes any such information has been compromised, it shall immediately contact the Bank.
(c) Company is strictly responsible for establishing and maintaining procedures to safeguard against unauthorized transmissions. Company warrants that no individual will be allowed to initiate transfers in the absence of proper supervision and safeguards, and agrees to take reasonable steps to maintain the confidentiality of the procedures and any logins, passwords, codes, or other security devices in connection with the initiation of Entries. If Company believes or suspects that any such information or instructions have been known or accessed by unauthorized persons, Company agrees to notify the Bank immediately followed by written confirmation. The occurrence of unauthorized access will not affect any transfers made in good faith by the Bank prior to receipt of such notification and for a reasonable time period after such notification to allow the Bank to prevent unauthorized transfers.
Compliance with Security Procedure.
(a) If an Entry (or a request for cancellation or amendment of an Entry) received by the Bank purports to have been transmitted or authorized by Company, it will be deemed effective as Company’s Entry (or request) and Company shall be obligated to pay the Bank the amount of such Entry even though the Entry (or request) was not authorized by Company, provided the Bank accepted the entry in good faith and acted in compliance with the Security Procedures with respect to such entry. If a signature comparison is to be used as a part of the Security Procedures, the Bank shall be deemed to have complied with that part of such procedure if it compares the signature accompanying a file of Entries (or request for cancellation or amendment of an Entry) received with the signature of an Authorized Representative of Company (an “Authorized Representative”) and, on the basis of such comparison, believes the signature accompanying such file to be that of such Authorized Representative.
(b) If an Entry (or request for cancellation or amendment of an Entry) received by the Bank was transmitted or authorized by Company, Company shall pay the Bank the amount of the Entry, whether or not the Bank complied with the Security Procedures with respect to that Entry and whether or not that Entry was erroneous in any respect or that error would have been detected if the Bank had complied with the Security Procedures.
Processing, Transmittal and Settlement by the Bank.
(a) Except as provided in Section 6 On-Us Entries and Section 7 Rejection of Entries, the Bank shall (l) process Entries received from the Company to conform to the file specifications set forth in the Rules and (ll) transmit such Entries as an ODFI to the ACH, and (lll) settle for such Entries as provided in the rules.
(c) The Bank shall transmit or complete the necessary batch authorization of such ACH Entries by the Delivery Date deadline of the ACH for the Effective Entry Date shown in such Entries, provided (I) such Entries are received by the Bank’s stated cut-off time (as described in sub-paragraph 5(d) below) on a given Banking Day, (II) the Effective Entry Date is at least 2 Banking Days after such Banking Day, and (III) the ACH is open for business on such Banking Day. For purposes of this Agreement (x) a “Banking Day” is a day on which the Bank is open to the public for carrying on substantially all of its business [other than a Saturday or Sunday], and (y) Entries shall be deemed received by the Bank, when the transmission is completed in compliance with the Security Procedures.
(d) If any of the requirements of clause, (I), (II), (III) of Section 5(b) are not met, the Bank may refuse to transmit such Entries or may use reasonable efforts to transmit such Entries to the ACH by the next deposit deadline of the ACH which is a Banking Day and a day on which the ACH is open for business.
(e) All ACH Entries should be completed/authorized at least two (2) Banking Days prior to the “Effective Date” of the transactions. If the transactions are not completed/authorized by the required timeframe, the Bank cannot guarantee the transactions will be accepted by ACH processors, or be received/posted on the “Effective Date” by the recipient’s bank. The Bank may accept these items and they will be forwarded to the ACH processor no later than the Bank’s next regularly scheduled delivery time. For Settlement/Delivery purposes, a Banking Day is defined as legal Banking Days where both the Bank and ACH processor are open for business. The end-of-day cutoff time is 7:30pm EST.
(f) All ACH Credit originations represent financial obligations for the Company and the Bank. The Bank may reject any Entry if Company has failed to comply with its account balance obligations under Section 11 or The balance showing on Bank’s Business eBanking system associated with the account designated as the settlement account for the Entries must be sufficient to cover the total originations on the Delivery Date as described above. If the settlement account does not have sufficient funds at that time, the Bank may, without any liability, deny, reject or process the Entries. If the Entries are processed, the Company is still obligated to pay the Bank for the Entries.
- On-Us Entries. Except as provided in Section 7, Rejection of Entries, in the case of an Entry received for credit or debit to an account maintained with the Bank (an “On-Us Entry”), the Bank shall credit or debit the Receiver’s account in the amount of such Entry on the Effective Entry Date contained in such Entry, provided the requirements set forth in clauses (I) and (II) of Section 5(b) are met. If either of those requirements is not met, the Bank shall use reasonable efforts to credit the Receiver’s account in the amount of such Entry no later than the next Banking Day following such Effective Entry Date.
- IAT- International ACH Transaction. This Standard Entry Class Code identifies an ACH credit or debit entry that is part of a payment transaction that involves a financial agency’s office that is not located within the territorial jurisdiction of the United States. These international payments convey specific information defined within the Bank Secrecy Act’s “Travel Rule” to ensure that all parties to the transaction have information necessary to comply with U.S. law, which includes the programs administered by the Office of Foreign Assets. Control (OFAC) (a) The company is required to comply with OFAC obligation, and the penalties for ignoring those obligations can be both criminal and civil and include both jail time and fines ranging from $10,000 to $10,000,000 per occurrence. If these fines are levied against the financial institution they may be passed back to the corporate originator depending on the specifics of the case and the details of their agreement contract with the financial institution. The fines are levied by the U.S. government and funds collected are the property of the government, not the financial institution. Additional information on OFAC obligations and fines can be found at http://www.treas.gov/offices/enforcement/ofac/.
- Rejection of Entries. The Bank may reject any Entry which does not comply with the requirements of Section 2, Transmittal Of Entries By Company, or Section 3, Security Procedure, or which contains an Effective Entry Date more than 2 days after the Banking Day such Entry is received by the Bank. The Bank may reject an On-Us Entry, for any reason for which an Entry may be returned under the Rules. The Bank may reject any Entry if Company has failed to comply with its account balance obligations under Section 12, The Account. The Bank may reject any entry of Company that does not adhere to the Security Procedures. The Bank shall notify Company by phone, mail, in writing, or any combination, of such rejection no later than the Banking Day such Entry would otherwise have been transmitted by the Bank to the ACH or, in the case of an On-Us entry, two days after its Effective Entry Date. Notices of rejection shall be effective when given. The Bank shall have no liability to Company by reason of the rejection of any such Entry or the fact that such notice is not given at an earlier time than that provided for herein.
- Cancellation or Amendment by Company. Company shall have no right to cancel or amend any Entry after its receipt by the Bank. However, if such request complies with the Security Procedures, the Bank shall use reasonable efforts to act on a request by Company for cancellation of an Entry prior to transmitting it to the ACH or, in the case of an On-Us Entry, prior to crediting or debiting a Receiver’s account, but shall have no liability if such cancellation is not effected. Company shall reimburse the Bank for any expenses, losses, or damages the Bank may incur in effecting or attempting to affect Company’s request for the cancellation or amendment.
- Reversing Files. The Rules permit the Company to reverse duplicate or erroneous files or entries. A reversing file must be initiated in such time to be transmitted or made available to the RDFI(s) within five banking days after the settlement date of the duplicate or erroneous file or entry. The reversing file must be transmitted within twenty-four (24) hours of the discovery or error. Under the Rules, the RDFI is indemnified against any losses incurred as a result of effecting a reversal. Company shall reimburse the Bank for any expenses, losses, or damages the Bank may incur in effecting or attempting to effect Company’s request for a reversing file.
- Notice of Returned Entries. The Bank shall notify Company by phone, mail, in writing or any combination thereof, of a returned entry from the ACH no later than one Banking Day after the Banking Day of such receipt. Except for an Entry retransmitted by Company in accordance with the requirements of Section 2, Transmittal of Entries By Company, the Bank shall have no obligation to retransmit a returned Entry to the ACH if the Bank complied with the terms of this Agreement with respect to the original Entry. The Bank may place a hold against the account upon receiving any notice of, or return of any Debit entries until the final settlement of the transaction.
- Payment by Company for Entries. Company shall pay the Bank the amount of each Entry transmitted by the Bank pursuant to this Agreement. It is the policy of the bank that all ACH originating customers must have sufficient and available funds in the debiting account on the day that the file is being presented for processing. Insufficient or unavailable funds will result in a delay in processing the file received.
- The Account. The Bank may, without prior notice or demand, obtain payment of any amount due and payable to it under this Agreement by crediting or debiting the account as stated in the Account Agreement, maintained by the Company at the Bank (the “Account”). The Bank and the Company agree that the Bank will credit or debit the Account, as applicable, for any amount received by the Bank by reason of the return of any Entry originated by the Bank on behalf of the Company. Such credit or debit shall be posted no earlier than the Banking Day of such receipt by the Bank and upon the Bank’s verification of the Entry or upon receipt of the funds by the Federal Reserve. The Company shall at all times maintain a balance of available funds in the Account sufficient to cover its payment obligations under this Agreement, The Company agrees that the Bank may immediately discontinue this service and that the Bank may debit any account maintained by the Company with the Bank or any affiliate of the Bank or that the Bank may set off against any amount it owes to the Company in order to obtain payment of the company’s obligations under this Agreement.